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Attachment C Consultants Response to the RFP I ATTACHMENT C CONSULTANTS RESPONSE TO THE (RFP) • , i‘ .4., pi ''0 1 7' V i '., , 4Z,. \ 1 , G S ‘.N‘i\\.,3/4 •' :', ' . `.. #11)4) Securing Your World lige_ , . : _. .. _ , ... ,.., . A 01•' ''. :4 IAA I r. ,,, vitt . Ak ) , I DI 1 ./,, . . .. ,, ..._ , . 4 .,.. ...... . . 3 ,i , _, . . , ' 6 1 11 • • *114:1, 14 '.4.' 17.414‘.. Y1...-.. 1.....-:. • •.,t,, ... ...- Presented To: City of Miami Beach ORIGINAL RFP #: 2015-013-YG Lourdes Rodriguez Senior Procurement Specialist Presented By: G4S Secure Solutions (USA) Inc. I Eduardo Yero, General Manager 5820 Blue Lagoon Drive, Suite 300, Miami, FL 33126 (305) 266-2004 I (305) 788-7810 — cell I Eduardo.Yero@usa.g4s.com I www.g4s.com/us ataS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services 1 TAB 1 : Cover Letter and Minimum Qualifications Requirements 1.1 Cover Letter and Table of Contents. The cover letter must indicate Proposer and Proposer Primary Contact for the purposes of this solicitation. 1.2 Proposal Certification, Questionnaire &Requirements Affidavit(Appendix A). Attach Appendix A fully completed and executed. 1.3 Minimum Qualifications Requirements. Submit verifiable information documenting compliance with the minimum qualifications requirements established in Appendix C, Minimum Requirements and Specifications. TABLE OF CONTENTS 1 TAB 1: Cover Letter and Minimum Qualifications Requirements 1 1.2 Proposal Certification, Questionnaire&Requirements Affidavit(Appendix A) 3 1.3 C.1 Minimum Qualifications Requirements(Appendix C) 10 2 TAB 2: Experience and Qualifications 21 2.1 Qualifications of Proposing Firm 21 2.2 Qualifications of Proposer Team 29 2.3 Financial Capability 45 3 TAB 3: Scope of Services Proposed 46 3.1 Custom Protection Officers®(CPOs) 46 3.2 G4S Compliance with Minimum Requirements for Security Officers 47 3.3 Upscale Security Officers(USOs) 48 3.4 Recruitment Program [RFP C.6] 48 3.5 Military Programs 49 3.6 Pre-Employment Screening 49 3.7 Drug and Alcohol Policy 52 3.8 Employment Records 53 3.9 Personnel Standards 54 3.10 Equal Opportunity Employment 54 3.11 Retention Programs 54 3.12 Employee Benefits and Incentives 57 3.13 Staffing Annual Events and Special Events 59 3.14 Emergency Services 60 4 TAB 4: Approach and Methodology 63 4.1 Project Management 63 4.2 Dedicated Project Manager 63 4.3 On-site Management 64 4.4 G4S Key Management Personnel 65 4.5 Operating Plan 67 4.6 Local Support&Resources 67 4.7 Actionable Post Orders 68 4.8 Cross-Training&Flex-Force for Non-Routine Needs 69 CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 1 I - G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services 4.9 Professional Appearance 69 4.10 Operational Reporting 69 4.11 Training 70 4.12 Training Plan 74 4.13 Use of Innovative Technology 81 4.14 Evaluation of Radio Communications System 83 4.15 G4S Insight 87 4.16 Labor Scheduling 91 4.17 Financial Management 92 4.18 Quality Assurance 93 4.19 Transition 96 4.20 Corporate Responsibility 103 5 TAB 5 Cost Information 109 5.1 Pricing Methodology 109 5.2 Cost Proposal 111 6 TAB 6 Appendices 113 6.1 Appendix A: Code of Business Ethics 114 6.2 Appendix B—G4S Exceptions to RFP 115 6.3 Appendix F—Insurance Requirements 122 Attachment 1 —Supplier Quality Report 124 Attachment 2--2014 Annual Report 124 Tables and Figures Table 1:G4S Complete List of Services Offerings 22 Table 2: G4S Local Government Clients 23 Table 3: G4S Organization Chart 33 Table 4: Drug Testing Criteria& Limits (10-Panel) 53 Table 5: G4S Employee Benefits 58 Table 6: Transition Matrix 97 Table 7: G4S Exceptions to Terms&Conditions 115 Figure 1: Private Investigative and Security Agency Branch Office 11 Figure 2: Miami Security Officer School/Training Facility 12 Figure 3: Miami-Dade Local Business Tax Receipt 13 Figure 4: Miami-Dade Fire Rescue Department Operating Permit 14 Figure 5: Florida Department of State, Authority to Operate 15 Figure 6: G4S Corporate Support 30 Figure 7: G4S Miami Area Office Organization Chart 32 Figure 8: Preface, G4S Security Officer Handbook 54 Figure 9: Secure Trax Features 82 Figure 10: NCC view of South Florida Communications Network via CAD(July 2015) 86 Figure 11: G4S Insight 87 Figure 12: G4S' Labor Scheduling System 93 STATEMENT OF PROPRIETARY INFORMATION This proposal contains proprietary information regarding G4S Secure Solutions USA)Inc.and is not for public disclosure.Dissemination and reproduction may only be made after written permission by an authorized representative of G4S Secure Solutions(USA)Inc.is granted.This document was prepared and is s.ubmitted.in.confirience.lo1hes2cipient.ltis submitted solely for use by your managementlorJhe_.purp.ose of review in connection with an invitation to submit a proposal to provide security services. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 2 I P a g e G4S Secure Solutions(USA)Inc. I 5820 Blue Lagoon Drive,Suite 300 Miami,FL 33126 Telephone:305-266-2004 Fax:305-261-6511 Email:Eduardo.Yero @usa.g4s.com www.g4s.com/us July 29, 2015 Mr. Lourdes Rodriguez Procurement Specialist City of Miami Beach 1700 Convention Center Drive Procurement Division, 3rd Floor Miami Beach, Florida 33139 Re: RFP#2015-013-YG for Security Officer Services Dear Mr. Rodriguez: On behalf of our dedicated and highly diverse G4S Miami Team, thank you for the opportunity to submit this proposal for Security Officer Services to the City of Miami Beach. We understand the City of Miami Beach's world class status requires a world class security partner. G4S is the global leader in security services with operations in 125 countries and over 657,000 employees. G4S can be trusted to represent the City with professionalism, integrity and dedication. With its proposal for Security Officer Services, G4S will support the City's Excellence Standards and provide outstanding public service and safety to all who live, work, and play in our vibrant, tropical, historic community. With an exceptional reputation working with the City of Miami Beach and other government and private entities across the U.S., G4S is the ideal partner for the City of Miami Beach. Our solution combines the best security professionals equipped with the latest technology, and led by an experienced and diverse management team that offers superior commitment to service. We are confident that our approach will maximize your investment. G4S' security solution for the City of Miami Beach provides: Highest Quality Security Personnel: The quality and professionalism of our Security Officers separates G4S from our competition. G4S Security Officers have the experience, integrity, and character that will surpass your expectations. G4S' is an industry leader and we attract the best candidates. Our stringent testing and background investigations ensure only fully vetted and capable personnel will join our team. We select individuals from our Custom Protection Officer® ("CPO") program for experienced officer and supervisory positions. CPOs represent the highest caliber professional, with law enforcement or military backgrounds. Less experienced Security Officer positions are filled from our Upscale Security Officer ("USO") program. USOs are recruited from the top of the commercial security officer pool and have proven work histories or relevant security experience and must meet the same stringent background screening and training requirements of our CPOs. Dedicated & Experienced Management Team: Our solution provides you with a dedicated Project Manager supported by an accomplished management team that will deliver on your service requirements. The proposed Project Manager, Mr. Ronald Foster is a former FBI Special Agent and currently the Director of Public Safety at St. Thomas University. Mr. Foster's 28 years of combined federal law enforcement and contract security management brings a wealth of expertise and experience for success in providing contract security services for the City of Miami Beach. He is supported by the management team from G4S' Miami Office, whose managers have over 90 years of combined of experience in the industry. Advanced Training: All G4S officers go through our "in house" corporate university, North American Training Institute (NATI). This ensures G4S' officers have the necessary skills to meet the City's unique security requirements. G4S'training program focuses on exceptional physical protection with an emphasis on customer service and public relations. G4S officers will also serve as Ambassadors for the City. More Securing Your World than security, our officers are customer service professionals who will engage tourists and residents when providing assistance and information., Our officers will expand Homeless Outreach efforts, conduct litter/graffiti cleanup, risk mitigation, and advance your S.M.I.L.E. program for Service, Manners, Ideals, Leadership and Excellence. Proprietary Security Technologies: With G4S' proprietary Secure Trax®, our officers can perform more effectively and efficiently than any other officers in the industry. Security Officers can communicate, report observations and incidents, perform inspections and guard tours, check-in/out of post, and log incidents real time through the G4S' Secure Trax application deployed on a latest technology smartphone. Key features include GPS tracking, incident notification, guard tour tracking, and safety and facility inspections (including "lights out" occurrences). With Secure Trax, the City will experience increased situational awareness and improved operational efficiencies. G4S also provides the City with an online customized Web Portal—G4S Insight--which gives you instant access to security data and view of Key Performance Indicators (KPIs) and incident reports, post compliance and post inspection information, operational performance, turnover, and billing information. G4S is proposing Secure Trax® with AT&T's enhanced - Communications requirement. Push to-Talk technology as the solution for the Communicat o s 9Y Special Event & Disaster Response: G4S' Security Solution goes beyond what standard guard companies can offer the City. Each year since 2012, during the Memorial Day Weekend, G4S has provided the Miami Beach Police Department a supplemental force of 76 Custom Protection Officers. G4S has the staffing infrastructure to cover any special event request with fully vetted and trained Security Officers, drawing from our internal staff of 1,500 Security Officers in Broward and Dade counties. Should you require emergency or disaster services above our contracted scope, we can quickly provide a contingent of over 600 pre-qualified and trained personnel to meet your emergency needs through our Emergency/Disaster Services Management Services. Our ample staffing and resources will eliminate the uncertainty of whether the City's security partner can staff additional service needs without having to subcontract with less experienced companies. 24/7 Commitment: Based in South Florida, G4S' National Communications Center is a fully staffed round the clock resource available to answer dispatch calls and provide instant communication through our cellular radio network and dedicated radio frequency to field personnel, site supervisors and local management. Our Secure Trax® and AT&T central dispatching will be fully supported by our highly experienced professionals assigned to our National Communications Center. Our 24-hour Field Supervisors and Area Supervisors conduct frequent unannounced site and performance inspections to maintain the highest level of quality control. We know the City of Miami Beach is the world's playground, active "25/7". We are certain that our professional officers, state-of-the-art technology, and experienced local management team will help you achieve your security goals and exceed your expectations with the best value for the City of Miami Beach. We again appreciate the opportunity to partner with the City of Miami Beach in providing a safe and enjoyable world class destination for residents and visitors alike. Sincerely, Eduardo Yero General Manager, Miami Office Securing Your World Cyj I G4S Secure Solutions City of Miami Beach • RFP#:2015-013-YG Security Officer Services 1.2 Proposal Certification, Questionnaire &Requirements Affidavit (Appendix A) sct»Ialbb No: Scfialattan Tale: 2015-013-YG I SECURITY OFFICER SERVICES 4 Pnsaleine tContact Tet - _ 1 Emel: Yusbel Gonzalez _ _ 305 673,7000 x 6230 , yusbetgonza lezftmlamibeactil,gov — PROPOSAL CERTIFICATION,QUESTIONNAIRE&REQUIREMENTS AFFIDAVIT Purpose: The purpose of this Proposal Certification,Questionnaire and Requirements Affidavit Form is to inform prospective Proposers of certain solicitation and contractual requirements,and to collect necessary information from Proposers in order that certain portions of responsiveness, responsibility and other determining factors and compliance with requirements may be evaluated, This Proposal Certification,Questionnaire and Requirements Affidavit Form is a REQUIRED FORM that must be submitted fully completed and executed. General Proposer Information. a=IRnrilAME– G4S Secure Solutions(USA)Inc. No of Years n kalESS. 61 No of?MS in eusi.e La.":557 tla of Ei1 0MIER NAMEtS)PROPOSER HAS OPERATED LANCER IN The LAST 141 �`j -S• Wackenhut;The Wackenhut Cot oration FCM PRIMARY ACORESSI HEAC'LARTERSt. 1395 University Boulevard -CITY Jupiter STATE: FL ziPCO;33458 �. TELEPHONE 561-691-6497 TQtLrRIsrTo.: 800-275-8305 FAX NCI: 561-691-6727 FIFA tccx,inss: 5820 Blue Lagoon Drive tire: Miami STATE: FL ZPCODE: 33126 -- FRIMARYACCOIRIT REPRESENTATIVE FOR THIS ENGAGEMENT:Eduardo Yero,G4S General Manager AC.CCLTIT REP TELEPMOaNE NO,: 305-266-2004 ACCCLelT REP TOLL FREE N0: - AGCO"T"P caiilL: Eduardo.Yero @usa.g4s.com FUIEttAL Tai%QENTECATicFi tta_ 59-0857245 The City reserves the right to seek additional informaton from Proposer or other source(s),including but not limited to:any firm or principal information-apOicabie lieensure,resumes of relevant indishduals,client information,financial information,or any inforrualion the City deems necessary to evaluate the capacity of the Proposer to perform in accordance with contract requirements. RI=P'2U1,�,C13-YY_� - — t.;,ge 15 CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 3 I P a g e I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services t- Veteran Owned Business.Is Proposer claiming a yetere ++' o ei business status? r I YES tro StiBhltTTAL REQUIREMENT:Proposers claiming veteran cwred business status shad stibn'rt a de•rs rrenlaion proving that rim 's certified as a vetera±r-owned business or a service-disabled:etr- r ,weed business by'the State of i'lorida or United Slates federal government,as required pursuant to ordinanrc 2011-3748. 2. -Conflict Of interest.A4 Froposers rwsl cloricloSe,in their Proposal, he came;s)of ary c fcer.chrec:or,agent,er iramodiate family re+nber(spouse,paten!,sibling,and child)who is also on employee of the City of Kart Beach.. Further,all Proposers must disclose t e name of any Chi emplcyee oho awns,either directly or ndirectly,an interest of ten(10%)percent or more in the Proposer entity or any of ifs afr"ates SUBMITTAL REQUIREMENT:Proposers must disclose the garne(s)of a j otter,Girectc;,agent.or'mmediate family member [spouse,parent:sibling,aid child}Hto is also at employee of the City of Miami Bea-...h_ Proposers must also disclose the name of any City employire who owns.either dir ty cr indirectiy,an interos;of ten(10%)percer t et:mere in the Proposer entity or any of is affiliates 3_ R e f e r s r ,cot-Propee r-s4all-s bn,it a ihrec(3)rc,`crcncc for wharf the-Propeser has eemel&led-work k'EME sr_ eferense- in f iieri-is-requfrcd: 1)tcirril-P4aper-2)-C 1aet Irrrruie blotto: . . - 's- -- - - ' - = 'ees-Previded, 4 Litigation History.Proposer shall submit a statement of any litgation or regulatory acticn that has been filed against you firrn(s) in the'as!five years.If an action:las been filed,state ayd describe the`ifigation or regulatory acton.riled,and identify the court or agency before which the action was Instituted,the applicable case or tie number,and the status or disposition for such reported action,of no.titigatlon or regulatory action has been filed against your firm(s),provide a statement to that effect.If Flo'litigation or regulatory action has been filed against your frm(s),please provide a statement to that effect Trrethful and complete answers to this question may not necessarily disqualify a firm from consideration but will be a factor In the selection process, Untruthful,misleading or false answers to this question shall result In the disqualification of the firm for this project. SUBMITTAL REQUIREMENT: Proposer shale.submit hisbxy of Iibcalicn cr eegutatory action filed agair:st proposer,or any proposer team member'firm,in the past 5 years,if Proposer has no litigation history or regulatory action in the past S years,submit a statement accordingly. 5. Suspension,Debarment or Contract Cancellation.Has Proposer ever been debarred,suspended or other legal'violator_,or had a contract canceled due to non-performance by an bite seaor agency? l� YES EJ NO SUBMITTAL REQUIREMENT: answer to above is.'YES,,'Proposer shall submit a statement detailing the reasons that fed'o action(s). Vendor Campaign Contributions,Proposers are ea ected to be Of become familiar with the City's Campaign Finance Reform ,aws,as codired in Seot ons 2-437 through 2-490 of the City Code,inducting a prohibition against any vendor Oiling a campaign c>rntn`butan directly or indirectly to a can5date, or to the campaign committee of a c -didate, for the offir s of mayor or commissioner.Proposers stall be solely responskte for ensuring that all applicable provisions of the City's Campaign Finance Reform laws are complied~kith,and shall be subtect to any and an sanctions,as prescribed therein,including disqualification of their Proposals,in the event of suet non-corrpliance.A fine of up to 5500.0 shall be imposed on every person who violates this motion.Each act of giving or deposting acon'.ributlorr n violation of this sectico shall constitute a separate violation, "Ardor*shat include natural pe'scos and:or er.ifies tAtto ha'd a centrnting financial interest in a vender entity.The term 'controlling financial interest"shall mean the ownership,directly cr i hctrec':ly,of lee percent or more of the outstanding capital stock in any ccrperato:t or a direct or indrect ntere sf of ten?erc r t+lr mere In a firm, SUBMITTAL REEQUIREMENT:Submit tt-e names cf ati indivduals or e,tities(to•ni dt the derinit`.an of veerdor as deified woe fray acdy),Including your sub-consultants),etc has ccntributed to the carroargn etcher directly cr incireclly,rf s'andidate n'o his been elected to the o5oe cf Mayor or City Cony-.ssioner fcr the City of Miami Seams, RFC 015013YG - — — — Poge 1 CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 4 I P a g e Cyj I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services T- Code of Business Ethics.Pursuant to City Resolution No2000.23879.each person or ent;ly prat seeks to do business rat the City shall adept a Code of Business Ethics("Code')and subunit that Code b the Procaement Division with its proposal/response Of within fire' (5)days upon receipt of-equest_.The Code shad,at a rinimr.r7,req,ire the Proposer,to comply with at applicable governmental rues and regulations including,arroq other's.Jt o onllict of interest,tobbyrrg and ethics provision of the City of Miami 3each and Prani Bade COL ay. SUBMITTAL REQUIREMENT: Proposes shall submit Cirri's Code of Bus ress Ethics, In lieu of submitting Code of Businoss Ethers.,Proposer may submit a statement irudicating that it will adopt,as required;r the ordinance,the City of Miami Beach Code of Ethics;available at v worniemibeachl.govipnxuremenii. S. Living Wage.Ptrrsr;ant°o Section 2-408 of the'Semi Beach City Code.as same may be amended from lime to time.Proposers shall be required to pay all employees who provide services pursuant to this Aciemert,the hourly hying wage rates listed below. The City Commission approved Crcinarca 2014.3897 on September 30, 2014 increasing the living wage rate to $13.31rhourly without health benefits or$11.62mourly Oh health benefits with an effective date of January 1,2015. The giving wage rate and health care benefits rate may,by Resclution cf the City Commission be indexed annually for inflation using the Consumer Price Index for al Urban Consumers(C131-U)MiamfFt.Lauderdale,issued by he U.S.Department of Labor's Bureau of Laf cr Statistics. Nlotwithstanding the preceding,no annual kndex sisal exceed three percent(3%).The City may also,by resclutcrr,elect riot to index the living wage rate in any parbcutar yea,if it determines it would not be fiscaliy sound to in sent some(in a particular ysarj. Proposers'failure to comply with this prof•isian shall be deemed a material breach under this prapos ,under which fhe City may, at its sole option,immediately deem sad Proposer as non-responsive,and may further sut ect Proposer to additional penalties and fines,as provided in the City's Living Wage Ordinance,as amended. Further information on the Living Wage requirement's available atwww miamibeachrl.gov,1procuienrantf. SUBMITTAL REQUIREMENT; additonal submittal is required.By virtue of executir.-g this affidavit document,Proposer:egress to the flying wage requirement. g. Equal Benefits for Employees with Spouses arid Employees with Domestic Partners.When awarding compeii vely solicited contracts valued at over$100,000 whose Ocotr'a tors maintdn 51 or more full time employees on they payrolls during 20 or more calendar work weeks,the Equal Benefits for Domestic Pa-there Ordinance.2005-3494 requires certain contractors doing business with the City of Miami Beach,who are awarded a contract pursuant to competitive proposals,to provide'Equal Benefits'to their employees with domestic partners,as they provide to employees with spouses.The Ordinance applies to all employees of a Contractor who viol(within the City limits of the City of Miami Beach,Faida;and the Contractor's employees located in the United States,but cuLide of the City of Fs amt Beach limits,who are directly per`orrning work on the contract within the City of fFciarri Beach. A. Does ye+ut company provide cr stiffer access to any benefits to employees with spouses or to spouses of employees? f Nil YES F-1 N° B. Do , company provide or offer access to any benefits to employees:r,th(sans or opposite sexy domestic paters'or to domestic partnersof employees'? YES NO • RC=P 2015-013-Y3 - P'o,3e 1 l .CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 5 I P a g e CyjG4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services • C Please check ail ter'efits that apply la your arswera above and list in the"other`section any additional benefit not already specified,Note; some benefits are provided to employees because they have a spouse or domestic partner,.such as bereavement leave;other benells are prvided duecdy to the spouse or domestic partr,er,such medical inst ranee. BENEFIT Firm Provides fir Firm Provides for Firm does not Employees with Employees with Provide Benefit. Spouses. D omestic Partners Health - Sick Leave . Family Medical Leati Bereavement Leave If Proposer cannot offer a tenefit to domestic paters because of reasons outside your control, (e.g.,there are no insurance provldels in your area willing to offer domestic partner coverage)you may be eigible for Reasonable Measures compliance.To comply on this basis,you must agree to pays a cash equivalent and submit a completed Reasonable Measures Application (attached)with all necessary documentation.Your Reasonable Measures Application will be reviewed for consideration by the City Manager,or his designee Approval is nct guaranteed and the City Manager's decision is final.Further kdormatiori on the Equal Benefits requirement-3 Roble at w ww.miarnibeeatfrf.gov/prccurerr enlL t�.. Public Entity Crimes.Section 287.133(2)(4 Florida Statutes,as currently enacted or as amended from time to lime,states that a person or affiliate who has been placed on the convicted vendor kst following a conviction for a public entity crime may not submit a proposal, proposal,or reply on a contract to provide any goods or services to a public entity,may not submit a proposal, proposal,or reply on a contract with a public entity for the construction or repo of a pubic building er public work;may not submit proposals,proposals,or replies on leases of real property to a public entity;may non be awarded cr perform wort as a contractor, supplier,subcontractor,or consultant under a contract with any public entity;and may not transact business with any public entity in excess c-f the threshold amount provided in s.287.017 for CATEGORY TWO for a period of 36 months following the dale ci • being placed on the convicted vendor list SUBMITTAL REQUIREMENT:No additional submittal is required.By virtue of executing this affidavit document,Proposer agrees with the requkemenls of Section 287.133,Floirttla Statutes,and certifies it has not been placed on convicted vendor£51. 11, Acknowledgement of Addendum. Alter issuance of solicitation,the City may release one or more addendum to the solicitation which may provide additional information to Proposers or alter solicitation requirements. The City will strive to reach every Proposer having received solicitation through the Cihy s a-procurement system, PublicPUrchase.carm.However, Proposers are sold responsible for assuring they have received any and a4 addendum issued pursuant to solicitation.This Acknowledgement of • Addendum section certifies that the Proposer has received all addendum released by the City pursuant to this soLoitallon.Failure to obtain and acknowledge receipt of all addenda may result;in proposal disqualification. 1,141)o ernrirr ( k,5a1 to Gan tin Initial to Confirm Fret 4 Rd}i Rr wpt —117 Addendum 1 Addendum 6 Addendum 11 Addendum 2 Addendum 7 Addendum 12 Addendum 3 • Addendum 8 I Addendum 13 Addendum 4 Addendum 9 Addendum 14 Addendum 3 Addendum 10 ;Addendum 15 If additi al cantirmation of addendum is required;submit under seperate cover. RFP 2WW5-013-YG Page 18 CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION - 6 I P a g e I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services • DISCLOSURE AND DISCLAIMER SECTION The sericitation referenced herein is being furnished to the recpient by the City of Miami Beach(the'C iy')'er the rea pienr's ccnven fence. Any anion take:by the City in response b Proposals rrae'a perseant la this solicitation.or vi'nak:,ng any award,or in failing or refusing to make any award pursuant to stub Proposals,or in candling awards,or in withdrawing or canceffing this sclidrtation,either before ar after issuance cf an award,shad be without any abeity or c igation on the.part of Ire City. 11 its sale discretcn,the City nay withdraw the solicitalrcet either before or after, receiving prcposals,may accept cr reject proposals,and may accept proposals which deviate from the soticitatien,as it deems appropriate and in its best interest In is sore discretion,the City may determine the qe ificatins and acceptability of any party or parties eebmtltr g Propos s in response to Ih s soFcitation. Following submission of a Ed cr Proposal the applicant gees to de.livar sue!,ktther details..'nfcmatien and assurarces, ince‘;ding franciaf and diviosore data, retatng to the F=oposal and the applicant including, without Fmilafion, the appicarts alniates,officers, directors,shareholders,partners and employers,as requested by the City in its dscreticrt, The'nforma:ion ntainod here,is prceided se;e:y for the convenience cf prospective Proposers.!t is the responsibility of the°ecipiert to assure itself that information contained herein.s accurate and complete.The City does not provide any assurances as to the accuracy of any nformalicrr it this sot;citation_ Any reliance on these contents,or on any permired xmmun:catirns with Cty ofidcis,shat be at the recipient's own risk.Proposers should rely.exefusively co their own in'iesligaatiors,interpretaticrs,and analyses.The solicitation is being:ro'/+red by the City without any warranty or representation,express cc mpfied,as to is ecctent,its accuracy,or its completeeess.No warranty or ter resentation is made by the City or its agents that any Proposal con'omning to these rese,iremento will I e selected for cansderation,r.egodiatio ,Cr approva. The City shall ?a.‘e no obligatzan or Debility with Fesprecl to this solicitation,the selection and the award prcoans,or whether any award will be made Any recipient of this sotiatafon Kfio responds hereto fthhy acknowledges all the provisions of this Disclosure and Disclaimer,is totally relying on this Disclosure and Csclaimer,and agrees to be bound by the terms hereof.My Proposals su+•vmitted to the City pursuant to this solicitaticat are submitted at the sole risk and responsibility of the party suljmitting such Proposal. This solicitation is made sutiect to correction of errors,omissions,or withdrawal from the market.nithcut notice,Information is for guidance only,and does not constitute all cr any part of err agreement_ The City and all Proposers will be bcvd only as,if and when a Prepped(a Proposas;,as same may be modified,and the apptncatae definitive agreements pertaining thereto,are approved and executed by the parties,and:hen on y pursuant to the terms of the definitive agreements executed among the parties.Any response to this splici1e;ion may be accepted or rejected by the City for any reason,or fcr no reason,without any resultant liability to the City. The City is goveirsd by the Gavemment•in•the-Sunshine La'#i,and all Prposais and supporting document shall be subject to disclosure as required by such law.All Proposals shall be submitted in sealed proposal form and shall remain confidential to tire extent permitted by Florida.Siatutes,until the date and time selected for opening the responses,At that time,all documents reeeived by the City shat become public records. Proposers are expected to melee all disclosures and declarations as requested fro This solicitation.By subrrssion of a Proposal,the Proposer acknowledges.aid agrees that the City gas the right to make any inquiry or investigaben it deems appropriate to sebstantiale or supplement informa ice contained n the Proposal,and authorizes the release to the City of any and all rfcrmalion sought in such inquiry or investigalicc. Each Proposer certifies that the information contained a the Proposal is brie, accurate and complete, to the best of its knowledge, information,and belief. h ottrithstand r g the foregoing or anything coxntairrred,.fl the solicitation,all Proposers agree that in the e'.ent of a final;rnappeafakle judgme-t by a court of competent yurisdiction fat-eh imposes on he City any liability anslrsg out of Me.soliatalicn,or any response thereto,or any action or enaction by the City with respect`thereto,such Lability shall be limited to S1O,C4)0.CIO as acgeed•upon and liquidated damages.The prexicus sentence,however, s"trall not be construed to prorrm'aenl any of the ether prav'isicrs of this Disclosure and Disclaimer.thi,h imposes no nattily on the City in tte event of any d-fferences in'ar,guage between This Disclosure and Disdairrkr and she balance of the solicitation,it is understood that the provisions cf this Discosure and Disclaimer shall always govern.The solicitation and any disputes wising from the soficilaticn shat be governod by andconstrved In ewer-dance WIIA tire cf the State of Florida. REP-201 3-YG Rae:: �w CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 7 I P a g e cyjiG4S Secure Solutions City of Miami Beach • RFP#:2015-013-YG Security Officer Services • PROPOSER CERTIFICATION • - a I hereby certify that I,as an authorized agent of the Proposer,am submitting the following intimation as my firms proposal;Proposer agrees to complete and unconditional acceptance of the terms and conditions of this document, , inclusive of this sofrcitaion,all attaclianents,exhibits and appendices and the contents of any Addenda released hereto, and the Disclosure and Disclaimer Statement;Proposer agrees to be bound to any and all specifications,terms and conditions crttained in the solicitation,and any released Addenda and understand that the following are requirements , of this solicitation and failure to comply will result in disqualification of proposal submitted;Proposer has nct divulged, discussed,or compared the proposal vrith other Proposers and has not colluded with any other Proposer or party to any other proposal;Proposer acknowledges that all infonnaiion contained herein is part of the public domain as defined by the State of Florida Sunshine and Public Records Laws;all responses,data and information contained in this proposal, inclusive of the Proposal Certification,Questionnaire and Requirements Affidavit are true and accurate- Harm of PrecosEes fwtricrtterr Reg-Merle/Re; T-nle cr Frapcsers Authai au Recre=„enia1i v Eduardo Yero G4S General Manager s1natureoi Pre y d DI 7/ (/ ` ,,,:`-'''' ..__.:777 - . - ' , • ' StLt.ai 1' - ) - On t i day of 0' }' ',,�j rsron` � a appeared before m&dr<a/J® r0 w "- - ' County o` - 1' - '; - stated that{s}he is the t.. kfil/f - of`S4 �, ".' oration,and that the instrument eras signed in behalf of the said corporation by authority of its board of directors and acknowledged said _ . - .- instrument to be its voluntary act and deed.Before me: ; -. .;Notary Public for the GI ir,illglillv i- My Car:nisi on Expires: — (a--/ 1 • arovm�v x sago or e. Kim Roer1gueZ • P.,co�,�,sson FP 2121105 1 E.n9.sooriceguis i . • t _ ge2O CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 8 P a g e 74. G4S Secure Solutions City of Miami Beach I_ RFP#: 2015-013-YG Security Officer Services Litigation History Additional information is provided in accordance with paragraph 4 in the above Affidavit. G4S Secure Solutions(USA) Inc. is subject to routine litigation in the ordinary course of its business, some of which involves claims resulting from the conduct of its security operations. We maintain general liability and other insurance coverage which we believe adequately insure against the risks associated with these claims. There is no pending litigation or like legal proceeding which, in the event of an adverse verdict or result, would have a materially adverse impact on G4S Secure Solutions (USA) Inc., its operations or its financial condition. The table below is a list of all litigation in the last 5 years for the G4S Miami area office. Date Claim Status Description Claim Number Court 8/15/2010 ,Open Alleged Negligent 000891-088289- Circuit Court of Act-Other , , GB-01 the 11th Judicial Circuit in and for • Miami-Dade County, Florida 8/19/2011 Closed Security 000891-091151- Miami-Dade Guard/Asset GB-01 County Circuit Protection Court, Florida • • • • • • • • • CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 9 P a g e • _ ais G4S Secure Solutions City of Miami Beach .RFP#: 2015-013-YG Security Officer Services 1 .3 C.1 Minimum, Qualifications Requirements (Appendix C) G4S meets all C.1. Minimum qualifications requirements. These requirements include a copy of our Class AB license, detailed references of similarly scoped (public sector)security guard services within the last five (5) years, and compliance with the Dun & Bradstreet Supplier Qualification Report(SQR). Licenses and Certifications[C.1.a.] RFP Reference: C1. Minimum Requirements. Paragraph a. SUBMITTAL REQUIREMENT: Submit a copy' of Proposer's Class "B,""AA,_"or"AB,"as applicable, for the location identified in Proposal. On the following pages, G4S has provided the licensing documentation to satisfy the City of Miami Beach's minimum qualification requirements, including: • Florida Private Investigative and Security Agency Branch Office(License#AB8700008) • Miami Security Officer School Training Facility (License#DS8800002) • Miami Dade County Local Tax Receipt(207191) • State of Florida,Department of State, authority to operate in Florida(217,838) • • • • • • • CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 10 P a g a (1,45 G4S Secure Solutions City of Miami Beach RFP#:2015 013 YG Security Officer Services • Figure 1:Private Investigative and Security Agency Branch Office FLORIDA DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES ADAM H.PUTNAM COMMISSIONER • DIVISION OF LICENSING 03/20/14 06/30/17 AB8700008 DATE ISSUED DATE OF EXPIRATION LICENSE NUMBER G4S SECURE SOLUTIONS (USA) INC MIAMI) DBA G4S 5820 BLUE LAGOON DRIVE SUITE 300 MIAMI,FL 33126 • .f N THE PRIVATE INVESTIGATIVE&SECURITY AGENCY BRANCH OFFICE NAMED ABOVE IS LICENSED AND REGULATED UNDER THE PROVISIONS OF CHAPTER 493,FLORIDA STATUTES. C,g/C44., A=204.*d. :f :'. ADAM H.PUTNAM III YIO Lt COMMISSIONER • • CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 11 P a g e cyj I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services • Figure 2:Miami Security Officer SchooUTraining Facility . CAA. _— -'to_ 0A.t _ - FLORIDADEPARI ENT OF AGRICULTURE AND CONSUMER SERVICES ADAM H.PUTNAM • COMMISSIONER DIVISION OF LICENSING • 4' 12/15/14 02/06/17 DS8800002 • ••- DATE ISSUED DATE OF EXPIRATION LICENSE NUMBER a I .1 G4S--SECUR - (USA)INC. -- - - - — — DBA G4S • 5820 BLUE LAGOON DRIVE 1 SUITE 300 MIAMI,FL 33126 • w di . THE SECURITY OFFICER SCHOOL OR TRAINING FACILITY NAMED ABOVE IS LICENSED AND REGULATED UNDER THE PROVISIONS OF CHAPTER 493,FLORIDA STATUTES. • • ; - c..ja4V ierigNra ADAM H.PUTNAM COMMISSIONER • • • .. _ !Ji• .. n _- u! 'T -.••i '`� �.:'...'• '. of TY _- �•,• .. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 12 I P a g e Q j i G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services • Figure 3:Miami-Dade Local Business Tax Receipt Local Business Tax Receipt 1B1: Miami-Dade County, State of Florida -:THIS IS NM A BILL -00 NOT PAY 6749429 BUSINESS NAME/LOCATION RECEIPT NO, EXPIRES G4S RENEWAL SEPTEMBER 30, 2015 5820 BLUE LAGOON DR 300 207191 MLsr he outplayed at place of business MIAMI FL 33126 Pursuant to County Code Chapter 8A-Art.9&10 OWNER SEC.TYPE OF BUSINES- 6d5 SECURE SOLUTIONS USA INC 213 GUARD PATROL AGE CY BY TAX C LLE TOR DS83000�02 BY TAX COLLECTOR Emplayee(s) 621 $44657.50 07/17/2014 CHECK 21-14-023149 This Local Business Tex Reteipt only cents payment of the Local Husi 'Tao.The Receipt is not a license, permit sr a eertvreationotnor bolder oquatifications,to do business.NW er arum ramps,with any goverernercal of nonyoeemmon.ol regt lato,y town and renal rearms which apply to Eto•usaaess. The RECEIPT NO.shoes must be displayed ea all eatenercial relic -Miami-Dade Code Sec Ss-?766 Fes mom infomootiott visit www neon lla o.g•yta,collecmr COF3 Local Business Tax Receipt IBT Miami-Dade County, State of Florida -71-US IS NOT A 911 -DO V0TPAY 6749429 BUSINESS NAME/LOCATION RECEIPT NO. EXPIRES 645 RENEWAL SEPTEMBER 30, 2015 5820 BLUE LAGOON DR 300 1941096 Mi";t ix displayed a;piece of business MIAMI FL 33126 Pursuant to County Code Chapter llA-A,L 9&10 OWNER SAC TYPE OF BUSINESS PAYMENT RECEIVe0 W5 SECURE SOLUT°ONS USA INC 213 PRIVATE IVESTIGAT,VE AGENCY BY Tax COLLECTOR Employee(s) 21 ABB7GOU8 5157.50 07/16/2014 CHECK21-14-021030 This Local Business Tan Receipt ordy confirm payment at the local liminess Tax The Receipt is rota license, permit or certification et Ste holder's qualifications.todabtsmens.Ned fie must comply wilt any governmental or nengoveremalxal regulatory laws and renuirunents which apply to the Weems_ The RECEIPT NO.above uses:be displayed an eft commie!%eNci -Miami-Dade Cede Sec 8e-2t6. For roar*Worms:bon.visa:team de oe CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 13 P a g e jeS G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services Figure 4:Miami-Dade Fire Rescue Department Operating Permit MIAM•OAD FIRE RESCUE DEPARTMENT FIRE PREVENTION DI':tslo z 9368.NW41ST STREET MIAMFDADE MIAMI,FLORIDA 231-18 PERMIT COUNTY t1r!av is:ire Annual(7peralir9 Permit issued by vie Miarni-Dade Fife Rescue Depart:nef3. Should you have anyquer;t,o1a regarding tds pernit.please corlad tl'e Fire Prevention Division 3's(7u5)331.4000 PERMIT#:04126-00036 G4S SECURE SOLUTION USA 5820 BLUE LAGOON DR SUITE 3 MIAMI,FL 33126 mt along doffed(ne.and pad�in far pace of nr,e:,oasi PERMIT CERTIFICATE • MIAMh=ADE MIAMI-DACE FIRE RESCUE DU AR fMENT COUNTY ANNUAL OPERATING PERMI r • 93{4 N+141 STREET MIAMI,FLORIDA 33178 (786)331-4tt00 PERMIT#:04126-00036 Permit Expires Last Date In The Month Of: January:2016 Business Name: Business Owner/Rep: Gds SECURE SOLUTIONS(USA)INC/Business JUAN CASAL Offices Billing Address: Location Address: 045 SECURE SOLUTION USA 04-5 SECURE SOLUTIONS(USA)INC 5820 BLUE LAGOON DR SUITE 3 5820-5820 BLUE LAGOON DR FLOOR 3.3 MIAMI,FL 33128 MIAMI.FL 33126 This Permit is issued in accordance with Article ill,Section 14-53,of the code of Miami-Dade County and the South Florida Fire Prevention Code under conditions set forth herein. Violations of the aforementioned will be grounds for Immediate revocation. tmm lie. ``` * Permit Authorized by: • it i{ 11 41f4;T //.;Oep-�=t�� Chief Alan Ft_Cominslty,Fire Merstsd -".1111•' Miami-Dade Fire Rescue O4psrdnent rv':llrfi5 cipsemarvxa,p, .,..1e Za CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 14 I P a g e • aj1 G4S Secure Solutions City of Miami Beach J RFP#:2015-013-YG Security Officer Services Figure 5:Florida Department of State,Authority to Operate State of Florida Department of State I certify from the records of this office that G4S SECURE SOLUTIONS(USA) MC.is a corporation organized under the laws of the State of Florida,filed on December 4, 1958. The document number of this corporation is 217838_ I further certify that said corporation has paid all fees due this office through December 31,2015,that its most recent annual report/uniform business report was filed on January 13,2015,and that its status is active_ I further certify that said corporation has not filed Articles of Dissolution_ Given under my hand and the Great Seal of the State of Florida at Tallahassee,the Capital,this the Thirteenth day of 1prd,2015 Cf t.:.- -••- .,4 -,,,,,,. : vi_Vr,— '•Vr-f, --',e"Vi .• Ke% 04Ak •,' YYf Secretary of State • Trading Number:CU2710143129 To authenticate this certifcate,sisit the following site,enter this number,and then follow the instructions displayed_ htipsJ/sersices_snnbizorg/Ffingsi•Certif cateof5tatus!CertiiicateAuthentication CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 15 I P a g e Ogj I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Past Performance References [RFP C.1 b.] RFP Reference:C1. Minimum Requirements. Paragraph b. SUBMITTAL REQUIREMENT:For each of the three(3)public sector clients,provide the following:Name of Agency;Agency Contract Representative and Contact Information;Beginning and Ending Dates of Service. At G4S, our goal is not only to fulfill a contract with our client; our goal is to enjoy a successful long-term relationship built of establishing a service model that provides true value. We are pleased to provide the following representative list of our premier clients as confirmation of our commitment to deliver to the City of Miami Beach the best security program. Please contact our references to learn more about our performance. Additional references are available upon request. Reference#1-City of Miami Beach Captain Enrique H. Doce Patrol Division, North District Commander, Special Event Commander • 1100 Washington Avenue, Miami Beach, Florida 33139 (305)673-7776 ext. 5449 EnriqueDoce @miamibeachfl.gov Fax(305)673-7867 Project Duration: Memorial Day Weekend, 2012, 2013, 2014, and 2015 Scope of Work: G4S was awarded the contract in 2012 to provide unarmed security officers and crowd control services during Memorial Day weekend. G4S provided 76 officers from our most elite service level, the Custom Protection Officer®. These officers have law enforcement or military backgrounds with the necessary qualifications, training and skills to competently interface with the Miami Beach Police Department while providing professional representation to the City's visitors, residents, employees and businesses. The G4S officers' performance was such a success that we have been selected every year since to provide 114 Security Officers per day during that challenging weekend (4,500 total hours of service). No other company can match an effort of that magnitude with the outstanding quality to ensure the safety and enjoyment of Miami Beach. G4S received positive feedback from the Miami Beach Police Department on June 23, 2015 (from Captain Doce to G4S General Manager Eduardo Yero). I wanted to take this opportunity in thanking you and your team for your assistance during this year's Memorial Weekend. As in years past the guards from your team were extremely professional very helpful and motivated. I drove around during the course of the weekend and witnessed the G4S guards at their posts looking sharp and always eager to help out. I personally witnessed them engage residents and guests in a positive manner. Without the help from your team members we would not have had such a successful outcome. Captain Enrique Doce Miami Beach Police Department CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 16 I P a g e CLS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Reference#2-Miami-Dade County Public Works Mr. Donald Thompson Security Program Administrator 111 NW 1st Street, Suite 1510, Miami, FL 33128 305-375-2005 dxt @miamidade.gov Fax 305-375-3338 Project duration: 1997 to present Scope of Work: Since 1997, G4S has been providing security services to Miami-Dade Public Works, consisting of 1,512 hours per week of service using our Custom Protection Officer® program. G4S began Officers perform gatehouse operations, access control and vehicle patrol at seven (7) Public Works facilities. I am very much satisfied with the excellent service they provide, from the Security Officers themselves to the account representatives, and the regional management that we deal with. Any problems that may arise are quickly resolved, and they have shown exceptional flexibility when working under unusual circumstances such as post-hurricane outages and construction-related difficulties. Donald Thompson Security Supervisor CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 17 I P a g e tP I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Reference#3-Orange County Mr. Bruce Hellelbower Building Security Coordinator 2010 E. Michigan St., Orlando, FL 32803 407-836-7475 Bruce.hesselbower@ocl.net Fax 407-836-7498 • Secondary Contact Mr. Julian Mewton Orange County Downtown District Supervisor 1944 Michigan St., Orlando, FL 32806 407-836-0161 julian.mewton @ocfl.net Fax 407-836-7491 Project Duration: 2002 to present Scope of Work: Since January 1, 2002, G4S' Orlando office has been the prime contractor to the Government of Orange County, Facilities Management Division, providing both armed and unarmed security officer services. Initially contracted in 2002 to provide 2,000 weekly hours of security service to the Orange County Government, our services have grown to over 6,370.50 weekly hours. G4S services 28 County buildings to include the County Courthouse Complex, Annexed Orange County Courthouses, Juvenile Court, Orange County Administration Building, Water Treatment and Reclamation Facilities, Solid Waste Landfill, Barnett Park, Corrections Department including the Video Visitation Center, Orange County Medical Clinic,and the Orange County Regional History Museum and the Sunrail Station. The hours do not include additional hours requested by the Orange County Convention Center to cover Special events. We provide armed officers; unarmed officers, vehicle patrols; 3,329 of those hours involve courthouse screening procedures and duties. G4S provides all management, supervision, labor, training, officer relief, supplies and equipment for physical building security. G4S Security Officers provide screening/access control of all employees and visitors using walk-through magnetometers, hand wands and X-Ray screening equipment; maintain physical security; operate entrance/exit control posts; conduct motorized and foot perimeter patrols; monitor CCTV control room, security, fire and utility systems; enforce building rules and regulations; provide crowd control; prevent unauthorized access; record and report hazardous conditions; emergency and event response; provide First Aid/CPR; and other additional duties as required. G4S personnel have received numerous commendations for outstanding customer service. Providing the best security is almost always not the cheapest. The need for competent, effective, reliable security services at the courthouses and at our water and wastewater facilities is imperative. John Terwilliger Director of Administrative Services Orange County, Florida CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 18 I P a g e a/1 G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Reference#4-Broward County Ian M. Mitchell Project Manager Facilities Management Division/Governmental Center 115 S. Andrews Ave Fort Lauderdale, Florida 33301 954.357.5675 imitchell @broward.org Project Duration: 1985 to present Scope of Work: Service with Broward County initially commenced in 1985 and has since expanded over the course of the contract. G4S currently provides over 2,595 hours per week of security services for Broward County's various facilities including Facilities Management, Libraries, Mass Transit, Parks, Revenue, Office of Environmental Services and Aviation Department. Our services encompass parks and recreation,water plants,courthouses, bus terminals, and government center parking areas. Reference#5-Collier County Mr. Dennis Linguidi Director of Facilities Management 3301 Tamiami Trail E., Building W Naples, FL 34112 239-252-8760 • dennislinguidi @colliergov.net Fax 239-252-6425 Project Duration: 2004 to present Scope of Work: Since 2004, G4S has been providing security services for the Collier County government, consisting of 1,132 hours per week of service over seven (7) sites. G4S provides 32 qualified Security Officers from our elite Custom Protection Officer®and Upscale Security Officer programs. Security Officers are responsible for full screening services for the main courthouse and manning the administration building where county officials are housed. G4S also performs screening services using walk-through machines and hand-held wands for the County's library facilities, County Health Building and other off-site facilities. G4S officers also provide monitoring services for the Collier County Government Operations Center located within facilities management where the automation equipment is located. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 19 I P a g MIS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Reference#6-Hillsborough County Major James Livingston Major-Court Operations Division 2008 East 8th Ave., Tampa, FL 33605 813-242-5061 jlivings @hcso.tampa.fl.us Fax 813-323-2903 Project Duration: 2009 to present Scope of Work: G4S' security services for Hillsborough County encompass 1,800 hours per week of service spanning over 250,000 square feet and three(3) locations. G4S provides a blended security program of armed and unarmed Custom Protection Officers® and Upscale Security Officers. Over 45 officers are dedicated to Hillsborough County at the main courthouse and satellite offices, serving over 3,000 visitors daily through advanced access control measures, manned guarding and patrols. All officers receive specialized training through our corporate university,which includes over 80-hours of pre-assignment/OJT and FAA approved"Safe Passage"(screening and x-ray). To maintain a weapon free environment, the officers are skilled at using magnetometer and hand wand devices and are responsible for screening all individuals entering the courthouse, x-ray screening of parcels, bags and briefcases carried into the courthouse. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 20 I P 3 .� aljuiS 1 G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services 2 TAB 2: Experience and Qualifications 2.1 Qualifications of Proposing Firm. Submit detailed information regarding the firm's history and relevant experience and proven track record of providing the scope of services similar as identified in this solicitation, j including experience in providing similar scope of services to public sector agencies. For each project that the Proposer submits as evidence of similar experience, the following is required:project description, agency name, agency contact, contact telephone&email, and year(s)and term of engagement. 2.2 Qualifications of Proposer Team. Provide an organizational chart of all personnel and consultants to be used for this project if awarded, the role that each team member will play in providing the services detailed herein and each team members'qualifications.A resume of each individual, including education, experience, and any other pertinent information, shall be included for each Proposal team member to be assigned to this contract. 2.3 Financial Capacity. Each Proposer shall arrange for Dun&Bradstreet to submit a Supplier Qualification Report(SQR) directly to the Procurement Contact named herein. No proposal will be considered without receipt, by the City, of the SQR directly from Dun&Bradstreet. The cost of the preparation of the SOR shall be the responsibility of the Proposer. The Proposer shall request the SOR report from D&B at: https://supplierportal.dnb.com/webapp/wcs/stores/servlet/SupplierPortal?storeld=11696 Proposers are responsible for the accuracy of the information contained in its SQR. It is highly recommended that each Proposer review the information contained in its SQR for accuracy prior to submittal to the City and as early as possible in the solicitation process. For assistance with any portion of the SQR submittal process, contact Dun &Bradstreet at 800-424-2495. 2.1 Qualifications of Proposing Firm G4S Secure Solutions (USA) Inc., headquartered in Jupiter, Florida, is a wholly owned subsidiary of G4S plc, the largest employer quoted on the London Stock Exchange. G4S is a leading provider of security solutions, specializing in outsourced business processes and facilities.in sectors where security and safety risks are considered a strategic threat. I ,��. ,i , '- With a storied history dating back to 1901 in Denmark, G4S has ��; ' -� y �i+ grown to become the world's leading security solutions group � ��! � �� r � �-C�� yea �r -� _. k g 9 ty 9 P 1'- ` = 1i � . „ET. I with more than 625,000 employees and operations in more than 9 Ei , J i'" -. r$1 • 1� 120 countries. G4S works across a wide range of business in ,_ ., i L j ,, ' i ,z, ' _a, f sectors and is a major provider of risk management and ® l �� protection to governments and businesses around the world.To {� I -�c�� 4, , { ' s - ! support our clients' needs, G4S focuses on the assessment of d - current and future risks and develops secure solutions to r-- --,-, -Aft: minimize their impact. G4S has been in operation in the United States for 61 years, tracing its beginnings in the U.S back to 1954 when George Wackenhut founded The Wackenhut Corporation in Miami, Florida. After 48 years of unprecedented growth and becoming one of the largest security companies in America, The Wackenhut CONFIDENTIAL, PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 21 ! P a g e aj$1 G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Corporation merged with Group 4 Falck A/S based in Denmark in 2002, beginning a transformation to becoming the global security leader. Through our unique combination of personnel, project management, risk management, and technology solutions, G4S focuses on advancing the safety and security of governments and businesses, ensuring the security of key assets—people, property, products and reputation. We are a total security solutions provider with services going beyond what traditional security companies can offer, as highlighted by our complete service offering list below.. Table 1:G4S Com.lete List of Services Offerin.s Manned Security Services Technology&Technical Services Security Officers Secure Trax® TM Platform: Incident Reporting & Receptionist Services Notification technology Switchboard Operators RISK360TM: Risk Management Software Command Center Operators Access Control Alarm Monitoring & Response Video Management Mobile Patrol Identity Management Employee Shuttle Drivers Biometric Technology Emergency Response Teams Smart Card Technology Emergency Key-holding Visitor Management Fire Protection Officers Intrusion Detection High Value Goods Vehicle Escorts Remote Monitoring Center Transportation Services OneFacility Facility Management Software Installation and Maintenance CCTV/Video Analytics S stems Inte•ration Security Consulting &Design Services ! Compliance& Investigative Services Security Risk Assessments Pre-Employment Screening Security Systems Engineering and Design Safe2Say Hotline: Incident& Ethics Management Master Planning Harassment/Discrimination Investigations Benchmarking FMLA Abuse Business Continuity Planning Workplace Violence Investigations Security Policies, Methods&Procedures Employee Dishonesty Site Penetration Testing Executive Backgrounds Labor Dis•ute In the United States, G4S employs over 40,000 employees and provides security services throughout a network of over 110 local area offices. We currently provide over 60,000 weekly hours of service for government contracts, representing over 3,120,000 hours of security service per year. This includes several contracts that have been running for more than 30 consecutive years, a testament to our refined operational processes and dedication to long-term partnerships.The City of Miami Beach will benefit from our experienced capabilities that span a wide array of operating environments that include courthouses, administrative office buildings, libraries, hospitals, campuses, command/control centers, financial centers, and transit facilities. G4S is a leader in providing similar security services in the Municipal and County Government sector with CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 22 P a g e 14 1 G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services contracts involving the State of Florida and many of its cities and counties. For many years we have secured the courthouses and agency facilities, such as in Broward, Duval, Marion, Polk and Orange counties. G4S Security Officers provide numerous services throughout these sites, including: • Communicating effectively with the public and City government personnel; directs visitors to personnel and services within the facility. • Conducting patrols in accordance with routes and schedules established in the Post Orders. • Verifying the security of safes and areas where equipment or valuable materials are stored. • Ensuring that only authorized personnel are permitted access to closed or restricted facilities or areas by detaining unidentified or unauthorized individuals. • Responding to reports of ill or injured patrons, visitors, or employee, renders first aid, and notifies supervisor if further assistance is considered necessary or desirable. • Reporting safety hazards, malfunctioning equipment, liquid spills,and other such matters to appropriate maintenance personnel. • Monitoring and operating facility fire alarm and intrusion detection systems and other protection devices or facility equipment. • Responding to scene of locally activated fire, burglary or other alarms, or other emergency situations, evaluate situations encountered, and takes action as prescribed in Post Orders and/or facility self- protection plans. • Investigating questionable acts or behavior observed or reported on client premises and questioning witnesses and suspects to ascertain or verify facts. • Maintaining daily logs and writing incident reports. • Providing escorts and assisting other security personnel as required. • Directing traffic, controls parking, issuing parking violation warnings as authorized • Conducting Screening Procedures to include x-ray machines, hand held and walk through magnetometers; conduct pat downs to prevent unauthorized items from entering client facilities or meetings. Based upon critical knowledge we have gained from our wide spectrum of government customers, we have developed the expertise to meet any challenge. While we have provided reference information in the next section, we provide a representative list of local government clients across the country. G4S would be happy to provide reference contract information on these customers in Table 4 upon request: Table 2: G4S Local Government Clients Client Name and Location Hours Per Start of Service Week Orange County, Orlando, FL 6,370 January 2002 Jacksonville Sheriffs Office, Jacksonville, FL 3,450 November 2004 Broward County, Ft. Lauderdale, FL 2,595 September 1996 City of Jacksonville, Jacksonville, FL 1,800 October 2002 State of Florida, Division of Administrative 760 January 2002 Hearings Sarasota County, Sarasota, FL 443 Since 1999 Collier County, Naples, FL 1,200 November 2004 City of Houston, Houston, TX 8,500 July 2009 Metropolitan Government of Nashville and 6,900 December 1992 Davidson County, Nashville, TN DHS -Federal Protective Services, Albany, NY 3,000 October 2002 DHS Immigration and Customs Enforcement 5,800 August 2009 DHS U.S. Customs and Border Protection 12,370 August 2006 CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 23 1 P a g e �4 G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Client Name and Location Hours Per Start of Service ! Week Cit of Portland, Portland, OR 1,675 November 2011 ��.ra > ► �•��=fia�icarika��t•`• 1,400 Jul 2002 Milwaukee Count Sheriff, WI 1,400 Janua 2010 Cit of El Paso TX Police De•artment 390 Se•tember 2012 Past Performance References [RFP C.1 b.] RFP Reference: C1. Minimum Requirements. Paragraph b. At G4S, our goal is not only to fulfill a contract with our client; our goal is to enjoy a successful long-term relationship built of establishing a service model that provides true value. We are pleased to provide the following representative list of our premier clients as confirmation of our commitment to deliver to the City of Miami Beach the best security program. These references also meet the C1. Minimum Requirements (B). Please contact our references to learn more about our performance. Additional references are available upon request. • CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 24 I P a g e 4:743 I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Reference#1-City of Miami Beach Captain Enrique H. Doce Patrol Division, North District Commander, Special Event Commander 1100 Washington Avenue, Miami Beach, Florida 33139 (305) 673-7776 ext. 5449 EnriqueDoce @miamibeachfl.gov Fax(305)673-7867 Project Duration: Memorial Day Weekend, 2012, 2013, 2014, and 2015 Scope of Work: G4S was awarded the contract in 2012 to provide unarmed security officers and crowd control services during Memorial Day weekend. G4S provided 76 officers from our most elite service level, the Custom Protection Officer®. These officers have law enforcement or military backgrounds with the necessary qualifications, training and skills to competently interface with the Miami Beach Police Department while providing professional representation to the City's visitors, residents, employees and businesses. The G4S officers' performance was such a success that we have been selected every year since to provide 114 Security Officers per day during that challenging weekend(4,500 total hours of service). No other company can match an effort of that magnitude with the outstanding quality to ensure the safety and enjoyment of Miami Beach. G4S received positive feedback from the Miami Beach Police Department on June 23, 2015 (from Captain Doce to G4S General Manager Eduardo Yero). I wanted to take this opportunity in thanking you and your team for your assistance during this year's Memorial Weekend. As in years past the guards from your team were extremely professional very helpful and motivated. I drove around during the course of the weekend and witnessed the G4S guards at their posts looking sharp and always eager to help out. I personally witnessed them engage residents and guests in a positive manner. Without the help from your team members we would not have had such a successful outcome. Captain Enrique Doce Miami Beach Police Department CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 25 I P a g e f7 I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Reference#2-Miami-Dade County Public Works Mr. Donald Thompson Security Program Administrator 111 NW 1st Street, Suite 1510, Miami, FL 33128 305-375-2005 dxt @miamidade.gov Fax 305-375-3338 Project duration: 1997 to present Scope of Work: Since 1997, G4S has been providing security services to Miami-Dade Public Works, consisting of 1,512 hours per week of service using our Custom Protection Officer® program. G4S began Officers perform gatehouse operations, access control and vehicle patrol at seven (7) Public Works facilities. I am very much satisfied with the excellent service they provide, from the Security Officers themselves to the account representatives, and the regional management that we deal with. Any problems that may arise are quickly resolved, and they have shown exceptional flexibility when working under unusual circumstances such as post- hurricane outages and construction-related difficulties. Donald Thompson Security Supervisor CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 26 I P a g asiS I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services Reference#3-Orange County Mr. Bruce Hesselbower Building Security Coordinator 2010 E. Michigan St., Orlando, FL 32803 407-836-7475 bruce.hesselbower@ocl.net Fax 407-836-7498 Secondary Contact Ms. Julian Mewton Orange County Downtown District Supervisor 1944 Michigan St., Orlando, FL 32806 407-836-0161 julian.mewton @ocfl.net Fax 407-836-7491 Project Duration: 2002 to present Scope of Work: Since January 1, 2002, G4S' Orlando office has been the prime contractor to the Government of Orange County, Facilities Management Division, providing both armed and unarmed security officer services. Initially contracted in 2002 to provide 2,000 weekly hours, our services have grown to over 6,370.50 weekly hours. G4S services 28 County buildings to include the County Courthouse Complex, Annexed Orange County Courthouses, Juvenile Court, Orange County Administration Building, Water Treatment and Reclamation Facilities, Solid Waste Landfill, Barnett Park, Corrections Department including the Video Visitation Center, Orange County Medical Clinic, and the Orange County Regional History Museum and the Sunrail Station. The hours do not include hours requested by the Orange County Convention Center for Special events. We provide armed officers; unarmed officers, vehicle patrols and 3,329 of those hours involve courthouse screening procedures and duties. G4S provides all management, supervision, labor, training, officer relief, supplies and equipment for physical building security. G4S Security Officers provide screening/access control of all employees and visitors using walk-through magnetometers, hand wands and X-Ray screening equipment; maintain physical security; operate entrance/exit control posts; conduct motorized and foot perimeter patrols; monitor CCTV control room, security, fire and utility systems; enforce building rules and regulations; provide crowd control; prevent unauthorized access; record and report hazardous conditions; emergency and event response; provide First Aid/CPR; and other additional duties as required. G4S personnel have received numerous commendations for outstanding customer service. Providing the best security is almost always not the cheapest. The need for competent, effective, reliable security services at the courthouses and at our water and wastewater facilities is imperative. John Terwilliger Director of Administrative Services Orange County, Florida CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 27 P a g CoPJ I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Reference#4-Broward County Ian M. Mitchell Project Manager Facilities Management Division/Governmental Center 115 S.Andrews Ave Fort Lauderdale, Florida 33301 954.357.5675 imitchell @broward.org Project Duration: 1985 to present Scope of Work: Service with Broward County initially commenced in 1985 and has since expanded over the course of the contract. G4S currently provides over 2,595 hours per week of security services for Broward County's various facilities including Facilities Management, Libraries, Mass Transit, Parks, Revenue, Office of Environmental Services and Aviation Department. Our services encompass parks and recreation, water plants, courthouses, bus terminals, and government center parking areas. Reference#5-Collier County Mr. Dennis Linguidi Director of Facilities Management 3301 Tamiami Trail E., Building W Naples, FL 34112 239-252-8760 dennislinguidi @colliergov.net Fax 239-252-6425 Project Duration: 2004 to present Scope of Work: Since 2004, G4S has been providing security services for the Collier County government, consisting of 1,132 hours per week of service over seven (7) sites. G4S provides 32 qualified Security Officers from our elite Custom Protection Officer®and Upscale Security Officer programs. Security Officers are responsible for full screening services for the main courthouse and manning the administration building where county officials are housed. G4S also performs screening services using walk-through machines and hand-held wands for the County's library facilities, County Health Building and other off-site facilities. G4S officers also provide monitoring services for the Collier County Government Operations Center located within facilities management where the automation equipment is located. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 28 I P 3 S I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services Reference#6-Hillsborough County Major James Livingston Major-Court Operations Division 2008 East 8'h Ave., Tampa, FL 33605 813-242-5061 jlivings @hcso.tampa.fl.us Fax 813-323-2903 Project Duration: 2009 to present Scope of Work: G4S'security services for Hillsborough County encompass 1,800 hours per week of service spanning over 250,000 square feet and three (3) locations. G4S provides a blended security program of armed and unarmed Custom Protection Officers® and Upscale Security Officers. Over 45 officers are dedicated to Hillsborough County at the main courthouse and satellite offices, serving over 3,000 visitors daily through advanced access control measures, manned guarding and patrols. All officers receive specialized training through our corporate university, which includes over 80-hours of pre-assignment/OJT and FAA approved "Safe Passage" (screening and x-ray). To maintain a weapon free environment, the officers are skilled at using magnetometer and hand wand devices and are responsible for screening all individuals entering the courthouse, x-ray screening of parcels, bags and briefcases carried into the courthouse. 2.2 Qualifications of Proposer Team G4S' organizational structure offers management supervision at every level of our organization to ensure quality and reliable security services, as follows: • Corporate—Corporate Headquarters Support and Resources • Regional—Florida Regional Operations • Local—Miami Area Office Operations CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 29 I P a g e C743 G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services City of Miami Beach G4S Miami Office Operates 24/7 Supporting the Supervision of Your Account / !arida Reg n / Oversi.ght@W ' ' i Augmen'atio Ge Resources 1+�, Quality Assurance \ G4S Corporate Support • Payroll&Billing •• Contract Compliance&Support • HR '. • Procurement&Purchasing • North America Training Institute • Emergency Services ` • Safety&Safety Director • Experienced Transition Teams • IT&Secure Trax® I G4S Corporate Support Our corporate headquarters develops standardized policies and procedures that prescribe overall operations for the organization. Below are some examples of the corporate resources available to support the City's account: Figure 6: G4S Corporate Support • Pool of readily available pre-qualified and trained • Financial functions, including payroll and billing personnel for Special Events • Security best practices • Disaster and Emergency Services Agreement and • Business processes contingent of over 600 qualified and trained • Staff and line supervision personnel to respond to customer's • Employer-employee relations emergency/disaster situations • Insurance claims,tax data and reports • G4S North America Training Institute • Legal guidance and assistance • Quality Assurance programs • Consulting and investigative services • Experienced transition teams • Guidance and instruction in human resources • Procurement of uniforms, equipment,and supplies • Systems integration • Contract administration support • Safety and Risk management CONFIDENTIAL, PROPRIETARY, COMMERCIAL OR FINANCIAL INFORMATION 30 I P a g e Q I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services Florida Region G4S Florida Region The regional management team is responsible for the supervision of area office operations in their region and the John D'Agata dissemination of corporate policies and procedures Regional Vi€e President throughout all levels of the organization. Under the direction of John D'Agata, Regional Vice Eduardo Yero ; Frank Hernandez President,the G4S Florida Region will directly support the Miami Office Boca Raton Office City of Miami Beach account by providing transition assistance and additional contract oversight to the Miami area office. Mike Boss Bill Buchinsky Ft. Lauderdale Office Ft. Myers Office The Florida Region office operates from G4S' Miami area office. In Florida, G4S has 10 local area offices supported by over 5,000 security professionals.Additional personnel Roger Sulimirski j Steve Billips can be pulled from our Florida offices should the City have Jacksonville Office j Orlando Office surge requests, special events, or other emergency situations. Patrick Dawson Jim Parrish Pensacola Office Tampa Office Ed Rodriguez Bill Buchinsky West Palm Beach Off ice Sarasota Office CONFIDENTIAL,PROPRIETARY, COMMERCIAL OR FINANCIAL INFORMATION 31 ! Page I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Figure 7: G4S Miami Area Office Organization Chart JOHN D'AGATA REGIONAL VICE PRESIDENT,FLORIDA EDUARDO YERO I - I GENERAL MANAGER Sarahlene Hill Exec Adm Assistant Johann Lopez William Winstel Ronald Fagan Douglas Brown,Mgr Brian Reynolds Juan Casal Manager,Operations Manager,Training_J Manager,HR Business Development Mgr,Recruiting FL Supply Administrator Kim Rodriguez Wilfredo Soto(PIT) Yenisei Mogena j Erik Rojas Timothy Destro Peter-Jon Doxsee Admin Assistant 2 Training Specialist Adm Asst 2,HR J Receptionist Tech Support FL Region 360 Pgrm Mgr. Stephanie Ehrman HR Assistant Dwayne Harris Anthony Anderson Area Supervisor 4 Sr.Road Captain Suleiman Mulindwa Willie Jacobs Area Supervisor 4 [James Richardson Michael Serrano Area Supervisor 4 Wilfredo Soto Anthony Gonzalez G4S Miami Area Office G4S' Miami area office will be primarily responsible for the successful delivery of services to the City of Miami Beach. Established in 1966, and only 9 miles from the City of Miami Beach, the Miami area office operates approximately 25,000 hours of security service per week throughout the Miami metro area and Miami-Dade County. It also serves as the headquarters for G4S' Florida Regional operations. With an employee base of over 700 licensed Security Officers in Miami alone, G4S has the geographic compatibility to properly supervise the account, local knowledge of the labor market, and access to any needed resources to staff special events or emergency situations. As an example, each year since 2012, the G4S Miami area office has assisted the Miami Beach Police Department during Memorial Day Weekend. G4S deploys 76-100 Custom Protection Officers®to serve as a force multiplier to augment the police presence during each shift with great success. Corporate policy requires each area office to follow standardized procedures that ensure consistency and quality throughout the organization. It also provides a common focus, strengthens communication, CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 32 I P a g C743 I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services enhances supervision, and reduces costs. Decisions pertaining to the day-to-day operation of the City's account will be made immediately at the local level. Our Miami office support to the City of Miami Beach includes, but is not limited to, the following: 1 • Recruitment and Hiring • Client Relations • Background Screening • Review/Write Post Orders i • Pre-Assignment Testing • Supervision • Classroom Training • Inspections and Quality Control • On-the-Job Training • Payroll and Administrative Functions • Continuing Education I • Transition Support • Equipment Procurement • Uniforming Eduardo Yero,General Manager, oversees the business relationship in the Miami Beach and Miami area offices and will be responsible for ensuring quality to the City. Eduardo has been authorized to commit the resources necessary to satisfy contract requirements, conduct all required customer interface/inspections, and is required to maintain the highest standards of quality. Operating 24 hours a day, seven days a week, the Miami office is vigilant in its ability to respond to your needs.All managers, supervisors, and designated Security Officers are assigned mobile communication devices. Regardless of whether contact is made with the local office during business hours or the G4S 24/7 Communications Center after hours, this system allows our key personnel to immediately respond to your needs at any time. Key Personnel Resumes With backgrounds in law enforcement, military and the security industry, G4S provides the City of Miami with a partner you can trust and with expertise you can count on. The management team's resumes are presented on the following pages. Table 3: G4S Or.anization Chart Position l Name President, North America Drew Levine Chief Financial Officer Susanne Jorgensen Chief Operating Officer Danny Grizzard Vice President, Florida Region John D'Agata Director of Operations, Florida Region Paul Burbridge General Manager, Miami Area Office Eduardo Yero Operations Manager, Miami Area Office Johann Lopez Human Resources Manager, Miami Area Office Ronald Fagan Training Manager, Miami Area Office Bill Winstel Proposed Project Manager Ronald J. Foster CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 33 I P a g e G4S Secure Solutions City of Miami Beach l RFP#:2015-013-YG Security Officer Services Drew Levine President, North America G4S Secure Solutions (USA) Inc. Industry Experience: 26 Years Employment History G4S Secure Solutions, North America 1987 to Present Responsible for Secure Solutions USA, Secure Solutions Canada, G4S Regulated Security Solutions/G4S NSSC, our nuclear services company,and G4S Youth Services. Experience &Qualifications Drew joined G4S in 1987 and rose through the ranks, serving in various levels of the organization: • President, G4S Secure Solutions—North America • President, G4S Secure Solutions • Sr.Vice President of Security Services Division • Vice President, Florida Region • General Manager, Broward County Office • Manager, Business Development-Miami Office • Supervisor, Physical Security Education &Training Associate in Arts Degree, Criminal Justice—Miami Dade College Industry& Community Associations • Chairman for the Private Investigation, Recovery and Security Advisory Council — Florida Department of Agriculture and Consumer Services • Board of Directors for G4S Secure Solutions • Board of the Palm Beach County Sheriffs Foundation CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 34 P a g e C743 1 G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Susanne Jorgensen Chief Financial Officer G4S Secure Solutions, Americas Region Industry Experience: 17 years fl Employment History G4S Secure Solutions 2004 to Present Chief Financial Officer Group 4 Falck 1998 to 2004 Director Group Controlling&Internal Audit Lucent Technologies 1996 to 1998 Regional Treasurer, EMEA AT&T 1993 to 1996 Regional Treasurer, EMEA Manager, Financial Services Manager, Corporate Finance Experience & Qualifications Susanne has held various positions in the financial industry. Her expertise includes: • Executive Management • International Management • Financial Management • Strategic Planning • International Business Education &Training • Master's Degree in Economics& Finance—University of Copenhagen, Denmark CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 35 P a g e a aG4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services 4f, 4 Dann y Grizzard Chief Operating Officer G4S Secure Solutions (USA) Inc. y Industry Experience: 20 Years Employment History G4S Secure Solutions, North America 1993 to Present • Responsible for overall growth and operations of G4S Secure Solutions for the United States. Experience &Qualifications Danny joined G4S in 1993 and has successfully held various positions in the organization: • Chief Operating Officer • Senior Vice President, Operations • Regional Vice President, Southern Region • General Manager • Operations Manager • Project Manager • Area Supervisor Education &Training • Memphis State, Criminology and Accounting Industry &Community Associations • ASIS International • Association of Certified Fraud Examiners • Native American Law Enforcement Association • Building Owners and Managers Association (BOMA) CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 36 P a g a 0:743 I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services John D'Agata _ Regional Vice President of Florida Region G4S Secure Solutions (USA) Inc. 4 24 Years' Experience with G4S f 2 Years Law Enforcement Employment History G4S Secure Solutions, North America 1991 to Present Responsible for overall growth and operations of G4S Secure Solutions in the Florida Region. Experience & Qualifications John D'Agata began his career with G4S in October 1991 as a Custom Protection Officer®. He quickly moved up the ranks and held several positions, including area supervisor, operations manager, and chief investigator and training coordinator. He was promoted to General Manager of G4S' Fort Myers Office in 2000 and the Boca Raton Office in May 2006. In July of 2014, John was promoted to his current role as the Regional Vice President for Florida. Prior to joining G4S, John was a deputy sheriff in Sullivan County, New York and attended the State University of New York in Buffalo, where he majored in biological science. John is a recipient of G4S'W-Valor award and has received numerous awards and commendations. Education &Training John holds a State of Florida Security Managers License, State of Florida Private Investigators License, State of Florida Security Officer License, and a State of Florida Security Officer Instructor License. John is a diploma graduate of the Florida Crime Prevention Training Institute, a non-violent crisis intervention instructor, and a member of the CAI Educational Development Staff for continuing education. Industry & Community Associations John is a member of ASIS International, Condominium Owners and Managers Association (COMA), National Association of Chiefs of Police, and the Community Association Institute(CAI). CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 37 I P a g e asiS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Paul Burbridge Director, Operations and Shared Services, Florida G4S Secure Solutions(USA) Inc. 1• Industry Experience: 18 Years Employment History G4S Secure Solutions(USA) Inc. 1997 to Present US Army(Ranger) 1983-1997 Provides operations, human resources, administrative, and contract compliance support to ten field offices in the Florida. Coordinates emergency services response efforts. Experience&Qualifications Security Contract Management experience across all major industry sectors: • Commercial Real Estate • Higher Education • Banking/Financial • Public Utilities • Data Centers/Technology • Residential • Government • Retail • Healthcare • Transportation/Mass Transit Education &Training Numerous Leadership, Training, and Operations Courses—US Army Special Operations Command Leadership, Operations, and Compliance Training—G4S North America Training Institute Licenses&Certifications Security/Investigative Agency Manager, State of Florida class"MB" License (F.S. 493.6301) Industry&Community Associations ASIS International, US Army Ranger Association CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 38 I _. ClOPj I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services Eduardo Yero . . General Manager G4S Secure Solutions (USA) Inc. Industry Experience: 28 years Responsibilities • Provide direct supervision, guidance, and support to all of their office personnel to assure continued delivery of quality security services to all customers within their geographic area • Overall responsibility for ongoing business development and growth for their area office • Responsible for maintaining an active, strong partnership with all current clients Experience • Joined G4S in February of 2013 as a Project Manager • Retired Lieutenant of Police for the City of Miami Beach (26 years)-duties included SWAT Team Operator, Team Leader, and Team Commander, Tactical Operations Commander that included terror threat mitigation and training, Emergency Management and planning, Investigations Associations and Certifications • Department of Agriculture and Consumer Services Division of Licensing Security/Investigative Agency Manager"M"License, • Reserve Police Officer City of Miami Beach Police Department • Member of the Miami-Dade County Association of Chiefs of Police and ASIS Education &Training • Graduate of the Executive Management Program, Northwestern University, Evanston IL • Line Supervision—Broward Community College, Criminal Justice Institute • Special Weapons and Tactics, Miami Police Department • Special Weapons and Assault Tactics, Southeast Florida Institute of Criminal Justice • Basic Law Enforcement Class#108 CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 39 1 P a g e 03P7L I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Johann Lopez Operations Manager G4S Secure Solutions (USA) Inc. Employment History G4S Secure Solutions (USA) Inc. 2001 -Present Joined G4S as a Custom Protection Officer® and has since served as, Executive Protection Officer, Project Manager, and Area Supervisor leading up to his current role Responsibilities • Assist the General Manager in the operations of the area office to include quality assurance and contract compliance for current customers • Coordinate training and assignment of newly hired officers to stringent G4S requirements • Ensure that required training and screening for individual accounts are met providing customers reduced risk of turnover at sites • Responsible for the overall operations of the Miami Area Office including staffing, scheduling, overseeing the disciplinary process for Security Officers, supervision of payroll and billing for invoicing and payroll accuracy Experience • U.S. Marine, Sergeant, Anti-armor and Demolitions. Directly supervised approximately 53 Marines as Weapons Company Platoon Sergeant while surpassing standards of combat readiness. Successfully coordinated and implemented tactical security coverage for several military installations throughout the world Education &Training • Bachelor of Science in Business Administration—University of Phoenix • Non-Commissioned Officer Course—Camp Pendleton, CA • Military Operations in Urban Terrain—Instructor Course—Camp Pendleton, CA Associations and Certifications • ASIS CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 40 I = �� G4S Secure Solutions City of Miami Beach T! RFP#:2015-013-YG Security Officer Services w. Ronald Fagan Human Resources Manager G4S Secure Solutions (USA) Inc. Employment History G4S Secure Solutions(USA) Inc. 1997—Present • Responsible for the overall management of their applicable area office,to include applicant flow, hiring/termination process, personnel records, background investigations, group insurance administration, and monthly reconciliation,workers'compensation,state licensing, unemployment claims,Affirmative Action planning. • Ensure compliance with G4S corporate policies and applicable federal, state and local laws. • Ensure overall contract compliance regarding employee basic and preferred qualifications, screening, training, and licensing. Experience • Joined G4S in 1997 • Served in the U.S.Army Reserves Education • B.A. in Political Science, Eastern Illinois University • Jurist Doctor, DePaul University Associations and Certifications • Current member of the Florida Bar(inactive status) CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 41 I ''=' a g e 47 I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services Bill Winstel Training Manager G4S Secure Solutions (USA) Inc. Employment History G4S Secure Solutions(USA) Inc. 1998—Present • Ensure the uniformed services provided at any area/branch facility meet or exceed requirements set forth in policy, contracts, and applicable laws. • Determine and prepare appropriate training programs specific to local customer needs and G4S requirements. • Conduct and/or oversee all training for security personnel reporting to their applicable area office. Experience • Joined G4S in 1998 • Retired Chief Legalman, Master Training Specialist, U.S. Navy(21 years) Certifications • NRA Certified Police Firearms Instructor • Private Investigator, Security Agency Trainer and Security Agency Manager, State of Florida • Instructor Certification, State of Florida,Commission on Criminal Justice Standards and Training • Instructor Certification, State of Florida, Protective Action Response(P.A.R) • Instructor Certification,Armament Systems and Procedures, Tactical Baton Instructor • American Red Cross Instructor Certification • American Heart Association Heartsaver Instructor Certification • Instructor Certification,Judgment Under Stress, National Intelligence Academy Education • B.S. in Education, Southern Illinois University • M.S. in Criminal Justice, Florida International University CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 42 P a g a CLS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Fl 11 Suleiman Mulindwa Area Supervisor IV, Miami, Florida G4S Secure Solutions (USA) Inc. Employment History G4S Secure Solutions (USA), Inc. 2003 to Present • Directs Security Daily Operations for 21 accounts in Miami, Florida Experience and Qualifications • Industry Experience: 11 years • Security Contract Management experience across all major industry sectors: o Commercial Real Estate/ Residential o Banking / Financial / Retail o Data Centers/Technology o Government/ Healthcare o Higher Education / Hospitality Education and Training • Bachelor of Science—Criminal Justice, Degree— Florida International University. • (Graduated —Cum Laude) • Associate of Science—Criminal Justice Degree— Miami Dade Community College • Leadership Training—G4S North America Training Institute CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 43 I P p, g e (LS G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Proposed Project Manager for Security Officer Services oirk ` Ronald R. Foster --= Project Manager G4S Secure Solutions (USA) Inc. Responsibilities As the Director of Public Safety at St. Thomas University, I am responsible for all administrative and operational functions of the department, including staffing, scheduling, discipline for security officers, accurate reporting of payroll and billing for invoicing accuracy and minimization non-billable overtime expenses. • Responsible for maintaining the campus crime statistics and assuring university compliance with all requirements of the Clery Act. • Establish and maintain a mutually beneficial, long term, client relationship. Experience • Fifteen years as a Special Agent of the Federal Bureau of Investigation. SWAT team member, SOG member, additionally, Bureau trained as a Photographer and Bombing Investigator • Thirteen years in contract security management • Joined G4S in 2007 as a CPO. Served as Site Supervisor and Project Manager Certifications • FEMA certified in the Introduction to the Incident Command System • FEMA certified in ICS for Single Resources and Initial Action Incident • FEMA certified in an Introduction to the National Incident Management System • FEMA certified in an Introduction to the National Response system • FEMA certified in Active Shooter Situations • Division of Emergency Management certified in Intermediate ICS For Expanding Incidents Education • Rensselaer Polytechnic Institute—Bachelor of Science in Business Management • FBI Academy—New Agent Training • Graduate of the Executive Management Program, Northwestern University, Evanston IL • Line Supervision—Broward Community College, Criminal Justice Institute • Special Weapons and Tactics, Miami Police Department • Special Weapons and Assault Tactics, Southeast Florida Institute of Criminal Justice • Basic Law Enforcement Class#108 CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 44 C74 1 G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services 2.3 Financial Capability At G4S' request, Dun & Bradstreet provided to the City of Miami Beach Procurement contact a Supplier Qualification Report (SQR) for G4S Secure Solutions (USA) Inc. We were advised by Dun & Bradstreet that they transmitted our SQR to the City on June 23, 2015 at 12:48 am. A copy of the SQR is provided in Attachment 1 to this proposal. Please note that G4S Secure Solutions (USA) Inc. is a wholly owned subsidiary of G4S plc; therefore, G4S Secure Solutions(USA) Inc.financial results are not reported independently, but are rolled up into the financials of G4S plc. The annual report is comprehensive and in our efforts to be a good environmental steward, we provide our 2014 Annual Report as Attachment 2 to this proposal. The Annual Report may also be found on our website link below. http://www.g4s.com/-/medial Files/Annual%20Reports/AR%202014/Full%20ARA.pdf Choosing the right security provider today means you can expect continuous performance year after year. Financial strength is an often overlooked indicator of a provider's long-term presence. It provides you greater confidence regarding the provider's ability to: • Make payroll 100% of the time, on-time • Continuously bring new technologies to your service • Maintain an office today and tomorrow • Survive during the normal turbulence of doing business • Reliably deliver on their promises during today's once in a lifetime economic challenge G4S has exceptional credit and financial stability, as reported by the largest reporting agencies. Also possessing all the above capabilities, our financial strength means you can expect G4S to continue to: • Invest heavily in new technologies to reduce costs while improving security • Research and develop new solutions that stay ahead of your evolving security needs • Increase our geographic coverage to serve you wherever your facilities are • Be your strong and viable security solution this year, this decade and the future CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 45 04 G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services 3 TAB 3: Scope of Services Proposed Submit detailed information addressing how Proposer will achieve each portion of the scope of services and technical requirements outlined in Appendix C, Minimum Requirements and Specifications. Responses shall be in sufficient detail and include supporting documentation, as applicable, which will allow the Evaluation Committee to complete a full review and score the proposed scope of services. At G4S, we believe that one size does not fit all in security. As a result, we created distinct Security Officer Programs based on the individual's specific responsibilities and the customer's operating environment. We have tailored our Security Officer program especially for the City of Miami Beach to provide competent physical protection by customer-service oriented Security Officers focused on the City's goals. G4S looks at different components and customer-specific requirements (e.g., living wage requirements, pre- employment screening requirements, training requirements, and type of duties) to determine which level of officer is best suited. Based on our assessment of your RFP and the pre-bid meeting and our experience working with other local governments in Florida,we propose a blended Security Officer program combining our Custom Protection Officer®(CPO) and Upscale Security Officer(USO) programs to meet your staffing levels for officer and supervisor positions. This security program is recommended because your: • Security requirements exceed the capabilities of standard commercial guards • The City demands a strong physical security presence and positive public image • Security Officers must be ambassadors of goodwill on behalf of the City • Security Officers must show good judgment, make Or independent, on-the-spot decisions and react appropriately / under stressful conditions • Security Officers have experience interfacing with law w 3 enforcement agencies and possess the requisite years of security experience �. � � �I . 3.1 Custom Protection Officers® (CPOs) ` . // k :1 Our CPO program will provide you the most qualified level of Security -0 - • 4 Officer available, that of law enforcement-quality or above. In the gp ast, clients typically used off-duty p olice officers. With G4S' CPOs, �► the City will receive police-quality standards at competitive rates.This elite force provides you elevated security as these officers are recruited from a different labor pool than typical commercial Security Officers. To become part of this premier corps of security professionals, all candidates must meet at least one of the following qualifications, in addition to the basic qualifications required of all G4S Officers: CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 46 I _ ,a CZIASI G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services • Law enforcement experience • Service in the Elite Military Forces, Military Police or combat arms • Graduate of Police/Corrections Academy • Criminal Justice Degree(Associate's or higher) • Career Military With backgrounds in law enforcement or the military, CPOs have the right aptitude and experience to serve as supervisors and can work seamlessly — and effectively — with the City's Police Department. Rigorous recruitment, screening and training mean the City can have peace of mind knowing these supervisors have advanced security knowledge and competence to meet, and exceed, your requirements. CPOs have been an integral part of the security for the City's Memorial Day weekend each year since 2012. 3.2 G4S Compliance with Minimum Requirements for Security Officers • The City of Miami Beach requirements for Security Officer Levels III—VI mirror G4S'CPO requirements in terms of background, experience and qualifications. • For this account G4S will fill positions requiring Security Officer Levels III—VI with individuals who meet our CPO qualifications.These will be individuals with active Class D and Class G licenses and possess the requisite years of experience. • The Security Officer Level III will have at least two (2) years' experience either as a Class D licensed Security Officer, Police Officer, or Military Police. The Security Officer Level IV will have at least five (5)years of qualifying experience. • G4S will staff its Supervisor positions at the Security Officer Level V. These will be individuals with a demonstrated ability to supervise, monitor and regulate Security Officers with Class D and Class G licenses in coordinating security services. • G4S' proposed Project Manager will far exceed the Security Officer Level VI, which requires at least ten (10) years of Security Officer, Police Officer or Military Police experience, and have the ability to lead and supervise multiple supervisors in a coordinated security services operation. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 47 P a g a CIAP43G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services 3.3 Upscale Security Officers (USOs) Our USO program provides higher quality Security , Officers than the industry norm as seen in the USO's tt' appearance, attitude, training and performance. ' These officers are prepared to efficiently handle a it ,+ wide spectrum of problems and possess the ability to maintain their composure under stressful conditions. "m""111111111.11111111. 111111111.1.1.1111111111111.1111 USOs are trained in customer service and understand ,- the importance of conveying a positive public image while maintaining the City's security and safety goals. In addition to the basic qualifications required of all G4S Security Officers, USOs must meet at least one of the following qualifications,: Iv • Associate's degree or higher • Service in the active duty military, military reserves, or National Guard • Service in Auxiliary Police or Police Cadets • Minimum of one (1) year verifiable work experience with at least six months successful security experience To meet Security Officer Level I and Level II, G4S proposes our Upscale Security Officer(USO) program. To qualify for a Level I Officer, the USO will possess at least one (1) year of experience as a Class D licensed Security Officer.To qualify for the Level II Officer,the USO will possess at least two(2)years of experience as a Class D licensed Security Officer. 3.4 Recruitment Program [RFP C.6] Where possible and with the consent of the City, G4S will retain the employees in the existing workforce that meet both G4S' and the City's employment standards and successfully pass our rigorous background investigation. G4S has recognized that the traditional recruiting methods are not always effective to attract the types of individuals needed to meet the needs of a changing industry and an increasingly competitive employment market. After extensive research and consultation, G4S launched an industry-first Online Career Center and Applicant Tracking System (ATS) (http://usajobs.g4s.com).This system is designed to attract and select the best possible candidate for available opportunities by matching job specifications to candidate profiles. The City can be assured G4S will continue to attract ideally suited security personnel who are professional, motivated and meet your requirements. The Career Center also plays a vital part in retaining employees by enhancing the prospects for promotion and career advancement within G4S nationally and globally. Other sources for recruitment include graduates of the local police academy,federal,state and local law enforcement CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 48 IPage CZ.ES G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services organizations, CareerBuilder.com,job fairs, employee referrals, veteran's organizations, and local police and sheriffs departments. 3.5 Military Programs 104, G4S places much focus on military hiring partnerships aimed at expanding our reach to the high caliber candidates in the military. Through an agreement with the U.S.Army,G4S is able to recruit pre-qualified returning JOINING FORCES veterans. G4S is also participating in "Joining Forces," a White House T A K I N G A C T I O N TO S E R V E AMERICA'S MILITARY FAMILIES campaign to promote the hiring of returning veterans and their family members. Through this initiative, G4S has committed to hiring 6,000 ; ° r N I N G = O F C E S C O veterans by the end of 2013. In fact, G4S had already hired more than 5,500 former military personnel through this program. Our relationship with the U.S. military is both valued and nurtured by everyone at G4S. For example, we assisted the U.S. Navy by participating in a review of l the basic training curriculum for the Master-at-Arms (MA) rating. This program y IVOLIh N i provides comprehensive training to individuals in security and law enforcement roles in the Navy and prepares them for transfer to such roles in the civilian IEN DIY: sector. ' i 0 FR LOYERS G4S has consistently been recognized for its military outreach initiatives, including: • Named to the G.I. Jobs Top 50 Military Friendly Employers list for four consecutive years, ranked #18 on the 2015 list. • Awarded "Most Valuable Employer(MVE)for Military"by CivilianJobs.com in 2012 and 2009 • Patriotic Employer Above and Beyond Award from the National Committee for Employer Support of the Guard and Reserve • Member of U.S. Chamber of Commerce's initiative Hiring Our Heroes; committed to helping veterans and military spouses find meaningful employment. 3.6 Pre-Employment Screening (RFP C.6 Approval and Removal of Personnel] G4S is committed to providing the highest caliber security personnel. G4S'qualification requirements are the most stringent in the industry; G4S will only consider applicants who meet the following minimum qualifications that are aligned with the City's requirements: • U.S. citizen, or a legal alien possessing appropriate work permit or visa • Minimum one year of security experience, law enforcement or equivalent military • Fluent, both orally and in writing, in English (multilingual desirable for the City's contract), at a high school level and be clearly understandable via radio communication transmissions • Possess a high school diploma or equivalent • Good health, emotionally stable, mentally alert and able to perform job responsibilities • Possess a valid driver's license CONFIDENTIAL, PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 49 I P a g e C7jiiS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services • Trained and licensed in accordance with State of Florida Department of Licensing pursuant to Section 493.6123 (1) F.S. and possess Florida Class"D" License • Able to successfully complete a written, validated examination indicative of their ability to understand and perform the assigned duties • Possess a work and character background that indicates dependability, reliability, and the ability to work harmoniously with others ° • If served in a branch of the military service: Honorably discharged • Must not have been terminated from any previous employment for other than honorable circumstances, unless documented extenuating circumstances can be demonstrated • Provide a contact telephone number, have access to reliable transportation, and be available in the event of an emergency • Possess the capacity to acquire a good working knowledge of all aspects of the job • Able to operate under stressful situations • Possess basic computer skills and/or security systems knowledge as required by the position • Capable of pursuing and detaining individuals who have committed criminal acts Background investigations are critical in the screening process and we do not rely on third-party firms. Instead, we conduct our own investigations using our G4S Compliance and Investigations (C&I) division. We use advanced background investigation technologies that integrate with the G4S Human Resource (HR) System. As a result, candidates cannot be hired unless background investigations are initiated. We store completed investigations digitally within employees' HR records. G4S will seek approval of each and every Security Officer to be assigned.All assigned Security Officers will be on Probation for 30 days. G4S will re-verify the integrity of our security team by annually re-screening 15% of the G4S officer population each year. This random re-screening will include criminal searches for the past three years or since date of hire (whichever is shorter). The following G4S screening process will be conducted on all officers: • Identity Verification - Social Security Trace Report& E-Verify G4S initiates a social security number confirmation trace to validate the name(s) and addresses provided. We also check against the Specially Designated Nationals (SDN) and Blocked Persons list maintained by the Office of Foreign Assets Control (O.F.A.C.). Checking candidates to these two lists ensures G4S complies with the Patriot Act and the Trading with the Enemy Act. Our system updates the list daily to ensure that all new hires are screened against the most current lists. After candidates successfully complete the screening process and are hired, we send their identifying information automatically to the United States Citizenship and Immigration Services (USCIS). This further confirms their identity and work authorization using both Social Security Administration (SSA) and Department of Homeland Security (DHS) information through our participation in the E-Verify work authorization program. • Criminal Searches (7 years) G4S submits a request to the appropriate state agency where state-wide criminal record checks are available for all residential addresses provided for the last seven years. In the event the statewide check is CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 50 I P a g e du G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services unavailable or incomplete, G4S conducts a county of residence criminal record check. A multi-jurisdictional search of criminal database records is conducted that covers courts, correctional departments, departments of parole, and sex offender registries nationwide. This includes a check against the Specially Designated Nationals (SDN) and Blocked Persons list maintained by the Office of Foreign Assets Control (O.F.A.C.). With this check, G4S is in compliance with the Patriot Act and the Trading with the Enemy Act. Our system updates daily to ensure screened to the most current lists. • 7 Years of Activity(Employment, Unemployment, Education) G4S verifies all activity, including prior employment and/or education for the last 7 years with verification of the highest level of education completed. Periods of unemployment lasting 90 days or more are also be verified. This may include character references from non-related individuals. • Driver's License(DMV) Check G4S initiates a check of the applicant's driving record through the state department of motor vehicles. This reveals all traffic violations and substantiates a valid operator's license as allowed by state law for employment purposes. Once hired, G4S Officers have their driving records checked every year. • Military service(DD214)— if applicable Based on the candidate's application indicating prior military service, G4S will request from the candidate a copy of their DD214. The DD214 provides separation information, such as type of separation, character of service, authority and reason for separation, separation and reenlistment eligibility codes. • 1-9 verification Candidates' I-9s are automatically verified through our use of the E-Verify work authorization program. The E-Verify uses information from both Social Security Administration (SSA) and Department of Homeland Security(DHS). 1-9 verification occurs during our Identity Verification -Social Security Trace Report. • 10-panel Drug Screen All candidates undergo a 10-panel urinalysis test conducted by Quest Diagnostics, an independent drug- screening clinic. G4S contracts with Quest Diagnostics to ensure testing consistency and reliability nationwide.Candidates are sent to a collection location to submit a urine specimen.The collected specimen is sent to the designated lab using chain-of-custody forms to ensure testing integrity. The G4S Drug Screening Coordinator receives the lab results from Quest Diagnostics and forwards them to the local G4S office screening the candidate. All CPOs will receive additional screening for the following: • Physical Examination Each CPO candidate will undergo a physical examination by a licensed physician to determine if the CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 51 1 :. ajG4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services candidate is physically suited to perform the duties of a G4S Security Officer in accordance with the physical requirements specified by the City of Miami Beach. • Psychological Examination G4S will administer the Minnesota Multiphasic Personality Inventory (MMPI) for CPO applicants prior to employment. G4S has thoroughly vetted and contracted national providers to ensure the integrity of the psychological examinations. • Suitability/Trustworthiness Assessment - G4S also administers the Security Officer Profile (SOP) to measure suitability for a security assignment, compliance with workplace values, decision making, responsiveness to stressful aspects of the job, interaction with customers, and compatibility of job preferences with job requirements, honesty and trustworthiness. 3.7 Drug and Alcohol Policy G4S is committed to the safety, health and well-being of all employees and client personnel.We recognize that alcohol abuse and drug use pose a potential threat. We have elected to be an Alcohol- and Drug-Free Workplace and to establish an Alcohol- and Drug-Free Workplace Program that balances our respect for individuals with the need to maintain an alcohol and drug-free environment. It is a violation of our Alcohol-and Drug-Free Workplace policy to use, possess, sell, trade, and/or offer for sale alcohol, illegal drugs or other intoxicants in the workplace or to be on duty while under the influence of any of these. As a Federal contractor, G4S is required by The Drug-Free Workplace Act of 1988 to provide a drug-free workplace by taking the following steps: • Publish and provide access to this policy, informing all employees that the unlawful manufacture, distribution, dispensation, possession or use of a controlled substance is prohibited in the workplace and specifying the actions that will be taken against employees who violate the policy. • Establish a drug-free awareness program that makes employees aware of a)the dangers of drug abuse in the workplace; b)the policy of maintaining a drug-free workplace; c) any available drug counseling, rehabilitation, and employee assistance programs; and d) the penalties that may be imposed upon employees for substance abuse violations. • Notify employees that as a condition of employment they must a) abide by the terms of the policy statement; and b) notify the employer, within five calendar days, if he or she is convicted of a criminal drug violation. • In the case of Federal contracts, notify the contracting or granting agency within 10 days after receiving notice that a covered employee has been convicted of a criminal drug violation in the workplace. • Impose a penalty on any employee who is convicted of a reportable workplace drug conviction. The G4S application packet includes information regarding G4S' policy on drug and alcohol abuse and a drug CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 52 I P a g e aj I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services screening consent form. After execution of the pre-employment consent form, an applicant will submit to substance abuse testing. G4S uses a 10-panel urinalysis test to detect recent or current use of drugs. This panel meets and exceeds the RFP requirements for drug testing (RFP Page 27). We send our applicants to a collection location where their identity is verified by a photo I.D., and where they are asked to remove outer clothing,such as coats and hats. The lavatory is secured and a laboratory technician waits outside the private stall until the donor indicates completion.After collection in the presence of the donor, the temperature of the specimen is immediately tested and must fall within 90.5 to 99.8 degrees to detect possible specimen switching. The specimen is then checked for contaminants. The specimen must be in view of the donor at all times while he witnesses the sealing procedure and initials the seal. The donor then reads and completes the donor affidavit and is given his/her copy of the form. The specimen is sent to the lab for analysis, and the results are sent to our Drug Screening Coordinator,who forwards the results to the local area office. Quest Diagnostics and RN Expertise are two firms that provide substance-testing services for G4S. Table 4:Dru. Testin. Criteria&Limits 10-Panel Drug Group EIA Screen Cutoff Level GC/MS Confirmation Cutoff (ng/mL) Level(ng/mL) Amphetamines 1,000 500 (amphetamine and methamphetamine) Cocaine metabolite 300 150 Marijuana metabolites 50 15 Opiates(codeine and morphine) 2,000 2,000 Phencyclidine 25 25 Barbiturates 300 200 Benzodiazepines 300 200 Methadone 300 200 Propoxyphene 300 200 All tests are certified at Substance Abuse and Mental Health Services Administration (SAMHSA)-certified laboratories. A Medical Review Officer(MRO)who is a licensed physician receives the laboratory results and has appropriate training to interpret and evaluate drug test results. Gas Chromatography/Mass Spectrometry (GC/MS) is the method used for test verification. 3.8 Employment Records G4S' Human Resources Manager maintains an Employment Record for each employee, which includes the employment application, attendance reports, training records, and results of background investigation, drug/urinalysis testing, any pre-employment honesty tests, classifiable fingerprints, a recent photograph, and any work related injury reports. G4S will furnish these records of Security Officers assigned to the City upon request. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 53 I P a g a 3 I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services 3.9 Personnel Standards Figure 8:Preface, G4S Security Officer Handbook Once hired, each new employee is given a copy of the G4S A Personal Nlessage from the President of Security Officer Handbook. This publication provides general G4S Secure Solutions North America information about the company, mission and expectations,duties, personal appearance, rules of conduct, and security issues. After J'1conre to G4S Secure Solutions(USA)Inc.We are happy that you chose to join our team. Your presence as a menr- the new team member has had an opportunity to study the booklet, bet°f our team is very important to our success.Your new we administer a test on its content. We place the completed job will involve a great amount of responsibility. Our cus- tomers will depend of you to endeavor to protect their answer sheet in the team member's personnel file and enter the selves and their propem'from theft,fire and other da►t- examination results on the Training Report for Security Officers. A gers.In a general sense,you are one of thousands of secu- copy of the examination is maintained in the employee's personnel rity providers who are on the first line of defense in nation- al security. Your dedication and commitment to duty may folder. save lives! 3.10 Equal Opportunity Employment This Security Officer Handbook contains the basic infor- mation you will need to get started in your new role.Read As a labor-intensive organization with approximately 40,000 it acquai carefully ►vin help you become better n with your duties.Ir Follow the rules and procedures explained in employees, EEOC issues arise from time to time that must be it and, if you need more information, speak with your addressed. In those rare instances, G4S has been able to resolve supervisor Formal policies and procedures also exist in the issue and any claims made have had no material effect on the ►vrittelr forth at G4S Secure Solutions (USA) Inc. As an employee of GJS Secure Solutions (USA) Inc., you are operations of the company. responsible for adhering to them.Copies of all formal poli- cies and procedures are available for reading in the office 3.11 Retention Programs that holds your records. At G4S,we believe people are one of our competitive advantages, 1*are glad you accepted a position with G4S. We are a proud team of customer focused security providers. We and we are committed to developing and retaining the very best pride ourselves on doing our job well. You can help us do talent. Through our comprehensive benefits, awards and it even better! recognition programs, G4S has achieved long-term stability in our Sincerely, workforce as evidenced by the employees' length of service — a quarter of our employees have over five years'service and almost one in ten have stayed with G4S for more than a decade. Drew Levine President G4S will work to retain your workforce by respecting the input of G4S Secure Solutions North America individuals and teams; by providing the tools,support and opportunity for officers to perform to the best of their ability; and by sharing with them the success of a winning organization. In the U.S. G4S'personnel retention was over 71%in 2014.Our retention efforts focus on the key areas for the greatest retention results and those with the greatest value for our officers,which include: • Good Job Fit—Importance of Incumbents and Hiring • Proper Pay for Skills and Experience • Recognition for Superior Performance • Training for Success and Career Development • Meaningful Communication: Listening and Sharing • Enhanced Benefits and Incentives CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 54 I P a g e 45Pj G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services Good Job Fit-Importance of Incumbents and Hiring G4S will offer 100% of the officers you wish to retain the opportunity to complete our hiring process. The incumbents who successfully pass all our background investigations and screenings will receive G4S employment for the City and will be grandfathered for group insurance purposes. G4S will continually attract,engage,develop and retain the very best people available.The G4S Career Center will provide immediate access to a large pool of qualified candidates that fully meet your officer and supervisory requirements.When officers are in the right job,they are ready for successful job performance, and that brings a high degree of job satisfaction. Proper Pay for Skills and Experience G4S agrees with and will conform to the City of Miami Beach's Living Wage Ordinance. The Living Wage Ordinance will serve as the basis for proper wages,and we will ensure excellent benefits to promote retention. Recognition for Superior Performance Desiring recognition for a job well done is part of human nature.Our programs provide that individual recognition and publish achievements for all G4S employees to see-in our magazine, G4S News. G4S will recognize our officers' superior performance at the City through a number of programs, including: • Excellence—Challenge"Coin of Excellence" Program SO LU 7-/O • Learning—Certificate of Achievement Q- :•N i/,, • Service—Certificate of Appreciation O ..> G • Courage—Certificate of Recognition. • Above and Beyond—Certificate of Distinction • Exceptional Valor Award j S • Corporate—Officer of the Quarter/Year Award * ` • Tenure—Service Award Program / .. • Community Service Award \\`r� �, . \a �` �ngYour`� Training for Success and Career Development G4S will provide trained instructors, curricula, lesson plans, audio-visual aids, online learning programs and platform training expertise to support security operations for the City.These training resources will be provided by our ISO-registered North America Training Institute(NATI)as part of its Learning Management System.G4S has advanced learning and career development programs available through our online Learning Management System, to allow our personnel to participate in instructional courses that earn them college'credits. Meaningful Communication: Listening and Sharing G4S will actively seek officers'comments, input and assess their satisfaction in a comprehensive manner.We will do this through: • Active listening skills by our supervisors in their daily interactions with officers CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 55 P a g e • Orj I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services • G4S'Safe2SaysM-our anonymous hotline • G4S'Anything2SaysM-our telephonic exit interview process • G4S'annual employee engagement survey G4S will keep our Security Officers informed of their individual and team performance for the City of Miami Beach, and the appropriate developments for your account, industry, G4S and as required by City, County, State and Federal agency regulations. We will do this A OAS s..,*so+et.a.,au3A►rage 9uhlieAlrpn-FAA 2112 through various channels, including: G4S Officers First on the Scene Table of Contents • Supervisor to employee dialogue pc of a Traffic Accident ..:.1....,�. �... lam( .w 5 Grua:t stl aRmm tsheo ro '_ivy" ar:al;a:llrw xho+a re*.r a ae6c CMS.Moir flea i7 =CW' r*a s a s,in R9'6o:yn.1 gams • Manuals ar— 27OI(At c pS/1 rs o .��.�... . G!Ls'alsyw/►:An !al.S • Post Orders G4S Teams Praised For h"°"`°'aa'°" Emergency Effort During Gl.�Maar �. • Focus publications (continuing education Waldo Canyon Fire ' publications) coS:run mmainirs•r•awl Cannon Fie.=,..e,.l M w foil,moan wr.e.i G4S Career Center website �'°`� �` ""°" °°u"` -.-_ ammo • +air,xt ro�'!1'e.,t.>'2e loin i � ww.■n • Scheduled meetings __ Win Prizes Bit l,,,,,, „.,R, S100 Gas Card • Pay stub attachments and payroll stuffers an'Pad! .�,,�,,..,,,o.,�,., �: .T.� ✓i.r!!'1fi4 G+fi'e.fStCtJwl 1ALf f `who ASR ra CAS C-mar feY @r 1-'9 rem:lsq fir gr, 'ae ks*',tar-.Ito IY4 tt¢rSll ern Posters ,A�ru Da Yn 9r�wirers a2 Moron • ; i .am s1Ud _rcn to.yu 1,n `"..4''"" • G4S News(company publication focused '° W . �..�..1..w.y ninon.a•�r me on employee recognition) Qa,.d,Q„.OM.p Pins S oficooR.oP.r. ,,. 4o.by en...5 • Safety Matters (monthly safety newsletters) CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 56 I P a g e MRS 1 G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services 3.12 Employee Benefits and Incentives G4S will provide employee benefits that attract and retain skilled and experienced officers. In addition to the health insurance supplement, all employees will be eligible to participate in the robust health insurance plan and other employee benefits. Health & Life Insurance Under G4S' Preferred Provider Organization (PPO) plan, employees are eligible for the following benefits: • Medical insurance administered by BlueCross BlueShield • $10,000 Basic Life Insurance and Accidental Death & Dismemberment (AD&D) at no cost to the employee The plan is effective after 90 days of continuous service. Plan Overview G4S will provide personnel assigned to the City a robust major medical plan that gives employees an unlimited lifetime maximum benefit. Administered by BlueCross BlueShield, G4S' Preferred Provider Organization (PPO) plan offers the strength and breadth of the BlueCross network while giving personnel more flexibility in seeking care. Unlike an HMO, G4S' PPO plan includes a full spectrum of covered services and direct access to specialists without the need to gain approval from a primary care doctor. This plan also features an out-of-pocket limit, helping the employee plan for healthcare expenses, and several services are provided with no deductible required. This plan exceeds the requirements of the Miami Beach Living Wage Ordinance. Plan highlights include: • $6,350 individual out-of-pocket maximum ($12,700 family) — employees will pay no more than the maximum in one calendar year, helping employees plan for their health care expenses. • No annual or lifetime maximums • $35 copay for Primary Care Physician office visits—no deductible • Specialisttcovered after 50%coinsurance and deductible with 10 visits per year • Preventative/Wellness Services covered at 100%—no deductible • $10 copay for telemedicine—no deductible • Labs and imaging covered after 50% coinsurance and deductible • Outpatient surgery benefit with 50% coinsurance for after deductible • Durable medical equipment available with 50% coinsurance after deductible • $75 copay for Urgent Care and no deductible • Inpatient Hospitalization covered with 50% coinsurance after deductible(21-day annual limit) CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 57 P a g e C743 I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services • Emergency Room covered with 50% coinsurance after deductible (4 visit annual maximum per individual) • 50% coinsurance after deductible for most other covered services • Prescriptions covered with no deductible and a copayment of: 20% for Generic; 35% for Preferred Brand; 50%for Non-Preferred Brand and mail-order available. • Employees may also add dependents at low group rates and pay the premium through payroll deductions. Retirement Plan G4S provides a 401(k) Plan to qualified employees(employees considered highly compensated under ERISA do not quality). Qualified employees: • May contribute 1%to 40%of their compensation on a pre-tax basis • Have the opportunity to save for retirement with current tax-deferral advantage • Can take loans from their 401(k) Plan, repaying through convenient payroll deductions G4S also offers additional benefits to promote employee well-being and retention, including: Table 5: G4S Em•lo ee Benefits Benefit Highlights Full-time employees will receive vacation days based upon the following: Vacation • After one year of service- One week(40 hours) • After two years of service-Two weeks(80 hours), Custom Protection Officers only • After five years of service-Three weeks(120 hours), Custom Protection Officers only • Six holidays annually, paid to full-time and part-time personnel at time-and-one-half for Holidays hours worked, including: New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. • Administered by Horizon Health Employee • Voluntary program providing confidential assessment, counseling and referral services for Assistance Program employees and their families to help resolve personal concerns(e.g., marriage, stress, depression, mental health, credit and financial issues,etc.). • G4S employees can choose to have payroll funds direct deposited to their bank account or distributed instantly to a prepaid debit card at no additional cost to them • ADP Total Pay Card gives employees immediate access to their money in a convenient Direct Deposit or and safe way—without the hassles of waiting in long lines at banks to deposit checks or ADP Total Pay Card paying exorbitant cash checking fees. • Employees can upgrade to the Prepaid Banking Service at no additional cost which has the added benefits of being able to load other payments to the card(including tax returns), make money transfers to other countries or bank accounts, and add cards for family members. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 58 I P a g a f4 I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services Benefit Highlights G4S offers a robust employee purchase program with negotiated employee pricing at over 30,000 national and local merchants. Such benefits include: • Vehicle purchase programs with Ford, Chrysler and GM Great 4 Savings • Discounts from national merchants including Sears, Target, Toys R Us, Walgreens • Special pricing on movie tickets, sporting events and other entertainment venues • Being rewarded for pledging to be Greener and Healthier • Discounts at local merchants including restaurants,spas, entertainment venues and more 3.13 Staffing Annual Events and Special Events G4S' strength in providing additional staffing for annual events, special events, temporary and emergency situations is a tremendous asset to the City. With over 1,500 qualified, vetted, trained, and uniformed G4S personnel available to draw from in Dade and Broward counties alone, we offer a trouble-free and time-saving solution to staffing the many special events and/or short term situations the City of Miami Beach is often tasked to perform. G4S' services for the City of Miami Beach's annual events and special events can take the worry out of your event coverage needs. G4S has extensive experience augmenting law enforcement services, protecting community and professional association ceremonies, visiting dignitaries, major political, charity, and sporting events, corporate conferences, shareholder meetings, and trade conventions. With G4S' additional personnel performing their duties, the City of Miami Beach can be confident your residents, visitors, and employees are safe, assets are secure, and your City's reputation is protected. Special Event services we provide include: • Crowd Control • Traffic and Parking Control • Access and Perimeter Control • Goodwill Ambassadors Annual Events such as New Year's Eve and Memorial Day Weekend and Special Events will be easily staffed by contacting the Project Manager, Mr. Foster,who will coordinate with the G4S Miami Area Office to promptly fulfill your staffing request. We will work with the City to understand your project's needs and budget requirements to ascertain the best fit security officer program. Local customers, including the City of Miami Beach, have trusted G4S with the security and protection of many of their high-profile events.A few examples include: • City of Miami Beach—Custom Protection Officers for Memorial Day Weekend (2012-2015) • Multiple customer locations to support additional security needs during the 2012 Presidential Debate at Lynn University • Client support at both the Democratic and Republican National Conventions in 2012 • NASCAR Events CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 59 I P a g a Cyj I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services The following lists a typical special event planning and activation procedure: • Definition of annual event and special event services team—Project Manager and G4S designated special event manager(e.g., Ronald Foster, Project Manager and Eduardo Yero, General Manager) • Definition of yearly annual event/special event calendar — Communication of historical safety/ security and risk data • Development of security plan per event—Coordination with representatives from the City of Miami Beach with Project Manager and the G4S Miami Area Office to determine staffing levels, site layout, special training, and equipment • Performance — In coordination with representatives from the City of Miami Beach, the Project Manager, G4S Miami Area Office and 24/7 Communications Center • Post-event evaluation—Process review and lessons learned The G4S Miami offices will maintain a local, flexible, operational security force of trained personnel that are available for assignment at various customer facilities to handle short-term or cyclical assignments, or emergency staffing situations. Members of our "Flex Force" will also be cross-trained and pre-approved for multiple client sites, including the City of Miami Beach. This Flex Force is comprised of both full-and part-time personnel and is available to support your additional security staffing needs.G4S has the ability to tap additional resources through the Florida region and our network of over 110 local area offices with over 40,000 Security personnel in the U.S. 3.14 Emergency Services Should the City of Miami Beach require emergency or disaster services in addition to our contracted scope,we maintain an Emergency/Disaster Services Rapid Response Team comprised of a contingent of 600 qualified personnel to meet client emergency needs. This response force is well trained, pre-equipped and capable of responding to crises wherever directed, such as: • Natural disasters such as hurricanes, flooding, or storms • Accidents that can lead to chemical spills or toxic releases • Acts of violence or malice directed at the City, other governmental agencies, or individuals • Work stoppages related to labor unrest Security for emergency situations is "out of scope" of our security contract and is often negotiated under our Emergency or Disaster Services Agreements with applicable pricing that is mutually negotiated in advance. Components of the G4S Emergency/Disaster Services program include: • G4S Emergency/Disaster Services Rapid Response Team CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 60 1 ctisi G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services • Officer communication during crises • G4S Emergency Operations Center • IT continuity plan and backup • Key fundamentals of the G4S Emergency/Disaster Plan • Objectives of the G4S Emergency/Disaster Plan • Proven response and performance experience Recent examples of disaster and emergency services include: HURRICANE SANDY(2012-2013) • Deployed, within 24-hours, over 350 officers throughout the Northeast to protect people and property in the aftermath of Hurricane Sandy • G4S Emergency Response Teams logged close to 100,000 hours of service • As many as 1,000 officers, who permanently support private businesses in the Northeast, provided additional services as electrical power was being restored. OCCUPY MOVEMENT(2011-2012) • Deployed over 800 armed and unarmed officers throughout the U.S. at various client facilities • Coordinated all logistics including housing,transportation and equipment BP OIL SPILL(2010-2011) • Preferred provider of armed and unarmed Custom Protection Officers to BP as part of its response to the oil spill in the gulf coast in 2010 • G4S officers provided protection of BP's assets and personnel across the gulf region in Louisiana, Alabama and Florida with 1 tasks that included access control at critical command and control .! locations and at shore rehabilitation centers and wild life refuges. . .'-'- --------_ • Deployed over 75 CPOs within 24 hours along the coast line. Also, deployed an additional 300 CPOs throughout the region. -3: HURRICANE KATRINA(2005) Hurricane Katrina devastated the gulf coast region of the U.S. and affected many G4S customers in the area. Even before the hurricane grade winds diminished, G4S activated its Emergency Response Center and deployed over 1,600 Security Officers to the area in a matter of hours. The G4S security professionals were stationed at the sites for weeks and did not leave the protected area until the situation returned to normal. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 61 1 043 G4S Secure Solutions City of Miami Beach RFP#: 2015013YG Security Officer Services J POST SEPTEMBER 11, 2001 Within 90-days of the 9-11 tragedy, G4S recruited, hired, trained and deployed over 6,000 officers to U.S. airports, such as: • Baltimore Washington International Airport lif • Nashville International Airport • Las Vegas International Airport - HURRICANE ANDREW(1992) G4S' headquarters in South Florida stood directly in Andrew's path and was severely damaged; over 75%of our personnel were without homes, water, electricity, and other necessities for weeks. Government agencies and critical businesses closed. Yet G4S completely fulfilled its responsibilities in South Florida, regionally, nationwide and internationally. No client lost service;and all Security Officers continued to receive their pay on-time. ', Fi • • • CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 62 P a g e aj I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services 4 TAB 4: Approach and Methodology Submit detailed information on how Proposer plans to accomplish the required scope of services, including detailed information, as applicable, which addresses, but need not be limited to: use of innovative technology, training received by security officers above basic licensing requirements, communication protocols, proactive approach to dealing with quality of life issues affecting Miami Beach, crime prevention and retaining sufficient personnel to meet the City's needs. In this section we provide detailed information on how G4S plans to accomplish the required scope of services for the City of Miami Beach. This begins with our management approach and comprehensive operations plan to ensure successful execution of all contract requirements. Key components of G4S' successful delivery of services include a professional training plan and a well thought out transition plan. Cost effectiveness is a cornerstone of our solution with our innovative technologies for driving performance, transparency and managing the program. These and other essential details of G4S' approach and methodology are fully detailed. 4.1 Project Management A key element of G4S' solution to the City of Miami Beach is our account management platform to ensure the efficient operation of your security program. Our process-driven approach will provide the City with the confidence to know G4S' security services are reliable, consistent and properly managed, thus allowing you to focus on your wider government objectives. Your project management team will consist of: • A dedicated, full-time Project Manager assigned solely to the City of Miami Beach account • On-Site Management • G4S Key Management Personnel 4.2 Dedicated Project Manager G4S' Project Management program provides the City with a full-time Project Manager dedicated exclusively to the City of Miami Beach to lead your account and provide hands-on daily management. The Project Manager will be responsible for the overall performance of the contract. G4S has named Ron Foster as a candidate for this critical position with his resume under Tab 2. Mr. Foster brings invaluable expertise to the City of Miami Beach with his 15 years as a Special Agent of the Federal Bureau of Investigation and 13 years in contract security management. His current role as Director of Public Safety at St. Thomas University is indicative of Mr. Foster's sensitivities to the customer many needs and requirements. Mr. Foster will operate with the autonomy necessary to support the City's security requirements using his team of Supervisors and Security Officers The Miami area office will support the Project Manager by providing the resources and guidance necessary to ensure that our contractual obligations are met, the City's expectations are exceeded and our personnel are CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 63 I J 3 1 CLIS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services able to perform at their peak. Mr. Foster will be the key point of contact for City representatives. With the support of the site supervision team and his unique understanding of the City, Mr. Foster will: • Provide 24/7 Project Management availability through cell phone or G4S Communications Center Dispatch Operations • Provide overall supervision and management of account • Serve as a liaison between the Contract Administrator and other City representatives and G4S management • Maintain the G4S Insight access and customization for the City • Monitor and report contract-specific Key Performance Indicators(KPIs) • Conduct business review meetings • Provide statistical analysis and reporting of security incidents • Share best practices and productivity enhancements with the City • Maintain continuous communication and rapport with City and Law Enforcement representatives • Verify proper post and shift supervision staffing and take corrective action if necessary • Conduct personnel scheduling • Properly train and direct all Security Officers on security tasks and execution of post orders • Oversee and/or conduct all site-specific training • Review and maintain all daily reports • Attend security meetings or other meetings as requested • Maintain current post orders for each post and/or facility • Maintain roster of trained Officers and Supervisors • Maintain custody of all keys and electronic key cards with documented inventory. • Initiate discipline of workforce including counseling, suspension and termination if necessary • Respond to employee or City management concerns • Coordinate enforcement policies and procedures • Provide assistance and guidance to employees and visitors 4.3 On-site Management Project Manager Foster will directly supervise Shift Supervisors, who will conduct all duties as outlined in the scope of work and receive training of on all essential functions to be cross-functional when needed. This level CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 64 I P a g e CLS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services o f management ensures that all G4S Security Officers are closely supervised and the City's security pro ram operates effectively. G4S will support the Project Manager through our internal Area Supervisor Suleiman Mulindwa who will make unannounced site inspections at posts throughout the area as part of our Quality Assurance Program. Shift Supervisors will be responsible for making regular rounds throughout the locations covered by contract and assure that officers are adhering to their post orders as specified by the City. Shift Supervisors will ensure that posts are staffed correctly and that remedial action is taken when necessary. Supervisors will also respond to any calls for service arriving within fifteen minutes by way of G4S'fully marked patrol vehicle. Supervisors will perform duties to include: • Review the day or night activities and report in writing to the proper City of Miami Beach authorities any unusual incident. • Insure proper inventory of supplies. • Coordinate with proper City of Miami Beach designees all security operations and services for regular and event assignments to ensure that all are properly staffed. • Conduct daily visual inspection of assigned personnel verifying all posts are manned and all Security Officers are fully equipped and in proper uniform. • emergency notifications as necessary pursuant to the City's Post Orders • Provide weekly Secure Trax®tour reports of all the City of Miami Beach Posts RFID tags. • Oversee that all aspects of the security function is performed in a diligent manner(staffing, scheduling, and on-site training) • Perform other operations and related functions (e.g., review and maintain incident reports, assist in preparation of security surveys and post orders). • Make recommendations for positive or disciplinary personnel actions for those security professionals under his/her direct supervision • Provide guidance and instruction to subordinate personnel in relation to the performance of their duties • Make productivity and cost reduction recommendations to management, and make recommendations for physical security surveys and post orders • Respond to the City's requests, and provide assistance to the City's customers, employees and visitors in a courteous and professional manner. 4.4 G4S Key Management Personnel The G4S Miami area office has an exceptional management team staffed with experienced industry leaders and tenured company professionals who would partner with the City to provide support and oversight of the account. These individuals will provide all the necessary support to the City Project Manager, Supervisor and Officers to ensure their success and that of the City security program. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 65 I P a g e a/I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services G4S' key management personnel for the project include: Key Management Personnel Responsibilities Ronald R. Foster, Project Manager • Responsible for the day-to-day operations of the City's security Phone: 305-266-2004/Cell: TBD program, solely responsible for the City of Miami Beach Ronald.Foster @usa.g4s.com • Serve as liaison between the City and G4S • Ensure contract compliance by regularly inspecting posts and facilities, and ensuring appropriate scheduling, payroll accuracy, security staff supervision, coordinating all training, and conducting performance evaluations • Maintain control of Keys and other access control items that require inventory and chain of custody. • Other duties include safety direction, quality assurance, and performing payroll functions. Eduardo Yero,General Manager • Provides overall supervision, guidance, and support to the Project Phone: C: 305-788-7810 Manager and management team to assure continued delivery of Eduardo.Yero @usa.g4s.com quality services to the City of Miami Beach • Responsible for maintaining an active, strong partnership with the City and end-users of service Johann Lopez, Operations • Serves as the required Primary Contract Manager for the City Manager • Assists General Manager in operations to include quality assurance Phone: C: 305-397-3992 and contract compliance for the City Johann.Lopez @usa.g4s.com • Ensures contract-required training and screening are met • Responsible for staffing, scheduling and discipline and supervision of payroll and billing Suleiman Mulindwa,Area • Serves as the required Secondary Contract Manager for the City Supervisor and provides primary support to the Project Manager. Phone: C: 305-321-0139 • Ensures the Miami Office is compliant with your contract, policies and Suleiman.Mulindwa @usa.g4s.com statutory regulations • Directly responsible for all daily operational matters pertaining to the security officer services for the City • Available to the City via cell phone twenty-four hours a day, seven days a week to address any questions or concerns William Winstel,Training Manager • Responsible for instructing all pre-assignment and ongoing/annual Phone: 305-266-2004 Ext 114 refresher training, and weapons and first aid/CPR/AED training, in William.Winstel @usa.g4s.com compliance with contractual, City and G4S guidelines • Administer the physical fitness tests, career development training, leadership development training and any other specially requested training outside of the Scope of Work • Collaborate with HR Manager and the Operations Manager to make sure every officer assigned to the City completes all required training in accordance with the Scope of Work Ronald Fagan, Human Resource • Coordinates recruiting, training and assignment of newly hired officers Manager for the City's contract Phone: 305-266-2004 Ext 127 • Work closely with Operations Manager and is responsible for ensuring Ronald.Fagan @usa.g4s.com all personnel meet the City and G4S' requirements for employment on this contract • Development and maintenance of employee personnel files, and entering all required personnel information into the G4S' HR Management System CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 66 I P ? g CZJLS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Key Management Personnel Responsibilities • Maintains all administrative aspects of the transition, to include background checks, drug screens and physical fitness tests • Coordinates the ordering and issuing of uniforms and assists with payroll or any other functions as needed. John D'Agata, Regional Vice • Ensure that the resources necessary to carry out a seamless transition President, Florida Region of the City's security service are in place, leveraging the assets of the Phone: 561-994-0358 Florida Region and G4S' corporate headquarters John.Dagata @usa.g4s.com • Augment the Miami Office's resources with operational, HR, technology and administrative support • Facilitate both inter-state and intra-state staffing deployment when needs arise, including special events or emergency disaster recovery G4S will use an Operating Plan to lead and continuously improve your security program, and ensure we maintain a high degree of adherence to your scope of work, and satisfy Security Officer requirements/qualifications. Outlined in this section, we describe the following: • Operating Plan • Financial Management • Employee Management • Administrative Policies and Procedures 4.5 Operating Plan The G4S Operating Plan makes certain high quality security services are delivered consistently and reliably to the City of Miami Beach. Before the first day of service and continuing through every hour of every day, our plan provides guidance to all operational aspects of your security program. Key components include: • Local Support& Resources • Actionable Post Orders • Cross-Training & Flex Force for Non-Routine Needs • Employee Communication • Officer Surveys • Professional Appearance • Operational Reporting • G4S Insight 4.6 Local Support & Resources The core of the Operating Plan begins with offering the City ample support and resources. The City of Miami Beach will be supported by G4S' Miami office and our Jupiter-based National Communications Center(for 24 hour Dispatch operations). CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 67 G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services The proposed structure and staffing plan provides direct supervision, hands-on management,and resources to ensure Quality Assurance,such as unannounced site inspections by our Area Supervisor.The Project Manager will oversee your account and directly interface with City representatives. Supporting the Project Manager are the designated G4S Managers — Johann Lopez (Operations Manager) and Suleiman Mulindwa (Area Supervisor)who will meet with City representatives daily or as needed. You also receive full support of our 24/7 National Communications Center (NCC). The NCC provides centralized dispatch services and is designed to support communications of Security Officers and assist City representatives or others as needed.The NCC also allows our customers to make a single call to the local area office for any issues that may arise on the account and to eliminate the need to make numerous calls when a problem or emergency arises after normal business hours. Located at G4S corporate headquarters in Jupiter, FL, the center is staffed with qualified personnel who immediately respond to Officer calls and calls from any stakeholder and have access to your account information to respond appropriately.Operators handle all Secure Trax®communications traffic.The benefits of the G4S Communications Center are: • Make only one call to the local office 24/7 for any issues • Eliminates the need for multiple calls&follow-up • Provides a recording of each call and Security Officer's Secure Trax®Push-To-Talk(PTT)broadcasts. • Follow-up as necessary to ensure the situation has been resolved to your satisfaction 4.7 Actionable Post Orders G4S agrees to follow the current post orders listed in the RFP. During the transition period and prior to service start, we will coordinate with the Contract Administrator and other representatives to review and update your existing Post Orders for each position with any approved changes or requests.Security Officers will have clearly defined written instructions for each assignment on which they will be regularly tested for their C7,.$ working knowledge. Post Orders contain: POST ORDERS FOR EKE • Responsibilities ABC eeRPORA'.tar: • Policies • Procedures • Standards Security post orders will outline all aspects of physical security for catastrophic or emergency conditions as they apply to the safety and security of people and facilities. These post orders will provide Security Officers with an approved, preplanned method of maintaining security at each post with a minimal reliance on memory. G4S' Supervisors will ensure that each officer has been tested on and has a working knowledge of the specific job details. CONFIDENTIAL, PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 68 I P a g e dP4AS 1 G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services 4.8 Cross-Training & Hex-Force for Non-Routine Needs G4S is prepared to serve your non-routine security requirements. Cross-training of on-site Security Officers with scenario-based training will ensure that our Security Officers are prepared for the proper and prompt response to emergency conditions. Cross-training allows officers and supervisors to cover posts (e.g., Bike Patrol duties) when necessary (e.g., absences due to vacation or illness). All required City of Miami Beach training will be given to personnel working posts for the City. Certain Supervisors will also receive police-style and bike patrol-style uniforms to offer greater flexibility in their functions. The Miami Office also maintains a cadre of Security Officers to handle short notice, cyclical, or emergency staffing situations that extend beyond the personnel assigned to the City. 4.9 Professional Appearance , . , :, x, ,77 G4S agrees to meet and or exceed all uniform and equipment _ .' ,p.:, requirements by the City of Miami Beach. L`, • = �..,i._ r- 1- ,,f All G4S Officers that are assigned to a post for the City will be neatly t;11. _;,-t_ mod e uniformed and well groomed. Each officer will wear a nameplate bearing - =r '= • ` v. the officers name over the right pocket. On both sleeves of the officers y�� '737'''` 2. uniform shirt, the G4S logo will be displayed to help distinguish the 0 =`�,_. ;;; . uniforms from the City of Miami Beach Police uniforms. , '- °?�J- t--�!-- CPOs and USOs will receive a plentiful issuance of full uniform with :"-- - `! accessories and accoutrements at no cost to them to ensure a sharp #- --Y ,` and professional appearance at all times. Replacements are provided as L.-- -'- ` i L~C z :.j, _ needed whenever uniforms fail to maintain our high standards for appearance or due to normal wear-and-tear or damage caused during work. G4S personnel will always look professional and well-groomed. 4.10 Operational Reporting G4S will deliver the required reports according to the Post requirements, such as visitor access logs, maintenance requests, and NFC logs. Basic security operational information is captured using the following tools: Feature Description • Each Security Officer records activities daily on this form as determined by Project Manager Security Officer Report • Submitted to supervisor at the end of each shift • Reports available for review upon request • Real-time incident available via Secure Trax® &G4S Insight • Unusual incidents recorded on this report Incident Report • Supervisor review for appropriate action to be taken • Real-time incident available via Secure Trax® &G4S Insight Supervisor Inspection • Used by off-site(area/roving)supervisors for facility inspections Report • Ensures proper security procedures are in place&carried out CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 69 I P a g e C743 f G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services Feature Description • Reports available for review upon request • Real-time incident available via Secure Trax® &G4S Insight • Security Officers use Secure Trax® to record shift start&end Time&Attendance times • Information automatically generates payroll& invoicing • Real-time incident available via Secure Trax® &G4S Insight • Used by supervisor to record interaction with City representatives Client Contact Form • Includes time&date of contact,topics discussed&follow-up actions,as necessary • Real-time incident available via Secure Trax® &G4S Insight • Officers will record "light out"occurrences in real time via Secure Trax® and provide instant notification to identified Lights Out Occurrence point of contact Report • Immediate notification to designated MBPD personnel—mitigating the gap from incident to reporting it • Light out reports available to the City for review 4.11 Training G4S will use the resources of our ISO-certified corporate university, G4S North America Training Institute (NATI), to develop and instruct training programs for the City of Miami AsTD Beach contract. Our awards and ISO-registration attest to the world-class training we provide our officers —giving you the confidence in knowing our personnel are competent, professional, TOP efficient and fully prepared to serve the City of Miami Beach. It further underscores our - 12 commitment to providing personnel training that exceeds industry standards and S opportunities that support professional career development to retain the highest caliber personnel. G4S'corporate university has received numerous accolades, awards and certifications,with the most recent being: • Seven consecutive years(2008-2014)recognition as Top 125 LEARN,NGELITE Training Company by Training magazine ;2014 ORGANIZATION • 2014 Learning Elite Award by Chief Learning Officer Magazine • 2014 Top 20 HR Leadership 500 Excellence Award (Large Company)by HR.com • 2014 The American Society for Training&Development(ASTD)Best Award winner • Workforce Magazine Workforce 100 Company • Brandon Hall Bronze Award for Best Inclusion and Diversity Strategy,the Bronze Award for Best in Rewards and Recognition and the Silver Award for Best Talent Acquisition Process CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 70 I P a g e C74,1S I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services G4S understands that public environments have specialized security needs and require dedicated training.As an extension of the City, G4S Security Officers will have a critical duty to represent the City with the utmost of professionalism and convey a positive, proactive customer service attitude.At the same time,Security Officers will be required to perform high-level security duties involving emergency and challenging situations. To that end, G4S' robust training program will be essential to ensuring quality service and exemplary security performance for the City. G4S'training program will be customized to meet the unique needs of the City and include: • Pre-Assignment(Initial)Training • First Aid/CPR/AED Training • Site-Specific Training 7=.--. 111/1 • Specialized Training • • Ongoing/Annual Refresher Training • Supervisor Training DALE CARN EG I E" • Value-Added Training and Advanced Training TRAIN ING • Safety Training To ensure all training is accomplished, G4S will employ its advanced, online Learning Management System (LMS)to monitor,track and record training for all personnel. Our LMS tracks web-based eLearning, instructor- led classroom training, read/print/sign documentation, Competencies, Certifications, and bundled courseware via Learning Paths. Using the LMS, G4S can generate the following reports: • Course • Users, Courses Enrollments • Sessions • Session • Log Entries Enrollments • Competencies • Course Enrollment Tasks • User Competencies The Project Manager will furnish training records to the Contract Administrator to ensure all required training is accomplished. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 71 1 P a g e a is I G4S Secure Solutions City of Miami Beach RFP#:2015 013 YG Security Officer Services The LMS features the following capabilities: • Task Course Notifications—G4S personnel are notified of required tasks to be completed as part of their course. Mr. Foster will also receive notification to ensure and sign-off on completed tasks. • Auto-generated emails, can be mapped to a course. Mr. Foster can specify alerts and reminders to be sent out based on specific triggers. Some of these triggers are: o Enrollment trigger-alerts personnel that a new course has been assigned o Reminder trigger-reminds personnel of an upcoming assignment o Fail trigger-notifies personnel of a failing course grade o Pass trigger-congratulates personnel on a passing course grade a G45 Secure Solutions USA:Enrollment history Alex Smith -Enrollment History Course/lame Status Score. Credit Hours Completed On Safety Orientation 20131 FEP,tA!S-35.13) Passed 0.0 01102/2013 Job Set-up for Bank of America Passed G.0 1010202012 How to Create a Holiday Schedule in Labor Scheduling Passed 0.0 09/1912012 Community Preparedness:Implementing Simple Activities for Everyone(FEMA Independent Study Course I5-909) Passed 0.0 0511412012 Focus on Custom Services-Special Event Security Passed 0.0 00109/2012 Check It-How to Check a Bag Passed 0.0 02.11412012 Check It-How to Check a Bag Passed 0.0 03113/2012 Patrols and Fined Posts Passed 0.0 02113/2012 EP-06-Professional Communication Dropped 0.0 0212912012 LM-99:Employee Awareness Training(Business Ethics and Conduct Policy) Passed 100% 0.0 02129/2012 Warning Signs of Transit Terrorism Passed 0.0 02/22/2012 LM-09 Emergency Power Off Devices Passed 90% 0.0 02/2212012 LM-09 Emergency Power Off Devices(instructor Copy, Passed 0.0 02+112012 Check it-How to Check a Bag Passed 0.0 02'0302012 LPd-Oh Emergency Power Off Devices Passed 1CC% P.O 12/30/201 1 LM-09 Emergency Power Off Devices Passed 10C% 0.0 12,2012011 Patrols and Fbced Posts Passed G.0 12112,2011 Check It-How to Check a Bag Passed 0.0 12112,2011 Example Screenshot of LMS Enrollment History • CONFIDENTIAL, PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 72 P a g e (743 G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services Example Screenshots of Training Enrollment Summary and Enrollment History Co III®® Raage PacRa9ea Billing $ if,,<wf.. ./ -: .� '-'. . 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Enrollment history Current History 5'rc_CiT Punt iirtery, Fitt - Enrollments Catalog Flies COURSE COMPLETED STATUS slogs - - --LM-99_Employee Awareness Training(Business Ethics and Conduct Policy) Wed Feb 29 2012 Passed 100% d Forums ;,. nnaT: df Warning Signs of Transit Terrorism Wed Feb 22.2012 Passed 1 Dashboard ® __ __ _ Users 11 LR1-O9 Emergency Power Off-Devices ' Wed Feb 22.2012 Passed 90% Groups .___ _ __ __ Courses II L1I-09 Emergency Power Off Devices(Instructor Copy) - Wed Feb 15.2012 Passed Sessions Reports V&A Check n-How to Check a Bag Wed Feb 08 2012 Passed Requests System Log VI LM-09 Emergency Power Off Devices Fri Dec 30 2011 Passed 100% — Sett!ngs LM-09 Emergency Power Off Devices Fri Dec 30.2011 Passed 100% Customs _ -__ Positions I. Patrols and Fixed Posts Tue Dec 13.2011 Passed Letters _ _ _ _ _ Categories sir Check It-How to Check a Bag Tue Dec 13 2011 Passed Competencies ___L.—.t __ __ Billing - Interacting with Disturbed Person Tue Nov 22.2011 Passed - --- Patrols and Fixed Posts -- - - — - Fri Nov 18,2011 Passed w CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 73 I P a g e G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services All training is documented in each employee's individual training record. This formal document records all training (pre-assignment, ongoing/refresher, annual, etc.) and is entered into the individual's online folder via our Human Resource(HR)System. Records contain the course description,the date completed and the grade earned, if applicable. It also contains information on annual refresher training to ensure that all training remains current. 4.12 Training Plan At G4S, we believe in providing the best training for our personnel, regardless of industry norms. NATI, our corporate university, has f developed award-winning training programs for all of our Security Officers, which are then customized to specifically address the needs,challenges and situations that are unique to the City and your scope of service and level of security officer. - Personnel assigned to the City will satisfy all requirements under the State of Florida Department of Licensing pursuant to section 493.6123(1) F.S., and possess a Florida Class"D" License and/or a Florida Class"G" License based on their Security Officer Level. Outlined below are the training programs proposed for the City, which can be adjusted to meet your individual needs. Pre-Assignment(Initial)Training (48 Hours) G4S' pre-assignment(initial)training consists of forty(48)hours of classroom training in the following courses: PHASE ONE Training Subject Training Course Hours of Instruction • Serving the Security Customer INTRODUCTION • Customer/Public Relations(Dale Carnegie 3 Course) • Basic Duties of Private Security Personnel BASIC PREPAREDNESS • Shift Work, Sleep and Alertness 2 • Fire Detection, Suppression,and Life Safety • Accident Prevention and Investigation LIFE SAFETY • OSHA First Responder—Awareness Level 4 • Emergency Response • Patrol Vehicle Driving Safety BASIC FIRST AID– • AHA First Aid, CPR and AED Course(G4S including CPR&AED AHA Instructors) 8 • Legal Authority of the Security Officer LEGALITIES • Powers of Arrest 4 • Search and Seizure CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 74 I P a j C745 G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services PHASE ONE Training Subject Training Course Hours of Instruction • Protecting Crime Scenes and Preserving Evidence • Courtroom Testimony • Field Note-Taking • Report Writing PROFESSIONAL • Two-Way Radio Operations 6 COMMUNICATIONS • Telephone Procedures and Etiquette • Security Interviewing Techniques • Techniques of Effective Patrol • Night Vision Techniques for Patrol • Access Control • Information Protection PHYSICAL SECURITY • Protective Alarm Systems 8 • Crowd Management • Bomb Threats • Traffic Control • Controlled Substances • Escort services • Loiterers • Vandalism SPECIAL SITUATIONS • Threats of personnel safety 3 • Burglary, robbery, or theft • Espionage • Sabotage • Human, Public, and Media Relations • Effective Assertion INTERPERSONAL • Private Security and Police Relations 6 RELATIONS • Abnormal Behavior • Violence in the Workplace • Final Exam and Review COURSE ADMINISTRATION 4 TOTAL 48 PHASE TWO—SPECIALIZED TRAINING Training Subject Training Course Hours of Instruction • Bike patrol personnel will complete G4S Bike Patrol Training focused on bicycle basics, BIKE PATROL OFFICERS tactical procedures, public relations, 8 intelligence gathering and special events. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 75 G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services Testing Ensuring that our training programs are the best in the business CT AS guarantees that our people are unrivalled in the industry,which is why testing Security Officers after pre-assignment training is standard PRESENTS THIS company protocol. Upon completion of each training module, Security Frrff;pi.r/i.r! (,,/'Nf..�riiiirlr� Officers will be tested via a written exam and a final written exam that TO covers all the training modules covered during the pre-assignment FOR COMPLETION OF training. Following the completion of testing, students'test scores are documented in the individual's training record,which is maintained in 41' AWARDED ON our HR system. This ensures mandated and account-specific training completed prior to assignment at the City. First Aid Training G4S is the largest American Heart Association (AHA) Corporate Training Center in the nation.With over 320 instructors nationwide, G4S is ' "m"lea^ i AUTHORIZED g Heart TRAINING able to provide all officers assigned to the City with eight (8) hours of First :C E N T E a Aid/CPR/AED training by our internally certified AHA instructors. First Aid/CPR/AED training will be conducted as part of the officers' pre- assignment training (see the above table). All personnel completing First Aid/CPR/AED training will be measured through a hands-on skills test to demonstrate competency and comprehension. Officers will receive re-certification training every two years by our AHA Training Center Faculty. Weapons Training Security Officers at Level Ill and higher will receive 32 hours of weapons training.Weapons training consists of 28 hours of initial Florida State Certification Training and 4 hours of Annual Requalification Training for all "G"licensed officers. Our Firearms Training follows the NRA Course of Fire and meets Florida State Licensing for a"G"License. Site-Specific(OJT)Training As part of their assignment to the City,Security Officers will complete a robust site-specific(on-the-job)training program that exceeds the State's minimum security requirements. Site specific training hours will be provided as outlined below: • Security Officers(USOs): 24 hours • Supervisors(CPOs):40 hours CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 76 I P a g C 'IS I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services G4S will provide structured and supervised OJT by a certified G4S trainer or supervisor. OJT takes place in a normal working situation, using the actual tools, equipment, documents and/or materials the officers will use when fully trained. The curriculum will be strictly site-specific and will be developed in coordination with the Contract Administrator. Topics will include, but not limited to: • City of Miami Beach Post Manual and SOP • Report writing familiarization • Homeless Outreach Training • Safety and fire safety training • Customer service and personal interaction • Civil Disturbance Training • Management of Aggressive Behavior • Performance of special assignments (MOAB) • Public relations/effective communications • Patrol Procedures • City emergency response plans • Crowd Control OJT also presents an opportunity TRAINING CHECKLIST(CONTINUED) to provide additional training for CONTINUING EDUCATION SUBJECT/ DATE LENGTH SUCCESSFUL COMPLETION COMMENTS officers assigned to code CORP.L LAR,CALL NUMBER' EMP.INRwLS SUP.Nnuls compliance duties. Focused OJT GENERAL AND POST ORDERS will assist officers in understanding the responsibilities in this role and the City's rules for: dog off leash, pooper scooper, littering, skateboarding on Lincoln A Road, homeless outreach efforts, and skateboard and bicycling on boardwalk. G4S'OJT is designed so officers can take advantage of the tools and knowledge acquired from the classroom and apply it through an interactive testing process led by seasoned Security Officers or Trainers. Newly assigned officers will be given a demonstration of all the duties required of their assigned post(s). Officers will be required to show they understand the task and can efficiently complete it. A checklist will be provided for each specific security post to ensure full completion and competency of the duties. CONFIDENTIAL, PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 77 I P a g e G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Specialized Training Specialized training will be offered to those officers performing services in Traffic Control or Bike Patrol, as follows: • Bike Patrol Officers: 8 hours G4S' Bike Patrol training program explains in detail the expectations and procedures of a bike patrol. The instructor reviews the types of bicycles, bicycle nomenclature, proper fit, and tactical procedures such as security riding techniques. As bicycle patrol is highly interactive, public relations are emphasized to ensure officers have great personal interaction skills. Special enforcement is covered, e.g., intelligence gathering and use, gang recognition, and special events. Annual Refresher Training To support ongoing learning and training, all G4S Security Officers assigned to the City will be required to satisfy eight (16) hours of annual in-service training. We will work with the City to determine the appropriate subject matter and topics specific to your changing security needs. We will submit the schedule of courses to the Contract Administrator for approval prior to implementation. Some of the topics for ongoing training could include: • Lessons learned from recent incidents • Terrorism Awareness • Homeless outreach training • Emergency Incident Response • Risk mitigation • Safety • Access control policies/procedures • Customer Service Standards • Changes in Post Orders Supervisory and Management Training G4S' supervisory development training provides comprehensive hands-on learning and education to prepare our personnel to be effective leaders. All personnel assigned to management and supervisory positions will complete G4S' supervisory development training within six months of assignment. This supervisory development training program is recognized by The University of Maryland, and the student can earn eight continuing education units (CEUs) upon completion. The American Council on Education recommends full college credit for this course. The courses covered in the supervisory development training are reflected in the chapter titles listed below: • The Role of the G4S Leader • Transition from Team Member to Team Leader • Leadership in Multicultural Environments • Traits of Successful Leaders • Time and Task Management • Safety and Loss Control • Quality Decision Making • Interpersonal Communication CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 78 I P a g 07j I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services • Employee Relations • Customer Relations • Police, Community, and Media Relations • Interviewing Techniques • Motivation, Self-Image, and Success • Team Building • Equal Employment Opportunity and the • Coaching and Counseling Quality of Work Life • Evaluating Performance • Progressive Discipline • Conflict Resolution • Dealing with Human Behavior • Change Management • Shift Work, Sleep, and Optimum Performance • Substance Abuse • Stress Management • Ethical Conduct • Serving the Security Customer • Career Development Value-Added and Advanced Training G4S also provides employees with optional, value-added training opportunities at no additional labor costs. Employee participation in these learning programs results in greater job satisfaction, retention, and professionalism. The learning programs are available online via G4S' Learning Management System (LMS). Officers can take courses 24/7 at their convenience to improve their skills and enhance their professional development. Courses include: • 182 training programs consisting of learning programs and workbooks • 25 interactive security training modules • 42 management skills programs produced by Harvard University • Over 100 Microsoft Office training courses • E-Safety courses Some of the advanced training programs available to Officers include: Project Manager Employment Law Training Program • 30-hour distance-learning program • Studying videotapes/DVDs • Completing workbook/test on each segment • Work submitted to G4S North America Training Institute for evaluation and grading • Universit of Ma land awards 2.9 CEU's Professional Development Program Security Officers • Studying at least 38 security-subject workbooks • Workbooks are designed to lead them from the basics to advanced topics in security • Pros ram ma be redesi•ned to meet site-s•ecific needs Professional Development Program Security Supervisors • More challenging than the program for Security Officers • Studying at least 32 security-subject learning programs(LPs) • Completion of the Leadership Manual Course CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 79 P a g e (7 I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Safety Training G4S prides itself on the quality and training of our Security Officers. This also applies to our Safety Program and safety training that we provide our Officers. All new Security Officers receive initial safety training prior to assignment on the 14 general safety topics covered in the Employee Safety Handbook. Officers then receive site-specific training as they are trained on their Post Orders. Depending on the work environment, additional safety training is provided to ensure a safe workplace for the Security Officers (e.g., bike patrol or vehicle safety). Safety training does not stop after the initial assignment; NATI has developed several types of training programs to provide effective on-going safety training to our employees. These topics include: • Back safety • Fall protection • Lock out/Tag out(LO/TO) • Basic First Aid, part 1 • Fire extinguishers • Occupational ergonomics • Personal Protective • Hazard communication Equipment • Commitment to safety • Hearing conservation • Respiratory protection • Basic First Aid, part 2 • DOT HazMat awareness • Safe Driving • Industrial fire protection • Office ergonomics • Electrical safety G4S' Safety Director, Frank Knapfel distributes a monthly safety newsletter to all the field locations and all employees. Safety Matters is distributed at least monthly and covers a safety topic and safety related information. G4S also provides a weekly safety message training topic at many of our locations. ON -..s14 Ever Alert, Alwa s Safe CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 80 F, $ G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services 4.13 Use of Innovative Technology Secure Trax®-A Force Multiplier G4S will take your security to the next level by leveraging advanced tools that :Anson provide you with value-added benefits and increased situational awareness. More advanced than the Deggy Wand, or other similar Guard Tour Systems, G4S will Secure Tr six use our propriety mobile technology, Secure Trax®, to support employee i management and your key security and safety processes. Secure Trax®is deployed on smartphones and allows officers to check-in/out of 44 post, report observations(with text and photographs), perform post inspections (e.g., door/gate locks, maintenance issues) and log incidents real time (e.g., 30 O "light out" occurrences, security breaches). Secure Trax® can enable our officers to communicate with the City's designated representatives using the 1 methods you prefer, such as: i • Cell phone with controlled access • Email • Text messages All data collected from Secure Trax®is available via your Customer Web Portal, G4S Insight. You will have online access to compliance data including check-in/check-out reports and histories of officers' observations, reports and concerns. A key component of supervising our employees is the use of Secure Trax®,which offers the following functions: • Electronic Time and Attendance: Officers check-in/out of Post using the Time and Attendance feature, which feeds accurate attendance data into the invoicing system to ensure accurate billing. Plus, real-time monitoring ensures employees are at the right place at the right time. • Check-in and out data links with labor scheduling: If a check-in is missed according to the Labor Scheduling System,Supervision is immediately notified.This allows staffing arrangements to be made to minimize instances of"open post. • GPS Tracking and Bar Codes:Supervision can track officers'locations to ensure they conduct patrols and inspections according to post orders. • Tour Watch: This feature provides us the ability to monitor patrols, check points, safety inspections, etc.to ensure our employees are adhering to your post orders.The use of Secure Trax®gives a visible and timely record of employee compliance with your post orders, so we can more accurately measure and monitor performance. This functionality will be used by Security Officers to fulfill the touch point requirements and locations in Exhibit C of the RFP. Secure Trax®—Advanced Features Secure Trax®offers more than simply employee management.With G4S'security program,the City can realize operational efficiencies and cost savings, because Secure Trax® allows our officers to do more, provide CONFIDENTIAL, PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 81 1Page C7aS{ G4S Secure Solutions City of Miami Beach i RFP#: 2015-013-YG Security Officer Services relevant security and facility data, and enhance your security environments. These advanced features are in Secure Trax®at no additional cost, and include: The City of Miami Beach Requirement Fea tur ur e Trax® Fea Description • Safety violations(including photos) • Written street/park lighting report transmitted to G4S Supervision and forwarded to MBPD within 24 hours of Risk- appropriate the City representatives any lights out occurrence Management: . • Real-Time notification to the appropriate City Facility and stakeholder if an issue is observed and • Making rounds and clock rounds; Safety recorded(e.g., lighting replaced, pot hole, gate checking lights; assuring locks of gates Inspections open, etc.). and doors • Documented inspections available in real time ensure we are meeting your security protocols • Incidents are captured via images/photographs and transmitted to the designated City representative • Ability to take photographs and • Critical security incidents or maintenance Incident document violations and incidents as issues(e.g., lights out)are captured and required Notification Contract Administrator immediately notified to remedy issue without delay. • Secure Trax® automate reporting allows Security Officers to be more efficient • Communication(with controlled access)by cell phone,email and text/picture messaging • Allows officers to respond immediately and • Responding to alarms, suspicious your representatives to be notified instantly Multi-mode activities, fires, injuries, security Communication when emergencies occur incidents or any emergency situation • Features Duress Alarm—Security Officers depress silent button in distress situation and email and/or text message sent to G4S supervision and Communication Center • Bar codes are scanned to document patrol and record conditions • All sensor/readers at contracted posts • Exterior guard tours via GPS tracking- helps to ensure that Security Officers are ensure tour compliance, and missed activities making required rounds at assigned Guard Tour alert security supervisor frequencies and times • Guard tours can be customized to your needs • Online tracking provides reporting and insight into our performance • Automated officer check-in/check-out via GPS • Security Guard completion of all Post or RFID capability—you know the officer is on post at the scheduled time. assignments, in a timely manner Compliance • Automated open post alerts to the supervisor and the 24/7 National Communications Center Figure 9:Secure Trax Features Benefits of Secure Trax® With Secure Trax®,we provide the City reassurance that our officers are performing according to your security protocols. Secure Trax®allows our officers to communicate quickly and efficiently to keep you in the loop, and will document their actions and observations thoroughly.You will have easy online access to your Secure Trax® CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 82 I P a a • aiLS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services data,which is securely stored at an ISO certified, SAS 70 Type II network facility.Secure Trax®benefits include: • Confidence knowing the right people will be notified immediately • Your risk management and legal processes supported by documented histories • Optimal use of officers through better communications • Ability to create customized inspections for officers • Responsive and reliable security during and after emergencies • Greater protection of life safety, business continuity, assets and reputation • Safer community and workplace from "near misses"entered into system as areas to improve • Electronic Time and Attendance also captures reasons codes for early and late check-in times that are used for reporting. • Supports green initiatives by reducing paper reporting and paper time and attendance • Improves the accuracy of invoicing through reduction in errors caused by paper reporting and data entry 4.14 Evaluation of Radio Communications System G4S' communications solution for the City of Miami Beach incorporates our Secure Trax®platform and AT&T's enhanced Push to Talk network. An outline of the features of the G4S solution are provided below within the outline of the City's communication requirements. Hand Held Communication Device: G4S proposes our Secure Trax® platform on rugged Smartphone devices using PoC "Push to Talk over Cellular" will be provided to all on duty security officers and supervisors in lieu of hand held two-way radios. This PoC uses licensed FCC radio frequencies operated by AT&T. PoC has all the capabilities of traditional 2- Way radios, and many advantages over traditional 2-Way Radios. The following are features provided by the Push to Talk over Cellular. • Sub 1 second call setup(i.e.,the call transmission from caller to receiving person occurs in one second) • Support for large contact lists(up to 1300)contacts per device • Support for large"talk groups" up to 100 talk groups with up to 250 users per call group • Support for Supervisor Override capability • Broadcast Group Calling with up to 500 users in the group with a special alert tone. • Secure Communications with 256 bit AES encryption from the device through the POC architecture • Support for communications over WiFi networks to allow for redundant network architecture • Devices have a presense status so users can set their availability i.e. "available" "do not disturb" and "offline" • Support for"talk group camping" allowing a user to lock on a specific"talk group" • Support for"talk group scanning" so a single device can scan a series of"talk groups" CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 83 I P a g e aj( G4S Secure Solutions City of Miami Beach ` RFP#: 2015-013-YG Security Officer Services I WIN. ________ t;:. f _ .4 *t v. 04 " - -. 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Frew I swum Gm*.i I Loci 6.0. f n 7•.e.,ysd,..�ss .. 17 DGoner ives Iii ._.. ,. i 1•MB Waal*-Gillet S5 I 1 n'!•`Madan-thine Mend =1 Locatonmon=nisnubnch MAo(1s NOM 5 El*� :6 n.-_ BobCanda Tab 3 ; '.",Z1.` n om„ ee�a.rse15eeealawta..n. 4 •' , yasn " ? a . - 1 it ..d,4 j-15_Po,s _ Centralized Dispatch: CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 84 1 P a g e tY 1 G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Centralized dispatching services will be provided by the G4S National Communications Center, using AT&T's centralized dispatching system. Our Communications Center staff will handle dispatch for the City of Miami Beach 24 hours-a-day, 7 days-a-week. The dispatch system we will employ for this requirement includes the following: • GUI (graphical user interface) that provides dispatch agents the ability to initiate and receive a"one to one" or"one to many" PoC call to a rugged device in the field. • The system also provides location information for all of the devices in the field using the devices's GPS receiver. Devices will report to the centralized dispatch system location information in various configurable intervals. • The system will also support call recording in the form of"ad hoc", or always on recording. In addition these call records can be exported and saved in various formats. • The system also supports talk group camping/monitoring allowing dispatch the ability to monitor multiple talk groups/channels simultaneous. • The system is IP based to allow for communications over various network technologies including Cellular, WiFi, and LAN technologies. This IP based functionality will allow the system to be located anywhere there is an internet connection, and can be setup in a redundant fashion. ElldlelleIleillell w pm + 7t1-,... 44 _ M ' Pl. '..., .11 _. ' '2 • ::::::::::::: ,L s'' - 4 d OP X 11 .,,,..„. �\ , .,_._,_,., ,, , , v �It r , _ ,, .._._ Al( A , A ---allk- - System Quality : The PoC system operates on AT&T's cellular network. The system/network is nation wide and encompasses CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 85 ° a g e a I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services all of the City of Miami Beach. AT&T will at all times maintain high quality/high availability transmit and receive communications. The PoC system will be configured as a private communications system used exclusively by the City of Miami Beach contract. An administration portal will be provided to allow for the creation of private contact lists and talk groups isolating the City of Miami Beach radio traffic. This radio traffic is also encryped with 256 bit AES encryption so that the radio traffic cannot be compromised. The PoC devices can be provided with spare batteries, multi bank battery chargers, spare devices, and any other equipment deemed necessary to meet the requirement of sufficient operating power during a tour of duty. : swam ' 'tN-1::-,, ..0, 'o. t '1 ; F E • fir 'MM ti .w .i . mss. y. „ —,--,:',-,„ti,:-.-- --- i-.43 -_, tot,,...: oil ,, ..,.., , • am 41 .i Figure 10:NCC view of South Florida Communications Network via CAD(July 2015) CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 86 I P a g e CrI G4S Secure Solutions City of Miami Beach ti RFP#: 2015-013-YG Security Officer Services 4.15 G4S Insight G4S Insight ensures delivery of standardized policies and procedures, post instructions and performance criteria. We propose this technology to capture and measure our performance and provide The City of Miami Beach real-time visibility or"Insight"into our operations. Our Secure online portal is named G4S Insight for that reason. Our technology reaches beyond the capabilities provided by similar systems.We provide transparency of reporting metrics for your security program. G4S was the first to develop technological tools to deliver improved security and reduce costs, and we have integrated this technology into our manned security operations. It allows us to closely measure our performance and report the results to The City of Miami Beach representatives. Secure Trax®will be deployed to document and report on operational tasks, observations, and actions, which are available to the Contract Administrator and other representatives in G4S Insight. G4S Insight is a web-based online repository of key account information and reporting tools and is an important part of our solution to the City of Miami Beach. G4S Insight provides a user-friendly interface and automatically populates data from our Automated Time&Attendance application, Secure Trax®, Labor Scheduling System, and our enterprise PeopleSoft applications. You can view reports online, download them as Adobe PDFs, or receive them by e-mail on request. You can analyze your security KPIs by geography, business unit or one of many other categories that you define. Data can be grouped and reports formatted in the best way to meet your audience's needs. Figure 11:G4S Insight G S sight .o $ Qo U'1 Proof of Operational Financial Employee Presence Management Management Engagement and Development 00oo( t>� Safety Incidents Dispatch Contact Us G4S Insight provides the City of Miami Beach with a customized view into your account including the following five core components: CONFIDENTIAL, PROPRIETARY, COMMERCIAL OR FINANCIAL INFORMATION 87 I P a g e �iS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services • Compliance - This section provides access to the City of Miami Beach account-specific Key Performance Indicators (KPIs) which include: Post Coverage, Turnover, Training, Post / Site Inspections, and Invoice Accuracy. • Financial Tracking-The ability to capture The City of Miami Beach budget information to support your Budget versus spend reporting to include statistical forecasting, invoice accuracy and overtime analysis reports. • Incident Reporting -All incidents observed by G4S' Security Officers are electronically recorded using Secure Trax®. The incident reporting section of G4S Insight includes: o Search - Ability to quickly search on key fields associated with people, vehicles, sites, and incident type. There is also an ability to search on a word or phrase and the reports are delivered instantly in a PDF format. o Standard Reports and Graphs with advanced filtering capabilities for easy drill down that are exportable to PDF or Excel. o Pivot360 -An advanced analytical tool that allows customizable and personalized reporting. Each report can be dynamically representing as a graph using an integrated charting feature. • Tour and Inspections - Using Secure Trax®, G4S is able to provide unlimited options for automating and reporting guard tours, safety inspections,facility inspections or any current manual checklists or reporting. A portfolio of reports and graphs, including compliance reports (e.g., completed vs. target scans) and detailed reports with filtering and drill down capabilities are available on demand and can be exported in a variety of formats. • Staffing-Addressing everything from on-time compliance to Daily Activity Reports(DARs)to Post Orders, G4S Insight provides searchable work schedules, GPS tracking with geo-fence capability for outdoor patrols and the tools you need to assure full contract compliance and the delivery of service on a daily basis. These and other metrics are made available to senior level customer contacts via G4S Insight. The metrics can be delivered in hard copy format or can be downloaded and e-mailed to the client. The G4S Insight dashboard is of great value to G4S local, area, regional and global management in analyzing our operations and an excellent tool for the City of Miami Beach to measure our performance, measure agency spend and compare spend to budgets. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 88 S 1 G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services City specific data can be analyzed by geography, City Using Agency or other custom defined categories to monitor business performance,spot trends and assist with budget forecasts.With flexible reporting capabilities, information can be presented in multiple formats for different audiences. G4S Insight components are easily selectable at the top of the dashboard. The figure above is an example of invoice adjustments by Quarter. Please note the capability to customize the reporting variables and report format. Sample Dashboard of Customer Web Portal G S sight A Compliance Financial Staffing Tours/Inspections Incidents Contact Us Overview Breakdown 91 Saved Reports r Export to PDF ' Export to Excel Mores t Invoices Adjustment Accuracy% Year i Quarter y' B 2013 B 2012 State-+' City Site Q1 Q2 Q3 Q4 ACNracy Accuracy Accuracy Invoices Adjustment � Invoices Adjustment 96 Invoices Adjustment ,� Invoices Adjustme 8 East Palo n' 2 0 100% 3 0 100% 3 0 100% 2 Alto 8 CA _ _ __ B Palo Alto 2 2 0% 3 1 75% 3 0 100% 2 8 TX B Austil + 8 0 100% 7 B WA Wenatchee 2 0 100% 3 0 100% 3 0 100% 2 Page 1 of 1(4 items) 1®: Page sue: 10 CI CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 89 I P a g e , , G4S Secure Solutions City of Miami Beach Ti-le I RFP#:2015-013-YG Security Officer Services Customer Operational Reporting Tour Inspections Check In 1: l l l l 500 Other I UnSched-Post Covered- eoa 7,^s', Early-Post Uncovered# :00 "'c"D Early-Post Covered�I OnTime-Post Covered Jai 10g i1ii ITI Iii I 1 I Late-Post Uncovered JII1l1 ( I 0 5 10 15 20 25 Peg D. .Y A.. mar MN Os Iw Invoicing Turnover Invoice Accuracy 13000 g0 7o 2 aim iiiiiiiii 10000 - 50 5000 11 10 .E ,ii . ' ' ,, t 1 H , Rib Pr J. Aug _.. Die Fab M J. Aug Oct D.c Fet Apr 1:r. :,,g x, Dec 1 ,G4S can implement KPIs specific to your contract and culture. For instance, a "green efforts" KPI could be used to evaluate how G4S partners with the City to reduce your carbon footprint. These KPIs may include, for example, green initiatives, usage of electronic, and paperless incident reporting. Insight gives the City access to a powerful business intelligence application that provides browser-based analytics. Self-service reporting gives you the ability to customize and design reports real-time with the ability to filter, highlight, drill- down, and create o s Secure Traf interactive visuals, tables and charts that can be ' IN ' =I= 11. • 4. downloaded or viewed live 1 Tour Inspections Unwary Check In kteldents during a meeting. 1�• 1 I SSS( F -.y sr� �W.....r..wA !b VOm ? { f G4S Insight allows your —`°�' .r r 100P , ' i reporting capabilities to v ,.•*wor . 93• ~°� d r t r. I adapt to your changing needs, on demand. The City of Miami Beach's Ste Inspections GP$Plots Turnover f' Insight can also include ' B.,,.,'„. 30 contract specific reporting !it.. r_ " ' r including: . •" ; e= • Officer *- - Incident/Occurrence Wi •.s -., „ ,,. Reports • Contact List • General Orders • Post Orders CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 90 I P a g e aj I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services • Supervisory Orders • Special Orders • Training Records Tour Inspections Summary e March n February m January Site Tour Shift Required Actual % Required Actual % Required Actual % o BOA Buckeye 0 Camelback Large 444 444 100 1.073 1.071 99.8 296 296 100 Road HCamelback Medium 374 374 100 986 985 99.9 272 272 100 0 Camelback Small 1071 2.069 995 5225 5225 100 1,425 1.424 99.9 0 Cataina Large 444 437 98.4 1.073 1.072 99.9 296 295 99.7 131Etaina Medium 330 330 100 870 870 100 240 221 ----- ----- C7+Catatna Small 1210 1201 99.3 3,025 1022 99.9 825 825 100 BCCutyaidPatrd 1 2.128 2,127 100 `5,985 5,985 100 1,710 1,710 100 D Exterior Patrol Graves 440 440 100 3.025 3.024 100 ,,,..0 Bderior Patrol Graves.Minus Sat 3.850 3.850 100 8,965 8.960 99.9 D Bderior Patrol Weekday Days. i 1630 3.630 100 10.395 10.390 100 2,970 2.969 100 Swings ,,,:D Bdenor Patrol Weekend Days, Swings 1.540 1535 991 ,,0 Exterior Patrol Weekend Days. 2.420 2.419 100 5.005 5.002 99.9 Swags,Sat Graves D Maricopa Large 264 264 100 638 638 100 176 176 100 ----------------------- 0 Maricopa Medium , 220 219 99.5 580 580 100 160 160 100 1`0 Maricopa Sinai 1.650 1,650 100 4.125 4.123 100 1.125 1.124 99.9 D McDowell Small 1.980 1.979 99.9 4,995 4.981 99.7 1.365 1.363 99.9 D OPS 1st Check Sin 30 30 100 60 60 100 15 15 100 DOPS 2nd Check Sun -.---] 66 66 100 132 129 33 33 100 0 OPS Check SAT - - i 180 180 100 360 360 100 90 0 D Perimeter Patrol 2.413 2,413 100 6,050 6.048 100 1,670 1.670 100 0 South Mountain Large 468 468 100 1.131 1.129 99.8 312 312 100 1 4.16 Labor Scheduling G4S employs an enterprise-wide automated resource scheduling system to optimize our operations and minimize errors. G4S' Labor Scheduling will schedule officers based on their straight-time availability, prior post/job experience, and will avoid scheduling conflicts that may cause unscheduled overtime costs. Our system-wide technology effectively reduces G4S' non-scheduled overtime and ensures we meet your specific staffing needs We developed our proprietary Labor Scheduling technology with input from G4S field operations to ensure we designed the functionality to minimize overtime, reduce officer turnover and increase customer satisfaction. Principal features include: CONFIDENTIAL, PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 91 ! Page CLS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services • Scheduling Based on Officer Availability — not to exceed a threshold (usually set for 40 hours); Schedulers can quickly identify officers in an overtime position and those that are under 40 hours when filling an open post. • Scheduling Based on Job Experience —tracks how many times officers worked at the City. When selecting an officer to cover an open post, we can quickly identify officers with experience working that post. • Recognition of Scheduling Conflicts — will flag officer schedule if they're scheduled at multiple locations or posts for the same period. • Real-Time Open Post Reporting with Time and Attendance Interface—time and attendance can be viewed online within the actual schedules, and open posts will notify supervisors. • Master /Actual Schedules (Permanent/Temporary Assignments) — officers are permanently assigned to particular accounts and shifts through a master schedule.The master is rolled-over weekly to an actual schedule where updates are made for temporary changes. • Automated Interfaces: HR, Contract Management and Payroll Systems — interfaces with multiple systems to eliminate data entry errors in payroll that lead to billing errors. 4.17 Financial Management G4S is an industry pioneer in automation and technology enhancements that make our operations more efficient and more reliable. The City of Miami Beach can count on G4S to be a sound partner in financial management through our integrated systems,which combine invoicing, payroll, labor scheduling, and time and attendance. The following graphic illustrates our systems integration of our Labor Scheduling and Time and Attendance with our payroll and billing systems. This ensures scheduled Security Officers are checking in/out of their posts on time (via Secure Trax®,) and ensures the City is provided with accurate invoices and Security Officers are paid correctly. These systems feed data into G4S Insight, so you can receive on-demand financial management reporting. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 92 1 P a g e ai G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Figure 12: G4S'Labor Scheduling System Labor Scheduling r G4S' Sound Financial Practices ,t Benefit the City: a ; ;�. Invoices �.—' ■ Precise time and attendance data .��._...".',...-�°- means invoice integrity •Accurate and timely payroll ice'► Time and �°— -- fosters employee retention 3 Attendance °` 7 7 Pay a Convenient direct deposit and s . • OS R• ADP Total Pay Card promotes Pay ... . w. Checks - employee satisfaction Financial reporting made w , _T_._._,_. . available through your secure \ ' customer portal for clear insight into security spend and easy I '41P1 G4S'billing technology is a single entry system from which we will produce officer paychecks and your invoices using the same data input. G4S' corporate personnel located in our headquarters manage your key contract standards and parameters, such as services contracted, bill and pay rates, reporting codes, etc. This will provide your invoice integrity and consistency and flexibility to meet your unique billing and reporting requirements. Starting from our master schedules in our proprietary Labor Scheduling system, time-and-attendance data automatically flows directly from our Secure Trax® check-in/check-out functions. This adjusts the master schedules each day with real-time adjustments and validations of changes. Throughout this continuous workflow, we have manual and automated checkpoints to assure the integrity of the information for each transaction as they flow through our integrated billing technology. 4.18 Quality Assurance The components of our quality control process have been applied to the development of a formalized Quality Control Plan (QCP)that is currently in use on many of our commercial and federal, state and local government services contracts. The following provides an outline of our Quality Control Plan that we propose customizing for the City of Miami Beach and executing through Secure Trax®and Insight platforms. Standard Policies and Procedures G4S employs quality-driven standard operating policies and procedures for all aspects of our services. These policies and procedures are documented in our company manuals that are published and maintained electronically at the corporate office. In addition to corporate administrative procedures such as payroll and billing, individual post orders at the site level are also critical to our service delivery to our clients. G4S will work with the Contract Administrator to develop and update general and specific post orders. Standard policies and procedures ensure a consistent and documented approach to our operations, regardless of the client or CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 93 I P a g e 45P4 I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services be subject to regular scheduled audits conducted both by our Government Services Division and the Florida Regional Office. • Customer Satisfaction Program: Customer satisfaction is the most critical aspect of our success and we use the following methods to solicit feedback from our customers: • Online Customer Evaluations: G4S uses a web-based customer satisfaction survey that rates key aspects of our service. This system allows for re-formatting data elements for analysis purposes. Evaluations that score less than an "adequate" rating require immediate action, to include a written corrective action plan. The action plan must be submitted to our management team within ten (10) business days. • Business Review Meetings: Quarterly meetings between G4S corporate management and City representatives will provide an opportunity to evaluate the overall security program performance, review any safety or security incidents and develop/implement revised requirements, monitor implementation of any corrective actions, and share best practices. In line with the principles of ISO and G4S' ongoing efforts to continuously improve, we have a formal policy on Customer Relationship Management that requires documented contact with clients on a monthly basis and any action items that result from the contact are documented. Action items are separated into three categories as follows: Other Action Items—This report documents standard follow-up issues, such as re-training and follow-up visits to affected posts. Corrective Action Report(CAR)—This report documents the needed adjustments to the overall policies and procedures as they relate to your account. Preventative Action Report (PAR) — This report identifies potential enhancements to current policies and procedures to avoid future Corrective Action Reports. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 95 I F a :; 1 G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services Recruit incumbent Issue uniforms/ personnel equipment Recruit new personnel . Human Conduct surveys Audit personnel files Resources Operations Write Post Orders Initiate background Assign personnel investigations Place equipment/ Offers of employment supplies on post Schedule resources& Order uniforms/ setup compliance equipment reporting Finalize contract,setup Supervisors billing&reporting Pre-assignment Training Administration protocols On-the-job Maintain files&records Refresher Secure Trax'&Insight setup&training Fully Mapped Process—Transition Plan Our plan outlines each individual task, assigns team members, establishes date specific milestones and monitors the weekly progress of each task. G4S has identified the following key activities and milestones necessary for a successful initiation of service for the City: Table 6: Transition Matrix WEEKS BEFORE START DATE TASK 6 5 4 3 2 1 Notification of Award to Incumbent Personnel Meeting of start-up team Start-up team meets with City of Miami Beach Recruit incumbent&new personnel Interview personnel Conduct background investigations Offers of employment Conduct surveys Review/Write or Refresh Post Orders Order uniforms/equipment CONFIDENTIAL, PROPRIETARY, COMMERCIAL OR FINANCIAL INFORMATION 97 I P a g e aj G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services Train Project Manager&Supervisors (as necessary) Create master schedules/assign personnel Issue uniforms/equipment Classroom training Firearms training Place equipment/forms on posts Create Contract Master On-the-job training Contract commences Contract compliance/quality control The following is a description of our transition plan that identifies key activities and when they occur: TRANSITION WEEK 1 • Contract is finalized &G4S'Transition Team forms • Our transition team meets City of Miami Beach representatives several times before service starts • Recruit Personnel (Incumbent& New Officers) G4S will offer 100% of the officers you wish to retain the opportunity to complete our hiring process. Our online application process helps facilitate this process by eliminating the need for incumbent officers to come to the contractor's office to fill out an application, or the cumbersome and undesirable process of dropping off/picking up stacks of applications at City of Miami Beach locations. The incumbents who successfully pass all our background investigations and screenings will receive G4S employment at your locations. To fill remaining positions at your locations,we will recruit new officers using our award-winning G4S Career Center, an online community and resource for job seekers. In addition to G4S Career Center, we will recruit using traditional methods, such as our Military Recruitment Program, newspaper ads, state employment services, employee referrals, local police and sheriff's departments, and federal law enforcement organizations. TRANSITION WEEK 2 • Interview Candidates Our transition team will interview all officer candidates to clarify their application information, elaborate where needed, and ensure all forms are completed and signed. • Conduct Background Investigations Our HR team member will ensure we have signed and witnessed releases before beginning background investigations. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 98 P a g e aAS G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services • Offers of Employment G4S will offer employment only to those candidates who have successfully passed all steps of our hiring process and that meet your qualifications. Our HR team member will notify the successful candidates and continue with the G4S new hire process. • Conduct Surveys Our Operations team member will conduct a general security survey of your locations under contract including those where we currently provide service. We use this survey to identify a baseline security/risk posture, and also to potentially identify any immediately apparent security vulnerabilities. ▪ Review/Write or Refresh Post Orders Based on your security plan and findings from our survey, we will create Post Orders for each post based at your locations. Post Orders will be for general, specific and emergency orders, and will be stored at your locations. G4S will also use this as an opportunity to refresh Post Orders for sites where we are the incumbent. G4S supervisors will use Post Orders to train officers at their assigned posts.Additionally, Post Orders will be the basis for post inspections carried out by G4S supervision and management. • Order Uniforms/Equipment G4S will order uniforms, equipment and supplies using our online order system. Our technology orders direct from the G4S warehouse and pre-approved vendors to expedite delivery, ensure accuracy and reduce costs through purchase volume discounts. Our Operations team member will order all materials to ensure time for delivery and uniform alterations if needed. TRANSITION WEEK 3 • Train Supervisors We will train supervisor candidates for your locations drawing from incumbent supervisors or officers who have successfully passed our hiring process, or other G4S candidates who are also pre-approved by the City of Miami Beach. • Classroom Training Our training team member will implement the training program and plan as designed by the G4S North America Training Institute. Training material will be consistent with the knowledge, skills and abilities necessary to perform their general responsibilities, and are presented in a variety of languages and self-study student workbooks. TRANSITION WEEK 4 • Create Master Schedules We will create an Installation Schedule for staffing at your locations to cover post hours, number of officers at each post, and skills needed. The schedule is entered into the G4S Labor Scheduling System and includes pay and billing information. We prepare the schedule as far in advance as practical to give officers early notice of their work schedule and days off. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 99 1 D a g e aziS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services • Issue Uniforms/Equipment We will issue uniforms and equipment, documenting the number of issue, item, date of issue, employee's signature and initials, and witness signatures in the G4S Uniform and Accessories Record. Officers will receive training in proper uniform wear and care during their initial orientation. • Assign Personnel to Schedules In every case possible, officers will be assigned to schedules that are suited to their personal background, personality, appearance, and desires, thereby contributing to a higher level of personal performance. Officers will not exchange scheduled shifts or days off without first obtaining approval from their G4S supervisor. TRANSITION WEEK 5 • Place Equipment/Forms on Post The first officer assigned to the post will deliver, tag, and sort equipment, forms and supplies on the day service starts. The officer will use them as Post Orders dictate, and pass them on to the relieving officer. • On-The-Job Training We will conduct on-the-job training with officers new to your locations and for any incumbent officers changing positions. Our training team member, G4S supervisor or incumbent officer familiar with the post and its responsibilities will perform training. TRANSITION WEEK 6 • Wrap-Up& Finalization During the final week of transition, all tasks are finalized to ensure contract compliance and quality control. On-the-job training continues during the last week of transition. WEEK 1 —CONTRACT PERIOD • Contract Commences G4S management will be present during the first week of service to facilitate any questions your representatives may have, as well as to handle any contingencies that may arise. Going forward, G4S management will continue to make regular site visitations to observe our operations, follow up with any request or issues, and communicate status to your representatives. They are available by cell and email in addition to these scheduled site visits. 90 Days Following Start of Service • In line with principles of ISO and G4S' efforts to continuously improve; we use a 90-day Control Plan to monitor the period immediately following transition. This plan includes monitoring of the operations to identify issues to follow-up and resolve. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 100 � G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services Constant and Proactive Communications—Transition Reporting G4S will keep you informed on the status of pre-start up activities and during the service start. We will do this through several communications channels, including: • Weekly(or more) in-person meetings prior to, and during the first month of service • Phone, email and text messages for communications requiring more immediate response • Online transition schedule available via the secure G4S Insight • After-hours phone messages handled by live customer service representatives at the G4S 24/7 Communications -- r va Center na hbawe Retaining the Best—Hiring Incumbent Officers „.saa./ inside Sword Maas you We de PS•rea,owneel Moe b S.. G4S seeks to preserve the expertise and knowledge of the incumbent Officers. We understand the potential stress and fear that change °'S' °ffic• frwwNownMrie.YewerrbMwail 5820BAreldgoonpr $tl30Q brings and we will strive to make the transition smooth for the officers ....74.====r: Wan FL 33126 COM= you would like us to retain. Minimizing your incumbent Officers' City of Miami Beach onar,d0 Aguk.306-266-2004 beat concerns begins with early and frequent communications. An ====°:°a °end'"'" ' .94sc"n introductions meeting at the beginning of the transition is a great waym� to begin developing a relationship of trust and respect. MPMYa.ailtl'/a Ywa1 beets Ol eaeeaa. AN al Os aftmeton4iIM to tilt .41%* G4S will also create and distribute a Transition Newsletter to all .1."al "WA.bU.S.aarar affected contract security employees. We will update it frequently to 4:.:wre `' arm mlAaq w M sa t Mr alr•age keep Officers abreast of the transition. G4S will provide Officers wither ' a toll-free 24/7 hotline to call the local G4S office to address any questions or concerns about the transition. Continuous Improvement—Post-Transition Satisfaction Survey At the close of the security transition,we will ask for your feedback to provide help us assess our performance and document lessons learned for continuous improvement in our transition process. Notable Transitions Using the transition process outlined above, G4S has successfully transitioned some of the most substantial accounts in the industry for both the private sector and government. These transitions demonstrate our ability to manage all aspects of the transition, reduce risk, and increase customer satisfaction. Some transitions in Florida include: DHL In January 2013, G4S was awarded the contract to provide security services at DHL's domestic hub located at the Miami International Airport(MIA). The overall project involves 1,200 hours per week of service, 30 Custom CONFIDENTIAL, PROPRIETARY, COMMERCIAL OR FINANCIAL INFORMATION 101 ' P a g e ClOPAS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Protection Officers and is an example of G4S'ability to coordinate complex licensing and training requirements in a smooth and efficient manner. Officers are responsible for a high-level of service including ramp and perimeter security, escorting guests and clients, scanning packages, and serving as a Ground Security Coordinator, and specialized licensing through MIA is required. G4S coordinated to ensure the company and all new employees quickly obtained licensing. G4S facilitated all required pre-assignment and on-the-job training, including an 18-hour safety and security training program specific to MIA. Although the multifaceted transition involved rigorous licensing and training requirements, we successfully completed the transition in 35 days using G4S'Transition Program outlined above. Health First In October 2011, G4S was awarded a 3-year contract from Health First that involved assuming the duties of the current in-house security force. The contract encompassed 3,400 hours per week of service by 90 employees which consisted of Custom Protection Officers® (CPOs) and Upscale Security Officers (USOs). G4S took over security at four (4) hospitals and assumed mail room duties and courier service to increase security presence across the hospital network. G4S rolled out a staggered transition based on the sensitivity and scope of the project, beginning with the largest hospital first and finalizing the transition by February 20th. The transition was executed seamlessly despite the challenging goal of retaining incumbents and working in a critical environment. We mobilized a skilled team of G4S personnel from the Florida Region, local offices and headquarters to conduct the transition and to recruit incumbents. Communicating frequently with incumbents, G4S was able to allay any fears and develop a relationship of trust,which was seen in the high retention rate of the incumbent security force. The transition also involved enhancing Health First's security by equipping officers with Secure Trax®(20 total). All officers received First Aid/CPR/AED training and critical healthcare-related training, including CPI (Crisis Intervention), developed in partnership with G4S North America Training Institute and G4S' Director of Healthcare Security. This example represents G4S'transition acumen that began with developing a transition strategy appropriate for the client's needs and executing it smoothly with little impact on the client's operations and the incumbent security force. Orange County Government Since 2002, G4S has been providing approximately 5,000 hours of weekly service to various County facilities. During an RFP process in 2012, the County selected the lowest bidder to assume security services for the majority of facilities. However, 3 months later, the new provider's poor performance compelled the County to award G4S an emergency contract to take control of all security. G4S was then re-awarded the business during an RFP process. Using our systematic transition process, we retained 95% of the workforce who met our stringent background qualifications.Additionally, training, post orders and operational plans were reinstated to G4S' quality standards. ICA/Florida Department of Transportation In November 2012,G4S was awarded a 7-year contract from ICA(for FDOT sites).The contract encompassed 735 hours per week to provide security services at 14 rest areas and two welcome centers. The incumbents, Florida Highway Patrol Officers, were able to return to their primary role, patrolling the highways. As a result, G4S had to quickly recruit, hire and train 20 Custom Protection Officers®(CPOs)for startup by December 1st. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 102 I P a g e alS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services G4S completed the transition within 20 working days, including over one holiday. Key to the success of the transition was G4S' robust infrastructure and resources to support the process, including Florida regional personnel, local area office staff, corporate headquarters, and 24/7 operations. We leveraged our advanced recruitment technologies and Career Center to select from an existing pool of qualified officers and expediently recruited new hires. With support from G4S' North America Training Institute, all officers received 40 hours of pre-assignment training and 28 hours of firearms training. The transition process also involved implementing Secure Trax®on nine smartphones and training officers on its usage. Through G4S' corporate purchasing department, G4S was able to quickly procure nine vehicles in the short timeframe. During the transition, there were no disruptions to ICA/FDOT and the customers they serve. The transition exemplifies G4S' ability to efficiently and effectively implement new security service, no matter the size of the contract, challenges, or customer objectives. These recent examples show how we effectively manage all aspects of the transition, reduce risk, and increase customer satisfaction. G4S' implementation process is systematic, structured and proven to ensure minimal disruption to the City's operations, beginning four weeks before the start of service, and continuing 90 days afterwards. If your situation needs an earlier start date,we will revise our schedule accordingly. 4.20 Corporate Responsibility G4S is a socially and environmentally responsible corporate global citizen. We practice sustainability and have published policies on Climate Action and Environmental Responsibility, and Corporate Social Responsibility. We manage our businesses in a way that protects communities, the environment, our people, customers, suppliers and other stakeholders and creates sustainable long-term partnerships, built on trust and respect. G4S plays an important role in society. We make a difference by helping clients operate in a safe and secure environment in which they can thrive and prosper. Our size and scale means we touch the lives of millions of people across the globe and we have a duty and desire to ensure the influence we have makes a positive impact on the people and communities in which we work. As one of the world's largest global employers, we work to ensure our employees are cared for and are given every opportunity to develop and flourish. At G4S, we seek to make a positive impact on local communities wherever our staff, customers and suppliers live and work around the world. A complete copy of the G4S Corporate Social Responsibility (CSR) Report can be found at the following link: http:/lwww.g4s.com/en/Social%20Responsibility/. Rather than print a hard copy due to the large size of this report, we have opted to include an electronic copy on the enclosed flash drive. The Benefits of G4S' Social and Environmental Commitment The City's reputation and public image will benefit from G4S' commitment to social and environmental responsibilities. Our transparency and full compliance means your security partner will fully support the City's brand. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 103 P a g e f7 I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services Securing our Environment Alongside the risks faced by people and infrastructure from climate change are the challenges presented by the economic climate. Increased fuel costs and the introduction of'carbon taxes' ensure that energy efficiency and environmental impact remain important to the effectiveness and sustainability of our business. We recognize the impact that our business activities can have on the environment and are committed to managing this impact in a responsible manner. Through our climate action program we measure, report and reduce the intensity of our environmental impact. We have partnered with our customers, employees and suppliers to invest in energy efficient technologies and reduce waste and water consumption. We are very proud of the progress we have made and the steps we have taken to develop an environmentally sustainable company by increasing our energy efficiency and reducing our environmental impact through new ways of working. 2014 Highlights Priorities for 2015 • G4S total carbon footprint in 2014 was 548,303t/CO2e • Achieved a carbon intensity of 76.3 t/CO2e per£m revenue in 2014, representing a reduction of 6.3% since 2013 • Measured 56% of the group's waste consumption • Continue to implement energy totaling 10,400 tons of mixed waste with 18%diverted efficiency strategies to reduce from landfill carbon intensity by at least 4.5% per annum • Measured 64% of the group's water usage with a total consumption of 1,678,000 liters. • Continue to develop our measurement methodology for waste and water consumption • Installed telematics technology into a further 114 UK- and identify targets for based vehicles, bringing the total number of UK-based reduction vehicles fitted with telematics to almost 2,000. The use of this technology helps to reduce fuel and maintenance costs,while improving driver safety. • Achieved an Energy Star rating at the headquarters of G4S North America. Energy Star-certified buildings generate lower greenhouse gas emissions than typical buildings. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 104 I P a g e CIPLIS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services G4S Cares for Employees All employees want a fair and decent wage, no matter where they work. However, many employees desire more: a career that gives them a sense of purpose, to feel valued, challenged, and inspired, and a company that offers stability, flexibility and opportunities.As the second largest employer in the world, it is no doubt that we strive to be the employer of choice to top talent across the globe. G4S believes that when we take good care of our employees, they will be more satisfied, more productive and contribute to improved business results. To that end, G4S offers employees a fair wage and comprehensive benefits to support their well-being and promote retention. G4S is in full support the City of Miami Beach's Living Wage Ordinance (2-407 thru 2-410) and proposed competitive wages to compensate our employees fairly. We have also proposed a comprehensive benefits package that offers employees major medical insurance administered by BlueCross BlueShield. The health plan for the City of Miami Beach extends the same health benefits to the domestic partners of eligible employees as it does to spouses of eligible employees in cases where the employee is assigned to a contract governed by local ordinance that requires domestic partner benefits. We treat our employees as individuals and provide them opportunities for professional growth. When we see potential, at any level, we do our utmost to develop that potential by providing support and training. We also actively encourage people to move around internationally,to experience different cultures,challenges and ways of working—whether that's a two-week job swap or a permanent relocation. In today's economically volatile times, finding career stability is rare; however, at G4S it is the norm. Growing year over year, G4S offers career security and longevity to potential candidates, and this is seen in career tenures unheard of—upwards of 20 to 30 plus years for some. G4S Supports the Military Through an agreement with the U. S. Army, we give preference in hiring to pre-qualified returning veterans when possible, using our award winning Military Transition Program. We have full-time dedicated military recruiters that make overseas' recruiting trips seeking qualified military law enforcement personnel. G4S participates in"Joining Forces,"a White House campaign to promote the hiring of returning veterans and their family members. As a result of our dedicated military recruiting, G4S has been recognized for providing opportunities to former military personnel, including: • G4S has been named by U.S.Veterans Magazine as a 2014 Top Veteran-Friendly Company • For the fifth consecutive year, G4S has been recognized as a Top 100 Military Friendly Employer®by GI Jobs magazine and ranked#18 of the top 100 for 2015. • G4S has been awarded the VetJobs Outstanding Veteran Employer Award (July 2014) • 2011 Best Veteran Employers: A Top-35 List(Military.com) • Most Valuable Employer(MVE)for Military TM by CivilianJobs.com CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 105 I P a g e aiS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services • 35 Most Valuable Employers for Military, compiled by Civilian Job News Veterans can be found at every level of the G4S organization — from entry-level roles through to senior management. G.I.Jobs magazine recognizes that G4S supports military veterans, National Guard and Reserve members with our recruitment and employment outreach, professional development opportunities and transition assistance for vets as they move from the military to a corporate culture. Patrick Dawson, G4S General Manager in Pensacola, Florida, is a former Command Sergeant Major in the U.S.Army. Dawson believes that G4S is a great place for veterans to work after leaving the military. "G4S is a Top Military Friendly Employer® because our structure and professionalism align with our military,"said Dawson. "Veterans understand G4S security job standards and being held accountable for the work they do. It's a seamless transition for veterans." G4S is proud to have developed programs that target and build upon the excellent skills and training of our military veterans. These skill sets combined with multiple levels of training, experience and qualifications allow us to design specialized security programs that meet our customers' specific needs. Charitable Contributions G4S strives to make a positive impact on local communities wherever our staff, customers and suppliers live and work. In 2013, G4S contributed over$630,000 to the U.S. communities we live and work in. We also donated 130 pints of blood (saving over 400 lives)and volunteered 3,994 hours. Here are some examples of our community support and involvement: G4S Charity Golf&Tennis Tournament—$2 Million Raised Each year G4S sponsors a charity golf and tennis tournament. Since 1997, G4S has donated more than $2 million to many charities. The 18th Annual Charity Golf and Tennis Tournament raised more than $100,000 to support: • Habitat for Humanity • Gold Coast Down Syndrome • Cystic Fibrosis • American Heart Association • American Cancer Society • Joe DiMaggio Children's Hospital • Juvenile Diabetes • Chris Evert Children's Hospital • Kids In Distress, Inc. • Boys and Girls Club of Palm Beach County • Wounded Warriors of South Florida • Junior Achievement of the Palm Beaches and Treasure Coast • Palm Beach Gardens Police Explorers • Police Benevolent Association Officers' Ball CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 106 I P a g N G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services • Palm Beach County Sheriffs Foundation G4S MATCH IT! PROGRAM G4S recognizes the impact our employees make by supporting good causes in their local communities. To help support their efforts, G4S runs a matched fundraising program that matches the funds raised by employees for local charities or community good causes, up to the value of$500 per application. Since its inception in 2013, Match It! has made more than 31 payments to good causes, matching more than $36,000 in employee fundraising in support of various charitable causes, including cancer research and prevention, wounded warrior programs, Special Olympics, Down Syndrome and Autism groups. G4S Cycling Teams Raise$170k to fight MS I Since 2008, the G4S USA cycling team has raised more than $177,000 to fight multiple sclerosis. The MS 150 Ride is Florida's largest cycling �� ,._ , . �� event of the year and participation in this event is a big commitment as ��,:jv tY�!`a>ty �_ '� Y ►1' each cyclist spends countless hours of their personal time raising funds ' l %'�` �. ; y� for MS Society and training for the event. ' . 4,.��; Toys for Tots program in Broward County, FL G4S security teams at five county medical centers worked to collect toys for the U.S. Marine Corps Toys for Tots program in Broward County, Florida. This program provides toys at Christmas for children from low- income families across the U.S. and is run by reserve Marine units in their local areas. School Packs&Study Equipment in Bowie,AZ The G4S team in Tucson,Arizona has formed an enduring relationship with the small town of Bowie, through which G4S buses pass every day. G4S has helped charities in the town since 2008. This past year, G4S provided back-to-school packs with study equipment to almost 100 students, as well as additional material for the school and teachers. Habitat for Humanity Team Build in Jupiter, Florida In 2015, G4S headquarters employees volunteered 419 hours to help build a home, and the company made a$65,000 donation. Drew Levine, president of G4S Secure Solutions North America, said: "We are committed to building stronger communities where we operate. This is more than an investment of cash and hundreds of hours of labor into building this home, it's about helping make the dream of homeownership come true and helping make our community more safe and secure." G4S has been a long-time supporter of Habitat for Humanity in Florida and across the United States for several years. Habitat for Humanity of Palm Beach County is a non-profit organization and has built 111 homes over the past 25 years. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 107 � ; tY G4S.Secure.Solutions _ City of Miami Beach � RFP#: 2015013YG _ Security Officer Services • Community Initiatives inthe-Miami Area ". The local Miami office has supported many good causes throughout the year, including .• • Sponsor-for Habitat for'"'Humanity in Miami-Dade County. Since 2010 G4S employees'have either - - volunteered their time to build affordable homes throughout Miami-Dade County and/or supported the ` organization through fundraising efforts. • Fundraising and participating for Multiple Sclerosis Society in Florida: Since 2008, the G4S Florida cycling team has raised more than $100,000 to fight multiple sclerosis,.a chronic, often disabling disease of the central nervous system. The MS 150 Ride is Florida's'largest cycling event of the year Participation in this event is a big commitment as each cyclist spends countless hours of their personal time raising funds for the MS Society and training for the event. Many-G4S employees,from the Miami office and throughout Florida participate in this event. . - - •- • Donated to the Love Fund•Inc. for the LEO Gala hosted by the Miami-Dade County Police Benevolent Association. Proceeds go directly to the Police Officers Assistance Trust(POAT)and Brothers in Arms to help wounded officers and their families. • Donated to the Leukemia=Lymphoma Society fundraiser. This organization continues to raise funds to find a cure,for blood cancers. • Sponsored our client, Miami Jewish Health Systems,for their Thanksgiving Turkey Give Away. • Participated in a fundraiser.in support-of men's and women's varsity sports at St Thomas University,• which is our client. • CONFIDENTIAL PROPRIETARY,.COMMERCIAL OR FINANCIAL INFORMATION - 108 P a g e a/I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services 5 TAB 5 Cost Information 5.1 Pricing Methodology At G4S, our goal is to be a collaborative business partner with the City of Miami Beach, and we believe this starts with providing transparent pricing and an explanation of our methodology for determining the proposed bill rates. Based on our review of the RFP and our knowledge of providing security to similar customers in like environments, G4S has proposed a security solution that combines our quality Upscale Security Officer(USO) program for Level I and Level II Officers and Custom Protection Officer(CPO)program for Level III-VI Officers, with the use of Secure Trax® at designated critical posts and Security Patrol Officers to ensure adherence to the scope of work and Post Orders above and beyond the expectations of the City of Miami Beach. The rates quoted are in compliance with the Living Wage Ordinance effective January 1, 2015. Our health plan outlined in this proposal meets the health benefit requirement of$1.69 an hour. G4S has developed a security program aimed at attracting and retaining the highest caliber of security professionals to represent your organization. G4S' Miami Area Office will provide dedicated Contract and Operations Management to ensure consistent services and ongoing communication and feedback to the City's management. The rates quoted will remain in effect for one (1) year and shall be automatically adjusted to fully recover any change in costs mandated by law, including but not limited to licensing fees, Federal Insurance Contribution Act (FICA), Federal Unemployment Tax Act (FUTA), State Unemployment Insurance (SUI), Worker's Compensation, Collective Bargaining Agreements, Union Activities, regulatory costs associated with compliance with the Patient Protection and Affordable Care Act (PPACA), and/or Federal or State minimum wage laws. The following are G4S' pricing notes which provide additional details on our pricing structure: Pre-Employment Screening The rates quoted include the following background investigation and screening elements: • Identity Verification: Social Security Trace Report • Criminal Searches (7 years): o Statewide Criminal Search (where available) o County Criminal Search (when state not available or historically incomplete) o Multi-jurisdictional and Sex Offender Search — includes OFAC SDN search (Terrorist Watch List) • 7 Years of Activities (Employment, Unemployment, Education) - Review, investigation and resolution of all gaps 90 days or longer • Driver's License (DMV)Check—annually for driving positions • Drug Screen (10-panel) • Physical Exam (CPO Only) • Psychological Evaluation(MMPI-II) Training G4S'training meets and exceeds the requirements of the State of Florida and includes the following training: • Pre-assignment training:48 hours (includes First Aid/CPR/AED Training) CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 109 I P e at AS 1 G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services • Specialized training for specific positions include: o Bike Patrol Officers: 8 hours • On-the-Job Training, as follows: o Officers&Supervisors: 16 hours • Annual In-Service, as follows: o Officers&Supervisors: 16 hours The above training is built into the proposed pricing. Employee Benefits The following employee benefits have been factored into our proposed pricing unless noted as direct bill: • Vacation: - 1 week(40 hours)after 1 year - 2 weeks (80 hours)after 2 years—CPO ONLY - 3 weeks (120 hours)after 5 years—CPO ONLY • Health Coverage: Each employee will receive health insurance coverage valued at $1.69 per hour worked as the health insurance supplement per the Living Wage Ordinance • 6 Holidays paid at time and one half if worked • Sick Time—24 hours of sick time after every 12 months worked • Comprehensive Major Medical PPO Plan administered by BlueCross BlueShield • Dental Insurance administered by Delta Dental (optional, employee paid) • Vision Insurance administered by Vision Service Plan (optional, employee paid) • $10,000 Life and AD&D • Standard 401(K) • Uniforms—No deposit required • Standard Incentive and Recognition Awards • Employee Assistance Program Benefits Eligibility G4S qualifies employees with 32 or more hours per week as eligible for the identified benefits program. Overtime The rates quoted are based on a 40-hour workweek schedule. Overtime billing rates will apply when the City of Miami Beach places our personnel in an overtime posture for pay purposes as a result of your schedule (over 40 hours per week)or if additional hours are required outside the regular schedule. G4S will endeavor to use part-time personnel whenever possible to avoid overtime rates. Our personnel will be paid time and one half their base pay rates for overtime. The overtime bill rate is 1.4 times the straight time bill rate. Overtime rates are in the pricing sheet by Officer Level. Equipment The rates are in the pricing sheet for straight time and specials. Uniforms Our rates include a plentiful allotment and complete complement of the police-style uniform. Level III and IV Officers will also receive a bike-style uniform for covering bicycle posts. All personnel will be issued foul weather gear,traffic vests(where necessary)and flashlights. Personnel are required to maintain their uniforms in a neat and orderly manner at all times. Uniforms are provided to the employee at no cost or deposit. Taxes The rates quoted do not include sales or use taxes where applicable. Permanent Service CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 1 1 0 I P a g e du 1 G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services 5.2 Cost Proposal ESTIMATED PROPOSED DESCRIPTION QUANTITIES(A) HOURLY RATE(B) TOTAL COST PER LEVEL(C) ROUTINE RATE 1 Security Officer Level I 30,000 $ 18.82 $ 564,600.00 2 Security Officer Level II 30,000 $ 18.82 $ 564,600.00 3 Security Officer Level III 8,700 $ 22.19 $ 193,053.00 4 Security Officer Level IV 12,500 $ 22.87 $ 285,875.00 5 Security Officer Level V 21,500 $ 23.88 $ 513,420.00 6 Security Officer Level VI 2,000 $ 40.26 $ 80,520.00 7 Vehicle- Monthly 3 $ 4,956.00 $ 14,868.00 8 Vehicle- Daily 15 $ 75.56 $ 1,133.33 9 Bicycle- Monthly 8 $ 50.62 $ 404.96 10 Bicycle- Daily 30 $ 48.89 $ 1,466.67 11 Golf Cart- Monthly 4 $ 400.00 $ 1,600.00 12 Golf Cart- Daily 15 $ 182.11 $ 2,731.67 SUB-TOTAL(ROUTINE RATE) $ 2,224,272.63 SPECIAL OR EMERGENCY RATE -Security Officer Level I 1,000 - $ 26.35 - $ 26,348.00 -Security Officer Level II 1,000 - $ 26.35 - $ 26,348.00 -Security Officer Level III 250 - $ 31.07 - $ 7,766.50 -Security Officer Level IV 500 - $ 32.02 - $ 16,009.00 -Security Officer Level V 800 - $ 33.43 - $ 26,745.60 -Security Officer Level VI 100 - $ 56.36 - $ 5,636.40 -Vehicle- Daily 2 - $ 75.56 - $ 151.11 -Bicycle- Daily 4 - $ 48.89 - $ 195.56 -Golf Cart- Daily 2 - $ 182.11 - $ 364.22 SUB-TOTAL(SPECIAL OR EMERGENCY RATE) $ 109,564.39 I I I SUB-TOTAL(ROUTINE RATE) $ 2,224,272.63 SUB-TOTAL(SPECIAL OR EMERGENCY RATE) $ 109,564.39 TOTAL COST* $ 2,333,837.02 *The Total Cost shall be utilized to allocate Cost Points in the Evaluation of Proposals. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 111 I .. • • G4S Secure Solutions City of Miami Beach < RFP#: 2015-013-YG • • • - • 'Security Officer Services Bidder's Affirmation Com an G4S Secure Solutions USA--Inc. 'Address: 5820 Blue Lagoon Drive, Suite 300, Miami,;'FL 33126 • Telephone: 305-266-2004 is Email: Eduardo•Yero @usa.g4s corn- ..;Authorized Representative's Signature • • • L .A • CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION _ 112 I°P a g; r' t QSviS G4S Secure Solutions r•:� City of Miami Beach . - RFP#: 2015-013-YG f.` _ 1v Security Officer Services ,- 6 TAB 6 Appendices } i • Appendix A Code of Business Ethics ' Appendix B t G4S:Exceptions-to Contract Terms and Conditions "''' ' j ''Appendix F''.- Insur`ance'Requirements ' . _ •P Attachment a G4S 2014'Annual Report , . F1 -- _, ti . ` • ." CONFIDENTIAL PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION ' ,= - 113 1-,P a,g e `•:y IG4S Secure Solutions City of Miami Beach j RFP#:2015-013-YG Security Officer Services 6.1 Appendix A: Code of Business Ethics Pursuant to paragraph 7 of the Proposal Certification,Questionnaire&Requirements Affidavit,G4S is supplying the City with G4S' Code of Business Ethics. We agree to comply with all applicable governmental rules and regulations, among others, conflict of interest, lobbying and ethics provision of the City of Miami Beach and Miami-Dade County. THE G4S ETHICS CODE The business philosophy of G4S has been developed around a core set of values which are fundamental to the organization's development and success. One of these values is Integrity,which means we can always be trusted to do the right thing, and the G4S Ethics Code below sets out how we expect all our employees to behave to live this core value. Being safe and secure Being fair and Being professional and considerate proud •Putting health and safety *Always following the law •Showing respect and •Doing the best job you first 'Reporting any consideration for others can 'Protecting the security wrongdoing *Treating people fairly *Looking smart and of our customers,the •Never offering or taking •Considering our local professional public and those in our a bribe communities •Being a good role model care *Avoiding any conflict of *Thinking about the *Safeguarding the G4S 'Carefully following interest environment name company rules and procedures All G4S companies are required to ensure the G4S Ethics Code is cascaded throughout their business and brought to the attention of all employees. THE BUSINESS ETHICS POLICY In support of this code, the purpose of this Business Ethics Policy is to ensure that managers and employees have a detailed understanding of the group's minimum standards of operation and the expectations of our customers and stakeholders. It is essential that the ethical business standards set out in this policy are applied throughout our countries of operation.Our senior managers are therefore asked to show their personal commitment by regularly endorsing this policy and confirming compliance within their own areas of responsibility. All G4S companies are also required to ensure this policy is cascaded to all managers and to other employees whose roles are impacted by these standards. We are committed to these standards and routinely monitor compliance across the organization, taking necessary action in the unlikely event that they are not being met. CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 114 I P a g a aiS I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services 6.2 Appendix B — G4S Exceptions to RFP Reference:RFP Instructions Paragraph 34. EXCEPTIONS TO RFP. G4S would like to discuss with the City of Miami Beach a number of exceptions to the Contract Terms and Conditions in the RFP document. In the table below, we have identified the item of concern by page number/section number, our proposed amendment to the language, and commentary to explain our position. Table 7: G4S Exceptions to Terms&Conditions Page Number/Section Number Amendment Comments RFP INSTRUCTIONS Page 7; Section 27 G4S respectfully requests each 27. OPTIONAL CONTRACT option is by mutual written USAGE. When the successful agreement of the parties involved. Proposer (s) is in agreement, other units of government or non- profit agencies may participate in • purchases pursuant to the award of this contract at the option of the unit of government or non-profit agency and the successful Proposer. Page 8; Section 30 30. INDEMNIFICATION.The G4S accepts responsibility for its contractor shall indemnify and negligence and willful hold harmless the City and its misconduct. But because G4S officers, employees, agents and does not control the premises instrumentalities from any and all where services are performed liability, losses or damages, and because G4S performs in including reasonable attorney's accordance with your directives, fees and costs of defense,which G4S respectfully cannot accept the City or its officers, responsibility losses that occur employees, agents or on the property or claims that instrumentalities may incur as a arise from the proper result of claims, demands, suits, performance of our services (i.e. causes of actions or proceedings City asks G4S to refuse access of any kind or nature arising out to certain buildings to visitors of, relating to or resulting from without proper badging. G4S the willful misconduct or does so. Citizen sues alleging negligent performance of the discrimination. If G4S improperly agreement by the contractor or refused access in accordance its employees, agents, servants, with the mutually agreed post partners, principals or orders, G4S would be subcontractors. The contractor responsible. If G4S properly shall pay all claims and losses in refused access in keeping with connection therewith, and shall the City's directive, G4S would investigate and defend all claims, not be responsible for the suit). suits or actions of any kind or The language as drafted is too CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 1 1 5 I P a g e f G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services nature in the name of the City, broad. We respectfully request a where applicable, including fault based indemnification appellate proceedings, and shall standard as indicated herein. pay all costs,judgments, and reasonable attorney's fees which may be incurred thereon. The contractor expressly understands and agrees that any insurance protection required by this Agreement or otherwise provided by the contractor shall in no way limit the responsibility to indemnify, keep and save harmless and defend the City or its officers, employees, agents and instrumentalities as herein provided. The above indemnification provisions shall survive the expiration or termination of this Agreement. Notwithstanding the foregoing, in Due to the fact that G4S does not no event will contractor be liable control the premises where to the City and its officers, services are performed or the employees, agents and value of the property and assets instrumentalities for any loss of present, and because G4S business or profits, penalties, or performs in accordance with your special or indirect, consequential, directives, G4S respectfully punitive, exemplary or liquidated requires limitation of liability. damages. Contractor's total liability shall in no event exceed the total amount paid by City to contractor under the Contract. Page 8; Section 31 31. CONTRACT G4S respectfully requires EXTENSION.The City reserves termination rights for in the event the right to require the Contractor of nonpayment. to extend contract past the stated termination date for a period of up to 120 calendar days in the event that a subsequent contract has not yet been awarded. Additional extensions past the 120 calendar days may occur as needed by the City and as mutually agreed upon by the City and the contractor. This right shall not apply to circumstances where the contract was terminated early by the contractor. APPENDIX C—Min Requirements&Specifications Page 26; Section C2 h h. Uninterrupted services _ Whilst G4S will make every effort CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 116 ' P a g e CIPP,45 I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services under all conditions, to include, to provide continuity of service, but not limited to the threat or the there may be circumstances actually of a strike, adverse outside of both parties'control weather conditions, a disaster, or where this is particularly emergency situations, at the challenging. Therefore, G4S agreed upon hourly contractual respectfully requires a force rate, subject to force majeure majeure provision. provision. Page 27; C6 Background Checks G4S will make records available Prior to assigning personnel to providing we have the required the City,the Contractor, at no releases from individuals to do so cost to the City, shall perform as some information may contain background checks on its sensitive information such as personnel which comply with, at social security numbers. In some a minimum, Section 1012.465, instances we may be able to Florida Statutes. By virtue of provide redacted copies but submitting a proposal to this generally we prefer to provide RFP, the Contractor fully you with certification that the indemnifies and holds the City individual has been vetted and harmless for any and all actions fully complies with your and damages resulting from its requirements under the contract. failure to comply with this requirement. be reported to the City, Contractor shall provide a written certification to the City through its Human Resources Director that all personnel assigned to City meet the requirements of the background check and vetting required under the contract who Additionally, the City may require, at any time(including annual contract anniversary, change in assignment or any other instance for which an additional background check is deemed necessary by the City • through its Human Resources Director), that any Contractor personnel submit to additional background screenings as deemed necessary by the City. The Contractor shall reimburse the City for the cost of said administrative fee of 10%). Page 29; C6 Personnel Probation All security officers working for CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 117 P a g e a AS I G4S Secure Solutions City of Miami Beach RFP#: 2015-013-YG Security Officer Services successful contractor may, at the sole discretion of the City of Miami Beach, be terminated, and any additional cost incurred by the City of Miami Beach may be withheld from funds owed to the Successful Contractor. Page 41; Section 9 9. PROTECTION OF Removed due to the vague PROPERTY. The Succcssful language. We cannot be held -_ -_ _ • _ _ --- -_- _ responsibility for the city's property for sites and times property belonging to the City of where we are not requested to It is the provide services. responsibility of the Successful Contractor to replace or repair any property lost or damaged by any of its employees. The City of Miami Beach may withhold payment or make such deductions as it might deem necessary to ensure reimbursement for loss or damage to property through negligence of the Successful Contractor, its employees or agents. INSURANCE REQUIREMENTS Page 47; B. B. Commercial General G4S offers to provide additional Liability on a comprehensive insured status to the extent of the basis in an amount not less than mutually agreed obligations $1,000,000 combined single limit under the contract. per occurrence, for bodily injury and property damage. City of Miami Beach must be shown as an additional insured to the extent of contractor's obligations under the contract with respect to this coverage. Page 47; D. The insurance coverage required Rather than a blanket waiver of above must include a waiver of subrogation, G4S can agree to a subrogation in favor of the City to waiver to the extent of our the extent of contractor's contractual obligations. obligations under the contract. The insurance coverage required shall include those classifications, as listed in standard liability insurance manuals, which most nearly reflect the operations of the provider. Page 47; D Certificates will indicate no Due to a change in wording on modification or change in the Acord form, we can no longer CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 120 Fag 9, G4S Seabee Solutions = City of Miami Beach RFP#: 2015 013 YG :Security Officer Services - insurance shall be made without,...: '-agree-to 30 days'.notice. We can, y- thirt :(30)days however, provide notice in advance notice in accordance '. accordance with the policy with•the policy provisions to the ._ provisions , certificate holder • • • • • • • • • • • • • • • • • • 'CONFIDENTIAL,PROPRIETARY;:COMMERCIAL OR FINANCIAL INFORMATION 12:1 1 P a,g'e a As 1 G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services 6.3 Appendix F — Insurance Requirements °r CERTIFICATE OF LIABILITY INSURANCE 07/.4!3115 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND. EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES . BELOW.THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S),AUTHORIZED REPRESENTATIVE OR PRODUCER AND THE CERTIFICATE HOLDER IMPORTANT:If the certificate holder is an ADDITIONAL INSURED,the policy(ies)must be endorsed.If SUBROGATION IS WAIVED.subject to the terms and conditions of the policy,certain policies may require an endorsement A statement on this certificate does not confer rights to the a certificate holder in lieu of such endorsement(s). c PRODUCER cUN CAL'I Aon Ri�;k Services, Inc of Florida vA tgsg)284 71p2 I>a� (800)363 0105 `do, 1001 Brickell Bay Drive WC.NO.Eatl; WC.No.g S Suite 1100 E-MAIL o Miami FL 33131 USA ADDRESS: I INYURER(S)AFFORDING COMRADE NAIL• WSUREI) MiSURERA. National Union Fire Ins Co of Pittsburgh 19445 G4S secure solutions (uSA) In C. INSURER B; New Hampshire Ins Co 23841 1395 university Blvd Jupiter FL 33458 USA INSURER C: Illinois National Insurance Co 23817 g15URER 0; AIG Specialty Insurance Company 26883 WSURERE; Lexington Insurance Company 19437 WSUYIER F: COVERAGES CERTIFICATE NUMBER:570058790170 REVISION NUMBER= MS I✓TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE.INSURED NAMED ABOVE FOR THE POLICY PERIOD I INDICATED_NOTWITHSTANDING ANY REQUIREMENT.TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE I;SSUED OR MAY PERTAIN.THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS. WyEXCLUSIONS AND CONDITIONS OF SUCH POUCIES.LIMITS SHOWN MAY HAVE BEEN REDUCED yDUtf tt�BY PAID CLAIMS. Limits mown are as requested LI t TYPE OF RSURANCE WsO'4,', POuCY NUMBER 1I 05 Y I IA�MWIYYY'nl LIMITS AI X COmERCILLUENERALUAIMUTY Y Y 012047515 10/01/2014 10/0112015, Ea1'�!OCCtA+iREVCE 31,000,000 JCLA►uBlrAne © R 'AI"". "�NT 51,000,000 MED EiP ALrya.puoorl Excluded ,ER9uwabs.olne NARY_ 51.000,000 R CEf61,E S5 ATE LaiInAPPLIES PER SaMEM#LA C EUAIE 51,000,0W 5 6�GLA:Y' IIECT LOC �'HC❑LUIN-c'li1P,C'AAl:i1 $1,000,000 b7ER. {4--►i A AUTOMUe1.E.UABBILT'IY CA 381-47-70 111/01/2014 10/0212015 .20ma IEDRMYELAUT 31,000,000 acs ,1..sil.n2 , .. 8 X Ao1YAUTI CA 381-47-71 10/01/2014 10/01/2015 augLY SULJB'I Nw u..WI -ALLCO'rNED 101EDULED MA BOCILRtuURYUPS./wo nnl r A AUTOS AOTOS CA 381-47-72 10/01/2014 10/02/19x5-I'IR IWRIY 13IMAUE-EiEi[:Ct�AH&T7a3 ^JALP.OB VA .(' aa<i:.,t� I= - • UMBRELLA DAB OCCUR F1.CH,I=IFIR&ICE ' u EXCESS WM N CIAI6 MADE A11 RELATE DE I I1W:7E34710N B WORKERS CONPENsATEMYANO Y wCO28234486 10/01/2014 10/01/2015 x I PER STATUTE I IER EMPLOYERS'LiNEHLITY A of IDLY uuL�itr=AR`�'Lxfcnlilue L NIA ACO28234487 10/91/2014 10/01/2011 EL.EACH ACCSEM 51.000,000 (NawlalwInNH) CA E ..OF . .EAEIPL0vEE 31.000.000 U e..,IN crL.undo, 4ESCRPTCHOAOPERATKINSb.h.. EL.DI., -+POLCYUNIT 31,000,000- A Excess WC XWC6636322 10/01/2014 10/01/15115 EL Each Accident 31,000,000- OH EL Disease - Policy 51,000,000 N SIR applies per policy terms&condi ions EL Disease- Ea Enp 51.000.000 DESCR1YTUON OF UFEIIAI'IONS I LUt:ATIONR I VEHCLE3 tAa'ORD 101,Add8Seal R.owia Schedule.mar B.M=A.d Y=AA'A...wmu5.•dl + Prolevsional Liability and Excess Professional Liability policies are claims-made. Specimen for RFP No. 2015-013-yG Security -12:1 Officer services. City of Miami Beach is included as Additionalinsured in accordance with the policy provisions of the General Liability policy. A Waiver of Subrogation is granted in favor of Certificate Holder in accordance with the policy provisions of the General Liability and Workers Compensation policies. G45 Branch: Miami. ;IL. ..J Ca 4i CERTIFICATE HOLDER CANCELLATION is-1. SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE L▪ S EXPIRATION DATE THEREOF,NOTICE WILL BE DELIVERED W ACCORDANCE*OH THE -. POLICY PROV1SION9. City of Miami Brach AUTHORIZED RtPRESFN!AINE r Attention: Risk Management Division Om- Miami Convention Center Drive, 3rd Floor t i�� Beach FL 33139 USA m▪o 01988-2014 ACORD CORPORATION.All rights reserved. ACORD 25(2014101) The ACORD name and logo are registered marks of ACORD CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 122 ' P a g e cyj I G4S Secure Solutions City of Miami Beach RFP#:2015-013-YG Security Officer Services AGENCY CUSTOMER ID: 10S1577; LOC#: • -°c3 ADDITIONAL REMARKS SCHEDULE Page _ of AGENCY ^LAMED INNLRED Aon Risk Services. Inc of Florida G4S Secure Solutions (USA) Inc. FtkicY NX,WIRER See Certificate Number: 570018790170 CARRIER Rae CuOE See Certificate Number: 570018790170 EFFE1:`IVEUA E_ ADDITIONAL REMARKS • THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM. FORM NUMBER: ACORD 25 FORM TITLE: Certificate of Liablity Insurance INSURER(S)AFFORDING COVERAGE NAIC# Th SLRER LKSLRER ! SURER INSURER ADDITIONAL POLICIES If a policy below does not include limit information,refer to the corresponding policy on the ACORD certificate form for policy limits. • roLacv - POLICY Lkedl AWL 5LIR POLICYNCMIER [IR EFFECTIVE RE C TElON LnS TYPE OF INSURANCE w o DATE RATE M7W O1WV YI 4■Ma5arYVYYI YORKERS COMPENSATION [ N/A Y wc028214488 10/01/2014 10/01/2015 FL B N/A wc028234493 10/01/2014 10/01/2011 MN g N/A wt028214491 10/01/2014 10/01/2015 MA, WI - incl. Slop Gap B N/A wc028234490 10/01/2014 10/01/2011 LL,KY.RC,NH,UT,VT B N/A wc028234489 10/01/2014 10/01/2011 AZ,CA.VA B N/A w028234492 10/01/2014 10/01/2015 ME B N/A wc028234494 10/01/2014 10/01/2011 NJ, PA OTHER • p E&O-PL-Primary GL2047540 10/01/2014 10/01/2015 Agg Limit 51.ono,000 Per occ S1,000.000 Limit E Edo-PL-XS 016026940 10/01/2014 10/01/2015 Agg/Per occ 51.000,000 Exccxs Prof Ear-Guards ACORD 101(2001101) 10 2008 ACORD CORPORATION.AR rights recenred_ The ACORD name and logo are replstenrd marks of ACORD CONFIDENTIAL,PROPRIETARY,COMMERCIAL OR FINANCIAL INFORMATION 123 I P a g e - C;P4.1$ G4SSecure.Solutions i .,•,•• City of Miami Beach -I ,^ '.. RFP#: 2015-013-YG Security Officer Services Attachment 1 Supplier Quality Report Attachment 2 `2014 Annual Report ; - _ We_are•providing the recently,provided Supplier Quality Report(SQR)and 2014 G4S Annual Report as an-:attachments following'this-page.` _ -, - .t i l h ' F - . ` .•jam f - — - is r y• r . - .ti _ _' — t -: -CONFIDENTIAL;PROPRIETARY,COMMERCIAL OR`FINANCIAL INFORMATION ;• 124-I P a g."-.e- 7/28/2015 D&B Supplier Qualifier Report:G4S SECURE SOLUTIONS(USA)INC 7107,,i5-1:111-8-71ir adstreet`; Supplier Qualifier Report 1: Print this Report Copyright 2015 Dun&Bradstreet-Provided under contract for the exclusive use of subscriber 263159923 ATTN: Namel Report Printed: JUN 23 2015 In Date BUSINESSINFORMA LEON G4S SECURE SOLUTIONS (USA)INC (SUBSIDIARY OF G4S HOLDING ONE, INC:, JUPITER,FL) G4S WACKENHUT 1395 University Blvd Jupiter, FL 33458 . Rating Change This is a headquarters.(subsidiary) D-U-N-S®Number: 00-190-3723 location. Branch(es) or division(s) exist. Parent D-U-N-S®: 11-104-1401 Mailing PO Box 109603 address: Palm Beach Gardens, D&B Rating: -- FL 33410 Formerly 5A2 D&B Supplier Risk: 3 Telephone: 561 622-5656 SUPPLIER EVALUATION RISK (SER) RATING FOR THIS FIRM 3 Fax: 561 662-7406 hr-, Chief GRAHAME GIBSON, executive: CEO Year started: 1954 Management. control:. " 2002 file:///C lUsers/antcap/Downloads/D8B%20Supplier%20Qualifier%20Report%20G 4S%20SECURE%20SOLUTIONS%20(USA)%201NC.htm 1/12 7/28/2015 D&B Supplier Qualifier Report G4S SECURE SOLUTIONS(USA)INC Employs: 38,425 (300 here) All amounts are displayed in local currency. Net worth F: 544,216,000 History: CLEAR • Financing: SECURED D&B PAYDEX: 57 When weighted by dollar amount, payments to suppliers average 25 days beyond terms. Based on up to 24 months of trade. _ D&B Rating:-- The Rating was changed on October 17, 2014 because of changes in financial information,payment information, or other information about this business. The blank rating symbol should not be interpreted as indicating that credit should be denied. It simply means that the information available to D&B does not permit us to classify the company within our rating key and that further enquiry should be made before reaching a decision. Some reasons for using a"-" symbol include: deficit net worth, bankruptcy proceedings, insufficient payment information, or incomplete history information. For more information, see the D&B Rating Key. Below is an overview of the company's rating history since 08/07/08: D&B Rating Date Applied -- 10/17/14 5A2 07/24/14 -- 05/30/14 • 5A2 08/31/11 1R3 08/29/11 -- 08/07/08 file:///C:/Users/arrtcapl Downloads/D&B%20Supplier%20Qualifier%20Report%20G4S%20SECURE%20SOLUTIONS%20(USA)%20INC.htm 2/12 7/28/2015 D&B Supplier Qualifier Report G4S SECURE SOLUTIONS(USA)INC The Summary Analysis section reflects information in D&B's file as of June 22, 2015. SER COMMENTARY: - Higher risk industry based on inactive rate for this industry. - Proportion of slow payment experiences to total number of payment experiences reported. SUPPLIER EVALUATION RISK RATING: 3 The probability of ceased operations/becoming inactive indicates what percent of U.S. businesses is expected to cease operations or become inactive over next 12 months. Probability of Supplier Ceased 3.1% (310 PER 10,000) Operations/Becoming Inactive : Percentage of US business with same SER 12% (1,200 PER 10,000) score : Average Probability of Supplier Ceased 5.60% (560 PER 10,000) Operations/Becoming Inactive : - Average of Businesses in D&B's Supplier Database CREDIT DELINQUENCY SCORE: 294 If you have questions about this report, please call our Customer Resource Center at 1.800.234.3867 from anywhere within the U.S. If you are outside the U.S. contact your local D&B office. *** Additional Decision Support Available *** Additional D&B products,monitoring services and specialized investigations are available to help you evaluate this company or its industry. Call Dun& Bradstreet's Customer Resource Center at 1.800.234.3867 from anywhere within the U.S. or visit our website at www.dnb.com. The following information was reported 10/17/2014: Officer(s): GRAHAME GIBSON, CEO JULIE T PAYNE,V PRES-SEC file///C:/Users/antcap/Downloadsl D8 B%20Supplier%20Qtialifier%20Report%20G4S%20SECURE%20SOLUTIONS%20(USA)%201NC.htm 3/12 7/28/2015 D&B Supplier Qualifier Report:G4S SECURE SOLUTIONS(USA)INC SUSANNE JORGENSEN, V PRES-CFO DREW LEVINE, V PRES IAN A GREEN,V PRES JEFF CAPPELLETTI,TREAS JEFF MORROW,COO MALCOM BURCHETT,ASST SEC DANIEL W GRIZZARD,ASST SEC MICHAEL HOGSTEN,ASST SEC JAMES P KONDZIELA,ASST SEC DAVID YURCHAK,ASST SEC DIRECTOR(S): THE OFFICER(S)and Brian McCabe. The Florida Secretary of State's business registrations file showed that G4S Secure Solutions (USA) Inc was registered as a corporation on December 4, 1958. Business started 1954. Present control succeeded May 2002. 100% of capital stock is owned by the parent company. RECENT EVENTS: On June 17, 2008, sources stated that G4S PLC,Crawley, West Sussex, England,through its subsidiary The Wackenhut Corporation,Palm Beach Gardens, FL,has announced the acquisition of MJM Investigations Inc, Raleigh, NC, on May 23, 2008. After this acquisition, MJM Investigations Inc will become a wholly owned subsidiary of The Wackenhut Corporation. The employees and management were retained at this time. Financial terms are not disclosed. GRAHAME GIBSON. 2008-present active here. JULIE T PAYNE. 2005-present active here. SUSANNE JORGENSEN. 2008-present active here. DREW LEVINE. 2005-present active here. IAN A GREEN. 1995-present active here. JEFF CAPPELLETTI. Corporate Treasurer and Risk Manager for The Wackenhut Corporation in Palm Beach Gardens,FL. In addition to being a corporate officer of Wackenhut, serves as President of Titania Insurance Company of America,a Vermont based captive insurance company. A member of the Board of Directors since 2006 and currently serves on the Finance Committee which he has been a member since 2006. In 2006 and 2005 he was a member of the Annual Conference Task Force. In 2002 he served as a Pinnacle Award judge. He has been a member of AFP since 2001. JEFF MORROW. Antecedents are unknown. MALCOM BURCHETT. 2002-present active here. DANIEL W GRIZZARD. 2008-present active here. MICHAEL HOGSTEN. 2007-present active here. IUsers/antcap/Downloads/D&B%20Supplier%20Qua1ifier%20Report%20G4S%20SECURE%20SOLUTIONS%20(USA)%201NC.htm 4/12 7/28/2015 D&B Supplier Qualifier Report G4S SECURE SOLUTIONS(USA)INC JAMES P KONDZIELA. 2008-present active here. DAVID YURCHAK. 2002-present active here. BRIAN MCCABE. 2004-present active here. AFFILIATES: The Wackenhut Corporation has affiliates that operate security service businesses in Canada, Europe, Africa, the Far East and Central and South America. Related companies include Wackenhut de Colombia SA(WACOL), Bogota, Colombia; Wackenhut SA, San Jose, Costa Rica;. CORPORATE AND BUSINESS REGISTRATIONS REPORTED BY THE SECRETARY OF STATE OR OTHER OFFICIAL SOURCE AS OF JUN 04 2015: Registered Name: G4S SECURE SOLUTIONS (USA) INC. Business type: DOMESTIC CORPORATION Corporation type: PROFIT Date incorporated: DEC 04 1958 State of incorporation: FLORIDA Filing date: DEC 04 1958 Registration ID: 217838 Federal ID: 590857245 Status: ACTIVE Where filed: STATE DEPARTMENT/CORPORATION DIVISION,TALLAHASSEE,FL file)//C JUsers/antcap/Downloads/D&B%20Supplier%20Qualifier%20Report%20G4S%20.SECURE%20SOLUTIONS%20(USA)%20INC.htm 5/12 7/28/2015 D&B Supplier Qualifier Report G4S SECURE SOLUTIONS(USA)INC Registered agent: CORPORATION SERVICE COMPANY, 1201 HAYS STREET, TALLAHASSEE,FL, 323012525 Principals: TIMOTHY MCCORMICK, CFO, 1395 UNIVERSITY DRIVE, JUPITER, FL, 334580000 IAN A GREEN, VP„ 1395 UNIVERSITY DRIVE,JUPITER,FL, 334580000 DREW M LEVINE, VP„ 1395 UNIVERSITY BLVD., JUPITER,FL, 334580000 JOHN KENNING,Pres, 1395 UNIVERSITY BLVD.,JUPITER, FL, 334580000 JOHN SUMNER,VP„ 1395 UNIVERSITY BLVD.,JUPITER, FL, 334580000 SUSANNE JORGENSEN, VP„ 1395 UNIVERSITY BLVD., JUPITER,FL, 334580000 10/17/2014 Description: Subsidiary of G4S HOLDING ONE, INC.,JUPITER,FL. Parent company owns 100% of capital stock. As noted, this company is a subsidiary of G4S Holding One, Inc, DUNS number 111041401, and reference is made to that report for background information on the parent company and its management. In turn, G4S Holdings One,Inc is a wholly-owned subsidiary of Group 4 Securicor Plc, DUNS number 737341631,which forms one of the largest global networks of security operations worldwide, with 360,000 full and part-time employees. Group 4 Securicor operates in more than 100 countries on 6 continents. Group 4 Securicor listed on the London and Copenhagen Stock Exchanges. Provides detective, guard or armored car services, specializing in security guard services and private investigating. Provides facilities support management services, base maintenance, correctional facilities and privately operated jails. Provides business consulting services. Provides management consulting services, specializing in training or development. ADDITIONAL TELEPHONE NUMBER(S): Toll-Free 800 275-8305. Has 15000 account(s). Terms are security services are contracted for a term of usually one year,billings made weekly,bi-weekly and monthly, due upon receipt, Other business segments normally sell on net 30 day terms. Sells to all types of businesses, governmental units and individuals. Territory : United States. Nonseasonal. Territory: United States(100%). Employees: 38,425 which includes officer(s). 300 employed here. Facilities: Leases 95,000 sq. ft. in a four story a building. file:///C:/Users/antcapl Downloads/D&B%20Supplier%20Qualifier%20Report%20G4S%20SECURE%20SOLUTIONS%20(USA)%201NC.Mm 6112 7/2812015 D&B Supplier Qualifier Report G4S SECURE SOWTIONS(USA)INC Location: Suburban business section on well traveled street. Branches: This business has multiple branches, detailed branch/division information is available in D&B's linkage or family tree products. Subsidiaries: This business has multiple subsidiaries, detailed information is available in D&B's linkage or family tree products. Parent Information: Domestic Ultimate Parent Information: D-U-N-S®#: 11-104-1401 D-U-N-S®#: 11-104-1401 Name: G4S HOLDING ONE, INC. Name: G4S HOLDING ONE, INC. Country: US Country: US Revenue: N/A Revenue: N/A Global Ultimate Parent Information: D-U-N-S® #: 73-734-1631 Name: G4S PLC Country: GB Revenue: N/A UNSPSC (United Nations Standard Product and Services Code) is a globally accepted commodity (Product and Services)classification system. G4S SECURE SOLUTIONS (USA) INC offers the following product(s) and service(s): 72100000 Building construction and support and maintenance and repair services 80101500 Business and corporate management consultation services 80161600 Business facilities oversight 92101700 Jail and prison system 92101701 Jail or prison or penitentiary services 92121504 Security guard services 92121604 Private investigation services Beginning in 1997,the Standard Industrial Classification (SIC)was replaced by the North American Industry Classification System(NAICS). This six digit code is a major revision that not only provides for newer industries, but also reorganizes the categories on a production/process- oriented basis. This new, uniform, industry-wide classification system has been designed as the index for statistical reporting of all economic activities of the U.S., Canada,and Mexico. 561612 Security Guards and Patrol Services 561611 Investigation Services file:/l/CJ Users/arttcaplDowNoads/D&B%20Supp1ier%20Qualifier%20Report%20G4S%20SECURE%20SOLUTIONS%a20(USA)%201NC.h#m 7/12 7/28/2015 D&B Supplier Qualifier Report G4S SECURE SOLUTIONS(USA)INC 561210 Facilities Support Services 541618 Other Management Consulting Services 541612 Human Resources Consulting Services Based on information in our file,D&B has assigned this company an extended 8-digit SIC. D&B's use of 8-digit SICs enables us to be more specific to a company's operations than if we use the standard 4- digit code. 73810105 Security guard service 73810204 Private investigator 87440000 Facilities support services 87449901 Base maintenance(providing personnel on continuing basis) 87449902 Correctional facility 87449903 Jails,privately operated 87480000 Business consulting, nec 87420206 Training and development consultant The D&B PAYDEX is a unique, dollar weighted indicator of payment performance based on up to 264 payment experiences as reported to D&B by trade references. 3-Month D&B PAYDEX: 55 D&B PAYDEX: 57 When weighted by dollar amount, payments When weighted by dollar amount, payments to suppliers average 26 days beyond terms. to suppliers average 25 days beyond terms. Based on trade collected over last 3 months. Based on up to 24 months of trade. When dollar amounts are not considered,then approximately 77% of the company's payments are within terms. The Payment Summary section reflects payment information in D&B's file as of the date of this report. Below is an overview of the company's dollar-weighted payments, segmented by its suppliers' primary industries: Total Total Largest Within Days Slow Dollar ollar High Terms <3131-60 61-90 90> (#) Amts Credit (%) (0/0) (S) (S) Top industries: Telephone 26 file:///C:/Users/an leap/Dowrioads/D&B%20Supplier%20Qualifier%20Report%20G4S%20SECURE%20SOLUTIONS%20(USA)%201NC.htm 8/12 7/28/2015 D&B Supplier Qualifier Report G4S SECURE SOLUTIONS(USA)INC communictns The highest Now Owes on file is$300,000 The highest Past Due on file is$200,000 Dun& Bradstreet has 264 payment experiences in its file for this company. For your convenience, we have displayed 80 representative experiences in the PAYMENTS section. Detailed payment history High Now Last Sale Reported Paying Past Due Credit Owes Selling Terms Within (mm/yy) Record (S) (S) ($) (months) Accounts are sometimes placed for collection even though the existence or amount of the debt is disputed. Payment experiences reflect how bills are met in relation to the terms granted. In some instances payment beyond terms can be the result of disputes over merchandise, skipped invoices etc. Each experience shown is from a separate supplier. Updated trade experiences replace those previously reported. SUPPLIER VERSUS INDUSTRY PAYDEX -> PRIOR 4 QTRS CURRENT 12 MONTH TREND 2013 --- 2014 --- --- --- --- --- --- --- 2015 --- --- --- --- --- SEP DEC MAR JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN Supplier 62 66 66 55 59 56 55 58 60 61 66 66 67 66 60 57 PAYDEX Industry PAYDEX(Based on 26 establishments in SIC 73XX) UP QRT 80 80 80 80 80 80 80 MEDIAN 76 76 76 76 76 76 76 LO QRT 69 69 69 69 68 68 69 PAYDEX scores are updated daily and are based on upto 13 months of trade experiences from the Dun& Bradstreet trade file. All amounts displayed within this report are in local currency. fileJl/CIUsers/antcap/Downloads/D&B%20Supplier%20Qualifier%20Report%20G4S%20SECURE%20SOLUTIONS°A,20(USA)%201NC.htrn 9/12 7/28/2015 D&B Supplier Qualifier Report G4S SECURE SOLUTIONS(USA)INC 10/17/2014 Three-year statement comparative: Fiscal Fiscal Fiscal Jan 1 2012 Dec 31 2012 Dec 31 2013 Current Assets 357,311,000 396,609,000 444,809,000 Current Liabs 101,547,000 86,395,000 82,251,000 Current Ratio 3.52 4.59 5.41 Working Capital 255,764,000 310,214,000 362,558,000 Other Assets 414,067,000 423,652,000 424,627,000 Net Worth 510 25 0,000 536,088 000 544,216,000 Long Term Liab 159,581,000 197,778,000 262,259,000 Submitted JUL 22 2014 by Tim McCormick, CFO. STATEMENT ITEM EXPLANATIONS There are intangibles which represent goodwill and other intangible assets. The statement includes no deferred credits. Contingencies None. Non-current assets consist of leasehold improvements,operating equipment, deferred tax assets and other financial assets. Long term liabilities consist of provisions, payables to group companies and other long term debt. CURRENT ASSETS Consist of cash, prepayments,receivables (from others and group companies) and trade debtors. CURRENT LIABILITIES Consist of taxes, payables to group companies,accruals, trade & other creditors and credit institutions. LIQUIDITY Liquid assets provide full coverage of current liabilities. As of October 16, 2014, attempts to contact the management of this business have been unsuccessful. Outside sources confirmed operation and location. file:///C:/Users/antcapl Downloads/D&B%20Supplier%20Qualifier%20Report%20G4S%20SECURE%20SOLUTIONS%20(USA)%201NC.htm 10/12 7/28/2015 D&B Supplier Qualifier Report G4S SECURE SOLUTIONS(USA)INC Statement date: DEC 31 2013 Based on this number of establishments: 26 Firm Industry Median Quartile Rank (Supplier) Return of Sales: UN Return of Sales: 2.5 N/A Current Ratio: 5.4 Current Ratio: 1.9 1 Quick Ratio: UN Quick Ratio: 1.6 N/A Assets/Sales: UN Assets/Sales: 22.0 N/A Total Liability/Net UN Total Liability/Net 98.7 N/A Worth: Worth: UN=Unavailable PI BM FiL i\f1S The following Public Filing data is for information purposes only and is not the official record. Certified copies can only be obtained from the official source. JUDGMENTS . 1`! If it is indicated that there are defendants other than the report subject, the lawsuit may be an action to clear title to property and does not necessarily imply a claim for money against the subject. There are additional Suits in D&B's file on this company available by contacting 1-800-234-3867. EIE0S A lienholder can file the same lien in more than one filing location. The appearance of multiple liens filed by the same lienholder against a debtor may be indicative of such an occurrence. \. F I LIN 3 i There are additional UCC's in D&B's file on this company available by contacting 1-800-234-3867. The public record items contained in this report may have been paid, terminated, vacated or released prior to the date this report was printed. t,‘,a ` R\ME\I k(. I'1Z 1T\ fiIe)//C J Users/antcap/Downloads/D8,13%20Supplier%20Qualifier%20Report%20G4S%20SECU R E%20SOLUTIONS%20(USA)%20INC.hlam 11/12 7/28/2015 D&B Supplier Qualifier Report G4S SECURE SOLUTIONS(USA)INC Activity summary Borrower(Dir/Guar): NO Administrative debt: NO Contractor: YES Grantee: NO Party excluded from federal program(s): NO Congressional District: 22 The details provided in the Government Activity section are as reported to Dun& Bradstreet by the federal government and other sources. Copyright 2015 Dun& Bradstreet- Provided under e contract for the exclusive c usive use of subscriber 263159923 file:///C:l Users/antcap/Downloads/D&B%20Supplier%20Qualifier%20Report%20G4S%20SECURE%20SOWTIONS%a20(USA)%201NC.htrn 12/12 r. __ . _ ,...!"Zr:,,,,:.,, a - .. ' _ if"TM MI my flit me fntt n u MT m MI m IM TM mE mt ON MR MI wt t!1 ` , s. 71INIV. -0 . ._ ;..ao.... . '4,,,,%i7-----'., b k • ,'::1' ,d? '? qty ,r r:4 '_ ? ,_..,:, 0000).-..4:, ' ''‘At 4 t.. "a 'N,,,4 -.4...- c_ T fi, G s . ' 1 f!, Viet 00'f‘. At? f N• ' . 4,,, --":.e. ^ ' vi '-,. '1/4. \ eif — ' . #: 4 4 , '0.0 Y • 0.;• sti : 0 , L.. a • tIll ,--, 7 iltir iltAt* '1,11 INAO a", t., It" ..1..t ill/.li : �:— - Delivering value �, for our customers ... . . ,,„ . aiii- A .; i / and shareholders P... ` • 'f .. • T /�w��1� a G•Via S Securing your world Annual Report and Accounts 2014 Introduction G4S is the world's leading global, integrated security company specialising in the provision of security and related services to its customers across six continents. Our mission is to create sustainable value for our customers and shareholders by being the supply partner of choice in all of our markets. Our strategy addresses a positive, long term demand outlook for our core services and seeks to deliver sustainable, profitable growth. Our strategic plan focuses on growth, productivity, active portfolio management and disciplined financial and risk management. Our success is underpinned by our customers, our people and our values. Financial highlights Underlying revenue' Underlying PBITA' Underlying EPS' £6.8bn 424m I 3.6p (2013:£6.5bn2) (2013£393m2) (2013: 12.9p) Total revenue' Total PBITA' Total EPS3 £6.8bn 329m 9.8p (2013:£6.6bn) (2013:£23m) (2013:(24.7p)) Total cash generated by Dividend per share continuing operations £553m 9.24p (2013:£496m) (2013:8.96p) I. To clearly present underlying performance,specific items have been excluded and disclosed separately—see page 90.For basis of preparation and an analysis of specific items see page 91. 2. 2013 underlying results are shown at constant exchange rates and have been re-stated for the adoption of IFRS I 0 and IFRS 1 I and re-presented for businesses subsequently classified as discontinued or identified as part of the portfolio management programme—see page 90 for details. 3. Including specific items.See page 9 I for details. In this report Strategic priorities at a glance 1 Strategic report Financial highlights IFC Our services 2 Business model 5 Our customers and markets 6 Chairman's statement 8 Chief Executive Officer's review 10 Strategy in action 14 ....`„` Key performance indicators 32 I� Business review 34 ,* , , Risk management 42 ., .. Principal risks 45 tp +id ' \\ Governance See page 14 See page 20 Chairman's introduction 51 P'f Board of directors 52 /nn� Executive committee 54 I.Transform our culture 2.Invest in organic growth, Corporate governance report 56 through our people customer service and Audit committee report 65 Directors'remuneration report 70 and values operational excellence Directors'report 85 ---0--, moos Directors'responsibilities 88 4 lit. 401, FIT-1 1 Iiiimi . . J , z i . 1 Financial statements Chief Financial Officer's review 89 Independent auditor's report 96 Ir' See page 24 G/ See page 28 Consolidated income statement 99 Consolidated statement of comprehensive income 100 ..il Consolidated statement of financial position 101 3.Make our organisation 4.Actively manage our Consolidated statement of cash flow 102 more productive portfolio and performance Notes to the consolidated financial statement 103 Parent company balance sheet 156 Parent company reconciliation of movements in equity shareholders'funds 157 liir Notes to the parent company financial statements 158 Shareholder information • Notice of Annual General Meeting 165 • -- Recommendation and explanatory notes relating C,., to business to be conducted at the Annual General ' Meeting on 4 June 2015 I69 ,,,. Group financial record 172 CSR performance in 2014 174 'r Application of FRS 101 176 See page" uralcimrsimmie General information 177 5.Embed disciplined financial and risk management 111131/4 Visit www.g4s.corn for more information Annual Report and Accounts 2014 G4S plc i i JA Our services ,. _ . .. a,,r r y ,1"^ G4S works to safeguard the welfare - I and prosperity of millions of people ', r, l' worldwide— helping to create safer or and better environments in which people live and work.The breadth of our services 4 " 1 ' , and geographic coverage provides both resilience and growth opportunities. ?: INIP Cr Secure solutions 0 84q° group revenue Security and facilities management (FM) services Security systems and technology Market and strategy Market and strategy G4S is a global provider of security and FM services with a top-three market Security systems and technology represented position in the majority of the 91 manned security markets in which we around 8%of group revenue in 2014. operate.Security and facilities management services accounted for 59% of group revenues in 2014. The global security systems market is a large growing market(source:Freedonia,November As one of the few global security companies,our main international competitors 2014)but regional market dynamics vary widely in developed markets tend to be regional and international companies in terms of competition,products sold and operating in a single market segment such as manned security,security systems customer segments.Our technology strategy or facilities managementThere are also many local security companies operating therefore has to adapt to meet each region's in developed and emerging markets. 1 unique requirements. We aim to differentiate our business to customers through our expertise, We aim to drive outsourcing and enhance excellent service delivery,integrated security solutions and geographic coverage. the value of traditional security services through The secure solutions business covers a wide range of greater use of technology(see p23). services,including: Security systems and technology includes: Risk services Risk management and consultancy services including risk Security installation Access control,CCTV, and consultancy analysis,personal protection,compliance and investigations, and maintenance intruder alarms,fire training,mine detection and clearance services detection and video Monitoring Key holding,mobile security,patrol and response analytics to identify and and response services,and alarm receiving and monitoring facilities notify operators of issues System software/ Security and building Secure facilities Integrated facilities services for entire sites or estatesg services for commercial customers and governments integration systems technology integration Manned security Trained and vetted security officers services Revenue Revenue £4,004m £5 66m (2013:£3,898m) (2013:1..550m) 2 G4S plc Annual Report and Accounts 2014 -,,,,,,, .. f . ,.> • 41 ',my i r i a 5'Y'`. 00 • x 1 \ . .,. ,. .... ;pi ' (fa ad , x_ r y II Care and justice services Specialist outsourced services Market and strategy Market and strategy Care and justice services represented around 9%of group Based mainly in the UK,G4S offers revenue in 2014.The market structure is typically consolidated a range of outsourcing services, on the supply side with a small number of providers.Larger which together accounted for around companies are usually better equipped to deliver such 8%of group revenues in 2014. highly specialised services. We aim to offer innovative and While the care and justice services market is concentrated cost-effective solutions to customers. primarily in the UK,USA,Australia and New Zealand,we see Police Support for frontline a number of countries exploring the possibility of outsourcing services policing including the these services to the private sector in the future provision of custody suite Care and justice services offers highly specialised services and forensic services to central and local governments and medical services,and government agencies and authorities: back-office support — functions for police forces Juvenile and Management of all aspects of a facility — - adult custody and those held within the facility- Welfare- Assisting long term and rehabilitation similar centres are also used for the to-work unemployed people detention of asylum applicants programme into work Prisoner Transportation of prisoners and asylum Utility Data and meter escorting applicants between courts,police stations services services,and contact and custody and asylum centres centre management for private energy Asylum services Management of housing provision and and utility companies other services for asylum applicants Electronic Electronic tagging and monitoring of monitoring offenders at home or in the community Revenue Revenue £605m £504m (2013:£586m) (2013:£399m) Annual Report and Accounts 2014 G4S plc I 1 - y7 - _ " x i u ` i l..._",,,,aka. 1 fi ,,. ,, a' Jm fill°' ....,r1,50:11 .� r O IR', ,1, 1 ,,,.. ' .. - i WI* *., Ili ‘ ' f 0, -- "" , .L'-UtiDs Btfr 41 I 1 r )1.11" 4-i rye . A' I �'"f 1e ' _ 4'_ _rte 05„, .„ , seritt .r. .. , Cash solutions © gro group revenue Cash solutions & secure logistics Market and strategy The cash solutions business covers a wide range The cash solutions business accounted for around 16%of group of services including: revenue in 2014.We are the market leader or number two in 54 of our 62 cash solutions markets.The main providers of similar Cash Managing cash on behalf of financial institutions, services are a small number of international competitors in mainly management including cash transportation,high security developed markets.Our cash solutions business is integrated into outsourcing cash centres,counting and reconciling cash, our wider organisation and processes through shared customers, fitness sorting of notes for use in automated management structures and systems in many countries.The teller machines(ATMs),counterfeit detection market is highly regulated,often by central banks,and the business and removal,distribution of cash to bank requires complex infrastructure and significant expertise. branches,ATMs and retail customers We aim to: Cash Provision of consultancy services to consulting central banks and commercial banks on - play a key role in the management of the cash cycle on overall cash management strategy,bank note behalf of central banks,commercial banks and retailers, production and security and all aspects of allowing them to focus on their core business cash cycle efficiency • use our developed market cash cycle expertise and track record to encourage central bank and financial institution ATM Managing ATMs on behalf of banks,retailers outsourcing in emerging markets management and independent ATM providers—including • continue the expansion of innovative technology such cash forecasting,cash transportation and as CASH360T""for retail customers(see page 26). reconciliation services,first-line maintenance Revenue and ATM engineering services I 07 I m Retail cash Provision of systems and hardware which I 1 ' management provide an automated cash office for retail sites to improve security and faster banking (2013:£I,063m) of cash,electronic audit trails of takings and a real-time view of retail cash balances International Bespoke international transportation and transportation insurance of currency and other valuables Cash Secure transportation of cash using specialist transportation vehicles,screened and trained personnel and purpose-built technology to transport,protect, count and reconcile cash to customer records 4 G4S plc Annual Report and Accounts 2014 I Business model Our business model is market led; `" Delivering CUStC1f1'ler g We seek to understand our customers' focused solutions strategic and commercial objectives so g 1 that we can design and deliver security solutions which support them. Customer relationships and contacts G4S has a very diverse contract portfolio.The duration of contracts a higher capital intensity being usually five years in duration varies from annual sporting events to 25-year contracts.In cash or longer.In practice many annual contracts lead to solutions,most contracts are annual,with those contracts requiring long-term relationships. Service excellence We foster a high performance culture which focuses on service excellence,operational management and financial performance.High performance leads to strong customer relationships,motivated employees and achievement of strategic goals—critical elements of delivering sustainable,profitable growth. Solutions design By analysing customers'existing and future complex security needs and bringing together our expertise in market sectors,technology,project management and service delivery we design solutions which help our customers to manage risks,improve service,protect people and assets and achieve their own organisational objectives. Customer Understanding customer needs is central to our success.This enables us to align our organisational objectives to those of the customer and means we can help our understanding customers to be successful.See pages 2 to 4 for an overview of our service lines. We build customer understanding through involvement in industry bodies and academic institutions,strategic work with customers,customer service assessments and feedback. Market Demand There is positive demand for our core services around the world.See page 10 for a discussion of some of the market growth drivers. Scale and capabilities With 623,000 dedicated employees and operations in over 1 10 countries, our ability to deploy skilled staff on a global basis to support local and international customers is central to our business model.This coverage means we can share learning and experiences across our markets to the benefit of our customers and our business.We work in line with relevant international standards and strive to achieve consistent high quality employee engagement,health and safety,training and ethical business practices across our operations. G4S Secure solutions:positioned for future development G4S Cash solutions:unique breadth and reach t4 System software/integration 15 E A Outsourcing services 13 ea i oti Ai Consultancy services 17 t ATM maintenance 34 • Monitoring&response 66 replenishment 48 System install&maintenance 73 . Cash processing 58 F . Manned security 91 I Secure transportation 62 I Number of G4S co,--tees around the world Ni,,,--ber of G4S countries aro,.nd the world A key element of our growth and customer service strategy is to leverage the opportunity to design,sell and deliver more sophisticated, complex solutions in more countries.Such services tend to have longer contract terms and higher margins than manned security alone. Annual Report and Accounts 2014 G4S plc Our customers and markets Leveraging strong Revenue by customer type in 2014(%) g Consumers J y positions. . .market Government 25% We are a global business with large, Major corporates established market positions in developed and industrials Financial institutions 29% 18% markets and outstanding positions in fast- growing emerging markets.Our emerging Retail 8% market businesses accounted for 36% of 1 Leisure and tourism 2% I Utilities 8% group revenues and 40% of profits in 2014. and airports 3% Transport and logistics 2% North America 1 UK&Ireland Europe Services: 20% 23' 2 I % 0 Security and facilities management 0 Security systems and Revenue Revenue Revenue technology 000 00000 0000 ®Care and justice ®Outsourcing ----- 0 Cash solutions /� 4 4 lit_- , ----1t-r:1"li r ,sue i. -'‘, , _,K4_,H--- ,' #4,1011t) ' • , WI . -41.6 it ,,,,t_-Illr 1 0 Latin America 10' P Revenue i i.40114,1-...„,„, 000 V ; Africa ■Developed markets ` 70/0 Asia Middle East •Emerging markets No presence Revenue I / 1 0000 For a detailed summary of our activities,employees and performance by region see the Business Review Revenue � 0000 section on pages 34 to 41. G4S plc Annual Report and Accounts 2014 In its recent study into the ...to meet the growing gl global security industry,independent research firm Freedonia projects demand for security that the security market will grow at an average of 6.8%per annum from 2013 to 2023.See page I 0 for a description of some of the drivers of growth. Our strategy addresses the positive long term demand for security across a wide range of commercial and government customers.We have } a diverse range of services to meet our customers' 6.8% footprint requirements and have a broad geographic i q expected market growth from to meet their demand for security around the world. 2013 to 2023 per annum Global security market by region($m) ■00.000 ! ASIA PACIFIC 80,000 NORTH 1 AMERICA LATIN n `,` �� ‘‘‘00:. AMERICA 60^..000 j ``%% ‘ `````` WESTERN ` �� EUROPE• 40.000 • t►►tttl►tt°- i +►1' AFRICA& ```````,`,`Nt 1►j1t11,11111++111111 i M/EAST I `ON 1 1+11111►1+111+++ 1111111►►11t111tt111t1 100 1111►t1t111tt11t+tt1 20,000 !t111tWttit►t1111t i 1111111th% EASTERN utltttttttttttt►tttti►t1 EUROPE tttttttttttt 1t ttttnutltt►it►t►ttttltt►lit►tt►tttttttttttttt n�iitittii�ititttiitiitiiiitiiinnttt'titt�tttittittittitttttttttitttt 0 1 2008 12013 Source Freedonia World Security Services report November 2014 excluding residential security. Annual Report and Accounts 2014 G4S plc 7 Chairman's statement r A year of progress During the second half of 2013 the new management ;, 4" team developed a strategic plan which envisaged a group-wide transformation programme and extensive "'"0".. proposals to implement new processes and disciplines, 1-I emphasising our key values of customer service ! ,�� and integrity , '1f The board approved the new strategic plan in 2013 and in 2014 the board devoted considerable time to assessing iii/11‘ . Ifli the implementation and effectiveness of that plan. I am delighted to report that,over the course of 2014, the group has moved forward across a broad front as management has made excellent progress executing the group's strategic plan with great skill and energy. The board has been particularly pleased with the John Connolly progress made in strengthening the global leadership Chairman team,reinforcing the group's values,investing in organic growth,customer service and operational efficiency. Management also successfully supplemented the group's portfolio management programme and strengthened BuildB u i l d i n on risk management. ing In March the company reached a settlement with the UK Government in relation to historical billing issues strong foundations and management developed and began implementing v a fundamental programme of corporate renewal. This focused on strengthening the culture and control processes in our UK Government business. "As I reported last year,G4S has embarked on As noted above,the group's transformation programme extends well beyond our UK Government business and a group-wide transformation with a strengthened is being implemented on a group-wide basis.The board management team and a clear strategic plan. has been pleased with the progress made to date and In 20 14 that plan was put into action and the will continue to monitor management's implementation of the programme during 2015. board has been pleased with the clear progress The Board made in all areas of the business,including financial In 2015,we will be making a number of changes to performance.This provides strong foundations the membership of the board.Mark Seligman has now served on the board for nine years and,in line with for further progress in 2015 and beyond.„ UK corporate governance guidelines,will retire from the board after the 2015 AGM.Mark has made a significant contribution board during a period of great change and I am very grateful for all that he has done. In preparation for his retirement from the board, Mark handed over the chairmanship of the Audit Committee to Tim Weller,a serving CFO with considerable financial and business skills and experience. Mark remained on the Audit Committee until the end Dividend per share of 2014 to ensure a smooth handover and to assist with the tender process for the role of the company's external auditor.That process resulted in a clear recommendation 9.24p from the Audit Committee,fully endorsed by the board, that shareholders approve the appointment of PwC as (2013:8.96p) the company's external auditor for 2015. G4S plc Annual Report and Accounts 2014 Grahame Gibson will stand down from the board at Financial performance the conclusion of the 2015 AGM and retire from the The progress made in 2014 was reflected in the . group in October 2015.Grahame is the longest serving group's financial performance. member of our board,having been appointed in 2005, and he has been a senior executive of the G4S group Organic growth was 3.9%overall and 9%in emerging and its predecessors since 1 983.I would like to record markets.That growth,combined with the success of the board's gratitude to Grahame for the enormous restructuring and efficiency programmes,saw underlying contribution he has made to the group.The board profit increase by 8%,underlying earnings increase extends its best wishes to Grahame and his family in by 12%and cash generated by operating businesses his retirement increase from£420 million to£526 million. The Nomination Committee has commenced a process The board has confidence in the group's performance to recruit a new non-executive director and I expect and prospects and the directors propose an increase of that process to be completed during the first half of 2015. 5%in the final dividend which is payable on 12 June 20 15, With the new non-executive director in place,I believe With an interim dividend of 3.42p(DKK 0.3198) we will have a board which retains a good knowledge per share paid on 17 October 2014 and a final dividend of the group and its businesses whilst also having the of 5.82p(DKK 0.6041)per share,the total dividend broad spectrum of skills,experience and background for the year will amount to 9.24p per share appropriate for this company and the strategy it is (2013:8.96p per share). pursuing.It also has a suitably diverse composition in terms of nationality and gender,which is important in The progress which has been made in 2014 was any business,but particularly so in one which is as large the result of a great deal of hard work by the group's and geographically and culturally diverse as G4S.In 2015 management and 623,000 employees,many of whom the board will continue with a programme of regular work in challenging circumstances.They provide vital engagements with management teams from across the services for the group's customers around the world group,which enables the non-executive directors to and I would like to express my appreciation for their broaden and deepen their knowledge of the group continuing dedication. and its strategy,management and operations. John Connolly Chairman Revenue by region(%) UK&Ireland - Africa 23% 7% Asia Middle East 19% Latin America glop North America 10% 20% Europe 21% Annual Report and Accounts 2014 G4S plc Chief Executive Officer's review 2014 review "- Our strategic plan combines cultural transformation with sustained investments in organic growth and productivity improvements,together with active portfolio management and disciplined financial and risk !{ management I'm pleased to report that we made good progress in all of these areas during 2014. (4-1" Our markets 1-4k ,rumnii-141 As the world's leading global integrated security company,our mission is to create sustainable value for our customers and shareholders by being the �✓ supply partner of choice in all of our markets. Independent studies indicate that global demand for security is expected to grow at a compound per e rate of 7% er annum between 2013 and 2023, AshleyAlmanza reaching cL210 billion in annual revenues by 2023. Group Chief Executive Officer The main drivers of industry growth are diverse and include: the economic environment and GDP growth; infrastructure investment;levels of conflict and crime; customer attitudes to risk and focus on security;customer Delivering sustainable efficiency and outsourcing objectives;regulation and the regulatory environment;technological change and innovation;interest rates and the role and policies profitablee grvvth of central banks influence the cash handling industry.u Through its unique market positions,G4S has attractive exposure to the growing demand in global security markets.We also have a diverse and proven "In 20 13 we established a new strategic plan to range of services and the expertise to address this g p organic growth potential. transform G4S and deliver sustainable,profitable Investing in organic growth growth.In 2014,the group made good progress In 2014 we took action to strengthen our sales capability, executing this strategic plan and I am pleased customer relationships and customer service.We invested in strategic account management and also implemented to report a 12% increase in underlying earnings a systematic approach to measuring and monitoring (to £210 million) and a 25% increase in cash flow customer satisfaction. from operating businesses (to £526 million). We continued to invest in service and product innovation and strengthened our sales operations and our sales The group's performance and prospects are capacityThese investments have begun to improve our reflected in the directors recommendation to pipeline management and in 2014 we won new contracts increase the final dividend by 5%to 5.82 pence with a total value of£2.1 billion. per share.Much remains to be done to realise In 2014,we achieved revenue growth of 8.9%in our emerging market businesses and 6.9%in our North the full potential of our strategy." American businesses.As expected,revenues in our UK& Ireland and Europe regions declined by 1%,reflecting the end of the Electronic Monitoring contract in the UK and the end of the prison service contract in the Netherlands. Our People It is essential for the successful and sustainable growth of our business that we attract,retain,develop and incentivise the best people in our industry. During 2014 we made a number of key appointments to the Group Executive Committee(GEC).Peter Neden has been appointed to the role of Regional President UK& Ireland.Peter is a proven service industry executive,covering both commercial and government sectors in the UK John Kenning joined us in the role of Regional CEO, North America and Technology,succeeding Grahame Gibson who retires this year.John has a successful track record in sales and security technology. G4S plc Annual Report and Accounts 2014 • • • • • - In July this year Jenni Myles will take up the role of.group now comes under the formal oversight of our group HR Director,succeeding Irene Cowden who retires in June. general counsel. . Jenni has held a number of senior HR positions at G4S including HR Director for our North American and Latin We established"Safety first"as a new group value and all a American businesses.Jenni brings a deep knowledge of our senior executives completed mandatory safety leadership industry and company combined with a track record of training which we are extending across the group in 2015. leading and supporting large organisational change We established the new position of Group Head of programmes.Grahame and Irene have each made an Health and Safety and appointed an experienced safety . enormous and valuable contribution to G4S and they leave professional to this role.Whilst we have been successful with our profound thanks and best wishes. in raising safety awareness and strengthening our resources and systems,we remain fundamentally dissatisfied with our Mel Brooks was promoted to Group Strategy overall safety performance.I deeply regret to report that .. &Commercial Director after successfully managing our in 2014,41 of our colleagues lost their lives in work-related . large Indian business.Mel brings security and technology incidents(2013:49 work-related fatalities),including 14 • expertise from a variety of senior leadership roles he colleagues who died in attack-related incidents,protecting. • has held both in G4S and in the defence industry - •our customers and their property. Beyond the GEC,we continued to invest heavily in Work-related fatalities have a devastating impact on refreshing and strengthening our senior management team. families and colleagues at G4S and they motivate us to put . . .. Since spring 2013 we have made 114 senior appointments Safety First.Zero harm remains our goal and each and to our senior leadership cadre of 220 executives, every member of the global leadership team is committed comprising 64 external hires and 50 internal promotions. to this goal.In 2014,we also established a UK corporate The new appointments cover key positions in general renewal plan and made good progress in implementing the • management,sales,business development,operations, plan.Implementation of this plan remains a priority in 2015. technology,procurement,IT finance and risk management • • All of these changes have been designed to strengthen Productivity . _Over the past 18 months we have established a number . • - our organisation and support the group-wide • transformation of G4S. of important programmes to improve the productivity of •• G4S.Given the scale and current stage of organisational Our global leadership development programme was •maturity of G4S,these programmes address a material. re-launched in 201 4.We are also simplifying and opportunity to improve our performance and create reinforcing succession and development planning to ensure shareholder value.Our restructuring and organisational that our leaders of tomorrow are identified and given the efficiency programmes made good progress in 2014 and . _=appropriate opportunities to develop early in their careers. we believe there are further opportunities to implement Our investment in training and development permeates lean processes and more efficient organisation structures. the entire organisation and is nowhere more important Any new programmes will be subject to stringent financial, • than in customer-facing roles. economic and operational criteria. I would like to thank the more than 623,000 colleagues Our operational reliability and efficiency programmes across the world whose skill,energy and dedication to broadly fall into two categories.Firstly,direct labour our customers and our company is reflected in the efficiency,which aims to ensure we deploy the correct progress made by G4S in 2014. service at the right time,thereby helping to improve Ou�Values • customer service and reduce costs(see page 27). During 2014,we updated and re-launched our group Secondly,route planning and telematics,which seeks values and mounted an awareness and training programme to reduce vehicle and crew requirements and to reduce • to ensure that G4S managers and employees understand fuel and maintenance costs whilst simultaneously how to put our group values into practice in everyday improving driver safety(see page 27). business activities.To support and reinforce this - In 2014,we established the new position of Chief programme we have updated and re-launched.our Procurement Officer and recruited an experienced whistleblowing policy and compliance monitoring • _procurement leader and team.We aim to achieve Our values at work—an integrated reporting framework • Our corporate values influence every aspect of corruption,health and safety,and human rights. our culture and day-to=day business activity,and To better reflect the focus which our values we recognise that CSR strategies are best achieved have within our organisation and the importance • when integrated into business practices.It is with • we place upon ethics and sustainability,we have this- that in mind that our CSR strategies and priorities year implemented an integrated CSR reporting - are developed in conjunction with our operational framework which is led by our Annual Report • businesses and help to improve the way we work and Accounts and supported by a CSR report and our approach to doing business.Our priority and our website. - • areas are business ethics-and anti-bribery and • 1 uaj R--port sod.Accounts 20i 4 G4S plc I I • • • . Chief Executive Officer's review continued procurement efficiencies by using our global scale to. IT service management models to improve consistency consolidate supply chain management and secure and efficiency in IT infrastructure,development better terms of business.We are also beginning to and operations. improve visibility,understanding and control of our buying behaviours to improve efficiency Active Portfolio Management During 2014 we continued to apply the Last year we completed the first phase of our UK structured approach to portfolio management shared service centre to standardise key processes and which we established in 2013.Since the inception reduce the cost of functional support.In 2015 we will of this management discipline we have completed the extend the scope of shared services performed at our divestment of eight businesses at attractive exit UK centre and we will consolidate our North American multiples,generating aggregate proceeds of£248 million back office.We have begun to assess the feasibility of and an aggregate profit on disposal of£92 million. applying our shared service model in other regions. Businesses sold previously contributed revenue of over £700 million at an average net margin of 2.8%,well We are undertaking a disciplined and progressive IT transformation programme.During 2014,we focused below the group average.We also discontinued a further 22 businesses.Portfolio management remains an on building our IT leadership and development capability.We currently spend around£180 million important discipline in ensuring that we maintain strategic focus,capital discipline and effective on IT services and we are now progressively employing ctive financial performance across the group. Del egg value.through our kw programme4. Our strategic plan encompasses key programmes which address multiple sources-of-value. I.Transform our /A 2.Invest in organic 3.Make our J II� culture through_h ;I III growth,customer organisation more our people and service and productive (p24) values (p 14) operational excellence 4,-20) Building capacity in our people Strengthening or ga nic sales and Investing in or gan isational efficiency • Strengthened global leadership business development capability De-layering our organisation team— 114 appointments to top —invested additional cf2Om j • Shorter lines of communication, 220 executive roles(50 internal, i • Appointed new sales leaders across ! reduced costs and increased time 64 external) the group focused on customers • Re-launched leadership programmes i • Investment in sector and Globalising key functions --- ---- technology specialists E • Improve consistency,efficiency and Re-focusing our values • Appointed 385.additional new hires j effectiveness of our support functions • Greater emphasis on Health ' into sales and business development and Safety(Safety first) roles in the past 21 months Creating shared service centres • Employee communications and i _ for back office functions training to reinforce group values I Improving sales operations • Leverage scale of organisation • Enhanced whistleblowing and • More proactive management of and standardise processes case management j sales pipeline Implemented first phase in finance • Investing in customer relationship in UK in 2014 Managing risk and global account management • US shared service centre in 2015 • Investment in improved --{ • Better alignment of sales incentives management ! g IT transformation risk g .� with customer satisfaction • Progressive,disciplined change Enhancing our • Extending proven services from one. ( programme to improve efficiency market to another and consistency in IT infrastructure, performance management development and operations • Increased rigour in our I performance contracts I • Aligned incentives with values and performance f . 12 G4S plc A.rt,uai Report and Accounts It . Disciplined risk and financial management Outlook `" During 2014 we established an enterprise risk G4S'strategy and plan address a positive, . management system based on the"three lines of . long term demand outlook for our core services 5. defence"model.As noted above we have invested and seek to deliver sustainable,profitable growth. heavily in strengthening our senior leadership teams We are making good progress with the implementation and reinforcing our group values,both of which are of our strategic plan and this was reflected in the important components of our risk and financial group's commercial,operational and financial . management systems.We also strengthened our performance in 2014.The group's performance contract risk management processes and made and prospects are also reflected in the directors' significant investments in financial control resources recommendation to increase the final dividend by 5%. and audit and assurance capacity. There remains much to be done to realise the full The importance of contract risk management potential of our strategy and we expect to make was highlighted again last year with the£1 16 million further progress in 2015. settlement of the electronic monitoring contract and a further charge to profits of£45 million relating _ • to provisions on legacy UK contracts. Ashley Almanza Group Chief Executive Officer . 4.Actively manage 1 5. Embed our portfolio and 41 I I disciplined . performance(p309 financial and risk management (p32) • Investing in operational excellence Reviewed 56 under performing j Soundly financed • —accelerated best practice(ABP) j or immaterial businesses in 2014 j • Investment grade credit rating • Direct labour efficiency ` • Eight businesses sold in 2014 including and£998m of unutilised credit facilities • Uses subject matter experts working with . US Government Solutions i - local line managers to deploy the correct — raised gross proceeds of£177m Global capex rationing—central ' service at the right time,improving in 2014 and gross proceeds£248m I pool of capital . customer service and reducing costs ' since 2013 i • Investment hurdle rate 10%post . • Multi-year programme covering 39 1 • 20 discontinued;22 under review and tax IRR . businesses and 376,000 employees I 14 to be retained with performance • Rebalance investment towards • in the first phase improvement plans organic growth Telematics and route scheduling • Businesses sold had revenue of more ! -- — -- • programmes for our fleet than£700m and an average net margin ; Improve sustainable free cash • of 2.8% I flow and working capital • Telematics — reduces fuel and maintenance ! management _ costs;improves driver safety • i • Implementing a --In 4,500 vehicles at the end of 2014 ; "cash matters.'culture • Route scheduling —fewer vehicles and efficient crew I Strong focus on financial • requirements leading to improved stewardship customer service • Strengthened capability and —7,000 vehicles to be covered by capacity in audit risk and financial management • end of 201 5 - • Strengthened contract New global procurement programme . review process • Baseline study identified addressable i spend of£1.3bn(70%in eight categories) —material opportunities to reduce costs • Negotiating with a number of key - • • suppliers with the first global • procurement deals signed r.=: � - i: • Leveraging our scale - . `o-w-tii Report,n Accounts is f 1 4 . a c�c:,r+._r.1 G4S-plc 1 • • • Strategy in action ..." ; . . I.Transform our culture through . our people and values Our financial performance is underpinned by recruiting, developing and deploying the best people against our • - most important opportunities by applying our group Strew-?x hen i values in everything we do and by delivering outstanding . customer service. capa.bility . - The group values are: Safety first ' -- — We prioritise safety management to protect identified • the health and well-being Of ourcolleagues Our strategic review in 2013 identi and those around us. the need to strengthen our resource . Customer focus . • and capability in a number of key areas- . , We have close,open relationships with our of the business—leadership,senior customers which generate trust and we work in partnership for the benefit of our organisations: line management,sales and business Integrity • development.We have also strengthened We can always be trusted to do the right thing. our teams in IT,procurement,finance Best people , and risk management. We employ the best people,develop their competence,provide opportunity and inspire • — them to live our values.. 2014 highlights Performance 4 Safety first • We seek to improve performance year on year to create long-term sustainability. • new senior appointments to new value Teamwork and collaboration • the global leadership team We collaborate for the benefit of our customers and G4S. New Expertise We develop and demonstrate our expertise . whistleblowing through our innovative approach to creating• policy created and delivering the right solutions. 2015 priorities Our plans to improve customer service are outlined . in more detail on pages 20 and 23.How our values. o Increase health and safety focus on road safety are integrated into the group's strategic priorities is G Extend health and safety leadership training to • covered throughout the Strategic Report and in this - a wider population - section we discuss: • Implement an online system to better capture and record health and safety incident data i.Safety first—protecting colleagues and those around us O Enhanced whistleblowing hotline and case management - ii.Integrity—being trusted to do the right thing system to be implemented globally • Global engagement survey to be undertaken and fed iii.Best people—employing the best people and back within the organisation - providing opportunity . - • Design and implement a new single regional leadership • programme for middle managers . • • • 14- G4S plc 1'j.i cn,ai Report 3r ,A(Lc vF;iS 2014 • • 1 1 \ a h Di j . 4041110111111r _, oar.11," : i . a.., it J• 1100 , 9 * `\. ( - ..'L ♦. as, f \ '` _-.rte:„- 4,,,,O,,,,,‘,,,,,,„ektor' .,;_ 4 Nuclear power - United States . Allialltlit's-t- . , At one of the newest and largest nuclear 41, - facilities in the United States,the G4S Regulated Security Solutions team has worked safely for { i nearly I I years since a recorded lost-time _ " , accident,and worked nearly 2 million safe z N man-hours by implementing a comprehensive `., behaviour-based safety programme. C a,, ,.,,, .... __,.. , ,e. ,,,..,:, -;„*„...:e: f, t i f$= t r 9 , ' ;.*, ' . - : ' •:' p 1 ` y , E`er • 2 t ■ Ethical employment - i partnership -global f Since 2008,G4S has had an ethical employment .0 partnership with UNI,the global union federation. t G4S was the first UK company to enter such a partnership,which drives improvements in employment standards across the global security "ti, industry,while helping to ensure that employee w and union rights are respected throughout the company. Annual Report and Accounts 2014 G4S plc 1.5 • • , • . ir i I t; f '.'.,4.444106-e, 4 1 11 a • • . -..--AllOr itu. 1 , ::, , • I .. ., , . t, 1 , 4 , . , ... . . \ f • .1001 -`e Secure solutions — India With a workforce of 130,000 people across • 'r- ..1,— J 25 states,G4S India launched a strong health and safety initiative aimed at spreading the concept of"zero harm"for its employees and customers.Throughout the year,it introduced a .. series of campaigns aimed at making the -•'' workplace environment safer. .0, .,• \ i I I II •=1,,, = . , -:, - It 7 if i ■ t A. A 1 , 1 t • .4 ' traffic Al..-.' . I 44111‘' IIIIIIIIIIIk ..... , Driving Force —global '1") In2014a,cc19idecnoulle.TaghueesplroivstintgheFoirrcliveeisniitniarotivaed aims to significantly reduce these incidents. Based on an initial pilot in seven countries, •.,.. -, :... . Driving Force is now being rolled out to every •11011111L G4S company globally • 1..4 Two of the pilot countries experienced significant ' reductions in the number of fatal road traffic accidents in the twelve-month study period. As well as informative literature packs distributed within the business,Driving Force rules include training,vehicle checklists,and basic driver evaluation and investigation tools to help understand the root cause of incidents. 1 . . I G4S plc Annual Report and Accounts 201 4 Strategy in action continued Strengthening capability Achievements Best people—building capability Since April 2013 we have strengthened our global . Our performance management approach addresses leadership team materially,with 114 appointments to both non-financial and financial performance in an • our top 220 executive roles.Of the 114 appointments, integrated way and is outlined in more detail in the 50 were internal promotions and role changes and 64 key performance indicators section of the Strategic were external hires.These changes have been focused on Report on pages 32 and 33. senior line management,sales and business development Safety first We have also strengthened our teams in IT procurement The nature of our work and the environments in finance and risk management which we operate can expose some of our employees The senior leadership programme is being re-launched in to a high risk of harm.Mitigating and managing these risks 2015 to better reflect the strategic priorities of the group. so that our people return home safely every day is our A new cohort of senior managers with potential to move paramount concem.Tragically,colleagues from across the to more complex roles will be identified to participate. group are injured and sometimes killed during the course The programme,which started in 2005,will support of their work.Any death or injury is unacceptable and in and challenge participants to contribute to sustainable 2014 we have invested in additional health and safety business performance and continue their own personal resources with the aim of preventing such incidents leadership development Every element of the across the group and to learn from those which do occur programme will explicitly promote the G4S values so that we can address the root causes. and draw on good practice from existing G4S senior The continued effort to improve the safety of our staff leaders around the world. is led from the top of the organisation with personal Gender diversity(9b) leadership from each member of the Group Executive Committee supported by human resources experts and 108 safety professionals across the group. . - Processes and practices across the group are challenged frequently by our health and safety professionals,and fir critical country reviews,carried out by experts who are independent of the business under review,highlight learning points following every serious incident To ensure that our managers take ownership and 9,040, 34 Ku" responsibility for improving health and safety,we recently re-designed incentive plans to ensure that avoiding harm to employees,and to those with whom we come into contact during the course of our business remains the focus for managers across the organisation.Improved Please see page 58 for the board's policy on diversity health and safety performance will continue to be a key area of focus in 2015. Work-related fatalities by category 4: 40 t=. d3 20 i4 r,3 !I 8 Z Attar!, Non-axts:k Road Tc+al 2013 •201'. Astio*. • _ G4S plc • - , .,,,,,„ 1 _.,, , , `t ,.. r,-.,•, : „ . r - �, - .. f ,r t14; ' ' i c f t' t . 'si Ali' - .,_-.,..,-„,_ J el- - -, _ Ebola response —Africa �___ Responding to the outbreak of Ebola in the region,G4S Sierra Leone,in conjunction `° �, A sii with our G4S Africa head office,developed an r::. .. Ebola awareness programme for employees, incorporating posters,handouts and training. Cx # Symptom testing,hand washing facilities and the provision of personal protective equipment were implemented at G4S offices as part of the programme of increased preventative measures, and a comprehensive contingency plan was developed.These measures greatly assisted c in the prevention of infection and subsequently have been shared with other affected countries such as Mali,Nigeria and Guinea. I (01, 4011111411,tir 4 ,i -. a lop? ,., .4"?.. 4e ' e 41111111‘1'.'s II ,,-, Compliance and Investigations '" �� - .,; '. —North America The United States'second largest school 4 t ° district,serving one million students and 90,000 employees,worked with the G4S : Compliance and Investigations team to reduce .t y six ` workers'compensation fraud and abuse losses. The organisation-wide programme saved the customer more than$10 million in fraudulent , claims and resulted in 24 arrests and convictions. S V G4S plc • • Strategy in action continued 2. Invest in organic growth,customer service and operational excellence Achievements Investing organic rk opportunities u sto m e r focused Group-wide i tiaes to take advantage of the organic growth opportunity including: • sales capability assessment and recruitment • mandatory implementation of standard sales operations systems • sales performance in all businesses • customer engagement and retention • global account management Following the strategic review • pricing policy and management undertaken in 20 13,we concluded that In the past I8 months,we have appointed new sales leaders in all of our six regions and at group level. the group had been under-investing in Across the group as a whole,we have appointed 391 organic growth opportunities and.since additional new employees into sales and business then we have established a number of development roles,including industry sector specialists in a number of our regions.We have also been programmes designed to strengthen implementing a standard tool for measuring organic sales and business development. customer satisfaction.Through regular customer surveys and feedback,we will be better able to identify and quickly address service issues and deepen and strengthen customer relationships. 2014 highlights Customer relationship management I We are also investing in a more rigorous approach to X5.5 b n i . I b n customer relationship and global account management. We are placing greater emphasis on managing and retaining annual value of sales pipeline annual contract value of the existing customer base and have continued to invest as at end December 2014 new business won in new service development and innovation for existing customers.We have also begun to export commercially o proven services across countries and regions. C' / �' Our investment in organic growth implemented through contract retention rate annualised additional these programmes provides long-term support for our for existing contracts investment in sales and sales pipeline.During 2014,we won new work with business development an annual contract value of over£1.1 billion and a total contract value of£2.I billion.See the Business review on • Group-wide initiatives to improve organic growth pages 34 to 41 for a description of the type of new and customer retention rates contracts won per region.We continue to build and to • Investing in a more rigorous approach to customer replenish our pipeline which,after taking into account strong relationship management conversion in 2014,had an annual contract value of£5.5 • Investment in technology development and sales billion at the end of December 2014. • Roll out of standardised sales operations system commenced 2015 priorities • Implement our standardised customer satisfaction survey tools across the group • Complete roll out of standard sales operations • Continue to improve pipeline management • Increase mufti-service offerings to existing and new customers G4S plc Ann:uai Report and Accounts 2014 N Annual contract value Large,diversified sales pipeline l. of sales pipeline at end a of December 2014 During 2014 we won new work with an annual contract value of over £I.I billion and a total contract value of£2.1 billion.We continue to build and replenish our pipeline which,after ei9bn taking into account strong conversion in 2014,had an annual contract value of£5.5 billion at the end of 2014. Leads and prospects(unrisked) I . I bn Bidding L0.5 bn Negotiation , K .....- . : , 110H. . _ _ a i 4 0 tfr' , , !We'' f 1 T-1- iti ' - ,, ? s ' . 4 El itillik,,v,. Global agriculture a _- — Latin America .,...7, 1 '�,* 7-� ► _ - ' . G4S provides secure solutions to one of the world's leading global agriculture companies that k has operations in more than 90 countries.In Latin i , + �` f if ,� ,%I'll ', ' . '- .. America,G4S services more than 30 customer kl i, '' . '. ` ' ..{ I p'':.' '', ''1 , N. L 1 4,• �+s " r� locations in Brazil,Argentina,Colombia,Chile and ', . ��`' a - t r / -- ,t N ., ` fj 1. Mexico,incorporating risk mitigation,integrated D ;),, ; ... •0. 1 f % ' 4•.'m N 't 1 C.,: security solutions and world-class technology. . �, ,l ,. # ` f.�` ..•5 ' ;. mat., -. An u,...-.and.A counts 201-' G4S plc 1 1 1'-t{ . .ci jaiiiiiiiiiiitw t AO • Ilitor ., r ' 1111r ;: C j Bank of America—global . With operations in more than 40 countries, .` F �t y serving 48 million consumers at 4,800 retail , ‘- " = • j, banking offices and 15,800 ATMs,the needs of i s a global customer like Bank of America are * complex and dynamic.G4S partners with them ' .4... { AI to provide total security including software, t„2;, systems and over 5,000 security officers posted ` at more than 1,300 buildings and banking centres .; o, across the world. io•' . Ys � n .i j .. r�a` A+ . � t • � • a r. r y r r „„ . . `; ii,°.- . ' x t lir , , ` Lake Turkana—A rica SS , In April 2014,G4S was named security partner ° ' :, I for the£500 million Lake Turkana sustainable - • ..,'' '`, r ll It, 1 ;i energy project in Kenya.Lake Turkana is a I. large-scale infrastructure project in Kenya, — IF,. ,r s ,p, , - .-0;-'r.- f ;,..a ,, i transforming the lives of many Kenyans and f �T'�"��,;% ;�r"4r, F.,``'t f' y providing a sustainable low-cost source of energy. r •-� ;` ;.�'% .1:i70j' NA:' , 4 1, ( `'", = Part of a public and private sector joint initiative, +,,r �'� • �� ,1y ,'. G4S will work alongside other international At 0'1- I r t .j -,r -, j I _:. businesses under a three-year rolling contract for ' �--'i f .r.f r ' 't` p• , f-. *I; P7 '`-,. ` - i �• -. R ■ up to 15 years. '.t l�a;1 ♦ F'wR ' F �ii'Ifs 1 ' . t., b'1 r 1 °, ; ',J.; #`•,„TM: _ The G4S solution includes securing generators =;;;� S.O r'... .,.4 .`*+• _` .• and bore-holes,over-seeing the taking of water '.• � r� '-1.` 'S.`'" "` : . ° .-- -_ f ,,- ; r- , from those bore-holes and controlling access on - = i � ,. ,,,t, ;,, 4 w• . - _�. ,.r.ry- � and off the site.It also involves the staffing of an �' +' . � y -.:. .,,..1,_ ! t a•► �- •” operations room with a communications system #' ''':_ -.S!-,4► Wit' +► .7.•„r..toot = '� '. `�, ; - •� which all the major contractors will be using. A.- r. i „•mot ; d”_.,.Z-.AI. r�•1 ♦ 1" y 7 v. G4S plc Annual Report and Accounts 2014 . • • . Strategy in action continued Customer focused We have also started to strengthen our sales The global security systems market is a large,growing v, operations so that we can manage our pipeline market(source:Freedonia World Security Services . more pro-actively and improve the alignment of Report,November 2014). sales incentives with sales performance and customer satisfaction.Sales incentives have been redesigned We believe specific technologies with significant market for 2015 to better align them to drive growth, potential include: customer retention and customer satisfaction. • advanced access control systems Investment in technology specialists • video and image analytics software.Through constant automated digital screening and filtering, In 2014,the group initiated a strategic review of video analytics can identify and notify operators capabilities in technology addressing IT and back office of potential issues,allowing security officers to make technology,operational technology and customer-facing quick,informed decisions technology.The opportunity for using technology to • integration software for connecting and drive back office efficiencies for areas such as payroll controlling multiple devices to create an and accounts payable through shared service centres end-to-end security solution is outlined on page 24 and operational technology such • data analytics software for pooling and rapidly as telematics is outlined on page 27.In terms of customer synthesising large volumes of data and facing technology,the group derived 8%of revenue from • automated cash management systems. security systems revenue in 2014 but this is largely concentrated in the North America and Europe regions. The group has proven in-house product development ------ capabilities in a number of these areas: Security systems revenue(%) • United States–OneFacilitytm technology solution spanning security,safety and facilities management, j— – -- Africa 7% Secure TraxT"automation of typical security UK&!rE:and communication including incident reporting via a handheld device and Risk360 security incident z information capture,investigation and analysis tool, North Ar,+ar•:ca 7% • UK–Symmetrym access control and building 20% � er_� management system,electronic monitoring equipment; 12% • South Africa–Deposita end to end cash management IkN# solution for retail customers and • Europe–CASH360T"end to end cash management for retail solutions(see page 26)and localised product centres(e.g.Hotelo access control technology). Euroae' Regional markets vary widely in terms of competition, products sold and customer segments,and our approach is adapted to meet each customer's unique requirements. • \nnual Report and.Accounts 2014 G4S pk 23 Strategy in action continued 'a"" + 3. Make our organisation more productive Achievements Organisational effectiveness As well as taking action to strengthen our organisation Levers a our g � . with new appointments,we have also been reviewing go bal scale and our organisational design to ensure that management structures are both effective and efficient In a number of Q regions we have embarked on a de-layering programme technology which aims to shorten lines of communication,reduce costs and increase the amount of time devoted to customers and the marketplace.We have also created two global functions that should deliver significant One of our key goals is to improve synergies in the areas of IT and procurement operational and overhead efficiency During 2014 we also established a project to globalise and organisational effectiveness.We a number of our key functions—such as HR, communications,finance and legal.We believe that global also aim to better leverage the scale of functions will improve the consistency,effectiveness and the organisation through group-wide efficiency of our functional services. procurement and IT programmes for Shared service centres An example of our approach to improve back office the first time. efficiency through shared service centres is in the UK, where we have completed the first wave of consolidating finance functions spread across nine different accounting locations and six different accounting platforms into one 2014 highlights combined UK-based shared service centre on a single IT platform. • Global procurement and IT functions established In North America,Canada will be consolidated into the US • Annual addressable procurement spend identified shared service centre during 2015,and beyond that we see • Strategic review of IT resources and capability completed opportunities to bring one smaller US business into scope • Began implementation of accelerated best practice that is not currently in the US shared service centre. (ABP)across the group including: In the AME region we have made tangible progress since — 4,500 vehicles fitted with telematics devices by last year in evaluating how we can transition to regional the end of 2014 hubs by,for example,co-locating simpler transaction — Implemented route scheduling programme processing activities before consolidating onto a single — Started our multi-year labour scheduling IT platform. programme covering 39 countries and 376,000 employees • Phase I of UK shared service centre completed 2015 priorities • Migrate G4S Canada into North America shared service centre • Improve development and deployment of IT systems and tools across the group • Continue implementation of direct labour efficiency programme • Supplier negotiation and rationalisation • or • G4S plc Annual Report and Accounts 2014 s. 4 Direct labour management—global Labour costs are around 75%of the total cost base _ --- — for the group.Our in-house employee scheduling Labour efficiency measurement system provides reporting,key performance indicators(KPIs)and management information Total hours billed and paid around direct labour management,so that businesses (output from billing and payroll systems) can better manage their labour costs.This solution is already in the process of being implemented in I3 countries and a significant number of other countries will have access to it in 2015. Reconciled to: A detailed management information pack of KPIs has Contracted hours and actual hours delivered also been produced by the secure solutions Service (output from operating systems) Excellence Centre(SEC)to enable businesses to better measure labour efficiency by tracking unbilled overtime,non-billable hours and reconciliation of labour hours in a much clearer and more consistent Variance analysed and ongoing way is proving to be very valuable.It reconciles the improvements made output from payroll systems—what has actually been paid—and compares it to the expected output from the operating systems i.e.,what the scheduling system expects to pay and bill to customers.It highlights any variance for further review and analysis,enabling us to make improvements going forward. Cash Solutions/SEC partnership— Serbia,Europe t1� G4S Cash Solutions,Serbia has to manage �p a very broad range of note denominations and so the size and volume of notes they transport ''.Y' -- and insert in ATMs is different compared with most other cash solutions businesses. As with all cash solutions SEC reviews,the team looked for efficiencies that could be achieved by applying proven methods to improve efficiency and customer service,while reducing costs and ' increasing profit.These include combining routes, increasing productivity,reducing premium hours, reviewing branch boundaries,realigning customer J' "' s" sites and re-planning to reduce or eliminate route if .� 'c> cross-overs,and absorbing new contracts into existing routes. 4 t In Belgrade,a dedicated team from G4S Serbia it worked with the SEC and improved productivity by removing routes and vehicles by integrating collections or deliveries into other routes and planning the routes differently. Annual Report and Accounts 2014 G4S plc 25 r.: n !F°'1! ' . ',toximiptee, r illit . : II 10 : Jim, r / -_ 5. 7 ,, ___ 0 4 Australia care and justice .- 1. F- ° - services—Asia Middle East °, G4S is one of the leading private providers 4, ' of care and justice services in Australia and New Zealand,overseeing almost I,500 at F= , offenders and transporting over 100,000 ., prisoners and 86,000 non-emergency patients �'' { 11 A MOE in 2014.Leveraging our local knowledge and ; E 'I .- '- international expertise,a key part of the G4S ri—°'. _ _.- Australia growth strategy is to develop our care r , . """'� and justice portfolio in new markets(Queensland ..-•- ''-.*- and Western Australia)and new sectors(policing). To support this we have invested in senior °' ;Ai executive level sector expertise in those states, Y. in policing in Australia and transferred policing *}- -i' experts from the UK business. '�� ;> t' } CASH360n1—global CASH360T"is the first integrated end-to-end cash management system that controls every stage,from cash payment by purchasers to .•-.., P depositing the proceeds into sellers'bank > • =�= -a - accounts.It has been launched in Europe sr ' and other markets.Over the last three years, , CASH360T"revenues have grown over five-fold � ' . R and we have plans to launch in more markets. —, _ This will enable our banking and retail customers - to become more efficient and secure and help <° 1 them to spend more time with their customers. By automating the entire process,CASH360T"has Y - been able to mitigate the risks that surround the F „ )f management of money in a wide range of scenarios. I The financial benefits for customers include better f cash flow simplified operations,a safer environment •,y and reduction in losses,giving business owners and I ., management more time to focus on trading successfully.Users have reported in-store costs of handling cash reduced by up to 70%and the ', elimination of"shrinkage"-loss of inventory that can be attributed to a variety of causes,from employee theft to administrative errors. J G4S plc .., _._, ,,:.,orr and Ac _:4' _ 2i F • Strategy in action continued Leverage our global scale and technology Group procurement Operational excellence During 2014 we established the position of In addition to programmes focused on organic growth,we chief procurement officer and conducted a baseline have programmes under way designed to improve operating survey of non-payroll spend.This allowed us to determine and organisational efficiencyThese programmes are the scale and the nature of the opportunity to reduce described collectively as Accelerated Best Practice(ABP). costs by employing a global approach to procurement Two years ago we invested in creating Service Excellence By bringing procurement under a global function we Centres(SECs),for both secure solutions and cash solutions. can use our scale to better negotiate deals with SECs aim to deliver gross margin improvement and suppliers,reduce costs and make more structured improved customer service by driving consistent operational purchasing decisions. excellence throughout the business. The baseline survey carried out in 2014 identified ABP programmes include: addressable spend of£1.3bn,of which 70%was Telematics and route planning attributable to eight broad categories of expenditure. We have around 34,000 vehicles in our fleet and spend Since then we have started the process of employing over£300m per year on vehicle capital investment and experienced category managers and opened negotiations operating costs.The telematics programme involves the with a number of our key suppliers.We concluded our installation and use of tracking devices that enable us first global procurement deals in early 2015 in IT and to measure and reduce fuel and maintenance costs and telecoms,and believe that this approach presents improve driving safety.At the end of 2014,4,500 of significant opportunities to reduce our costs and achieve better service and value for money. our vehicles were fitted with telematic devices. Our route scheduling programme involves the use of IT transformation equipment and software that enables our businesses to In IT,we have a new group chief information officer, plan and operate optimal routes for collections,deliveries and have established a global leadership team. and site visits.When fully deployed,the programme can We are adopting industry-recognised IT service reduce both vehicle and crew requirements and improve management models,driving consistency and efficiency in customer service by helping our crews to meet delivery, IT infrastructure,development and operations.The first collection and visit windows.By the end of 2015 we plan phase of transformation is focused on infrastructure. to have 7,000 vehicles operating under an enhanced In addition to improving supply chain management we route scheduling system. are also using vendors'IT platforms to give us visibility Direct labour efficiency programme and control of our spending. The programme aims to improve customer service and reduce costs by deploying the right security officers are also taking a global approach to rationalise the fficers at the right time and at the right cost,and by minimising numerous email systems which exist across the group, non-billable time.This is an enormous mufti-year improving communication and productiv'ity.We are taking programme covering 39 businesses and 376,000 a similar approach to the rationalisation of our telecoms employees in the first phase alone. infrastructure and data centres. Direct labour efficiency reconciles the output from payroll On IT development,we have begun to offshore the systems—what's actually been paid—and compares it to software development that underpins our accelerated the expected output from the operating systems i.e.,what best practice for labour scheduling and route planning. the scheduling system expects to pay,and highlights any Finally,during 2015 we will seek to bring a standard variance for further review and analysis enabling us to approach to our IT operations. make improvements going forward.See the case study on page 25 for more information. and Ac:~r°..ents 2.0#4 G4S pk 21 • Strategy in action continued 4.Actively manage our portfolio and performance Achievements During 2013,our strategic review identified a number PC) of businesses which were under-performing or lacking in scale.We also looked at business risk profiles and market values.Depending on our assessment of all of these- m a nage m e nt factors,we decided to either sell,discontinue or invest in the turnaround of these businesses.During 2014,we reviewed 56 businesses in greater depth and detail. Of these we have sold eight businesses,including US Government Solutions,which was managed through a proxy structure over which we had limited control. Portfolio management remains an Since 2013,our disposal programme has raised around important tool for capital discipline £248m from businesses which generated a below group Im P P P average operating margin of 2.8%.Of this,£177m was and performance management. raised in 2014. Portfolio management remains an important tool for capital discipline and performance management A further 20 smaller businesses are being sold or ceased, and another 22 are currently under review.None of 2014 highlights these smaller businesses,alone or in aggregate,has a material impact on our revenue,our profit or our cash 5 6 8 flows.Our portfolio management programme has improved our strategic focus and we have released businesses reviewed businesses sold capital at attractive overall realisations. At the same time as divesting under-performing businesses or those lacking materiality,we have been L 248 m investing in the organic growth opportunity,where we expect to see good returns on our investment and to gross proceeds raised make G4S more productive.As outlined in the previous since 2013 "Strategy in action"sections,we have been investing in our continuing businesses in the following areas:people, sales and business development,technology and business 2015 priorities improvement programmes,including restructuring to drive operational excellence and organisation efficiency. • Cease or sell 20 smaller businesses • Continue to invest in the organic growth opportunities to drive sustainable profit and cash flow - I G4S plc 3.nntal per- and Accci.nu 2014 • • a Active portfolio management Since then,we have reviewed 56 businesses looking at strategic value,risk profile and materiality During 2013,we conducted a"bottom-up"analysis of contribution(growth,PBITA and cash generation), of all of our businesses,evaluating their performance and sold eight businesses,raising gross proceeds of and prospects.The results showed that 62 countries £248 million.Twenty further businesses are being sold were expected to contribute 95%of the total PBITA or closed. expected in 2016. 2013 Forecast of G4S PBITA in 2016 by country Cumulative PBITA(%) - 62 COUNTRIES CONTRIBUTE 95%OF 2016 PBITA 3' ?f 101 111 Country 2016 PBITA High to Low -' :��r`_ rd� _T.'I G4S plc - Strategy in action continued st. 5. Embed disciplined financial and risk managemf r- Achievements Operating cash flow I m rovi n In 2014,we made a material change to the cash P g measure used in budgets,monthly reviews,long-term cash fi ow business and incentive plans,to deliver free cash flow after working capital.Our performance management cycle around cash flow has also changed.Our debtors sales outstanding(DSO),based on revenue for the last 90 days of 2014 was 48 days and there are many businesses where there are opportunities for improvement We have moved the monitoring of cash The group's capital allocation and and cash collections from monthly to weekly,and moved the collections agenda beyond finance by engaging the contract review processes have business in cash collections.We also need to be more been strengthened to ensure that all disciplined about commercial terms for receivables,drive investment opportunities compete for better terms from our supply chain through the new procurement processes and to reduce the time from capital in a single`pool' and are evaluated event to billing.On average across the group we bill in against a stringent set of economic and 13 days,and as with DSO,there is considerable variation in the timeliness of billing across the group. risk criteria. We are developing a programme across the global finance and commercial communities to systematically look at both the order to cash cycle,and the procure — — -- -- — to pay cycle and analyse the systemic root causes that 2014 highlights affect cash flow and then drive improvement,based on this root cause analysis. £526 m £553 m Contracts,risk management and delivery Cash generated from Total cash generated assurance operating businesses from continuing operations We now have enhanced contract management in 2014 in 2014 processes in place across the group.There are clear reserved powers for the approval of contracts at group I b n c.200 executive committee and board level to approve bidding for major,complex contracts and all material contracts with low profitability are subject to review at regional, revolving credit bank facility contracts across the group or board level,as appropriate,29 contracts went refinanced in January 2015 group reviewed by the through this process in 2014.For more detail please see CFO on a quarterly basis the risk management section on page 42. --- Contract risk management and governance model 2015 priorities • Improve cash generation e7 ifc L co �= a. m c4 co'ea; 6- ''�� r+4 cC m°G b�C�s 4ce G4S plc • ' a We have also introduced a 360-degree model for ongoing contract assurance("Contract 360").As the Capital discipline name implies,this brings together a review of the financial,commercial,legal,delivery and reputational risks We believe our new approach to capital discipline in taking on work for a customer and means that there is working;one single capital pool;a minimum is a holistic view of contract risk,both before we commit 10%post-tax internal rate of return on all and during the contract life cycle.Then,during contract investments;a group wide investment committee execution,amongst other things,we review the progress that oversees both revenue and capital on delivery commitments made and we monitor investments;and rebalancing capital away from customer satisfaction as well as commercial and financial acquisitions to organic capital investment The performance.Contract 360 is well developed and more rigorous process around capital discipline embedded in our UK business and will be progressively was reflected in£138m capital expenditure implemented across all regions in 2015. (2013:£178m)down 22%from 2013.The lower spend is also a deferral of spend into 2015 as we In terms of the broader contract portfolio,every bring some capital investment under the global IT, quarter the finance organisation reviews the financial shared service and other programmes. performance of all the major contracts,and the CFO performs a top-level review of the top 200 contracts across the group each quarter;equivalent to around a third of group revenue.These contract disciplines give us early sight of emerging contract issues,and the Contract 360 review process enables us to develop the appropriate commercial and legal strategy and ensures that the accounting is sound. Capability building Restructuring These contract management changes would not be In 2013,we invested£63m to reduce costs,mainly in possible without capable people and effective processes, the UK and Europe.New areas of opportunity identified in finance,risk management and control.In Audit and in 2014 accounted for a further£29 million charge. Risk,we have appointed a Head of Global Risk and Audit These programmes were essential in strengthening our In finance,we have four new regional CFOs and a new competitive position,principally in the UK and in Europe. group Financial Controller.Together with their teams they In the UK cash solutions business,we have reduced our have significantly improved our internal financial reporting. branch footprint by 20%and headcount by around We have a much more rigorous monthly and quarterly 10%.In Europe,we have consolidated our regional HQ close process,monthly reviews through group finance in Amsterdam,consolidated our operations in the that focus on quality of earnings,as well as enhanced Netherlands and Belgium,and across the group funded processes around balance sheet integrity and control. some modest de-layering of duplicated or overlapping management and supervision. Regional Risk and Audit Committees We also introduced regional risk and audit committees Balance sheet across the group,and these bring together the ongoing The board remains committed to maintaining a strong risk management agenda in the region,compliance balance sheet with the long-term net debt to EBITDA matters,issues arising from internal and external audit, ratio of less than 2.5 times.At the end of 2014,the and an ongoing review of any issues requiring judgement net debtJEBITDA was 2.8x—a little higher than our long They are chaired by the Regional CEO and include term aim mainly because of the payment relating to the representatives from group as well as Regional Finance, UK electronic monitoring contract settlementThe group's and are also attended by our external auditor revolving credit bank facility was successfully refinanced in January 2015 with improved pricing,terms and conditions The Regional Risk and Audit Committees are now a achieved.The new facility is a five-year£I billion core part of the governance processes within the group. committed facility provided by a consortium of leading Together with the other changes discussed above,they international banks.Our unutilised but committed facilities provide an enduring platform in risk management and at the year end were£998m.We continue to be soundly controls and have resulted in significant strengthening financed and have good access to capital markets as of the stewardship in the group. demonstrated by the recent renewal of the revolving credit facility. • a1� �, , ..e=ocr-t"and,' :courts 20 i G4S plc 3; • • Strategy in action:Key performance indicators Financial KPIs Key performance indicators Our progress in implementing Underlying' revenue(£bn) Underlying' PO TA(£m) our key strategic objectives is measured using key performance 6.8 424 indicators (KPIs) for the group. • In addition to the group's financial KPIs of revenue growth,operating cash flow,and profit,managers 393 400 across the group are also incentivised to achieve 6S 6.8" personal objectives.These are agreed on an __ _ individual basis and are usually linked to business 6 300 plan milestones. 4 1 200 • 2 100 0 13 14 0 13 Description G4S has an organic growth We believe there is still great strategy based on strong potential to sell more complex market positions in structural solutions which tend to have growth markets.We are longer contract terms and - investing in improved customer higher margins service and sales and business development people,and aim The group has a number of • to build long term relationships initiatives—called Accelerated with customers. Best Practice—to drive efficiency and operational improvement across the group. In 2014,revenues grew 3.9% In 2014,PBITA grew 7.9% to£6.8bn(2013:£6.5bn), to£424m(2013:£393m)as a with organic growth of 8.9% result of these initiatives starting in emerging markets and 1.4% to benefit.PBITA in emerging growth in developed markets. markets was up 10.3%and in developed markets PBITA increased by 12.3%, • • Link to l ("C„ Transform a i r u t h r o,g h pe ple a values strategy .. C Y t¢ t invest n crganic;;rr.'wth and cus'arster se;wce :Make our organ Cation more • r- G✓ Actively manage rx,r 2or tfoi:c and fora nce :.d.iisripiir.ad financial arid r km ama.,r;e st. G4S plc nn d .r • 5 Lic)1 CZ:.GG"'�KBE t`J ..LLi!"'�5 L1�i`t Non-Financial KPIs I _, Cash generated by Underlying' EPS In 2015,examples of performance contracts = of senior managers include personal operating businesses(£m) (pence per share) objectives aligned to their respective roles, such as customer retention for business unit 52.6 13.6 managers,succession strategies for human resources roles and cost savings for • s procurement roles.We believe that strong employee relationships help to deliver i excellent customer service. 1123 i 3.a px. }-0 Values including Safety first 1•200 f` _ People and Organisation 1 1 4-111 Operational excellence . Business development -- A key priority for the group G4S is looking to deliver HR standards and KPIs is to drive improved cash sustainable growth in earnings generation,through better over the long term. In addition,our businesses are required to working capital management _ report monthly on key metrics relating to: . and capital discipline. f . Safety first Industrial relations II Employee retention .-- -- Recruitment Total cash flow from In 2014,underlying earnings ---- l continuing operations in increased 11.7%to£210m The objectives and targets are focused on 2014 increased 11%to£553m (2013:£1 88m).As a result of maintaining the G4S values,indtiding Safety (2013:£496m).Cash generated the share placing in August First and driving sustainable profitable growth. from operating businesses was 2013 and the subsequent £526m(2013:£420m),up 25% increase in average number - excluding one off corporate of shares in issue,EPS increased items of£27m(2013: 5.4%to 13.6p(2013:12.9p). £76m)per page 93. ill g Pf - G Of G . • I. To clearly present underlying performance,specific items have been excluded and disclosed separately—see page 90.For basis of preparation and an analysis orspecific items see page 9I. • • ,'%.,,,r L,at Report and Accounts 2014 G4$tic 33 • . - .9 1 0 Business review ______ _ _ 20 I 4 G4S is managed through a geographic and functional organisational structure. Business review Underlying regional and group financial performance The analysis of the group's business performance reflects internal management reporting lines which are based on geographic regions. The group's underlying segmental results are presented below,excluding specific items and operations identified in portfolio rationalisation. Prior year results are presented at constant currency and have been restated for the adoption of IFRS I 0 and IFRS I I,for businesses classified as discontinued operations during the year,and for the transfer of business between regions to reflect the way the businesses •-. are managed across the group. Revenue PRITA Organic At constant exchange rates £m £m growth 2014' 20132 YoY% 2014' 20132 YoY% Africa 485 440 10.2% 46 36 27.8% 10.1% Asia Middle East 1,260 1,192 5.7% 107 103 3.9% 5.7% Latin America 653 570 14.6% 39 35 11.4% 14.6% Emerging Markets 2,398 2,202 8.9% 192 174 10.3% 8.8% Europe 1,400 I,409 (0.6%) 85 82 3.7% (0.7%) North America 1,365 1,277 6.9% 75 56 33.9% 6.9% UK&Ireland 1,587 _ 1,608 (1.3%) 132 122 82% (1.4%) Developed Markets 4,352 4,294 1.4% 292 260 12.3% 1.3% Total Group before corporate costs 6,750 6,496 3.9% 484 434 11.5% 3.9% Corporate costs (60) (4 I) 46.3% Total Group 6,750 6,496 3.9% 424 393 7.9% 3.9% I. To clearly present underlying performance,specific items have been excluded and disclosed separately-refer to page 90 for a reconciliation to total results. 2. 2013 results are presented at constant exchange rates and have been restated for the adoption of IFRS 10 and IFRS I I,for businesses classified as discontinued operations and exclude the results of portfolio businesses. The statutory segmental analysis as presented in note 6 of the financial statements includes revenue from businesses that are being sold or ceased and for the prior year the impact of foreign exchange by region was as follows-Africa£nil(2013:£56m);AME£67m(2013:£I80m); Latin America£I Om(2013:£1 23m);Europe£21 m(2013:£1 17m);North America£nil(2013:£82m);UK and Ireland£nil(20 13:£7m). Operating profit in note 6 of the financial statements includes the trading results from businesses that are being sold or ceased,interest and tax from joint ventures and for the prior year the impact of foreign exchange by region was as follows-Africa£nil(2013:£4m);AME£6m(20 13: £5m);Latin America£I m(2013:£9m);Europe£I m(2013:£6m);North America£nil(2013:£3m);UK and Ireland£2m(2013:profrt of£3m). 2014 Revenue and PBITA by region Revenue(%) PBITA(%) UK&k Viand ' Africa UK& Africa 23;5 7% 27% 10.6 111, Asia Middle East Asia Middle East 19% 22% tarn America Latin America Nor°i�}±r ica 10% North America 8% 20% •.5 Europe Europe 21% ta% 34 G4S plc Arvsud: ieoort and Accounts 2.014 J. Africa ; ii gif fi s . ,$, a In Africa revenue and organic growth was 10%and PBITA J increased 28%,benefiting from the growth in revenue as well — — — — as overhead efficiency programmes. Andy Baker New contracts won across the region include work for customers Regional President—Africa such as financial institutions and utilities in Kenya,gold mining in DRC,embassies in Tanzania and Sierra Leone,a hydro-electric plant in Mozambique and mine clearance work in Southern Sudan. G4S is the largest provider of integrated In South Africa,we won major new contracts with distribution companies and financial institutions. security solutions in the region,with The sales pipeline in Africa has a diverse and growing number operations in 24 African countries. of new contract opportunities in areas such as financial institutions, We focus on core sectors in the region, aviation,mining,oil and gas and embassy security.The region also particularly telecommunications,aviation, remains focused on embedding Accelerated Best Practices primarily in the areas of direct labour management and on mining,oil and gas,embassies and ports, organisational efficiency as well as post-conflict humanitarian work with government agencies and NGOs. Africa case study— Tangier Med Port 2014 highlights In 2014,G4S Morocco was awarded a three-year contract for Tangier-Med Port,one of the largest capacity ports in 0%3 q bn the Mediterranean and Africa.G4S protects the port's assets,commodities and people through a broad range Organic growth Africa security market of specialised services,including operational and technical in 2013' security focused on passenger and freight screening. 125 000 +28% k_ x .. . ., 1,F„gam + 7 ..ye--4- Employees PB1TA growth 9. .` w, Revenue P13ITA . - Em £m It 2014' 2011' YoY% 2014' 2013' YoY% 485 440 I0.2% 46 36 27.8% — * Source:Freedonia World Security Services report November 2014,excluding residential security. All tables show underlying • performance at constant - exchange rates. • G4S plc '' .. • Business review continued Asia Middle East lf, t A +, ,' Revenue and organic growth in Asia Middle East was 6%and lilt PBITA increased 4%,reflecting a good performance in the region. v 1 The performance on PBITA reflects only three months'contribution -- - ----- - - - from the Manus Island immigration processing centre contract Dan Ryan in 2014,compared with the full 12 months of 2013.The contract Regional CEO-Asia Middle East ended in March 2014. The region benefited from new contracts in aviation,demining G4S is the leading security provider and risk management for international oil and gas companies in Iraq,electronic security systems contracts in the UAE,Qatar and in the Asia Middle East region with Guam,and the extension of a contract with a major US motor operations in 29 countries.Our largest manufacturer into Australia and UAE. countries by revenue are India, We invested in establishing a China outbound business Saudi Arabia and Australia. development function in the fourth quarter;which will focus on developing business across the group with Chinese multinationals with overseas operations. The sales pipeline is strong in areas such as care and justice services in Australia and New Zealand and a number of port security systems opportunities in the region. We have made significant investment in sales and operational capability in the region.Country sales leaders have been recruited 2014 highlights for most countries and a customer satisfaction programme was launched in the first quarter of 2015.In addition,organisational +5.7% $42bn structures are being reviewed with the aim of streamlining regional and country overheads. Organic growth Total security market size In terms of portfolio management,we have exited six businesses in 2013' in the region during the year. 264,000 3.9% ..,-. Employees PBITA growth Asia Middle East— UAE systems Following investment in 2014,the Middle East systems business generated nearly£50 million of new business from customers in sectors such as government real estate Revenue PBITA and transportation. £rn £m 2014' 20132 YoY% 2014' 20132 YoY% c - 1,260 1,192 5.7% 107 103 3.9% iii . -7.1". illprP--- c--:_._,„.,. ' I __ __ ___ oh, AI 6 G4S plc _ -{ , - pi;- _: • ... . • Latin America a. 3 4 .it -, If`" Revenue and organic growth in Latin America was 15%with gaillil" 1 a number of contract wins in the ports,car manufacturing, transportation,financial services,telecommunications and extractives sectors.The macro-economic slowdown impacted Martin Alvarez the technology businesses in Brazil and Chile. Regional President,Latin America&Caribbean PBITA was I I%higher with the legislated increase in pay in Brazil,partially recovered in the second half of the year and offset G4S is a leading integrated cash solutions by the drop in commodity prices in Chile creating a difficult environment to pass on cost increases to mining customers. and secure solutions provider for Our sales pipeline for the Latin America region is growing well, commercial and government customers with a number of large new multi-year manned security and facilities across 16 countries in Latin America, management opportunities for multinational customers in Brazil with Brazil,Colombia and Argentina and manned security customers in Peru, being its largest markets in the region by revenue. ___. _____-._____.____ Latin America case study— 2014 highlights Food manufacturing _F. 14.6% $26bn G4S provides technology,security solutions,secure facilities management and high-level risk consulting to Organic growth Total security market size one of the world's largest food companies and one of in 2013' Brazil's largest employers across more than 35 sites. 76,000 + I I .4% Employees PBITA growth -H`= "I ;O!' i t.Revenue PBITA { Ertl £m s 2014' 20132 YoY% 2014' 20132 YoY% 653 570 14.6% 39 35 11.4% • `:••rt.;:21 R,rcwt nd Accounts 20, G4S plc Business review continued Europe In Europe revenue declined 0.6%with the insourcing of the 411411,1111 Department of Justice contract in the Netherlands.This was N" largely offset by healthy revenue growth in some Eastern European faint countries,as well as Austria and Turkey.PBITA was 4%higher Graham Levinsohn than 2013,reflecting efficiency improvements and benefits of the Regional CEO—Europe restructuring programme implemented in 2013 and 2014. We made further progress with portfolio management in the G4S Europe has activities in 23 countries region,disposing of three businesses including the sale of our business in Sweden for£39 million.The region also continues in Scandinavia,Benelux,Southern Europe, to focus on implementation of Accelerated Best Practice;targeting Eastern Europe and Central Asia.It has direct labour efficiency;cost leadership in the areas of organisational strong market positions in cash solutions efficiency and effectiveness,and on procurement and IT benefits. and around 20% of the region's revenues Recent contract renewals include Schiphol airport contract for five years in the Netherlands and a major Belgian bank. are security systems-related. Our European markets are showing some signs of stabilising,and with our investment in sales and business development including sector specialists in aviation,ports and justice,we have a diverse contract pipeline in these sectors. .. — Europe study a case stud GSN 2014 highlights p In January 2014,G4S won the majority of GSN cash (0.6%) $39bn solutions business in the Netherlands for five years,valued at€50m per annum.GSN serves the major banks in the G4S Revenues Total security market size Netherlands and is their provider of cash counting,handling in 2013' and logistics including the maintenance of cash devices. 64,000 +3,7 ; . Employees PBITA growth o Revenue PBITA £m Em I 2014' 20142 YoY% 2014' 20132 YoY% . • 1,400 1,409 (0.6%) 85 82 3.7% • G4S plc __ °c ,-,�i otrt.."ICJ; • • North America • ' r John Kenning succeeded Grahame Gibson as CEO for the North America region in December 2014 following Grahame's retirement from the role after 30 successful years with the group. - — John brings extensive security and systems experience to the group. John Kenning Regional CEO for North America&Technology Revenue grew by 7%in North America reflecting a strong performance in commercial security,compliance awl ickvestigations: and justice services. G4S North America is predominantly We have retained contracts with major financial institutions and an integrated secure solutions business IT companies,and grown our business in the wholesale retail sector. We have extended our youth justice services to now cover 13 for commercial customers,with states.There were also major contract wins in the industrial, some government contracts including healthcare and biotech sectors. juvenile detention services and border PBITA for the region was 34%higher;reflecting higher revenue protection.It has recently launched an and improved direct labour efficiency resulting in a reduction in non-billable overtime,and overheads. innovative cash management solution With the introduction of the Affordable Care Act,effective in the for retail customers,CASH360TM fourth quarter of 2015,we have reviewed and modified our plans. We do not expect the Act to have a material impact on the group's (see page 26). P P g P� business,as our plans were broadly compliant with the legislation. The region is expanding its shared services centre to include 2014 highlights Canada,which will generate overhead savings in 2015. +6.9% $46bn Good progress was made in the region on rationalising the business portfolio.The sale of the cash solutions business in Organic growth Total security market size Canada completed for£60 million in January 2014 and the sale in 2013' of the US Government Solutions business for£36 million completed in November 2014. 57 .4....000 3 39% Overall,the North American business has a strong contract pipeline J with opportunities across diverse sectors including commerce,retail, Employees PBITA growth industry and government. North America case study— Revenue PBffA International Gem Tower £ >m 2014' 20131 YoY% 2014' 20132 YoY% The International Gem Tower in NewYork opened in 1,365 1,277 6.9% 75 56 33.9% 2014 and is designed specifically for the global diamond, gem and jewellery industry.Because security,safety and speed are essential to success,the developers required a comprehensive,world-class solutions including security technology,consulting,personnel and international logistics. :YS "1. — y. •.�t✓'. " ..:.. . :r- _ u c Accounts 20 i-t G4S plc 39 Business review continued UK & Ireland N, flip 4,4, .., lit Following his successful leadership of the region as interim j regional president for the UK&Ireland region,Peter Neden , dli itI was appointed the regional president in January 2015. Peter Neden Revenue declined 1.3%and PBITA was 8.2%higher than the prior Regional President—UK&Ireland year with improved performance in the UK cash solutions business being partially offset by the ending of the MoJ Electronic Monitoring contract G4S is the leading provider of cash Significant restructuring programmes were implemented in the and secure solutions in the region UK cash solutions,Ireland cash solutions and secure solutions businesses covering branch networks(Ireland and UK cash with a broad range of expertise covering solutions)and organisational design.These initiatives will mitigate specialist event security,government some of the impact of the loss of a large ATM retail contract from outsourcing,including care and justice the fourth quarter of 2014.The region also continues to focus on implementation of Accelerated Best Practice,focused on direct services,and cash solutions. labour efficiency,and cost leadership in the areas of organisational efficiency and effectiveness and on procurement and IT UK contracts won during 2014 include selection by the Department for Work&Pensions(DWP)to manage community work placement contracts for the long term unemployed;renewal of the Rainsbrook SecureTraining Centre contract;renewed cash solutions and manned security contracts with major financial 2014 highlights institutions;a new contract with a major property management 41 %) company;the first major smart metering programme;the North 7bn East Prisons secure healthcare contract;a new seven year contract for national infrastructure and a regional secure solutions contract Organic growth Total security market size with a global IT company. in 2013' The UK&Ireland bidding pipeline is broad-based and has grown 37,000 -F ,2.° strongly in the areas of facilities management and outsourcing. mommommom Employees PBITA growth UK & Ireland case study— DWP The Work Programme aims to help long term unemployed people in the UK into work and since June Revenue PBITA 2010.G4S has been delivering the Work Programme in im E'T' three contract package areas,helping more than 45,000 2014' 20132 YoY% 2014' 20132 YoY% long-term unemployed people into work and is one of 1,587 1,608 (1.3%) 132 122 8.2% the highest performing providers.In April 2014,G4S was awarded a contract to deliver Community Work Placements in six areas. ' El -- ";" 4.- • , • 4i r* ,: G4S plc 1 luai Report and Accounts 2014 • . . . • . . . ., . . . . . . _-.. • - . . . . . . . . . 11111P:-' • ' - • ' •- -'-':-..."-----.7::--.4ove.,... - . Underlying service line operating review 3 -3 a -_, Secure solutions Revenue PBITA At constant exchange rates £m Cm 2014' 20132 YoY% 2014' 20132 YoY% Emerging Markets 1,951 1782 9.5% 136 122 11.5% Developed Markets 3,728 3,651 2.1% 227 206 10.2% Total 5,679 5,433 4.5% 363 328 10.7% The secure solutions businesses achieved 5%growth in revenue and I I%PBITA growth. Emerging markets revenue grew by 10%,and PBITA grew 12%driven by contract mix,price increases and cost efficiencies. Developed markets revenue grew 2%with PBITA growth of I 0%.There was good growth in North America offset by a decline in the UK,resulting in part from exiting unprofitable contracts. Cash solutions Revenue PBITA At constant exchange rates £m Cm _ 2014' 20132 YoY% 2014' 20132 YoY% Emerging Markets 447 420 6.4% 56 52 7.7% Developed Markets 624 643 (3.0)% 65 54 20.4% Total 1,071 1,063 0.8% 121 106 14.2%. Cash solutions revenue increased by I%and PBITA grew I. At constant exchange rates.To present clearly underlying by 14%,helped by a strong improvement in the UK cash performance,specific items have been excluded and disclosed solutions business and good performances elsewhere. separately—see page 90. 2. 2013 results are presented at constant exchange rates and have Emerging markets revenue growth was 6%and PBITA was been restated for the adoption of IFRSIO and IFRS1 I,for businesses 8%higher.Developed markets revenue declined 3%principally classified in discontinued operations,and exclude the results of in the Ireland cash solutions business.PBITA in developed businesses identified as part of the portfolio rationalisation. markets grew 20%,reflecting strong performances in the UK and Europe. : 4 `k‘.it •Z -- r .4. ti' Iiipi, 0 4 -,..4 4111..)111111L - • 1.. lk .11..s, • if". R, - , .. I' 1 - , . . . • • ' Annual Repot-t and,4ccounts 2014 G4S plc 41 .. . . . . . . . • .,,.. Risk management Embeddin g management ement g in the business Our aim is to gain a deep What we did in 2014 understanding of the principal risks The improvements to our risk management processes g P P have continued during 2014.The quarterly Regional we face at all levels of the business Risk and Audit Committees are now well established and to focus management attention and similar committees have been established in the larger countries.A new Governance Risk and Control on effective mitigation of the most (GRC)information system has been implemented and critical risks. good progress has been made in transitioning countries from the previous risk management system.The new contract management approval and broad risk-based contract review process has been embedded effectively Our risks in the UK&I region.A quarterly financial contract review The last year has continued to highlight the dynamic process has been implemented globally nature of the markets in which G4S operates.The The board has provided greater formality and detail geo-political situation in the Middle East has been very concerning its risk appetite,linking it more explicitly to volatile.Global economic recovery has been highly the group's principal residual risks and a structured risk variable.G4S also continues to face the operational and universe.This detailed risk appetite statement has been health and safety risks which are particular to the security shared with all the Regional Risk and Audit Committees business,along with the financial control and commercial and they have provided positive feedback on it During risks common to all multinational companies. 2015 the document will be shared more widely with How we manage our risks individual countries and business units and increasingly Our risks are captured in a global risk reporting used to inform prioritisation of risk mitigation activities. information system.These risks are reviewed at least Alastair James,who joined G4S in 2013 as Group annually by the operating companies,with more material Director of Risk and Programme Assurance,has now risks being reviewed quarterly.The group Executive been appointed Group Director of Risk and Audit. Risk Committee and board Risk Committee review We will continue to have separate internal audit and the most significant risks on a regular basis,and the board risk management teams reporting to Alastair but we will regularly reviews the overall impact of these major risks ensure that these processes are appropriately integrated. on the group's activities. What we will do in 2015 We will complete the transition of all countries to using the new GRC tool for risk management We will migrate existing group control standards self-assessments as well as Group Internal Audit to "2014 has seen us make significant the GRC tool from the separate platforms which strides in improving our risk support them currently.This will enable a much greater management approach.2015 IS consistency of reporting and a much tighter link between control effectiveness and risk assessment about embedding this in our operations across the world. We will embed the newly formulated board risk appetite into the business and use it to drive prioritisation of John Connolly risk mitigation plans. Risk Committee Chairman The contract risk management processes that have been successfully implemented in the UK will be extended globally.We will work to harmonise and simplify contract sign-off processes to ensure that they are effective without being a barrier to sales success and revenue growth. As new processes and systems stabilise there will be an increasing focus on ensuring quality of risk assessments and progress of planned mitigating actions. G4S plc Enterprise risk management governance model Board The board has ultimate responsibility for assuring Board risk management processes by reviewing the most critical Board risk committee risks and controls. The board Risk Committee sets the group's risk appetite, assesses the group's principal Board Risk Board Audit Board audit committee residual risks and assesses Committee Committee The board Audit Committee the overall enterprise risk ensures the group's control management process. framework is operating Meets four times per year: effectively.Meets four times per year: Executive risk committee � 1` z' Regional risk and audit The Executive Risk r` .", �,r r I committees Committee considers the The Regional Risk and group's principal residual risks Audit Committees review: and the progress of mitigating I.regional level risks; actions.Meets four times per year: 2.the progress of mitigating actions;and 3.quarterly audit and Operating companies Operating companies financial control status Our operating companies reports,internal financial We employ three lines of defence to control identify and assess the risks reviews and balance - to their business objectives and manage risks across the group. sheet integrity,and any .Y `s and plan appropriate accounting judgements. +4rr► _ •,,�E I st Line Business operatioos and support :- _ mitigating actions.These are Each regional committee recorded in our group-wide Responsibility for the first line sits with the managers meets four times per year: risk management tool. of our businesses,whether line management or financial support.The senior management team within each business is responsible for implementing and maintaining appropriate controls across their business. sternal audli t.F Result Ensures standards expected by the group, our customers and other stakeholders are met Independent oversight of the entire process. -- — — — 2nd Line:Control and oversight functions The second line consists of oversight functions at both regional and group level including:risk,finance, legal,human resources,operations,information technology,commercial and CSR Result Provides support to the business managers. 3rd Line:Internal independent assurance The third line is designed to detect or prevent unexpected outcomes and comprises the internal audit function.As part of its annual programme of work,internal audit conducts regular reviews of risk management processes and gives advice and recommendations on how to improve the control environment Result Provides independent assurance over the design and operation of controls. G4S plc - Risk management continued Contract risk management and governance model Based on financial,legal, reputational and operational The board risk risk criteria committee will �.s�e e� Referred to the region,group undertake a review � •,d-• �s�osd� or board as appropriate for of a major contract at Qt <c• % review and approval. each of its meetings. v �� cBid's customer value proposition, L commercial terms and risk Internal audit c a mitigation strategy are challenged. conducts audits of o" v selected contracts. Expected risk return is assessed before approval is given or withheld. Contracts subject to Ga�La Key contractual requirements and on-going scrutiny at `��s risk mitigation strategies,based on regional or group level mob complexity and risk profile of based on commercial mobilisation,are mapped to scale and level of risk accountable contract managers. • What are the key risks faced There are many opportunities for growth: by G4S? • Broadening our service provision with existing customers; During February 2015,the Regional Risk and Audit • Taking existing services into new countries; Committees met to agree the regional principal • Bringing new high value add services to market residual risks.These meetings were facilitated by group that build on our core competencies and brand; risk management and identified the risks to each and we should be ambitious in seeking out region's strategic business objectives and to on-going and pursuing these opportunities. business operations.The meetings were informed by the country level risks recorded in the group's risk There are many opportunities to improve the productivity management systems. of the business(see pages 24 to 27)and we should set ambitious programmes of change and improvement Group risk management and the CFO consolidated these risks and identified common themes and regional risks However in delivering this agenda of change and growth which were material to the group. we need to manage the risks we are taking on effectively • These group principal residual risks were reviewed By thoroughly assessing the risks of major contracts; and approved by the Executive Risk Committee and applying the best resources and our best expertise; the Risk Committee of the board. and hence putting in place mitigation strategies which will control the risks to a commercially acceptable level; The group's principal residual risks must be considered • By applying commercial and financial discipline in the context of the board's risk appetite,which can be and controls to manage our growth portfolio;and summarised as follows: • By applying effective programme and project G4S has a higher risk appetite with regard to growing management to our change agenda and transforming its business. • G4S operates`in nigh risk lines of business in which our core competence and value add is managing those risks effectively.We should be willing to take on such business when we have the expertise to deliver and achieve a good commercial return on the risk we are accepting from our customers. G4S plc • • • • • -Principal risks • - Link-to Strategic Priorities Key • as • PA. • risi<. • Transform c,i cldlure and•,skins Acctve.ty msn ge our tx rtfn;o and performance \/ Reduced risk I O No ding g ;ri cr gari a Ernb°.d disc:p!ined financial and risk managQrne^.t teTh Make our C'33Nsndori,no.?"-' • ._. • Health and Safety (H&S) • • Risk description the group.We appointed.a group head resulting action plans being The provision of integrated security of health and safety to provide personally monitored by the country or services,often in hostile or dangerous leadership to our existing network of business leader.This'Step Up'initiative circumstances across such a broad health and safety professionals across the will be part of a broader program, diversity of countries presents group.We have introduced an enhanced encompassing the roll out of safety . particular health and safety challenges. Health and Safety(H&S)management leadership training to managers across The protection of our staff,people in system which has further developed our the group,as well as implementation of a our care and third parties,including capabilities and processes.This has process whereby business leaders report the public,is of utmost importance. included increasing the personal and take ownership for follow up,close We believe that accidents are responsibility borne by country Managing out and sharing of lessons learnt for any preventable and that"zero harm"is Directors for incident reporting and serious work-related incidents.We will an appropriate goal.We put safety first investigation of serious injuries,and an continue to develop our road safety and prioritise the wellbeing of our enhanced safety leadership training toolkits,and the Service Excellence employees,setting the benchmark for course for senior management We have Centres will continue to develop our health and safety across the industry. rolled out a road safety programme mitigating strategies with regard to • The principal health and safety risks called Driving Force Rules and attacks on our people.Our Health and • are work related attacks and road strengthened.governance around Safety management system will be • traffic accidents.In 2014,41 (2013:49) firearms management. augmented with the introduction of • employees lost their lives.We are Mitigation priorities for 2015 toolkits and templates to support • implementation in local businesses,and committed to strengthening our Compliance with our core H&S we will review the training for our H&S health and safety systems,processes standards will continue to be monitored practitioners across the group to ensure and cultures. and periodically audited,with reviews they are equipped to implement these •Fatalities and serious injuries to our of performance at a regional,group and enhanced procedures.An enhanced IT :' • staff impact not only the individuals• board level via the CSR Committee. system for incident reporting will be concerned,but also their families and Management incentives are aligned _ implemented and self-assessments of . •loved ones. to safety best practice.Detailed H&S control compliance will be • assessments of H&S practices in a integrated into the risk management and . .Movement since 2013 0 number of high-risk countries will be audit IT system. We added Safety first as a core value for undertaken,with implementation of the • • • • F-Ze ca.aid Accounts 20 I G4S plc 45 • Flittpal risks continued Culture and Values Pfc l j G btf Risk description This can lead to penalties,failure to has been undertaken,and G4S provides security to people, renew contracts and ultimately reduced management performance incentives premises and valuable assets.In its profitability and damage to our global explicitly linked to all of the values care and justice services businesses it brand and reputation. were implemented. also provides services which interact with Movement since 2013', Mitigation priorities for 2015 detainees,victims of crime,those on state We have completed a corporate renewal On-line management training will be assistance,vulnerable people and other programme which has been assessed by implemented covering all of the G4S members of the puse is requires our the UK govemmentThe G4S values were values.Demonstration of the values staff to conduct themselves with the utmost integrity.We operate in more re-launched globally,with the addition of will continue to be integral to than I I 0 countries around the world the Safety First value and an emphasis on management performance contracts in with a diversity of local and national delivering long-term sustainable value for 2015.Improved whistleblowing processes customers,employees and shareholders. are also being implemented. cuftures.These factors mean that having a strong set of corporate values that unite We have continued to embed our A values self-assessment programme the organisation deeply embedded in human rights framework,based on the will benchmark managers'views of our culture is of particular importance. UN Guiding Principles on Business and performance versus the group values and If we fail to behave in accordance with the Human Rights,into the group's practices, a global employee and management high standards that we set ourselves,there such as our risk and compliance systems survey being undertaken this year will is a risk that we will not deliver on our and processes. provide essential feedback on how the commitment to customers,and fail to Corporate governance has been values are working in practice across comply with legislation and international enhanced through the Enterprise the organisation. standards.We may also compromise the Risk Management process and safety and security of our employees and introduction of Regional Risk and the assets or people that we are protecting. Audit Committees.Leadership training People r" • Risk description professionals and front line staff can In 2015 our management incentives We are a people business and we take affect customer service,customer will be further reviewed to ensure they • -- " great care to ensure that we employ the_ retention and sales growth,impacting are competitive,motivational and drive • best people to deliver quality services our financial performance. the right behaviour;in line with our values to our customers.We employ 623,000 Movement since 2013 0 and business objectives.Common talent people world-wide,and are the largest G4S'human resource processes are well review processes will be cascaded security solutions provider in the world. throughout the organisation, This means we have expertise in established and effective.During 20 14 we supplemented by the introduction of app • screening and training,which together appointed a significant number of new new leadership development programs. with our integrity and trustworthiness individuals to management positions in This will strengthen our succession plans is an important factor in why customers regions and countries around the globe. and support retention of key talentTo choose G4S. This has included recruitment from a help employee retention at all levels of range of high quality companies both the organisation,the global employee In a global and diverse business such as within and outside the security sector;as and management surveys will be ours,there are inherent risks associated well as the promotion of internal talent undertaken in the first half of the year, with recruiting,motivating developing We have also invested significantly in providing rich insight into our employees' and training employees on a large scale, strengthening our sales resource. opinions.This will assist in identifying as well as appropriately rewarding and In a low-margin,low-salary business there priority areas for action,which will be retaining our critical talent and ensuring will always be challenges in retaining staff, implemented and tracked across the effective succession in management roles. and in particular we experience this as a remainder of the year.The recruitment of Screening is also a particular challenge in challenge in Africa and Europe, operational employees will be augmented some territories which lack supporting by sharing best practices across the group infrastructure from the relevant authorities. Mitigation priorities for 2615 Y g P g P On I July 2015 Irene Cowden will retire and providing detailed guidance and In these territories we identify alternative oversight to ensure appropriate screenin as measures which are approved by group group HR Director.She will be g screening HR to mitigate this risk as much as possible, succeeded by Jenni Myles,who since standards are met 2011 has been the HR Director for Failure to recruit,retain,motivate and North America and Latin America,having develop key managers,sales been with G4S since 1998. G4S plc <.lc' r' r _ ., .,_.c,... • • • • Brand and Reputation AR B • Risk description were raised in 2013,and we have since considered to be high risk Customer We provide our customers across the won new contracts.Globally we have satisfaction monitoring is being world with a wide range of high quality, implemented a process for reviewing all implemented across the group. • well controlled services.Nevertheless business opportunities with regard to We are promoting G4S values and the nature of the group's activities means our values and the reputational risks communicating our desired behaviours • that we can face high inherent they bring.This enables us to make with colleagues across the group; reputational risks related to the appropriate decisions whether or not countries in which we operate,the to bid.There were material opportunities engaging proactively with ethical and. susta services we provide,the customers and during 2014 which we decided not to analy inability ratings agencies and suppliers we work with,the people in bid for. analysts;and increasing our dialogue - with customers on high profile contracts our care and our interactions with On occasion,services we provide meet and issues.We have invested in an members of the public with whom our significant challenges which exceed enhanced corporate.media team to V • colleagues come into contact our reputational risk appetite,at which develop relationships with and educate Our reputation can be damaged when point we look for alternative options, commentators and journalists;and are we fail to meet our own standards or which may result in non-renewal of implementing a programme of political the expectations of our key stakeholder existing contracts or disposal of risk management and engagement to • groups.Service failures or behaviour certain businesses. continue to build relationships with • by G4S or its partners which does not Mitigation priorities for 2015 politicians.and regulators. meet those standards can result in adverse publicity and damage to the We are embedding human rights due We are also enhancing our group's reputation. diligence processes and reputational whistleblowing and case management considerations into our systems for processes,to ensure that employees Movement since 2013 evaluating new market entries or bidding can raise issues of ethics to the highest In the UK,we have significantly improved for new contracts.We are also reviewing level of the organisation and to enable our relationship with central government and auditing our performance on human us to identify trends and emerging following some high-profile issues which rights in existing markets which are reputational risks. • • • Major contracts • Risk description Failure to ensure effective contract and regional finance directors now The group has a number of long term, take-on,mobilise successfully and report directly to the group legal complex,high-value contracts with manage complex contracts effectively counsel and group CFO,providing multi-national,government or other throughout their lifecycles can impact - greater independence.Group internal strategic customers.The group's growth the group's liabilities,customer audit has recruited a specialist contracts strategy includes a greater focus on satisfaction,reputation,revenue, auditor to audit both individual major higher value,and more technology-rich . cash flow,and profitability. contracts and also the effectiveness services.This will increase the complexity Movement since 2013 u of the processes described above. and uniqueness of customer We have established Group and Mitigation priorities for 2015 requirements and contracts. Regional Investment Committees. The new major contract approval,and For such contracts there are risks to In the UK,we have implemented a major 360°contract review processes the group accepting onerous contractual contract approval process with oversight implemented in the UK during 2014 will • terms;mobilising contracts well; from these committees;strengthened start to be rolled out globally in 2015. -.. - transitioning effectively from mobilisation the contract on-boarding process;and to on-going contract management; rolled out a 360°contract review of all delivering to contractual requirements; aspects of our most significant contracts. and managing complex billing A quarterly financial review of the top arrangements,contract change control 200 contracts across the group has been •- and sub-contractors. implemented.Regional legal counsels • • • i',DO t 31,d A_C_:u•-as 20 14 G4S pie 47 • • Principal risks continued . . • Delivery of core service lines 4 • Risk description Additional risks relate to business Mitigation priorities for 2015 We deliver our core secure solutions resilience,control systems,and the The G4S Way supports the best services in 9 I markets and our core availability of critical systems,facilities practice processes and standards for _ cash solutions services in 62 markets. and people to perform contractually all aspects of service delivery with the A number of these businesses have .agreed services. aim of improving service excellence been acquired over time,resulting in This can lead to financial penalties, and margin. cultural differences,varying degrees of and negatively impact customer Development of our technology solutions operational maturity and multiple • retention and goodwill,to the strategy and innovation in cash services information systems. detriment of financial performance. will provide added value to our • This can create risks around core Movement since 2013 customers.Our risk management is being _ operational service delivery and improved by integrating the Service . supporting functions.Failure to meet G4S has continued to focus on Excellence Centre operational standards . - � the service delivery requirements of developing and consolidating into our Governance,Risk and Control • IT platforms,implementing the Service ' our customers,because we have not tool.This is supported by the continued Excellence Centre programmes implemented the right solutions or implementation of our.Service Excellence followed appropriate agreed procedures, of standardisation,and driving and Centre standards through an Accelerated can create risks around cash losses; monitoring contract formalisation Best Practice ro ramme. - processes across our developing markets. p g • attacks on our staff,subcontractors or We have.recruited new chief operating A programme of customer satisfaction • third parties;and the non delivery of officers in a number of regions and monitoring is being implemented - the service level agreements and KPIs •countries to drive the operational across the group. - • agreed with our customers. - _ . - - standards expected from our customers. - -- _ • Laws and Regulations PFk Risk description " through direct ownership or joint Mitigation priorities for 2015 G4S operates in many jurisdictions ventures;loss of management control; The Ethics Steering Group will • globally,with complex and diverse damage to our reputation;and loss strengthen its effort to provide regulatory frameworks. - of customer confidence. compliance with internal policies • and procedures and we are introducing An additional complexity arises from Movement since 2013 0 new systems and processes for the extraterritorial reach of some of Our internal policies and procedures whistleblowing and incident the legislation to which the company clearly set out that most of these risks, management We will be implementing is subject. including compliance with local laws and a process for political risk management Risks include increasing litigation and regulations,are the direct responsibility to ensure that we are monitoring class actions;bribery and corruption; of local management.An Ethics Steering regulatory and other emerging political failure to obtain operating licences; Group has been formed to provide risks within our key markets.This process non-compliance with local tax oversight and support compliance with will be supported by a programme . the internal policies and procedures regulations;changes to employment to enhance our engagement with to mitigate the risks.Specifically,_ legislation;non-compliance with human regulators,politicians and political whilst ownership of implementing rights legislation;and new or changed influencers across the group. restrictions on foreign ownership.Risk anti-bribery and corruption policies lies G4S continues to liaise with relevant . also arises from new or changing with the business Managing Directors, governments and authorities to • our legal communities have been regulations which require modification assigned compliance oversight with a positively influence the regulatory of our processes and staff training. environments in which we work. direct escalation route to the group legal Non-compliance with applicable laws . counsel.Also,where group internal . and regulations could have far-reaching audit has identified non-compliance, . consequences,including higher costs for example with licensing and labour . from claims and litigation;inability to regulations,these have been reported operate in certain jurisdictions,either and acted upon. . . 48 G4S plc A.n' _i Repoct and ACC-OLE -C'- • • • Growth strategy Risk description Failing to create higher value Mitigation priorities for 2015 Our growth strategy is to leverage solutions that differentiate us from We are making significant investments • our expertise to expand our core local commoditised competitors could in our sales and business development service lines into more complex impact targeted growth in revenues systems and capabilities.We are outsourcing areas which increase and margins. developing our customer relationship long-term customer partnerships;to -management tools as well as our Movement since 2013 focus on organic growth opportunities approach to global account management We appointed Mel Brooks as group with less reliance on acquisitions;and strategy and commercial director and We are taking a more rigorous approach to leverage our expertise in security in the monthly regional pipeline reviews systems technology across key markets. developed and enhanced the leadership and instilling improved contract pipeline and capacity of the regional commercial management disciplines. There are risks that we will lose and strategy teams.We have contracts or growth'opportunities implemented a global account through price competition and market management structure and established changes;that we fail to successfully enter an'outbound'programme for working target markets or territories;that we with Chinese and North American become over-reliant on large customers; multinational clients.We have been and that adverse government legislation innovating and developing our core changes could impact on our growth service lines through the application of • potential or force exit from markets technology and consulting services.The and territories. major elements of the growth strategy - have been allocated to specific members • of the group executive committee to ensure integrated ownership. • Geo-political Risk description Movement since 2013 Mitigation priorities for 2015 We operate in more-than I I 0 countries We perceive the inherent external We have a great deal of experience across the developed and developing threat to have increased in the last of operating in a wide range of difficult world,with wide-ranging government year given the backdrop of an increased territories.We collaborate with our local and political systems,differing cultural global terror threat,the seizure of partners and/or agents;conduct early landscapes,and varying degrees of rule "territory by Islamic State,tensions in risk assessments before and during of law;and within conflict and post- Ukraine,and potential increase in security assignments;have robust conflict zones.The risk factors range political instability and the risk of civil operating procedures;and work closely from political volatility revolution, unrest in parts of Africa,Europe and with our local and global customers in • terrorism,military intervention and Latin America.Given the wide range of managing the risks of operating in such insurgency.The geo-political risks we countries in which the group operates environments.We have a global process face impact us in many ways:the health there will always be some with a degree for assessing the geopolitical risks of and safety of our staff and customers; of serious political instability.We take different countries which determines the • the continued operation of our great care with our operations in these types of customers we will serve and businesses;and the ability to secure countries to monitor the situation closely the types of services we will provide. our assets and recover our profits. and respond appropriately. - - • =�r,ruul?.sort_.nc Accour rs"2014- G4S plc 49 . H.'.$.5�. per o- Q _• - �,•' • • •• S • • • e _. ' — Prncipal risks ^ a ,,a _ i•• • •. • F ° -. -: .-., ..�. • *e'''''',._.:-...., 77- . -- . : ` • . . - . -"_"' - -• Information Security /. 1' Risk description Movement since 2013. Mitigation priorities for 2015 The clients,staff,suppliers and partners The sophistication of hackers continues G4S will continue to manage risks of G4S that entrust their sensitive and to increase and we see a broad range to information by integrating the g Y g g confidential business information into of other corporates coming under attack information risk framework with the our care rightl4.expect that we.will;take • Given the high profile G4S has,and the global risk framework and will ensure all reasonable steps to protect it nature of our business,we believe the that risks above the risk appetite are Given the high-profile nature of some threat of external attack has increased appropriately managed.The G4S of G4S'operations globally,we are at over the year, global information security centre of risk of cyber and physical attack by G4S constantly monitors attacks against excellence will develop best practice in criminal organisations and individual its systems and takes steps to safeguard coordination with regional and business hackers.There is also the risk that an business information entrusted to us.A unit committees,through the publication individual with legitimate access to new set of Mandatory Minimum Security of policy and the identification of risk business information could disclose it Controls have been developed and we with appropriate mitigation strategies. inappropriately,or that an insider could have assessed each of our businesses' We will be implementing new disrupt the availability of key systems. compliance to these standards, monitoring and compliance systems An information security breach could developing plans where improvements throughout 2015 to increase our result in:censure and fines by national need to be made.Additionally we have controls over the unstructured governments;loss of confidence in the assessed the operational level security information assets held on computers, G45 brand and reputation;specific loss of over 600 systems,capturing a risk file systems and email. of trust by clients,especially those in assessment of each system in line with government and financial sectors; our group standards. and disruption to service delivery Additionally a group IT Auditor was and integrity,particularly in cash solutions appointed to provide independent business operations. assurance of our Mandatory . Minimum Security Controls and Systems Risk Assessments. Cash losses Ail Risk description the regions,improvements have been new system will be implemented in We have cash solutions businesses made to processes and systems in many 2015 for businesses to conduct spread across the world responsible for of our cash solutions businesses over the self-assessments twice a year cash held on behalf of our customers. course of 2014.Responsibility for auditing The outcome will be controlled centrally We provide cash transportation from cash reconciliation in our cash processing at group level.In 2015,we will be one site to another in high-security centres has been transferred from the working to harmonise the standards of vehicles,a range of cash management cash solutions SEC to group Internal Audit cash reconciliation audits with those of services including secure storage, group Internal Audit We also have a counting,reconciliation and sorting of Mitigation priorities for 2015 robust process to monitor all cash- Our forATMs;a range of ATM services; Our cash solutions SEC and group related loss incidents through a team of and secure international transportation Internal Audit work in collaboration physical security specialists and we of cash and valuables. with the regions to embed robust ensure that lessons learned are shared procedures into every cash business to through the SEC. There are inherent risks in this business mitigate cash losses.Innovative security related to external attacks,internal theft defence products are in use,ranging Following a reorganisation at the end of and poor cash reconciliation. from pavement box tracking to vehicle 2014,during 2015 G4S will be Cash losses can have a major impact protection foam and protective integrating its UK&Ireland and for our customers and ourselves in pavement boxes. European cash solutions businesses under the leadership of Graham respect of loss of profit,increased cost All cash transactions are subject to strict Levinsohn.As well as strengthening our of insurance and health and safety authorisation limits and we have go-to market offering this will also considerations for our staff and the public. controlled cash reconciliation procedures enable enhanced development of best Movement since 2013 O that are undergoing implementation practice,which will be transmitted via Through the work of the Service across the group to ensure cash is fully the cash SEC to our cash solutions Excellence Centres(SECS)working with accounted for and controlled.Those businesses in the rest of the world. procedures are subject to audits and a G4S plc . . 0: u _ ?∎• • Chairman's introduction;:,_:_- _ • . w.. • . i.: • ---- - - - -- "" This report explains how the G4S group is governed . • •, by setting out the details of the work of the board over g; -- . the last year and the processes adopted by the board. . ,�. • It also describes some of the mechanisms by which the R board satisfies itself that adequate controls are maintained ' throughout the group. « In a group as large and diverse as ours, p it is important ' to ensure that strong controls are in place and that there . . • ,. ..i, are adequate processes to ensure those controls are _ implemented.At the same time,we are aware of the need to allow our business to develop and,most x importantly,to concentrate on meeting the needs of . r our customers.The board is conscious of the importance E of maintaining the right balance. _ After a period of considerable change in the recent past, John Connolly 2014 was a year of stability and consolidation for the -c -Chairman board in terms of membership and indeed the frequency , 3 with which the board met As the new members of the board have learned more about the business and . relationships between board members have developed and strengthened,the board has become more effective - Corn ® d to at providing an environment for constructive challenge' and debate.It is my expectation that the work of the _governance� board will concentrate more on business as usual after good the challenges of the past couple of years,but we will not lose sight of the need for the board—and for the entire group—to maintain the highest governance standards. John Connolly 'Ensuring that good governance is achieved throughout G4S Chairman is vital for the delivery of long term sustainable value for shareholders.and for all the group's stakeholders.ft is important — --- ----- therefore that the right tone is set by the board and the way it In this section. • • operates.It-is equally important that strong governance Board of directors 54 . frameworks are applied.throughout the group:' --— -- — — -- Executive committee 56 Corporate governance report 58 Audit Committee report —__ 67 Directors'remuneration report 72 Directors'report ------_ -----_—___---87 Directors'responsibilities 90 • • Board highlights 2014 Board priorities in 2014(X) --_—- - —�- • Concluded an investigation by external lawyers on the board's behalf into events surrounding the group's electronic monitoring Financial ra rt r,g(pir}n«;ng I ! Investor relations i 0.5� 3.5 contract with the UK Ministry of Justice(MoJ)and agreed a financial . settlement with the MoJ _ \, Baud governance • Conducted visits to three business sites in the UK -- ; i2 5% • Received in-depth presentations on the UK&Ireland and Europe `n"i"mR"r approvals 3% regions,the group's technology and IT strategy,service excellence • centres and risk management processes • Conducted a review of the group's strategy 5F�e y is+;: Executive • Agreed to recommend a change of external auditor 14% - • Approved a new£I bn revolving credit finance facility • Focused on the health and safety of employees -- , Lindarst_ rtg • Commissioned a review of its own performance the b,ire:s 24 Committee reports• i 5% _ . Grcap s ztegy 4% 'plus a dec`•ieated ria,.°anc a tmli strategy;leering . Annual?'ep rt an: I ticaUr!is 201' G4S plc 5 • • Board of directors Jahn Connolly `. - Ashley Almanza Adam Crozier Non-executive - Executive director/ Non-executive r+ or/Chair an - ; .. . Chief executive IV WV director s" of .-4,- — _.; - Allete _ ....._ June 2012 4411 May 2013 January 2013 Key strengths and experience:Developing Key strengths and experience:Extensive Key strengths and experience:Wide-ranging the board and its governance of the group. board and executive management experience of business transformation in 1 Extensive experience of working in a experience and strong track record a number of public and private sector global business environment and in sectors working across international borders in organisations in the media,logistics and of strategic importance to the group. complex businesses.Held a number of retail sectors and a serving FTSE 100 CEO. A chartered accountant,John spent his senior executive roles at BG Group Started his career with Mars before joining career until May 20 I I with global from 1993 to 2012,including Chief the Daily Telegraph followed by Saatchi professional services firm Deloitte, Financial Officer from 2002 to 2011 and and Saatchi,where he became joint chief was Global Chairman between 2007 Executive Vice President from 2009 to 2012. executive.He then became chief executive and 20 I I,and prior to that Global As Executive Vice President he was of the Football Association and was Managing Director between 2003 and accountable during 2009 and 2010 for the subsequently appointed chief executive 2007.He was Senior Partner and CEO strategic and operational management of BG of the Royal Mail Group,where he oversaw of the UK partnership from 1 999 until his Groups UK,European and Central Asian an extensive programme of modernisation retirement from the firm. businesses.He also led a consortium of and change to enable the business to global companies through complex Current external commitments:Chairman government negotiations in Central Asia compete in the UK and international • ofAmec FosterWheeler plc and of a marketplaces.Since April 2010 he has number of private companies.Beyond He holds an MBA from London Business been chief executive of ITV plc. commercial business roles,he is on the School and was previously Chairman of Current external commitments Board of Governors of London Business the 100 Group of Finance Directors. Chief executive of ITV plc.. School,chairman of the Board ofTrustees of Great Ormond Street Hospital Charity Current external commitments:Non-executive - and a member of the CBI President's director of Schroders plc and Noble Advisory Council. Corporation,but will step down from the board of Noble Corporation in the near future.Board member of the Ligue • Internationale des Societes de Surveillance. Mark Elliott Grahame Gibson Winnie Kin Wah Non-executive Executive director Fok director/Senior i*ll Non-executive independent director l director September 2006 , April 2005 ' October 20I 0 Key strengths and experience:Extensive Key strengths and experience:Extensive Key strengths and experience:International international board and executive knowledge of the group and its predecessor board and senior management experience experience having held a number of senior companies in many different markets and with extensive knowledge of Asian markets management positions at IBM,including in a number of executive functions.Joined and strong involvement in Scandinavia. leadership of IBM's operations in Europe, Group 4 in 1983,starting as finance director the Middle East and Africa with responsibility (UK)followed by a number of senior roles, Takes a particular interest in the group's including deputy managing director(UK), businesses in Asia. for operations in more than 110 countries. g per' g g General Manager IBM Global Solutions; vice president(corporate strategy), An auditor by training,was involved in Managing Director of IBM Europe,Middle vice president(finance and administration), management positions in finance,audit East and Africa;member of the board vice president operations(central and south and corporate advisory work and a wide of IBAX,a hospital software company eastern Europe and UK)and chief operating range of roles in asset management firms jointly owned by IBM and Baxter Healthcare; officer of Group 4 Falck A/S.He was the investing with a focus in Asia.Senior partner formerly chairman of Reed Elsevier's group's regional CEO for the Americas until of EQT and CEO of EQT Partners Asia remuneration committee and chairman November 2014 and was chief operating Limited;managing director of CEF New of the Dean's Advisory Council of the Kelly officer between 2005 and 20 12.Will retire Asia Partners Limited. School of Business,Indiana University. from the board at the conclusion of the 2015 AGM. Current external commitments Senior Current external commitments:Non-executive adviser to Wallenberg Foundations AB; chairman of QinetiQ Group plc and Current external commitments:Board non-executive director of Volvo Car chairman of Kodak Alaris Holdings Limited. member of the Ligue Internationale Corporation;non-executive director of des Societes de Surveillance. SEB AB,Kemira Oyj and HOPU Investments Co Ltd. ..- G4S plc r, ,._ `•. _ __ . �--=: . Himanshu Raja Mark Seligman Paul Spence Executive director/ Non-executive Non-executive I. w ; Chief financial 1 director/Deputy director iiiii officer I chairman O 0 • 0 October 2013 January 2006 January 2013 Key strengths and experience:Strong track Key strengths and experience:Extensive Key strengths and experience:In-depth record as a financial executive in global financial and management experience knowledge of outsourcing in both the services businesses. having worked in the financial services public and private sectors and extensive As well as having responsibility for all core sector,with a focus on investment banking. international experience in key developing finance functions including tax,audit,treasury Takes particular interest in the financial countries such as India,China and Brazil. and investor relations,Himanshu oversees performance of the company,including its A graduate of the Wharton School at the the IT,procurement and Service Excellence financing and transactional activity.Qualified University of Pennsylvania with a degree in Centres for procurement globally. as a chartered accountant with Price economics and decision sciences;served a G4S Waterhouse.Senior roles at SG Warburg 30-year career with Capgemini and its % Prior to joining G4S,Himanshu was CFO &Co Ltd and Barclays de Zoete Wedd; predecessors.Having started in the US g at Misys,and from 2010 to 2012 he was Head of UK Investment Banking at CSFB; and become managing partner of mid- CFO of Logica plc.Himanshu worked for Chairman of UK Investment Banking at Atlantic information and technology for more than 10 years at BT Group in a Credit Suisse;member of the Credit Suisse Ernst&Young,he went on to gain significant number of divisional finance director roles Global Investment Banking Executive Board international experience for 16 years as including Chief Financial Officer of BT and senior adviser to Credit Suisse Europe. managing partner of Ernst&Young Global Services,BT Design,BT Operate Will retire from the board at the conclusion Consulting Australia,CEO of Capgemini and BT Wholesale.His early career included of the 2015 AGM. Ernst&Young in Asia and CEO Capgemini • finance and systems roles at Worldcom Ernst&Young UK.He then spent eight years International,UUNET and MFS. Current external commitments:Alternate serving on Capgemini's executive member of the Panel on Takeovers and management committee during which Himanshu is a qualified chartered Mergers;member of the Regional Growth accountant and holds an honours degree Fund Advisory Panel;non-executive time his roles included deputy group in law. director and audit committee chairman CEO and CEO of Capgemini Global for BG Group plc;and senior independent Outsourcing Services. Current external commitments None director of Kingfisher plc. Current external C rr r+itrnents:None Clare Tim Weller Spottiswoode Non-executive f Non-executive ifirg, ; director director 'CD . 00 0 . June 2010 41116 April 2013 Key strengths and experience:Considerable Key strengths and experience:Significant experience in the public sector,the energy experience of the energy and utilities sectors markets and the financial services sector and serving FTSE 250 CFO.An accountant as well as setting up and managing her by training,joined KPMG in 1985,rising to own businesses.A mathematician and partnership in 1997 before joining Granada economist by training,worked for the plc as director of financial control.Between UKTreasury,director general of Ofgas, 2002 and 2010,he gained significant further the UK gas regulator;policyholder advocate experience in the energy and utilities sectors for Norwich Union's with-profits holding CFO positions with Innogy(one of policyholders at Aviva and a member of the UK's leading integrated energy the Independent Commission on Banking companies at the time),RWEThames Water and the Future of Banking Commission. (the world's third largest water and Current external commitments:Chairman wastewater service company)and United of Gas Strategies Group and Flow Group; Utilities Group PLC(a UK-based water and g p p' wastewater service company).He was to committee membership non-executive director of llika plc,Enquest p y)' Chief Financial Officer of Cable&Wireless Nomination plc,Partnership Assurance Group plc, Remuneration Seven Energy International Limited and Worldwide plc between 2010 and 201 I. ti Audit BW Offshore Limited;and independent Current external commitments CFO of director of the Payments Council. Petrofac Limited,the international oil and CSR gas service provider and a non-executive lljj��Risk director of the Carbon Trust. . • .. •:.: . .- . . G4S plc • Executive committee . . AshleyAlmanza .,; , Martin Alvarez °F, Andy Baker r; Executive director/ I Regional president, ` �f Regional president rf, Chief executive. . Latin America& '` —Africa 0 , Caribbean Ner See page 52 fors 11 bio rah �l 4. g P y r - Martin joined G4S as Regional President, Andy joined G4S as Regional President Latin America and Caribbean for G4S for G4S Africa in 2012. • Americas in 2013. Andy has wide ranging experience of Martin has extensive experience working in managing and building sustainable • the region and a wealth of experience in businesses across Africa,with a strong • strategic commercial and operational roles. emphasis on technology and logistics. • Martin joined G4S from Dell,where he Andy joined G4S from Nashua Group, • I served eight years as executive director the second largest ICT business in South , of multi-country Latin America(MCLA), Africa,where he was Group Chief responsible for 38 countries,more than Executive Officer. Our executive team US$I billion in revenue and the Americas G4S is managed through a functional (Shared Service Centre with over 3,000 Prior to this,Andy spent four years as group and regional structure. employees.Prior to Dell,Martin spent 10 chief operating officer ofAltech,a JSE listed F • years with DHL holding various management technology group with revenues of US Our structure enables us to deliver and leadership roles including vice president $1.2bn and operations in 15 countries. • our strategic objectives,maintain DHL Mexico.and General Manager for Andy also spent 13 years at DHL as . a strong governance framework, several other countries in the region. regional MD of Southern Africa and Turkey. develop integrated solutions,target . key regional markets and build Martin has an MBA from(ESE in Andy holds an MBA from • ___ customer relationships. Barcelona and a Bachelor's degree in Cranfield Univers•ty. - International Trade and Finance from Louisiana State University. 1444\ Mel Brooks Irene Cowden r; :f John Kenning Group strategy A Group HR director �; Regional CEO l &commercial ; 4 ._p for North America i 4 director - - , sr &technology l.' 2� _ - Mel became group strategy and Irene has spent her career in HR John joined G45 in November 2014 to commercial director in July 2014, management;specialising in employee lead the diverse range of services the responsible for ensuring that the group relations,organisational development, North America businesses provide such has robust strategy and planning processes, talent management,employee engagement, as consulting,investigations,security, • a technology strategy and high quality sales compensation and health and technology and youth services solutions - operations and bidding resources across safety matters. across multiple private and public sectors.• the organisation. She has been involved in major change John has a proven track record leading Mel's previous role within G4S was regional -projects including the cultural and global organisations.Prior to joining . strategy director for the Asia Middle East integration aspects of mergers and G4S,John was executive vice president region and CEO for G4S India where he acquisitions,as well as large scale and president,commercial business for lead the transformation of the businesses, organisational change involving workforce OfficeMax where he led the global, focusing on key customer segments and restructuring and working in partnership - business-to-business(B2B)division. improving customer service. with major trade unions. John was'formerly president,North • Prior to joining G4S,Mel held a number Irene has worked in the security industry America commercial for ADT/Tyco Security of senior line and functional roles in the for 37 years and has held director level Services,where he led the transformation defence and technology-industry where positions at business unit,divisional and of the business to a technology services he was responsible for service line and corporate.level.She was appointed to the leader and also led the separation of commercial strategies,technology board of Securicor plc in 2002 as group the residential and commercial security • development and leadership of a number HR director.She will retire from the group businesses in North America of business unit turnaround programmes. executive in June 20 15. John is a board member for Miami _ • • . Irene is a Fellow of the Chartered Institute University Advisory Athletic Board and of Personnel and Development(FCIPD). past board member of the Make-a-Wish Foundation.John holds a bachelors degree - in business from Miami University.• if' G4S plc ;,,i^"._i(.'`�'r:o�-1—and Ac:_c)1.:ni.s 2 i• - • • • Graham Soren Lundsberg- • i Peter Neden Levinsohn Nielsen • , i Regional president Regional CEO - Group general + "`' ;q ' —UK&Ireland • ` , i. a • —Europe a• counsel •jam..; 4 Aiku isiiii:,‘,./ 4 ,, . Aol . ► Graham became Regional CEO—Europe Soren began his career as a lawyer in Peter became Regional President of UK in November 2013.Graham has more than Denmark and since 1 984 he has had a wide &Ireland in January 20 I 5,following his 20 years'experience in the security industry, range of legal experience as general counsel appointment on an interim basis in May having joined Securicor Cash Services in for international groups in Denmark,. 2014.Peter was previously Regional 1 994 as general manager—marketing. Belgium and the US before joining Group 4 managing director of G4S Outsourcing Since then,Graham has held a number of Falck in 2001 as Group General Counsel. Services for the UK&Ireland region. commercial and line management positions Soren has been involved in a wide range Previous roles included responsibility in both the cash and security lines of the of successful mergers and acquisitions for the business development programme 0 business.Graham was responsible for the • during his career,including the acquisition within G4S in the UK and Africa regions, % creation of the UK cash centres outsourcing of Wackenhut and the Group 4 Falck as well as a number of senior positions 5 business in 2001 as managing director, merger with Securicor. in both the commercial and government before moving on to become divisional Soren has overall responsibility for all businesses across the group. managing director for G4S Cash Services internal and external legal services for G4S _ Prior to the merger between Group 4 UK,and then regional president—Nordics. as well as the group's insurance programme. Falck and Securicor,Peter was Securicors He became group strategy and development director,having joined the development director in 2008 and joined Soren is a member of the Danish'Bar and company in 2001.Peter's early career the executive committee in 2010. Law Society,a member of the advisory included a number of sales,marketing and board of the Danish UK Chamber of general management roles within Centrica. Graham is a fellow of the Chartered Commerce and author of the book. g g Institute of Marketing and a director Executive Management Contracts,published Peter has a degree in economics from the • of COESS,ESTA and member of the Ligue in Denmark. University of Nottingham. Internationale des Societes de Surveillance. University_ of Raja :4� Dan Ryan s Debbie Walker • Group chief Regional CEO t'. Group - .ifo,, I •financial officer . '` —Asia Middle East i F,, communications •' �� director - 'r, 'r_ ", See page 53 for ,. `• ' ' 4.full biography ±A.'"- — • Dan joined G4S in August 2010,from Debbie is group communications global logistics and transportation company director,heading the corporate Neptune Orient Lines(NOL),where he communications team which focuses on was a member of the group executive team the group's key audiences—media, and held a number of senior management government,employees and customers. • positions including regional president roles Debbie is also responsible for the group's for Greater China,Middle East and Europe• CSR and human rights strategies. • during his 20-year career there:In his last Prior to the merger between Group 4 • position with the group,Dan led the project Falck and Securicor,Debbie held a number . to review,redesign and transform NOL's of senior marketing and communications organisation across all its Americas divisions. . roles within the Securicor group from • • 'Dan is a charter member of the Middle 1993 to 2004. . East Logistics/Supply Chain Management Debbie is also vice chairman of the Forum,Hong Kong Liner Shipping CBI South East Regional Council • Association and the American Chamber (the representative body for all CBI of Commerce—Shanghai.He holds an member companies based in the South MBA from the University of Notre Dame East of England and the Thames Valley), • • in Indiana and-a B.S.Finance,from California State University,Sacramento, having previously served as chairman for two years. " G4S plc 3 5 ��:1nU:-a -cp�i'f,dt��_!fal_:=O.i;n?S :.1:I•t • • • Corporate governance report Our governance framework The board leads the group's governance framework These matters fall under 12 categories: setting broad strategic targets,-monitoring progress,approving ° Strategy and management proposed actions and ensuring appropriate controls are in ° Structure and capital place and operating effectively. • Financial reporting and controls Management decisions,development of strategies and • Risk and internal controls - policies and implementation of board decisions fall to the ° Contracts group executive committee. • Communication Regional management teams have responsibility for businesses ° Board membership and other appointments within their regions and are tasked with implementing policies ° Remuneration and controls at business unit level,as well as ensuring they ° Delegation of authority meet agreed financial and non-financial goals. ° Corporate governance matters • Policies The presence of a majority of independent non-executive _ ° Other matters—such as settling material litigation,making • directors on the board ensures objectivity,challenge and major changes to the group's pension scheme rules and the debate.It is the primary responsibility of the board to appointment of group advisors provide effective leadership for the group and this is done By way of example,board approval is required for:unbudgeted by,amongst other things,ensuring that decision making is capital projects of more than£I Om;entering into a sales conducted throughout the group within a strong internal contract where annual revenue is anticipated to be more than control framework—and by setting values and standards. £50m;any changes to the group's capital structure;and the There is a detailed schedule of matters which are reserved annual operating and capital expenditure budgets. to the decision of the board. The board fulfils a number of its most important functions through its committees.The work of these committees is described below in this report.The terms of reference of each of the committees are available on the company's website at www.g4s.com. Governance structure Board • Cy y.,, r�-•a:.. A'� i\,',. C,„,,-fir f r- r.-.F+..�r rtLa• j1'�1�t1 ? ..' itt;i L!° . � 1'Li'J'J�� = C" .it- �. 3s,Ci/Jr ' 62 !es 63-61 L- IGroup Executive Committee Group Risk Internal Audit Function Investment Executive Risk Committee Committee Regional Regional • Executives Risk&Audit Committees 56 G4S plc Repo-_and Accounts nt,20 i$ •. • • Board balance _ tenure Board composition As at the date of this report,the board comprises I I members: the non-executive chairman(John Connolly),seven other . . _- . . non-executive directors and three executive directors.The board • -- •- considers all the non-executive directors to be independent der,-�.,.5 _, yrs or!esa— I The names of the directors serving as at 3 I December 2014 `' ''�`' = 3 ti z<<3 and their biographical details are set out on pages 52 and 53. `A"' R' ��) All the directors served throughout the year.Grahame Gibson, __ one of the executive directors,and Mark Seligman,the non- . . • executive-deputy chairman,will retire from the board at the .�f, . - conclusion of the company's 2015 Annual General Meeting. _ NT_The Nomination Committee is engaged in a process to recruit 2 a rn;.or5 - J/ ,2 yr, y_;_ • a new non-executive director. ( '' ) 3 c'ire tors (AC,PS,IC) Gl Induction,information and professional development • g •• A tailored induction is provided to new directors joining the board. '' `'"'-V ?'CtC•3 Fa In the case of non-executive directors,this includes spending time —— - with the executive directors and other senior executives to . understand the business,its structure and people,as well as the Board performance review company's strategy and financial performance.Induction also In 2014,Lintstock Limited conducted a performance review for the provides details of the group's governance policies and structure board.The review involved detailed self-assessment questionnaires and risk management framework. being completed by board members and regular board committee To build on the induction programme,directors receive further attendees,as well as individual interviews with each director and the briefings both to help in their own development and also to company secretary.The resulting report was considered by the enhance their awareness of the different elements of the business. board when it reviewed its own performance and informed its Briefings are provided to all board members on legal,governance, planning for the board's priorities in 201 5.Lintstock also reviewed compliance and reporting developments and to those members the performance of each of the board committees,which in turn - of board committees.on matters.which are relevant to their work- considered the resulting reports when reviewing their performance. on the committees in question. As part of its review process,Lintstock also reported on the In addition,non-executive directors are encouraged to learn about performance of each of the directors and separately on that of •the chairman.The individual director reviews,were used as the basis the group's business and to meet employees and management through site visits,attendance at group and regional conferences. for the chairman's individual discussion with each of the directors In 2014,non-executive directors visited a cash centre,an adult about their performance and any training and development needs. prison and a youth training centre operated by the group and The report on the chairman was used to inform the discussion attended part of the group management conference. about the chairman which was conducted by the senior independent director without the chairman being present Lintstock has no connection with the company otherthan evaluating the board and its committees'performance. Board balance 2015 primary board objectives • Following consideration of Lintstock's report on the board's Non-Executive li ft*it John Connolly Adam performance,and after consideration of priorities chosen. • directors ! ° Crozier,Mark Elliott, by the board and the strategy adopted by the company, ff I f Winnie Fok,Mark the board has agreed a set of primary objectives for its work 8 • Seligman,Paul Spence, in 2015,which will include: - - Tim Clare Weller woode, • R viewing progress on strategy execution and a range _____ _________Tim Weller _________ Executive ° ' Ashley Almanza, of business improvement programmes approved by T i w the board directors Grahame Gibson, • Monitoring the performance of the wider leadership team Himanshu Raja • Addressing the new requirements of the UK Corporate 3 - Governance Code - - -- — ---- -- — • Increasing focus on people in terms of succession planning • • •_ . for the senior executives,employee satisfaction and -- management development • Maintaining emphasis on risk management -- • Gaining greater understanding of markets and competitors • • Annual R.,-;.port-gill Ac_cuunts 20 i 4 G4S plc 57 • • • • Corporate governance report continued • • • • Director re-election • The company's articles of association require that all Relations with shareholders continuing directors are subject to election by shareholders The company actively seeks to engage with shareholders •at the next Annual General Meeting following their and during 2014,senior management had contact via • • appointment and that they submit themselves for re-election one-on-one meetings,group meetings and telephone at least every three years and that at least one-third-of the conference calls With shardholders representing over directors not standing for election for-the first time stand for 80%of the share register across over 150 institutions. re-election at each annual general meeting.However,in accordance with the UK Corporate Governance Code In November,the chief executive and chief financial provision on re-election of directors,all the continuing officer provided a capital markets update via a webcast, directors stand for re-election every year. which is available on the company's website.Additional meetings are held after the preliminary and half-year Conflicts authorisation results are announced. Each of the directors has disclosed to the board any • • situations which apply to them as a result of which they The chairman met with major shareholders as part of have or may have an interest which conflicts or may conflict a general governance road show.The chair of the CSR • with the interests of the company.In accordance with the Committee,Clare Spottiswoode,and relevant senior company's articles of association,the board has authorised executives met with a group of socially responsible such matters.The affected directors did not vote when their investors in June 2014,updating them on the group's own interests were considered.Where the board deemed corporate responsibility programme:Tim Weller,in his it appropriate,such authorisation was given subject to capacity as chair of the Audit Committee,consulted major certain conditions.The board reviews such matters on • shareholders regarding the external audit tender.As chair a regular basis. of the Remuneration Committee,Mark Elliott engaged with a number of shareholders and their representatives • on remuneration issues. • Diversity With operations in over 110 countries,the group operates in It is intended that all the directors will attend and be very diverse communities and its workforce reflects that diversity available to answer questions at the company's Annual in terms of its mix of gender,age,race,religion,nationality,language, General Meeting which is an important opportunity for • background and experience.The board recognises that the group communication between the board and shareholders, benefits greatly from this diversity and needs to continue to • particularly private shareholders.At the Annual General promote it in order to help create an organisation which attracts, Meeting,the meeting is informed of the number of proxy supports and promotes the broadest range of talent.This allows votes cast and the same information is published individuals to reach their full potential and the group to provide the subsequently on the company's website. best service to its customers.Diversity is a consideration that forms part of any new recruitment for,and appointment to,the board. Although appointments will always be made on merit,the Nomination Committee and the board recognise that the board 0` performs better when its members are from varying backgrounds ••and possess different experiences and perspectives.Diversity will - therefore continue to be a key consideration when contemplating r_- the composition and refreshing of the board and senior f y� -..- management,although the board has no specific targets in . - _$y, -I • relation to diversity including gender. - - 58 G4S plc A'nr:Liai Fs4.-)o t and;2k.ccoun,_s 20 i . . • • • • • • • • • Board meetings and information-flow Fair,balanced and understandable Seven board meetings were held during the year ended assessment 3 I December 2014.One of these meetings was an extended In relation to compliance with the Code,the board has given • two-day board and strategy session at which,in addition to normal consideration to whether the annual report and accounts,taken board business,the board and executive committee met and as a whole,is fair,balanced and understandable.The preparation reviewed the group strategy by region and by business line,as well of the annual report and accounts is coordinated by the finance, ... as considering succession planning,risk appetite,the technology investor relations and company secretariat teams with group-wide • used by the group and the financial basis of the strategy support and input from other areas of the business.Comprehensive PP P P Prior to each board meeting,comprehensive papers are circulated reviews were undertaken at regular intervals throughout the - to the directors addressing not only the regular agenda items on process by senior management and other contributing personnel which the executives will report,but also details of any matters within the group.The statement required to be given by the - P Y g P g Y requiring approval or decisions,such as significant transactions or directors by Code provision C.I.I can be found on page 88. events or important market issues. - • Risk management and internal control At each meeting the board receives reports from the chairman, the chief executive,the chief financial officer and the company The directors acknowledge their responsibility for the group's c' secretary,an HR and health and safety report and an investor system of risk management and internal control and for reviewing 3 relations report,which includes summaries of analysts'reviews and its effectiveness each year.The system is designed to manage rather any comments received from major shareholders since the previous than eliminate the risk of failure to achieve business objectives and board meeting.The board receives regular in-depth presentations can only provide reasonable and not absolute assurance against from regional management and from the management of business material misstatement or loss. units and the board makes visits to business sites from time to time. The group's key risks are summarised in the principal risks section After meetings of the board committees,the respective chairmen on pages 44 to 50. report to the board on the matters considered by each committee. The key features of the group's risk management process,which Regular board dinners are held prior to board meetings which was in place throughout the year under review,are: provide an opportunity for the directors to discuss topics in an • Senior executives in each business unit and region use a informal environment outside the more formal setting of the common risk management framework°to provide a profile •board meeting. of those risks which may have an impact on the achievement After each board meeting the chairman holds meetings with of their business objectives. the non-executive directors without the executives being present. • Each significant risk is documented in the group's risk - management system,showing an overview of the risk,its owner, There are seven board meetings scheduled for the current how the risk is managed,and any improvement actions.Risk year including a two-day board and strategy meeting. appetite/tolerance is considered in the context of the residual Meeting attendance in 2014 (after controls and mitigation)risk with a particular focus on — — — — -- — — — — — "High"net risks.To be categorised as"High"a risk must meet BOA at least one of the following criteria: • scheduled Executive directors - major impact on the achievement of the business strategy --- — — —— — —— --- — serious damage to business reputation; AshleyAlmanza(CEO) 7/7 • Himanshu Raja(CFO) 717 — severe business disruption; — impact of>5%on operating profit or assets. Grahame Gibson 6/7 -- --- -- — ---— -- —" ° The risk profiles ensure that internal audit reviews of the Non-executive directors adequacy,application and effectiveness of risk management - John Connolly(chairman) 7n and internal controls are targeted on the key risks. Mark Seligman(deputy chairman) 717 ° Risk management committees have been established at • Mark Elliott(senior independent director) 717 regional and-group level. Clare Spottiswoode 7/7 ° Risk and control self-evaluation exercises are undertaken for Winnie Fok - 717 each operating company,for most companies at least twice a year, Paul Spence 7/7 and updated risk profiles are prepared.Similar exercises are Adam Crozier • 6/7 undertaken as part of the integration process for all major Tim Weller 6/7 acquisitions.The results of the company risk evaluations are ---_.�.—_______ m. _� _ assessed by the regional risk management committees° ° Both the regional committees and the group executive risk committee receive internal audit reports and regular reports on risks.They monitor the actions taken to manage risks. • • • Annual:R,, -t .nd &::.coups 20!4 G4S plc 59 • • • • Corporate governance report continued i n The process is carried out under the overall supervision of the The Audit Committee undertakes a high-level review of risk group executive risk committee,which comprises the group chief management and internal control each year.As well as the above financial officer,the group general counsel,the group processes and sources of assurance,the Audit Committee also communications director,the group human resources director, considers the following year end reporting in conducting this review: the group director risk and audit and the group head of risk.The • Summary of internal audit work including update on all open group executive risk committee reports to the group executive and audits with a deficient rating,analysis of results by region, to the Risk Committee of the board.The process outlined above is common audit findings and areas identified for improvement reviewed regularly by the board through its Risk Committee to in internal controls ensure its robustness and suitability to meet the group's needs. • Summary of internal financial reviews including significant During 20 15 the risk management improvement plan will focus on: accounting or financial control issues and common • embedding the risk management approach into businesses concerns identified ° Overview of ear-end financial control status reports completed across the group; • of year-end p • enhancing the quality of information being provided by businesses; by all businesses confirming adherence to group standards with • managing the group's residual risk exposure; any exceptions reported. ° progress on implementation of mitigation action plans; • A broad overview of the general risk management and internal o new and emerging risks; control systems in place during the year • • rolling-out enhanced contract approval and contract review ° Review of risk management processes and of the group s processes for large contracts piloted in the UK region across principal residual risks by the Risk Committee of the board the rest of group. ° External audit year end reporting on financial controls and accounting. Further information about the Risk Committee,its remit,work Further information about the Audit Committee,its remit,work during 2014 and its plans for 2015 can be found on pages 63-64. during 2014 and its plans for 2015 can be found on page 65-69. The internal control system includes clearly defined reporting lines The Audit Committee has confirmed that it is satisfied that and authorisation procedures,a comprehensive budgeting and the group's risk management and internal control processes and • monthly reporting system,and written policies and procedures. procedures are appropriate.The board has reviewed the group's In addition to a wide range of internal audit reports,senior • risk management and internal control system for the year to • management also receive assurance from other sources including 3 I December 2014 by considering reports from the Audit • security inspections,third party reviews,company financial control Committee and the Risk Committee and has taken account reviews,external audit reports,summaries of whistleblowing activity, of events since 3 I December 2014. fraud reports and risk and control self-evaluations. • G4S Government Solutions,Inc.("GSI')which was disposed of in November The group has in place robust internal control and risk management 2014 was governed through a proxy agreement under which the group systems for financial reporting.The group has a single global was excluded from access to operational information,therefore GSI was not • subject to the same risk management process as is applied to other group consolidation system which is used for both internal management companies.The board had however satisfied itself as to the adequacy of the reporting,budgeting and planning as well as external reporting. internal control processes adopted by GSI which included a risk review by an • The group has a comprehensive budgeting process with the budget external advisor being approved by the board.Forecasts for the year are reported quarterly.Actual results at business unit,region and group level are reported monthly and variances are reviewed.A programme of _. business internal financial reviews is performed by a finance team from either region or group to check the accuracy of financial reporting and compliance with the group finance manual. _ Compliance with the UK Corporate Governance Code The board's statement on the company's corporate governance performance is based on the September 2012 edition of the UK Corporate Governance Code,which is available on the Financial Reporting Council's website(https://www.frc.org.uk). The Listing Rules require companies to disclose whether or not they have complied with all relevant provisions in the Code and to report how the main principles in the Code have been applied by the company.The Code recognises that alternatives to following its provisions may be justified in particular circumstances if good governance can be achieved by other means,provided the reasons are explained clearly and carefully.In such cases companies must also illustrate how their actual practices are - consistent with the principle in question and contribute to good governance. The company complied throughout the year under review with the provisions of the Code.The Corporate governance report,together with the Audit committee report and the Directors'remuneration.report,describe how the board has applied these provisions. • • • • .30 G4S plc Air)ual Report and Accounts 20 i 4 • • • Main activities of the Nomination Committee during The Nomination Committee the year(%) — -– ----- --'.. —_ R ed?ev�rin z it e damvn is of - • 0%) . , Re,:ruitrnent of new NEN(50%) {!-., �. .•i' a. Slcces3ion planning ti • 'There have been no changes to the composition Extending terms o„ % apa>oins?er;t for NEiOs(20) 3 - of the board or its committees during 2014. P Nevertheless the committee has been active Refreshing the board to ensure that helnembership of the board is After the changes to the_board and the„board committees,made appropriate and where necessary refreshed. in 2013,it was felt that no changes were required during 2014, Both-Graha •Gibson and-Mark Seligman will but the chairmanship of the Audit Committee passed to Tim Weller leave the board in 20 15 and this has meant that following the AGM.Mark Seligman will retire from the board in the fitfure.composition of the board and its 2015 and stood down from the Audit Committee at the end of 20I 4.The Nomination Committee has therefore-begun a process committees have been given careful consideration:' to seek a new non-executive director.The specification for the ideal. - - - • John Connolly candidate was drawn up after discussion by the full board and the Nomination Committee Chairman Nomination Committee is being assisted by the external executive search consultant,the Zygos Partnership.Zygos has no other connection with the company other than as provider of recruitment • consultancy services to the Nomination Committee. _________.___..___..___..______._-____________-_._.-__________ — Grahame Gibson will also stand down from the board in 2015, - Meetings butthe board and the Nomination Committee have agreed not to Committee membership and attendance ,— — _attended . ------------- —— seek a replacement executive director at this time. • John.Connolly(chairman) 3 of 3 A number of the serving non-executive directors'terms of Adam Crozier 3 of 3 appointment expired during 2014 and the committee Mark Elliott 3 of 3 recommended to the board that such appointments be extended -—_____ --•------__ —°- — -° °- after consideration of the directors'independence,commitment to Responsibilities the role,their other commitments and the experience and qualities The Nomination Committee is responsible for making they bring to the board.When the directors concerned were also recommendations to the board on appointments and on members of the Nomination Committee,they did not participate maintaining a balance of skills and experience on the board and in the committee's deliberations. its committees.Succession planning for the board is a matter which Diversity • is devolved primarily to the Nomination Committee,although the The board's approach to diversity is set out on page 58. committee's deliberations are reported to and debated by the full _ . •board.The board itself also reviews more general succession Committee performance . planning for the senior management of the group. The performance of the Nomination Committee was reviewed • as part of the exercise undertaken by Lintstock to assess the The committee's terms of reference are available at performance of the board and each of its committees.Whilst the w,w.w.g4s.com/investors. Nomination Committee's performance was determined to have • • Succession planning been satisfactory,the review did identify additional issues which it The entire board has considered succession planning for the could consider.The committee has already begun to address senior management of the group in some detail during 2014 and, those issues. in addition,the Nomination Committee gave further consideration Priorities for 2015 to the succession plans for the most senior board roles. The committee's primary specific focus in 2015 will be the • recruitment of a new non-executive director.In more general terms though,it will continue to monitor carefully the need to refresh the . membership of the board and each of its committees and to ensure that membership has an appropriate range of talents and experience to fulfil their duties and to meet the needs of the group and its strategy over the medium and longer term.ft will also ensure - -that succession planning is given appropriate prioritisation. P,:;nun_;1?,...pert.and Accour;a 2011 G4S plc o■ Corporate governance report continued Main activities of the CSR Committee during the year(%) The CSR Committee • -- --- .64.. y - ,_ - - -4. 4 Xvioliff - -- — 'We are aware that both the inherent nature As part of the CSR Committee's focus on health and safety during of the group's activity and the numerous and often the year,the committee oversaw a number of initiatives such as the complex and challenging environments in which it roll-out of health and safety training to the senior management o ' s has a potential impact on societies. community and the Safety First campaign aimed at embedding Our task is to ensure that such impact is a positive 10 fundamental rules of safety in all businesses.As part of its normal one.The work of the committee focuses on health cycle of work,the committee received six critical country reviews and safety,business ethics and anti-bribery and (CCRs)during the year.CCRs provide important information to • senior management and the committee and are an important tool corruption and human rights to ensure it is closely to support those businesses where fatalities have occurred in aligned to the group's values.Good progress was assessing their health and safety management,raising awareness and made in health and safety during the year with the sharing good practices.The committee also reviewed the process safety rules campaign which took place across the for and policy on serious incident reporting and investigation. group and road traffic awareness material made As part of the annual review of the group's Business Ethics available to all businesses.However,too many of Policy,the document which defines what the group considers are our colleagues still lose their lives to work-related acceptable and unacceptable business practices,the committee incidents,therefore health and safety remains a reviewed and commented on proposed changes.In addition, priority in 2015:' the committee oversaw the review of the whistleblowing policy and Clare Spottiswoode practices in place across the group,which resulted in a number of CSR Committee Chair changes being made to better align it with the principles of the "Whistleblowing Commission's"code of practice in the UK This review also led to the selection of a new global whistleblowing Meetings hotline system,which will be implemented during 2015.A new Committee membership and attendance _ attended case management tool which will enable the capture of information on whistleblowing cases across the group and the analysis of Clare Spottiswoode(chair) 3 of 3 trends and issues raised in a more systematic way is also due to Winnie Kin Wah Fok 3 of 3 be implemented. Paul Spence 3 of 3 The CSR Committee receives regular updates On current issues and Other regular attendees include Grahame Gibson,one of the allegations from the group's internal audit,human resources and executive directors of the board,the group communications CSR teams. director and the group human resources director.When Grahame Committee performance Gibson steps down later in the year,Peter Neden,Regional The assessment of the committee's performance concluded that President for the UK and Ireland region and a member of the it performed well in monitoring compliance with CSR policies and group executive committee will succeed him as the regular reviewing the integration of CSR processes within the group's executive attendee at CSR Committee meetings.Peter has already broader risk management regime.The committee's targeted attended one meeting in 2015. approach focusing on a small set of issues was found to be effective. Responsibilities Priorities for 2015 The CSR Committee reviews and monitors the group's CSR Priorities for 2015 are to drive continued improvements in strategy,which includes developing policies on various CSR-related health and safety and to monitor and review the implementation matters for consideration by the board and reviewing the activities of enhanced whistleblowing systems and case management tools of the executives who have responsibility for CSR matters.The CSR across the group. Committee also reviews and monitors how the group performs against relevant policies.The committee oversees reporting on CSR matters and the company's separate CSR Report for 2014,which provides more detail on the group's CSR strategy and progress made during the year,is available at www.g4s.com.Further details of the committee's responsibilities can be found in the committee's terms of reference which are available at www.g4s.com/investors • • G45 plc :, • • • • • • • • • • • • Main activities of the Risk Committee during the year(%) The Risk Committee . • Large contracts/ - ids appr-vai I (t sin) • h . T s governance�� (4S%) In dept=ra,iew of � . sper..ific high risk >.,. '. calla acts --- ' - ,S 10 0-, t. :.. L___ In 2013,recognising that risk oversight and risk cam,_-nom"risk mrlagernent governance are vital to the continued growth • PO%) 5 and profitability of the group,the board constituted In 2014,a significant amount of the Risk Committee's time was a separate Risk Cornmittee.The Risk Committee allocated to risk govemance.The committee reviewed and was tasked with providing robust oversight of . approved the revised group risk framework developed in response the management of risk within the group.We have to the report commissioned from Deloitte during 2013.1n doing = so,the committee sought to ensure that the proposed changes made considerable progress in this respect.During would reinforce the group by providing a sound risk management the past year,changesto the governance structures and internal controls system to identify the risks facing the group and processes were implemented.These are now as a whole,assess their likelihood and impact,develop robust well embedded in the business and are supported mitigation plans and define clear control processes.Throughout the — by a new risk management information system.In year the committee received regular reports on the progress of 2015 we will,.focus on ensuring that the business• its implementation. gets the maximum value from the investments The committee also defined the company's risk appetite and made in 2014 by focusing on the quality of risk developed a more precise and formal group risk appetite statement assessments=and-on making measurable progress which was subsequently approved by the board. on planned mitigation actions at all levels of the business:' The principal residual risks to the group's 2014 business plan were reviewed and approved'and reports from the group risk John Connolly function on implementation by management of mitigation actions Risk Comm ittee Chairman to address them were also received.The committee noted that the progress in reducing residual risk levels over the year across the group was variable.In some cases,this was due to changes external —— — --— — — to G4S such as an increase in terrorism threats,political instability Meetings P Committee membership and attendance attended and civil unrest in certain regions,while in others the level of investment and timescales required to drive improvement in specific John Connolly(chairman) 3 of 3 areas needed to be recognised.For example,although there was Ashley Almanza 3 of 3 significant progress in the approach to health and safety across the • Himanshu Raja 3 of 3 group during 2014,more time is needed to ensure new practices become fully embedded in all businesses and translate into a Paul Spence 3 of 3 significant reduction in the risk of injuries. Tim Weller 2 of 3 The committee tasked management with ensuring that the right Other regular attendees include the group general counsel,and balance is struck between the level of residual risk and the the group director of risk and audit allocation of the group's resources to opportunities for improvement Further details of the principal risks and uncertainties Responsibilities facing the business are set out on pages 44 to 50. The Risk Committee advises the board on the group's overall risk appetite,develops the group's risk management strategy,advises the Audit Committee and the board on risk exposures and reviews the level of risk within the group and assesses the effectiveness of the group's internal control and risk management systems. - • The committee's composition ensures that a broad-ranging set of . skills and experience come together to look at how the group manages risk in the business.The Risk Committee will consider all • • V . - significant risks to the group,not only financial risks.Further details _ can be found in the committee's terms of reference available at - .- vwww.g4s.com/investors. - .1..!nual Percrt. r.(.1.A.ccl_i't_20;=1.G4S plc -:A . • Corporate governance report continued Contract risk management was another key area of focus for Committee performance the committee which oversaw the inception and implementation in The assessment of the committee's performance showed that the the UK of new review processes for new and ongoing contracts. composition of the committee and the chairman's leadership were With regard to new contracts,the group risk function was tasked highly rated.It was also reported that the committee was effective with reviewing and improving contracts"onboarding"processes to in providing oversight of the controls in place over significant risks. ensure that,in addition to financial assessment criteria,other criteria focusing on the ability to win and deliver the opportunity were also Priorities for 2015 considered.These changes to the group's contract risk managements of focus for 2015 will include reviewing progress on were implemented in the UK during the year and implementation embedding a risk management approach into businesses across across the rest of the group is planned during 2015. the group with a view to increasing the quality of information being reported,reviewing the group's residual risk exposure and The committee will receive regular reports on its implementation progress of mitigation action plans,as well as reviewing new and __ and key themes identified through these contract reviews are to emerging risks. be reported regularly to the committee. • The committee also conducted a review of two large high-risk _ and complex on-going contracts in the UK and a sub-committee _ • ° . considered a major contract bid,the risks associated with it and - .,- proposed mitigation plans. or, 1 t lo , , 31. ;) . ...S:e I' -f L ,cc.,, -:1-1401— v,-0.- \ ..., _. ,, .__ ct. J 4iii,.., . �, o is v -. a„4 I r " . ,mss. . t��, ' '` 't a 4 _ , �." �, ,1 ;1 :y, -_.�.._ Wt., ' - •- ' Aisi - 1,,,,i' f,r,- - i; , ,..$4 ,c. , ,, . --- . ...-„.., .-. „s , x r yr 1 • v• ;-..t.-- e L` . ' , n • 1 _ _,It-8 4 p0- ..-. , , i j ,,,...1-, : 1. ' '' #k+Fjf' ~0''') -% ,A Ike+ f ' . f ,-,'t .PO' 'f -�r f� 'I[ s { r. ,,,. 14 i, , 1 ' 'S ' _ r , */ ' c •!ii,,,- -+�1 ? , relict, ► R;S5 y`�#tK`test r- •h�, i :4', ` t, ' % T z . , < ,, .�I t 4 _ '' - �.v*. • ... -_,If. 4. ,,..., 4,° 1`c , ''.#' 4 -`. ,� -z:,r p/. , i<` v.,--,,,,d 4_, fr ,Na.. ' `tn: .....-.' -,- ....,-'..,. _ 4 , - , ---"-. 5s .- . %(, ,-;-. - Ati,..,,----"-•4.,,',' ' -4,. A,T,..."1,-._.-..:','-ie.."' --.-'-'''''s''' LAS44.44,— ''14‘- -,-, ' -' -kt., litikeikitig; irlisNr.' 5. r f t._` t s"r` s 1 .R. -,'`1't`•'i C•:+I. •'t• ' 'fit; ti:(4••91'`a�'~l fi " y -kti � ' ' ��" '""y0'i,.Z b .M t 'Y ii -, '"#,,'1°q m t---,-', ' ,!..1'r _4;1. ' , s f 4 Mr��1 #S r�,v � -�. � r � •ice'liN f' ,�...,5'�" f` - ., 1 0.-•, .i~ts Pr 'A_l",v- �''. i'y 'N�'; , 1 >. � q"J , r'�' F' Øb '` I, • ;t ' +,: •4 G4S plc,A',r�ruai R per and Accct;;- s .101 4 - The committee members were selected for their range of • • • • commercial and financial expertise,necessary to fulfil the • The Audit Committee committee's responsibilities.Each member ofthe Audit ---_ .— -- - Committee brings significant and relevant experience gained at senior management level.Their skills and experience are set out • '.' , > • on pages 52 and 53.The Audit Committee's chairman MrWeller is, • and Mr Seligman was,considered by the board to be members of the Audit Committee with recent and relevant financial experience. ii, M Audit Committee meetings are attended by the chief financial officer,the group financial controller,the head of group internal audit,the company secretary,the group director of risk and audit • • and representatives of the group's external auditor.The chairman • 7 • of the board and the chief executive also attend meetings from time . to time in agreement with the chairman of the committee. — After each meeting,the chairman of the committee reports to the "As announced in last year's report,I succeeded board on the matters which have been discussed. Mark Seligman as chairman of the Audit Responsibilities g Committee after the AGM in June 2014.Mark The committee makes sure there is effective governance of the remained a member of the committee until the group's financial reporting and internal controls to ensure the end of the year and I.am very grateful for his integrity of its financial statements and adequacy of related support during this time.During the year;the disclosures.The committee also has oversight of the performance group made significant progress in strengthening of both the internal audit function and the external auditor.Further the organisation in terms of finance,internal audit details can be found in the committee's terms of reference available and risk managementThe Audit Committee's work at www.g4s.com/investors: • focused on the group's system of internal controls, Main activities of the Audit Committee during the year(%) • -the quality of our group financial reporting and " • the effectiveness of the external and internal audit processes.We also conducted a tender ,•nv for the role of the group's external auditor.This ` ``""' • has resulted in the proposal to shareholders at the 2015 AGM-to confirm-the appointment of sn;) PricewaterhouseCoopers LLP as group auditor." ,, Tim Weller —^ f Audit Committee Chairman ern;1`,:adit =r n non-3[icic 5er/i_es Committee membership and attendance Meetings attended • / • Scheduled Unscheduled Tim Weller(chairman)' 4 of 4 2 of 2 _ E44ectivaness of financial ccznuais and " • Mark Seligman2" 4 of 4 2 of 2 • risk rnanu-arnei„procedure;(25f.) Adam Crozier 4 of 4 2 of 2 The committee has an annual agenda which includes standing items • • Paul Spence _ 4 of 4 2 of 2 that the committee considers regularly,as well as specific matters that require the committee's attention. I. Tim Weller became chairman after the AGM in June 2014. 2. Mark Seligman stood down as chairman after the AGM in June 2014 and - as a member on 31 December 2014. . • • • • • • .. Annual Report and L`ccourts 20.1 4 G4S plc 65 • • • • Corporate governance report continued _- Significant issues considered by the Audit Committee The primary issues considered by the committee in the 2014 financial statements,and how these were addressed,were: • • • -_- -Significant issue considered Mitigation/Action _ Revenue recognition on-UK Government and other contract-related•provisions - V • The group delivers outsourcing services that can be complex During the year management enhanced the processes and controls for contract reviews and now in nature.There is a risk that billing and revenue recognition reviews on a quarterly basis the top 25 contracts for each region,as well as those contracts with on these contracts is not in accordance with contractual low profitability.In addition,a new process of 360 degree contract review on the largest and most entitlements or that-contracts are forecast to be loss making complex contracts was introduced,covering financial,legal,reputational andoperationai risk over the remaining life of the contracts and therefore criteriaThese reviews are attended by at least one member of the group eXecutive-committee. provisions may be required.The identification of potential loss malting contracts and measurement of any related provision Each quarter,the Audit Committee receives a report summarising the results of these requires judgement to be exercised and there is a risk that reviews and the contract judgements made.The committee was satisfied that the • provisions are not estimated appropriatelyThis was aprime judgements made by management were balanced and_the recommended provisions were .• . area of focus for the Audit Committee and external audit. appropriate. Goodwill impairment testing _ The total value of the group's goodwill and other intangible The committee addressed these matters ttarough'r•eceiving reports from management assets as at 3 I December 2014 was£2.I bn and relates to a outlining the basis for the assumptions used in relation to terminal growth,resulting significant number of historic acquisitions.The estimation of the . headroom and sensitivities applied by management and alternative valuation bases such recoverable amount of goodwill supported by the group's cash as reference to transactions for similar assets. generating units requires significant judgement primarily in relation to the achievability of long-term business plans and The committee was satisfied with the carrying value of goodwill. macroeconomic assumptions and related modelling assumptions . underlying the valuation process.During the year there have been some changes in material contracts that required further focus on the review of future projections Consequently this continued to be a significant area of focus for the committee, V• • and a prime area of external audit focus - • • Taxation The group operates in many tax jurisdictions,including — — The committee asked the external auditor to ensure that taxation constituted an important countries where tax legislation is not always applied area of focus during the external audit and to report on key tax issues identified during the audit • consistently and under certain complex contractual_ , - process.The committee also asked management to pay particular attention to the review of the ' circumstances where the responsibility for tax arising is level of estimation of tax provisions and contingencies in the financial statements. . not always dear The committee was satisfied with the report from the external auditor and that the provisions in the financial statements are adequate. Risk of management override of internal controls The group operates in a large number of diverse locations The committee reviewed the overall control environment of the group,and monitored . with a significant number of local financial systems and progress against the approved group internal audit plan for the year the different financial •- -processes which could potentially lead to management control and balance sheet review processes and the output of the whistleblowing process.. override of internal controls.During the year,,the group has • In addition,the committee received regular updates on the implementation of risk and audit • continued to make significant investment in strengthening committees in each of the regions,the consistent application of the different financial capability in finance,internal audit and risk,and introduced . control processes across the group,and the half year review of financial statements by stronger internal controls and group oversight to mitigate the external auditor • these risks.These include monthly reviews of the quality of earnings,a comprehensive internal audit plan and a regular The committee also examined significant accounting estimates and judgements,and the cycle of reviews of local business units or country balance supporting documentation for evidence of fraud or bias that may represent a risk of sheets and controls. material misstatementThe committee satisfied itself that the risk of material misstatement• resulting from management override of internal controls was not significant Pr esentation of the income statement -------_—__------------- _---- __ —__ —____ _ --_ In order to give better understanding of the underlying The committee discussed the rationale for this presentation with management and with performance of the business,the underlying results of the external auditor and concluded that separate presentation of the restructuring charges the group are presented with separate disclosure of and other specific items provides users of the group's financial statements with added clarity restructuring changes and specific items. and transparency and therefore facilitates a clearer assessment of the group's performance over time. Management confirmed to the committee that appropriate accounting policies,guidance and controls had been exercised over the treatment of restructuring items and other. specific items,allowing the committee to be satisfied that the presentation and disclosures were fair,balanced and reasonable. Going,concern and liquidity risk The group has net debt of£1,578 million and the board The committee reviewed the group's forecasts of cash flow and net debt taking into account . • has set a goal of net debt to EBITDA of<2.5 times over reasonably possible risk sensitivities as well as the financing facilities available to the group; the medium term. - noting the group had renewed its revolving credit finance facility for up to a further seven years The committee also reviewed compliance with covenants and the availability of headroom in relation to those covenants. The committee was satisfied that the group adopt the going concern basis of accounting • -- in the financial statements and recommended the same to the board. • iE G4S plc Annual Re,::;rt arc rAccou.-,`s 2 0I"4 • • • • Internal control • a risk-based internal audit plan,as well as changes to the reporting The group has in place robust systems of internal control and risk and communication on a quarterly basis of summary audit-findings • management for financial reporting.Their main features include • to the regional risk and audit committees,had resulted in clear clearly defined reporting lines and authorisation procedures,a improvements.The need to ensure the efficient coordination • - comprehensive budgeting and monthly reporting system,written • of initiatives from internal audit,the finance team and the risk policies and procedures and the use of a single global consolidation function was identified and addressed through the creation of system for both internal management reporting,budgeting and a working group. planning as well as external reporting.The group budget is approved In October 2014,the group director,risk and programme ••. •by the board.A regular update is provided by the group CFO on assurance was appointed to the combined role of group director of the outlook Actual results at business unit,region and group level risk and audit.The group internal audit team was reinforced are reported monthly and.variances reviewed.A programme of significantly,both-'-through increasing.the size of the team and also • business internal financial reviews(IFRs)is performed by a finance its expertisethrough the addition ofa number of-specialists in t he team from either region or group to check the accuracy of financial areas of contracts and IT, _ _ - reporting and compliance with the group finance manual. . Each year the carmm�rttee reviews and approves the internal audit ;, The system is designed to ensure the inter of financial reporting sY g g plan.The 26'1:5* is more risk based than its predecessors and and the committee's responsibility is to ensure these-internal -covers 55%of the group's businesses and 83%of the group's controls remain effective.The committee does this primarily through _ . reviewing the process followed by management to review the revenue.Reports from internal audit are reviewed at each committee meeting and the committee monitors senior group's control environment such as IFRs. management's responsiveness to is sues raised in these reports. The committee also receives quarterly reports from group External auditor internal audit,summarising the results of internal audits carried out The committee considers the reappointment of the external Open audits with a deficient rating,as well as common audit auditor,including the rotation of the audit partner,•each year and findings and areas identified for improvement,any instances of alleged fraud,in particular allegations of fraud involving employees assesses its independence on an ongoing basis.The external auditor • in roles with responsibility over internal controls,are also included. is required to rotate the audit partner responsible for the group audit every five years.The current external auditor,KPMG Audit Plc In addition,during 2014,the group introduced regional risk was first appointed in 2005 and the current lead audit partner has and audit committees in each of the regions formed by regional been in place since June 2014.KPMG undertook the audit of the management,group management and internal and external auditors. group's consolidated accounts for the year ending 3 I December • They bring together a formal review of risk management for each 2014,having been reappointed at the company's 2014 AGM. region,internal and external audit issues arising and any significant Last year the company indicated that it planned to put the external judgements in the financial statements.The Audit Committee audit engagement for the 2015 financial year out to tender and reviews the issues arising from these regional risk and audit the associated tender process is outlined on page 68.The'Big Four' committees.The Audit Committee has confirmed to the board audit firms were invited to take part in the tender..After discussion that it is satisfied that the group's risk management and internal with the committee,the company and KPMG mutually agreed •control processes and procedures are appropriate. that KPMG would not participate in the tender,noting the longevity Internal audit review of their appointment.Responses to the audit tender were assessed • The Institute of Internal Auditors suggests that internal audit -using detailed evaluation criteria which incorporated key aspects functions are subject to an external assessment at least every - of the Financial Reporting Council's audit quality framework, five years.In May 2013,the Audit Committee commissioned including organisation,capability and service delivery,audit quality, • an independent review of the group's internal audit function audit approach,and team capability and frt.Having concluded the by Deloitte. process at the end of September 2014,the committee recommended to the board that PricewaterhouseCoopers LLP Deloitte reported in November 2013 and found that the existing (PwC)be appointed as the group's external auditor for the - internal audit function was organised and diligent and made some 2015 financial year.A resolution to this effect will be put to the suggestions for improvement in certain-areas.The committee adopted Deloitte's recommendations aimed at strengthening the shareholders at the companys AGM on 4 June 2015. internal audit function and placing more emphasis on auditing the Subject to shareholders'approval,PwC will take over the audit "third line of defence"activities.Resources available tothe internal engagement contract for the year ending 3 I December 2015. • audit function were increased significantly. There are no contractual obligations restricting the company's • A follow-up report from Deloitte was commissioned to assess choice of external auditor. - -• the progress-made by the group internal audit function.The report, A tri-partite transition plan setting out the agreed principles, submitted to the committee in August 2014,concluded that, framework and timeline to ensure the efficient and effective transfer although good progress had been made,certain areas required of the external audit arrangement from the incumbent to PwC. further work Several initiatives,such as increasing collaboration has been prepared. • between the risk and group internal audit functions,developing- • • • • - Annual Report and Accconts 20 i'4 G4S plc 67 . • • • Corporate governance report continued • Audit tender process • - In'April 2014,having considered proposed changes to the UK Corporate Governance Code and the recommendations of the Financial Reporting Council,the company announced its intention to put the external audit engagement for the 2015 financial year out to tender.The process the company followed is outlined below. RFP development A request for proposal document was developed following consultation between the chairman of the Audit Committee and the chief financial officer and distributed to the four largest ('Big Four')audit firms in May 2014. • Expressions of interest received Having received the request for proposal document, - each of the participant audit firms completed a confidentiality • undertaking and a conflict of interest declaration and affirmed its intention to respond. • Preliminary meetings A preliminary meeting was held with each of the participant • audit firms and members of the Audit Committee and chief financial officer in early June 2014 in order to establish the committee's overall requirements and the significance - attached to the selected evaluation criteria. Data room access Access was then granted to historic-information held within an externally hosted virtual data room throughout June-July 2014. - Meetings with G4S senior management A series of meetings and conference calls were held during June July 2014 between the participant audit firms and members of the group finance leadership team,company secretariat and regional finance directors in order to supplement the data room material. Written proposals A written response to the request for proposal was received from participant audit firms in early August 2014 together with a preliminary indication of the firms'independence to act as the group's auditor Evaluation and assessment During August-September 2014,these proposals were • of the proposals assessed and scored against the group's weighted evaluation criteria by executives from the group finance leadership team, company secretariat and regional finance directors. High-level meetings During August-September 2014,additional meetings were held between participant audit firms and the chairman of the Audit Committee and,separately,the chief financial officer. Presentations At the end of September 2014,participant audit firms made a final presentation of their overall proposals—and confirmed • their independence to act as the group's auditor—to the members of the committee,chief executive officer and • chief financial officer. - .. On the basis of the above—and in conjunction with C; `�L�r - the evaluation of the audit firms'written proposals— ____.�_______L_.��_.� - --- the committee recommended to the board that PricewaterhouseCoopers LLP be selected as the group's • : = external auditor for the 2015 financial year• Boa-d decision The board accepted the committee's recommendation at its October 2014 meeting. • • • 6E G4S plc r•.a u a rie; and cccunti 2_01 y • • • • • Non-audit services Effectiveness of the external auditors To ensure that the independence of the audit is not compromised, A combination of formal and informal processes is used in the the committee has put a policy in place on the non-audit services assessment of the effectiveness of the external audit process. • that can be provided by the external auditor,the relevant approval A formal questionnaire is completed at the end of the audit by process for certain services and those services the auditor is members of the audit committee,group finance department and . prohibited from providing.In essence,the external auditor is the finance directors of significant operations across the group and • prohibited from providing services that could create a conflict of the output is reviewed by the Audit Committee.The assessment of interest,result in the audit firm auditing its own work or result in the external audit concluded that it remained effective and the the performance of management functions.The committee has external auditor independent pre-approved certain services which can be provided by the auditor Committee performance subject to specified fee limits above which further approval is required.All other services would require prior approval by The assessment of the committee's performance showed that the the committee. committee remains effective at discharging its responsibilities and in particular in reviewing the quality of the group's financial reporting. Every year the Audit Committee reviews its policy on the provision of non-audit services by the external auditor.This year the Audit Priorities for 2015 Committee's review was carried out in light of the new EU The priorities for the committee for the next year will include regulatory framework for statutory audit,which was adopted in overseeing the transition of the group's external audit to the new April 2014 and is due to come into force in June 2016.The review -auditor,reviewing the implementation of further changes to the resulted in a number of amendments to the non-audit services internal audit function and testing the'effectiveness of changes made policy to better align the policy with the proposed EU reforms. to the internal controls environment. The list of pre-approved services,which includes consultation and due diligence services related to mergers and acquisitions,audits of employee benefit plans,reviews of internal accounting.and control policies and general advice on financial reporting standards, was amended to include work of a reporting accountant nature a - (for example,stock exchange circulars or comfort letters). - - The approval process for non-audit services was also amended • so that a two-tier approval process is now in place,whereby any engagement with the external auditor for pre-approved services above a certain threshold requires the joint prior approval of the r- - • Audit Committee chairman and the chieffinancial officer and any • engagement with the external auditor for any other services or ._ for pre-approved services above a second,higher,threshold requires - - prior approval from the committee. „. _ The provision of any non-audit services by the audit firm must, in any event,comply with the requirements in that regard of the Auditing Practices.Board.The auditor,KPMG Audit Plc,has written • to the Audit Committee confirming that,in its opinion,it was . independent for the period through to 5 March 2015. . Details of the fees paid for audit services,audit-related services and non-audit services can be found in note 10 to the financial statements.The external audit is a complex exercise involving more than 1,000 KPMG personnel covering over 1 1 0 countries in which G4S operates. In anticipation of taking over the audit engagement contract for the year ending 31 December 2015,in order to ensure independence, PwC had previously terminated all services which fell within the scope of the non-audit services policy by 31 December 2014. Since the Audit Committee is keeping under review whether and V when to bring tax compliance and tax advisory services within the scope of the non-audit services policy,it is anticipated that the vast majority of tax compliance and tax advisory services being undertaken by PwC will have either terminated or transitioned by 30 June 2015.There were around thirty such services ongoing across the group at the beginning of.2015,however,these are deemed insignificant both individually and in aggregate. ,==,r,ry..iai Report and AcceuiYi' -1 G4S plc 69 • • • Directors' remuneration report . . In line with our policy,any annual bonus due to the directors in excess of 50%of maxim um will be deferred for a period of The Remuneration Committee the years and paid in G4S shares. -- -- — -- • Although operational performance in the year was strong,awards • that had been made under our performance share plan in 2012_ did not pay out.The threshold level of performance over the three-year performance period of the plan that ended in 2014 • was not met for either-relative TSR or EPS growth.This largely reflects the challenges the business has faced,and now addressed, J r in the earlier years of the performance period. ' How we implemented our remuneration policy :T _ . + When operating the policy,the committee takes account of the - _overall approach and structure of employee reward across the 4‘, group and pay decisions for the wider:workforce as well as the t results of relevant benchmarking data.It is the committee's intention thgt`pay should reflect the responsibility attached to the role "I am pleased to present the directors' fulfilled,individual performance and other relevant market remuneration report for 2014.As indicated by information.Our remuneration must allow the company to attract, John Connolly and Ashley Almanza in their retain and motivate directors who will lead the group in the long respective statements,iri2014 we made term interest of its stakeholders. considerable progress in the implementation of Base salary increases our strategy and improved financial resufs.Those As disclosed last year the CEO's salary was increased to£890,000 results are reflected in the pay outcomes for • with effect from I January 2014,whereas salaries for other • our executive directors." executive directors were unchanged.This year both the CEO Mark Elliott ' and CFO received a salary increase from 1 January of 3%. Remuneration Committee Chairman This increase took account of market salary levels as well as salary increases elsewhere in the group.As announced in October 2014, Grahame Gibson will be retiring from the board at the AGM in 2015 and his salary will remain unchanged again in 2015. The Remuneration Committee spent much of its time communicating with management on the implementation of How we operate our annual bonus plan our new annual and long term incentive systems.We focused There were no changes to the way in which we operated our on ensuring that these systems supported leaders both in • annual bonus during 2014.For 2015,the committee has decided delivering desired financial results and in the delivery of our strategy to operate the annual bonus with financial measures of In particular,we discussed non-financial measures of health and performance of underlying group earnings and underlying group safety and group values and the manner in which they interact with operating cash flow before capex.The non-financial measures of our financial measures.We also discussed those items to be performance are aligned with the group's strategic objectives and included in and excluded from our underlying performance metrics will continue to include health and safety.Underlying group earnings to ensure they reflect the highest quality outcomes.We are satisfied will replace the underlying group PBTA financial performance that our new leadership team has embraced and communicated measure under the annual bonus for 2015,as we consider this to those principles as they have delivered the new incentive systems be a better indicator of the group's performance going forward. across the group. Our long-term incentive plan How performance is reflected in remuneration outcomes We gained c.97%support from our shareholders for our new • • There was strong growth in underlying group profit before •long-term incentive plan at the AGM in 201 4.We plan to continue tax and amortisation(PBTA)and underlying group operating cash to operate our long-term incentive plan unchanged in 2015. flow,which reflected strong operating performances overall in UK Code compliance both emerging and developed markets.At group level,the stretch We had anticipated the changes which were introduced by the financial targets set for the annual bonus were exceeded,resulting revised UK Corporate Governance Code in September 2014 with in maximum payouts under the financial element of the annual respect to malus and clawback.Our incentive arrangements are bonus for two of the executive directors. already subject to malus and.clawback as explained on page 75. • Scoring for non-financial metrics ranged from 57%to 98% of maximum.As indicated above,we place a great deal of As a result,no changes were needed to our incentive arrangements emphasis on health and safety across the group,and take our to comply with the new requirements in 2015.The Remuneration responsibilities to our employees and to wider society very Committee's terms of reference have also been amended to bring seriously.As there were a number of health and safety incidents them into line with the new Code requirements and can be found in the year the Remuneration Committee took these into. on our website at www.g4s.com/investors.. account for the bonus outcomes for all of our senior executives. Full details of the bonus outcomes for each of the executive directors are set out on page 79. • 70"'G4S-plc Annual Repot and';cccun 20 0 yr. • Main activities of the Remuneration Committee Committee membership and attendance Meetings attended during the year(%) Scheduled Unscheduled Mark Elliott(chairman) 3 of 3 2 of 2 _:r.:as pokies I --- Winnie Fok 3 of.3 . 2 of 2 (6 74 I Mark Seligman 3 of 3 2 of 2 • Clare Spottiswoode 3 of 3 I of 2 anC-CT End �� rr.3 r::3RS gee o,ernar,- �' (9% Responsibilities i 3%) "— The Remuneration Committee is responsible for all elements of - • lel_:kY Ctirr ioFr�l the remuneration of the executive directors,other members of . - ',-'.- .+• ,,,,,,,,,,.,:en the group executive committee and the chairman of the board. - .. ", (' z) It also agrees with the board the framework and policy for the . ° remuneration of other senior managers of the group and reviews . (n.I%) _ and recommends the remuneration of the company secretary. 'TIP(23%) In determining•remuneration policy,the committee takes into account a variety of legal and regulatory requirements,and the - 0 Consulting with our shareholders . -relevant provisions of the UK Corporate Governance Code. g We are committed to consulting with our top shareholders on • V 5 key remuneration issues.In late 2013 and early 2014,we consulted fil The committee also determines policy on the duration,notice with 13 of our largest shareholders as well as certain shareholders` period and termination payments under the contracts with the representative bodies in respect of the proposed new LTIP and the executive directors,with a view to recognising service to the - directors'remuneration policyTheir feedback caused us to add company whilst ensuring that failure is not rewarded and that the • clarifications on our policy statement and to alter some of the duty to mitigate loss is recognised. .performance measures in the new LTIP.I will be available to answer The committee approves the design and determines the targets questions and listen to the views of our shareholders at the and formulae for performance-related pay schemes operated,by ,• , forthcoming Annual General Meeting. the company.It approves the eligibility of executive directors and -.:... __ Retirements other group executive committee members for annual bonuses and • benefits under long term incentive plans and assesses_performance. `-• . Trevor Dighton stepped down from the board at the 2013 Annual against the objectives of those plans. General Meeting and retired from the company on 30 July 2014. Details of Mr Dighton's termination arrangements are set out in The committees terms of reference are available on the company's - detail on page 81. website at w.w.w.g4s.com/in■estors. As reported above,in October 2014.it was announced that Our remuneration approach Grahame Gibson would retire from the board at the Annual We seek to attract and retain the best people whilst ensuring that General Meeting on 4 June 2015.The committee will consider the remuneration policy and practice drive behaviours that are in the retirement arrangements for Mr Gibson over the coming the long-term interests of the company and its shareholders. - months,and we will provide full disclosure of these arrangements Fixed a in next years report. • base pay I would like to take this opportunity to thank Mark Seligman, • retirement benefits . who will step down from the Remuneration Committee this year • other benefits when he leaves the board at the AGM in 2015.The committee has — - i. `Short-term:incentives- • ,. . • - benefited greatly from Mark's knowledge and experience. • annual bonus plan(one year) • • The committee's performance �;Y-�; ,_,^ ' The committee's formal performance review carried out at the end L ',_a7VtI TC.stet __ _ `- . 1 • of 2014 concluded that the committee was effective and continued ° Long term incentive plan(three years) to perform well.In particular,the committee had achieved its goal to have greater involvement in the operation of incentive schemes Remuneration Policy . across the group and to monitor the level and structure of - The company's remuneration policy for directors was set remuneration for senior managers across the group. out in full in the company's 201.3 Annual Report and Voting on remuneration Accounts on pages 66 to 72 and can also be found on the company's website.ft was approved by shareholders at the The annual report on remuneration will be put to an advisory company's Annual General Meeting held on 5 June 2014 with vote at this years Annual General.Meeting,and we look forward 98.38%of all votes cast in favour.The policy refers to a new to receiving shareholders'support once again this year. long term incentive plan which was also approved at the Mark Elliott 20 14 Annual General Meeting,with 96.88%of all votes cast • Remuneration Committee Chairman - in favour.That policy came into effect on 6 June 2014 and 26 March 2015 V will continue to apply for up to three financial years unless - - -a new or revised policy is approved by shareholders in the -meantime.No changes are proposed.For convenience a summary of some of the main features of the policy is set • - out on pages 72 to 77 below. . .-,nf u_:a a n d ts 20 .4-G4S plc 7 I • • • Directors' remuneration report continued . Directors'remuneration policy—summary Remuneration policy for executive directors • • Base pay Purpose and link to•strategy In determining salary increases,the committee considers .. - Base pay is set at competitive levels in order to recruit and market salary levels including those of appropriate comparator retain high calibre executives with the skills required in order companies. to manage a company of the size and global footprint of G4S. Ordinarily,annual salary increases would be no more than - The level of pay will reflect a number of factors including the average annual increase across the group.However;in • individual experience,expertise and role. exceptional circumstances a higher level of increase may be awarded,for example: Operation following a significant change to the nature or scale of Reviewed annually and fixed for 12 months commencing the business;or 1. I January.Interim salary reviews maybe carried out following • following a significant change to the nature or scope of significant changes in role,scope or responsibility or at any g g g p the role;or other time at the committee's discretion. • for a new appointment,where the base pay may initially • The final salary decision may also be influenced by role, be set below the market level and increased over time, experience,individual and company performance;internal as experience develops and with reference to the individual's relativities and increases for group employees. performance in the first few years in the role. Maximum opportunity Where exceptional increases are made we will fully disclose oP�rt and explain the rationale for such increases. Actual base pay for each executive director is disclosed each year in the Directors'remuneration report. Performance measures None,although individual performance may have a bearing on salary increases. • • • Benefits • Purpose and link to strategy - Maximum opportunity As with base salary,a suitable range of benefits is made maximum benefits per director per annum: available in order to recruit and retain high calibre executives. holidays—30 days Operation • car allowance—£20,000 business related local transport—£40,000 • Executives are entitled to a number of benefits comprising • for financial advice,expatriate benefits and relocation paid holiday,healthcare for themselves and their family and life - expenses,the expense will reflect the cost of the provision • insurance of up to 4 times base salary,car allowance,business of benefits from time to time but will be kept under review • related transport,limited financial advice from time to time by the committee and expatriate benefits where relevant A relocation allowance other benefits granted at the discretion of the committee reflecting reasonable costs actually incurred will be paid. up to 3%of base pay per annum per director Other benefits may be granted at the discretion of the • reasonable business expenses which are reimbursed are • Remuneration Committee. not subject to a maximum,since these are not a benefit to Reasonable business expenses in line with G4S'expenses the director policy(e.g.travel,accommodation and subsistence)will Any allowance in relation to relocation will provide for the be reimbursed and in some instances the associated tax will reimbursement of reasonable costs incurred. be borne by the company. Performance measures None. • • G4S plc ;---, ∎..;ai-t r> and AccrSu as 20 i • Annual bonus Purpose and link to strategy Performance measures Rewards the achievement of annual financial and strategic Typically,executive directors'bonus measures are weighted business targets and delivery of personal objectives. so that Deferred element encourages long-term shareholding • between 70%and 85%of the bonus is based on achievement of challenging financial performance measures and discourages excessive risk taking. (e.g.profit before tax and amortisation,organic growth, Operation cash-flow measures,etc.),with each measure operating Awarded annually based on performance in the year independently of the others;and Targets are set annually and relate to the group and/or , • the remainder is linked to personal and/or non-financial the business managed by the executive. measures,which are strategic or operational in nature. Bonus outcome is determined by the committee after the Each year,the committee may use its discretion to vary the year end,based on annual performance against targets. exact number of measures,as well as their relative weightings, 0 and this will be disclosed in the annual remuneration report Bonuses are paid in cash,but executives are required to defer any bonus payable in excess of 50%of their maximum bonus As a result of the number of factors taken into account in entitlement into shares.Deferral is for a minimum period of determining bonus,there is no minimum pay-out level. three years.Dividends or equivalents accrue during the For illustrative purposes,in the event that only threshold has deferral period on deferred shares. been achieved,pay-out would be 35%of maximum,rising to full pay-out should achievement of a stretch performance Bonuses are not pensionable. level be achieved for all measures assuming the non-financial Maximum opportunity performance measures were satisfied. Maximum opportunity of 150%of base pay per annum for The deferred element of the bonus is not subject to any the CEO and the CFO. further performance measures but is subject to clawback 125%of base pay per annum for any other executive director in certain circumstances.The non-deferred part of the • bonus,which is settled in cash,is also subject to clawback. (See separate section below on page 75) Purpose and link to strategy Maximum opportunity Incentivises executives to achieve the company's long-term Maximum opportunity of 250%of base pay per annum for financial goals,as well as focus on value creation,whilst aligning the CEO. the interests of executives with those of shareholders. Maximum opportunity of 200%of base pay per annum for „r. Operation the other executive directors. Executive directors are granted awards on an annual basis, Performance measures which vest over a period of at least three years subject to Awards vest based on performance over a period of at least continued service and the achievement of a number of key three financial years commencing with the financial year in performance measures. which the award is made. The Remuneration Committee reviews the quantum of Performance will be measured based on a combination of awards to be made to each executive each year to ensure earnings per share growth,total shareholder return against a that they remain appropriate. comparator group and average operating cash flow.For awards Dividends or equivalents accrue during the vesting period made in 2014,these were in the proportion of 40%,30%and on awards that vest. 30%respectively.However,the committee retains the flexibility The award is settled by the transfer of market-purchased to amend these proportions,provided that no single measure shares to the executive directors. will be a significantly greater proportion than the others. All the released shares(after tax)must be retained until the At threshold,25%of the relevant portion vests.This increases minimum shareholder requirement is met Currently,the on a straight-line basis up to 100%for performance in line with minimum shareholding requirement is 200%of base salary maximum.Targets are set out on page 83. for the CEO and 150%for the other executive directors. Awards are subject to clawback in certain circumstances (see below on page 75.) • • _ . , G4S plc ' • • • . Directors' remuneration report continued Retirement benefits • Purpose and link to strategy CFO receives 20%of base pay and the other executive As with base salary and other benefits,making available a director receives 40%of base pay reflecting his historic suitable retirement benefits package aids the recruitment participation in a defined benefits plan which has been closed. and retention of high calibre executives,allowing such The level of award is kept under review by the committee executives to provide for their retirement and is intended to be broadly market comparable for the roles. Operation Maximum opportunity G4S operates a defined contribution group-wide personal Maximum opportunity of up to 25%of base pay for the pension plan in the UK in which executives may participate. CEO and 20%for the other executive directors save that Alternatively,G4S may provide a cash allowance in lieu of 40%of base pay per annum is payable to Grahame Gibson. • a contribution into such plan. The current executive directors receive cash allowances. Performance measures The CEO receives 25%of base pay as a cash allowance;the None. Remuneration policy for non-executive directors • Chairman's fee Purpose The chairman's fees are reviewed against other companies of To attract and retain a high calibre chairman by offering a similar size. a market competitive fee,which also reflects the • responsibilities and time commitmentThere are no Maximum opportunity performance-related elements. Ordinarily,any increase of the chairman's fee would be in line with other increases for similar roles in other companies. Operation Fees payable to the chairman and other non-executive The chairman's fee is disclosed each year in the Directors' directors in aggregate per annum shall not exceed the remuneration reportThe fees are reviewed annually by maximum specified in the company's articles of association the committee.The annual fee is an all-inclusive consolidated for the relevant year. • amountThe committee retains the discretion to review the chairman's fees at any other time if appropriate. • • Non-executive directors' fees (excluding.the chairman) - • Purpose The NED component fees are reviewed annually by the • To attract and retain high calibre non-executive directors executive directors.The board retains the discretion to review (NEDs)by offering market competitive fees which should the NED fees at other times,as-appropriate,to reflect any. • reflect the responsibilities and time commitmentThere are changes in responsibilities or commitment no performance-related elements. The basic fee covers committee membership and each NED is Operation- expected to participate in one or more board committees.All NED fees including any additional'fee for any additional the fees are reviewed against other companies of a similar size. role listed below are disclosed each year in the Maximum opportunity Directors'remuneration report. Ordinarily,any increase of the NEDs'fees would be in line • • With the exception of the chairman,the fees for NEDs with other increases for similar roles in other companies. are structured by composition build-up consisting of Fees payable to non-executive directors(including the • a base fee chairman)in aggregate per annum shall not exceed the •• an additional fee for chairing a committee maximum specified in the company's articles of association • an additional fee for the role of deputy chairman for the relevant year • an additional fee for the role of senior independent director. 714 G4S plc i,r:ua!1-...p,,i T.and A,ccounis 2.0 • • • • • Benefits • Purpose • Maximum opportunity Benefits may be provided from time to time in connection Reasonable business expenses which are reimbursed are with the chairman and other NEDs performing their roles, not subject to a maximum,since these are not a benefit to • such as business travel,subsistence and entertainment, the director. . • • accommodation and professional fees for tax and social Benefits and expenses will reflect the actual cost of provision. security compliance,and other ancillary benefits. Operation • Reasonable business expenses in line with G4S expenses policy(e.g.travel,accommodation and subsistence)will be • • - reimbursed and in some instances the associated tax will be borne by the company. • • c� 3 • Notes to the directors'remuneration policy summary For these purposes,payments may include the committee satisfying .Performance measures awards of variable remuneration.In cases where all or part of the Annual Bonus Plan–The actual performance measures and targets variable remuneration award was in the form of shares,the payment are set by the.Remuneration Committee at the beginning of each terms are those agreed at the time the award was granted. year.The performance measures used for our annual bonus plan In particular,awards made under the previous Performance Share have been selected to reflect the group's key performance Plan will continue to vest in accordance with the rules of that plan • indicators.The committee aims to ensure that the measures and to the extent that the relevant performance tests are met appropriately encourage the executive directors to focus on the Details of the vesting of the awards will be published in the annual company's strategic annual priorities,whilst the targets are set to remuneration report each year be stretching but achievable. The non-executive directors do not participate in any incentive The aim is to strike an appropriate balance between incentivising schemes nor do they receive any benefits other than those referred annual financial and strategic business targets,and each executive to in the above table. . director's key role-specific objectives for the year. 2.Malus and claw-back mechanisms Long Term Incentive•Plan–In choosing the performance measures Since 2010 any cash and/or shares awarded under the annual - for the Long Term Incentive Plan,the committee aimed to find a bonus plans and the previous Performance Share Plan may be balance of measures which reflect the company's long-term subject to clawback.The Long Term Incentive Plan and the annual • financial goals as well as incentivise executives to create sustainable, bonus plan may be-subject to malus or clawback from the executive long-term value for shareholders. director concerned if the Remuneration Committee so determines Legacy plans–The committee reserves the right to make and,in the case of misstatement of accounts,where the Audit any remuneration payments and payments for loss of office Committee concurs.The time period in which the clawback can be notwithstanding that they are not in line with the policy summarised operated depends on the reason for the overpayment as above where the terms of the payment were agreed(i)before the set out in the table below. policy came into effect or(ii)at a time when the relevant individual The amount to be clawed back directly from the executive director was not a director of the company and,in the opinion of the will be the overpaid amount,but the Remuneration Committee. committee,the payment was not in consideration for the individual retains the discretion to claw-back the"net"(i.e.post-tax)amount becoming a director of the company. of the award received by the executive director. Malus and claw-back -Annual Bonus Plan(including LTIPs deferred elements) . • 2014 Plan PSP(previous) Current LTIP Material misstatement of up to 2 years after up to 2 years after vesting up to 2 years after vesting • group financial accounts the payment of the (except where due to cash element fraud or reckless behaviour when it shall be 6 years --— — — ---- ---– after vesting). •-. Misconduct up to 6 years after up to 6 years after vesting • the payment of the- cash element - Fraud unlimited - unlimited • • Annuci Re..por-i and:-Accounts 20 14 G4S plc 7.5 • • y. • • • • Directors'_remuneration report continued •. -. • Principles and approach to recruitment and internal Service contracts - promotion of directors . Shareholders are entitled to inspect a copy of executive When hiring a new executive director,or promoting to.the directors'service contracts at the company's head.office board from within the group,the committee will offer a package and annually at the AGM. - that is sufficient to retain and motivate and,if relevant,attract the Executive directors service contracts all have the following features: right talent whilst at all times aiming•to pay no more than is • Contracts are drafted in line with best practice at the time the necessary.Ordinarily,remuneration fora new executive director executive directors were appointed. • will be in line with the policy set out in the table summarised above. • Terminable on 12 months'notice by either party. However,discretion may be required for exceptional circumstances such as dealing with remuneration-relinquished in a previous job. Specific provisions for Ashley Almanza and Himanshu Raja's • The maximum level of on--going variable;pay-that may be awarded contracts(dated 2013)that are not in Grahame Gibson's to new executive.directors oncr'ecruitment:or on promotion to the contract(dated 2006)include: board shall be limited to 400%of base,salary as set out iWthe policy • Following board approval,Ashley Almanza is allowed to hold table summarised above(calculated at the date of grant,excluding two external non-executive appointments(he is currently any buy-out awards—see below).Remuneration and any buy-out a non-executive director of Noble Corporation and of Schroders arrangements will be announced as far as possible at the time a plc,although he will stand down from the board of Noble new executive director or chairman is appointed,or in the Corporation in the near future)and retain the fees paid directly • following Directors'remuneration report to him for the appointments.Himanshu Raja is allowed to hold one external non-executive appointment and retain any fees paid When determining the remuneration of a newly appointed directly to him for the appointment Grahame Gibson's contract executive director;the Remuneration Committee will apply does not specifically deal with NED positions,which will the following principles: therefore be subject solely to board discretion. • The on-going remuneration package to be designed in • Mitigation obligations on termination payments are explicitly accordance with the policy table summarised above.• included in the 2013 contracts.Notice payments for Ashley • New executive directors will participate in the annual bonus Almanza are payable monthly and those for Himanshu Raja scheme and long term incentive plan on the same basis as are payable in two six-monthly instalments,in advance. existing executive directors. • The Remuneration Committee shall have discretion to grant There are no express mitigation provisions in Grahame • one-off cash or share-based awards to executive directors Gibson's contract where it determines that such an award is necessary to secure Non-executive directors'letters of appointment: the recruitment of that executive director and where it is in the • Appointment is subject to the provisions of the articles best interests of the company to do so.Such awards would only of association of the company,as amended from time to time be made as compensation for remuneration relinquished under regarding appointment,retirement,fees,expenses,disqualification a previous employment(i.e.buy-out arrangements)and would be and removal of directors. intended to mirror forfeited awards as far as possible by reflecting • All continuing non-executive directors are required to stand - the value,nature,time horizons and performance measures for re-election by the shareholders at least once every three attached.In such circumstances,the company will disclose a full years,although they have agreed to submit themselves for • explanation of the detail and rationale for such one-off awards. re-election annually in accordance with the UK Corporate • In certain circumstances,it may be necessary to buy out long Governance Code. . notice periods of previous employment Initial period of appointment is two years. • With regard to internal promotions,any commitments made • All reasonably incurred expenses will be met before promotion and unconnected with the individual's • Fees are normally reviewed annually. promotion may continue to be honoured even if they would not otherwise be consistent with the policy prevailing when the commitment is fulfilled. • For external and internal appointments,the Remuneration Committee may agree that the company will meet certain - relocation expenses(including legal fees),as set out in the policy table. • In determining the approach for all relevant elements,the . Remuneration Committee will consider a number of factors, including(but not limited to)external market practice,current . arrangements for existing executive directors and other' • internal relativities. • • • • • 76 G4S plc r�rnnuai.Repo t and Accounts 20 14 • • • • • • Loss of office payment The value.of the termination payment would cover the balance . The duration of the notice period in each of the executive directors' of any salary and associated benefits payments due to be paid for contracts is 12 months. the remaining notice period,the value of which will be determined The Remuneration Committee would consider the application of by the Remuneration Committee.The Remuneration Committee would also retain the discretion to make appropriate payments mitigation obligations in relation to any termination payments necessary to finalise any settlement agreement,but in exercising where such provisions exist in the executive director's contract such discretion the Remuneration Committee will remain mindful The contracts do not provide for the payment of a guaranteed to ensure that there is no reward for failure. • bonus in the event of termination.Directors(other than Himanshu The fees for outplacement services and reasonable legal fees in Raja)will not be eligible for bonus accrual during any period of connection with advice on a settlement agreement may be met garden leave.In the case of Himanshu Raja,his contract provides by the company. for such accrual although any payment would depend on the discretion of the Remuneration Committee. The table below illustrates how each component of pay would be calculated under different circumstances: Plan • Automatic"good leaver categories Treatment for"good leavers" Treatment for other leavers Annual bonus(cash All leavers other than voluntary Executive directors may receive a bonus to be Bonus opportunity element) resignation and summary dismissal. paid on the normal payment date and in will lapse. accordance with the agreed performance measures but reduced pro-rata to reflect the time employed. Annual bonus e Injury,disability or ill health " Deferred shares may be released if the executive Deferred share (deferred share c Redundancy director ceases employment prior to the third awards shall lapse. element) • Retirement anniversary as a result of one of the good - .- o Death• leaver reasons. - • Termination without cause V • Change of control or sale of • • employing company or business • Any other circumstances at • the discretion of the Remuneration Committee .Performance Share • Injury,disability or ill health Awards will vest on the relevant vesting date on Awards will lapse. Plan(previous) • Redundancy . a time-apportioned basis,unless the Remuneration - • Retirement. Committee determines otherwise,and subject to e Death the achievement of the performance measures. • o Change of control or sale of employing company or business - . • - - • Any other circumstances,provided V V --- that the Remuneration - V _Committee considers there • • are exceptional.circumstances Long Term Incentive o-Injury,disability or ill health Awards will vest on the relevant vesting date on Awards will lapse. Plan(current) , e-'Redundancy - a time-apportioned basis,unless the Remuneration V - - Retirement Committee determines otherwise,and subject to -- • • Death - _ _ the achievement of performance measures at the v. e Change of control or sale of relevant vesting date. -employing company or business Any other circumstances at The vesting date for such awards will normally • the discretion of the be the original vesting date,unless otherwise - Remuneration Committee determined by the Remuneration Committee. As directors may leave employment for a wide range of reasons,the Remuneration Committee retains discretion to approve payments where the reason for leaving does not fall precisely within the prescribed"good leaverr"category.The committee will take account of the director's performance in office and the circumstances of their exi.The committee will seek to balance the interests of shareholders, the departing director and the remaining directors.Any awards subject to performance conditions would be assessed at the end of the relevant period and be subject to time apportionment • • • • Annual Report and:\cc:funts 2014 G4S plc 77 • • • • • Directors' remuneration•report continued • ANNUAL REPORT ON REMUNERATION . SINGLETOTAL FIGURE OF REMUNERATION.(AUDITED INFORMATION) - Executive directors The following table.shows a single total figure of remuneration in respect of qualifying services for the 2014 financial year for each executive director,together with the comparative figures for 20 I 3.Aggregate executive directors'emoluments are shown in the final column of the table. Base pay .Benefits Annual.Bonus- - PSP Pension related benefits Total 2014 2013_ 2014 2013 2014 2013 2014 2013 2014 2013 _-_2014 2013 Ashley Almanza 890,000 600,000 100,559 61,556 1,308,300 648,000 n/a n/a 222,500 150,000 2,521,359 1,459,556 Grahame Gibson 609,084 639,483 83,604 1 10,652 439,823 103,000 0 0 243,633 255,793 1,376,864 1,108,928 Himanshu Raja 625,000 156,250 121,729 25,179 890,625 234,375 n/a . n/a 125,000 31,250 1,762,354 447,054 Notes: _ • I. Certain information in 2013 relates to part years during which Ashley Almanza and Himanshu Raja served as executive directors: - - a. For Ashley Almanza,figures for 2013 include the period from I April 2013 when he commenced employment and when he was Group CFO from , 1 May 2013(during which time his base pay was£625,000 per annum)prior to his appointment as Group CEO from 1 June 2013(when his base pay increased ._ to£850,000 per annum). - b. For Himanshu Raja,figures for 2013 are from his appointment date on 7 October 2013 and this includes the period from 1 October 2013. 2. Benefits include car allowance,business related travel,healthcare,disability and life assurance.Benefit values include the cost of certain travel,overnight -. accommodation and meals which HMRC treats as a taxable benefrt and on which the company will pay tax in due course as it does not consider such expenses to be benefits in the ordinary sense.The grossed-up amounts for 2014 are£43,541 for Ashley Almanza,£59,521 for Himanshu Raja and£14,861 for Grahame Gibson.Benefit values also include local travel costs of£9,180 and£22,320 for Ashley Almanza and Himanshu Raja respectively who bear the tax themselves and - other business costs which HMRC deems to be benefits.In 2014 for Grahame Gibson,the benefrts value includes a total value of£31,257 relating to flights for. • him and his family between the UK and US. - 3..The benefits values for 2014 also indude taxes met by the company in respect of certain expenses which were incurred in 2013. • . 4. Part of Mr Gibson's salary is paid in sterling and part in US$.The US$element has been converted into sterling for the purposes of reporting,at the - . exchange rates prevailing in each month in which Grahame Gibson was paid.The average exchange rate during the year was$1.65055($1564933 in 2013). 5. Any bonus due above 50%of the individual's maximum bonus entitlement is awarded as deferred shares which vest after a period of three years. 6. In addition,Ashley Almanza received£122,500 from Schroders plc and a fee of$96,000 as well as shares valued at$230,993 from Noble Corporation from his non-executive directorships referred to on page 76 and retained such remuneration. - • Non-executive directors The following table shows a single total figure of remuneration in respect of qualifying services for the 2014 financial year for each non-executive director,together with the comparative figures for 2013.Aggregate non-executive directors'emoluments are shown in • the last column of the table. . • Base fee SID • Chair of Committee Deputy Chair Benefits Total Total • 2014 . 2013 2014 2013 2014 2013 2014 20132014 2013 . 2014 2013 • John Connolly 356,500 348,000 n/a n/a n/a n/a n/a n/a 5,307 2.638 361,307 350,638 -Adam Crozier 58,400 56,800 n/a • n/a n/a n/a n/a n/a 1,489 2,198 59,889 58,998 • Mark Elliott 58,400 56,800 10,750 5,896 17,775 17,550 n/a n/a 2,495 3,871 - 89,420 B4,117 Winnie Fok • 58,400 . 56,800 n/a n/a n/a n/a n/a n/a 10,087 15,117 68,487 71,917 Mark Seligman 58,400 56,800 n/a n/a 7,582 17,550 46,800 46.800 2,166 3,772 114,948 124,922 • - Paul Spence 58,400 56,800 n/a • n/a n/a - n/a n/a n/a 39,545 .72,348 97,945 129,148 Clare Spottiswoode - 58,400 56,800 ri/a n/a 17,775 9,855 n/a n/a 1,916 - -3,099 78,091 69,754 Tim Weller 58,400 42,600 n/a n/a 10,192 n/a n/a n/a 1,954 1,256 70,546 43,856 Notes:The above fees were pro-rated where the appointments or retirements were part way through the year. 1. Mark Elliott was appointed as chair of the Remuneration Committee and senior independent director on 6 June,.20 13. - 2. Clare Spottiswoode was appointed as chair of the CSR Committee on 6 June 2013. - • 3. Mark Seligman stepped down as chair of the Audit Committee on 5 June 2014. - 4. Tim Weller was appointed as Chair of the Audit committee on 6 June 2014. . 5. Benefit values include the cost of overnight accommodation,travel and meals which HMRC treats as a taxable benefit and on which the company will pay tax in due course as it does not consider such expenses to be benefits in the ordinary sense. • 6. The 2013 benefits values differ from the figures reported in the 2013 remuneration report in some cases following a review of the calculation methodology.This is mainly related to the classification of the reimbursement for flights to attend board meetings. • 1 G4S plc P,nr,:di Report ai'd,6,CCQunts 201 • • • • • • • • Further notes to the single total figure of Himanshu Raja remuneration tables ------ - ------------^-- %of-------- . maximum Score . 2014 Annual bonus Financial measures Targets Achievement bonus achieved _During the financial year ending 3 I December 20I 4,the Group PBTA £279m . £304m 70% 70% _ performance measures relating to the annual bonus scheme Group OCF £51 I m _E553m _ 15% 15% rules were consistent with the remuneration policy,with 85%of Total 85% 85% the bonus for all executive directors based on achievement of challenging financial performance measures set at the beginning Non-financial objectives were set in the following areas; - • of the year.The financial performance measures that applied to Health&Safety •Ashley Almanza--and Himanshu Raja were based on budgeted group People,capability building,values and organisation • profit before tax and amortisation and budgeted group operating Govemance&control "• cash flow before capital expenditure.The financial performance Operational Excellence - measures for Grahame Gibson consisted of four financial objectives, Cost Leadership initiatives three of which were for the Americas region and the fourth was 15%of maximum bonus potential was allocated to non-financial measures related to group PBTA.On-target performance would result in and the level of achievement was assessed at 10%. a payment of 60%of maximum entitlement,with 100%only being • o earned in the event of achievement of a stretch performance Grahame Gibson significantly in excess of budget - %of maximum Score m The remaining 15%was linked to objectives relating to non-financial Financial measures Targets Achievement — bonus achieved performance,which consist of personal objectives or relate to the Group PBTA £279m £304m 15% -- 15%_ • - organisation.In line with all senior business leaders across the group, Regional PBTTA £118m El 14m 40% 19.04% the executive directors'personal performance-related objectives Regional Organic Growth, 8.1% 9.2% 15% I5% included an objective on health and safety. Regional OCF —_--_— £138m £110m 15% 0 Total 85% 49.04% The maximum bonus potential has remained unchanged from - - 2013.It is 150%of base pay for Ashley Almanza and Himanshu • Non-financial objectives were set in the following areas • Raja and 125%of base pay.for Grahame Gibson.Bonuses are paid Health&Safety • - . in cash up to 50%of maximum entitlement Where the bonus Business Development/growth amount is in excess of 50%of the maximum bonus potential,the Operational Excellence amount which exceeds 50%will be delivered in the form of a People,Organisation&values deferred share award which vests after a period of three years. • Cost leadership initiatives . • The tables below show how pay was linked to performance in 2014 15%of maximum bonus potential was allocated to non-financial measures and set out details of each of the financial measures the targets in and the level of achievement was assessed at 8%.. -._ respect of these measures and the actual outcomes: The table below sets out the annual bonus awards which were • Ashley Almanza made to executive directors in respect of the financial year Of ending 3 I December 2014: . - maximum%O Score ----"" 2014 annual Financial measures Targets Achievement bonus achieved 2014 annual ' bonus Group PBTA £279m £304m 70% 70% 2014 annual bonus(%of deferred(% Group OCF £511m £553m 15% 15% ----- ---_---_ bonus(Cr -._salary) of salary) Total -----85% 85% Ashley Almanza — £1,308,300 147% 7296 Himanshu Raja £890,625 142% 68% Non-financial objectives were set in the following areas; Grahame Gibson .-£439,823 71% 9% '-- • Health and Safety - Any bonus due above 50%of the individual's maximum bonus entitlement Strategy - is awarded as deferred shares which vest after a period of three years: People,organisation&values `" — — — — —"" ——_—" Deferred Govemance Cash shares Stakeholder Engagement • Ashley Almanza E667,500 £640,800 15%of maximum bonus potential was allocated to non-financial measures- Himanshu Raja • . £468,750 £421,875 and the level of achievement was assessed at 13%. Grahame Gibson £380,678 £59,145 Performance Share Plan(PSP) .-• The PSP value shown in the single.figure table relates to the 2012 PSP awards made in March 2012.The performance measures _ were earnings per share growth and relative total shareholder return.Neither of these performance tests were met and the outstanding award lapsed. . .. . •• - - - Annual Rep:r 1 and Accounts.2;54=1 G4S plc 79 • • • Directors' remuneration report continued TOTAL PENSION ENTITLEMENTS(AUDITED INFORMATION) Neither Ashley Almanza nor Himanshu Raja is a member of the group's pension plan,which is a defined contribution group personal pension plan available to all UK employees.Instead they receive cash allowances of 25%and 20%of their base pay,respectively. • Grahame Gibson ceased accruing pensions under the company's defined benefit scheme in 2006.A salary supplement in lieu of pension • of 40%of basic salary was paid.His accrued pension at the relevant dates in the defined benefits scheme(all figures are in£'000s)is shown in the table below. ------ ------ ------------- --------- Total accrued Total accrued '^- --- Pension input Pension input annual annual Normal amount amount pension at pension at Date accrual retirement 2014 2013 31/12/14 31/1.2/13 ceased date Grahame Gibson 0 0 24.2 21.7 6/4/2006 17/1/2013 Notes: I. In 20 I I,Grahame Gibson transferred the majority of his pension benefits to a private pension arrangement leaving a residual pension payable from age 60. Grahame Gibson has passed normal retirement date and the accrued pension shown includes the application of a late retirement factor. • 2 The earliest date when entitlement to a pension arises without consent and without actuarial reduction is age 60(the normal retirement date). 3. On 3 March 2015,Grahame Gibson transferred his remaining and residual pension benefrts in an amount of£363,188 to a private pension arrangement The transfer value was calculated using the same actuarial basis as that used by the trustees of the pension scheme for all members. • SCHEME INTERESTS AWARDED DURING THE FINANCIALYEAR(AUDITED INFORMATION) Awards under the LTIP approved by the shareholders at the company's AGM in June 2014 were made in July 2014.They were,however, deemed to have been made in March in order to be consistent with the company's normal grant policy.Details of the awards made to the executive directors are summarised in the table below and further details are given in the table on directors'shareholdings and interests on page 81.: • Number of Face value EPS,TSR and AOCF %vesting at • Director Award type shares (£) Performance condition Performance period threshold Ashley Almanza Conditional shares 962,370 2,225,000 40%EPS/30%TSR/30%AOCF 01/01/2014–31/12/2016 25% Grahame Gibson _ Conditional shares 463,615 -1,071,880 40%EPS/30%TSR/30%AOCF 01/01/2014–31/I22016 25% Himanshu Raja Conditional shares 540,657 1,250,000 40%EPS/30%TSR/30%AOCF 01/01/2014–31/122016 25% I. The face value calculation was based on a share price of£2.3 12 which represents the average closing share price during the three business days following the announcement of the company's 2013 financial results. 2. Further details on performance conditions are set out in the table below PERFORMANCE MEASURES.FOR LONGTERM INCENTIVES AWARDED IN 2014 40%of each award granted . 30%of each award granted 30%of each award granted • . Average annual growth in Proportion of Ranking against the bespoke Proportion of Average operating cash Proportion of EPS period ending on 31 allocation vesting comparator group by allocation vesting flow . allocation vesting December in the third year reference toTSR . Less than 5%pa Nil Below median Nil <105% Nil. 5%pa(15%over 3 years) 25%------ ----Median __—_– 25% -----__----105%----_-----_--- 25% --- ---- +5 to 12%pa Pro-rata between 25% Between median and upper Pro-rata between 25% Between 105%and 125% Pro-rata between 25% and 100% quartile and 100% and 100% • Greater than+12%pa 100% Upper quartile I 00% . 125% 100% (36%over 3 years) - The bespoke comparator group consists of companies constituent The company calculates whether the EPS performance targets of the FTSE 100 index corrected to exclude financial institutions , have been achieved by reference to the company's audited accounts and companies in the extractive sector and include competitor which provide an accessible and objective measure of the companies which are outside that index. - . company's earnings per share.The committee may alter the terms of the EPS measure if it feels that it is no longer a fair measure and The company's current policy is to use market purchased shares to satisfy LTIP awards.Participants in the LTIP will receive a further is no longer incentivising.TSR ranking will be verified externally. • • share award with a value equivalent to the dividends which would have been paid in respect of LTIP awards,vesting at the end of the • performance period. - • • • .80 G4S plc Annual Report t and Accounts.2_014 • • • • . • . .. . • • STATEMENT OF DIRECTORS'SHAREHOLDING AND SHARE INTEREST(AUDITED INFORMATION) The executive directors are required to build up a minimum shareholding in G4S,as explained in the remuneration policy.Shares are valued for these purposes at the year-end price,which was 277.90p per share at 3 I December 2014. Number of shams owned outright . . Number of Total shares Share • • Deferred under LTIP ownership Shareholding shares held as awards subject requirements requirements 2014 2013 at 31/12/14 to performance (%of salary) achieved Ashley Almanza 100,000 1 00,000 85,640 1,739,407 200% 31% Himanshu Raja 50,000 0 50,686 888,188 150% 22% Grahame Gibson 657,553 659,208 0 1,1 1 1,310 150% 100% Notes: 1. Deferred share awards and PSP or LTIP awards do not include the further shares with a value equivalent to the dividends which are paid in respect of shares received.The number of shares is gross and will be subject to tax when they are released. 2. In addition to the above,each of the directors has a deemed interest in the total number of shares held by the company's employee benefit trust As at 31 December 2014,the trustees of the employee benefit trust held 6,408,450 shares(2013—6,934,564). . c) 3. Includes any shares owned by connected persons. . 4. The table does not include the deferred shares awarded to Ashley Almanza,Himanshu Raja and Grahame Gibson in respect of the portion of their R. annual bonus for the 2014 financial year which exceeds 50%of their respective maximum bonus entitlement 5. There were no vested but unexercised interests. The shareholdings for non-executive directors are shown below. . ---------- AS at As at 31.12.2014 31.12.2013 John Connolly 200,000. 100,000 Adam Crozier 2,000 0 Mark-Elliott 25,000 25,000 Winnie Fok 20,000 20,000 Mark Seligman 75,496 75.496 Paul Spence 10,000 10,000 Clare Spottiswoode • 4,681 4,681 Tim Weller • 37,570 37,570 - There have been no changes in the interests of each of the directors between 31 December 2014 and the date of this report There are no requirements for the non-executive directors or former directors to hold shares once they have left the company. • PAYMENTS TO PAST DIRECTORS(AUDITED INFORMATION) No payments have been made to former directors of the company during the financial year ended 3.1 December 2014 other than . those payments set out below(Payments for loss of office). . PAYMENTS FOR LOSS OF OFFICE(AUDITED INFORMATION) - Trevor Dighton - Trevor Dighton,who stepped down as a director of the.company in June 2013,ceased to be an employee on 30 July 2014.Mr Dighton was entitled under the terms of his contract to'payment comprising thesfollowing until his departure: e Base pay of£42,500 per month o Car allowance of£1,333.33 per month G Cash allowance in lieu of pension of£17,000 per month • • The total payment made for the period from I January 2014 to 30 July 2014 was£425,833.No further payment is due to be made. Trevor Dighton has not received any bonus in respect of the year under review.His unvested awards under the PSP were subject to performance and were pro-rated to 30 July 20 14.The award made in 2012 did not vest as the performance tests were not met . The award made in 2013 remains subject to performance which will be tested at the normal vesting date. • • ' Annual Rep,oi-t,=nd A.ccctur'i.s 2.01; G4S plc 8 r - . In July this year Jenni Myles will take up the role of group now comes under the formal oversight of our group il HR Director,succeeding Irene Cowden who retires in June. general counsel. Jenni has held a number of senior HR positions at G4S We established"Safety first"as a new group value and all 8 including HR Director for our North American and Latin senior executives completed mandatory safety leadership American businesses.Jenni brings a deep knowledge of our training which we are extending across the group in 2015. industry and company combined with a track record of We established the new position of Group Head of leading and supporting large organisational change Health and Safety and appointed an experienced safety programmes.Grahame and Irene have each made an professional to this role.Whilst we have been successful enormous and valuable contribution to G4S and they leave in raising safety awareness and strengthening our resources with our profound thanks and best wishes. and systems,we remain fundamentally dissatisfied with our Mel Brooks was promoted to Group Strategy overall safety performance.I deeply regret to report that &Commercial Director after successfully managing our in 2014,41 of our colleagues lost their lives in work-related large Indian business.Mel brings security and technology incidents(2013:49 work-related fatalities),including 14 expertise from a variety of senior leadership roles he colleagues who died in attack-related incidents,protecting has held both in G4S and in the defence industry. our customers and their property. Beyond the GEC,we continued to invest heavily in Work-related fatalities have a devastating impact on refreshing and strengthening our senior management team. families and colleagues at G4S and they motivate us to put Since spring 2013 we have made 114 senior appointments Safety First.Zero harm remains our goal and each and to our senior leadership cadre of 220 executives, every member of the global leadership team is committed comprising 64 external hires and 50 internal promotions. to this goal.In 2014,we also established a UK corporate The new appointments cover key positions in general renewal plan and made good progress in implementing the management,sales,business development,operations, plan.Implementation of this plan remains a priority in 20 15. i technology,procurement,IT,finance and risk management All of these changes have been designed to strengthen Productivity our organisation and support the group-wide Over the past 18 months we have established a number transformation of G4S. of important programmes to improve the productivity of G4S.Given the scale and current stage of organisational Our global leadership development programme was maturity of G4S,these programmes address a material re-launched in 2014.We are also simplifying and opportunity to improve our performance and create reinforcing succession and development planning to ensure shareholder value.Our restructuring and organisational that our leaders of tomorrow are identified and given the efficiency programmes made good progress in 2014 and appropriate opportunities to develop early in their careers. we believe there are further opportunities to implement Our investment in training and development permeates lean processes and more efficient organisation structures. the entire organisation and is nowhere more important Any new programmes will be subject to stringent financial, than in customer-facing roles. economic and operational criteria. I would like to thank the more than 623,000 colleagues Our operational reliability and efficiency programmes across the world whose skill,energy and dedication to broadly fall into two categories.Firstly,direct labour our customers and our company is reflected in the efficiency,which aims to ensure we deploy the correct progress made by G4S in 2014. service at the right time,thereby helping to improve Our Values customer service and reduce costs(see page 27). During 2014,we updated and re-launched our group Secondly,route planning and telematics,which seeks values and mounted an awareness and training programme to reduce vehicle and crew requirements and to reduce to ensure that G4S managers and employees understand fuel and maintenance costs whilst simultaneously how to put our group values into practice in everyday improving driver safety(see page 27). business activities.To support and reinforce this In 2014,we established the new position of Chief programme we have updated and re-launched our Procurement Officer and recruited an experienced whistleblowing policy and compliance monitoring procurement leader and team.We aim to achieve Our values at work—an integrated reporting framework ,l Our corporate values influence every aspect of corruption,health and safety,and human rights. our culture and day-to-day business activity,and To better reflect the focus which our values we recognise that CSR strategies are best achieved have within our organisation and the importance when integrated into business practices.It is with we place upon ethics and sustainability,we have this that in mind that our CSR strategies and priorities year implemented an integrated CSR reporting are developed in conjunction with our operational framework which is led by our Annual Report ' businesses and help to improve the way we work and Accounts and supported by a CSR report and our approach to doing business.Our priority and our website. areas are business ethics and anti-bribery and Annual Report and Accounts 2014 G4S plc I I Chief Executive Officer's review continued procurement efficiencies by using our global scale to IT service management models to improve consistency consolidate supply chain management and secure and efficiency in IT infrastructure,development better terms of business.We are also beginning to and operations. improve visibility,understanding and control of our buying behaviours to improve efficiency Active Portfolio Management • During 2014 we continued to apply the Last year we completed the first phase of our UK structured approach to portfolio management shared service centre to standardise key processes and which we established in 2013.Since the inception reduce the cost of functional support In 2015 we will of this management discipline we have completed the extend the scope of shared services performed at our divestment of eight businesses at attractive exit UK centre and we will consolidate our North American multiples,generating aggregate proceeds of£248 million back office.We have begun to assess the feasibility of and an aggregate profit on disposal of£92 million. applying our shared service model in other regions. Businesses sold previously contributed revenue of over We are undertaking a disciplined and progressive £700 million at an average net margin of 2.8%,well IT transformation programme.During 2014,we focused below the group average.We also discontinued a on building our IT leadership and development further 22 businesses.Portfolio management remains an capability.We currently spend around£180 million important discipline in ensuring that we maintain on IT services and we are now progressively employing strategic focus,capital discipline and effective financial performance across the group. Delivering value through our key programmes Our strategic plan encompasses key programmes which address multiple sources of value. P'c l I.Transform our r 2.Invest in organic l h 3. Make our culture through if growth,customer \i organisation more our people and service and productive (p24) values (p14) operational excellence (p20) Building capacity in our people Strengthening organic sales and Investing in organisational efficiency • Strengthened global leadership business development capability De-layering our organisation team— 114 appointments to top —invested additional cf2Om • Shorter lines of communication, 220 executive roles(50 internal, • Appointed new sales leaders across reduced costs and increased time 64 external) the group focused on customers • Re-launched leadership programmes • Investment in sector and Globalising key functions { — technology specialists • Improve consistency,efficiency and Re-focusing our values • Appointed 385 additional new hires effectiveness of our support functions • Greater emphasis on Health into sales and business development and Safety(Safety first) roles in the past 21 months Creating shared service centres • Employee communications and for back office functions training to reinforce group values Improving sales operations • Leverage scale of organisation • Enhanced whistleblowing and • More proactive management of and standardise processes case management sales pipeline • Implemented first phase in finance • Investing in customer relationship in UK in 2014 Managing risk and global account management • US shared service centre in 2015 • Investment in improved • Better alignment of sales incentives IT transformation risk management with customer satisfaction • Progressive,disciplined change • Extending proven services from one programme to improve efficiency Enhancing our market to another and consistency in IT infrastructure, performance management • Increased rigour in our development and operations performance contracts • Aligned incentives with values and performance 2 G4S plc Annual Report and Accounts 2014 Disciplined risk and financial management Outlook During 2014 we established an enterprise risk G4S'strategy and plan address a positive, management system based on the"three lines of long term demand outlook for our core services defence"model.As noted above we have invested and seek to deliver sustainable,profitable growth. a heavily in strengthening our senior leadership teams We are making good progress with the implementation and reinforcing our group values,both of which are important components of our risk and financial of our strategic plan and this was reflected in the group's commercial,operational and management systems.We also strengthened our financial contract risk management processes and made performance in 2014.The group's performance significant investments in financial control resources and prospects are also reflected in the directors' and audit and assurance capacity recommendation to increase the final dividend by 5%. There remains much to be done to realise the full The importance of contract risk management potential of our strategy and we expect to make was highlighted again last year with the£1 16 million further progress in 2015. settlement of the electronic monitoring contract and a further charge to profits of£45 million relating to provisions on legacy UK contracts. Ashley Almanza Group Chief Executive Officer ,, 1 4.Actively manage I o 1 5. Embed. our portfolio and disciplined p o oa p performance(p3o) financial and risk management (p32) - Investing in operational excellence Reviewed 56 under performing Soundly financed —accelerated best practice(ABP) or immaterial businesses in 2014 • Investment grade credit rating Direct labour efficiency • Eight businesses sold in 2014 including and£998m of unutilised credit facilities • Uses subject matter experts working with US Government Solutions local line managers to deploy the correct — raised gross proceeds of£1 77m Global capex rationing—central service at the right time,improving in 2014 and gross proceeds£248m pool of capital customer service and reducing costs since 2013 • Investment hurdle rate 10%post • Mufti-year programme covering 39 • 20 discontinued;22 under review and tax IRR businesses and 376,000 employees 14 to be retained with performance • Rebalance investment towards in the first phase improvement plans organic growth Telematics and route scheduling • Businesses sold had revenue of more programmes for our fleet than£700m and an average net margin Improve sustainable free cash • Telematics of 2.8% flow and working capital — reduces fuel and maintenance management costs;improves driver safety • Implementing a — In 4,500 vehicles at the end of 2014 "cash matters"culture • Route scheduling Strong focus on financial —fewer vehicles and efficient crew requirements leading to improved stewardship customer service • Strengthened capability and — 7,000 vehicles to be covered by capacity in audit,risk and end of 2015 financial management • Strengthened contract New global procurement programme review process • Baseline study identified addressable spend of£I.3bn(70%in eight categories) —material opportunities to reduce costs • Negotiating with a number of key suppliers with the first global procurement deals signed • Leveraging our scale Annual Report and Accounts 2014 G4S plc 13 Strategy in action I.Transform our culture through our people and values Our financial performance is underpinned by recruiting, developing and deploying the best people against our most important opportunities by applying our group Strengthen Strengthening values in everything we do and by delivering outstanding customer service. capability i l i P tY The group values are: Safety first We prioritise safety management to protect Our strategic review in 20 13 identified the health and well-being of our colleagues and those around us. the need to strengthen our resource Customer focus and capability in a number of key areas We have close,open relationships with our of the business— leadership,senior customers which generate trust and we work in partnership for the benefit of our organisations. line management,sales and business development.We have also strengthened Integrity p We can always be trusted to do the right thing. our teams in IT,procurement,finance and risk management. Best people g We employ the best people,develop their competence,provide opportunity and inspire them to live our values. 2014 highlights Performance I I 4 Safety fii'St We seek to improve performance year on year to create long-term sustainability. new senior appointments to new value Teamwork and collaboration the global leadership team We collaborate for the benefit of our customers and G4S. NewExpertise We develop and demonstrate our expertise whistleblowing through our innovative approach to creating policy created and delivering the right solutions. 2015 priorities Our plans to improve customer service are outlined in more detail on pages 20 and 23.How our values • Increase health and safety focus on road safety are integrated into the group's strategic priorities is • Extend health and safety leadership training to covered throughout the Strategic Report and in this a wider population section we discuss: • Implement an online system to better capture and record health and safety incident data i.Safety first—protecting colleagues and those around us • Enhanced whistleblowing hotline and case management ii.Integrity—being trusted to do the right thing system to be implemented globally • Global engagement survey to be undertaken and fed iii.Best people—employing the best people and back within the organisation providing opportunity • Design and implement a new single regional leadership programme for middle managers 14 G4S plc Annual Report and Accounts 2014 wP ' ; { .`4. .n I arlirri:411 $ I - ! ,.' a _.*" ! n pg m im m , r y r 'le '1 ,,,, ,,i.,.I, 4.„..,, ..,_. ,,, 41111111 ,... ... Op,f. .....0- ..,,,rte" • � If* )4Jik - Nuclear power — United States i At one of the newest and largest nuclear power i,,,, , ,. :, 4.1.„..4;aii\4 1,,,, 4 111 ?' _, ' -4,* _ facilities in the United States,the G4S Regulated a Security Solutions team has worked safely for 't ,e nearly I I years since a recorded lost-time ," ,,r` accident,and worked nearly 2 million safe man-hours by implementing a comprehensive behaviour-based safety programme. ,,,, t-0 iie: - 1.4.'.;,,,,,,,,,41,t It CA:- . r , $ U t 0, — , -lb lkek ik - \ 1 � a C 4. assa . oe al , 9 0$ a M 4 1 Ethical employment t w '„ ' 1 1 partnership —global . Since 2008,G4S has had an ethical employment P `t i partnership with UNI,the global union federation. _ ,'' G4S was the first UK company to enter such a partnership,which drives improvements in employment standards across the global security industry,while helping to ensure that employee _-' and union rights are respected throughout , 31110 the company. , r Annual Report and Accounts 2014 G4S plc 15 b fr ki - % ' --441 . al , . ‘,. 1 .mss _ „ . , ., , , ,, .. , \ ,.„,. ,,,„ s t Y Secure solutions — India With a workforce of 130,000 people across - , 25 states,G4S India launched a strong health �° and safety initiative aimed at spreading the concept of"zero harm"for its employees and customers.Throughout the year,it introduced a series of campaigns aimed at making the workplace environment safer. . ; li ,,„ , 1‘, I 4: I i ii,,\11.14.4 lir r-- , ii ' \ Driving Force—global j In 2014,19 colleagues lost their lives in road i traffic accidents.The Driving Force initiative I .. aims to significantly reduce these incidents. Based on an initial pilot in seven countries, - Driving Force is now being rolled out to every ift G4S company globally Two of the pilot countries experienced significant reductions in the number of fatal road traffic accidents in the twelve-month study period. As well as informative literature packs distributed within the business,Driving Force rules include training,vehicle checklists,and basic driver evaluation and investigation tools to help understand the root cause of incidents. 16 G4S plc Annual Report and Accounts 2014 Strategy in action continued Strengthening capability Achievements Best people—building capability Since April 2013 we have strengthened our global oi Our performance management approach addresses leadership team materially,with 114 appointments to both non-financial and financial performance in an our top 220 executive roles.Of the 1 14 appointments, a integrated way and is outlined in more detail in the 50 were internal promotions and role changes and 64 key performance indicators section of the Strategic were external hires.These changes have been focused on Report on pages 32 and 33. senior line management,sales and business development Safety first We have also strengthened our teams in IT procurement, The nature of our work and the environments in finance and risk management which we operate can expose some of our employees The senior leadership programme is being re-launched in to a high risk of harm.Mitigating and managing these risks 2015 to better reflect the strategic priorities of the group. so that our people return home safely every day is our A new cohort of senior managers with potential to move paramount concern.Tragically,colleagues from across the to more complex roles will be identified to participate. group are injured and sometimes killed during the course The programme,which started in 2005,will support of their work.Any death or injury is unacceptable and in and challenge participants to contribute to sustainable 2014 we have invested in additional health and safety business performance and continue their own personal resources with the aim of preventing such incidents leadership development Every element of the across the group and to learn from those which do occur programme will explicitly promote the G4S values so that we can address the root causes. and draw on good practice from existing G4S senior The continued effort to improve the safety of our staff leaders around the world. is led from the top of the organisation with personal leadership from each member of the Group Executive Gender diversity(/o) Committee supported by human resources experts and 108 safety professionals across the group. Processes and practices across the group are challenged Board 2 frequently by our health and safety professionals,and • critical country reviews,carried out by experts who are senor independent of the business under review,highlight management 32 learning points following every serious incident. . Total To ensure that our managers take ownership and employees responsibility for improving health and safety,we recently 20 40 60 80 re-designed incentive plans to ensure that avoiding harm to employees,and to those with whom we come into contact during the course of our business remains the Male emae focus for managers across the organisation.Improved Please see page 58 for the board's policy on diversity health and safety performance will continue to be a key area of focus in 2015. Work-related fatalities by category Z: 19 20 17 14 11 8 0 Attack Non-attack Road Total •2013 •2014 Annual Report and Accounts 2014 G4S plc 17 Strategy in action continued Strengthening capability Employee engagement As outlined in more detail on page 3 I,part of the remit Our employee engagement programme is based on of the Regional Risk and Audit Committees which were the internally developed PRIDE model: established in 2014,is to ensure compliance with our robust anti-corruption policies and embed the Integrity P rotect their basic needs value across the regions.Compliance statements are now R espect them as individuals signed by the businesses and regions on a quarterly basis. I nvolve them in the business In 2014,we completed a review of our global whistleblowing policy and practices against the principles D evelop their skills and potential of the UKWhistleblowing Commission's Code of Practice, E ngage them fully making a number of changes as a result of that review. More information on all of these areas can be found We have selected a new global hotline provider and in our CSR reporting framework,including our CSR `Hill be implementing a new global whistleblowing report and www.g4s.com/csrWe are currently planning system in 2015.We are also implementing a new case our next global employee engagement survey in 2015. management tool which will enable us to capture The survey is based on the PRIDE model and the information on whistleblowing cases across the group and principle that where employees feel Protected,Respected, to analyse trends and issues raised on a more systematic Involved,Developed and Engaged,they are more likely basis.We have re-established our ethics steering group to perform at their best,provide customers with —which was first created to ensure our compliance with the requirements of the UK Bribery Act—to ensure the exceptional service and be great advocates for the appropriate focus on whistleblowing and ethical behaviour organisation.The last global study was undertaken in across the group and make sure that we are constantly 2013 and received over 380,000 responses—a 62% challenging ourselves to meet the highest standards. response rate.Feedback from the 2013 survey and the forthcoming 2015 survey is shared with the relevant From time to time,concerns about the conduct of our business leaders,so that we can address areas which colleagues or our business partners are brought to our employees have highlighted as in need of improvement. attention.We take all such concerns seriously and work Examples where feedback has resulted in change include: with internal audit and external investigators to ensure all issues raised are addressed appropriately.Information on • enhanced health and safety leadership and training current issues can be found on page 21 in our CSR report • increased internal communications • leadership programme launched in the Americas Human rights • increased training resources being offered in Our human rights framework supports the continued Latin America and Europe development of an ethical and sustainable business Performance management model that encourages the improvement of standards, During 2014 we re-defined our performance measures job creation,community support and broader beneficial and incentives for our employees and our approach impacts on societies throughout the world. continues to address both non-financial and financial The framework is being embedded across the group, performance in an integrated way.Performance indicators along with newly-developed processes for assessing the include measuring customer needs,and achieving group's human rights risks in many areas such as bidding sustainable profit and cash flow,and provide clear for contracts,entering new markets and analysing our and strong alignment between management priorities existing countries of operation.These practices are driven and shareholder value. by an annual assessment of human rights risks and a series of assessments and reviews in markets where risks exist. Integrity Ethical conduct is not just a solution to the challenges Where risks or concerns are identified,action is taken of legal compliance,but a means of doing business to make sure that we put in place processes to mitigate which provides customers,employees,partners and or reduce any risk.In some cases,this means that communities with the confidence that they are working a business or operation can be scrutinised intensely by with an ethical organisation.Acting with integrity across either G4S or independent experts.For example,in the the world is a key element of our business strategy and spring of 2014,the board commissioned an independent a positive differentiator. review into the group's operations in Israel.The findings from the review were presented to the chairman of our Business ethics and anti-bribery and corruption CSR Committee and to a number of the Group Every year we review our business ethics policy to ensure Executive Committee members,and were published on it reflects the current business and political environment the group's website in the interests of transparency and addresses any risks which may exist Implementation of the standards described in the policy is the More detail on human rights risk assessment can be responsibility of local managers.These are subject found in the Risk Management section and the group's to review through our internal and external audit separate CSR report programmes and from investigations triggered by whistleblowers or colleagues raising concerns with their managers. _ G4S plc Annual Report and Accounts 2014 \ , 1„sir ' t4 Ra 4. 1 I �1 {w-.fix' �' - sp,� 01.1111.� � - 7,1;, • , iii,, , _ _ , , Ebola response—Africa - l''' Responding to the outbreak of Ebola in 14'4% ' the region,G4S Sierra Leone,in conjunction with our G4S Africa head office,developed an Ebola awareness programme for employees, incorporating posters,handouts and training. Symptom testing,hand washing facilities and 'gam x; the provision of personal protective equipment were implemented at G4S offices as part of the programme of increased preventative measures, and a comprehensive contingency plan was developed.These measures greatly assisted in the prevention of infection and subsequently have been shared with other affected countries such as Mali,Nigeria and Guinea. _ . . k a 40. ?zca K t Compliance and Investigations ..k North America 111. Mit 1 1111111111114: 410 e The United States'second largest school '�l' district,serving one million students and 90,000 employees,worked with the G4S , e ', Compliance and Investigations team to reduce a,m . ' workers'compensation fraud and abuse losses. The organisation-wide programme saved the - customer more than$10 million in fraudulent oveoigi .4A ` "' claims and resulted in 24 arrests and convictions. Annual Report and Accounts 2014 G4S plc Strategy in action continued -7 ,nil l 2. Invest in organic growth,customer service and operational excellence Achievements Investing in organic growth opportunities C u sto m e r focused Group-wide initiatives to take advantage of the organic growth opportunity including: • sales capability assessment and recruitment • mandatory implementation of standard sales operations systems • sales performance in all businesses • customer engagement and retention • global account management Following the strategic review • pricing policy and management undertaken in 2013,we concluded that In the past 18 months,we have appointed new sales leaders in all of our six regions and at group level. the group had been under-investing in Across the group as a whole,we have appointed 391 organic growth opportunities and since additional new employees into sales and business then we have established a number of development roles,including industry sector specialists in a number of our regions.We have also been programmes designed to strengthen implementing a standard tool for measuring organic sales and business development. customer satisfaction.Through regular customer surveys and feedback,we will be better able to identify and quickly address service issues and deepen and strengthen customer relationships. 20I4 highlights Customer relationship management We are also investing in a more rigorous approach to 5.5bn £ I . I b n customer relationship and global account management We are placing greater emphasis on managing and retaining annual value of sales pipeline annual contract value of the existing customer base and have continued to invest as at end December 2014 new business won in new service development and innovation for existing customers.We have also begun to export commercially c'90/o proven services across countries and regions. Our investment in organic growth implemented through contract retention rate annualised additional these programmes provides long-term support for our for existing contracts investment in sales and sales pipeline.During 2014,we won new work with business development an annual contract value of over£1.1 billion and a total contract value of£2.I billion.See the Business review on • Group-wide initiatives to improve organic growth pages 34 to 41 for a description of the type of new and customer retention rates contracts won per region.We continue to build and to • Investing in a more rigorous approach to customer replenish our pipeline which,after taking into account strong relationship management conversion in 2014,had an annual contract value of£5.5 • Investment in technology development and sales billion at the end of December 2014. • Roll out of standardised sales operations system commenced 2015 priorities • Implement our standardised customer satisfaction survey tools across the group • Complete roll out of standard sales operations • Continue to improve pipeline management • Increase mufti-service offerings to existing and new customers G4S plc Annual Report and Accounts 2014 Annual contract value Large,diversified sales pipeline of sales pipeline at end B of December 2014 During 2014 we won new work with an annual contract value of over £I,I billion and a total contract value of£2.I billion.We continue to build and replenish our pipeline which,after L3.9 bn taking into account strong conversion in 2014,had an annual contract value Leads and prospects(unrisked) £S.5 billion at the end of 2014. p p � ) I . I bn Bidding bn X0.5 Negotiation I .tea o-� -- .., . t 1•Y. M{ r s s - , — ..... : '.1 - „ ; ? '-' - . villi:-,',1.4.1 'Global agriculture _ 1� s � ,�.4 Latin America •�-' .4 ; ` i1 G4S provides secure solutions to one of the world's leading global agriculture companies that M' has operations in more than 90 countries.In Latin ,�► ' .` America,G4S services more than 30 customer 1 ' ,-.,, fir:. -*, ."s1`� , t.. `; ,4 �A 4,-.,ft ,� v a : $'° locations in Brazil,Argentina,Colombia,Chile and . !,ii r W,'; • i ,. •1 Mexico,incorporating risk mitigation,integrated 11t ' ,, , * 9 l 1, security solutions and world-class technology. T I '"Y. , - Annual Report and Accounts 2014 G4S plc 21 Mk•W yy ' ti v , v r • , Y Y. ' h ;,y, eihOltatayllik aV ,., P t' . f _.. ... r , Bank of America—global With operations in more than 40 countries, ii serving 48 million consumers at 4,800 retail banking offices and 15,800 ATMs,the needs of , a global customer like Bank of America are '� complex and dynamic.G4S partners with them to provide total security including software, ,E systems and over 5,000 security officers posted ",--, at more than I,300 buildings and banking centres ,; •'- across the world. r ; �V X 9s % rt: ..-•, � a6, � '�'!'.� � y.w + —. "" ,, •', ' 1f�' ^iR Al .".R` n{$' � Yc vy. a}w i" 4v - T � t M. 'n «''t .v 1.- Iv �, - ait0,,- . "okt, � m aL. k ~ �_ _ .n gVi. v ' a '�.'.. ...fit„ �M1 v�!:w ?• a'y�Y y�_ . v L >w ':`' " " �` It" Lake Turkana—Africa , :: In April 2014,G4S was named security partner . I , it for the E500 million Lake Turkana sustainable *• - :. -. h ' - - ' ; ,. energy project in Kenya.Lake Turkana is a wr _ Y, -, - g=al:' large-scale infrastructure project in Kenya, t,,,:,.!`4, ' , 1 '1* a. transforming the lives of many Kenyans and % ` r"#„ ,, ! , !.1.,',7,.., providing a sustainable low-cost source of energy. . .)1 I j;� ..,` ;; �.` 4. N.F � r-. Part of a public and private sector joint initiative, d - I_. M ••,._f;t r• F.' . ; ' , * y .y G4S will work alongside other international At Iv'L 7. �, 4 r r, .r.. *' ,,.,�' 4i ,,� '. `r businesses under athree-year rolling contract for d ,' �ii ::*1 p7.'�` ,.... ,} F t up to 15 years. k �- [ t t 1 w. , ##.A :tom r . A," P?1t 1) -i k0` .:` -.11! The G4S solution includes securing generators `,"r`„ -"- .1P I le . 1' , , . r, . ' ,, ',. ,. and bore-holes,over-seeing the taking of water 0.:›It 01�, << I, r 4.'�•11� ""`�'"" I 1- "` '` - °` from those bore-holes and controlling access on ''1►:--' ,� a, , ^. N.=' : ''~!, ," 4M, .�, : ,4,,..,, ` y ,,;,,,� ' •*. and off the site.It also involves the staffing of an -x '�• - .� t •• �, • ,.1.. �.' operations room with a communications system ` ad , `' "`" �� "^ which all the major contractors will be using. �`• 22 G4S plc Annual Report and Accounts 2014 I Strategy in action continued Customer focused We have also started to strengthen our sales The global security systems market is a large,growing a operations so that we can manage our pipeline market(source:Freedonia World Security Services A more pro-actively and improve the alignment of Report,November 2014). sales incentives with sales performance and customer We believe specific technologies with significant market satisfaction.Sales incentives have been redesigned potential include: for 2015 to better align them to drive growth, customer retention and customer satisfaction. • advanced access control systems • video and image analytics software.Through Investment in technology specialists constant automated digital screening and filtering, In 2014,the group initiated a strategic review of video analytics can identify and notify operators capabilities in technology addressing IT and back office of potential issues,allowing security officers to make technology,operational technology and customer-facing quick,informed decisions technology.The opportunity for using technology to • integration software for connecting and drive back office efficiencies for areas such as payroll controlling multiple devices to create an and accounts payable through shared service centres end-to-end security solution is outlined on page 24 and operational technology such • data analytics software for pooling and rapidly as telematics is outlined on page 27.In terms of customer synthesising large volumes of data and facing technology,the group derived 8%of revenue from • automated cash management systems. security systems revenue in 2014 but this is largely concentrated in the North America and Europe regions. The group has proven in-house product development capabilities in a number of these areas: Security systems revenue(%) • United States—OneFacilitym technology solution spanning security,safety and facilities management, Secure Traxm automation of typical security Africa communication including incident reporting via& raiand 8% asia a handheld device and Risk360 security incident Middle East information capture,investigation and analysis tool, lVorcnAmerica 7% • UK—Symmetry"'access control and building 20?6 n Am � management system,electronic monitoring equipment, t2% • South Africa—Deposita end to end cash management solution for retail customers and • Europe—CASH360h end to end cash management for retail solutions(see page 26)and localised product All centres(e.g.Hotelo access control technology). Europe 6 Regional markets vary widely in terms of competition, products sold and customer segments,and our approach is adapted to meet each customer's unique requirements. Annual Report and Accounts 2014 G4S plc 23 Strategy in action continued 3. Make our organisation more productive Achievements Organisational effectiveness Leverage our As well as taking action to strengthen our organisation with new appointments,we have also been reviewing scale and our organisational design to ensure that management structures are both effective and efficient In a number of glcbal regions we have embarked on a de-layering programme technology which aims to shorten lines of communication,reduce costs and increase the amount of time devoted to customers and the marketplace.We have also created two global functions that should deliver significant One of our key goals is to improve synergies in the areas of IT and procurement operational and overhead efficiency During 2014 we also established a project to globalise and organisational effectiveness.We a number of our key functions—such as HR communications,finance and legal.We believe that global also aim to better leverage the scale of functions will improve the consistency,effectiveness and the organisation through group-wide efficiency of our functional services. procurement and IT programmes for Shared service centres the first time. An example of our approach to improve back office efficiency through shared service centres is in the UK, where we have completed the first wave of consolidating finance functions spread across nine different accounting locations and six different accounting platforms into one 2014 highlights combined UK-based shared service centre on a single IT platform. • Global procurement and IT functions established In North America,Canada will be consolidated into the US • Annual addressable procurement spend identified • Strategic review of IT resources and capability shared service centre during 2015,and beyond that we see completed opportunities to bring one smaller US business into scope • Began implementation of accelerated best practice that is not currently in the US shared service centre. (ABP)across the group including: In the AME region we have made tangible progress since — 4,500 vehicles fitted with telematics devices by last year in evaluating how we can transition to regional the end of 2014 hubs by,for example,co-locating simpler transaction — Implemented route scheduling programme processing activities before consolidating onto a single — Started our mufti-year labour scheduling IT platform. programme covering 39 countries and 376,000 employees • Phase I of UK shared service centre completed 2015 priorities • Migrate G4S Canada into North America shared service centre • Improve development and deployment of IT systems and tools across the group • Continue implementation of direct labour efficiency programme • Supplier negotiation and rationalisation 24 G4S plc Annual Report and Accounts 2014 N a" Direct labour a management—global Labour costs are around 75%of the total cost base for the group.Our in-house employee scheduling L.,„`3'"'r `` y 'r system provides reporting,key performance indicators(KPIs)and management information Total hours billed and paid around direct labour management,so that businesses (output from billing and payroll systems) can better manage their labour costs.This solution is already in the process of being implemented in 13 countries and a significant number of other countries will have access to it in 2015. Reconciled to: A detailed management information pack of KPIs has Contracted hours and actual hours delivered also been produced by the secure solutions Service (output from operating systems) Excellence Centre(SEC)to enable businesses to better measure labour efficiency by tracking unbilled overtime,non-billable hours and reconciliation of labour hours in a much clearer and more consistent Variance analysed and ongoing way is proving to be very valuable.It reconciles the improvements made output from payroll systems—what has actually been paid—and compares it to the expected output from the operating systems i.e.,what the scheduling system expects to pay and bill to customers.It highlights any variance for further review and analysis,enabling us to make improvements going forward. . .0001°'.°1°1111°11'f Cash Solutions/SEC - ' . _r : , partnership — Serbia, Europe — .NT G4S Cash Solutions,Serbia has to manage a very broad range of note denominations and so the size and volume of notes they transport �"` and insert in ATMs is different compared with w most other cash solutions businesses. As with all cash solutions SEC reviews,the team looked for efficiencies that could be achieved by applying proven methods to improve efficiency and customer service,while reducing costs and increasing profit These include combining routes, increasing productivity,reducing premium hours, reviewing branch boundaries,realigning customer sites and re-planning to reduce or eliminate route cross-overs,and absorbing new contracts into existing routes. g . .1- In Belgrade,a dedicated team from G4S Serbia worked with the SEC and improved productivity by removing routes and vehicles by integrating collections or deliveries into other routes and leplanning the routes differently. Annual Report and Accounts 2014 G4S plc 25 • ,111.1•1110.•\ :wr Iiiii ,t , I at" 4 Vik)if' 3 /fj f Ipip , ,, .i OF P.4, ---- ,- , all Australia care and justice i services —Asia Middle East it G4S is one of the leading private providers t - 4 of care and justice services in Australia and 1 ;. ';, New Zealand,overseeing almost 1,500 ` `` 1t• " . it, offenders and transporting over 100,000 ''+ prisoners and 86,000 non-emergency patients tow` in 2014.Leveraging our local knowledge and �_ international expertise,a key part of the G4S ...„,„,/,,; , =-- Australia growth strategy is to develop our care '"� .. _ _ «• .. -- and justice portfolio in new markets(Queensland . ' .. and Western Australia)and new sectors(policing). To support this we have invested in senior �" n executive level sector expertise in those states, 4 `x t4 7 _;;„ >,t'� r k - --. .,; T- . in policing in Australia and transferred policing F ,-`". '"' f pr-, - 4„, 0, f c'' -.. we• '. * : experts from the UK business. -4''�' _`1.`'" t` -°mm , Y '},i '` �i , `, s- ',�...; .�_�'x:+4�C>wa.� �' 1:; '—wj7Y i . _"S ' .^'"eY°�F., v.A '4./'- 7 . .. t . — - ', is y'. + CASH36OTM —global CASH360T"is the first integrated end-to-end ` cash management system that controls every • ,, I stage,from cash payment by purchasers to depositing the proceeds into sellers'bank accounts.It has been launched in Europe 1 4. 1 "7 and other markets.Over the last three years, CASH360T"revenues have grown over five-fold - r and we have plans to launch in more markets. ' This will enable our banking and retail customers �' to become more efficient and secure and help them to spend more time with their customers. Ilk �r By automating the entire process,CASH360TM has ci been able to mitigate the risks that surround the management of money in a wide range of scenarios. � The financial benefits for customers include better cash flow,simplified operations,a safer environment +f and reduction in losses,giving business owners and I % management more time to focus on trading • successfully.Users have reported in-store costs of „ handling cash reduced by up to 70%and the • } elimination of"shrinkage"—loss of inventory that can be attributed to a variety of causes,from employee theft to administrative errors. I 1 G4S plc Annual Report and Accounts 2014 Strategy in action continued Leverage our global scale and technology Group procurement Operational excellence During 2014 we established the position of In addition to programmes focused on organic growth,we chief procurement officer and conducted a baseline have programmes under way designed to improve operating survey of non-payroll spend.This allowed us to determine and organisational efficiency.These programmes are the scale and the nature of the opportunity to reduce described collectively as Accelerated Best Practice(ABP). costs by employing a global approach to procurement Two years ago we invested in creating Service Excellence By bringing procurement under a global function we Centres(SECs),for both secure solutions and cash solutions. can use our scale to better negotiate deals with SECs aim to deliver gross margin improvement and suppliers,reduce costs and make more structured improved customer service by driving consistent operational purchasing decisions. excellence throughout the business. The baseline survey carried out in 2014 identified ABP programmes include: addressable spend of£I.3bn,of which 70%was Telematics and route planning attributable to eight broad categories of expenditure. We have around 34,000 vehicles in our fleet and spend Since then we have started the process of employing over£300m per year on vehicle capital investment and experienced category managers and opened negotiations operating costs.The telematics programme involves the with a number of our key suppliers.We concluded our installation and use of tracking devices that enable us first global procurement deals in early 2015 in IT and to measure and reduce fuel and maintenance costs and telecoms,and believe that this approach presents improve driving safety.At the end of 2014,4,500 of significant opportunities to reduce our costs and achieve our vehicles were fitted with telematic devices. better service and value for money. IT transformation Our route scheduling programme involves the use of equipment and software that enables our businesses to In IT,we have a new group chief information officer, plan and operate optimal routes for collections,deliveries and have established a global leadership team. and site visits.When fully deployed,the programme can We are adopting industry-recognised IT service reduce both vehicle and crew requirements and improve management models,driving consistency and efficiency in customer service by helping our crews to meet delivery, IT infrastructure,development and operations.The first collection and visit windows.By the end of 2015 we plan phase of transformation is focused on infrastructure. to have 7,000 vehicles operating under an enhanced route scheduling system. In addition to improving supply chain management we are also using vendors'IT platforms to give us visibility Direct labour efficiency programme and control of our spending. The programme aims to improve customer service and reduce costs by deploying the right security officers at We are also taking a global approach to rationalise the the right time and at the right cost,and by minimising numerous email systems which exist across the group, non-billable time.This is an enormous multi-year improving communication and productivity.We are taking programme covering 39 businesses and 376,000 a similar approach to the rationalisation of our telecoms employees in the first phase alone. infrastructure and data centres. Direct labour efficiency reconciles the output from payroll On IT development,we have begun to offshore the systems—what's actually been paid—and compares it to software development that underpins our accelerated the expected output from the operating systems i.e.,what best practice for labour scheduling and route planning. the scheduling system expects to pay,and highlights any Finally,during 2015 we will seek to bring a standard variance for further review and analysis enabling us to approach to our IT operations. make improvements going forward.See the case study on page 25 for more information. Annual Report and Accounts 2014 G4S plc 27 Strategy in action continued El/ 4.Actively manage our portfolio and performance Achievements PO rtf0 I'O During 2013,our strategic review identified a number of businesses which were under-performing or lacking in scale.We also looked at business risk profiles and market values.Depending on our assessment of all of these management factors,we decided to either sell,discontinue or invest in the turnaround of these businesses.During 2014,we reviewed 56 businesses in greater depth and detail. Of these we have sold eight businesses,including US Government Solutions,which was managed through a proxy structure over which we had limited control. Portfolio management remains an Since 2013,our disposal programme has raised around £248m from businesses which generated a below group important tool for capital discipline average operating margin of 2.8%.Of this,£177m was and performance management. raised in 2014. Portfolio management remains an important tool for capital discipline and performance management A further 20 smaller businesses are being sold or ceased, and another 22 are currently under review.None of 2014 highlights these smaller businesses,alone or in aggregate,has a material impact on our revenue,our profrt or our cash 5 6 8flows.Our portfolio management programme has improved our strategic focus and we have released businesses reviewed businesses sold capital at attractive overall realisations. At the same time as divesting under-performing businesses or those lacking materiality,we have been 248 m investing in the organic growth opportunity where we expect to see good returns on our investment and to gross proceeds raised make G4S more productive.As outlined in the previous since 2013 "Strategy in action"sections,we have been investing in our continuing businesses in the following areas:people, sales and business development,technology and business 2015 priorities improvement programmes,including restructuring to drive operational excellence and organisation efficiency. • Cease or sell 20 smaller businesses • Continue to invest in the organic growth opportunities to drive sustainable profit and cash flow 28 G4S plc Annual Report and Accounts 2014 09. 0 z Active portfolio management Since then,we have reviewed 56 businesses looking at strategic value,risk profile and materiality During 2013,we conducted a"bottom-up"analysis of contribution(growth,PBITA and cash generation), of all of our businesses,evaluating their performance and sold eight businesses,raising gross proceeds of and prospects.The results showed that 62 countries £248 million.Twenty further businesses are being sold were expected to contribute 95%of the total PBITA or closed. expected in 2016. 2013 Forecast of G4S PBITA in 2016 by country Cumulative PBITA(%) 100 80 60--------------- --- .------- ----- _ .__ 62 COUNTRIES • CONTRIBUTE • 95% OF 2.016 PBITA • 20 4 0 11 91 101 111 Country 2016 PBITA High to Low Annual Report and Accounts 2014 G4S plc 29 Strategy in action continued 5. Embed disciplined financial and risk management Achievements Operating cash flow I m rovi n In 2014,we made a material change to the cash P g measure used in budgets,monthly reviews,long-term cash fI ow business and incentive plans,to deliver free cash flow after working capital.Our performance management cycle around cash flow has also changed.Our debtors sales outstanding(DSO),based on revenue for the last 90 days of 2014 was 48 days and there are many businesses where there are opportunities for improvement.We have moved the monitoring of cash The group's capital allocation and and cash collections from monthly to weekly,and moved contract review processes have the collections agenda beyond finance by engaging the p business in cash collections.We also need to be more been strengthened to ensure that all disciplined about commercial terms for receivables,drive investment opportunities compete for better terms from our supply chain through the new procurement processes and to reduce the time from capital in a single`pool' and are evaluated event to billing.On average across the group we bill in against a stringent set of economic and 13 days,and as with DSO,there is considerable variation in the timeliness of billing across the group. risk criteria. We are developing a programme across the global finance and commercial communities to systematically look at both the order to cash cycle,and the procure to pay cycle and analyse the systemic root causes that 2014 highlights affect cash flow and then drive improvement based on this root cause analysis. £526rfl £553 m Contracts,risk management and delivery Cash generated from Total cash generated assurance operating businesses from continuing operations We now have enhanced contract management in 2014 in 2014 processes in place across the group.There are clear reserved powers for the approval of contracts at group I b n c.200 executive committee and board level to approve bidding for major,complex contracts and all material contracts revolving credit bank facia with low profitability are subject to review at regional, g �y contracts across the group or board level,as appropriate,29 contracts went refinanced in January 2015 group reviewed by the through this process in 2014.For more detail please see CFO on a quarterly basis the risk management section on page 42. Contract risk management and governance model 2015 priorities • Improve cash generation co ei ro °'t c-a a7 � 0 co as` g x co%t:„,i> '4dre mob 30 G4S plc Annual Report and Accounts 2014 We have also introduced a 360-degree model for ongoing contract assurance("Contract 360").As the Capital discipline name implies,this brings together a review of the financial,commercial,legal,delivery and reputational risks We believe our new approach to capital discipline in taking on work for a customer and means that there is working,one single capital pool;a minimum is a holistic view of contract risk,both before we commit 10%post-tax internal rate of return on all and during the contract life cycle.Then,during contract investments;a group wide investment committee execution,amongst other things,we review the progress that oversees both revenue and capital on delivery commitments made and we monitor investments;and rebalancing capital away from customer satisfaction as well as commercial and financial acquisitions to organic capital investmentThe performance.Contract 360 is well developed and more rigorous process around capital discipline embedded in our UK business and will be progressively was reflected in£I 38m capital expenditure implemented across all regions in 2015. (2013:£178m)down 22%from 2013.The lower spend is also a deferral of spend into 2015 as we In terms of the broader contract portfolio,every bring some capital investment under the global IT, quarter the finance organisation reviews the financial shared service and other programmes. performance of all the major contracts,and the CFO performs a top-level review of the top 200 contracts across the group each quarter,equivalent to around a third of group revenue.These contract disciplines give us early sight of emerging contract issues,and the Contract 360 review process enables us to develop the appropriate commercial and legal strategy and ensures that the accounting is sound. Capability building Restructuring These contract management changes would not be In 2013,we invested£63m to reduce costs,mainly in possible without capable people and effective processes, the UK and Europe.New areas of opportunity identified in finance,risk management and control.In Audit and in 2014 accounted for a further£29 million charge. Risk we have appointed a Head of Global Risk and Audit These programmes were essential in strengthening our In finance,we have four new regional CFOs and a new competitive position,principally in the UK and in Europe. group Financial Controller.Together with their teams they In the UK cash solutions business,we have reduced our have significantly improved our internal financial reporting. branch footprint by 20%and headcount by around We have a much more rigorous monthly and quarterly 10%.In Europe,we have consolidated our regional HQ close process,monthly reviews through group finance in Amsterdam,consolidated our operations in the that focus on quality of earnings,as well as enhanced Netherlands and Belgium,and across the group funded processes around balance sheet integrity and control. some modest de-layering of duplicated or overlapping management and supervision. Regional Risk and Audit Committees We also introduced regional risk and audit committees Balance sheet across the group,and these bring together the ongoing The board remains committed to maintaining a strong risk management agenda in the region,compliance balance sheet with the long-term net debt to EBITDA matters,issues arising from internal and external audit, ratio of less than 2.5 times.At the end of 20I 4,the and an ongoing review of any issues requiring judgement net debt/EBITDA was 2.8x—a little higher than our long They are chaired by the Regional CEO and include term aim mainly because of the payment relating to the representatives from group as well as Regional Finance, UK electronic monitoring contract settlement.The group's and are also attended by our external auditor revolving credit bank facility was successfully refinanced in January 2015 with improved pricing,terms and conditions The Regional Risk and Audit Committees are now a achieved.The new facility is a five-year£I billion core part of the governance processes within the group. committed facility provided by a consortium of leading Together with the other changes discussed above,they international banks.Our unutilised but committed facilities provide an enduring platform in risk management and at the year end were£998m.We continue to be soundly controls and have resulted in significant strengthening financed and have good access to capital markets as of the stewardship in the group. demonstrated by the recent renewal of the revolving credit facility. Annual Report and Accounts 2014 G4S plc 31 Strategy in action:Key performance indicators Financial KPIs Key performance indicators Our progress in implementing Underlying' revenue(£bn) Underlying' PBITA(Cm) our key strategic objectives is measured using key performance 6.8 424 indicators (KPIs) for the group. 10 =c In addition to the group's financial KPIs of revenue 424 growth,operating cash flow,and profit,managers 393 8 across the group are also incentivised to achieve 6S 6.8 • personal objectives.These are agreed on an _ individual basis and are usually linked to business 6 fi plan milestones. 4 I I 200 2 100 Description G4S has an organic growth We believe there is still great strategy based on strong potential to sell more complex market positions in structural solutions which tend to have growth markets.We are longer contract terms and investing in improved customer higher margins service and sales and business The group has a number of development people,and aim initiatives—called Accelerated to build long term relationships Best Practice—to drive with customers. efficiency and operational improvement across the group. Performance In 2014,revenues grew 3.9% In 2014,PBITA grew 7.9% to£6.8bn(2013:£6.5bn), to£424m(2013:£393m)as a with organic growth of 8.9% result of these initiatives starting in emerging markets and 1.4% to benefit PBITA in emerging growth in developed markets. markets was up I 0.3%and in developed markets PBITA increased by 12.3%. Link to �,,,,,,�� I �Q n 1r1 rn Transform our culture through our people and'ialues strategy ®, G Q ( 41 invest in organic growth and customer service Make our organisation more productive U Actively manage our portfolio and performance Embed disciplined financial and risk management _ G4S plc Annual Report and Accounts 2014 Non-Financial KPIs 0 a Cash generated by Underlying' EPS In 2015,examples of performance contracts operating businesses(£m) (pence per share) of senior managers include personal objectives aligned to their respective roles, 526 ( such as customer retention for business unit managers,succession strategies for human resources roles and cost savings for 600 procurement roles.We believe that strong employee relationships help to deliver 500 - excellent customer service. 420 !3.6 12.9 400 300 Values including Safety first 1 200 People and Organisation i00 Operational excellence 4 Business development A key priority for the group G4S is looking to deliver HR standards and KPIs is to drive improved cash sustainable growth in earnings generation,through better over the long term. In addition,our businesses are required to working capital management report monthly on key metrics relating to: and capital discipline. 1 Safety first Industrial relations Employee retention Recruitment g Total cash flow from In 2014,underlying earnings L__ continuing operations in increased I I.7%to£210m The objectives and targets are focused on 2014 increased 1 1%to£553m (2013:£1 88m).As a result of maintaining the G4S values,including Safety (2013:£496m).Cash generated the share placing in August First and driving sustainable profitable growth. from operating businesses was 2013 and the subsequent £526m(2013:£420m),up 25% increase in average number excluding one off corporate of shares in issue,EPS increased items of£27m(2013: 5.4%to 13.6p(2013: 12.9p). £76m)per page 93. I. To clearly present underlying performance,specific items have been excluded and disclosed separately—see page 90.For basis of preparation and an analysis of specific items see page 9 I. Annual Report and Accounts 2014 G4S plc 33 Business review 20 I 4 G4S is managed through a geographic and functional organisational structure. Business review Underlying regional and group financial performance The analysis of the group's business performance reflects internal management reporting lines which are based on geographic regions. The group's underlying segmental results are presented below,excluding specific items and operations identified in portfolio rationalisation. Prior year results are presented at constant currency and have been restated for the adoption of IFRS I 0 and IFRS I I,for businesses classified as discontinued operations during the year,and for the transfer of business between regions to reflect the way the businesses are managed across the group. Revenue PBITA Organic A t constant exchange rates _ £m £m growth 2014' 20132 YoY% 2014' 2013' YoY% Africa 485 440 10.2% 46 36 27.8% 10.1% Asia Middle East 1,260 1,192 5.7% 107 103 33% 5.7% Latin America 653 570 14.6% 39 35 I I.4% 14.6% Emerging Markets 2,398 2,202 8.9% 192 174 10.3% 8.8% Europe 1,400 I,409 (0.6%) 85 82 3.7% (0.7%) North America 1,365 I,277 6.9% 75 56 33.9% 6.9% UK&Ireland 1,587 1,608 (1.3%) 132 122 8.2% (1.4%) Developed Markets 4,352 4,294 1.4% 292 260 12.3% 1.3% Total Group before corporate costs 6,750 6,496 3.9% 484 434 11.5% 3.9% Corporate costs (60) (41L 46.3% Total Group 6,750 6496 3.9% 424 393 7.9% 3.9% I. To clearly present underlying performance,specific items have been excluded and disclosed separately-refer to page 90 for a reconciliation to total resuFts. 2. 2013 results are presented at constant exchange rates and have been restated for the adoption of IFRS I 0 and IFRS I I,for businesses classified as discontinued operations and exclude the results of portfolio businesses. The statutory segmental analysis as presented in note 6 of the financial statements includes revenue from businesses that are being sold or ceased and for the prior year the impact of foreign exchange by region was as follows-Africa£nil(2013:£56m);AME£67m(2013:£180m); Latin America£10m(2013:£I 23m);Europe£21 m(2013:£117m);North America£nil(2013:£82m);UK and Ireland£nil(2013:£7m). Operating profit in note 6 of the financial statements includes the trading results from businesses that are being sold or ceased,interest and tax from joint ventures and for the prior year the impact of foreign exchange by region was as follows-Africa£nil(2013:£4m);AME£6m(2013: {5m);Latin America£1m(2013:£9m);Europe£1m(2013:£6m);North America£nil(2013:£3m);UK and Ireland£2m(2013:profit of£3m). 2014 Revenue and PBITA by region Revenue(%) PBITA(%) UK&Ireland I Africa UK&Ireland ` Africa 23% 7% 27% 10% Asia Middle East Asia Middle East 19% 22% tacin America Latin America North America 10% North America 8X 20% 1 S% Europe Europe 21% 18% 34 G4S plc Annual Report and Accounts 2014 Africa r' s liter In Africa revenue and organic growth was 10%and PBITA increased 28%,benefiting from the growth in revenue as well as overhead efficiency programmes. Andy Baker New contracts won across the region include work for customers Regional President—Africa such as financial institutions and utilities in Kenya,gold mining in DRC,embassies in Tanzania and Sierra Leone,a hydro-electric plant in Mozambique and mine clearance work in Southern Sudan. G4S is the largest provider of integrated In South Africa,we won major new contracts with distribution companies and financial institutions. security solutions in the region,with The sales pipeline in Africa has a diverse and growing number operations in 24 African countries. of new contract opportunities in areas such as financial institutions, We focus on core sectors in the region, aviation,mining,oil and gas and embassy security.The region also particularly telecommunications,aviation, remains focused on embedding Accelerated Best Practices primarily in the areas of direct labour management and on mining,oil and gas,embassies and ports, organisational efficiency. as well as post-conflict humanitarian work with government agencies and NGOs. _ Africa case study— Tangier Med Port 2014 highlights In 2014,G4S Morocco was awarded a three-year contract for Tangier-Med Port,one of the largest capacity ports in + 10% $8bn the Mediterranean and Africa.G4S protects the port's assets,commodities and people through a broad range Organic growth Africa security market of specialised services,induding operational and technical in 2013' security focused on passenger and freight screening. 125,000 +28pk �yy _ Employees PBITA - � �� Revenue PBITA Em Ern 2014' 2013' YoY% 2014' 20136 YoY% 485 440 10.2% 46 36 27.8% * Source:Freedonia World Security Services report.November 2014,excluding residential security. All tables show underlying performance at constant exchange rates. G4S plc Business review continued Asia Middle East +111111 r 114' Revenue and organic growth in Asia Middle East was :6eanredgion. PBITA increased 4%, eflecting a good performance in The performance on PBITA reflects only three months'contribution from the Manus Island immigration processing centre contract Dan Ryan in 2014,compared with the full 12 months of 2013.The contract Regional CEO—Asia Middle East ended in March 2014. The region benefited from new contracts in aviation,demining G4S is the leading security provider and risk management for international oil and gas companies in Iraq,electronic security systems contracts in the UAE,Qatar and in the Asia Middle East region with Guam,and the extension of a contract with a major US motor operations in 29 countries.Our largest manufacturer into Australia and UAE. countries by revenue are India, We invested in establishing a China outbound business Saudi Arabia and Australia. development function in the fourth quarter,which will focus on developing business across the group with Chinese multinationals with overseas operations. The sales pipeline is strong in areas such as care and justice services in Australia and New Zealand and a number of port security systems opportunities in the region. We have made significant investment in sales and operational capability in the region.Country sales leaders have been recruited 2014 highlights for most countries and a customer satisfaction programme was launched in the first quarter of 2015.In addition,organisational +5.7% 42bn structures are being reviewed with the aim of streamlining regional and country overheads. Organic growth Total security market size In terms of portfolio management,we have exited six businesses in 2013' in the region during the year. 264,000 3.9% Employees PBITA growth Asia Middle East— UAE systems Following investment in 2014,the Middle East systems business generated nearly£50 million of new business from customers in sectors such as government,real estate Revenue PBITA and transportation. Ern Ern 2014' 20132 YoY% 2014' 2013' YoY% - 1,260 1,192 5.7% 107 103 3.9% 1 • 36 G4S plc Annual Report and Accounts 2014 a Latin America . . ti gill Revenue and organic growth in Latin America was 15%with a number of contract wins in the ports,car manufacturing, transportation,financial services,telecommunications and extractives sectors.The macro-economic slowdown impacted Martin Alvarez the technology businesses in Brazil and Chile. Regional President,Latin America&Caribbean PBITA was I I%higher with the legislated increase in pay in Brazil,partially recovered in the second half of the year and offset G4S is a leading integrated cash solutions by the drop in commodity prices in Chile creating a difficult environment to pass on cost increases to mining customers. and secure solutions provider for Our sales pipeline for the Latin America region is growing well, commercial and government customers with a number of large new multi-year manned security and facilities across 16 countries in Latin America, management opportunities for multinational customers in Brazil with Brazil,Colombia and Argentina and manned security customers in Peru. being its largest markets in the region by revenue. Latin America case study— 2014 highlights Food manufacturing + 14.6% $26bn G4S provides technology,security solutions,secure facilities management and high-level risk consulting to Organic growth Total security market size one of the world's largest food companies and one of in 2013' Brazil's largest employers across more than 35 sites. 76,000 11 .4 Employees PBITA growth '' gem' Revenue PBITA fm £m f .. 2014' 20132 YoY% 2014' 20132 YoY% 653 570 14.6% 39 35 11.4% " 4,!".10.. • Annual Report and Accounts 2014 G4S plc 37 • Business review continued Europe :00 In revenue declined 0.6%with the insourcing of the g Department of Justice contract in the Netherlands.This was largely offset by healthy revenue growth in some Eastern European countries,as well as Austria and Turkey.PBITA was 4%higher Graham Levinsohn than 2013,reflecting efficiency improvements and benefits of the Regional CEO—Europe restructuring programme implemented in 2013 and 2014. We made further progress with portfolio management in the G4S Europe has activities in 23 countries region,disposing of three businesses including the sale of our business in Sweden for£39 million.The region also continues in Scandinavia,Benelux,Southern Europe, to focus on implementation of Accelerated Best Practice;targeting Eastern Europe and Central Asia.It has direct labour efficiency;cost leadership in the areas of organisational strong market positions in cash solutions efficiency and effectiveness,and on procurement and IT benefits. and around 20% of the re ion's revenues Recent contract renewals include Schiphol airport contract for g five years in the Netherlands and a major Belgian bank are security systems-related. Our European markets are showing some signs of stabilising,and with our investment in sales and business development including sector specialists in aviation,ports and justice,we have a diverse contract pipeline in these sectors. 2014 highlights Europe case study—GSN In January 2014,G4S won the majority of GSN cash (0.6%) $39 bn solutions business in the Netherlands for five years,valued at€50m per annum.GSN serves the major banks in the G4S Revenues Total security market size Netherlands and is their provider of cash counting,handling in 2013' and logistics including the maintenance of cash devices. • 64 000 4. Employees PBITA growth '� ;t ,. �. • s Revenue PBITA Em Em ` 2014' 20141 YoY% 2014' 20132 YoY% 1,400 1,409 (0.6%) 85 82 3.7% 38 G4S plc Annual Report and Accounts 2014 a" North America 1 Ili II Y� s r- + John Kenning succeeded Grahame Gibson as CEO for the North America region in December 2014 following Grahame's retirement from the role after 30 successful years with the group. '' John brings extensive security and systems experience to the group. John Kenning Regional CEO for North America&Technology Revenue grew by 7%in North America reflecting a strong performance in commercial security,compliance and investigations and justice services. G4S North America is predominantly We have retained contracts with major financial institutions and an integrated secure solutions business IT companies,and grown our business in the wholesale retail sector. We have extended our youth justice services to now cover 13 for commercial customers,with states.There were also major contract wins in the industrial, some government contracts including healthcare and biotech sectors. juvenile detention services and border PBITA for the region was 34%higher;reflecting higher revenue protection.It has recently launched an and improved direct labour efficiency resulting in a reduction in non-billable overtime,and overheads. innovative cash management solution With the introduction of the Affordable Care Act,effective in the for retail customers,CASH360TM fourth quarter of 2015,we have reviewed and modified our plans. (see page 26). We do not expect the Act to have a material impact on the group's business,as our plans were broadly compliant with the legislation. 2014 highlights The region is expanding its shared services centre to include Canada,which will generate overhead savings in 2015. +6.9% $46bn Good progress was made in the region on rationalising the business portfolio.The sale of the cash solutions business in Organic growth Total security market size Canada completed for£60 million in January 2014 and the sale in 2013' of the US Government Solutions business for£36 million completed in November 2014. 57 000 +3 3 9% Overall,the North American business has a strong contract pipeline with opportunities across diverse sectors including commerce,retail, Employees PBITA growth industry and government North America case study— PR'TA International Gem Tower Cm Ern 2014' 20132 YoY% 2014' 20132__YoY% The International Gem Tower in NewYork opened in 1,365 1,277 6.9% 75 56 33.9% 2014 and is designed specifically for the global diamond, gem and jewellery industry.Because security,safety and speed are essential to success,the developers required a comprehensive,world-class solutions including security technology,consulting,personnel and international logistics. � .- + , Annual Report and Accounts 2014 G4S plc 39 Business review continued UK & Ireland :it.$1, ilk Following his successful leadership of the region as interim regional president for the UK&Ireland region,Peter Neden Idli • was appointed the regional president in January 2015. Peter Neden Revenue declined 1.3%and PBITA was 8.2%higher than the prior Regional President—UK&Ireland year with improved performance in the UK cash solutions business being partially offset by the ending of the MoJ Electronic Monitoring contract G4S is the leading provider of cash Significant restructuring programmes were implemented in the and secure solutions in the region UK cash solutions,Ireland cash solutions and secure solutions businesses covering branch networks(Ireland and UK cash with a broad range of expertise covering solutions)and organisational design.These initiatives will mitigate specialist event security,government some of the impact of the loss of a large ATM retail contract from outsourcing,including care and justice the fourth quarter of 20I4.The region also continues to focus on implementation of Accelerated Best Practice,focused on direct services,and cash solutions. labour efficiency,and cost leadership in the areas of organisational efficiency and effectiveness and on procurement and IT. UK contracts won during 2014 include selection by the Department for Work&Pensions(DWP)to manage community work placement contracts for the long term unemployed;renewal of the Rainsbrook Secure Training Centre contract;renewed cash 2014 highlights solutions and manned security contracts with major financial institutions;a new contract with a major property management I 4/ 7bn company;the first major smart metering programme;the North East Prisons secure healthcare contract;a new seven year contract for national infrastructure and a regional secure solutions contract Organic growth Total security market size with a global IT company. in 2013' The UK&Ireland bidding pipeline is broad-based and has grown 37'000 -n,2% strongly in the areas of facilities management and outsourcing. Employees PBITA growth UK & Ireland case study— DWP The Work Programme aims to help long term unemployed people in the UK into work and since June Revenue PBITA 2010.G4S has been delivering the Work Programme in £' £m three contract package areas,helping more than 45,000 2014' 20132 YoY% 2014' 2013' YoY% long-term unemployed people into work and is one of 1,587 1,608 (1.3%) 132 122 8.2% the highest performing providers.In April 2,014,G4S was awarded a contract to deliver Community Work Placements in six areas. pk4 1 ter, 40 G4S plc Annual Report and Accounts 2014 Underlying service line operating review 1 1 Secure solutions Revenue PBITA At constant exchange rates Em Em 2014' 20132 YoY% 2014' 20132 YoY% Emerging Markets 1,951 1,782 95% 136 122 1 1.5% Developed Markets 3,728 3,651 2.1% 227 206 10.2% Total 5,679 5,433 4.5% 363 328 10.7% The secure solutions businesses achieved 5%growth in revenue and I I%PBITA growth. Emerging markets revenue grew by 10%,and PBITA grew 12%driven by contract mix,price increases and cost efficiencies. Developed markets revenue grew 2%with PBITA growth of I 0%.There was good growth in North America offset by a decline in the UK,resulting in part from exiting unprofitable contracts. Cash solutions Revenue PBITA At constant exchange rates Em Em 2014' 20132 YoY% 2014' 20132 YoY% Emerging Markets 447 420 6.4% 56 52 7.7% Developed Markets 624 643 (3.0)% 65 54 20.4% Total 1,071 1,063 0.8% 121 106 14.2% Cash solutions revenue increased by I%and PBITA grew 1. At constant exchange rates.To present clearly underlying by 14%,helped by a strong improvement in the UK cash performance,specific items have been excluded and disclosed solutions business and good performances elsewhere. separately—see page 90. 2. 2013 results are presented at constant exchange rates and have Emerging markets revenue growth was 6%and PBITA was been restated for the adoption of IFRS 10 and IFRS I I,for businesses 8%higher.Developed markets revenue declined 3%principally classified in discontinued operations,and exclude the results of in the Ireland cash solutions business.PBITA in developed businesses identified as part of the portfolio rationalisation. markets grew 20%,reflecting strong performances in the UK and Europe. ' - ii-- V i....,' 'I,- '--• I V . , OM Annual Report and Accounts 2014 G4S plc 41 Risk management Embeddin g management mana ement in the business Our aim is to gain a deep What we did in 2014 understanding of the principal risks The improvements to our risk management processes g P P have continued during 2014.The quarterly Regional we face at all levels of the business Risk and Audit Committees are now well established and to focus management attention and similar committees have been established in the larger countries.A new Governance Risk and Control on effective mitigation of the most (GRC)information system has been implemented and critical risks. good progress has been made in transitioning countries from the previous risk management system.The new contract management approval and broad risk-based contract review process has been embedded effectively Our risks in the UK&1 region.A quarterly financial contract review The last year has continued to highlight the dynamic process has been implemented globally. nature of the markets in which G4S operates.The The board has provided greater formality and detail geo-political situation in the Middle East has been very concerning its risk appetite,linking it more explicitly to volatile.Global economic recovery has been highly the group's principal residual risks and a structured risk variable.G4S also continues to face the operational and universe.This detailed risk appetite statement has been health and safety risks which are particular to the security shared with all the Regional Risk and Audit Committees business,along with the financial control and commercial and they have provided positive feedback on it During risks common to all multinational companies. 2015 the document will be shared more widely with How we manage our risks individual countries and business units and increasingly Our risks are captured in a global risk reporting used to inform prioritisation of risk mitigation activities. information system.These risks are reviewed at least Alastair James,who joined G4S in 2013 as Group annually by the operating companies,with more material Director of Risk and Programme Assurance,has now risks being reviewed quarterly.The group Executive been appointed Group Director of Risk and Audit. Risk Committee and board Risk Committee review We will continue to have separate internal audit and the most significant risks on a regular basis,and the board risk management teams reporting to Alastair but we will regularly reviews the overall impact of these major risks ensure that these processes are appropriately integrated. on the group's activities. What we will do in 2015 We will complete the transition of all countries to using the new GRC tool for risk management We will migrate existing group control standards self-assessments as well as Group Internal Audit to „2014 has seen us make significant the GRC tool from the separate platforms which strides in improving our risk support them currently.This will enable a much greater management approach.2015 is consistency of reporting and a much tighter link between 'r control effectiveness and risk assessment about embedding this in our operations across the world. We will embed the newly formulated board risk appetite into the business and use it to drive prioritisation of John Connolly risk mitigation plans. Risk Committee Chairman The contract risk management processes that have been successfully implemented in the UK will be extended globally.We will work to harmonise and simplify contract sign-off processes to ensure that they are effective without being a barrier to sales success and revenue growth. As new processes and systems stabilise there will be an increasing focus on ensuring quality of risk assessments and progress of planned mitigating actions. 42 G45 plc Annual Report and Accounts 2014 Enterprise risk management governance model Board The board has ultimate responsibility for assuring Board "" risk management processes by reviewing the most critical Board risk committee risks and controls. The board Risk Committee sets the group's risk appetite, assesses the group's principal Board Risk Board Audit Board audit committee residual risks and assesses Committee Committee The board Audit Committee the overall enterprise risk ensures the group's control management process. framework is operating Meets four times per year. effectively.Meets four times per year. Executive risk committee Executive Risk Regional Risk and Regional risk and audit ONO The Executive Risk Committee Audit Committees committees Committee considers the The Regional Risk and group's principal residual risks Audit Committees review: and the progress of mitigating I.regional level risks; actions.Meets four times per year, 2.the progress of mitigating actions;and 3.quarterly audit and Operating companies Operating companies financial control status Our operating companies reports,internal financial identify and assess the risks We employ three lines of defence to control reviews and balance and manage risks across the group. sheet inter and any their business objectives g itY y and plan appropriate accounting judgements. mitigating actions.These are I st Line:Business operations and support g g Each regional committee recorded in our group-wide Responsibility for the first line sits with the managers meets four times per year risk management tool. of our businesses,whether line management or financial support.The senior management team within each business is responsible for implementing and maintaining appropriate controls across their business. External audit Result Ensures standards expected by the group, our customers and other stakeholders are met. Independent oversight of the entire process. 2nd Line:Control and oversight functions The second line consists of oversight functions at both regional and group level including:risk,finance, legal,human resources,operations,information technology,commercial and CSR. Result Provides support to the business managers. 3rd Line:Internal independent assurance The third line is designed to detect or prevent unexpected outcomes and comprises the internal audit function.As part of its annual programme of work,internal audit conducts regular reviews of risk management processes and gives advice and recommendations on how to improve the control environment. Result Provides independent assurance over the design and operation of controls. Annual Report and Accounts 2014 G4S plc 43 Risk management continued Contract risk management and governance model Based on financial,legal, reputational and operational The board risk risk criteria committee will undertake a review ,•,,, a �S ee as Biy Referred to the region,group o< � sej. �� or board as appropriate for of a major contract at Qj review and approval. each of its meetings. vo 6)�� Bid's customer value proposition, co commercial terms and risk Internal audit - a mitigation strategy are challenged. conducts audits of a A Expected risk return is selected contracts. o assessed before approval is given or withheld. 0 Contracts subject to co*.eon• tit's t` Key contractual requirements and 7 on-going scrutiny at s3.4 rtcr 8 Cor\`S�� risk mitigation strategies,based on regional or group level ••--••• •canoe mob complexity and risk profile of based on commercial mobilisation,are mapped to scale and level of risk. accountable contract managers. What are the key risks faced There are many opportunities for growth: by G4S? • Broadening our service provision with existing customers; During February 2015,the Regional Risk and Audit • Taking existing services into new countries; Committees met to agree the regional principal • Bringing new high value add services to market residual risks.These meetings were facilitated by group that build on our core competencies and brand; risk management and identified the risks to each and we should be ambitious in seeking out region's strategic business objectives and to on-going and pursuing these opportunities. business operations.The meetings were informed by the country level risks recorded in the group's risk There are many opportunities to improve the productivity management systems. of the business(see pages 24 to 27)and we should set ambitious programmes of change and improvement. Group risk management and the CFO consolidated these risks and identified common themes and regional risks However in delivering this agenda of change and growth which were material to the group. we need to manage the risks we are taking on effectively: These group principal residual risks were reviewed • By thoroughly assessing the risks of major contracts; and approved by the Executive Risk Committee and applying the best resources and our best expertise; the Risk Committee of the board. and hence putting in place mitigation strategies which will control the risks to a commercially acceptable level; The group's principal residual risks must be considered • By applying commercial and financial discipline in the context of the board's risk appetite,which can be and controls to manage our growth portfolio;and summarised as follows: • By applying effective programme and project G4S has a higher risk appetite with regard to growing management to our change agenda and transforming its business. • G4S operates in high risk lines of business in which our core competence and value add is managing those risks effectively.We should be willing to take on such business when we have the expertise to deliver and achieve a good commercial return on the risk we are accepting from our customers. 44 G4S plc Annual Report and Accounts 2014 Principal risks 00 Link to Strategic Priorities �y Key (�A U /\ increased risk A Transform n� our culture through our people and values Actively manage our portfolio and performance \/ Reduced risk ONo change Invest in organic growth axed customer service Embed disciplined financial and risk management ifTh Make our organisation more productive Health and Safety (H&S) Pso, n Risk description the group.We appointed a group head resulting action plans being The provision of integrated security of health and safety to provide personally monitored by the country or services,often in hostile or dangerous leadership to our existing network of business leaden.This'Step Up'initiative circumstances across such a broad health and safety professionals across the will be part of a broader program, diversity of countries presents group.We have introduced an enhanced encompassing the roll out of safety particular health and safety challenges. Health and Safety(H&S)management leadership training to managers across The protection of our staff,people in system which has further developed our the group,as well as implementation of a our care and third parties,including capabilities and processes.This has process whereby business leaders report the public,is of utmost importance. included increasing the personal and take ownership for follow up,close We believe that accidents are responsibility borne by country Managing out and sharing of lessons learnt for any preventable and that"zero harm"is Directors for incident reporting and serious work-related incidents.We will an appropriate goal.We put safety first investigation of serious injuries,and an continue to develop our road safety and prioritise the wellbeing of our enhanced safety leadership training toolkits,and the Service Excellence employees,setting the benchmark for course for senior management We have Centres will continue to develop our health and safety across the industry rolled out a road safety programme mitigating strategies with regard to called Driving Force Rules and attacks on our people.Our Health and The principal health and safety risks strengthened governance around Safety management system will be are work related attacks and road firearms management augmented with the introduction of traffic accidents.In 20 14,41 (20 1 3:49) toolkits and templates to support employees lost their lives.We are Mitigation priorities for 2015 implementation in local businesses,and committed to strengthening our Compliance with our core H&S we will review the training for our H&S health and safety systems,processes standards will continue to be monitored practitioners across the group to ensure and cultures. and periodically audited,with reviews they are equipped to implement these Fatalities and serious injuries to our of performance at a regional,group and enhanced procedures.An enhanced IT staff impact not only the individuals board level via the CSR Committee. system for incident reporting will be concerned,but also their families and Management incentives are aligned implemented and self-assessments of loved ones. to safety best practice.Detailed H&S control compliance will be assessments of H&S practices in a integrated into the risk management and Movement since 2013 O number of high-risk countries will be audit IT system. We added Safety first as a core value for undertaken,with implementation of the Annual Report and Accounts 2014 G4S plc Principal risks continued Culture and Values /' [✓, ��¢ Risk description This can lead to penalties,failure to has been undertaken,and G4S provides security to people, renew contracts and ultimately reduced management performance incentives premises and valuable assets.In its profitability and damage to our global explicitly linked to all of the values care and justice services businesses it brand and reputation. were implemented. also provides services which interact with Movement since 2013', Mitigation priorities for 2015 detainees,victims of crime,those on state We have completed a corporate renewal On-line management training will be assistance,vulnerable people and other programme which has been assessed by implemented covering all of the G4S members of the puse is requires our the UK govemmentThe G4S values were values.Demonstration of the values staff to conduct themselves with the utmost integrity We operate in more re-launched globally,with the addition of will continue to be integral to than 1 1 0 countries around the world the Safety First value and an emphasis on management performance contracts in with a diversity of local and national delivering long-term sustainable value for 20I 5.Improved whistleblowing processes cultures These factors mean that having customers,employees and shareholders. are also being implemented. a strong set of corporate values that unite We have continued to embed our A values self-assessment programme the organisation deeply embedded in human rights framework,based on the will benchmark managers'views of our culture is of particular importance. UN Guiding Principles on Business and performance versus the group values and ff we fail to behave in accordance with the Human Rights,into the group's practices, a global employee and management high standards that we set ourselves,there such as our risk and compliance systems survey being undertaken this year will is a risk that we will not deliver on our and processes. provide essential feedback on how the commitment to customers,and fail to Corporate governance has been values are working in practice across { the organisation. comply with legislation and international enhanced through the Enterprise standards.We may also compromise the Risk Management process and safety and security of our employees and introduction of Regional Risk and the assets or people that we are protecting. Audit Committees.Leadership training People Risk description professionals and front line staff can In 2015 our management incentives We are a people business and we take affect customer service,customer will be further reviewed to ensure they great care to ensure that we employ the retention and sales growth,impacting are competitive,motivational and drive best people to deliver quality services our financial performance. the right behaviour;in line with our values to our customers.We employ 623,000 and business objectives.Common talent Movement since 2013 O people world-wide,and are the largest G4S'human resource processes are well review processes will be cascaded security solutions provider in the world. throughout the organisation, This means we have expertise in established and effective.During 2014 we supplemented by the introduction of appointed a significant number of new { screening and training,which together new leadership development programs. with our integrity and trustworthiness individuals to management positions in This will strengthen our succession plans is an important factor in why customers regions and countries around the globe. and support retention of key talentTo choose G4S. This has included recruitment from a help employee retention at all levels of range of high quality companies both the organisation,the global employee In a global and diverse business such as within and outside the security sector;as and management surveys will be ours,there are inherent risks associated well as the promotion of internal talent undertaken in the first half of the year; with recruiting motivating developing We have also invested significantly in providing rich insight into our employees' and training employees on a large scale, strengthening our sales resource. opinions.This will assist in identifying as well as appropriately rewarding and In a low-margin,low-salary business there priority areas for action,which will be retaining our critical talent and ensuring will always be challenges in retaining staff, implemented and tracked across the effective succession in management roles. and in particular we experience this as a remainder of the year.The recruitment of Screening is also a particular challenge in challenge in Africa and Europe. operational employees will be augmented some territories which lack supporting by sharing best practices across the group priorities for 2015 Y g P g p infrastructure from the relevant authorities. and providing detailed guidance and In these territories we identify alternative On I July 2015 Irene Cowden will retire P g approved by group as group HR Director.She will be oversight to ensure appropriate screening roved u measures which are HR to mitigate this risk as much as possible. succeeded by Jenni Myles,who since standards are met 2011 has been the HR Director for Failure to recruit,retain,motivate and North America and Latin America,having develop key managers,sales been with G4S since 1998. 46 G4S plc Annual Report and Accounts 2014 i Brand and Reputation f r I Risk description were raised in 2013,and we have since considered to be high risk.Customer ,\+ We provide our customers across the won new contracts.Globally we have satisfaction monitoring is being world with a wide range of high quality, implemented a process for reviewing all implemented across the group. well controlled services.Nevertheless business opportunities with regard to the nature of the group's activities means our values and the reputational risks We are promoting G4S values and that we can face high inherent they bring.This enables us to make communicating our desired behaviours reputational risks related to the appropriate decisions whether or not with colleagues across the group; countries in which we operate,the to bid.There were material opportunities engaging proactively with ethical and services we provide,the customers and during 2014 which we decided not to sustainability ratings agencies and suppliers we work with,the people in bid for analysts;and increasing our dialogue with customers on high profile contracts our care and our interactions with On occasion,services we provide meet and issues.We have invested in an members of the public with whom our significant challenges which exceed enhanced corporate media team to colleagues come into contact our reputational risk appetite,at which develop relationships with and educate Our reputation can be damaged when point we look for alternative options, commentators and journalists;and are we fail to meet our own standards or which may result in non-renewal of implementing a programme of political the expectations of our key stakeholder existing contracts or disposal of risk management and engagement to groups.Service failures or behaviour certain businesses. continue to build relationships with by G4S or its partners which does not Mitigation priorities for 2015 politicians and regulators. meet those standards can result in adverse publicity and damage to the We are embedding human rights due We are also enhancing our group's reputation. diligence processes and reputational whistleblowing and case management considerations into our systems for processes,to ensure that employees Movement since 2013 evaluating new market entries or bidding can raise issues of ethics to the highest In the UK,we have significantly improved for new contracts.We are also reviewing level of the organisation and to enable our relationship with central government and auditing our performance on human us to identify trends and emerging following some high-profile issues which rights in existing markets which are reputational risks. Major contracts A G Risk description Failure to ensure effective contract and regional finance directors now The group has a number of long term, take-on,mobilise successfully and report directly to the group legal complex,high-value contracts with manage complex contracts effectively counsel and group CFO,providing multi-national,government or other throughout their lifecycles can impact greater independence.Group internal strategic customers.The group's growth the group's liabilities,customer audit has recruited a specialist contracts strategy includes a greater focus on satisfaction,reputation,revenue, auditor to audit both individual major higher value,and more technology-rich cash flow,and profitability contracts and also the effectiveness services.This will increase the complexity Movement since 2013 of the processes described above. and uniqueness of customer We have established Group and Mitigation priorities for 2015 requirements and contracts. Regional Investment Committees. The new major contract approval,and For such contracts there are risks to In the UK,we have implemented a major 360°contract review processes the group accepting onerous contractual contract approval process with oversight implemented in the UK during 2014 will terms;mobilising contracts well; from these committees;strengthened start to be rolled out globally in 2015. transitioning effectively from mobilisation the contract on-boarding process;and to on-going contract management; rolled out a 360°contract review of all delivering to contractual requirements; aspects of our most significant contracts. and managing complex billing A quarterly financial review of the top arrangements,contract change control 200 contracts across the group has been ` and sub-contractors. implemented.Regional legal counsels Annual Report and Accounts 2014 G4S plc 47 Principal risks continued Delivery of core service lines - /' Risk description Additional risks relate to business Mitigation priorities for 2015 \1 We deliver our core secure solutions resilience,control systems,and the The G4S Way supports the best services in 9 I markets and our core availability of critical systems,facilities practice processes and standards for cash solutions services in 62 markets. and people to perform contractually all aspects of service delivery with the A number of these businesses have agreed services. aim of improving service excellence been acquired over time,resulting in and margin. cultural differences,varying degrees of This can lead to financial penalties, ( and negatively impact customer Development of our technology solutions operational maturity and multiple retention and goodwill,to the strategy and innovation in cash services . information systems. detriment of financial performance. will provide added value to our This can create risks around core customers.Our risk management is being Movement since 2013 0 operational service delivery and improved by integrating the Service supporting functions.Failure to meet G4S has continued to focus on Excellence Centre operational standards the service delivery requirements of developing and consolidating into our Governance,Risk and Control IT platforms,implementing the Service our customers,because we have not Excellence Centre programmes tool.This is supported by the continued implemented the right solutions or implementation of our Service Excellence followed appropriate agreed procedures, of standardisation,and driving and monitoring contract formalisation Centre standards through an Accelerated can create risks around cash losses; Best Practice programme. attacks on our staff,subcontractors or processes across our developing markets. third parties;and the non-delivery of We have recruited new chief operating A programme of customer satisfaction 1 officers in a number of regions and monitoring is being implemented the service level agreements and KPIs countries to drive the operational across the group. agreed with our customers. standards expected from our customers. A _, Laws and Regulations PB Risk description through direct ownership or joint Mitigation priorities for 2015 G4S operates in many jurisdictions ventures;loss of management control; The Ethics Steering Group will l globally,with complex and diverse damage to our reputation;and loss strengthen its effort to provide regulatory frameworks. of customer confidence. compliance with internal policies An additional complexity arises from Movement since 2013 0 and procedures and we are introducing the extraterritorial reach of some of Our internal policies and procedures new systems and processes for whistleblowing and incident the legislation to which the company clearly set out that most of these risks, management We will be implementing is subject including compliance with local laws and . regulations,are the direct responsibility a process for political risk management Risks include increasing litigation and to ensure that we are monitoring of local management An Ethics Steering class actions;bribery and corruption; g regulatory and other emerging political failure to obtain operating licences; Group has been formed to provide risks within our key markets.This process ( non-compliance with local tax oversight and support compliance with will be supported by a programme p the internal policies and procedures pp y regulations;changes to employment to enhance our engagement with to mitigate the risks.Specifically, legislation;non-compliance with human whilst ownership of implementing regulators,politicians and political rights legislation;and new or changed influencers across the group. } restrictions on foreign ownership.Risk anti-bribery and corruption policies lies G4S continues to liaise with relevant also arises from new or changing with the business Managing Directors, governments and authorities to our legal communities have been regulations which require modification assigned compliance oversight with a positively influence the regulatory of our processes and staff training. k. direct escalation route to the group legal environments in which we work Non-compliance with applicable laws counsel.Also,where group internal and regulations could have far-reaching audit has identified non-compliance, consequences,including higher costs for example with licensing and labour ( from claims and litigation;inability to regulations,these have been reported operate in certain jurisdictions,either and acted upon. rj 48 G4S plc Annual Report and Accounts 2014 Growth strategy idi 4. I a Risk description Failing to create higher value Mitigation priorities for 2015 Our growth strategy is to leverage solutions that differentiate us from We are making significant investments our expertise to expand our core local commoditised competitors could in our sales and business development service lines into more complex impact targeted growth in revenues systems and capabilities.We are outsourcing areas which increase and margins. developing our customer relationship long-term customer partnerships;to management tools as well as our Movement since 2013 focus on organic growth opportunities approach to global account management with less reliance on acquisitions;and We appointed Mel Brooks as group We are taking a more rigorous approach strategy and commercial director and to expertise in key markets. developed and enhanced the leadership in and nstillinthm roved olntract pipeline y and capacity of the regional commercial management disciplines. p p There are risks that we will lose and strategy teams.We have contracts or growth opportunities implemented a global account through price competition and market management structure and established changes;that we fail to successfully enter an'outbound'programme for working target markets or territories;that we with Chinese and North American become over-reliant on large customers; multinational clients.We have been and that adverse government legislation innovating and developing our core changes could impact on our growth service lines through the application of potential or force exit from markets technology and consulting services.The and territories. major elements of the growth strategy have been allocated to specific members of the group executive committee to ensure integrated ownership. Geo-political . Risk description Movement since 2013/\ Mitigation priorities for 2015 We operate in more than 110 countries We perceive the inherent external We have a great deal of experience across the developed and developing threat to have increased in the last of operating in a wide range of difficult world,with wide-ranging government year given the backdrop of an increased territories.We collaborate with our local and political systems,differing cultural global terror threat,the seizure of partners and/or agents;conduct early landscapes,and varying degrees of rule territory by Islamic State,tensions in risk assessments before and during of law,and within conflict and post- Ukraine,and potential increase in security assignments;have robust conflict zones.The risk factors range political instability and the risk of civil operating procedures;and work closely from political volatility,revolution, unrest in parts of Africa,Europe and with our local and global customers in terrorism,military intervention and Latin America.Given the wide range of managing the risks of operating in such insurgency.The geo-political risks we countries in which the group operates environments.We have a global process face impact us in many ways:the health there will always be some with a degree for assessing the geopolitical risks of and safety of our staff and customers; of serious political instability.We take different countries which determines the the continued operation of our great care with our operations in these types of customers we will serve and businesses;and the ability to secure countries to monitor the situation closely the types of services we will provide. our assets and recover our profits. and respond appropriately. Annual Report and Accounts 2014 G4S plc 49 _ - - Principal risks continued Information Security Risk description Movement since 2013 c Mitigation priorities for 2015 The clients,staff,suppliers and partners The sophistication of hackers continues G4S will continue to manage risks of G4S that entrust their sensitive and to increase and we see a broad range to information by integrating the confidential business information into of other corporates coming under attack information risk framework with the our care rightly expect that we will take Given the high profile G4S has,and the global risk framework,and will ensure all reasonable steps to protect it nature of our business,we believe the that risks above the risk appetite are Given the high-profile nature of some threat of external attack has increased appropriately managed.The G4S of G4S'operations globally,we are at over the year global information security centre of risk of cyber and physical attack by G4S constantly monitors attacks against excellence will develop best practice in criminal organisations and individual its systems and takes steps to safeguard coordination with regional and business hackers.There is also the risk that an business information entrusted to us.A unit committees,through the publication individual with legitimate access to new set of Mandatory Minimum Security of policy and the identification of risk business information could disclose it Controls have been developed and we with appropriate mitigation strategies. inappropriately,or that an insider could have assessed each of our businesses' We will be implementing new disrupt the availability of key systems. compliance to these standards, monitoring and compliance systems An information security breach could developing plans where improvements throughout 2015 to increase our result in:censure and fines by national need to be made.Additionally we have controls over the unstructured governments;loss of confidence in the assessed the operational level security information assets held on computers, G4S brand and reputation;specific loss of over 600 systems,capturing a risk file systems and email. of trust by clients,especially those in assessment of each system in line with government and financial sectors; our group standards. and disruption to service delivery Additionally a group IT Auditor was and integrity,particularly in cash solutions appointed to provide independent business operations. assurance of our Mandatory Minimum Security Controls and Systems Risk Assessments. Cash losses Risk description the regions,improvements have been new system will be implemented in We have cash solutions businesses made to processes and systems in many 2015 for businesses to conduct spread across the world responsible for of our cash solutions businesses over the self-assessments twice a year cash held on behalf of our customers. course of 2014.Responsibility for auditing The outcome will be controlled centrally We provide cash transportation from cash reconciliation in our cash processing at group level.In 2015,we will be one site to another in high-security centres has been transferred from the working to harmonise the standards of vehicles,a range of cash management cash solutions SEC to group Internal Audit cash reconciliation audits with those of services including secure storage, group Internal Audit.We also have a counting reconciliation and sorting of Mitigation priorities for 2015 robust process to monitor all cash- notes for ATMs;a range of ATM services; Our cash solutions SEC and group related loss incidents through a team of and secure international transportation Internal Audit work in collaboration physical security specialists and we of cash and valuables, with the regions to embed robust ensure that lessons learned are shared procedures into every cash business to through the SEC. There are inherent risks in this business mitigate cash losses.Innovative security related to external attacks,internal theft defence products are in use,ranging Following a reorganisation at the end of and poor cash reconciliation. from pavement box tracking to vehicle 2014,during 2015 G4S will be Cash losses can have a major impact protection foam and protective integrating its UK&Ireland and for our customers and ourselves in pavement boxes. European cash solutions businesses under the leadership of Graham respect of loss of profit,increased cost All cash transactions are subject to strict Levinsohn.As well as strengthening our of insurance and health and safety authorisation limits and we have go-to market offering this will also considerations for our staff and the public. controlled cash reconciliation procedures enable enhanced development of best that are undergoing implementation practice,which will be transmitted via Movement since 2013 O p Through the work of the Service across the group to ensure cash is fully the cash SEC to our cash solutions Excellence Centres(SECS)working with accounted for and controlled.Those businesses in the rest of the world. procedures are subject to audits and a 50 G4S plc Annual Report and Accounts 20 4 Executive committee AshleyAlmanza Martin Alvarez Andy Baker Executive director/ Allitir Regional president, Regional president Chief executive Latin America& —Africa 4.iirA s IIPIF i Caribbean gV See page 52 for iliall iiii:44, 4 full biography f ii Martin joined G4S as Regional President, Andy joined G4S as Regional President Latin America and Caribbean for G4S for G4S Africa in 2012. Americas in 2013. Andy has wide ranging experience of Martin has extensive experience working in managing and building sustainable the region and a wealth of experience in businesses across Africa,with a strong strategic commercial and operational roles. emphasis on technology and logistics. Martin joined G4S from Dell,where he Andy joined G4S from Nashua Group, served eight years as executive director the second largest ICT business in South of mufti-country Latin America(MCLA), Africa,where he was Group Chief responsible for 38 countries,more than Our executive team US$I billion in revenue and the Americas Executive Officer. G4S is managed through a functional (Shared Service Centre with over 3,000 Prior to this,Andy spent four years as group and regional structure. employees.Prior to Dell,Martin spent 10 chief operating officer of Attech,a JSE listed years with DHL holding various management technology group with revenues of US Our structure enables us to deliver and leadership roles including vice president, $1.2bn and operations in 15 countries. our strategic objectives,maintain DHL Mexico.and General Manager for Andy also spent 13 years at DHL as a strong governance framework, several other countries in the region. regional MD of Southern Africa and Turkey. develop integrated solutions,target key regional markets and build Martin has an MBA from IESE in Andy holds an MBA from customer relationships. Barcelona and a Bachelor's degree in Cranfield University. International Trade and Finance from Louisiana State University. ell\ Mel Brooks Irene Cowden John Kenning Group strategy Group HR director _, Regional CEO *l e &commercial e. • '' for North America # 4) director , F &technology dallaili ger.lia Mel became group strategy and Irene has spent her career in HR John joined G4S in November 2014 to commercial director in July 2014, management specialising in employee lead the diverse range of services the responsible for ensuring that the group relations,organisational development, North America businesses provide such has robust strategy and planning processes, talent management,employee engagement as consulting,investigations,security, a technology strategy and high quality sales compensation and health and technology and youth services solutions operations and bidding resources across safety matters. across multiple private and public sectors. the organisation. She has been involved in major change John has a proven track record leading Mel's previous role within G4S was regional projects including the cultural and global organisations.Prior to joining strategy director for the Asia Middle East integration aspects of mergers and G4S,John was executive vice president region and CEO for G4S India where he acquisitions,as well as large scale and president,commercial business for lead the transformation of the businesses, organisational change involving workforce OfficeMax where he led the global, focusing on key customer segments and restructuring and working in partnership business-to-business(B2B)division. improving customer service, with major trade unions. John was formerly president North Prior to joining G4S,Mel held a number Irene has worked in the security industry America commercial forADT/Tyco Security of senior line and functional roles in the for 37 years and has held director level Services,where he led the transformation defence and technology industry where positions at business unit,divisional and of the business to a technology services he was responsible for service line and corporate level.She was appointed to the leader and also led the separation of commercial strategies,technology board of Securicor plc in 2002 as group the residential and commercial security development and leadership of a number HR director.She will retire from the group businesses in North America of business unit turnaround programmes. executive in June 2015. John is a board member for Miami Irene is a Fellow of the Chartered Institute University Advisory Athletic Board and of Personnel and Development(FCIPD). past board member of the Make-a-Wish Foundation.John holds a bachelor's degree in business from Miami University. G4S plc A ^o-__ c A,_;_"1,:ois 20 -1. Graham ' Soren Lundsberg- `' Peter Neden iii alli "*":91 Levinsohn Nielsen Regional president Regional CEO Group general .0"�` �; —UK&Ireland —Europe ' ' o counsel Wes., :ter wi Graham became Regional CEO—Europe Soren began his career as a lawyer in Peter became Regional President of UK in November 2013.Graham has more than Denmark and since 1 984 he has had a wide &Ireland in January 2015,following his 20 years'experience in the security industry, range of legal experience as general counsel appointment on an interim basis in May having joined Securicor Cash Services in for international groups in Denmark, 2014.Peter was previously Regional 1 994 as general manager—marketing. Belgium and the US before joining Group 4 managing director of G4S Outsourcing Since then,Graham has held a number of Falck in 2001 as Group General Counsel. Services for the UK&Ireland region. commercial and line management positions Soren has been involved in a wide range Previous roles included responsibility in both the cash and security lines of the of successful mergers and acquisitions for the business development programme 0 business.Graham was responsible for the during his career,including the acquisition within G4S in the UK and Africa regions, % creation of the UK cash centres outsourcing of Wackenhut and the Group 4 Falck as well as a number of senior positions � business in 2001 as managing director, merger with Securicor. in both the commercial and government before moving on to become divisional businesses across the group. managing director for G4S Cash Services Soren has overall responsibility for all UK,and then regional president—Services . internal and external legal services for G4S Prior to the merger between Group 4 g p as well as the group's insurance programme. Falck and Securicor,Peter was Securicor's He became group strategy and development director,having joined the development director in 2008 and joined Soren is a member of the Danish Bar and company in 2001.Peter's early career the executive committee in 2010. Law Society,a member of the advisory included a number of sales,marketing and Graham is a fellow of the Chartered board of the Danish UK Chamber of general management roles within Centrica. Institute of Marketing and a director Commerce and author of the book g Executive Management Contracts,published Peter has a degree in economics from the of.COESS,ESTA and member of the Ligue in Denmark. University of Nottingham. Internationale des Societes de Surveillance. '' Himanshu Raja Dan Ryan Debbie Walker Group chief Regional CEO , financial officer * —Asia Middle East # communications y director Mt a al See page 53 for full biography Dan joined G4S in August 2010,from Debbie is group communications global logistics and transportation company director,heading the corporate Neptune Orient lines(NOL),where he communications team which focuses on was a member of the group executive team the group's key audiences—media, and held a number of senior management government,employees and customers. positions including regional president roles Debbie is also responsible for the group's for Greater China,Middle East and Europe CSR and human rights strategies. during his 20-year career there.In his last Prior to the merger between Group 4 position with the group,Dan led the project Falck and Securicor,Debbie held a number to review,redesign and transform NOL's of senior marketing and communications organisation across all its Americas divisions. roles within the Securicor group from Dan is a charter member of the Middle 1993 to 2004. East Logistics/Supply Chain Management Debbie is also vice chairman of the Forum,Hong Kong liner Shipping CBI South East Regional Council Association and the American Chamber (the representative body for all CBI of Commerce—Shanghai.He holds an member companies based in the South MBA from the University of Notre Dame East of England and the Thames Valley), in Indiana and a B.S.Finance,from California State University,Sacramento. having previously served as chairman for two years. Annual Report and Accounts 2014 G4S plc 55 i Board balance Board tenure Board composition As at the date of this report,the board comprises I I members: the non-executive chairman(John Connolly),seven other non-executive directors and three executive directors.The board >8 considers all the non-executive directors to be independent 3 directors 2 yrs or is— The names of the directors serving as at 3 I December 2014 (GG'Ms,ME) 3 directors and their biographical details are set out on pages 52 and 53. (AA.HR,es All the directors served throughout the year.Grahame Gibson, one of the executive directors,and Mark Seligman,the non- executive deputy chairman,will retire from the board at the conclusion of the company's 2015 Annual General Meeting. . >4 yrs<6 yrs- The Nomination Committee is engaged in a process to recruit 2 directors >2 yrs<4 yrs- a new non-executive director. (CS, ) 3 directors (AC,PS.1C) Induction,information and professional development A tailored induction is provided to new directors joining the board. >6 yrs<8 yrs—o directors In the case of non-executive directors,this includes spending time with the executive directors and other senior executives to understand the business,its structure and people,as well as the Board performance review company's strategy and financial performance.Induction also In 2014,Lintstock Limited conducted a performance review for the provides details of the group's governance policies and structure board.The review involved detailed self-assessment questionnaires and risk management framework. being completed by board members and regular board committee To build on the induction programme,directors receive further attendees,as well as individual interviews with each director and the briefings both to help in their own development and also to company secretary.The resulting report was considered by the enhance their awareness of the different elements of the business. board when it reviewed its own performance and informed its Briefings are provided to all board members on legal,governance, planning for the board's priorities in 2015.Lintstock also reviewed compliance and reporting developments and to those members the performance of each of the board committees,which in turn of board committees on matters which are relevant to their work considered the resulting reports when reviewing their performance. on the committees in question. As part of its review process,Lintstock also reported on the In addition,non-executive directors are encouraged to learn about performance of each of the directors and separately on that of the group's business and to meet employees and management the chairman.The individual director reviews were used as the basis through site visits,attendance at group and regional conferences. for the chairman's individual discussion with each of the directors In 2014,non-executive directors visited a cash centre,an adult about their performance and any training and development needs. prison and a youth training centre operated by the group and The report on the chairman was used to inform the discussion attended part of the group management conference. about the chairman which was conducted by the senior independent director without the chairman being present Lintstock has no connection with the company other than evaluating the board and its committees'performance. Board balance 2015 primary board objectives Following consideration of Lintstock's report on the board's Non-Executive ###i John Connolly,Adam performance,and after consideration of priorities chosen directors Crozier,Mark Elliott, by the board and the strategy adopted by the company, tt Winnie Folc,Mark the board has agreed a set of primary objectives for its work 8 Seligman,Paul Spence, in 2015,which will include: Clare Weller woode, • Reviewing progress on strategy execution and a range Tim Weller of business improvement programmes approved by Executive ### Ashley Almanza, the board directors Grahame Gibson, • Monitoring the performance of the wider leadership team Himanshu Raja • Addressing the new requirements of the UK Corporate 3 Governance Code — — — — -- — • Increasing focus on people in terms of succession planning for the senior executives,employee satisfaction and management development • Maintaining emphasis on risk management • Gaining greater understanding of markets and competitors Annual Report and Accounts 2014 G4S plc 57 Corporate governance report continued Director re-election The company's articles of association require that all Relations with shareholders continuing directors are subject to election by shareholders The company actively seeks to engage with shareholders at the next Annual General Meeting following their and during 2014,senior management had contact via appointment and that they submit themselves for re-election one-on-one meetings,group meetings and telephone at least every three years and that at least one-third of the conference calls with shareholders representing over directors not standing for election for the first time stand for 80%of the share register across over 150 institutions. re-election at each annual general meeting.However,in accordance with the UK Corporate Governance Code In November,the chief executive and chief financial provision on re-election of directors,all the continuing officer provided a capital markets update via a webcast, directors stand for re-election every year. which is available on the company's website.Additional meetings are held after the preliminary and half-year Conflicts authorisation results are announced. Each of the directors has disclosed to the board any situations which apply to them as a result of which they The chairman met with major shareholders as part of have or may have an interest which conflicts or may conflict a general governance road show.The chair of the CSR with the interests of the company.In accordance with the Committee,Clare Spottiswoode,and relevant senior company's articles of association,the board has authorised executives met with a group of socially responsible such matters.The affected directors did not vote when their investors in June 2014,updating them on the group's own interests were considered.Where the board deemed corporate responsibility programme.Tim Weller,in his it appropriate,such authorisation was given subject to capacity as chair of the Audit Committee,consulted major certain conditions.The board reviews such matters on shareholders regarding the external audit tender.As chair a regular basis. of the Remuneration Committee,Mark Elliott engaged with a number of shareholders and their representatives on remuneration issues. Diversity It is intended that all the directors will attend and be With operations in over 1 10 countries,the group operates in very diverse communities and its workforce reflects that diversity available to answer questions at the company's Annual in terms of its mix of gender,age,race,religion,nationality,language, General Meeting which is an important opportunity for background and experience.The board recognises that the group communication between the board and shareholders, benefits greatly from this diversity and needs to continue to particularly private shareholders.At the Annual General promote it in order to help create an organisation which attracts, Meeting,the meeting is informed of the number of proxy supports and promotes the broadest range oftalentThis allows votes cast and the same information is published individuals to reach their full potential and the group to provide the subsequently on the company's website. best service to its customers.Diversity is a consideration that forms part of any new recruitment for,and appointment to,the board. Although appointments will always be made on merit,the Nomination Committee and the board recognise that the board 4 performs better when its members are from varying backgrounds and possess different experiences and perspectives.Diversity will therefore continue to be a key consideration when contemplating _ _ the composition and refreshing of the board and senior management,although the board has no specific targets in "r„ relation to diversity including gender. - - r ' G4S plc and A,:coun-is 2014 Board meetings and information flow Fair,balanced and understandable Seven board meetings were held during the year ended assessment 3 I December 2014.One of these meetings was an extended In relation to compliance with the Code,the board has given two-day board and strategy session at which,in addition to normal consideration to whether the annual report and accounts,taken board business,the board and executive committee met and as a whole,is fair,balanced and understandable.The preparation reviewed the group strategy by region and by business line,as well of the annual report and accounts is coordinated by the finance, as considering succession planning,risk appetite,the technology investor relations and company secretariat teams with group-wide used by the group and the financial basis of the strategy. support and input from other areas of the business.Comprehensive Prior to each board meeting,comprehensive papers are circulated reviews were undertaken at regular intervals throughout the to the directors addressing not only the regular agenda items on process by senior management and other contributing personnel which the executives will report,but also details of any matters within the group.The statement required to be given by the requiring approval or decisions,such as significant transactions or directors by Code provision C.I.I can be found on page 88. events or important market issues. Risk management and internal control At each meeting the board receives reports from the chairman, the chief executive,the chief financial officer and the company The directors acknowledge their responsibility for the group's o secretary,an HR and health and safety report and an investor system of risk management and internal control and for reviewing i relations report,which includes summaries of analysts'reviews and its effectiveness each year.The system is designed to manage rather any comments received from major shareholders since the previous than eliminate the risk of failure to achieve business objectives and board meeting.The board receives regular in-depth presentations can only provide reasonable and not absolute assurance against from regional management and from the management of business material misstatement or loss. units and the board makes visits to business sites from time to time. The group's key risks are summarised in the principal risks section After meetings of the board committees,the respective chairmen on pages 44 to 50. report to the board on the matters considered by each committee. The key features of the group's risk management process,which Regular board dinners are held prior to board meetings which was in place throughout the year under review,are: provide an opportunity for the directors to discuss topics in an • Senior executives in each business unit and region use a informal environment outside the more formal setting of the common risk management framework'to provide a profile board meeting. of those risks which may have an impact on the achievement After each board meeting the chairman holds meetings with of their business objectives. the non-executive directors without the executives being present • Each significant risk is documented in the group's risk management system,showing an overview of the risk,its owner; There are seven board meetings scheduled for the current how the risk is managed,and any improvement actions.Risk year;including a two-day board and strategy meeting. appetite/tolerance is considered in the context of the residual Meeting attendance in 2014 (after controls and mitigation)risk with a particular focus on "High"net risks.To be categorised as"High"a risk must meet Board at least one of the following criteria: scheduled Executive directors — major impact on the achievement of the business strategy; Ashley Almanza(CEO) 7/7 —serious damage to business reputation; —severe business disruption; . Himanshu Raja(CFO) 7/7 — impact of>5%on operating profit or assets. Grahame Gibson 6/7 Non-executive directors • The risk profiles ensure that internal audit reviews of the John Connolly(chairman) 717 adequacy,application and effectiveness of risk management and internal controls are targeted on the key risks. Mark Seligman(deputy chairman) 7/7 • Risk management committees have been established at Mark Elliott(senior independent director) 7/7 regional and group level. Clare Spottiswoode 7/7 • Risk and control self-evaluation exercises are undertaken for Winnie Fok 717 each operating company,for most companies at least twice a year, Paul Spence 7/7 and updated risk profiles are prepared.Similar exercises are Adam Crozier 6/7 undertaken as part of the integration process for all major Tim Weller 6/7 acquisitions.The results of the company risk evaluations are assessed by the regional risk management committees' • Both the regional committees and the group executive risk committee receive internal audit reports and regular reports on risks.They monitor the actions taken to manage risks. Annual Report and Accounts 2014 G4S plc 59 Corporate governance report continued The process is carried out under the overall supervision of the The Audit Committee undertakes a high-level review of risk group executive risk committee,which comprises the group chief management and internal control each year.As well as the above financial officer,the group general counsel,the group processes and sources of assurance,the Audit Committee also communications director,the group human resources director, considers the following year end reporting in conducting this review: the group director risk and audit and the group head of risk.The • Summary of internal audit work including update on all open group executive risk committee reports to the group executive and audits with a deficient rating,analysis of results by region, to the Risk Committee of the board.The process outlined above is common audit findings and areas identified for improvement reviewed regularly by the board through its Risk Committee to in internal controls ensure its robustness and suitability to meet the group's needs. • Summary of internal financial reviews including significant During 2015 the risk management improvement plan will focus on: accounting or financial control issues and common • embedding the risk management approach into businesses concerns identified across the group; • Overview of year-end financial control status reports completed • enhancing the quality of information being provided by businesses; by all businesses confirming adherence to group standards with • managing the group's residual risk exposure; any exceptions reported • progress on implementation of mitigation action plans; • A broad overview of the general risk management and internal control systems in place during the year. • new and emerging risks; • Review of risk management processes and of the group's • rolling-out enhanced contract approval and contract review principal residual risks by the Risk Committee of the board processes for large contracts piloted in the UK region across • External audit year end reporting on financial controls the rest of group. and accounting. Further information about the Risk Committee,its remit,work Further information about the Audit Committee,its remit,work during 2014 and its plans for 2015 can be found on pages 63-64. during 2014 and its plans for 2015 can be found on page 65-69. The internal control system includes clearly defined reporting lines The Audit Committee has confirmed that it is satisfied that and authorisation procedures,a comprehensive budgeting and the group's risk management and internal control processes and monthly reporting system,and written policies and procedures. procedures are appropriate.The board has reviewed the group's In addition to a wide range of internal audit reports,senior risk management and internal control system for the year to management also receive assurance from other sources including 31 December 2014 by considering reports from the Audit security inspections,third party reviews,company financial control Committee and the Risk Committee and has taken account reviews,external audit reports,summaries of whistleblowing activity, of events since 31 December 2014. fraud reports and risk and control self-evaluations. • G4S Govemment Solutions,Inc.("GSI")which was disposed of in November The group has in place robust internal control and risk management 2014 was govemed through a proxy agreement under which the group systems for financial reporting.The group has a single global was excluded from access to operational information,therefore GSI was not subject to the same risk management process as is applied to other group consolidation system which is used for both internal management companies.The board had however satisfied itself as to the adequacy of the reporting,budgeting and planning as well as external reporting. internal control processes adopted by GSI which included a risk review by an The group has a comprehensive budgeting process with the budget external advisor. being approved by the board.Forecasts for the year are reported quarterly.Actual results at business unit,region and group level are reported monthly and variances are reviewed.A programme of business internal financial reviews is performed by a finance team from either region or group to check the accuracy of financial reporting and compliance with the group finance manual. Compliance with the UK Corporate Governance Code The board's statement on the company's corporate governance performance is based on the September 2012 edition of the UK Corporate Governance Code,which is available on the Financial Reporting Council's website(httpsi/www.frc.org.uk). The Listing Rules require companies to disclose whether or not they have complied with all relevant provisions in the Code and to report how the main principles in the Code have been applied by the company.The Code recognises that alternatives to following its provisions may be justified in particular circumstances if good governance can be achieved by other means,provided the reasons are explained clearly and carefully.In such cases companies must also illustrate how their actual practices are consistent with the principle in question and contribute to good governance. The company complied throughout the year under review with the provisions of the Code.The Corporate governance report,together with the Audit committee report and the Directors'remuneration report,describe how the board has applied these provisions. 60 G4S plc Annual Report and Accounts 2014 Main activities of the Nomination Committee during The Nomination Committee the year(%) A . `1 twat AIL i `There have been no changes to the composition agL_Tt!;:,:....m2,aT of the board or its committees during 2014. -::z'a`�:-.::-?.,,°,-`� Nevertheless the committee has been active Refreshing the board to ensure that the membership of the board is After the changes to the board and the board committees made appropriate and,where necessary,refreshed. in 2013,it was felt that no changes were required during 2014, Both Grahame Gibson and Mark Seligman will but the chairmanship of the Audit Committee passed to Tim Weller leave the board in 2015 and this has meant that following the AGM.Mark Seligman will retire from the board in the future composition of the board and its 2015 and stood down from the Audit Committee at the end of 2014.The Nomination Committee has therefore begun a process committees have been given careful consideration.' to seek a new non-executive directorThe specification for the ideal John Connolly candidate was drawn up after discussion by the full board and the Nomination Committee Chairman Nomination Committee is being assisted by the external executive search consultant,the Zygos Partnership.Zygos has no other connection with the company other than as provider of recruitment consultancy services to the Nomination Committee. Grahame Gibson will also stand down from the board in 2015, Meetings but the board and the Nomination Committee have agreed not to Committee membership and attendance attended – -- seek a replacement executive director at this time. John Connolly(chairman) 3 of 3 A number of the serving non-executive directors'terms of Adam Crozier 3 of 3 appointment expired during 2014 and the committee Mark Elliott 3 of 3 recommended to the board that such appointments be extended -— - ---, -- - after consideration of the directors'independence,commitment to Responsibilities the role,their other commitments and the experience and qualities The Nomination Committee is responsible for making they bring to the board.When the directors concerned were also recommendations to the board on appointments and on members of the Nomination Committee,they did not participate maintaining a balance of skills and experience on the board and in the committee's deliberations. its committees.Succession planning for the board is a matter which Diversity is devolved primarily to the Nomination Committee,although the The board's approach to diversity is set out on page 58. committee's deliberations are reported to and debated by the full board.The board itself also reviews more general succession Committee performance planning for the senior management of the group. The performance of the Nomination Committee was reviewed as part of the exercise undertaken by Lintstock to assess the The committee's terms of reference are available at performance of the board and each of its committees.Whilst the w.w.w.g4s.com/investors. Nomination Committee's performance was determined to have Succession planning been satisfactory,the review did identify additional issues which it The entire board has considered succession planning for the could considerThe committee has already begun to address senior management of the group in some detail during 2014 and, those issues. in addition,the Nomination Committee gave further consideration Priorities for 2015 to the succession plans for the most senior board roles. The committee's primary specific focus in 2015 will be the recruitment of a new non-executive director.In more general terms though,it will continue to monitor carefully the need to refresh the membership of the board and each of its committees and to ensure that membership has an appropriate range of talents and experience to fulfil their duties and to meet the needs of the group and its strategy over the medium and longer term.It will also ensure that succession planning is given appropriate prioritisation. • Al,-uai il;pc.-any iAti,o't-i,)0 1 G4S plc . • Corporate governance report continued Main activities of the CSR Committee during the year(%) The CSR Committee r.vF Current issues (15%) 641 Health and saty (30 fe%) • r4 1 CSR reporting (2 ) 0% ethics, ann-corruption, human rights(35%) We are aware that both the inherent nature As part of the CSR Committee's focus on health and safety during of the group's activity and the numerous and often the year,the committee oversaw a number of initiatives such as the complex and challenging environments in which it roll-out of health and safety training to the senior management operates has a potential impact on societies. community and the Safety First campaign aimed at embedding Our task is to ensure that such impact is a positive I 0 fundamental rules of safety in all businesses.As part of its normal one.The work of the committee focuses on health cycle of work,the committee received six critical country reviews and safety,business ethics and anti-bribery and (CCRs)during the year.CCRs provide important information to senior management and the committee and are an important tool corruption and human rights to ensure it is closely to support those businesses where fatalities have occurred in aligned to the group's values.Good progress was assessing their health and safety management,raising awareness and made in health and safety during the year with the sharing good practices.The committee also reviewed the process safety rules campaign which took place across the for and policy on serious incident reporting and investigation. group and road traffic awareness material made As part of the annual review of the group's Business Ethics available to all businesses.However,too many of Policy,the document which defines what the group considers are our colleagues still lose their lives to work-related acceptable and unacceptable business practices,the committee incidents,therefore health and safety remains a reviewed and commented on proposed changes.In addition, priority in 2015:' the committee oversaw the review of the whistleblowing policy and Clare Spottiswoode practices in place across the group,which resulted in a number of CSR Committee Chair changes being made to better align it with the principles of the "Whistleblowing Commission's"code of practice in the UK. This review also led to the selection of a new global whistleblowing Meetings hotline system,which will be implemented during 2015.A new Committee membership and attendance attended case management tool which will enable the capture of information on whistleblowing cases across the group and the analysis of Clare Spottiswoode(chair) 3 of 3 trends and issues raised in a more systematic way is also due to Winnie Kin Wah Fok 3 of 3 be implemented. Paul Spence 3 of 3 The CSR Committee receives regular updates on current issues and Other regular attendees include Grahame Gibson,one of the allegations from the group's internal audit,human resources and executive directors of the board,the group communications CSR teams. director and the group human resources director.When Grahame Committee performance Gibson steps down later in the year,Peter Neden,Regional The assessment of the committee's performance concluded that President for the UK and Ireland region and a member of the it performed well in monitoring compliance with CSR policies and group executive committee will succeed him as the regular reviewing the integration of CSR processes within the group's executive attendee at CSR Committee meetings.Peter has already broader risk management regime.The committee's targeted attended one meeting in 2015. approach focusing on a small set of issues was found to be effective. Responsibilities Priorities for 2015 The CSR Committee reviews and monitors the group's CSR Priorities for 2015 are to drive continued improvements in strategy,which includes developing policies on various CSR-related health and safety and to monitor and review the implementation matters for consideration by the board and reviewing the activities of enhanced whistleblowing systems and case management tools of the executives who have responsibility for CSR matters.The CSR across the group. Committee also reviews and monitors how the group performs against relevant policies.The committee oversees reporting on CSR matters and the company's separate CSR Report for 2014,which provides more detail on the group's CSR strategy and progress made during the year,is available at www.g4s.com.Further details of the committee's responsibilities can be found in the committee's terms of reference which are available at www.g4s.com/investors 62 G4S plc Annual Report and Accounts 2014 Main activities of the Risk Committee during the year(%) The Risk Committee 3 ` :.1FjRs�ilYt -- Ili:s:t g�Iii AI".? c at.:.i..' t�55y "In 20 I 3,recognising that risk oversight and risk �Lr -r <"r�Mr; T governance are vital to the continued growth y ' and profitability of the group,the board constituted In 2014,a significant amount of the Risk Committee's time was a separate Risk Committee.The Risk Committee allocated to risk govemance.The committee reviewed and was tasked with providing robust oversight of approved the revised group risk framework developed in response the management of risk within the group.We have to the report commissioned from Deloitte during 2013.1n doing made considerable progress in this respect.During so,the committee sought to ensure that the proposed changes the past year changes to the governance structures would reinforce the group by providing a sound risk management and internal controls system to identify the risks facing the group and processes were implemented.These are now as a whole,assess their likelihood and impact,develop robust well embedded in the business and are supported mitigation plans and define clear control processes.Throughout the by a new risk management information system.In year the committee received regular reports on the progress of 2015 we will focus on ensuring that the business its implementation. gets the maximum value from the investments The committee also defined the company's risk appetite and made in 2014 by focusing on the quality of risk developed a more precise and formal group risk appetite statement assessments and on making measurable progress which was subsequently approved by the board. on planned mitigation actions at all levels of the business:' The principal residual risks to the group's 2014 business plan were reviewed and approved and reports from the group risk John Connolly function on implementation by management of mitigation actions Risk Committee Chairman to address them were also received.The committee noted that the progress in reducing residual risk levels over the year across the group was variable.In some cases,this was due to changes external Meetings to G4S such as an increase in terrorism threats,political instability Committee membership and attendance attended and civil unrest in certain regions,while in others the level of investment and timescales required to drive improvement in specific John Connolly(chairman) 3 of 3 areas needed to be recognised.For example,although there was Ashley Almanza 3 of 3 significant progress in the approach to health and safety across the Himanshu Raja 3 of 3 group during 2014,more time is needed to ensure new practices Paul Spence 3 of 3 become fully embedded in all businesses and translate into a significant reduction in the risk of injuries. Tim Weller 2 of 3 The committee tasked management with ensuring that the right Other regular attendees include the group general counsel,and balance is struck between the level of residual risk and the the group director of risk and audit allocation of the group's resources to opportunities for improvement Further details of the principal risks and uncertainties Responsibilities facing the business are set out on pages 44 to 50. The Risk Committee advises the board on the group's overall risk appetite,develops the group's risk management strategy,advises the Audit Committee and the board on risk exposures and reviews the level of risk within the group and assesses the effectiveness of the group's internal control and risk management systems. The committee's composition ensures that a broad-ranging set of skills and experience come together to look at how the group manages risk in the business.The Risk Committee will consider all significant risks to the group,not only financial risks.Further details can be found in the committee's terms of reference available at www.g4s.com/investors. Ar1ual Re,_,xr 20'4 G4S plc 6 Corporate governance report continued Contract risk management was another key area of focus for Committee performance the committee which oversaw the inception and implementation in The assessment of the committee's performance showed that the the UK of new review processes for new and ongoing contracts. composition of the committee and the chairman's leadership were With regard to new contracts,the group risk function was tasked highly rated.It was also reported that the committee was effective with reviewing and improving contracts"onboarding"processes to in providing oversight of the controls in place over significant risks. ensure that,in addition to financial assessment criteria,other criteria focusing on the ability to win and deliver the opportunity were also Priorities for 2015 considered.These changes to the group's contract risk management of focus for 2015 will include reviewing progress on were implemented in the UK during the year and implementation embedding a risk management approach into businesses across across the rest of the group is planned during 2015. the group with a view to increasing the quality of information being reported,reviewing the group's residual risk exposure and The committee will receive regular reports on its implementation progress of mitigation action plans,as well as reviewing new and and key themes identified through these contract reviews are to emerging risks. be reported regularly to the committee. The committee also conducted a review of two large high-risk and complex on-going contracts in the UK and a sub-committee considered a major contract bid,the risks associated with it and proposed mitigation plans. Y w «fie.. !sue Y d.:...:r.. .y . r>1 k, m ., 7_-„L''.. . :...+. � , ..msµ � " I § r 111111 . a G %...- e 414* 4.9 i ` w a SIP a IA.s ro . - u 41 ■A r • d _yL _Z - - r — -Y s pa* a r _ y,« .-- ., t3 ' 4' t 5 * -,,, — -- At. tk\ i Fr, i. • . 64 G4S plc Annual Report and Accounts 2014 The committee members were selected for their range of commercial and financial expertise,necessary to fulfil the The Audit Committee committee's responsibilities.Each member of the Audit — — — — Committee brings significant and relevant experience gained at senior management level.Their skills and experience are set out on pages 52 and 53.The Audit Committee's chairman MrWeller is and Mr Seligman was,considered by the board to be members of wthe j Audit Committee with recent and relevant financial experience. 1 ti Audit Committee meetings are attended by the chief financial ' l officer,the group financial controller,the head of group internal audit,the company secretary,the group director of risk and audit and representatives of the group's external auditorThe chairman of the board and the chief executive also attend meetings from time to time in agreement with the chairman of the committee. After each meeting,the chairman of the committee reports to the "As announced in last year's report,I succeeded board on the matters which have been discussed. Mark Seligman as chairman of the Audit Responsibilities Committee after the AGM in June 20 14.Mark The committee makes sure there is effective governance of the remained a member of the committee until the group's financial reporting and internal controls to ensure the end of the year and I am very grateful for his integrity of fts financial statements and adequacy of related support during this time.During the year,the disclosures.The committee also has oversight of the performance group made significant progress in strengthening of both the internal audit function and the external auditor.Further the organisation in terms of finance,internal audit details can be found in the committee's terms of reference available and risk managementThe Audit Committee's work at www.g4s.com/investors. focused on the group's system of internal controls, Main activities of the Audit Committee during the year(%) the quality of our group financial reporting and the effectiveness of the external and internal audit processes.We also conducted a tender Whistlebiowing/fraud allegations(10%) for the role of the group's external auditor.This has resulted in the proposal to shareholders at Internal audit the 2015 AGM to confirm the appointment of (lox) Financial reporting PricewaterhouseCoopers LLP as group auditor." Tim Weller Audit Committee Chairman External audit tender (10%) External audit and non-audit services (20%) Committee membership and attendance Meetings attended Scheduled Unscheduled Tim Weller(chairman)' 4 of 4 2 of 2 Effectiveness of financial controls and Mark Seligman2 4 of 4 2 of 2 risk management procedures(25%) Adam Crozier 4 of 4 2 of 2 The committee has an annual agenda which includes standing items Paul Spence 4 of 4 2 of 2 that the committee considers regularly,as well as specific matters that require the committee's attention. I. Tim Weller became chairman after the AGM in June 2014. 2. Mark Seligman stood down as chairman after the AGM in June 2014 and as a member on 31 December 2014. Annual Report and Accounts 2014 G4S plc Corporate governance report continued Significant issues considered by the Audit Committee The primary issues considered by the committee in the 2014 financial statements,and how these were addressed,were: Significant issue considered Mitigation/Action Revenue recognition on UK Government and other contract-related provisions The group delivers outsourcing services that can be complex During the year,management enhanced the processes and controls for contract reviews and now in nature.There is a risk that billing and revenue recognition reviews on a quarterly basis the top 25 contracts for each region,as well as those contracts with on these contracts is not in accordance with contractual law profitability.In addition,a new process of 360 degree contract review on the largest and most entitlements or that contracts are forecast to be loss making complex contracts was introduced,covering financial,legal,reputational and operational risk over the remaining life of the contracts and therefore criteriaThese reviews are attended by at least one member of the group executive committee. provisions may be requiredThe identification of potential loss malting contracts and measurement of any related provision Each quarter,the Audit Committee receives a report summarising the results of these requires judgement to be exercised and there is a risk that reviews and the contract judgements made.The committee was satisfied that the provisions are not estimated appropriatelyThis was a prime judgements made by management were balanced and the recommended provisions were area of focus for the Audit Committee and external audit appropriate. Goodwill impairment testing The total value of the group's goodwill and other intangible The committee addressed these matters through receiving reports from management assets as at 31 December 2014 was Q.1 bn and relates to a outlining the basis for the assumptions used in relation to terminal growth,resulting significant number of historic acquisitionsThe estimation of the headroom and sensitivities applied by management and alternative valuation bases such recoverable amount of goodwill supported by the group's cash as reference to transactions for similar assets. generating units requires significant judgement,primarily in relation to the achievabil'rty of long-term business plans and The committee was satisfied with the carrying value of goodwill. macroeconomic assumptions and related modeling assumptions underlying the valuation process.During the year there have been some changes in material contracts that required further focus on the review of future projections.Consequently this continued to be a significant area of focus forthe committee, and a prime area of external audit focus Taxation The group operates in many tax jurisdictions,including The committee asked the external auditor to ensure that taxation constituted an important countries where tax legislation is not always applied area of focus during the external audit and to report on key tax issues identified during the audit consistently and under certain complex contractual process.The committee also asked management to pay particular attention to the review of the circumstances where the responsibility for tax arising is level of estimation of tax provisions and contingencies in the financial statements not always clear. The committee was satisfied with the report from the external auditor and that the provisions in the financial statements are adequate. Risk of management override of internal controls The group operates in a large number of diverse locations The committee reviewed the overall control environment of the group,and monitored with a significant number of local financial systems and progress against the approved group internal audit plan for the year,the different financial processes which could potentially lead to management control and balance sheet review processes and the output of the whistleblowing process. override of internal controls.During the yearthe group has In addition,the committee received regular updates on the implementation of risk and audit continued to make significant investment in strengthening committees in each of the regions,the consistent application of the different financial capability in finance,internal audit and risk,and introduced control processes across the group,and the half year review of financial statements by stronger internal controls and group oversight to mitigate the external auditor these risks.These indude monthly reviews of the quality of earnings,a comprehensive internal audit plan and a regular The committee also examined significant accounting estimates and judgements and the cycle of reviews of local business units or country balance supporting documentation for evidence of fraud or bias that may represent a risk of sheets and controls material misstatementThe committee satisfied itself that the risk of material misstatement resulting from management override of internal controls was not significant Presentation of die income statement In order to give better understanding of the underlying The committee discussed the rationale for this presentation with management and with performance of the business,the underlying results of the external auditor and concluded that separate presentation of the restructuring charges the group are presented with separate disclosure of and other specific items provides users of the group's financial statements with added clarity restructuring changes and specific items and transparency and therefore facilitates a dearer assessment of the group's performance over time. Management confirmed to the committee that appropriate accounting policies,guidance and controls had been exercised over the treatment of restructuring items and other specific items,allowing the committee to be satisfied that the presentation and disclosures _ were fair;balanced and reasonable. Going concern and liquidity risk The group has net debt of£1,578 million and the board The committee reviewed the group's forecasts of cash flow and net debt taldng into account has set a goal of net debt to EBITDA of<2.5 times over reasonably possible risk sensitivities,as well as the financing facilities available to the group; the medium term. noting the group had renewed its revolving credit finance facility for up to a further seven years. The committee also reviewed compliance with covenants and the availability of headroom in relation to those covenants. The committee was satisfied that the group adopt the going concern basis of accounting in the financial statements and recommended the same to the board. 66 G4S plc Annual Report and Accounts 2014 Internal control a risk-based internal audit plan,as well as changes to the reporting The group has in place robust systems of internal control and risk and communication on a quarterly basis of summary audit findings management for financial reporting.Their main features include to the regional risk and audit committees,had resulted in clear clearly defined reporting lines and authorisation procedures,a improvements.The need to ensure the efficient coordination comprehensive budgeting and monthly reporting system,written of initiatives from internal audit,the finance team and the risk policies and procedures and the use of a single global consolidation function was identified and addressed through the creation of system for both internal management reporting,budgeting and a working group. planning as well as external reporting.The group budget is approved In October 2014,the group director,risk and programme by the board.A regular update is provided by the group CFO on assurance was appointed to the combined role of group director of the outlook Actual results at business unit,region and group level risk and auditThe group internal audit team was reinforced are reported monthly and variances reviewed.A programme of significantly,both through increasing the size of the team and also business internal financial reviews(IFRs)is performed by a finance its expertise through the addition of a number of specialists in the team from either region or group to check the accuracy of financial areas of contracts and IT reporting and compliance with the group finance manual. The system is designed to ensure the integrity of financial reporting Each year,the committee reviews and approves the internal audit plan.The 2015 plan is more risk based than its predecessors and and the committee's responsibility is to ensure these internal covers 55%of the group's businesses and 83%of the group's �' controls remain effective.The committee does this primarily through revenue.Reports from internal audit are reviewed at each g reviewing the process followed by management to review the committee meeting and the committee monitors senior group's control environment such as IFRs. management's responsiveness to issues raised in these reports. The committee also receives quarterly reports from group External auditor internal audit,summarising the results of internal audits carried out. Open audits with a deficient rating,as well as common audit The committee considers the reappointment of the external findings and areas identified for improvement,any instances of auditor,including the rotation of the audit partner,each year and alleged fraud,in particular allegations of fraud involving employees assesses its independence on an ongoing basis.The external auditor in roles with responsibility over internal controls,are also included. is required to rotate the audit partner responsible for the group audit every five years.The current external auditor,KPMG Audit Plc In addition,during 2014,the group introduced regional risk was first appointed in 2005 and the current lead audit partner has and audit committees in each of the regions formed by regional been in place since June 2014.KPMG undertook the audit of the management,group management and internal and external auditors. group's consolidated accounts for the year ending 31 December They bring together a formal review of risk management for each 2014,having been reappointed at the company's 2014 AGM. region,internal and external audit issues arising and any significant Last year,the company indicated that it planned to put the external judgements in the financial statements.The Audit Committee audit engagement for the 2015 financial year out to tender and reviews the issues arising from these regional risk and audit the associated tender process is outlined on page 68.The'Big Four' committees.The Audit Committee has confirmed to the board audit firms were invited to take part in the tender.After discussion that it is satisfied that the group's risk management and internal with the committee,the company and KPMG mutually agreed control processes and procedures are appropriate. that KPMG would not participate in the tender,noting the longevity Internal audit review of their appointment Responses to the audit tender were assessed The Institute of Internal Auditors suggests that internal audit using detailed evaluation criteria which incorporated key aspects functions are subject to an external assessment at least every of the Financial Reporting Council's audit quality framework, five years.In May 2013,the Audit Committee commissioned including organisation,capability and service delivery,audit quality, an independent review of the group's internal audit function audit approach,and team capability and frt.Having concluded the by Deloitte. process at the end of September 2014,the committee recommended to the board that PricewaterhouseCoopers LLP Deloitte reported in November 2013 and found that the existing (PwC)be appointed as the group's external auditor for the internal audit function was organised and diligent and made some 2015 financial year.A resolution to this effect will be put to the suggestions for improvement in certain areas.The committee shareholders at the company's AGM on 4 June 2015. adopted Deloitte's recommendations aimed at strengthening the internal audit function and placing more emphasis on auditing the Subject to shareholders'approval,PwC will take over the audit "third line of defence"activities.Resources available to the internal engagement contract for the year ending 3 I December 2015. audit function were increased significantly. There are no contractual obligations restricting the company's A follow-up report from Deloitte was commissioned to assess choice of external auditor the progress made by the group internal audit function.The report, A tri-partite transition plan setting out the agreed principles, submitted to the committee in August 2014,concluded that, framework and timeline to ensure the efficient and effective transfer although good progress had been made,certain areas required of the external audit arrangement from the incumbent to PwC further work Several initiatives,such as increasing collaboration has been prepared. between the risk and group internal audit functions,developing Annual Report and Accounts 20 14 G4S plc 67 Corporate governance report continued Audit tender process In April 2014,having considered proposed changes to the UK Corporate Governance Code and the recommendations of the Financial Reporting Council,the company announced its intention to put the external audit engagement for the 2015 financial year out to tenderThe process the company followed is outlined below. RFP development A request for proposal document was developed following consultation between the chairman of the Audit Committee and the chief financial officer and distributed to the four largest (Big Four')audit firms in May 2014. Expressions of interest received Having received the request for proposal document each of the participant audit firms completed a confidentiality undertaking and a conflict of interest declaration and affirmed its intention to respond. Preliminary meetings A preliminary meeting was held with each of the participant audit firms and members of the Audit Committee and chief financial officer in early June 2014 in order to establish the committee's overall requirements and the significance attached to the selected evaluation criteria. Data room access Access was then granted to historic information held within an externally hosted virtual data room throughout June July 2014. Meetings with G4S senior management A series of meetings and conference calls were held during June-July 2014 between the participant audit firms and members of the group finance leadership team,company secretariat and regional finance directors in order to supplement the data room material. Written proposals A written response to the request for proposal was received from participant audit firms in early August 2014 together with a preliminary indication of the firms'independence to act as the group's auditor. Evaluation and assessment During August-September 20 14,these proposals were of the proposals assessed and scored against the group's weighted evaluation criteria by executives from the group finance leadership team, company secretariat and regional finance directors. High-level meetings During August-September 20 14,additional meetings were held between participant audit firms and the chairman of the Audit Committee and,separately,the chief financial officer Presentations At the end of September 2014,participant audit firms made a final presentation of their overall proposals—and confirmed their independence to act as the group's auditor—to the members of the committee,chief executive officer and chief financial officer Recommendation to the board On the basis of the above—and in conjunction with by theAudit wee the evaluation of the audit firms'written proposals the committee recommended to the board that PricewaterhouseCoopers LLP be selected as the group's external auditor for the 2015 financial year. Board decision The board accepted the committee's recommendation at its October 2014 meeting. hF G4S plc ard 2u=4 Non-audit services Effectiveness of the external auditors To ensure that the independence of the audit is not compromised, A combination of formal and informal processes is used in the the committee has put a policy in place on the non-audit services assessment of the effectiveness of the external audit process. that can be provided by the external auditor;the relevant approval A formal questionnaire is completed at the end of the audit by process for certain services and those services the auditor is members of the audit committee,group finance department and prohibited from providing.In essence,the external auditor is the finance directors of significant operations across the group and prohibited from providing services that could create a conflict of the output is reviewed by the Audit Committee.The assessment of interest,result in the audit firm auditing its own work or result in the external audit concluded that it remained effective and the the performance of management functions.The committee has external auditor independent pre-approved certain services which can be provided by the auditor Committee performance subject to specified fee limits above which further approval is required.All other services would require prior approval by The assessment of the committee's performance showed that the committee remains effective at discharging its responsibilities and in the committee. particular in reviewing the quality of the group's financial reporting. Every year the Audit Committee reviews its policy on the provision of non-audit services by the external auditorThis year;the Audit Priorities for 2015 Committee's review was carried out in light of the new EU The priorities for the committee for the next year will include regulatory framework for statutory audit,which was adopted in overseeing the transition of the group's external audit to the new April 2014 and is due to come into force in June 2016.The review auditor,reviewing the implementation of further changes to the resulted in a number of amendments to the non-audit services internal audit function and testing the effectiveness of changes made policy to better align the policy with the proposed EU reforms. to the internal controls environment The list of pre-approved services,which includes consultation and due diligence services related to mergers and acquisitions,audits of employee benefit plans,reviews of internal accounting and control policies and general advice on financial reporting standards, was amended to include work of a reporting accountant nature (for example,stock exchange circulars or comfort letters). The approval process for non-audit services was also amended so that a two-tier approval process is now in place,whereby any engagement with the external auditor for pre-approved services above a certain threshold requires the joint prior approval of the Audit Committee chairman and the chief financial officer and any engagement with the external auditor for any other services or for pre-approved services above a second,higher;threshold requires prior approval from the committee. The provision of any non-audit services by the audit firm must, in any event,comply with the requirements in that regard of the Auditing Practices Board.The auditor,KPMG Audit Plc,has written to the Audit Committee confirming that,in its opinion,it was independent for the period through to 5 March 2015. Details of the fees paid for audit services,audit-related services and non-audit services can be found in note I 0 to the financial statements.The external audit is a complex exercise involving more than 1,000 KPMG personnel covering over 110 countries in which G4S operates. In anticipation of taking over the audit engagement contract for the year ending 31 December 2015,in order to ensure independence, PwC had previously terminated all services which fell within the scope of the non-audit services policy by 31 December 2014. Since the Audit Committee is keeping under review whether and when to bring tax compliance and tax advisory services within the scope of the non-audit services policy,it is anticipated that the vast majority of tax compliance and tax advisory services being undertaken by PwC will have either terminated or transitioned by 30 June 20I 5.There were around thirty such services ongoing across the group at the beginning of 2015,however;these are deemed insignificant both individually and in aggregate. Annual Report and Accounts 2014 G4S plc 69 Directors' remuneration report • In line with our policy,any annual bonus due to the directors in excess of 50%of maximum will be deferred for a period of The Remuneration Committee three years and paid in G4S shares. - -- - — • Although operational performance in the year was strong,awards that had been made under our performance share plan in 2012 did not pay outThe threshold level of performance over the three-year performance period of the plan that ended in 2014 dr. was not met for either relativeTSR or EPS growth.This largely I reflects the challenges the business has faced,and now addressed, in the earlier years of the performance period. ► How we implemented our remuneration policy When operating the policy,the committee takes account of the overall approach and structure of employee reward across the 0///14114� group and pay decisions for the wider workforce as well as the _ results of relevant benchmarldng data.It is the committee's intention that pay should reflect the responsibility attached to the role "I am pleased to present the directors' fulfilled,individual performance and other relevant market remuneration report for 2014.As indicated by information.Our remuneration must allow the company to attract, John Connolly and Ashley Almanza in their retain and motivate directors who will lead the group in the long respective statements,in 2014 we made term interest of its stakeholders. considerable progress in the implementation of Base salary increases our strategy and improved financial results.Those As disclosed last year,the CEO's salary was increased to£890,000 results are reflected in the pay outcomes for with effect from I January 2014,whereas salaries for other our executive directors." executive directors were unchanged.This year,both the CEO Mark Elliott and CFO received a salary increase from I January of 3%. Remuneration Committee Chairman This increase took account of market salary levels as well as salary increases elsewhere in the group.As announced in October 2014, Grahame Gibson will be retiring from the board at the AGM in 2015 and his salary will remain unchanged again in 2015. The Remuneration Committee spent much of its time communicating with management on the implementation of How we operate our annual bonus plan our new annual and long term incentive systems.We focused There were no changes to the way in which we operated our on ensuring that these systems supported leaders both in annual bonus during 2014.For 2015,the committee has decided delivering desired financial results and in the delivery of our strategy. to operate the annual bonus with financial measures of In particular,we discussed non-financial measures of health and performance of underlying group earnings and underlying group safety and group values and the manner in which they interact with operating cash flow before capexThe non-financial measures of our financial measures.We also discussed those items to be performance are aligned with the group's strategic objectives and included in and excluded from our underlying performance metrics will continue to include health and safety.Underlying group earnings to ensure they reflect the highest quality outcomes.We are satisfied will replace the underlying group PBTA financial performance that our new leadership team has embraced and communicated measure under the annual bonus for 2015,as we consider this to those principles as they have delivered the new incentive systems be a better indicator of the group's performance going forward. across the group. Our long-term incentive plan How performance is reflected in remuneration outcomes We gained c.97%support from our shareholders for our new • There was strong growth in underlying group profit before long-term incentive plan at the AGM in 2014.We plan to continue tax and amortisation(PBTA)and underlying group operating cash to operate our long-term incentive plan unchanged in 2015. flow,which reflected strong operating performances overall in UK Code compliance both emerging and developed markets.At group level,the stretch We had anticipated the changes which were introduced by the financial targets set for the annual bonus were exceeded,resulting revised UK Corporate Governance Code in September 2014 with in maximum payouts under the financial element of the annual respect to malus and clawback.Our incentive arrangements are bonus for two of the executive directors. 57% already subject to malus and clawback,as explained on page 75. • Scoring for non-financial metrics ranged from 57%to 98% of maximum.As indicated above,we place a great deal of As a resuht,no changes were needed to our incentive arrangements emphasis on health and safety across the group,and take our to comply with the new requirements in 20 1 5.The Remuneration responsibilities to our employees and to wider society very Committee's terms of reference have also been amended to bring seriously.As there were a number of health and safety incidents them into line with the new Code requirements and can be found in the year,the Remuneration Committee took these into on our website at www.g4s.com/investors. account for the bonus outcomes for all of our senior executives. Full details of the bonus outcomes for each of the executive directors are set out on page 79. G4S plc , and accounts 20 i4 Main activities of the Remuneration Committee Committee membership and attendance_ Meetings attended during the year(%) __ Scheduled Unscheduled Mark Elliott(chairman) 3 of 3 2 of 2 Expenses policies I II*1111111 E xecutives'base pay(i0%) Winnie Fok 3 of 3 2 of 2 (6%) Mark Seligman 3 of 3 2 of 2 ClareSpottiswoode 3 of 3 I of 2 ang Chairman's fee &Governance (9%) Responsibilities (18%) The Remuneration Committee is responsible for all elements of %pi, Below board levy the the exetires, e members f. ,,,ne�tio„ group re muneration executive of cothe m mittee cu an d ive d the ctor chairman oth r of the boarod. also agrees with the board the framework and policy for the Annual bonus remuneration of other senior managers of the group and reviews (22%) and recommends the remuneration of the company secretary. LTIP(23%) In determining remuneration policy,the committee takes into account a variety of legal and regulatory requirements,and the Consulting with our shareholders relevant provisions of the UK Corporate Governance Code. We are committed to consulting with our top shareholders on key remuneration issues.In late 2013 and early 2014,we consulted The committee also determines policy on the duration,notice with 13 of our largest shareholders as well as certain shareholders' Period and termination payments under the contracts with the representative bodies in respect of the proposed new LTIP and the executive directors,with a view to recognising service to the directors'remuneration policy.Their feedback caused us to add company whilst ensuring that failure is not rewarded and that the clarifications on our policy statement and to alter some of the duty to mitigate loss is recognised. performance measures in the new LTIP.I will be available to answer The committee approves the design and determines the targets questions and listen to the views of our shareholders at the and formulae for performance-related pay schemes operated by forthcoming Annual General Meeting. the company.It approves the eligibility of executive directors and Retirements other group executive committee members for annual bonuses and Trevor Dighton stepped down from the board at the 2013 Annual benefits under long term incentive plans and assesses performance General Meeting and retired from the company on 30 July 2014. against the objectives of those plans. Details of Mr Dighton's termination arrangements are set out in The committee's terms of reference are available on the company's detail on page 81. website at w.w.w.g4s.com/investors. As reported above,in October 2014 it was announced that Our remuneration approach Grahame Gibson would retire from the board at the Annual We seek to attract and retain the best people whilst ensuring that General Meeting on 4 June 20 I 5.The committee will consider the remuneration policy and practice drive behaviours that are in the retirement arrangements for Mr Gibson over the coming the long-term interests of the company and its shareholders. months,and we will provide full disclosure of these arrangements Fixed •a in next year's report • base pay I would like to take this opportunity to thank Mark Seligman, • retirement benefits who will step down from the Remuneration Committee this year • other benefits when he leaves the board at the AGM in 2015.The committee has Short-term incentives benefited greatly from Mark's knowledge and experience. • annual bonus plan(one year) The committee's performance Lon:-term incentives The committee's formal performance review carried out at the end of 2014 concluded that the committee was effective and continued • Long term incentive plan(three years) to perform well.In particular,the committee had achieved its goal to have greater involvement in the operation of incentive schemes Remuneration Policy across the group and to monitor the level and structure of The company's remuneration policy for directors was set remuneration for senior managers across the group. out in full in the company's 2013 Annual Report and Accounts on pages 66 to 72 and can also be found on the Voting on remuneration The annual report on remuneration will be put to an advisory company's website.ft was approved by shareholders at the vote at this year's Annual General Meeting,and we look forward company's Annual General Meeting held on 5 June 2014 with 98.38%of all votes cast in favour.The policy refers to a new to receiving shareholders'support once again this year. long term incentive plan which was also approved at the Mark Elliott 2014 Annual General Meeting,with 96.88%of all votes cast Remuneration Committee Chairman in favour.That policy came into effect on 6 June 2014 and 26 March 2015 will continue to apply for up to three financial years unless a new or revised policy is approved by shareholders in the meantime.No changes are proposed.For convenience a summary of some of the main features of the policy is set out on pages 72 to 77 below. Annual Report and Accounts 2014 G4S plc 71 Directors' remuneration report continued Directors'remuneration policy—summary Remuneration policy for executive directors Base pay Purpose and link to strategy In determining salary increases,the committee considers Base pay is set at competitive levels in order to recruit and market salary levels including those of appropriate comparator retain high calibre executives with the skills required in order companies. to manage a company of the size and global footprint of G4S. Ordinarily,annual salary increases would be no more than The level of pay will reflect a number of factors including the average annual increase across the group.However,in individual experience,expertise and role. exceptional circumstances a higher level of increase may be awarded,for example: Operation • following a significant change to the nature or scale of Reviewed annually and fixed for 12 months commencing the business;or I January.Interim salary reviews may be carried out following • following a significant change to the nature or scope of significant changes in role,scope or responsibility or at any the role;or other time at the committee's discretion. • for a new appointment,where the base pay may initially The final salary decision may also be influenced by role, be set below the market level and increased over time, experience,individual and company performance,internal as experience develops and with reference to the individual's relativities and increases for group employees. performance in the first few years in the role. Maximum opportunity Where exceptional increases are made we will fully disclose Actual base pay for each executive director is disclosed and explain the rationale for such increases. each year in the Directors'remuneration report. Performance measures None,although individual performance may have a bearing on salary increases. Benefits Purpose and link to strategy Maximum opportunity As with base salary,a suitable range of benefits is made maximum benefits per director per annum: available in order to recruit and retain high calibre executives. • holidays—30 days • car allowance—£20,000 Operation • business related local transport—£40,000 Executives are entitled to a number of benefits comprising • for financial advice,expatriate benefits and relocation paid holiday,healthcare for themselves and their family and life expenses,the expense will reflect the cost of the provision insurance of up to 4 times base salary,car allowance,business of benefits from time to time but will be kept under review related transport,limited financial advice from time to time by the committee and expatriate benefits where relevant A relocation allowance • other benefits granted at the discretion of the committee reflecting reasonable costs actually incurred will be paid. up to 3%of base pay per annum per director Other benefits may be granted at the discretion of the • reasonable business expenses which are reimbursed are Remuneration Committee. not subject to a maximum,since these are not a benefit to Reasonable business expenses in line with G4S'expenses the director policy(e.g.travel,accommodation and subsistence)will Any allowance in relation to relocation will provide for the be reimbursed and in some instances the associated tax will reimbursement of reasonable costs incurred. be borne by the company. Performance measures None. 72 G4S plc Annual Report and Accounts 2014 Annual bonus Purpose and link to strategy Performance measures Rewards the achievement of annual financial and strategic Typically,executive directors'bonus measures are weighted business targets and delivery of personal objectives. so that Deferred element encourages long-term shareholding ' between 70%and 85%of the bonus is based on and discourages excessive risk taking. achievement of challenging financial performance measures (e.g.profit before tax and amortisation,organic growth, Operation cash-flow measures,etc.),with each measure operating Awarded annually based on performance in the year independently of the others;and Targets are set annually and relate to the group and/or • the remainder is linked to personal and/or non-financial the business managed by the executive. measures,which are strategic or operational in nature. Bonus outcome is determined by the committee after the Each year,the committee may use its discretion to vary the year end,based on annual performance against targets. exact number of measures,as well as their relative weightings, and this will be disclosed in the annual remuneration report. Bonuses are paid in cash,but executives are required to defer any bonus payable in excess of 50%of their maximum bonus As a result of the number of factors taken into account in entitlement into shares.Deferral is for a minimum period of determining bonus,there is no minimum pay-out level. three years.Dividends or equivalents accrue during the For illustrative purposes,in the event that only threshold has deferral period on deferred shares. been achieved,pay-out would be 35%of maximum,rising to full pay-out should achievement of a stretch performance Bonuses are not pensionable. level be achieved for all measures assuming the non-financial Maximum opportunity performance measures were satisfied. Maximum opportunity of 150%of base pay per annum for The deferred element of the bonus is not subject to any the CEO and the CFO. further performance measures but is subject to clawback 125%of base pay per annum for any other executive director in certain circumstances.The non-deferred part of the bonus,which is settled in cash,is also subject to clawback. (See separate section below on page 75) Long Term Incentive Plan (current) Purpose and link to strategy Maximum opportunity Incentivises executives to achieve the company's long-term Maximum opportunity of 250%of base pay per annum for financial goals,as well as focus on value creation,whilst aligning the CEO. the interests of executives with those of shareholders. Maximum opportunity of 200%of base pay per annum for Operation the other executive directors. Executive directors are granted awards on an annual basis, Performance measures which vest over a period of at least three years subject to Awards vest based on performance over a period of at least continued service and the achievement of a number of key three financial years commencing with the financial year in performance measures. which the award is made. The Remuneration Committee reviews the quantum of Performance will be measured based on a combination of awards to be made to each executive each year to ensure earnings per share growth,total shareholder return against a that they remain appropriate. comparator group and average operating cash flow.For awards Dividends or equivalents accrue during the vesting period made in 2014,these were in the proportion of 40%,30%and on awards that vest. 30%respectively However,the committee retains the flexibility The award is settled by the transfer of market-purchased to amend these proportions,provided that no single measure shares to the executive directors. will be a significantly greater proportion than the others. All the released shares(after tax)must be retained until the At threshold,25%of the relevant portion vests.This increases minimum shareholder requirement is met Currently,the on a straight-line basis up to 100%for performance in line with minimum shareholding requirement is 200%of base salary maximum.Targets are set out on page 83. for the CEO and 150%for the other executive directors. Awards are subject to clawback in certain circumstances (see below on page 75.) Annual Report and Accounts 2014 G4S plc 73 Directors' remuneration report continued Retirement benefits Purpose and link to strategy CFO receives 20%of base pay and the other executive As with base salary and other benefits,making available a director receives 40%of base pay reflecting his historic suitable retirement benefits package aids the recruitment participation in a defined benefits plan which has been closed. and retention of high calibre executives,allowing such The level of award is kept under review by the committee executives to provide for their retirement and is intended to be broadly market comparable for the roles. Operation Maximum opportunity G4S operates a defined contribution group-wide personal Maximum opportunity of up to 25%of base pay for the pension plan in the UK in which executives may participate. CEO and 20%for the other executive directors save that Alternatively,G4S may provide a cash allowance in lieu of 40%of base pay per annum is payable to Grahame Gibson. a contribution into such plan. The current executive directors receive cash allowances. Performance measures The CEO receives 25%of base pay as a cash allowance;the None. Remuneration policy for non-executive directors Chairman's fee Purpose The chairman's fees are reviewed against other companies of To attract and retain a high calibre chairman by offering a similar size. a market competitive fee,which also reflects the Maximum opportunity responsibilities and time commitmentThere are no Ordinarily,any increase of the chairman's fee would be in line performance-related elements. with other increases for similar roles in other companies. Operation Fees payable to the chairman and other non-executive The chairman's fee is disclosed each year in the Directors' directors in aggregate per annum shall not exceed the remuneration reportThe fees are reviewed annually by maximum specified in the company's articles of association the committee.The annual fee is an all-inclusive consolidated for the relevant year: amountThe committee retains the discretion to review the chairman's fees at any other time if appropriate. Non-executive directors' fees (excluding the chairman) Purpose The NED component fees are reviewed annually by the To attract and retain high calibre non-executive directors executive directors.The board retains the discretion to review (NEDs)by offering market competitive fees which should the NED fees at other times,as appropriate,to reflect any reflect the responsibilities and time commitmentThere are changes in responsibilities or commitment no performance-related elements. The basic fee covers committee membership and each NED is Operation expected to participate in one or more board committees.All NED fees including any additional fee for any additional the fees are reviewed against other companies of a similar size. role listed below are disclosed each year in the Maximum opportunity Directors'remuneration report. Ordinarily,any increase of the NEDs'fees would be in line With the exception of the chairman,the fees for NEDs with other increases for similar roles in other companies. are structured by composition build-up consisting of Fees payable to non-executive directors(including the • a base fee chairman)in aggregate per annum shall not exceed the • an additional fee for chairing a committee maximum specified in the company's articles of association • an additional fee for the role of deputy chairman for the relevant year. • an additional fee for the role of senior independent director: 74 G4S plc Annual Report and Accounts 2014 Benefits Purpose Maximum opportunity Benefits may be provided from time to time in connection Reasonable business expenses which are reimbursed are with the chairman and other NEDs performing their roles, not subject to a maximum,since these are not a benefit to such as business travel,subsistence and entertainment, the director accommodation and professional fees for tax and social Benefits and expenses will reflect the actual cost of provision. security compliance,and other ancillary benefits. Operation Reasonable business expenses in line with G4S expenses policy(e.g.travel,accommodation and subsistence)will be i reimbursed and in some instances the associated tax will be borne by the company. Notes to the directors'remuneration policy summary For these purposes,payments may include the committee satisfying .Performance measures awards of variable remuneration.In cases where all or part of the Annual Bonus Plan—The actual performance measures and targets variable remuneration award was in the form of shares,the payment are set by the Remuneration Committee at the beginning of each terms are those agreed at the time the award was granted. year.The performance measures used for our annual bonus plan In particular;awards made under the previous Performance Share have been selected to reflect the group's key performance Plan will continue to vest in accordance with the rules of that plan indicators.The committee aims to ensure that the measures and to the extent that the relevant performance tests are met appropriately encourage the executive directors to focus on the Details of the vesting of the awards will be published in the annual company's strategic annual priorities,whilst the targets are set to remuneration report each year be stretching but achievable. The non-executive directors do not participate in any incentive The aim is to strike an appropriate balance between incentivising schemes nor do they receive any benefits other than those referred annual financial and strategic business targets,and each executive to in the above table. director's key role-specific objectives for the year. 2.Malus and claw-back mechanisms Long Term Incentive Plan—In choosing the performance measures Since 2010,any cash and/or shares awarded under the annual for the Long Term Incentive Plan,the committee aimed to find a bonus plans and the previous Performance Share Plan may be balance of measures which reflect the company's long-term subject to clawback.The LongTerm Incentive Plan and the annual financial goals as well as incentivise executives to create sustainable, bonus plan may be subject to malus or clawback from the executive long-term value for shareholders. director concerned if the Remuneration Committee so determines Legacy plans—The committee reserves the right to make and,in the case of misstatement of accounts,where the Audit any remuneration payments and payments for loss of office Committee concurs.The time period in which the clawback can be notwithstanding that they are not in line with the policy summarised operated depends on the reason for the overpayment as above where the terms of the payment were agreed()before the set out in the table below policy came into effect or(ii)at a time when the relevant individual The amount to be clawed back directly from the executive director was not a director of the company and,in the opinion of the will be the overpaid amount,but the Remuneration Committee committee,the payment was not in consideration for the individual retains the discretion to claw-back the"net"(i.e.post-tax)amount becoming a director of the company. of the award received by the executive director. Malus and claw-back Annual Bonus Plan(including LTIPs deferred elements) 2014 Plan PSP(previous) Current LTIP Material misstatement of up to 2 years after up to 2 years after vesting up to 2 years after vesting group financial accounts the payment of the (except where due to cash element fraud or reckless behaviour when it shall be 6 years after vesting) Misconduct up to 6 years after up to 6 years after vesting the payment of the cash element Fraud unlimited unlimited Annual Report and Accounts 2014 G4S plc 75 Directors' remuneration report continued Principles and approach to recruitment and internal Service contracts promotion of directors Shareholders are entitled to inspect a copy of executive When hiring a new executive director,or promoting to the directors'service contracts at the company's head office board from within the group,the committee will offer a package and annually at the AGM. that is sufficient to retain and motivate and,if relevant attract the Executive directors'service contracts all have the following features: right talent whilst at all times aiming to pay no more than is • Contracts are drafted in line with best practice at the time the necessary.Ordinarily,remuneration for a new executive director executive directors were appointed. will be in line with the policy set out in the table summarised above. • Terminable on 12 months'notice by either party. However,discretion may be required for exceptional circumstances such as dealing with remuneration relinquished in a previous job. Specific provisions for Ashley Almanza and Himanshu Raja's The maximum level of on-going variable pay that may be awarded contracts(dated 2013)that are not in Grahame Gibson's to new executive directors on recruitment or on promotion to the contract(dated 2006)include: board shall be limited to 400%of base salary as set out in the policy • Following board approval,AshleyAlmanza is allowed to hold table summarised above(calculated at the date of grant,excluding two external non-executive appointments(he is currently any buy-out awards—see below).Remuneration and any buy-out a non-executive director of Noble Corporation and of Schroders arrangements will be announced as far as possible at the time a plc,although he will stand down from the board of Noble new executive director or chairman is appointed,or in the Corporation in the near future)and retain the fees paid directly following Directors'remuneration report to him for the appointments.Himanshu Raja is allowed to hold one external non-executive appointment and retain any fees paid When determining the remuneration of a newly appointed directly to him for the appointment Grahame Gibson's contract executive director;the Remuneration Committee will apply does not specifically deal with NED positions,which will the following principles: therefore be subject solely to board discretion. • The on-going remuneration package to be designed in • Mitigation obligations on termination payments are explicitly accordance with the policy table summarised above. included in the 2013 contracts.Notice payments for Ashley • New executive directors will participate in the annual bonus Almanza are payable monthly and those for Himanshu Raja scheme and long term incentive plan on the same basis as are payable in two six-monthly instalments,in advance. existing executive directors. • The Remuneration Committee shall have discretion to grant There are no express mitigation provisions in Grahame one-off cash or share-based awards to executive directors Gibson's contract where it determines that such an award is necessary to secure Non-executive directors'letters of appointment: the recruitment of that executive director and where it is in the • Appointment is subject to the provisions of the articles best interests of the company to do so.Such awards would only of association of the company,as amended from time to time be made as compensation for remuneration relinquished under regarding appointment,retirement fees,expenses,disqualification a previous employment(i.e.buy-out arrangements)and would be and removal of directors. intended to mirror forfeited awards as far as possible by reflecting • All continuing non-executive directors are required to stand the value,nature,time horizons and performance measures for re-election by the shareholders at least once every three attached.In such circumstances,the company will disclose a full years,although they have agreed to submit themselves for explanation of the detail and rationale for such one-off awards. re-election annually in accordance with the UK Corporate • In certain circumstances,it may be necessary to buy out long Governance Code. notice periods of previous employment • Initial period of appointment is two years. • With regard to internal promotions,any commitments made • All reasonably incurred expenses will be met before promotion and unconnected with the individual's • Fees are normally reviewed annually promotion may continue to be honoured even if they would not otherwise be consistent with the policy prevailing when the commitment is fulfilled. • For external and internal appointments,the Remuneration Committee may agree that the company will meet certain relocation expenses(including legal fees),as set out in the policy table. • In determining the approach for all relevant elements,the Remuneration Committee will consider a number of factors, including(but not limited to)external market practice,current arrangements for existing executive directors and other internal relativities. 76 G4S plc Annual Report and Accounts 2014 Loss of office payment The value of the termination payment would cover the balance The duration of the notice period in each of the executive directors' of any salary and associated benefits payments due to be paid for contracts is 12 months. the remaining notice period,the value of which will be determined by the Remuneration Committee.The Remuneration Committee The Remuneration Committee would consider the application of would also retain the discretion to make appropriate payments mitigation obligations in relation to any termination payments necessary to finalise any settlement agreement,but in exercising where such provisions exist in the executive director's contract such discretion the Remuneration Committee will remain mindful The contracts do not provide for the payment of a guaranteed to ensure that there is no reward for failure. bonus in the event of termination.Directors(other than Himanshu The fees for outplacement services and reasonable legal fees in Raja)will not be eligible for bonus accrual during any period of connection with advice on a settlement agreement may be met garden leave.In the case of Himanshu Raja,his contract provides by the company. for such accrual although any payment would depend on the y discretion of the Remuneration Committee. The table below illustrates how each component of pay would be calculated under different circumstances: Plan Automatic"good leaver"categories Treatment for"good leavers' Treatment for other leavers Annual bonus(cash All leavers other than voluntary Executive directors may receive a bonus to be Bonus opportunity element) resignation and summary dismissal. paid on the normal payment date and in will lapse. accordance with the agreed performance measures but reduced pro-rata to reflect the time employed. Annual bonus • Injury,disability or ill health Deferred shares may be released if the executive Deferred share (deferred share • Redundancy director ceases employment prior to the third awards shall lapse. element) • Retirement anniversary as a result of one of the good • Death leaver reasons. • Termination without cause • Change of control or sale of employing company or business • Any other circumstances at the discretion of the Remuneration Committee Performance Share • Injury,disability or ill health Awards will vest on the relevant vesting date on Awards will lapse. Plan(previous) • Redundancy a time-apportioned basis,unless the Remuneration • Retirement Committee determines otherwise,and subject to • Death the achievement of the performance measures. • Change of control or sale of employing company or business • Any other circumstances,provided that the Remuneration Committee considers there are exceptional circumstances _ LongTerm Incentive • Injury,disability or ill health Awards will vest on the relevant vesting date on Awards will lapse. Plan(current) • Redundancy a time-apportioned basis,unless the Remuneration • Retirement Committee determines otherwise,and subject to • Death the achievement of performance measures at the • Change of control or sale of relevant vesting date. employing company or business The vesting date for such awards will normally • Any other circumstances at the discretion of the be the original vesting date,unless otherwise Remuneration Committee determined by the Remuneration Committee. As directors may leave employment for a wide range of reasons,the Remuneration Committee retains discretion to approve payments where the reason for leaving does not fall precisely within the prescribed"good leaver"category.The committee will take account of the director's performance in office and the circumstances of their exitThe committee will seek to balance the interests of shareholders, the departing director and the remaining directors.Any awards subject to performance conditions would be assessed at the end of the relevant period and be subject to time apportionment Annual Report and Accounts 2014 G4S plc 77 Directors' remuneration report continued ANNUAL REPORT ON REMUNERATION SINGLETOTAL FIGURE OF REMUNERATION(AUDITED INFORMATION) Executive directors The following table shows a single total figure of remuneration in respect of qualifying services for the 2014 financial year for each executive director,together with the comparative figures for 20 13.Aggregate executive directors'emoluments are shown in the final column of the table. Base pay Benefits Annual Bonus PSP Pension related benefits Total £ _ 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014. 2013 Ashley Almanza 890,000 600,000 100,559 61,556 1,308,300 648,000 n/a n/a 222,500 150,000 2,521,359 1,459556 Grahame Gibson 609,084 639,483 83,604 110,652 439,823 103,000 0 0 243,633 255,793 1,376,864 1,108,928 Himanshu Raja 625,000 156,250 121,729 25,179 890,625 234,375 n/a n/a 125,000 31,250 1,762,354 447,054 Notes: I. Certain information in 2013 relates to part years during which Ashley Almanza and Himanshu Raja served as executive directors: a For Ashley Almanza,figures for 20 I 3 include the period from I April 2013 when he commenced employment and when he was Group CFO from I May 2013(during which time his base pay was£625,000 per annum)prior to his appointment as Group CEO from I June 2013(when his base pay increased to£850,000 per annum). b. For Himanshu Raja,figures for 2013 are from his appointment date on 7 October 2013 and this includes the period from 1 October 2013. 2. Benefits indude car allowance,business related travel,healthcare,disability and life assurance.Benefit values include the cost of certain travel,overnight accommodation and meals which HMRC treats as a taxable benefit and on which the company will pay tax in due course as it does not consider such expenses to be benefits in the ordinary sense.The grossed-up amounts for 2014 are£43,541 for Ashley Almanza,£59,521 for Himanshu Raja and E14,86 I for Grahame Gibson.Benefit values also include local travel costs of£9,180 and£22,320 for Ashley Almanza and Himanshu Raja respectively who bear the tax themselves and other business costs which HMRC deems to be benefits.In 2014 for Grahame Gibson,the benefits value includes a total value of£31,257 relating to flights for him and his family between the UK and US. 3. The benefits values for 2014 also include taxes met by the company in respect of certain expenses which were incurred in 2013. 4. Part of Mr Gibson's salary is paid in sterling and part in US$.The US$element has been converted into sterling for the purposes of reporting at the exchange rates prevailing in each month in which Grahame Gibson was paid.The average exchange rate during the year was$1.65055($1564933 in 2013). 5. Any bonus due above 50%of the individual's maximum bonus entitlement is awarded as deferred shares which vest after a period of three years. 6. In addition,AshleyAlmanza received£122,500 from Schroders plc and a fee of$96,000 as well as shares valued at$230,993 from Noble Corporation from his non-executive directorships referred to on page 76 and retained such remuneration. Non-executive directors The following table shows a single total figure of remuneration in respect of qualifying services for the 2014 financial year for each non-executive director,together with the comparative figures for 2013.Aggregate non-executive directors'emoluments are shown in the last column of the table. Base fee SID Chair of Committee Deputy Chair Benefits Total Total 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 John Connolly 356,500 348,000 n/a n/a n/a n/a n/a n/a 5,307 2,638 361,307 350,638 Adam Crozier 58,400 56,800 n/a n/a n/a n/a n/a n/a 1,489 2,198 59,889 58,998 Mark Elliott 58,400 56,800 10,750 5,896 17,775 17,550 n/a n/a 2,495 3,871 89,420 84.117 Winnie Fok __ 58,400 56,800 n/a n/a n/a n/a n/a n/a 10,087 15,117 68,487 71,917 Mark Seligman 58,400 56,800 n/a n/a 7,582 17,550 46,800 46,800 2,166 3,772 114,948 124,922 Paul Spence 58,400 56,800 n/a n/a n/a n/a n/a n/a 39,545 72,348 97,945 129,148 Clare Spottiswoode 58,400 56,800 n/a n/a 17,775 9,855 n/a n/a 1,916 3,099 78,091 69,754 Tim Weller 58,400 42,600 n/a n/a 10,192 n/a n/a n/a 1,954 1,256 70,546 43,856 NotesThe above fees were pro-rated where the appointments or retirements were part way through the year 1. Mark Elliott was appointed as chair of the Remuneration Committee and senior independent director on 6 June 2013. 2. Clare Spottiswoode was appointed as chair of the CSR Committee on 6 June 2013. 3. Mark Seligman stepped down as chair of the Audit Committee on 5 June 2014. 4. Tim Weller was appointed as Chair of the Audit committee on 6 June 2014. 5. Benefit values include the cost of overnight accommodation,travel and meals which HMRC treats as a taxable benefit and on which the company will pay tax in due course as it does not consider such expenses to be benefits in the ordinary sense. 6. The 2013 benefits values differ from the figures reported in the 2013 remuneration report in some cases following a review of the calculation methodology.This is mainly related to the classification of the reimbursement for flights to attend board meetings. 78 G4S plc Annual Report and Accounts 2014 Further notes to the single total figure of Himanshu Raja remuneration tables %of maximum Score 2014 Annual bonus Financial measures Targets Achievement bonus achieved During the financial year ending 31 December 2014,the Group PBTA £279m £304m 70% 70% performance measures relating to the annual bonus scheme Group OCF £511m £553m 15% I 5% rules were consistent with the remuneration policy,with 85%of Total 85% 85% the bonus for all executive directors based on achievement of challenging financial performance measures set at the beginning Non-financial objectives were set in the following areas; of the year:The financial performance measures that applied to Health&Safety Ashley Almanza and Himanshu Raja were based on budgeted group People,capability building,values and organisation profit before tax and amortisation and budgeted group operating Governance&control cash flow before capital expenditure.The financial performance Operational Excellence measures for Grahame Gibson consisted of four financial objectives, Cost Leadership initiatives three of which were for the Americas region and the fourth was 15%of maximum bonus potential was allocated to non-financial measures related to group PBTA.On-target performance would result in and the level of achievement was assessed at I0%. • a payment of 60%of maximum entitlement,with 100%only being Grahame Gibson c� earned in the event of achievement of a stretch performance significantly in excess of budget %of maximum Score The remaining 15%was linked to objectives relating to non-financial Financial measures Targets Achievement bonus achieved performance,which consist of personal objectives or relate to the Group PBTA £279m £304m 15% 15% organisation.In line with all senior business leaders across the group, Regional PINTA £118m £114m 40% 19.04% the executive directors'personal performance-related objectives Regional Organic Growth 8.1% 9.2% 15% 15% included an objective on health and safety. Regional OCF £138m £I 10m 15% 0 Total 85% 49.04% The maximum bonus potential has remained unchanged from 2013.It is 150%of base pay for Ashley Almanza and Himanshu Non-financial objectives were set in the following areas; Raja and 125%of base pay for Grahame Gibson.Bonuses are paid Health&Safety in cash up to 50%of maximum entitlement Where the bonus Business Development/growth amount is in excess of 50%of the maximum bonus potential,the Operational Excellence • amount which exceeds 50%will be delivered in the form of a deferred share award which vests after a period of three years. People,Organisation&values Cost leadership initiatives The tables below show how pay was linked to performance in 2014 15%of maximum bonus potential was allocated to non-financial measures and set out details of each of the financial measures the targets in and the level of achievement was assessed at 8%. respect of these measures and the actual outcomes: The table below sets out the annual bonus awards which were Ashley Almanza made to executive directors in respect of the financial year %of ending 31 December 2014: maximum Score 2014 annual Financial measures Targets Achievement bonus achieved 2014 annual bonus Group PBTA Q79m £304m 70% 70% 2014 annual bonus(%of deferred(% Group OCF £5I lm £553m 15% 15% bonus(L)* salary) of salary)' Total 85% 85% Ashley Almanza £1,308,300 147% 72% . Himanshu Raja £890,625 142% 68% • Non-financial objectives were set in the following areas; Grahame Gibson E439,823 71% 9% Health and Safety • Any bonus due above 50%of the individual's maximum bonus entitlement Strategy is awarded as deferred shares which vest after a period of three years: People,organisation&values Deferred Governance Cash shares Stakeholder Engagement Ashley Almanza £667,500 £640,800 15%of maximum bonus potential was allocated to non-financial measures Himanshu Raja E468,750 £421,875 and the level of achievement was assessed at 13%. Grahame Gibson £380,678 E59,145 Performance Share Plan(PSP) The PSP value shown in the single figure table relates to the 2012 PSP awards made in March 2012.The performance measures were earnings per share growth and relative total shareholder return.Neither of these performance tests were met and the outstanding award lapsed. Annual Report and Accounts 2014 G4S plc 79 • Directors' remuneration report continued TOTAL PENSION ENTITLEMENTS(AUDITED INFORMATION) Neither Ashley Almanza nor Himanshu Raja is a member of the group's pension plan,which is a defined contribution group personal pension plan available to all UK employees.Instead they receive cash allowances of 25%and 20%of their base pay,respectively. Grahame Gibson ceased accruing pensions under the company's defined benefit scheme in 2006.A salary supplement in lieu of pension of 40%of basic salary was paid.His accrued pension at the relevant dates in the defined benefits scheme(all figures are in£'000s)is shown in the table below. Total accrued Total accrued Pension input Pension input annual annual Normal amount amount pension at pension at Date accrual retirement 2014 2013 31/12/14 31/12/13 ceased date Grahame Gibson 0 0 242 21.7 6/42006 17/12013 Notes: 1. In 2011,Grahame Gibson transferred the majority of his pension benefits to a private pension arrangement leaving a residual pension payable from age 60. Grahame Gibson has passed normal retirement date and the accrued pension shown includes the application of a late retirement factor. 2. The earliest date when entitlement to a pension arises without consent and without actuarial reduction is age 60(the normal retirement date). 3. On 3 March 2015,Grahame Gibson transferred his remaining and residual pension benefits in an amount of£363,188 to a private pension arrangement The transfer value was calculated using the same actuarial basis as that used by the trustees of the pension scheme for all members. SCHEME INTERESTS AWARDED DURING THE FINANCIALYEAR(AUDITED INFORMATION) Awards under the LTIP approved by the shareholders at the company's AGM in June 2014 were made in July 2014.They were,however, deemed to have been made in March in order to be consistent with the company's normal grant policy.Details of the awards made to the executive directors are summarised in the table below and further details are given in the table on directors'shareholdings and interests on page 81: Number of Face value EPS,TSR and AOCF %vesting at Director Award type shares (£) Performance condition Performance period threshold Ashley Almanza Conditional shares 962,370 2,225,000 40%EPS/30%TSR/30%AOCF 01/01/2014—31/12/2016 25% Grahame Gibson Conditional shares 463,615 1,071,880 40%EPS/30%TSR/30%AOCF 01/01/2014—31/12/2016 25% Himanshu Raja Conditional shares 540,657 1,250,000 40%EPS/30%TSR/30%AOCF 01/01/2014—31/12/2016 25% 1. The face value calculation was based on a share price of£2.312 which represents the average closing share price during the three business days following the announcement of the company's 2013 financial results. 2. Further details on performance conditions are set out in the table below PERFORMANCE MEASURES FOR LONG TERM INCENTIVES AWARDED IN 2014 40%of each award granted 30%of each award granted 30%of each award granted Average annual growth in Proportion of Ranking against the bespoke Proportion of Average operating cash Proportion of EPS period ending on 31 allocation vesting comparator group by allocation vesting flow allocation vesting December in the third year reference toTSR Less than 5%pa Nil Below median Nil <105% Nil 5%pa(15%over 3 years) 25% Median 25% 105% 25% +5 to 12%pa Pro-rata between 25% Between median and upper Pro-rata between 25% Between 105%and 125% Pro-rata between 25% and 100% quartile and 100% and 100% Greater than+12%pa 100% Upper quartile 100% 125% 100% (36%over 3 years) The bespoke comparator group consists of companies constituent The company calculates whether the EPS performance targets of the FTSE 100 index corrected to exclude financial institutions have been achieved by reference to the company's audited accounts and companies in the extractive sector and include competitor which provide an accessible and objective measure of the companies which are outside that index company's earnings per share.The committee may after the terms The company's current policy is to use market purchased shares of the EPS measure if it feels that it is no longer a fair measure and to satisfy LTIP awards.Participants in the LTIP will receive a further is no longer incentivising.TSR ranking will be verified externally share award with a value equivalent to the dividends which would have been paid in respect of LTIP awards,vesting at the end of the performance period. 80 G4S plc Annual Report and Accounts 2014 STATEMENT OF DIRECTORS'SHAREHOLDING AND SHARE INTEREST(AUDITED INFORMATION) The executive directors are required to build up a minimum shareholding in G4S,as explained in the remuneration policy.Shares are valued for these purposes at the year-end price,which was 277.90p per share at 3 I December 2014. Number of shares owned outright Number of Total shares Share Deferred under LT1P ownership Shareholding shares held as awards subject requirements requirements _ 2014 2013 at 31/12/14 to performance (%of salary) achieved Ashley Almanza 100,000 100,000 85,640 1,739,407 200% 31% Himanshu Raja 50,000 0 50,686 888,188 150% 22% Grahame Gibson 657,553 659,208 0 1,1 1 1,310 150% 100% Notes: I. Deferred share awards and PSP or LTIP awards do not include the further shares with a value equivalent to the dividends which are paid in respect of shares received.The number of shares is gross and will be subject to tax when they are released. 2. In addition to the above,each of the directors has a deemed interest in the total number of shares held by the company's employee benefit trust. As at 3 I December 2014,the trustees of the employee benefit trust held 6,408,450 shares(2013—6,934,564). 3. Includes any shares owned by connected persons. 4. The table does not include the deferred shares awarded to Ashley Almanza,Himanshu Raja and Grahame Gibson in respect of the portion of their annual bonus for the 2014 financial year which exceeds 50%of their respective maximum bonus entitlement 5. There were no vested but unexercised interests. The shareholdings for non-executive directors are shown below. As at As at 31.12.2014 31.12.2013 John Connolly 200,000 100,000 Adam Crozier 2000 0 Mark Elliott _ _ 25,000 j 25,000 Winnie Fok 20,000 20,000 Mark Seligman 75,496 75,496 Paul Spence 10,000 10,000 Clam Spottiswoode 4,681 4,681 • Tim Weller 37,570: 37,570 There have been no changes in the interests of each of the directors between 31 December 2014 and the date of this report. There are no requirements for the non-executive directors or former directors to hold shares once they have left the company. PAYMENTS TO PAST DIRECTORS(AUDITED INFORMATION) No payments have been made to former directors of the company during the financial year ended 31 December 2014 other than those payments set out below(Payments for loss of office). PAYMENTS FOR LOSS OF OFFICE(AUDITED INFORMATION) Trevor Dighton Trevor Dighton,who stepped down as a director of the company in June 2013,ceased to be an employee on 30 July 2014.Mr Dighton was entitled under the terms of his contract to payment comprising the following until his departure: • Base pay of£42,500 per month • Car allowance of£1,333.33 per month • Cash allowance in lieu of pension of£17,000 per month The total payment made for the period from I January 2014 to 30 July 2014 was£425,833.No further payment is due to be made. Trevor Dighton has not received any bonus in respect of the year under review.His unvested awards under the PSP were subject to performance and were pro-rated to 30 July 2014.The award made in 2012 did not vest as the performance tests were not met The award made in 2013 remains subject to performance which will be tested at the normal vesting date. Annual Report and Accounts 2014 G4S plc 81 Directors' remuneration report continued PERFORMANCE GRAPH AND TABLE The line graph below shows the nine-year annual Total Shareholder Return(TSR)performance against the FTSE 100 indexThe directors believe this to be an appropriate form of broad equity market index against which to base a comparison given the size and geographic coverage of the company and the fact that the company is itself a member of the FTSE 100. 2006—2014 Total Shareholder Return 300 250 -— 200 ---- 150 100 0 06 07 08 09 10 it 12 13 14 ♦-G4S f FTSE 100 index CEO'S PAY IN LAST NINE FINANCIALYEARS Year 2006 2007 2008 2009 2010 2011 2012 2013' 2014 Nick Nick Nick Nick Nick Nick Nick Nick Ashley Ashley Incumbent Buddes Buckles Buckles Buckles Buckles Buckles Buckles Buckles Almanza Almanza CEO's total single figure of annual remuneration(C000) 1,908 2,269 2,376 3,248 2,823 1542 1,186 514 1,459' 2,521 Bonus%of maximum awarded 76% 95% 83% 74% 53% 0% 0% 0% 72% 98% PSP%of maximum vesting 63% 75% 100% 100% 58% 14% 0% 0% n/a n/a Notes: 1. Nick Buckles stepped down as CEO on 3 I May 2013 and Ashley Almanza took over as CEO from I June 2013. 2. After July 201 I,the CEO's total single figure of annual remuneration included payment in lieu of pension.This was 40%of base pay for Nick Buckles and is 25% of base pay f o r Ashley Almanza.Prior to July 201 I,a notional sum equal to 40%of relevant base pay has been included.The value of shares that vested in the relevant year under the PSP(or a notional value in the case of shares vested but unexercised)have been included in the prior year's CEO's total figures since that is the most relevant year for measurement of performance. 3. The figures before 2013 did not include taxable expenses PERCENTAGE CHANGE IN CEO'S REMUNERATION G4S employs over 623,000 employees globally.Inflation is a key The table below shows how the percentage change in the CEO's driver of general increases in salary and the structure of the salary,benefits and bonus between 2013 and 2014 compares with benefits provided is often driven by the local market practice. the percentage change in the average of each of those components Hence,as the Group CEO is based in the UK,employees in the of pay for a selected group of G4S employees.The Remuneration same country rather than all employees within the group have been Committee has chosen all employees in the UK as the group which chosen as the comparator should provide the most appropriate comparator. RELATIVE IMPORTANCE OF SPEND ON PAY Percentage change in remuneration The table below illustrates the relative importance of spend on between 2013 and 2014 pay compared with other disbursements from profit. Annual Salary Benefits Bonus Disbursements 2014 2013 Change CEO 5.7% 18% 101% Dividends paid £138m £130m 6.2% See note Total employee costs £4,952m £5,333m* (7.2%) Average change for all other UK employees (2.9% (3.3%) below • Restated for IFRS 10 and I I. • Information on bonuses is not readily available for all other UK employees. There were no share buy-backs effected in either year. 82 G4S plc Annual Report and Accounts 2014 STATEMENT OF IMPLEMENTATION OF These are based on the group's core values and cover the following REMUNERATION POLICY IN 2015 key areas: A summary of the directors'remuneration policy is set out • Health&Safety on pages 72 to 77 and the full policy can also be found on • Growth,Market Share and Reputation wwwg4s.com/investors. • Best People Executive directors'remuneration •Operational Excellence Cost leadership Retirements • Values As reported in October 2014,Grahame Gibson will retire from Mr Gibson's bonus will be measured solely against the financial the board at the Annual General Meeting on 4 June 2015. measures mentioned above.Details of the performance measures and The committee will consider the retirement arrangements for are deemed to be commercially sensitive since they relate to the Mr Gibson over the coming months,and we will provide full 2015 financial year.To the extent that they are no longer commercially disclosure of these arrangements in next year's report sensitive,targets and performance levels against them will be disclosed in the company's 2015 annual report and accounts.The proposed Base pay target levels for 2015 have been set to be challenging and align with the For 2015,at the annual pay review,it was decided to increase business plan.In reviewing the targets,the committee took into account Ashley Almanza's and Himanshu Raja's base pay by 3%from Y Raja's P Y Y a number of factors including for example the fact that in relation to £890,000 and£625,000 respectively to£916,700 and group earnings,the minimum target that needs to be met in order for £643,750 respectively.No change was made to the base pay any bonus to be payable must be at least equal to the earnings in 2014. of Grahame Gibson. The committee considered the proposed targets relating to non- Annual Bonus Scheme financial measures and concluded that these were also demanding. The annual bonus for the 2015 financial year will operate on Long Term Incentive Plan the same basis as that for 20 14 and will be consistent with the The level of awards due to be granted in the 2015 financial year remuneration policy.The maximum bonus opportunity remains at under the LTIP approved by the shareholders at the 2014 AGM 150%of base pay for both Ashley Almanza and Himanshu Raja will be consistent with the remuneration policy As for 2014,the and 125%of base pay for Grahame Gibson.The financial measures Remuneration Committee considers that a combination of earnings are group earnings and operating cash flow These have been per share growth,total shareholder return and cumulative cash flow selected as they support the company's key strategic objectives.As targets are the most appropriate performance measures for the for last year,the financial measures are allocated an 85%weighting. 2015 awards,as they provide a transparent method of assessing For Messrs Almanza and Raja non-financial measures will account the company's performance,both in terms of underlying financial again for up to 15%of their maximum bonus opportunity. performance and returns to shareholders. Awards granted under the LTIP during the 2015 financial year are subject to the performance conditions listed in the table below. PERFORMANCE MEASURES FOR LONG TERM INCENTIVES AWARDED IN 2015 40%of each award granted 30%of each award granted 30%of each award granted Average annual growth in Proportion of Ranking against the Proportion of Average operating Proportion of EPS period ending on 31 allocation vesting bespoke comparator group allocation vesting cash flow allocation vesting December In the third year by reference to TSR Less than 5%pa Nil Below median Nil <105% Nil 5%pa(15%over 3 years) 25% Median 25% 105% 25% +5 to 12%pa Pro-rata between 25% Between median and Pro-rata between 25% Between 105%and 125% Pro-rata between 25% and 100% upper quartile and 100% and 100% Greater than+12%pa 100% Upper quartile 100% 125% 100% (36%over 3 years) The company's current policy is to use market purchased shares Adjustments to the EPS will be made in respect of to satisfy LTIP awards. • Constant exchange rates—in line with previous years,these Participants in the LTIP will receive a further share award with will be normalised to the rates in the base year a value equivalent to the dividends which would have been paid ' Acquisitions—earnings will be added to the EPS base at the level in respect of LTIP awards vesting at the end of the used in the acquisition business case performance period. • Disposals—earnings will be removed from the EPS base at the business plan rate The company calculates whether the EPS performance targets • Share buy-back—the company will only execute buy-backs if the have been achieved by reference to the company's audited accounts investment is economically accretive and it is in the interest of the which provide an accessible and objective measure of the company.The adjusted EPS for the purposes of calculating company's earnings per share. performance against the LTIP target shall be further adjusted by (a)increasing the average number of shares in issue during the performance year by the number of shares bought back during the past three years (b)Decreasing the net interest cost in the performance year in respect of the interest charge on the cash cost of any share buy backs during the past three years.Interest will be calculated at the group's average costs of funds for the year. Annual Report and Accounts 2014 G4S plc 83 Directors' remuneration report continued The Remuneration Committee will apply discretion in the event of impairment If the impairment is not a result of management failure, then it will not impact the payout. The Remuneration Committee may alter the terms of the EPS measure if it feels that it is no longer a fair measure and is no longer incentivising. Operating cash flow is a measure taken before capital expenditure and investments to ensure that management is not incentivised to under-invest in growth opportunities.Operating cash flow is expressed as EBITDA+/-working capital and provisions movement as a percentage of EBITDA.Average operating cash flow is the average over three years. TSR ranking will be verified externally. Non-executive directors'remuneration The fees payable to the non-executive directors are set by the executive directors and the chairman.The fees payable to the non-executive chairman are set by the Remuneration Committee.In both cases,fees are reviewed mid-year: ADVISORS TO THE REMUNERATION COMMITTEE For 2014,the Remuneration Committee received advice from Deloitte as the committee's appointed advisor on executive and senior management remuneration matters.Towers Watson provided management remuneration information in respect of senior management who are not on the board.The Remuneration Committee has satisfied itself as to the independence of Deloitte.Deloitte is a member of the Remuneration Consultants Group and operates voluntarily under its code of conduct in the UK. Advisor Appointment Services provided to Remuneration Committee Fees for Other services provided to Company services to Rem Co Towers Watson 2006 Information on executive remuneration and pay benchmarldng £23,005 Provision of market remuneration data for senior management,collation of pension data for accounting purposes and pensions advice Deloitte 2014 Advice on executive remuneration £57,200 Advice on controls,tax advice on expatriate and share plans,and also provided other consulting services. These services were provided by different parts of Deloitte. Alithos 2007 TSR—vesting indications for in-flight plans,verifying theTSR £10,000 None vesting percentage and advice on potential peer companies Fees for services to the Remuneration Committee are at an agreed rate based STATEMENT OFVOTING AT GENERAL MEETING on time involved. At the company's Annual General Meeting which took place on Herbert Smith Freehills LLP(HSF)provided legal advice to 5 June 2014,two ordinary resolutions were passed,one to approve the company,including in relation to the operation of the the Directors'Remuneration Policy set out in the annual report for company's incentive arrangements and on executive directors' the year ended 31 December 2013 and another to receive and service agreements.This advice was available to be considered by approve the Directors'Remuneration Report for the year ended the Remuneration Committee. 31 December 2013. The group chief executive,AshleyAlmanza,provided guidance The results of the vote are set out in the table below to the Remuneration Committee on remuneration packages for Resolution For Against Withheld senior executives within the group.Further guidance was received Directors'Remuneration Policy 98.38% 1.62% 787,216 from the group's HR director,Irene Cowden and the director of Directors'Remuneration Report 98.25% 1.75% 37,767,285 compensation and benefits SokWah Lee.Neither the group chief executive nor the group HR director participated in discussions Mark Elliott regarding their own remuneration. Remuneration Committee Chairman The Remuneration Committee is satisfied that the advice it received 26 March 2015 during the year was objective and independent based on the experience of its members generally. Information about who are the members of the Remuneration Committee and their attendance at meetings of the committee during the year under review can be found on page 71. 84 G4S plc Annual Report and Accounts 2014 Directors' report This is the report of the directors of the board of G4S plc for 5 Capital the year ended 3 I December 2014. The issued share capital of G4S plc at 3 I December 20 I 4 is as The company set out on page 15 I (note 35 to the consolidated financial • I G4S plc is a parent company with subsidiaries,associated statements)and consisted of 1,55 I,594,436 ordinary share of undertakings and joint ventures in numerous jurisdictions. 25 pence each.The number of shares in issue as at 26 March 2015 G4S plc has its primary listing on the London Stock Exchange and a remains unchanged. secondary listing on the NASDAQ OMX exchange in Copenhagen. Resolutions granting the directors power,subject to certain 2 Reporting obligations conditions,to allot and make market purchases of the company's p g shares will be proposed at the company's Annual General Meeting. In compliance with relevant listing rules and also DTR4.I.5.R The resolutions are set out in the Notice of Meeting on pages 165 and DTR4.I.8R,the annual report contains the consolidated result and 166 and further explanation is provided on pages 169 and 170. for the year shown in the consolidated income statement on page At 3 I December 2014 the directors had authority in accordance 99,a management statement contained in the Strategic Report and with a resolution passed at the company's Annual General Meeting in the Directors'report and responsibility statements on held on 5 June 2014 to make market purchases of up to pages 85 to 88. 155,1 59,000 of the company's shares. Details of the development and performance of the group's The company does not hold any treasury shares as such.However business during the year its position at the year end,future the 6,408,450 shares held within the G4S Employee BenefrtTrust 3 developments,principal risks and uncertainties and prospects of ("theTrust")and referred to on page 151 (note 36 to the the group and other information which fulfil the requirements of consolidated financial statement)are accounted for as treasury a management report are contained on pages 8 to 50 of the shares.TheTrust has waived its right to receive dividends in Strategic Report and are incorporated by reference in this respect of the company's shares which it held during the period Directors'reportThe Corporate governance report,the Audit under review. Committee report and the Directors'remuneration report set out on pages 51 to 84 and the chief financial officer's review on 6 Significant agreements pages 89 to 95 are also incorporated in this report by reference. The company was party to a GBP I,100,000,000 mufti-currency The group's financial risk management objectives and policies in revolving credit facility agreement which required prompt relation to its use of financial instruments,and its exposure to price, notification of a change of control event following which funds credit,liquidity and cash flow risk to the extent material,are set committed but unutilised could be cancelled and repayment of out in note 31 to the consolidated financial statements on pages outstanding commitments would need to be made within 45 days. 137 to 141 which is also incorporated by reference in this This facility was refinanced,effective 7 January 2015,with a new Directors'report. principal amount of GBP I,000,000,000.The change of control 3 Dividends clause remains unchanged. The directors propose the following net dividend for the year: The company entered into two US Private Placement Note • Interim dividend of 3.42p(DKK 0.3198)per share paid on Purchase Agreements(the"USPP Agreements"),on I March 2007 17 October 2014 and 15 July 2008 respectively.The first USPP Agreement is for • Final dividend of 5.82p(DKK 0.6041)per share payable on USD 550,000,000 and series B-D senior notes representing 12 June 2015 USD 450,000,000 remain outstanding and mature between Shareholders on the Danish VP register will receive their dividends I March 2017 and I March 2022.The second USPP Agreement in Danish kroner.Shareholders who hold their shares through is for USD 5 1 3,500,000 and GBP 69,000,000 and series B-F senior CREST or in certificated form will receive their dividends in sterling notes representing USD 448,500,000 and GBP 69,000,000 remain unless they prefer to receive Danish kroner,in which case they outstanding and mature between 15 July 2015 and 15 July 2020. should apply in writing to the Registrars by no later than Under the terms of both USPP Agreements,the company is 7 May 2015. required to offer the note holders the right to purchase the 4 Significant business acquisitions,disposals and notes at par value together with interest thereon upon a change of control. developments • In January 2014,G4S Cash Solutions(Canada)Limited Under the terms of the GBP 2,000,000,000 Euro Medium was disposed of in Canada. Term Note Programme the company issued three tranches of • In January 2014,G4S Holdings(Norway)AS was disposed of Medium Term Notes(MTNs)to various institutions on 13 May in Norway. 2009(GBP 350,000,000),2 May 2012(Euro 600,000,000)and • In March 2014,a settlement agreement was entered into with 6 December 2012(Euro 500,000,000),In the event of a change the Ministry of Justice in the UK in relation to contracts for of control,a put option comes into force,according to which electronic monitoring services provided between 2005 and 20 13 holders of any MTN may require the company to redeem the and two facilities management contracts. MTNs at par if the MTNs carry a sub-investment grade in the • In July,G4S Secure Solutions AB was disposed of in Sweden. period immediately prior to the change of control,or in certain • In November 2014,the US Government Solutions business circumstances where the MTNs are downgraded to sub-investment was disposed of in the USA. as a result of the change of control. • In January 2015,refinancing of the mufti-currency revolving credit facility agreement with a new principal amount of GBP 1,000,000,000 was completed. Annual Report and Accounts 2014 G4S plc 85 Directors' report continued 7 Research and development expenditure In the last 12 months the group has accelerated its efforts to Research in connection with the development of new services embed a health and safety culture with the addition of'safety first' and products and the improvement of those currently provided as a core value,the delivery of a series of toolkits and templates by the group is carried out continuously.Research and development to improve road safety awareness and the provision of on-line written-off to profit and loss during the year amounted to training about safety Ieadership.There is much more to do and £I Om(2013:£5m). efforts will continue in 2015 to protect the group's people and 8 Employees work towards its goal of zero harm. For the group's business to be successful and sustainable in the The group is committed to union relations at global,European future,the directors recognise the importance of having highly and local country and business unit levels and has both a engaged employees.They act as ambassadors for the G4S brand well-established international framework agreement with the by providing great customer service and many want to stay with the global union federation,UNI,and a European Works Council. organisation long terrn.To continually improve levels of employee Some of the group's union relationships have existed for over a engagement,the group aligns its strategies to the PRIDE model decade,with high levels of trust and respect developed on both which sets out how the group should protect,respect,involve, sides.Regular meetings with employee representatives take place develop and engage people.Businesses develop their own with consultation and communication including updates on the employee engagement plans based on feedback obtained from a company's performance and any financial or economic factors group-wide biennial employee survey where the questions asked affecting itThe meetings also enable businesses to gather relate to the PRIDE model.In the last survey in 2013,over 380,000 feedback on employee views about proposed changes and any employees shared their views about how they felt about working concerns which may otherwise escalate if not addressed quickly. for G4S and for the last 12 months plans have been implemented In non-unionised businesses,other employee forums and to respond to the issues they raised. communication channels such as newsletters and employee briefings are used to ensure people are updated regularly on the As an organisation with a hugely diverse workforce,the group company's performance and have the opportunity to ask questions has opportunities for generating innovative ideas and creating on matters likely to affect their interests. competitive advantage.The group's ability to leverage this advantage is best achieved if an environment is created where employees 9 Financial instruments feel included and able to share their own ideas and challenge other Details of the financial risk management objectives and policies people's.To help create such an environment the group has of the group and exposure to interest risk,credit risk,liquidity risk employment policies and procedures that do not discriminate and and foreign exchange risk are given in note 3 I to the consolidated make it clear that behaviours that seek to undermine the dignity financial statements. of others will not be tolerated.These policies cover aspects of 10 Political donations employment such as recruitment and training,development and Each year the company's shareholders have passed a resolution, promotion opportunities.They are intended to ensure that the on a precautionary basis to allow the company and its subsidiaries group is able to reach the widest talent pools in order to source to make political donations to political organisations or incur the best people.Once recruited,the group wants to enable people political expenditure not exceeding£50,000.However the board to reach their full potential regardless of their background or any confirms that the group's policy is not to make any financial disabilities.The group's inclusive approach to employment and contribution to political parties and that the company and its efforts to support employees who face challenges when they subsidiaries have made no contributions during the year to political become disabled in the course of their work are some of the parties carrying on activities,or to candidates seeking election many reasons why over 80%of respondents in the last employee within the EU,or anywhere else in the world. engagement survey stated that they would recommend G4S as an employer to a friend. I I Greenhouse gas emissions Protecting the group's employees is important not only as one of Alongside the risks faced by people and infrastructure from climate the drivers of engagement,but also as a business priority given the change are the challenges presented by the economic climate. group's challenging and sometimes hostile operating environments. Increased fuel costs and the introduction of"carbon taxes"ensure that energy efficiency robust security practices helps ensure the safety of the fficiency and environmental impact remain important group's own employees as well as those of its customers,so that to the effectiveness and sustainability of our business.We recognise both can perform their duties without fear of harm.As well as these the impact that our business activities can have on the environment procedures,the group has a clearly defined health and safety and are committed to managing this impact in a responsible manner. strategy and management system that identifies the actions needed Through our climate action programme we measure,report and for businesses to improve their safety performance.This includes aim to reduce the intensity of our environmental impact communication and consultation with employees on matters of What we are doing health and safety.Safety committees and representatives fulfil a vital Since 2008 we have used WBCSD'and WRI GHG protocols role in raising potential problems,reinforcing safety messages and to measure our Scope I and 2 emissions—vehicle fleet,fuel, updating processes and procedures as operations change. refrigerants and electricity usage for G4S businesses over which we have financial and operational control.In addition we have measured Scope 3 emissions from employee business air travel. 86 G4S plc Annual Report and Accounts 2014 • The businesses that reported data in our 2014 GHG measurement 13 Auditor represent 95.4%of the group's operations,across a 12 month A resolution to appoint PricewaterhouseCoopers LLP,chartered period.This level of measurement,including each of our main accountants,as auditor to the company for 2015 and for their service types,allows us to calculate reliably the total GHG remuneration to be fixed by the Audit Committee will be emissions for 100%of the group. submitted to the Annual General Meeting.The financial statements How we are performing on pages 99 to 164 have been audited by KPMG Audit Plc. The G4S total carbon footprint during 2014,extrapolated to 100% 14 Directors of the business equates to some 538,303 t/CO2e.Since 2010,our The directors,biographical details of whom are contained on carbon intensity has decreased by 15.7%per£m of revenue.This pages 52 and 53,held office throughout the year. reduction translates to a real reduction of 5.6%in carbon emissions against a 24.6%growth in the business during the same period, In accordance with the code provisions on re-election of directors much of which includes carbon emissions from services which our in the UK Corporate Governance Code 20 12,each of the directors customers have outsourced to G4S.This is a positive achievement continuing in office will offer themselves for re-election.Messrs which recognises the efforts made to increase the energy and fuel Gibson and Seligman will retire from the board at the conclusion efficiency of our business. of the company's Annual General Meeting in 2015 and will not therefore stand for re-election.The board believes that the directors * World Business Council for Sustainable Development standing for re-election possess experience and expertise relevant ** World Resources Institute greenhouse gas. to the company's operations;that they continue to be effective;that GHG emissions they are committed to the success of the company;and that they (Based on 95.4%measurement) 2013 2014 should be re-elected at the Annual General Meeting. Vehicles(inc refrigerants) 319,902 322,674 The contracts of service of the executive directors have no Total buildings(inc refrigerants) 169,435 157,03 I unexpired term since they are not for a fixed term.They are Including electricity emissions of 129,352 124,000 terminable at 12 months'notice.None of the non-executive Air travel 23,793 20,925 directors has a contract of service. The company has executed deeds of indemnity for the benefit Carbon intensity of each of the directors in respect of liabilities which may attach to 2010 2011 2012 2013 2014 them in their capacity as directors of the company.These deeds are Tonnes CO2e per qualifying third party indemnity provisions as defined by section 234 £m turnover 90.5 85.4 79.3 81.4 76.3 of the Companies Act 2006 and have been in effect since 3 November 2006 for Messrs Elliott,Seligman and Gibson, Due to a failure of our suppliers management systems it has 14 June 2010 for Ms Spottiswoode, I October 2010 for Ms Fok, been necessary to estimate 33%of our UK energy consumption 8 June 2012 for Mr Connolly, I January 2013 for Messrs Spence and during 2014,equating to some 2%of our overall energy usage. Crozier,I April 2013 for MrWeller,I May 2013 for MrAlmanza and To estimate this figure,we calculated an average daily consumption 7 October 20 13 for Mr Raja.Copies of the forms of indemnity are rate based on our previous usage,taking national weather and available on the company's website.In addition,indemnities have temperature data into account,this was then extrapolated to been granted by the company in favour of certain of the directors cover the missing period. of certain of the group's subsidiaries in the UK,Germany and the Netherlands.The company has maintained a directors'and officers' Priorities for 2015 liability insurance policy throughout the year under review. Continue to implement energy efficiency strategies with the aim Details of directors'interests(including the interests of their of reducing carbon intensity by at least 4.5%per annum. connected persons)in the share capital of G4S plc and of the For further details of our climate action programme,please directors'remuneration are set out on pages 70 to 84. visit wwwg4s.com/cap The directors who held office at the date of approval of this 12 Substantial holdings Directors'report confirm that,so far as they are each aware, The company had been notified under DTR 5 of the following there is no relevant audit information of which the company's interests in the ordinary capital of G4S plc: auditor is unaware and each director has taken all the steps that As at 31.12.2014 he or she ought to have taken as a director to make him or herself aware of any relevant audit information and to establish that the Invesco 217,1 1 3,38 I(13.99%) company's auditor is aware of that information. Tweedy,Brown Company LLC 71,420,862(5.06%)' None of the directors had a material interest in any contract College Retirement Equities Fund 49,655,900(3.2%) significant to the business of the group during the financial year. * notification received prior to the issue of 140,925,757 new shares on By order of the board 28 August 2013,therefore percentage based on total shares in issue prior to that date. Peter David Between 1.1.2015 and 26.3.2015 Company Secretary College Retirement Equities Fund 47,686,279(3.07396) 26 March 2015 Annual Report and Accounts 2014 G4S plc 87 Directors' responsibilities Statement of directors'responsibilities in respect of the Directors'responsibility statement annual report and the financial statements Each of the directors,the names of whom are set out on pages The directors are responsible for preparing the Annual Report 52 and 53 of this annual report,confirm that,to the best of his or and the group and parent company financial statements in her knowledge: accordance with applicable law and regulations. • the financial statements in this annual report have been prepared in accordance with the applicable accounting standards and give Company law requires the directors to prepare group and parent a true and fair view of the assets,liabilities,financial position and company financial statements for each financial year.Under that law profit of the company and the group taken as a whole;and they are required to prepare the group financial statements in • the management report required by DTR4.I.8R(contained in accordance with IFRSs as adopted by the EU and applicable law the Strategic Report and the Directors'report)includes a fair and have elected to prepare the parent company financial review of the development and performance of the business statements in accordance with UK Accounting Standards. and the position of the company and the group taken as a whole, Under company law the directors must not approve the financial together with a description of the principal risks and uncertainties statements unless they are satisfied that they give a true and fair they face. view of the state of affairs of the group and parent company and The Strategic Report from the inside front cover to page 50 of their profit or loss for that period.In preparing each of the and pages 89 to 95 includes information on the group structure,the group and parent company financial statements,the directors are performance of the business and the principal risks and required to: uncertainties it faces.The financial statements on pages 99 to • select suitable accounting policies and then apply them 164 include information on the group and the company's financial consistently; results,financial outlook,cash flow and net debt and balance sheet • make judgments and estimates that are reasonable and prudent positions.Notes 22,26,27,30 and 31 to the consolidated financial • for the group financial statements,state whether they have been statements include information on the group's investments,cash and prepared in accordance with IFRSs as adopted by the EU; cash equivalents,borrowings,derivatives,financial risk management • for the parent company financial statements,state whether objective,hedging policies and exposure to interest,foreign applicable UK Accounting Standards have been followed,subject exchange,credit,liquidity and market risks.In addition to the above, to any material departures disclosed and explained in the parent the directors have considered the group's cash flow forecast for the company financial statements;and next 12 months.The directors are satisfied that these cash flow • prepare the financial statements on the going concern basis forecasts,taking into account reasonably possible risk sensitivities unless it is inappropriate to presume that the group and the associated with them and the group's current funding and facilities parent company will continue in business. and its funding strategy show that the group will continue to The directors are responsible for keeping adequate accounting operate for the foreseeable future. records that are sufficient to show and explain the parent Accordingly,the directors have a reasonable expectation that the company's transactions and disclose with reasonable accuracy at any group and the company will continue to operate within the level time the financial position of the parent company and enable them of available funding for the foreseeable future and it is therefore to ensure that its financial statements comply with the Companies appropriate to adopt the going concern basis in preparing the Act 2006.They have general responsibility for taking such steps as financial statements. are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities. The directors consider that the annual report and accounts,taken as a whole,is fair;balanced and understandable and provides the Under applicable law and regulations,the directors are also information necessary for shareholders to assess the company's responsible for preparing a Strategic Report,Directors'Report, performance,business model and strategy. Directors'remuneration report and Corporate governance statement that comply with that law and those regulations. The statement of directors'responsibilities and the Strategic Report was approved by a duly authorised committee of the board The directors are responsible for the maintenance and integrity of directors on 26 March 2015 and signed on its behalf by of the corporate and financial information included on the Himanshu Raja,chief financial officer company's website.Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation Himanshu Raja in other jurisdictions. Chief Financial Officer 26 March 2015 88 G4S plc Annual Report and Accounts 2014 Chief Financial Officer's review • Introduction —,��.� We made good progress during the year in executing our strategic ' plans;this is reflected in the progress in our financial performance. The group's revenue from continuing operations increased by 3.9%to£6,750m.PBITA was£424m',a 7.9%increase on£393m2 in 2013,and earnings grew by I I.7%to£210m. M Revenue in our emerging markets grew by 8.9%to£2,398m and now represents 36%(2013:34%)of the group's total revenue and 40%(2013:40%)of the group's PBITA.In our developed markets, revenue increased by 1.4%to£4,352m with growth of 6.9%in North America and modest declines in the UK and Europe of 1.3%and 0.6%.PBITA in both emerging and developed markets grew faster than revenue reflecting good operating leverage 0- across our markets. - J Other specific items in the current year were a net£66m charge Himanshu Raja and resulted from increases in provisions for contract losses of Chief Financial Officer £45m relating to UK government contracts,the re-measurement of certain balance sheet assets and liabilities and other items of£32m and a net£10m charge relating to losses from smaller portfolio entities being sold or ceased and interest and tax from joint Disciplined fn a n c i a l ventures.These charges were offset by a pension settlement gain of £21 m relating to the transfer of the Netherlands secure solutions defined benefit pension scheme into an industry-wide scheme. and risk management Our restructuring programmes in 2013 and 2014 continued to deliver good returns;making the group more efficient and effective in its operating and overhead base.During 2014,we invested a further£29m in restructuring programmes,principally in the UK We have made good progress in embedding a &Ireland to bring the Ireland business under UK management and to introduce a shared services centre in the region;and in new and robust financial and risk framework Europe we accelerated some of the best practice plans to reduce into the business and building the capability our overheads. to ensure that the change is enduring. The group also recognised a profit of£63m on discontinued operations principally from the sale of the cash solutions business in Canada,the businesses in Sweden and Norway and the disposal a of US Government Solutions for combined gross proceeds of £l 77m.We now operate in over 1 I 0 countries.Portfolio management remains an important discipline in ensuring we maintain strategic focus,capital discipline and disciplined financial management across the group. PBIT for the year was£270m compared with the loss of£67m in 20 1 3.Total profit for the year was£169m compared with a loss of£351 m in 2013. The group has previously highlighted its focus on cash and free cash flow,and it is pleasing to report that cash flow from continuing operations improved by I I%to£553m(2013:£496m).There remains more to do to improve our operational processes around billing and cash collections and this remains a key target for 2015. The group's net debt at 31 December 2014 was£I,578m (2013:£1,552m)resulting in a net debt to EBITDA ratio of 2.8. In January 2015 the group renewed its£1.1 bn revolving credit facility.We saw good demand for the new facility of£I bn which matures in January 2020,with the option of two one year extensions which if exercised give the group facilities through to January 2021 and January 2022 respectively. Underlying EPS was 13.6p,up 5.4%on 12.9p in 2013 and total earnings per share was 9.8p,compared with loss per share of 247p in 2013.The group has declared a final dividend of 5.82p(2013: 5.54p),making the total dividend for the year 9.24p(2013:8.96p). ;,.,2 n. ort ana'\cco..nis 20 G4S plc 59 Chief Financial Officer's review continued Strengthening our capability each region,mitigations and actions and a quarterly review During 2014,we made good progress in strengthening our financial of internal and external audit matters arising and any key and risk management across the group. judgements.Significant matters arising from the regional risk We made a number of key changes across the finance organisation and audit committee are reported to the Board Audit Committee with the appointment of a new group financial controller;and by the Director of Risk and Audit appointed new regional finance directors in four of our six regions. As reported under the governance report,we have also They in turn have begun to strengthen the finance capability in their strengthened our contract risk and management processes. teams.We also went live on the first phase of our regional shared Outlook service centres for the UK&Ireland,and are developing plans to Our strategic plan addresses a positive,long term demand outlook implement similar shared services in some of our other regions. for our core services and seeks to deliver sustainable,profitable We brought together our risk and audit functions with the growth.We are making good progress with the implementation of appointment of a Director of Risk and Audit our strategic plan and this was clearly reflected in the group's We made progress in embedding our three lines of defence commercial,operational and financial performance in 20 14.There model with the introduction of regional risk and audit committees. remains much to be done to realise the full potential of our strategy These provide a key forum to review the regional level risks for and we expect to make further progress in 2015. GROUP FINANCIAL PERFORMANCE Summary income statement For the year ended 31 December 2014 Specific items Acquisition Underlying Other specific related Underlying Total results' items charges Total results' results 2014 2014 2014 2014 20132 20132 Em Em Em Em Em £m Revenue 6,750 98 — 6,848 6,496 6,615 PBITA before restructuring costs 424 (66) — 358 393 86 Restructuring costs _ — (29) — (29) — (63) PBITA 424 (95) — 329 393 23 Amortisation — — (58) (58) — (69) Goodwill impairment — — — — — (41) Acquisition-related expenses — — (I) (I) — (4) Profit on disposal of subsidiaries — — — — — 24 PBIT 424 (95) (59) 270 393 (67) Interest (120) (2) — (122) (1 22) (123) PBT 304 (97) (59) 148 271 (190) Tax (76) 21 13 (42) (68) (47) PAT 228 (76) (46) 106 203 (237) Discontinued operations — 63 — 63 — (1 14) Profit/(loss)for the year 228 (13) (46) 169 203 (351) Non-controlling interests (18) I — (17) (15) (8) Profit/(loss)attributable to equity holders of the parent 210 (12) (46) 152 188 (359) Earnings per share:Basic and diluted 13.6p 9.8p 12.9p (24.7)p Reconciliation of summary income statement to consolidated income statement The table below reconciles revenue and PBITA as originally presented in the prior year consolidated income statement to the results presented in the current year consolidated income statement 2014 2014 2013 2013 Revenue PBITA Revenue PBITA Em Em Em Ern Statutory results as reported 6,848 414 7,428 442 Effect of discontinued operations — — (145) (4) Effect of adoption of IFRS I 0 and IFRS I I — — (222) (21) Restated results reported in consolidated income statement 6,848 414 7,061 417 Portfolio businesses and joint ventures (98) 10 (1 19) 5 Exchange differences — — (446) (29) Restated results as reported in the summary income statement 6,750 424 6,496 393 90 G4S plc Annual Report and Accounts 2014 Basis of preparation PBITA The following discussion and analysis is based on,and should be PBITA of£424m up 7.9%(2013:£393m)represents the ongoing read in conjunction with,the consolidated financial statements, operations of the group.PBITA margin increased to 6.3% including the related notes,that form part of this annual report (2013:6.0%)benefiting from the progress on our Accelerated The consolidated financial statements have been prepared in Best Practice programmes on direct labour efficiency,route planning 1 accordance with IFRS as issued by the IASB and as adopted by the and telematics,focus on organisational efficiency.ht included the EU.A reconciliation of the summary income statement to the investment of£20m annualised we made in sales and business statutory results is set out on page 90. development capability.Corporate costs reflect the investment in To clearly present the underlying results of the group,PBITA financial control risk management,procurement and IT capability, represents the underlying continuing profit before interest,tax and together with an increase in non-cash items,resulting in a amortisation of the group,excluding the interest and tax from joint £12m increase principally related to pensions and LTIPs. ventures and the profits and losses of smaller portfolio businesses 2013 PBITA has been restated to adjust for discontinued operations, being sold or ceased,in line with the group's strategy.Specific items portfolio businesses that have been sold or discontinued and for the have been disclosed separately.The prior year income statement impact of adopting the new consolidation and joint arrangement comparative information is shown at constant exchange rates on standards(IFRS I 0 and IFRS I I).PBITA also excludes interest and pages 89 to 95,unless otherwise stated.The statutory results of the tax relating to joint ventures,which are presented on the associated group at actual exchange rates are set out on pages 99 to 155. lines in the summary income statement Specific items are those that in management's judgment need to Specific items be disclosed separately by virtue of their size,nature or incidence. Specific items have been disclosed separately from the underlying Specific items also include provisions for onerous contracts, results to provide a clear understanding of the underlying trading non-recurring restructuring costs,remeasurement of certain performance of the group. assets and liabilities and the profit and losses from smaller other Specific items portfolio businesses. 2014 2013 Revenue -- £m £m Revenue was£6,750m,an increase of 3.9%on 2013.Organic Contracts review (45) (I 36) growth was impacted by the loss of three significant contracts in Review of assets and liabilities (32) (I 66) the UK Netherlands and Australia. Pension settlement gain 21 — Portfolio businesses and joint ventures (10) (5) Emerging markets grew 8.9%year on year and,with revenues Restructuring (29) (63) of£2.4bn,now represent 36%of group revenue(2013:34%). Developed markets revenues were 1.4%higher than the prior Discontinued operations and profit on year with growth in North America of 6.9%offset by a small decline disposal 63 (90) i, Tax,interest and NCI 20, 6 in Europe of 0.6%.As expected,UK&Ireland revenues declined by _ 1.3%as the Electronic Monitoring contract ended in Q 1 2014 and (I 2)' (454) due to contract rationalisation. Other specific items that have been charged to PBITA in 2014 Gross margin and PBITA totalled£95m(2013:£370m)and comprised: 2014 2013 • £45m increase in provisions for legacy UK Government contracts. £m £" In 2013 a provision£1 36m was taken on onerous contracts, Revenue 6,750 6,496 including£116m for the Electronic Monitoring contract which Cost of sales (5,409)' (5,202) was settled in March 2014. Gross profit 1,341 ' 1,294 • A net£11m charge,mainly arising from the re-measurement Gross margin(%) 19.9% 19.9% of the 2013 review of assets and liabilities of£32m,offset by a Selling,general and administrative costs (917), (901) pension settlement gain of£21 m in the Netherlands.In the prior PBITA 424 1 393 year the group provided£1 66m against certain assets and liabilities as part of the 2013 review. Gross margin for the year ended 3 I December 2014 remained • A net£I Om charge,being the profit and losses from the smaller at the same level as the prior year.Developed markets gross portfolio entities being sold or ceased and interest and tax from margin remained constant year on year at 18.7%,emerging markets joint ventures. gross margins declined by 20 basis points to 22.0%(2013:22.2%). • The group invested£29m in restructuring programmes during Across the group gross margin benefited from our targeted the year(2013:£63m),including programmes in the UK&Ireland. restructuring programmes and from the progress on our In addition,major programmes were continued in Europe accelerated best practice programmes on direct labour efficiency, implementing accelerated best practice programmes focused route planning and telematics. on organisational effectiveness and back office synergies. Our selling,general and administrative expenses were£9 I 7m, In 2013£41m was written off goodwill on acquisitions and the a 1.8%increase year on year.This was after the investment of group recognised a gain of£24m following the disposal of the £ y 20m we made in sales and business development capability. Colombia Data Solutions business. There remains much to do to continue to drive productivity across the group.We will continue to seek more efficiency in our organisation and to introduce more efficient and leaner processes. Annual Report and Accounts 2014 G4S plc 91 • Chief Financial Officer's review continued Amortisation and impairment Non-controlling interest Acquisition-related intangible assets included in the balance sheet Underlying profit attributable to non-controlling interests was at 3 I December 2014 consisted of£I,939m goodwill, £18m in 2014,an increase on£15m for 2013,mainly due to the £83m acquisition-related intangible assets and£82m other partners'share of profit increasing in certain strongly performing intangible assets. businesses in the Asia Middle East region.Total profit attributable to The charge for the year for the amortisation of acquisition-related non-controlling interests was£17m in 2014,an increase on£8m intangible assets other than goodwill amounted to£58m due to the partners'share of specific items charges in 2013. (2013:£69m). Profit for the year The group made a total underlying profit attributable to equity Goodwill is not amortised,but it is tested for impairment annually holders('earnings)of£210m(2013:£188m),an increase of and the group did not incur any impairment charge to continuing 12%for the year ended 3 I December 2014. or discontinued operations for 2014.1n 2013 the group incurred a charge of£41m(at constant exchange rates)relating to goodwill The group made a profit of£169m(2013:loss of£351m)for the impairment See note 18 on page 128 for details of the results of year after specific items,interest,tax,amortisation and the results the group's impairment test for the year ended 31 December 2014. of discontinued operations. Interest and tax Earnings per share(EPS) Net interest payable on net debt was£100m(2013:£103m); Underlying earnings per share benefiting from lower interest rates and a decrease in 2014 average 2013 2013 net debtThe pension interest charge was£22m(2013:£20m), at constant at actual resulting in total net interest costs of£I 22m(2013:£123m). 2014 exchange rates exchange rates £m Em Ern The effective tax rate for the year on underlying earnings was Profit for the year 228 203 222 25%(2013:25%). Non-controlling interest ,A:. w„, 1c84 15 15 . Discontinued operations Profit attributable The profit from discontinued operations of£63m comprised to shareholders 210 188 207 £71 m of profit on disposal,offset by losses from discontinued Average number of operations of£8m. shares(m) 1,545 1,452 1,452 The profit on disposal arises from the sale of the cash solutions EPS(p) 13.6p 12.9p 14.3p business in Canada,the businesses in Sweden and Norway and the disposal of the US Government solutions business in Total earnings/(loss)per share November 20I 4. 2013 2013 at constant at actual Proceeds received on the disposal of businesses was£1 77m during 2014 exchange rates exchange rates 2014(comprising£159m cash proceeds and£18m relating to the £m Em £m settlement of outstanding leases).A further$55m mainly relating Profrt/(loss)for the year 169 (351) (357) to retained receivables is due to be received over the next Non-controlling interest 17 8 8 18 months from the US Government solutions business of which Profrt/(loss)attributable $15m was received in January 2015. to shareholders 152 (359) (365) Joint ventures Average number of The group has adopted the three new consolidation standards: shares(m) 1;545 1,452 1,452 IFRS 1O'Consolidated Financial Statements',IFRS I I'Joint EPS(p) 9.8p (24.7)p (25.1)p Arrangements'and IFRS 12'Disclosure of Interests in Other Entities'for the year ended 3 I December 2014.For more details Underlying earnings per share increased to 13.6p(2013:12.9p). on the impact of adopting these standards please see note 3(w). Total earnings per share was 9.8p(2013:loss per share 24.7p). These are based on weighted average number of shares in The adoption of these new standards resulted in certain group issue of 1,545m(2013: I,452m). businesses being re-classified from subsidiaries to joint ventures and therefore changing from being fully consolidated to Underlying earnings excludes the results from discontinued equity accounted. operations and smaller portfolio entities being sold,amortisation and impairment of acquisition-related intangible assets,acquisition- As a result of adopting these standards the group has restated related costs and specific items,all net of tax.This better allows the its prior year results which reduced revenue for the year ended assessment of operational performance,the analysis of trends over 31 December 2013 by£222m and reduced PBITA by£21 m time,the comparison of different businesses and the projection (both at 2013 exchange rates).The entities affected are largely in of future performance. the Middle East with a lower or zero effective rate of tax,and have the effect of increasing the group's effective tax rate on underlying PBT to 25%. 92 G4S plc Annual Report and Accounts 2014 1 Cash flow Cash generated from continuing operations was£553m A reconciliation of profit/(loss)to movement in net debt is (201 3:£496m).Operating cash flow from operating businesses presented below,with 2014 presented at the actual rates in the was£526m(2013:£420m)before corporate items.2013 included year and the prior year presented at 2013 exchange rates: £76m relating to the 2012 Olympics and 2014 included the£27m 2014 2013 receipt following the Electronic Monitoring contract settlement with £„ t.m the UK GovemmentThe group invested£I 22m in capex,net of Profit/(loss)retained for the year 152 (365) asset disposals in the year(2013:£167m)and received proceeds of£1 77m from the disposal of portfolio businesses(including£18m Adjustments for non-cash and for the settlement of outstanding leases). other items(page 102) 196, 789 The net cash flow after investing in the business and proceeds Net cash flow from operating activities from portfolio rationalisation was£507m(2013:£314m), of continuing operations 348 424 an increase of 61%. Net debt Adjustments to exclude: The net debt position as at 3 I December 2014 was£1,578m Pension deficit payments 42 38 (2013:£I,552m).The group's net debt to EBITDA ratio was 2.8 Electronic Monitoring payments (2013:2.8). (including fees) 116 — Net debt maturity Restructuring investment 47 34 The group's credit rating was confirmed by Standard&Poor's Corporate items(see below) (27) (76) as BBB-(Stable)in August 20 14.As of 31 December 2014 the Cash flow from operating businesses 526 420 group had access to unutilised and committed facilities of£998m. The group has sufficient borrowing capacity to finance its current Corporate items: "'" and medium term investment plans. '"' Electronic Monitoring contracts receivable The group has no material debt maturities until May 2017 and has (2013:Olympics receivable) 27 76 a diverse range of finance providers.Borrowings are principally in Cash flow from continuing operations 553 496 pounds sterling,US dollars and Euros,reflecting the geographies of Cash from discontinued operations (12) 3 I significant operational assets and profits. Net cash generated by operations 541 527 The group's primary source of bank finance is a£1.1 bn Investment in the business mufti-currency revolving credit facility('RCF)provided by a Purchase of fixed assets,net of disposals (122) (167) consortium of lending banks at a margin of 1.3%over LIBOR, Restructuring spend (47) (34) maturing on 16 March 2016. Acquisitions of businesses (3) (23) The RCF was successfully renewed on 7 January 2015 with a Disposal proceeds 159, 35 improved pricing,terms and conditions achieved.The new facility is k Net debt in disposed entities (12) (I 2) a five-year£1 bn committed facility with the option of two one-year 3 Net movement in finance leases (9) (12) extensions which,if exercised,gives the group facilities through 2021 Net investment in the business (34) (213) and 2022 respectively.The initial margin over LIBOR is 70 bps. Net cash flow after investing in the The group also has US$450m in financing outstanding from the business 507 314 private placement of unsecured senior loan notes on I March 2007, Other(uses)/sources of funds maturing at various dates between 2017 and 2022 and bearing Net financing (114) (108) interest at rates between 5.86%and 6.06%.The fixed interest rates Tax (81) (83) payable have been swapped into floating rates for the term of the Pensions (42) (38) notes,at an average margin of 0.60%over LIBOR. Dividends (149) (151) On 15 July 2008,the group completed a further US$514m and Share capital — 343 £69m private placement of unsecured senior loan notes,of which Electronic Monitoring(including fees) (1 16) — US$449m and£69m remain outstanding,maturing at various dates Other-3 (23) 18 between 2015 and 2020 and bearing interest at rates between 6.43%and 7.56%.US$200m of the loan note proceeds have been Net uses of funds (525) (19) swapped into£101m fixed rate sterling for the term of the notes Net cash flow after investment,financing and the interest rate on£44m swapped to floating rate linked to six and tax (18) 295 month LIBOR until July 2017. Net debt at beginning of year (1,552) (1,829) Foreign exchange (8) (18) On 13 May 2009 the group issued a£350m note bearing an interest rate of 7.75%and maturing in 2019.In April 201 4 the fixed Net debt at end of year (1,578) (1,552) interest rate payable on the note was swapped to floating rate linked to six month LIBOR until May 2017. Annual Report and Accounts 2014 G4S plc 93 I Chief Financial Officer's review continued On 2 May 2012 the group issued a€600m note bearing an interest Financing and treasury activities rate of 2.875%and maturing in 2017.€325m was swapped into The group's treasury function is responsible for ensuring the £266m fixed rate sterling and the interest rate on€90m was availability of cost effective finance and for managing the group's swapped to a floating rate linked to six month EURIBOR. financial risk arising from currency and interest rate volatility and On 6 December 2012,the group issued a€500m note bearing an counter-party credit.Treasury is not a profit centre and it is not interest rate of 2.625%and maturing in 2018.€350m was swapped permitted to speculate in financial instruments.The treasury into£287m fixed rate sterling and the interest rate on€120m was department's policies are set by the board.Treasury is subject to swapped to a floating rate linked to six month EURIBOR the controls appropriate to the risks it manages.These risks are discussed in note 3 I on pages 137 to 141. Dividend To assist the efficient management of the group's interest costs, The directors recommend a final dividend of 5.82p(DKK 0.6041) the group operates a mufti-currency notional pooling cash per share,an increase of 5%compared to 20 13.The interim management system with a wholly owned subsidiary of an A-rated dividend was 3.42p(DKK 0.3198)per share and the total dividend, bank.At year end,credit balances of£300m were pooled with debit if approved,will be 9.24p(DKK 0.9239)per share,an increase of balances of£301 m,resulting in a net pool debit balance of£1 m. 3%compared to 2013. There is legal right of set off under the pooling agreement and an The proposed dividend cover is 1.5 times(2013:1.6 times) overdraft facility of£3m. on adjusted earnings.The board's intention is that dividends Interest rate risk and interest rate swaps will increase broadly in line with underlying earnings over the The group's investments and borrowings at 3 I December 2014 medium term. were a mix of fixed rates of interest and floating rates of interest Other information linked to LIBOR and EURIBOR. Pensions The private placement notes in March 2007 and July 2008 and the As at 31 December 2014 the defined benefit pension obligation public notes in May 2009,May 2012 and December 2012 were all on the balance sheet was£319m(2013:£504m),or£255m net issued at fixed rates,whilst the group's investments and bank of tax(2013:£405m)of which£264m(2013:£472m)related to borrowings were all at variable rates of interest linked to LIBOR material funded defined benefit schemes.At 31 December 2014 and EURIBOR. the group transferred its Netherlands secure solutions defined The group's interest risk policy requires Treasury to fix a proportion pension scheme into the industry wide defined benefit scheme, of its interest exposure on a sliding scale in US dollars,sterling and resulting in a net settlement gain of£21m which was recorded Euro,using the natural mix of fixed and floating interest rates within specific items. emanating from the bond and bank markets and by utilising interest The most significant pension scheme is in the UK and accounts rate and cross currency swaps.Part of the proceeds of the private for 91%(2013:95%)of the total material scheme obligation.The placement and public notes have been swapped to floating interest scheme has approximately 30,000 members and further details of rates and accounted for as fair value hedges,with a net gain at the make up of the scheme are given in note 32 on page 141. 31 December 2014 of£49m.The market value of the pay-fixed receive-variable swaps and the pay-fixed receive-fixed cross Defined benefit obligation—UK scheme currency swaps outstanding at 31 December 2014,accounted for 2014 2013 Movement as cash flow hedges,was a net gain of£9m. Em £m Em Scheme assets 1,983 1,562 421 Obligations (2,222) (2,01 1) (21 1) Total UK obligations (239) (449) 210 The movement in the UK scheme was as a result of an increase of£421m in the value of scheme assets principally arising from an increase in underlying asset values,partly offset by the scheme obligations increasing by£21 I m.The increase in the obligation is mainly due to actuarial losses incurred in the year resulting from discount rates decreasing to 3.7%(2013:4.4%)partly offset by inflation rates decreasing to 3.0%(2013:3.4%). The group made additional pension contributions of£42m (2013:£38m)into the scheme during the year.Following the latest triennial valuation in 2012,the group agreed with the Trustees to increase next year's annual deficit recovery payment to£44m and extended the term of these payments from 2022 to 2024. The next triennial valuation is in 2015. 94 G4S plc Annual Report and Accounts 2014 • - - Foreign currency -- ;' - The group,has many overseas subsidiaries and joint ventures denominated in various different currencies.Treasury policy is to manage significant translation risks in respect of net operating assets .:and its consolidated net debt/EBITDA ratio by holding foreign currency denominated loans,where possible.The group no longer ._ • . uses foreign exchange contracts to hedge the residual portion of net assets not hedged by way of loans:The group believes cash flow should not be put at risk by these instruments in order to preserve the carrying value of net assets '. At 3 I December 2014,the groups US dollar and Euro net assets were approximately 78%and 74%respectively,hedged by foreign currency loans.As at 31 December 2014,net debt held in US dollar and Euro and in those currencies officially pegged to these two = ` - currencies,equated broadly to a ratio of 2.3 times EBITDA . . -. - - generated from these currencies.' - - Corporate governance . - _ . The group's policies regarding risk management and corporate: -•,__ governance are set out in the Corporate governance report on pages 56 to 69. Going concern The directors are confident that,after making enquiries and on • . the basis of current financial projections and available facilities, - - they have a reasonable expectation that the group has adequate - - • - resources to continue in operational existence for the foreseeable future.For this reason they continue to adopt the going;concem _ basis in preparing the financial statements as set out in the. ' Directors responsibility statement on page 88. . Himanshu Raja ' Chief Financial Officer . . -- , F - , I. To clearly present underlying performance,specific items have been disclosed �• separately,Total results include specific items.For an analysis of specific items - see page 91.The group's statutory results at actual exchange rates are set out on pages 99 to I55. . 2. 2013 results are shown at constant exchange rates and have been restated - for the adoption of IFRS I 0 and IFRS I I and re-presented for businesses subsequently classified as discontinued or identified as part of the portfolio rationalisation—'see page 90 for details. 3. Includes£22m of outflows related to movements in customer cash balances (2013:£22m inflows),£10m of cash outflows related to transactions with °" = non controlling interests(2013:£2m outflows)and£9m of cash inflows from . equity accounted investments(2013:£2m outflows). - Annual Report and Accounts 2014 G4S plc 95 _ Independent auditor's report to the members of G4S plc only Opinions and conclusions arising from our audit I.Our opinion on the financial statements is unmodified We have audited the financial statements of G4S plc for the year ended 3 I December 2014 set out on pages 99 to 164.In our opinion: • the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 3 I December 2014 and of the group's profit for the year then ended; • the group financial statements have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union; • the parent company financial statements have been properly prepared in accordance with UK Accounting Standards;and • the financial statements have been prepared in accordance with the requirements of the Companies Act 2006;and,as regards the group financial statements,Article 4 of the IAS Regulation. 2.Our assessment of risks of material misstatement In arriving at our audit opinion above on the financial statements the risks of material misstatement that had the greatest effect on our audit were as follows: Revenue recognition and related provisions on UK Government and other contracts Refer to page 66(Audit Committee Report),page 108(accounting policy)and page 1 14(financial disclosures). The risk—The group delivers outsourcing services that may be governed by unique and complex contractual arrangements.There is a heightened risk that billing and revenue recognition on these contracts are not in accordance with contractual entitlements and therefore provisions may be required for refunds due.There is a further risk that the provisions for refunds are not appropriately disclosed and presented.Many of the outsourcing arrangements are contracts of more than one year and where such contracts are forecast to be loss making it would be necessary to recognise a provision for future losses.The identification of potential loss making contracts,and measurement of any related provision,requires significant judgement and there is a risk that provisions are not appropriately estimated. Our response—In this area our audit procedures included testing the revenue,billing and contract review process,on complex and significant contracts in order to critically assess risks which might lead to revenue recognition issues,and comparing the contractual terms of the relevant agreements to the accounting treatment adopted.We made inquiries with contract managers and inspected customer correspondence to identify,investigate and evaluate any areas of dispute or subjectivity within contracts and related billing.We also tested the recovery of significant overdue receivables,taking into account the ageing of receivables and comparing any provision to recovery levels post year end.We also critically assessed significant accrued(unbilled)revenue balances and tested these against the contractual entitlement and,where relevant,post year-end billing. We evaluated the process to identify potentially loss making contracts,taking into account our knowledge of those contracts,and the assessment of onerous contract provisions required,including evaluating and challenging future cash flow forecasts and performance improvement plans.We also considered the adequacy of the group's disclosures in respect of the judgments taken regarding revenue recognition,provisions arising from contracts disputes and provisions for loss making contracts. Recoverable value of goodwill and other intangible assets Refer to page 66(Audit Committee Report),page 105(accounting policy)and page 125(financial disclosures). The risk—The group has£2.1 billion of goodwill and other intangible assets.Although the majority of this relates to business units where the carrying value is exceeded by the calculated'value in use'by a significant margin,in the current economic environment there is a risk of impairment related to particular business units within the Group.The estimation of the recoverable amount of cash generating units requires significant judgement in relation to the appropriate discount rates,growth rates,terminal values,forecast cash flows and,where the fair value less costs to sell approach is used,the appropriate market valuation multiple. Our response—In this area our audit procedures included challenging the forecast earnings and cash flows over the three year forecast period by comparison to historical results and business plans and by seeking explanations for any assumed trends and growth rates. We also challenged the discount rates and terminal values and,where a fair value less costs to sell approach is used,challenged the valuation multiples employed compared to multiples achieved on disposal transactions elsewhere in the Group and by reference to other companies in the sector.We compared the Group's assumptions to externally derived data.Our valuation specialists assisted in the challenge of key input assumptions in the valuation model for the more material cash generating units and those with greatest risk of impairment of goodwill.We challenged the Group's sensitivities to help us assess whether the key assumptions and drivers considered are correctly identified.We also assessed the reasonableness of the group's aggregate recoverable amount by comparing it to the group's market capitalisation. We have also assessed the adequacy of the group's disclosures on goodwill impairments(see note 18)and considered whether the sensitivity analysis provided properly reflects the risks inherent within the estimate of the recoverable amount of goodwill. 96 G4S plc Annual Report and Accounts 2014 Taxation exposures and provisions Refer to page 66(Audit Committee Report),pages 109(accounting policy)and page 120(financial disclosures). The risk—The Group is required to make estimates of tax provisions in jurisdictions and/or circumstances where the application of the tax rules is complex,uncertain and in some cases inconsistent Our response—Our audit procedures included,consideration of each significant exposure on a case by case basis taking into account our understanding of the facts,any specific advice the Group has received,past experience and any relevant observations of our tax specialists. Using this information we conducted a critical assessment of the Group's judgement as to the provision required.We have also evaluated the adequacy of the group's disclosures about the tax provisions and contingencies in note 34 and the level of estimation uncertainty in the tax provisions in note 4. Risk of management override of internal controls Refer to page 66(Audit Committee Report). The risk—The de-centralised structure of the group and the manual nature of many accounting entries means there is a higher risk of management override of financial controls.There is also a risk of management bias within judgements and estimates including those related to the other risks discussed in this reportThe application of management override or biased judgements could be influenced by targets on which bonuses are paid which could be significant to the relevant individuals.This risk affects all areas of the financial statements. Our response—In this area our audit procedures included extending the scope of our audit to include businesses where we see a risk of management bias or override of controls.We performed testing on manual journals within all in-scope businesses,performed testing on the group consolidation system,identifying and testing significant unusual transactions and assessing indications of management bias in judgements and estimates.This work was performed with assistance from our Forensic Accounting specialists. Presentation of the income statement Refer to page 66(Audit Committee Report),page 103(accounting policy)and page 99(financial disclosures). The risk—.In order to give better understanding of the underlying performance of the business,the directors have presented a view of the underlying results of the group,with separate disclosure of specific items.There is a risk that items included within'restructuring costs' and'specific items'are not in accordance with clearly disclosed group accounting policies,or that the reversal of any items previously taken through these categories have not been correctly identified,and therefore the underlying result is misstated. Our response—In this area our audit procedures included providing detailed instructions to all in-scope audit teams on the definitions of items that can be included within these income statement categories to assist them in their assessment of specific items and restructuring costs identified in their components.We considered and challenged the work of the group finance team in reviewing with the regional and local finance teams the basis of any specific items and restructuring costs.In doing so we assessed the appropriateness,by reference to the group accounting policies,of the individual items presented within these categories and therefore excluded from'underlying results'at both the local and group levels.In addition we critically assessed the accuracy and presentation of the identified specific items taking into account a their group accounting policy and accounting standards.Also,we have tested management's process for identifying and tracking the current year reversal of any prior year specific items,or utilisation of or adjustment to related provisions,to identify whether these have been appropriately presented in the current year income statement We have also considered the adequacy of the group's disclosures about the items included within'restructuring costs'and'specific items' in note 8 and the related accounting policies for these categories on page 103 and on page 107. 3.Our application of materiality and an overview of the scope of our audit The materiality for the group financial statements as a whole was set at£I Om,determined with reference to a benchmark of group profit before tax normalised to exclude specific items and restructuring costs(note 8),and goodwill impairment(note 18).Materiality represents 4.3%of group profit before tax adjusted for these items. We report to the Audit Committee any corrected or uncorrected identified misstatements exceeding£0.5m,in addition to other identified misstatements that warranted reporting on qualitative grounds. Of the group's 123 reporting components,we subjected 68 to audits for group reporting purposes. The components within the scope of our work accounted for the following percentages of the group's results: %of the total profits and losses that made up Number of components Group revenue group profit before tax Group total assets Audit for group reporting purposes 68 90% 76% 81% Annual Report and Accounts 2014 G4S plc 97 Independent auditor's report to the members of G4S plc only continued For the remaining components,we performed analysis at an aggregated group level to re-examine our assessment that there were no significant risks of material misstatement within these. The Group audit team instructed component auditors as to the significant areas to be covered,including the relevant risks detailed above and the information to be reported back.The Group audit team approved the component materialities,which ranged from £0.05m to£6m,having regard to the mbc of size and risk profile of the Group across the components.The work on 67 of the 68 components was performed by components auditors and the rest by the group audit team. The Group audit team visited or held telephone conference meetings with 30 component locations.At these visits and meetings,the findings reported to the Group audit team were discussed in more detail,and any further work required by the Group audit team was then performed by the component auditor. 4.Our opinion on other matters prescribed by the Companies Act 2006 is unmodified In our opinion: • the part of the Directors'Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006;and • the information given in the Strategic Report and the Directors'Report for the financial year for which the financial statements are prepared is consistent with the financial statements. 5.We have nothing to report in respect of the matters on which we are required to report by exception Under ISAs(UK and Ireland)we are required to report to you if,based on the knowledge we acquired during our audit,we have identified other information in the annual report that contains a material inconsistency with either that knowledge or the financial statements,a material misstatement of fact,or that is otherwise misleading. In particular;we are required to report to you if • we have identified material inconsistencies between the knowledge we acquired during our audit and the directors'statement that they consider that the annual report and financial statements taken as a whole is fair;balanced and understandable and provides the information necessary for shareholders to assess the group's performance,business model and strategy,or • the Audit Committee Report does not appropriately address matters communicated by us to the audit committee. Under the Companies Act 2006 we are required to report to you if,in our opinion: • adequate accounting records have not been kept by the parent company,or returns adequate for our audit have not been received from branches not visited by us;or • the parent company financial statements and the part of the Directors'Remuneration Report to be audited are not in agreement with the accounting records and returns;or • certain disclosures of directors'remuneration specified by law are not made;or • we have not received all the information and explanations we require for our audit. Under the Listing Rules we are required to review. • the directors'statement,set out on page 88,in relation to going concern;and • the part of the Corporate Governance Statement on page 60 in the Chairman's letter relating to the company's compliance with the ten provisions of the 2012 UK Corporate Governance Code specified for our review. We have nothing to report in respect of the above responsibilities. Scope and responsibilities As explained more fully in the Directors'Responsibilities Statement set out on page 88,the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view A description of the scope of an audit of financial statements is provided on the Financial Reporting Council's website at www.frc.org.uk/auditscopeukprivate.This report is made solely to the company's members as a body and is subject to important explanations and disclaimers regarding our responsibilities,published on our website at wwwkpmg.com/uk/auditscopeukco20I 4a,which are incorporated into this report as if set out in full and should be read to provide an understanding of the purpose of this report,the work we have undertaken and the basis of our opinions. John Morris(Senior Statutory Auditor) for and on behalf of KPMG Audit Plc,Statutory Auditor Chartered Accountants 15 Canada Square London E l 4 5GL 26 March 2015 98 G4S plc Annual Report and Accounts 2014 Consolidated income statement For the year ended 31 December 2014 ----- -------- ---- -- — 2013 2014 Restated' Notes Em Em Continuing operations Revenue 5,6 6,848 7,061 Operating profit before joint ventures 406 409 Share of profit from joint ventures 20 8 8 Operating profit before specific items and restructuring(PBITA) 6 414 417 Specific items 8 (56) (315) Restructuring 8 (29) (66) Operating profit before interest,tax and amortisation 6 329 36 Amortisation of acquisition-related intangible assets (58) (72) Goodwill impairment — (46) Acquisition-related expenses (I) (4) Profit on disposal of subsidiaries _ — 24 Operating profit/(loss) 6,8 270 (62) Net finance expense _ 12 122) (128) Profit/(Ioss)before tax (190) Tax _ 13 (42) (53) Profit/(loss)from continuing operations after tax 106 (243) Profit/(loss)from discontinued operations _ 7 63 (1 14) Profit/(Ioss)for the year s I69 (357) Attributable to: Equity holders of the parent 152 (365) Non-controlling interests 17 8 Profit/(Ioss)for the year 169 (357) ' Earnings per share attributable to equity shareholders of the parent 15 n From profrt/(loss)from continuing operations: Basic and diluted 5.8p (I 7.3)p From profrt/(loss)from continuing and discontinued operations: Basic and diluted 9.8p. (25.1)p * Restated—see notes 3(a)and 3(w) Annual Report and Accounts 2014 G4S plc 99 Consolidated statement of comprehensive income For the year ended 31 December 2014 2013 2014 Restated Notes £m £m Profit/(loss)for the year _ 169 (357) Other comprehensive income Items that will never be reclassified to profit or loss: Remeasurements relating to defined retirement benefit schemes 32 155 (60) Tax on items that will never be reclassified to profit or loss 13 (36), (I) 119 (61) Items that are or may be reclassified to profit or loss: Exchange differences on translation of foreign operations (4) (109) Change in fair value of net investment hedging financial instruments (44); 25 Change in fair value of cash flow hedging financial instruments 6 (8) Tax on items taken directly to equity 13 6 (4) (36) (96) Other comprehensive income/(loss),net of tax 83 (157) Total comprehensive income/(loss)for the year 252 (514) Attributable to: Equity holders of the parent 236 (521) Non-controlling interests 16 7 Total comprehensive income/(loss)for the year 252 (514) 1 I Consolidated statement of changes in equity For the year ended 31 December 2014 . Attributable to equity holders of the parent Share Share Retained Other NCI Total capital premium earnings reserves* Total reserve reserves £m £m £m £m £m £m £m At I January 2014 388 258 (418) 636 864 20 884 Total comprehensive income — — 272 (36) 236 16 252 Dividends declared — — (138) — (138) (I I) (149) Transfer to retained earnings — — 308 (308) — — — Recycling of translation reserves on disposal — — — (13) (13) — (13) Transactions with non-controlling interests — — (6) — (6) (3) (9) Equity-settled transactions — — 5 — 5 — 5 At 31 December 2014 388 258 23 279 948 22 970 At I January 2013—restated 353 258 143 422 I,176 32 1,208 Total comprehensive(loss)/income — — (425) (96) (521) 7 (514) Shares issued 35 — — 308 343 — 343 Dividends declared — — (130) — (130) (21) (1 51) Own shares awarded — — (2) 2 — — — Transactions with non-controlling interests — — (4) — (4) 2 (2) At 31 December 2013—restated 388 258 (418) 636 864 20 884 * See note 36 I 100 G4S plc Annual Report and Accounts 2014 1 Consolidated statement of financial position For the year ended 3 I December 2014 -------- - ----- ---- - - - - ---- - --- 2013 2012 2014 Restated Restated . Notes fm £m £m ASSETS---- — -- - - - - --- --- - - ------- -- - Non-current assets Goodwill 18 1,939 I,955 2,096 Other acquisition-related intangible assets 18 83 141 204 Other intangible assets 18 82 77 87 Property,plant and equipment 19 450 484 506 Investment in joint ventures 20 41 34 30 Trade and other receivables 23 97 104 1 18 Deferred tax assets 34 176 184 179 2,868 2,979 3,220 Current assets Inventories 21 108 112 124 Investments 22 60 39 52 Trade and other receivables 23 1,371 1,380 1,500 Cash and cash equivalents 26 409 532 419 Assets classified as held for sale 25 6 220 229 1,954 2,283 2,324 Total assets 6 4,822 5,262 5,544 LIABILITIES Current liabilities Bank overdrafts 26,27 (18) (9) - Bank loans 27 (60) (27) (13) Loan notes 27 (96) (61) (40) Obligations under finance leases 28 (14) (21) (18) Trade and other payables 29 (1,103) (1,166) (1,184) Current tax liabilities (69) (48) (38) in Provisions 33 (90) (195) (27) Liabilities classified as held for sale 25 (4) (I 33) (52) R — - -- -- — (1,454) (1,660) (1,372) a Non-current liabilities Bank loans 27 (105) (140) (324) Loan notes 27 (1,803) (1,921) (1,999) Obligations under finance leases 28 (26) (31) (43) Trade and other payables 29 (23) (13) (18) Retirement benefit obligations 32 (319) (504) (47 I) Provisions 33 (I 05) (64) (45) Deferred tax liabilities 34 (17) (45) (64) (2,398) (2,718) (2,964) Total liabilities 6 (3,852) (4,378) (4,336) Net assets 970 884 I,208 EQUITY Share capital 35 388 388 353 Share premium and reserves 36 560 476 823 Equity attributable to equity holders of the parent 948 864 1,176 Non-controlling interests 22 20 32 Total equity 970 884 1,208 The consolidated financial statements were approved by the board of directors and authorised for issue on 26 March 2015.They were signed on its behalf by AshleyAlmanza Himanshu Raja Director Director Alr-,,.a!Report and Accounts 2014 G4S plc I 0 Consolidated statement of cash flow For the year ended 3 I December 2014 ---- — — ------- 2013 2014 Restated Notes £m £m Profit/(loss)retained for the year 152 (365) Adjustments for non-cash and other items: Non-controlling interest 17 8 Pension settlement gain 32 (21) — (Profrt)/loss from discontinued operations 7 (63) 114 Tax charge 13 42 53 Net finance expense 12 122 128 Depreciation of property,plant and equipment 108 114 Amortisation of acquisition-related intangible assets 59 76 Amortisation of other intangible assets 25 24 Impairment of other assets 4 24 Goodwill impairment 18 — 46 Equity-settled transactions 5 — Share of profit from joint ventures 20 (8) (8) Profit on disposal of assets and subsidiaries (3) (24) (Decrease)/increase in provisions (68) 187 Additional pension contributions 32 (42) (38) Operating cash flow before movements in working capital '-•^ vr 129± 339 (Increase)/decrease in inventories (2) 6 Decrease in receivables 10 40 Increase in payables _ 11 39 Net cash flow from operating activities of continuing operations 348 424 Net cash flow from operating activities of discontinued operations (12) 3 I Cash generated by operating activities 336 455 Tax paid (81) (83) Net cash flow from operating activities 255 372 Investing activities Interest received I2 21 Cash flow from equity accounted investments 9 (2) Purchases of non-current assets (138) (178) Proceeds on disposal of property,plant and equipment and intangible assets other than acquisition-related 16 I I Acquisition of subsidiaries (3) (23) Net cash and overdraft balances acquired — (6) Disposal of subsidiaries 159 35 Cash,cash equivalents and bank overdrafts in disposed entities (12) (2) (Purchase)/sale of investments _ _ (17) 13 Net cash generated by/(used in)investing activities ' 26 (13 I) Financing activities Share issues 35 — 343 Dividends paid to equity shareholders of the parent (138) (130) Dividends paid to non-controlling interests ('I I) (21) Other net movement in borrowings (91) (188) Movement in customer cash balances (22) 22 Transactions with non-controlling interests (10) (2) Interest paid (126) (129) Repayment of obligations under finance leases __— (19) - (9) Net cash flow from financing activities _ (417) (1 14) Net(decrease)/increase in cash,cash equivalents and bank overdrafts 37 (136) 127 Cash,cash equivalents and bank overdrafts at the beginning of the year 538 439 Effect of foreign exchange rate fluctuations on cash held (I I) (28) Cash,cash equivalents and bank overdrafts at the end of the year 26 391 538 102 G4S plc Annual Report and Accounts 2014 Notes to the consolidated financial statements I.General information G4S plc is a company incorporated in the United Kingdom.The consolidated financial statements incorporate the financial statements of the company and entities(its subsidiaries)controlled by the company(collectively comprising the group)and the group's interest in associates and jointly controlled entities made up to 3 I December each year.The group operates throughout the world and in a wide range of functional currencies,the most significant being sterling,the US dollar and Euro.The group's financial statements are presented in sterling,as the group's primary listing is in the UKThe address of the registered office is given on page 177. 2.Statement of compliance The consolidated financial statements of the group have been prepared in accordance with International Financial Reporting Standards adopted by the European Union(adopted IFRSs).The company has elected to prepare its parent company's financial statements in accordance with UK Generally Accepted Accounting Practice(UK GAAP).These are presented on pages 156 to 164. 3.Significant accounting policies (a)Basis of preparation The consolidated financial statements of the group have been prepared under the going concern basis and using the historical cost basis, except for the revaluation of certain non-current assets and financial instruments.The principal accounting policies adopted are set out below.Judgements made by the directors in the application of these accounting policies which have a significant effect on the financial statements,and estimates with a significant risk of material adjustment,are discussed in note 4. The directors considered the group's strategy,liquidity and financial position and reviewed the budget for the next 12 months and the medium-term strategic plan.As part of this review,various stress test scenarios to assess the adequacy of resources available to the group were considered,including the newly refinanced£I bn revolving credit facility which is largely undrawn but committed and the headroom available within the group's financial covenants. The directors also considered the risks facing the business and whilst certain risks such as underperformance on major contracts could impact profitability they do not present a material risk to the group. On completion of the review the directors were satisfied that the group had access to sufficient resources to allow it to execute its strategy and continue to operate for the foreseeable future. The comparative income statement for the year ended 31 December 2013 has been re-presented for operations qualifying as discontinued during the current year Revenue from continuing operations has been reduced by£1 45m and loss before tax has increased by£3m compared to the figures published previously.Further details of discontinued operations are presented within note 7. (b)Presentation of the income statement The group's income statement and segmental analysis note separately identify results before specific items.This is consistent with the way that financial performance is measured by management and reported to the Board and assists in providing a meaningful analysis of the a underlying results of the group.The directors believe that presentation of the group's results in this way aids the understanding of the 3 group's financial performance.Specific items are identified by virtue of their size,nature or incidence.Any associated reversal will also flow through specific items such that the underlying results reflect the ongoing recurring results of the business. (c)Specific items Specific items are those that in management's judgement should be disclosed separately by virtue of their size,nature or incidence.In determining whether an event or transaction is specific,management considers quantitative as well as qualitative factors such as the frequency or predictability of occurrence.Specific items include items relating to acquisitions and disposals including amortisation and impairment of acquisition-related intangible assets,results relating to discontinued operations,certain restructuring costs,impairments, onerous contract provisions and other one-off items such as the review of the carrying value of assets and liabilities performed in 2013. Specific items may not be comparable to similarly titled measures used by other companies.Specific items for the current and prior year are disclosed in note 8. Annual Report and Accounts 2014 G4S plc 103 Notes to the consolidated financial statements continued 3.Significant accounting policies(continued) (d)Basis of consolidation During the year the group has adopted the new consolidation standards IFRS I 0'Consolidated Financial Statements',IFRS I I 'Joint Arrangements'and IFRS 12'Disclosure of Interests in Other Entities'.The following accounting policies reflect these new standards,and the impact of adopting these standards on the group's financial results and position is given in more detail in note 3(w)on page 110. Subsidiaries Subsidiaries are entities controlled by the group.Control is achieved where the group has existing rights that give it the current ability to direct the activities that affect the group's returns and exposure or rights to variable returns from the entit>This can be determined either by the group's ownership percentage,or by the terms of any shareholder agreement In the case of certain investments,detailed analysis of the different contracts in place is required,together with a level of judgement,to ascertain whether there is control under the definition of IFRS 10'Consolidated financial statements'(see note 4). On acquisition,the assets and liabilities and contingent liabilities of the acquired business are measured at their fair values at the date of acquisition.The cost of acquisition is measured as the acquisition date fair value of the assets transferred as consideration to the vendor and does not include transaction costs.Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill.Any deficiency in the cost of acquisition below the fair values of the identifiable net assets acquired(i.e.discount on acquisition)is credited to the income statement in the year of acquisition. The cost of acquisition includes the present value of deferred and contingent consideration payable,including that in respect of put options held by non-controlling shareholders,as estimated at the date of acquisition.For acquisitions prior to I January 2010 subsequent changes to the present value of the estimate of contingent consideration and any difference upon final settlement of such a liability are recognised as adjustments to the cost of acquisition.For acquisitions after I January 2010 such changes are recognised in the income statement with respect to contingent consideration and in other comprehensive income with respect to put options.Non-controlling interests are stated at their proportion of the fair values of the assets and liabilities recognised.Profits and losses are applied in the proportion of their respective ownership to the interest of the parent and to the non-controlling interest. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of control or up to the effective date of disposal,as appropriate. Joint arrangements A joint arrangement is a contractual arrangement which grants the group and other parties joint control over a shared undertaking.Joint control exists when decisions about the relevant activities require the unanimous consent of the parties sharing control.A joint arrangement is either a joint operation or a joint venture. Joint operations A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities,relating to the arrangementThe group's share of assets,liabilities,revenue,expenses and cash flows are combined with the equivalent items in the consolidated financial statements on a line-by-line basis. Joint ventures A joint venture is a joint arrangement whereby the parties that have joint control have the rights to the net assets of the arrangement The results and assets and liabilities of joint ventures are incorporated in the group's consolidated financial statements using the equity method of accounting.Under the equity method,investments in joint ventures are carried in the consolidated statement of financial position at cost as adjusted for post-acquisition changes in the group's share of the net assets of the joint venture,less any impairment in the value of the investment.The group's share of post-tax profits or losses is recognised in the consolidated income statement Associates An associate is an entity over which the group is in a position to exercise significant influence,but not control or joint control,through participation in the financial and operating policy decisions of the investee. The results and assets and liabilities of associates are incorporated in the group's consolidated financial statements using the equity method of accounting.Investments in associates are carried in the consolidated statement of financial position at cost as adjusted by post-acquisition changes in the group's share of the net assets of the associates,less any impairment in the value of individual investments.Losses of the associates in excess of the group's interest in those associates are not recognised. Transactions eliminated on consolidation All intra-group transactions,balances,income and expenses are eliminated on consolidation.Where a group company transacts with a joint venture or associate of the group,profits and losses are eliminated to the extent of the group's interest in the relevant joint venture or associate. 04 G4S plc Annual Report and Accounts 2014 (e)Foreign currencies The financial statements of each of the group's businesses are prepared in the functional currency applicable to that business.Transactions in currencies other than the functional currency are translated at the rates of exchange prevailing on the dates of the transactions.At each balance sheet date,monetary assets and liabilities which are denominated in other currencies are retranslated at the rates prevailing on that date.Non-monetary assets and liabilities carried at fair value which are denominated in other currencies are translated at the rates prevailing at the date when the fair value was determined.Non-monetary items measured at historical cost denominated in other currencies are not retranslated.Gains and losses arising on retranslation are included in the income statement for the period. On consolidation,the assets and liabilities of the group's overseas operations,including goodwill and fair value adjustments arising on their acquisition,are translated into sterling at exchange rates prevailing on the balance sheet date.Income and expenses are translated into sterling at the average exchange rates for the period(unless this is not a reasonable approximation of the cumulative effect of the rate prevailing on the transaction dates,in which case income and expenses are translated at the dates of the transactions).Exchange differences arising are recognised in other comprehensive income,together with exchange differences arising on monetary items that are in substance a part of the group's net investment in foreign operations and on borrowings and other currency instruments designated as hedges of such investments where and to the extent that the hedges are deemed to be effective.On disposal,translation differences are recognised in the income statement in the period in which the operation is disposed of. (f)Derivative financial instruments and hedge accounting In accordance with its treasury policy,the group only holds or issues derivative financial instruments to manage the group's exposure to financial risk,not for trading purposes.Such financial risk includes the interest risk on the group's variable-rate borrowings,the fair value risk on the group's fixed-rate borrowings,commodity risk in relation to its diesel consumption and foreign exchange risk on transactions on the translation of the group's results and on the translation of the group's net assets measured in foreign currencies.The group manages these risks through a range of derivative financial instruments,including interest rate swaps,fixed rate agreements,commodity swaps,commodity options,forward foreign exchange contracts and currency swaps. . Derivative financial instruments are recognised in the consolidated statement of financial position as financial assets or liabilities at fair value. The gain or loss on re-measurement to fair value is recognised immediately in the income statement,unless the derivatives qualify for hedge accounting.Where derivatives do qualify for hedge accounting,the treatment of any resultant gain or loss depends on the nature of the item being hedged as described below. Fair value hedge The change in the fair value of both the hedging instrument and the related portion of the hedged item is recognised immediately in the income statement Cash flow and net investment hedges The change in the fair value of the portion of the hedging instrument that is determined to be an effective hedge is recognised in equity and subsequently recycled to the income statement when the hedged cash flow or hedged net investment impacts the income statement The ineffective portion of the fair value of the hedging instrument is recognised immediately in the income statement. a (g)Intangible assets Goodwill All business combinations are accounted for by the application of the acquisition method.Goodwill arising on consolidation represents the excess of the cost of acquisition over the group's interest in the fair value of the identifiable assets and liabilities and contingent liabilities of a subsidiary,associate or jointly-controlled entity at the date of acquisition.No goodwill arises on the acquisition of an additional interest from a non-controlling interest in a subsidiary as this is accounted for as an equity transaction.Goodwill is stated at cost,less any accumulated impairment losses and is tested annually for impairment or more frequently if there are indications that amounts may be impaired.On disposal of a subsidiary,associate or joint arrangement,the attributable amount of goodwill is included in the determination of the profit or loss on disposal. Acquisition-related intangible assets Intangible assets on acquisitions that are either separable or arising from contractual rights are recognised at fair value at the date of acquisition.Such acquisition-related intangible assets include trademarks,technology,customer contracts and customer relationships.The fair value of acquisition-related intangible assets is determined by reference to market prices of similar assets,where such information is available,or by the use of appropriate valuation techniques,including the royalty relief method and the excess earnings method. Acquisition-related intangible assets are amortised by equal annual instalments over their expected economic life.The directors review acquisition-related intangible assets on an ongoing basis and,where appropriate,provide for any impairment in value. The estimated useful lives are as follows: Trademarks and technology up to a maximum of five years Customer contracts and customer relationships up to a maximum of ten years Annual Report and Accounts 2014 G4S plc 105 Notes to the consolidated financial statements continued 3.Significant accounting policies(continued) (g)Intangible assets(continued) Other intangible assets Development expenditure represents expenditure incurred in establishing new services and products of the group.Such expenditure is recognised as an intangible asset only if the following can be demonstrated:the expenditure creates an identifiable asset,its cost can be measured reliably,it is probable that it will generate future economic benefits,it is technically and commercially feasible and the group has sufficient resources to complete development In all other instances,the cost of such expenditure is taken directly to the income statement Capitalised development expenditure is amortised over the period during which the expenditure is expected to be revenue-producing,up to a maximum of ten years.The directors review the capitalised development expenditure on an ongoing basis and,where appropriate, provide for any impairment in value. Research expenditure is written off in the year in which it is incurred. Capitalised computer software is stated at cost,net of amortisation and any provision for impairment Amortisation is charged on software so as to write off the cost of the assets to their estimated residual values by equal annual instalments over their expected useful economic lives up to a maximum of eight years. (h)Property,plant and equipment Property,plant and equipment are stated at cost,net of accumulated depreciation and any provision for impairment Depreciation is provided on all property,plant and equipment other than freehold land.Depreciation is calculated so as to write off the cost of the assets to their estimated residual values by equal annual instalments over their expected useful economic lives as follows: Freehold and long leasehold buildings up to 50 years Short leasehold buildings(under 50 years) over the life of the lease Equipment and motor vehicles 2 to I 0 years Assets held under finance leases are depreciated over the shorter of the expected useful economic life and the term of the relevant lease. Where significant,the residual values and the useful economic lives of property,plant and equipment are re-assessed annually. (I)Financial instruments Financial assets and financial liabilities are recognised when the group becomes a party to the contractual provisions of the instruments. Trade receivables Trade receivables do not carry interest and are stated initially at their fair value.The carrying amount of trade receivables is reduced through the use of a bad debt allowance account-The group provides for bad debts based upon an analysis of those that are past due, in accordance with local conditions and past default experience. Service concession assets Under the terms of a Private Finance Initiative(PFI)or similar project,the control of the asset remains largely with the purchaser of the associated services.In such cases,the group's interest in the asset is classified as a financial asset and included at its discounted value within trade and other receivables,to the extent to which the group has an unconditional right to receive cash from the grantor of the concession for the construction of the assetTo the extent that the group has the right to charge for the use of such an asset,conditional upon the extent of the use,the group recognises an intangible asset Current asset investments Current asset investments comprise investments in securities which are classified as held-for-trading.They are initially recognised at fair value,including transaction costs.Gains and losses arising from changes in fair value are recognised in the income statement Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits.Bank overdrafts that are repayable on demand and that form an integral part of the group's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flow. Interest-bearing borrowings Interest-bearing bank overdrafts,loans and loan notes are recognised at the value of proceeds received,net of direct issue costs.Finance charges,including premiums payable on settlement or redemption and direct issue costs,are recognised in the income statement on an accrual basis using the effective interest method. Trade payables Trade payables are not interest-bearing and are stated initially at fair value. Equity instruments Equity instruments issued by the group are recorded at the value of proceeds received,net of direct issue costs. 106 G4S plc Annual Report and Accounts 2014 (j)Inventories Inventories are valued at the lower of cost and net realisable value.Cost represents expenditure incurred in the ordinary course of business in bringing inventories to their present condition and location and includes appropriate overheads.Cost is calculated using either the weighted average or the first-in-first-out method.Net realisable value is based on estimated selling price,less further costs expected to be incurred to completion and disposal. (k)Impairment The carrying value of the group's assets,with the exception of inventories and deferred tax assets,is reviewed on an ongoing basis for any indication of impairment and,if any such indication exists,the assets'recoverable amount is estimated.An impairment loss is recognised in the income statement whenever the carrying value of an asset or its cash-generating unit exceeds its recoverable amount An impairment loss in respect of goodwill is not reversed.In respect of any other asset,an impairment loss is reversed if there has been a change in the estimates used to determine its recoverable amountThe amount of the reversal is limited such that the asset's carrying amount does not exceed that which would have been determined(after depreciation and amortisation)if no impairment loss had been recognised. (I)Employee benefits Retirement benefit costs Payments to defined contribution schemes are charged as an expense as they fall due.Payments made to state-managed retirement benefit schemes are dealt with as payments to defined contribution schemes where the group's obligations under the schemes are equivalent to those arising in a defined contribution retirement benefits scheme. The retirement benefit obligation recognised in the consolidated statement of financial position represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost,reduced by the fair value of scheme assets.Any asset resulting from the calculation is limited to unrecognised past service cost plus the present value of available refunds and reductions in future contributions to the scheme. For defined benefit plans,the cost charged to the income statement consists of current service cost net interest cost,and past service cost. The finance element of the pension charge is shown in finance expense and the remaining service cost element is charged as a component of employee costs in the income statement Actuarial gains and losses and other remeasurement gains and losses are recognised immediately in full through the statement of comprehensive income. Share-based payments The group issues equity-settled share-based payments to certain employees.The fair value of share-based payments is determined at the date of grant and expensed,with a corresponding increase in equity,on a straight-line basis over the vesting period,based on the group's estimate of the shares that will eventually vest.The amount expensed is adjusted over the vesting period for changes in the estimate of the number of shares that will eventually vest,save for changes resulting from any market-related performance conditions. (m)Provisions and contingent liabilities Provisions are recognised when a present legal or constructive obligation exists for a future liability in respect of a past event and where the amount of the obligation can be estimated reliably.The amount recognised as a provision is the group's best estimate of the cost of settlement at the end of the reporting period. In respect of claims and litigation,the group provides for anticipated costs where an outflow of resources is considered probable and a reasonable estimate can be made of the likely outcome.For all risks,the ultimate liability may vary from the amounts provided and will be dependent upon the eventual outcome of any settlement Management exercise judgement in measuring the exposures to contingent liabilities(see note 33)through assessing the likelihood that a potential claim or liability will arise and in quantifying the possible range of financial outcomes. Where the time value of money is material,provisions are stated at the present value of the expected expenditure using an appropriate discount rate. (n)Restructuring provision A restructuring provision is recognised when the group has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by itThe measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity. The group distinguishes between restructuring costs that are recurring and those restructuring costs that relate to one-off or transformational group programmes that impact a number of operations. Restructuring costs that are incurred in the normal course of business are recorded as part of the group's trading results. Restructuring costs that are individually material or relate to programmes linked to the group's wider transformation and require approval at executive level are presented within specific items and disclosed separately in the consolidated income statement Annual Report and Accounts 2014 G4S plc 107 Notes to the consolidated financial statements continued 3.Significant accounting policies(continued) (o)Revenue recognition Revenue Revenue represents amounts receivable for goods and services provided in the normal course of business and is measured at the fair value of the consideration received or receivable,net of discounts,VAT and other sales-related taxes.Revenue for manned security and cash solutions products and for recurring services in security systems products is recognised to reflect the period in which the service is provided.Revenue on security systems installations is recognised either on completion in respect of product sales,or in accordance with the stage of completion method in respect of construction contracts. Construction contracts Where significant security system installations with a contract duration in excess of one month are accounted for as construction contracts. Where the outcome of a construction contract can be estimated reliably,revenue and costs are recognised by reference to the stage of completion of the contract activity at the balance sheet date.This is measured either by the proportion that contract costs incurred for work to date bear to the estimated total contract costs,or by the proportion that the sales value of work completed to date bears to the total sales value.Variations in contract work,claims and incentive payments are included to the extent that it is likely that they will be agreed with the customer. Where the outcome of a construction contract cannot be estimated reliably,contract revenue is recognised to the extent of contract costs incurred that are deemed likely to be recoverable.Contract costs are recognised as expenses as they are incurred.Where it is probable that total contract costs will exceed total contract revenue,the expected loss is recognised immediately as an expense in the income statement Construction contracts are recognised in the consolidated statement of financial position at cost plus profit recognised to date,less provision for foreseeable losses and less progress billings.Balances are not offset (p)Pre-contract costs Pre-contract costs in respect of major outsourcing contracts incurred after the point at which the group achieves preferred bidder status (at which point it is considered probable that the contract will be obtained)are capitalised and expensed over the life of the contract, subject to recoverability criteria.Costs incurred prior to this point are expensed as incurred.Capitalised costs are expensed immediately in the event that preferred bidder status is not followed by the award of the contract. (q)Onerous contracts Onerous contract provisions are recognised for losses on contracts where the forecast costs of fulfilling the contract throughout the contract period exceed the forecast income receivable.Management plans to recover the position on loss-making contracts require a level of judgement and are only taken into account in the calculation of the onerous contract provision when implementation has commenced and tangible evidence exists of benefits being delivered.The provision is calculated based on discounted cash flows to the end of the contract. Provisions for future losses are charged to the income statement where onerous contract provisions are material by virtue of their size, incidence or nature they are separately disclosed as specific items.In-year losses from onerous contracts will continue to be reported in underlying earnings as they are incurred,with provisions for future losses on onerous contracts being unwound against these losses in underlying earnings. Vacant property provisions are recognised when the group has committed to a course of action that will result in the property becoming vacantThe provision is calculated based on discounted cash flows to the end of the lease taking into account expected future sub-lease income. (r)Interest Interest income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable.This is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset's net carrying amount Borrowing costs are recognised as an expense in the income statement 108 G4S plc Annual Report and Accounts 2014 (s)Income taxes Tax is recognised in the income statement except to the extent that it relates to items recognised in equity,in which case it is recognised in equity or other comprehensive income.The tax expense represents the sum of current tax and deferred tax Current tax is based on taxable profit for the year.Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.The group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit,and is accounted for using the balance sheet liability method.Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and interests in joint ventures, except where the group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of each deferred tax asset is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is measured based on the tax rates that have been enacted or substantively enacted by the end of the reporting period. Tax liabilities or refunds may differ from those anticipated due to changes in tax legislation,differing interpretations of tax legislation and uncertainties surrounding the application of tax legislation.In situations where uncertainties exist,provision is made for contingent tax liabilities and assets on the basis of management judgement following consideration of the available relevant information. (t)Leasing Leases are classified as finance leases when the terms of the lease transfer substantially all of the risks and rewards of ownership to the lessee.On occasion this classification requires a level of judgement All other leases are classified as operating leases. Assets held under finance leases are recognised at the inception of the lease at their fair value or if lower,at the present value of the minimum lease payrnents.The corresponding liability to the lessor is included in the consolidated statement of financial position as a finance lease obligation.Lease payments made or received are apportioned between finance charges or income and the reduction of the lease liability or asset so as to produce a constant rate of interest on the outstanding balance of the liability or asset Rentals payable or receivable under operating leases are charged or credited to income on a straight-line basis over the lease term,as are incentives to enter into operating leases. a (u)Non-current assets held for sale and discontinued operations Non-current assets(and disposal groups)classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use.This condition is regarded as met only when the sale is highly probable and the asset(or disposal group) is available for immediate sale in its present condition.The group must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification. A discontinued operation is a component of the group's business that represents a separate major line of business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale that has been disposed of,has been abandoned or meets the criteria to be classified as held for sale. (v)Dividend distribution Dividends are recognised as distributions to equity holders in the period in which they are paid or approved by the shareholders at a general meeting. Annual Report and Accounts 2014 G4S plc 109 Notes to the consolidated financial statements continued 3.Significant accounting policies(continued) (w)Adoption of new and revised accounting standards and interpretations In the year ended 3 I December 2014,the group adopted the following new standards and amendments: • IFRS 10(201 I)'Consolidated Financial Statements',which replaces parts of IAS 27'Consolidated and Separate Financial Statements' and all of SIC-12'Consolidation—Special Purpose Entities',introduced a new control model that focuses on whether the group has power over an investee,exposure or rights to variable returns from its involvement with the investee and the ability to use its power to affect those returns.This differs from the previous approach where one of the main criteria used to consolidate was to have the power to govern the financial and operating policies of the entity.As a result of the adoption of IFRS 10 the group has reclassified certain businesses within the Asia&Middle East region as joint ventures where previously they were classified as subsidiaries.As a result of applying IFRS I I 'Joint Arrangements',the group now accounts for these businesses using the equity method. • IFRS I I 'Joint Arrangements'replaces IAS 3 I'Interests in JointVentures'and SIC-13'Jointly Controlled Entities—Non-monetary Contributions byVendors'and removes the option to account for jointly controlled entities using the proportionate consolidation method.Instead all jointly controlled entities are accounted for using the equity method of accounting,similar to that used to account for associates under the previous standards.As the group previously applied the proportionate method of accounting to its jointly controlled entities this has impacted the group's consolidated income statement and consolidated statement of financial position. • IFRS 12'Disclosure of Interests in Other Entities'is a new and comprehensive standard on disclosure requirements for all forms of interest in other entities,including joint arrangements,associates,special purpose vehicles and other off balance sheet vehicles.The standard includes disclosure requirements for entities within the scope of IFRS I 0(201 I)and IFRS I I As a result of adopting this standard the group has re-assessed the criteria used to determine material joint ventures.The new criteria are based on the contribution of revenue,operating profit and net assets that the joint ventures make to the group's results.Under these new measures the group has determined that none of its joint ventures are individually material for the purposes of disclosure in accordance with IFRS 12. • The group also adopted IAS27(revised)'Separate Financial Statements'and IAS28'Associates and Joint Ventures'.The adoption of these standards did not have a material impact on the financial statements. The group has presented a restated income statement for the year ended 31 December 2013,restated statements of financial position at 31 December 2013 and 31 December 2012,and a restated cash flow statement for the year ended 31 December 2013.The following pages contain reconciliations between the restated amounts and those previously published. The adoption of IFRS I 0 has resulted in certain businesses in the Asia Middle East region being re-classified as joint ventures rather than subsidiaries.These businesses were previously consolidated into each of the relevant line items in the group's income statement,statement of cash flows and statement of financial position at 100%of their reported results with an appropriate adjustment made to reflect the non-controlling interests'share.As a result of being classified as joint ventures they fall into the scope of IFRS I I and are now reported using the equity method.Under the equity method the group's share of the entities'post-tax results are shown in the income statement under 'share of profit from joint ventures'and the group's net investment is shown in the statement of financial position under'investment in joint ventures',with no adjustment required for non-controlling interests. In addition the group previously applied the proportionate method of consolidation to its existing joint ventures.Under the proportionate method of consolidation the group consolidated its share of each relevant line item in the group's income statement statement of cash flows and statement of financial position.As a result of adopting IFRS I I the results of these joint ventures are now also consolidated using the equity method as described above. The income statement reconciliation for the year ended 3 I December 2013 separately presents restatements for discontinued operations. The restated opening balance sheet as at 3 I December 2012 for the year ended 31 December 20 13 has also been presented. Restatements Entities for IFRS 10& reclassified as As published IFRS I I Revised discontinued Restated Consolidated income statement for the year ended 31 December 2013 £m £m £m Ern £m Revenue from continuing operations 7,428 (222) 7,206 (145) 7,061 Operating profit before specific items and restructuring 442 (21) 421 (4) 417 Loss before tax (1 70) (17) (187) (3) (190) Loss from continuing operations after tax (226) (I 5) (241) (2) (243) Loss for the year (342) (I 5) (357) — (357) Profit attributable to non-controlling interests 20 (12)* 8 — 8 * This adjustment includes a£3m reclassification to the NCI result for the year ended 31 December 2013. 1 10 G4S plc Annual Report and Accounts 2014 Restatements for IFRS 10& As published IFRS I I Restated Consolidated statement of financial position for the year ended 31 December 2013 Em Ern Em ASSETS Goodwill 1,966 (I I) 1,955 Investment in joint ventures — 34 34 Other non-current assets 1,022 (32) 990 Trade and other receivables 1,394 (14) 1,380 Cash and cash equivalents 594 (62) 532 Other current assets 376 (5) 371 5,352 (90) 5,262 i LIABILITIES Bank overdrafts (22) 13 (9) Trade and other payables (1,220) 6 (1,214) . Other current liabilities (442) 5 (437) Bank loans (169) 29 (140) Non-current liabilities (2,580) 2 (2,578) (4,433) 55 (4,378) Net assets 919 (35) 884 EQUITY Share capital 388 — 388 Share premium and reserves 479 (3)' 476 Equity attributable to equity holders of the parent 867 (3) 864 Non-controlling interests 52 (32)' 20 Total equity 919 (35) 884 * This adjustment indudes a£3m reclassification to reserves as at 31 December 2013 Restatements for IFRS 10& As published IFRS I I Restated } Consolidated statement of cash flow for the year ended 31 December 2013 £m Em Em Net cash flow from operating activities 400 (28) 372 Net cash used in investing activities (163) 32 (131) Net cash flow from financing activities (95) (19) (1 14) Net movement in cash,cash equivalents and bank overdrafts 142 (15) 127 Cash,cash equivalents and bank overdrafts at the beginning of the year 472 (33) 439 Effect of foreign exchange rate fluctuations on cash held (27) (I) (28) Cash,cash equivalents and bank overdrafts at the end of the year 587 (49) 538 Annual Report and Accounts 2014 G4S plc I I I Notes to the consolidated financial statements continued 3.Significant accounting policies(continued) (w)Adoption of new and revised accounting standards and interpretations(continued) Restatements for IFRS 10& As published IFRS I I Restated Consolidated statement of financial position for the year ended 31 December 2012 Em Em fm ASSETS Goodwill 2,108 (12) 2,096 Investment in joint ventures — 30 30 Other non-current assets 1,114 (20) 1,094 Trade and other receivables 1,506 (6) 1,500 Cash and cash equivalents 469 (50) 419 Other current assets 413 (8) 405 5,610 (66) 5,544 LIABILITIES Bank overdrafts (17) 17 — Trade and other payables (1,234) 12 (1,222) Other current liabilities (157) 7 (150) Non-current liabilities (2,971) 7 (2,964) (4,379) 43 (4,336) Net assets 1,231 (23) 1,208 EQUITY Share capital 353 — 353 Share premium and reserves 823 — 823 Equity attributable to equity holders of the parent 1,176 — 1,176 Non-controlling interests 55 (23) 32 Total equity 1,231 (23) 1,208 The group has not adopted early any standard,amendment or interpretation.A number of new standards,amendments to standards and interpretations have been announced but are not yet effective for the year ended 31 December 2014.Those that are expected to have an impact on the group accounts are detailed below. • IFRS 9'Financial Instruments'is effective for the year ended 31 December 2018 and removes the multiple classification and measurement models for financial assets required by IAS 39 and replaces it with a model with only two classification categories:amortised cost and fair value.The business model for managing the financial assets and the contractual cash flow characteristics of those assets drives the classification.There have been no significant changes to the accounting and presentation for financial liabilities and for derecognising financial instruments.The group is currently assessing the impact this standard would have on its consolidated results and financial position. • IFRS 15'Revenue from Contracts with Customers'is effective for the year ended 3 I December 2017 and establishes a comprehensive framework for determining whether,how much and when revenue is recognised.The group is assessing the potential impact on its consolidated financial statements resulting from the application of IFRS 15. The following revisions,amendments and improvements are not yet effective and are not expected to have a material impact on the results of the group when they are adopted: • Accounting for Acquisitions of Interests in Joint Operations(Amendments to IFRS I I) • Clarification of Acceptable Methods of Depreciation and Amortisation(Amendments to IAS 16 and IAS38) • Defined Benefit Plans:Employee Contributions(Amendments to IAS 19) • IFRS 14 Regulatory Deferral Accounts • Improvements to IFRS 2010-2012 Cycle and 2011-2013 Cycle 112 G4S plc Annual Report and Accounts 2014 • • Detail by Entity Name Page 1 of 5 F i '1: , FLORIDA DEPARTMENT OF STAT r DIVISION OF CoRPoRATIoNS ' m/1 AL ; d .� a : Detail by Entity Name Florida Profit Corporation G4S SECURE SOLUTIONS (USA) INC. Filing Information Document Number 217838 FEI/EIN Number 59-0857245 Date Filed 12/04/1958 State FL Status ACTIVE Last Event CORPORATE MERGER Event Date Filed 12/30/2010 Event Effective Date 12/31/2010 Principal Address 1395 UNIVERSITY BLVD. JUPITER, FL 33458 Changed: 02/23/2011 Mailing Address 1395 UNIVERSITY BLVD. JUPITER,FL 33458 Changed: 02/23/2011 Registered Agent Name &Address CORPORATION SERVICE COMPANY 1201 HAYS STREET TALLAHASSEE, FL 32301-2525 Name Changed: 10/26/2006 Address Changed: 10/26/2006 Officer/Director Detail Name &Address Title CFO MCCORMICK, TIMOTHY 1395 UNIVERSITY DRIVE JUPITER, FL 33458 http://s.earch.sunbiz.org/Inquiry/CorporationSearch/SearchResultDetail?inquirytype=Entity... 2/12/2016 ■ 4.Accounting estimates,judgements and assumptions The preparation of financial statements in conformity with adopted IFRSs requires management to make judgements,estimates and assumptions that affect the application of the group's accounting policies,which are described in note 3,with respect to the carrying amounts of assets and liabilities at the date of the financial statements,the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period.These judgements,estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances,including current and expected economic conditions,and in some cases,actuarial techniques.Although these judgements, estimates and associated assumptions are based on management's best knowledge of current events and circumstances,the actual results may differ. Estimates and underlying assumptions are reviewed on an ongoing basis.Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. The judgements,estimates and assumptions which are of most significance in preparing the group's 2014 accounts are detailed below Revenue recognition and contract review The group delivers outsourcing services that in some circumstances can be complex in nature and may be governed by unique contractual arrangements.There is a risk that revenue recognition on these contracts is not in accordance with contractual entitlements and therefore provisions may be required to be recognised within'contract provisions'(see note 33).Estimates and judgements are therefore required to determine the appropriate level of provisioning applied to these contracts. Carrying value of goodwill The group tests tangible and intangible assets,including goodwill,for impairment on an annual basis or more frequently if there are indications that amounts may be impaired.The impairment analysis for such assets is based principally upon discounted estimated future cash flows from the use and eventual disposal of the assets.Such an analysis includes the estimation of future results,cash flows,annual growth rates and discount rates.Judgement is required in relation to the achievability of the long-term business plan and macroeconomic assumptions underlying the valuation process.In certain circumstances,where market prices can be ascertained(for example,through recent transactions),fair value less costs to sell is used as a basis for the recoverable amountThis involves judgments and estimates to apply reasonable valuations techniques and to estimate future selling costs.The full methodology and results of the group's impairment testing is presented in note 18. Taxation The group operates in many tax jurisdictions including countries where the tax legislation is not consistently applied and under some complex contractual circumstances where the responsibility for tax arising is not always clear.Management are required to apply judgements and estimates to determine the appropriate amount of tax to provide for and any required disclosure around contingent tax liabilities at each period end. Review of the carrying value of assets and liabilities In 2013 the group carried out a review of the carrying value of its assets and liabilities as at 31 December 2012,taking into account any changes in facts or circumstances since that date.The purpose of this review was to ensure that the financial statements were presented in a more balanced way.This exercise required a level of judgement and in many cases taking a more balanced judgement based on the group's current understanding of circumstances surrounding each issue.The results of the review were presented within'specific items' given the one-off nature of the review performed and are disclosed in note 8.As at 31 December 2014 these estimates and judgements have been updated to reflect any changes in facts or circumstances during the year to 3 I December 2014 with any additional charges or reversals also being presented within specific items. Compliance with foreign ownership rules and consolidation of subsidiaries The group has a diverse set of complex ownership structures,which are sometimes driven by local laws and regulations relating to foreign ownership.In some instances the group operates through local structures with limited direct share ownership of the business,but exercises control through shareholder agreements.In determining whether some group entities qualify for consolidation under IFRS 10'Consolidated Financial Statements',professional and legal advice is sought and a level of judgement is required.Consolidation of any of these entities would be at risk if the group's ability to enforce its rights of control were successfully challenged. Valuation of retirement benefit obligations The valuation of defined retirement benefit schemes is arrived at using the advice of qualified independent actuaries who use the projected unit credit method for determining the group's obligations.This methodology requires the use of a variety of assumptions and estimates, including the appropriate discount rate,the expected return on scheme assets,mortality assumptions,future service and earnings increases of employees and inflation.Full details of the group's retirement benefit obligations,including an analysis of the sensitivity of the calculations to the key assumptions are presented in note 32. Annual Report and Accounts 20 14 G4S plc 113 Notes to the consolidated financial statements continued 5.Revenue An analysis of the group's revenue,as defined by IAS 18'Revenue',is as follows: - - ---- ------ 2013 2014 Restated Notes £m £m Continuing operations Sale of goods 188 159 Rendering of services 6,495 6,721 Revenue from construction contracts 165 181 Revenue from continuing operations as presented in the consolidated income statement 6 6,848 7,061 Discontinued operations Sale of goods - I Rendering of services 391 742 Revenue from construction contracts - 23 Revenue from discontinued operations 6,7 391 766 Other operating income Interest income 12 11 13 Total other operating income 11 13 Total revenue as defined by IAS 18 7,250 7,840 6.Operating segments The group operates on a worldwide basis and derives a substantial proportion of its revenue and operating profit from each of the following six geographic regions:Africa,Asia Middle East Latin America,Europe,North America and UK&Ireland.For each of these reportable segments,the group executive committee(the chief operating decision maker)reviews internal management reports on a regular basis. Segment information is presented below: Continuing Discontinued Continuing Discontinued operations operations Total operations operations Total 2013 2013 2013 2014 2014 2014 Restated Restated Restated Revenue by reportable segment and geographical area £m £m £m £m £m £m Africa 485 3 488 496 8 504 Asia Middle East 1,327 - 1,327 1,372 I 1,373 Latin America 663 22 685 693 24 717 Europe 1,421 100 1,521 1,526 285 1,811 North America 1,365 266 1,631 1,359 448 1,807 UK&Ireland _ 1,587 - 1,587 1,615 - 1,615 Total revenue 6,848 391 7,239 7,061 766 7,827 Total gross Total gross segment Inter-segment External segment Inter-segment External revenue revenue revenue revenue revenue revenue 2013 2013 2013 2014 2014 2014 Restated Restated Restated Revenue from internal and external customers by reportable segment £m £m £m £m £m £m Secure Solutions 6,132 (9) 6,123 6,531 (8) 6,523 Cash Solutions 1,118 (2) 1,116 1,306 (2) 1,304 Total revenue 7,250 (I I) 7,239 7,837 (10) 7,827 Inter-segment sales are charged at prevailing market prices.Refer to note 7 for details on discontinued operations. 1 114 G4S plc Annual Report and Accounts 2014 - --_--------- - - - - — - - - - Continuing Discontinued Continuing Discontinued operations operations Total operations operations Total 2013 2013 2013 2014 2014 2014 Restated Restated Restated Operating profit by reportable segment and geographical area Cm £m Cm Em Em fin Africa 46 (I) 45 40 (5) 35 Asia Middle East 101 — 101 108 — 108 Latin America 38 — 38 44 — 44 Europe 84 — 84 88 (3) 85 North America 75 (3) 72 59 18 77 UK&Ireland 130 — 130 119 — 119 Operating profit/(Ioss)before corporate costs 474 (4) 470 458 10 468 Corporate costs (60) - — (60) (41) - - (41) Operating profit/(loss)before specific items and restructuring 414 (4) 410 417 10 427 Specific items (56) (3) (59) (315) (23) (338) Restructuring (29) — (29) (66) (4) (70) Operating profit/(Ioss)before interest,tax and amortisation 329 (7) 322 36 (17) 19 Amortisation of acquisition-related intangible assets (58) (I) (59) (72) (4) (76) Goodwill impairment — — — (46) (80) (126) Acquisition-related expenses (I) — (I) (4) — (4) Profrt/(loss)on disposal of subsidiaries — 71 71 24 (3) 21 Operating profit/(Ioss) 270 63 333 (62) (104) (166) Refer to note 7 for details on discontinued operations. Segment assets and liabilities The following information is analysed by reportable segment and by the geographical area in which the assets are located: ------------ -- - - ----------------- --— - - - --- - - Total Total Total assets Total liabilities assets 2013 liabilities 2013 2014 Restated 2014 Restated Total assets and liabilities by reportable segment and geographical area Cm fm £m fin a Africa 227 240 (79) (78) i Asia Middle East 676 702 (248) (239) Latin America 352 348 (1 19) (105) 4 Europe 720 851 (256) (357) North America 768 826 (165) (186) UK&Ireland 1,285 1,390 (343) (489) Inter-segment trading balances (188) (192) 188 192 Total segment assets and liabilities 3,840 4,165 (1,022) (1,262) Corporate 169 116 (152) (90) Total operating assets and liabilities 4,009 4,281 (1,174) (1,352) Non-operating assets and liabilities _ _ 813 981 (2,678) (3,026) Total assets and liabilities 4,822 5,262 (3,852) (4,378) A'Waal Repor'.Inc;>._,:,-, u,' 4 G4S plc Notes to the consolidated financial statements continued 6.Operating segments(continued) ------ --- — --—— — -- — 2013 2014 Restated Non-current operating assets by reportable segment and geographical area _ £m £m Africa 123. 133 Asia Middle East 359 383 Latin America 208 226 Europe 452 514 North America 479 5 1 6 UK&Ireland _ _ 964 1,019 Total segment assets 2,585 2,791 Corporate 68 45 Total non-current operating assets 2,653 2,836 Non-operating assets 217 245 Less:Non-current assets held for sale (2) (102) Total non-current assets 2,868 2,979 Non-operating assets and liabilities comprise financial assets and liabilities,taxation assets and liabilities and retirement benefit obligations. Included within operating and non-operating assets are£6m(2013:£I 79m)and£nil(2013:£41 m)respectively relating to disposal groups classified as held for sale.Included within operating and non-operating liabilities are£3m(2013:£93m)and£I m(2013:£40m)respectively relating to liabilities associated with disposal groups classified as held for sale.Disposal groups are analysed in note 25. Other information Impairment Impairment losses Depreciation losses Depreciation recognised and Capital recognised and Capital in income amortisation additions In income amortisation additions 2013 2013 2013 2014 2014 2014 Restated Restated Restated By reportable segment £m £m £m Em £m Ern Africa — 13 12 12 15 27 Asia Middle East — 28 30 5 33 40 Latin America — 18 12 — 21 14 Europe — 39 37 14 41 47 North America — 19 16 105 29 I I UK&Ireland 4 75 36 7 84 65 Head office — 3 2 7 2 3 Total 4 195 145 150 225 207 116 G4S plc Annual Report and Accounts 2014 7.Discontinued operations Operations qualifying as discontinued in 2014 mainly comprised the US Government Solutions business,sold in November 2014,the group's cash business in Canada,sold in January 2014,the group's business in Norway,also sold in January 2014,the group's business in Sweden,sold in September 2014 and the group's business in Costa Rica. The US Government Solutions business,the cash business in Canada and the business in Norway were also classified as discontinued as at 31 December 20 13. The results of the discontinued operations are presented below: 2013 2014 Restated Note Lm £m Revenue 391 766 Operating(loss)/profit before specific items (4) 10 Specific items (3) (23) Restructuring costs — (4) Acquisition-related amortisation and expenses (I) (4) Goodwill impairment — (80) Profrt/(loss)on disposal of discontinued operations 17 71 (3) Operating profit/(loss) 63' (104) Finance income — 1 Finance costs -i (2) Profit/(loss)before tax 63 (105) Tax —; (9) Operating profit/(loss)for the year 63` (1 14) The effect of discontinued operations on segment results is disclosed in note 6. The impairment of goodwill and other assets in 2013 relates to the US Government Solutions business and reduced the carrying value of its net assets down to their estimated recoverable amount Cash flows from discontinued operations included in the consolidated cash flow statement are as follows: ,, 2013 . 2014 Restated _ [m £m Net cash flows from operating activities(after tax) (12) 3 I 3 a Net cash flows from investing activities 152 (18) Net cash flows from financing activities (17) 19 123 32 Annual Report and Accounts 2014 G4S plc 117 Notes to the consolidated financial statements continued 8.Operating profit The income statement can be analysed as follows: -- — — 2013 2014 Restated Continuing operations Em £m Revenue 6,848 7,061 Cost of sales (5,546) (5,779) Gross profit 1,302 1,282 Administration expenses (1,040) (1,352) Share of profit from joint ventures 8. 8 Operating profitl(loss) 270 (62) Total specific items charged in the year were£56m(20 13:£315m)and restructuring costs of£29m(2013:£66m). Cost of sales Specific items included within cost of sales relate to the increase in provisions for legacy UK government contracts of£45m(2013:£27m) and other items of£5m(2013:£98m). Administration expenses Specific items relate to the re-measurement of the review of assets and liabilities of£27m(2013:£81 m)offset by a pension settlement gain of£21 m(2013:£nil)in the Netherlands. Restructuring costs were£29m(2013:£66m)relating to the re-organisation of the UK&Ireland business and programmes in Europe to accelerate best practice and identify back office synergies. Also included in administration expenses are amortisation costs of£58m(2013:£72m)and acquisition-related expenses of£1m(2013:£4m). In 2013 administration expenses also included a charge of£109m relating to the settlement on the UK Electronic Monitoring contract and two smaller contracts,a charge of£46m relating to goodwill impairment and were net of a£24m profit relating to the disposal of the group's secure data archiving business in Colombia. 9.Profit from operations Profit from continuing and discontinued operations has been arrived at after charging/(crediting): Continuing Discontinued Total Continuing Discontinued Total 2013 2013 2013 2014 2014 2014 Restated Restated Restated Notes Em Em Em Ern £m fm Cost of sales Cost of inventories recognised as an expense 99 — 99 105 6 I I I Onerous contracts 8 45 - 45 27 — 27 Other items 8 5 — 5 98 — 98 Administration expenses Review of assets and liabilities 8 27 3 30 81 24 105 Pension settlement gain 8 (21) — (21) — — — Restructuri ng costs 8 29 — 29 66 4 70 Amortisation of acquisition-related intangible assets 8 58 I 59 72 4 76 Acquisition-related expenses 8 I — I 4 — 4 Electronic Monitoring settlement 8 — — — 109 — 109 Goodwill impairment 8,18 — — — 46 80 126 Amortisation of other intangible assets 25 — 25 24 2 26 Depreciation of property,plant and equipment 108 3 I 1 1 114 9 123 (Profit)/loss on disposal of subsidiaries 17 — (71) (71) (24) 3 (21) Impairment of trade receivables 4 — 4 19 I 20 Litigation settlements — — I — I Research and development expenditure 10 — 10 5 — 5 Operating lease rentals payable 107- — 107 126 10 136 Operating sub-lease rentals receivable (14) — (14) (15) — (I 5) Share based payments 5 — 5 — — — 1 18 G4S plc Annual Report and Accounts 2014 I 0.Auditor's remuneration --------- — — ---- -- — -- — 2013 2014 Restated Lm £m Fees payable to the company's auditor for the audit of the company's annual report and accounts I 1 Fees payable to the company's auditor and its associates for other services: The audit of the company's subsidiaries pursuant to legislation 5 6 All other services I • Other services relates to the provision of tax and non-audit advisory services. The Audit Committee Report on page 69 outlines the company's established policy for ensuring that audit independence is not compromised through the provision by the company's auditor of other services. I.Staff costs and employees The average monthly number of employees,in continuing and discontinued operations,including executive directors was: 2013 2014 Restated By reportable segment and geographical area Number Number Africa 124,024 119,930 Asia Middle East 243,909 236,984 Latin America 76,061 75,137 Europe 66,346 72,154 North America 59,232 60,226 UK&Ireland 41,221 44,681 Head office 196. 173 Total average number of employees(excluding joint ventures) 610,989. 609,285 Average number of employees employed by joint ventures 20,476 19,850 Total average number of employees(including joint ventures) 631,465 629,135 Their aggregate remuneration,in continuing and discontinued operations,comprised: 2013 2014 Restated Lm £m Wages and salaries 4,243 4,561 Social security costs 489 560 Employee benefits 220 212 Total staff costs(excluding joint ventures) 4,952 5,333 Joint venture staff costs III 108 Total staff costs(including joint ventures) 5,063 5,441 Information on directors'remuneration,long-term incentive plans,pension contributions and entitlements is set out in the Directors' remuneration report on pages 70 to 84. Annual Report and Accounts 2014 G4S plc 119 Notes to the consolidated financial statements continued 12.Net finance expense -�'----—_ 2013 2014 Restated Em £m Interest income on cash,cash equivalents and investments 10 12 Other interest income I I Gain/(loss)arising from change in fair value of derivative financial instruments hedging loan notes 5 (28) (Loss)/gain arising from fair value adjustment to the hedged loan note items (5) 28 Total finance income I I 13 Interest on bank overdrafts and loans (23) (24) Interest on loan notes (91) (100) Net interest receivable on loan note related derivatives 11 12 Interest on obligations under finance leases (4) (4) Other interest charges (4) (5) Total group borrowing costs (III) (121) Net finance costs on defined retirement benefit obligations (22) (20) Total finance costs (133) (141) Net finance expense (122) (128) Included within group borrowing costs is a charge of£6m(2013:£6m)relating to cash flow hedges that were transferred from equity during the year: 13.Tax Continuing Discontinued Continuing Discontinued operations operations Total operations operations Total 2013 2013 2013 2014 2014 2014 Restated Restated Restated Em Em Em £m frn £m Current tax expense/(credit) UK corporation tax 11 — 11 10 — 10 Overseas tax 66 — 66 58 (4) 54 Adjustments in respect of prior years: UK corporation tax I — I I — I Overseas tax 12 (1) 11 _ 20 9 29 Total current tax expense/(credit) 90 :(I) 89 89 5 94 Deferred tax(credit)/expense (see note 34) Current year (20) I - (19) (23) (I) (24) Adjustments in respect of prior years (28) - . (28) (I 3) 5 (8) Total deferred tax(credit)/expense (48) I (47) (36) 4 (32) Total income tax expense for the year 42 — 42 53 9 62 UK corporation tax is calculated at 21.5%(2013:23.3%)of the estimated assessable profits for the period.Overseas tax is calculated at the corporation tax rates prevailing in the relevant jurisdictions. 120 G4S plc Annual Report and Accounts 2014 • The tax charge for the year can be reconciled to the profit per the income statement as follows: 2013 2014 Restated £m £m Profit/(loss)before tax Continuing operations 148' (190) Discontinued operations 63 (105) Total profrt/(loss)before tax 211 (295) Tax at UK corporation tax rate of 21.5%(2013:23.3%) (45) 69 Expenses that are not deductible in determining taxable profit (15) (47) Deferred tax recognised on purchased intangibles 15 — Profits on disposal of businesses not taxable 15 — Tax losses not recognised in the current year (26) (44) Different tax rates of subsidiaries operating in non-UK jurisdictions (4) (16) Movement in deferred tax balance due to reduction in UK rate to 20%from I April 2015 — (3) Adjustment for joint ventures 2 2 Adjustments for previous years 16 (23) Total income tax charge (42) (62) Effective tax rate for continuing and discontinuing operations 20% 21% The effective tax rate for continuing operations was 28%(2013:28%). The following tax charge/(credit)has been recognised directly in equity within the statement of comprehensive income: — ------ - Restated 2014 2013 Cm £m Tax relating to components of other comprehensive income Change in fair value of cash flow and net investment hedging financial instruments (6) 3 Actuarial profit on defined retirement benefit schemes 36 1 3, Other — I r Total tax debited to other comprehensive income 30 5 14.Dividends --- -- ----- -- - 2013 Pence DKK 2014 Restated per share per share Cm £m Amounts recognised as distributions to equity holders of the parent in the year Final dividend for the year ended 31 December 2012 5.54 0.4730 — 78 Interim dividend for the six months ended 30 June 2013 3.42 0.2972 — 52 Final dividend for the year ended 31 December 2013 5.54 0.4954 85 — Interim dividend for the six months ended 30 June 2014 3.42 0.3198 53 — _ 138 130 Proposed final dividend for the year ended 31 December 20 14 5.82 0.6041 90 The proposed final dividend is subject to approval by shareholders at the Annual General Meeting.If so approved,it will be paid on 12 June 2015 to shareholders who are on the UK register on 8 May 2015.The exchange rate used to translate it into Danish krone is that at 9 March 2015. Annual Report and Accounts 2014 G4S plc 121 Notes to the consolidated financial statements continued 15.Earnings/(loss)per share attributable to equity shareholders of the parent - - -- — - - — 2013 2014 Restated £m £m From continuing and discontinued operations Profrt/(loss)for the year attributable to equity shareholders of the parent 152 (365) Weighted average number of ordinary shares(m)(see note below) 1,545 1,452 Earnings/(loss)per share from continuing and discontinued operations(pence) Basic and diluted 9.8. 25.1 • From continuing operations Earnings/(loss) Profrt/(loss)for the year attributable to equity shareholders of the parent 152 (365) Adjustment to exclude(profit)/loss for the year from discontinued operations(net of tax) (63) 114 Profrt/(loss)from continuing operations 89 (251) Earnings/(loss)per share from continuing operations(pence) Basic and diluted 5.8p (I7.3)p From discontinued operations Earnings/(loss)per share from discontinued operations(pence) Basic and diluted 4.Ip (7.8)p From adjusted earnings Earnings/(loss) Profrt/(loss)from continuing operations 89 (251) Specific items 56 315 Restructuring 29 66 Amortisation of acquisition-related intangible assets 58 72 Goodwill impairment — 46 Acquisition-related expenses 1 4 Profit on disposal on subsidiaries — (24) Tax on amortisation and specific items (33) (20) Non-controlling interests'share of specific items (I) (7) Adjusted profit for the year attributable to equity shareholders of the parent 199 20 I Weighted average number of ordinary shares(m) 1,545 1,452 Adjusted earnings per share(pence) 12.9p 13.8p Adjusted earnings per share In the opinion of the directors the earnings per share figure of most use to shareholders is the adjusted earnings per share.This figure better allows the assessment of operational performance,the analysis of trends over time,the comparison of different businesses and the projection of future earnings. Share placing In August 20 13 the group completed a 9.99%share placing of 140,925,797 shares.The increase in average shares during 2014 reflects the full year impact of this share placing. �Z G4S plc Arruii Report a-.d t?c:aur._LC 4 I 6.Acquisitions Current year acquisitions The group did not undertake any material business combinations in the current year Prior year acquisitions The group undertook a number of business combinations in the prior year including the acquisition of Deposita,a cash solutions business in South Africa. The following table sets out the fair value to the group in respect of all acquisitions made in the prior year: Fair value 2013 acquisitions Eir, Intangible assets 15 Property,plant and equipment 2 Deferred tax assets 2 Inventories 4 Trade and other receivables 3 Cash and cash equivalents Trade and other payables (6) Borrowings (4) Deferred tax liabilities (3) Net assets acquired of subsidiary undertakings 14 Goodwill 4 ��; Total purchase consideration(paid in cash) 18 Adjustments were made to identifiable assets and liabilities on acquisition to reflect their fair value.These included the recognition of customer-related intangible assets amounting to£12m. From their respective dates of acquisition,the acquired businesses contributed£28m to prior year revenues,£4m to prior year operating profit before specific items and£3m to prior year profit for the part year they were under the group's ownership.If all acquisitions had occurred on I January 2013,group revenue for that year would have been£7,067m,operating profit before specific items would have been£418m and total loss for the year would have been£356m. 7, I a Annual Report and Accounts 2014 G4S plc 123 Notes to the consolidated financial statements continued 17.Disposal of subsidiaries During the current year the group disposed of its US Government Solutions business,its cash business in Canada,its business in Norway, its locks business in Finland and its business in Sweden. In the prior year the group disposed of its data solutions business in Colombia recognising a profit of£24m presented in continuing operations and its cash business in Slovakia resulting in a£3m loss presented in discontinued operations. The net assets and profit on disposal of operations disposed of were as follows: 2014 2013 fm fin Goodwill 54 — Acquisition-related intangible assets I — Property,plant and equipment and intangible assets other than acquisition-related 27 8 Other non-current assets .80; — Current assets 103 I I Liabilities (150) (5) Net assets of operations disposed 115 14 Less:recycling of cumulative translation reserve (13) — Net impact on statement of financial position due to disposals 102 14 Profit on disposal 71 : 21 Total consideration 173 35 Satisfied by. Cash received 16,1 35 Disposal costs (4) — Used to repay debt 16 — Total consideration relating to current year disposals 173 35 Additional consideration received in the current year relating to disposals completed in prior years 2 — Total consideration recognised in the current year 175; 35 Included in proceeds is£16m that was paid by the purchaser directly to the group's counterparties to repay existing debt at the time of disposal. 124 G4S plc Annual Report and Accounts 2014 18.Intangible assets Acquisition-related intangible assets Customer Other Total Goodwill Trademarks related Technology intangibles 2014 £m Em Em Em Em Em Cost At I January 2014 2,052 32 657 9 200 2,950 Acquisition of businesses - - I - - Additions - - - - 34 34 Disposals (13) - (I) - (I I) (25) Translation adjustments (13) - (4) - (3) (20) At 31 December 2014 2,026 32 653 9 220 2,940 ' Amortisation and accumulated impairment losses At I January 2014 (97) (31) (520) (6) (123) (777) Amortisation charge - - (58) (I) (25) (84) Disposals 3 - 3 - 8 14 Translation adjustments 7 - 2 - 2 At 31 December 2014 (87) (31) (573) (7) (138) (836) Carrying amount At I January 2014 1,955 I 137 3 77 2,173 At 31 December 2014 1,939 I 80 2 82 2,104 2013 Cost-- — ---- - - -- --- ----- ------- -- -- --- At I January 2013-restated 2,158 33 675 6 199 3,071 Acquisition of businesses 4 - 12 3 - 19 Additions - - - - 27 27 s Disposals - - - - (5) (5) f Reclassified as held for sale (45) (I) (18) - (14) (78) Translation adjustments (65) — (12) (7) (84) 1 At 3 I December 2013-restated 2,052 32 657 9 200 2,950 a Amortisation and accumulated impairment losses At 1 January 2013-restated (62) (30) (475) (5) (1 12) (684) Amortisation charge - (2) (73) (I) (26) (102) Impairment charge (46) - - - - (46) Disposals - - - - 4 4 Reclassified as held for sale - I 17 - 8 26 Translation adjustments I I - I 1 - 3 25 At 31 December 2013-restated (97) (31) (520) (6) (123) (/I/) Carrying amount At I January 2013-restated 2,096 3 200 I 87 2,387 At 31 December 2013-restated 1,955 I 137 3 77 2,173 An:-,..,at►.77:,:]‘;;:',irrr Accour-rs S 1 G4S plc Notes to the consolidated financial statements continued 18.Intangible assets(continued) • Goodwill allocation Goodwill acquired in a business combination is allocated to the cash-generating units(CGUs)which are expected to benefit from that business combination.A significant portion of the group's goodwill was generated by the merger of the security services businesses of Group 4 Falck and Securicor in 2004 which was accounted for as an acquisition of Securicor by Group 4 Falck Goodwill impairment testing The group tests tangible and intangible assets,including goodwill,for impairment on an annual basis or more frequently if there are indications that any of these assets may be impaired.The annual impairment test is performed prior to the year end when the budgeting process is finalised and reviewed post year end.The group's impairment test compares the carrying value of each CGU with its recoverable amount CGUs are identified on a country level basis including significant business units,as per the group's detailed management accounts. Under IAS 36'Impairment of Assets',an impairment is deemed to have occurred where the recoverable amount of a CGU is less than its carrying value. The recoverable amount of a CGU is generally determined by its value in use which is derived from discounted cash flow calculations.The key inputs to the calculations are described below.In rare circumstances,where market prices can be ascertained(for example through recent transactions or by reference to normal industry standard multiples),the fair value less costs to sell is used as a basis for the recoverable amount In the current year the value of goodwill in the UK cash business and the Brazil security business was supported by this valuation method. Forecast cash flows All operating countries in the group are required to submit a budget for the next financial year(for the current year test this is for the year ended 31 December 2015)and their strategic plan forecasts for the following two years(in this case the years ended 31 December 2016 and 31 December 2017). The revenue figures submitted as part of this exercise are used to derive a growth rate for the discounted cash flow calculation(see the growth rate table below).The group applies a 10%forecast risk to reduce revenue forecasts in each year to reflect the uncertainties inherent in estimating future revenue streams. Forecast cash flows are adjusted from year 4 onwards by applying a growth rate as detailed in the growth rate section,and discounted using specific risk-adjusted discount rates as described in the discount rate section. Growth Rate Growth rates are determined from the budgeted and forecast revenue in years 1-3 and then projected using the lower of the forecast growth rate and the country's nominal growth rate(per the IMF)to a terminal growth rate in year 15 of I%for developed markets or 3%for emerging markets.This is detailed in the table below Growth assumptions Year I Year 2 Year 3 Year 4 Year 5 Year 6 to 15 Terminal value Input Budget' Forecast' Forecast' Projected—to Projected—to Projected to Estimate of year 5 at lower year 5 at lower year 15 residual growth: of forecast or of forecast or `terminal growth' developed 1%; country growth country growth emerging 3% Example 8% 7% 6% 5% 4% 4%to I% I% over 10 years * Budgets and forecasts are reviewed by the group Board In the above example,budgeted year I growth rate is 8%,forecast growth in year 2 is 7%and in year 3 is 6%.The country growth rate is 4%so the growth rate is reduced each year to reach 4%at year 5.From year 6 the growth rate is then reduced over the next ten years to provide a terminal value growth of I%(the example is based on a developed market CGU). 126 G4S plc Annual Report and Accounts 2014 Discount rate Discount rates are calculated for each CGU based on the relevant local risk-free rate adjusted for that CGU's specific risk-adjusted equity risk premium.For the impairment test performed for the year ended 3 I December 2014 the group has revised the calculation of the pre-tax discount rates applied to certain CGU's.This revision adjusts for the current low-interest rate environment by increasing abnormally low pre-tax discount rates.Details of how the other key discount rate inputs are derived are given below. Input How determined 31 Dec 2014 Risk-free rate The risk-free rate is generally obtained from the local governments 10 year gilt/bond rates. 2.35%in UK Where these are unavailable the group uses the closest available information(e.g.shorter term gift rates). UK equity risk premium The equity risk premium is determined for the UK by analysing a variety of sources including 5.0%in UK economic studies carried out by Barclays Capital and others. Operating country Specific local equity risk premiums are based on the UK risk premium adjusted for specific equity risk premium economic and financial risks.The sources for these adjustments are the Institutional Investor Magazine and the IMF website as well as other studies by independent economists. Leveraged beta Beta is a risk adjustment applied to the discount rate to reflect the risk of the group's 0.8 for the operating companies relative to the market as a whole.The group's beta is obtained from group independent market studies and is adjusted for the appropriate leverage of the group. Tax rate Local tax rates are applied to each CGU to calculate pre-tax cost of equity. 21%in UK Debt margin The group applies a margin to the cost of debt for each CGU,with a higher margin applied to 1.5%in UK those CGUs operating in higher risk environments.These margins range from 1.5%in less risky CGUs(for example in the UK)to 7%in more risky CGUs(e.g.6.5%in Yemen). Weighted average The weighted average cost of capital is calculated by weighting the cost of equity and the cost 8.7%in UK cost of capital(pre-tax) of debt by the applicable debtequity ratio at the year end. The table below sets out the pre-tax discount rates and growth rates used for the group's significant countries: Goodwill Discount rate Discount rate Growth rate' Growth rate Goodwill 2013 2014 2013 2014 2013 2014 Restated % % % % £m £m South Africa 16.3% 16.0% 6.7% 8.5% 33 30 Brazil 20.5% 18.4% 7.6% 8.0% 92 98 21 United States of America 8.5% 9.0% 4.6% 5.3% 407 384 g Hong Kong 7.9% 9.2% 7.3% 7.5% 41 38 E Malaysia 10.4% 10.4% 7.9% 7.4% 39 40 3 n Estonia 7.7% 9.2% 5.9% 6.2% 59 63 a Israel 8.5% 10.4% 5.2% 1.0% 34 36 Netherlands 7.2% 8.9% 2.2% 3.1% 140 150 United Kingdom 8.7% 8.6% 4.0% 4.3% 710 710 Other(all allocated) 384 406 Total goodwill 1,939 1,955 • Lower of year 5 country growth rate per the IMF and implied year 3 business forecast growth rate. Within the UK,the most significant CGUs and their goodwill carrying values are UK Care and Justice(£247m),UK Cash Solutions(£205m) and UK Secure Solutions(£1 02m).Within the USA,the most significant CGU is US Commercial Security Solutions with goodwill of£321m. Arnual Re4sor!ryo..Accour i. 13 G4S plc !2% I Notes to the consolidated financial statements continued 18.Intangible assets(continued) Impairment There were no impairments recognised during 2014.During the year ended 31 December 2013,impairment charges totaling£46m were recorded in respect of the group's goodwill,in the following countries: — —— I 2013 £m Democratic Republic of Congo (4) Malawi (2) Nigeria (4) Brazil (24) Ireland (5) Other impaired (7) Total (46) The impairment charge in Brazil was driven by losses incurred in the first half of 2013 in the technology business and a general turndown in trading.The impairment in Ireland was as a result of the economic challenges in the country and the specific situation of the group's cash business.Certain CGUs in Africa were impaired mainly as a result of worsening economic and political circumstances in those countries. Sensitivity to key assumptions The key assumptions used in the discounted cash flow calculations relate to the discount rates and growth rates used.The table below shows the additional impairment that would arise from an increase in discount rates by I%and 3%(with all other variables being equal,for example,taking the UK base rate from 8.7%to 9.7%and 11.7%)or a decrease in growth rates by I%and 3%(with all other variables being equal,for example,taking the UK growth rate from 4.0%to 3.0%and 1.0%)for the group in total and for each of its significant countries. Additional impairment Additional impairment Base 1% 3% Base I% 3% Goodwill discount increase increase growth decrease decrease 2014 rate 2014 2014 rate' 2014 2014 £m 2014 £m £m 2014 £m £m South Africa 33 16.3% — — 6.7% — — Brazil 92 20.5% 6 16 7.6% 3 7 United States of America 407, 8.5% — — 4.6%; — — Hong Kong 41 7.9% — — 7.3% — — Malaysia 39 10.4% — — 7.9% — — Estonia 59 7.7% — 12 5.9% — Israel 34 8.5% — — 5.2% — — Netherlands 140 7.2% — — 2.2% — — United Kingdom 710 8.7% 27 72 4.0% 11 33 Other(all allocated) 384 6 17 3 8 Total 1,939 39 117 17 49 • Lower of country growth rate per IMF and implied year 3 business forecast growth rate. I 128 G4S plc Annual Report and Accounts 2014 I i 19.Property plant and equipment Land and Equipment buildings and vehicles Total 2014 Em Em Em Cost --- - ---------- ---At I January 2014 241 993 1,234 Additions 12 98 110 Disposals — (140) (140) Reclassified as held for sale — (5) (5) Translation adjustments (5) (27) (32) At 3 I December 2014 248 919 1,167 Depreciation and accumulated impairment losses At I January 2014 (79) (671) (750) Depreciation charge (15) (96) (III) Disposals 6 112 118 Reclassified as held for sale — 3 3 Translation adjustments 2 21 23 At 3 I December 2014 (86) (631) (717) Carrying amount At I January 2014 162 322 484 At 31 December 2014 162 288 450 2013 Cost ------ -- -- -- ---- ---At I January 2013—restated 237 980 1,217 Acquisition of businesses — 2 2 Additions 21 138 159 Disposals (10) (63) (73) E Reclassified as held for sale (5) (35) (40) 1 Translation adjustments (2) (29) (31) At 3 I December 2013—restated 241 993 1,234 Depreciation and accumulated impairment losses At I January 20 13—restated (77) (634) (71 1) Depreciation charge (15) (108) (123) Disposals 8 47 55 Reclassified as held for sale 4 22 26 Translation adjustments I 2 3 At 3 I December 2013—restated (7) (671) (750) Carrying amount At I January 2013—restated 160 346 506 At 31 December 2013—restated 162 322 484 Annual Report and Accounts 2014 G4S plc 129 Notes to the consolidated financial statements continued 19.Property plant and equipment(continued) The net book value of equipment and vehicles held under finance leases was£34m(2013:£52m).Accumulated depreciation on these assets was£100m(2013:£I 24m)and the depreciation charge for the year was£14m(2013:£17m). The rights over finance leased assets are effectively security for lease liabilities.These rights revert to the lessor in the event of default. The net book value of equipment and vehicles includes£28m(2013:£26m)of assets leased by the group to third parties under operating leases.Accumulated depreciation on these assets was£110m(2013:£97m)and the depreciation charge for the year was£8m(2013:am). The net book value of land and buildings comprises freeholds of£85m(2013:£73m),long leaseholds of£19m(2013:£20m)and short leaseholds of£58m(2013:£69m). 20.Investment in joint ventures The following is summarised financial information for the group's interest in immaterial joint ventures,based on the amounts reported in the group's consolidated financial statements: 2013 2014 Restated £m Ern Carrying amount of interests in joint ventures 41 34 Group's share of Profit from continuing operations 8 8 Other comprehensive income - (5) Total comprehensive income 43, 3 21.Inventories 2013 2014 Restated £m fm Raw materials 12' 14 Work in progress I I 9 Finished goods including consumables 85' 89 Total inventories X108., 112 22.Investments Investments comprise primarily listed securities of£52m(2013:£29m)held by the group's wholly-owned captive insurance subsidiaries. These are stated at their fair values based on quoted market prices consistent with level I of the valuation hierarchy.Use of these investments is restricted to the settlement of claims against the group's captive insurance subsidiaries. 130 G4S plc Annual Report and Accounts 2014 23.Trade and other receivables 2013 2014 Restated Notes Em £m Within current assets Trade debtors 1,129 1,122 Allowance for doubtful debts (50) (37) Other debtors(including tax receivable) 175 183 Prepayments and accrued income 73 74 Amounts due from construction contract customers 24 I 1 ; 23 Derivative financial instruments at fair value 30 33 15 Total trade and other receivables included within current assets 1,371 1,380 Within non-current assets Derivative financial instruments at fair value 30 57 74 Other debtors 40 30 Total trade and other receivables included within non-current assets 97 104 Credit risk on trade receivables There is limited concentration of credit risk with respect to trade receivables,as the group's customers are both large in number and • dispersed geographically in over 110 countries.The group's largest customer is the UK Government which comprises approximately 10% (2013:13%)of the total trade debtor balance as at 31 December 2014.Group companies are required to follow the Group Finance Manual guidelines with respect to assessing the credit worthiness of potential customers.These guidelines include processes such as obtaining approval for credit limits over a set amount,performing credit checks and assessments and obtaining additional security where required. Credit terms vary across the group and can range from 0 to 90 days to reflect the different risks within each country in which the group operates.There is no group-wide rate of provision,and provision is made for debts that are past due according to local conditions and past default experience. The movement in the allowance for doubtful debts is as follows: —i— _ -- 2013 2014 Restated Em £m At I January (37) (44) Amounts written off during the year 4 20 k Increase in allowance (17). (13) a At 31 December (50) (37) The ageing of trade debtors,net of allowance for doubtful debt,is as follows: 2013 2014 Restated £m £m Not yet due 864 859 1-30 days overdue 124 128 3 I-60 days overdue 42. 26 61-90 days overdue 19 27 91-180 days overdue 24 37 181-365 days overdue 6 6 Over 365 days overdue _ — 2 Net trade debtors I,079 I,085 No additional provision has been made on the above amounts as there has not been a significant change in credit quality and the group believes that the amounts are still recoverable.The group does not hold any collateral over these balances.The proportion of trade debtors at 31 December 2014 that were overdue for payment was 20%(2013:21%).The group's DSO measure(days sales outstanding)based on revenue for the last 90 days of the year was 48 days(2013:49 days). The directors believe the fair value of trade and other receivables,being the present value of future cash flows,approximates to their book value. Annual Report and Accounts 2014 G4S plc 131 Notes to the consolidated financial statements continued 24.Construction contracts — --—-- — --- 2013 2014 Restated Notes £m £m Amounts due from contract customers included in trade and other receivables 23 I I 23 Amounts due to contract customers included in trade and other payables 29 (2) (2) Net balances relating to construction contracts 9 21 Contract costs incurred plus recognised profits less recognised losses to date 127 287 Less:progress billings ('I'18) (266) Net balances relating to construction contracts 9 21 At 31 December 2014,advances received from customers for contract work amounted to£4m(2013:£4m).There were no material retentions held by customers for contract work at either balance sheet date.All trade and other receivables arising from construction contracts are due for settlement within one year: 25.Disposal groups classified as held for sale At 3 I December 2014,disposal groups classified as held for sale included the assets and liabilities associated with the group's business in Costa Rica. At 31 December 2013,disposal groups classified as held for sale included the assets and liabilities associated with the group's cash business in Canada and the group's business in Norway,both of which were sold in January 2014.Disposal groups held for sale at 31 December 2013 also included the assets and liabilities associated with the classified US Government Solutions business which was sold in November 2014. The major classes of assets and liabilities comprising the operations classified as held for sale are as follows: 2014 2013 £m £m ASSETS Goodwill — 45 Acquisition-related intangible assets — I Property,plant and equipment and intangible assets other than acquisition-related 2 20 Interest in associates =° 12 Trade and other receivables(non-current) — I 0 Deferred tax asset — 14 Trading investments — 12 Inventories — 2 Trade and other receivables(current) 4 89 Cash and cash equivalents — 15 Total assets classified as held for sale 6 220 LIABILITIES Bank loans (:l) (19) Trade and other payables (3) (93) Retirement benefit obligations — (17) Deferred tax liability _ (4) Total liabilities associated with assets classified as held for sale (4) (133) Net assets of disposal group 2. 87 132 G4S plc Annual Report and Accounts 2014 26.Cash,cash equivalents and bank overdrafts A reconciliation of cash and cash equivalents reported within the consolidated cash flow statement to amounts reported within the consolidated statement of financial position is presented below -------— -- ------ — — -- -- 2013 2014 Restated tm £m Cash and cash equivalents 409 532 Bank overdrafts (18) (9) Cash,cash equivalents and bank overdrafts included within disposal groups classified as held for sale — 15 Total cash,cash equivalents and bank overdrafts 391 538 Cash and cash equivalents comprise principally short-term money market deposits,current account balances and group-owned cash held in ATM machines and at 3 I December 2014 bore interest at a weighted average rate of 0.8%(2013:0.7%).The credit risk on cash and cash equivalents is limited because wherever possible and in accordance with Group Treasury policy the cash is placed with bank counterparties that hold investment grade credit ratings assigned by international credit-rating agencies. The group operates a mufti-currency notional pooling cash management system which included over I40 group companies at 31 December 2014.The group met the conditions of IAS 32'Financial Instruments:Presentation'allowing balances within this cash pool to be offset for reporting purposes.At 31 December 2014£300m(2013:£422m)of the cash balances and the equivalent amount of the overdraft balances were offset Cash and cash equivalents of£26m(2013:£39m)are held by the group's wholly-owned captive insurance subsidiaries.Their use is restricted to the settlement of claims against the group's captive insurance subsidiaries. simA 27.Bank overdrafts,bank loans and loan notes 2013 2014 Restated Em £m Bank overdrafts 18 9 Bank loans 165 167 Loan notes' 1,899 1,982 Total bank overdrafts,bank loans and loan notes 2,082, 2,158 The borrowings are repayable as follows: On demand or within one year 174 97 In the second year 129 95 3 In the third to fifth years inclusive 1,648 1,392 a After five years _ _ 131 574 Total bank overdrafts,bank loans and loan notes 2,082 2,158 Less:Amount due for settlement within 12 months(shown under current liabilities): Bank overdrafts (18) (9) Bank loans (60) (27) Loan notes (96) (61) (174) (97) Amount due for settlement after 12 months 1,908 2,061 • Loan notes includes£687m(2013:£7 16m)of private loan notes and£1,212m(2013:£I,266m)of public loan notes. Annual Report and Accounts 2014 G4S plc 133 Notes to the consolidated financial statements continued 27.Bank overdrafts,bank loans and loan notes(continued) Analysis of bank overdrafts,bank loans and loan notes by currency Sterling Euros US Dollars Others Total £m £m £m Cm £m Bank overdrafts — — I . 3 14 – . 18-; Bank loans 48 – 108 9 165 Loan notes 419 858 622 – 1,899 At 31 December 2014 468 861 744 9 2,082 Bank overdrafts I 5 3 – 9 Bank loans – 37 80 50 167 Loan notes 419 915 648 – 1,982 At 3 I December 2013–restated 420 957 731 50 2,158 Of the borrowings in currencies other than sterling,£926m(2013:£I,0 14m)is designated as a net investment hedge. The weighted average interest rates on bank overdrafts,bank loans and loan notes at 3 I December 2014 adjusted for hedging were as follows: 2014 2013 % % Bank overdrafts 0.9 1.1 Bank loans 2.3 3.5 Private loan notes 4.3 4.2 Public loan notes 4.1 4.2 At 31 December 2014,the group's committed bank borrowings comprised a£I.1 bn mufti-currency revolving credit facility with a maturity date of March 2016.At 31 December 2014,undrawn committed available facilities amounted to£998m(2013:£965m).Interest on all committed bank borrowing facilities is at prevailing Libor or Euribor rates,dependent upon the period of drawdown,plus an agreed margin, and re-priced within one year or less. In January 2015 the revolving credit facility was refinanced.The new facility is£I.Obn and matures in January 2020,with two one-year extension options exercisable with lending bank consent on the facility's first and second anniversary.If exercised the maturity date would extend to January 2021 and January 2022 respectively. Borrowing at floating rates exposes the group to cash flow interest rate risk.The management of this risk is discussed in note 31. The group issued fixed rate loan notes in the US Private Placement market totalling US$550m(£353m)on I March 2007.$100m of these notes matured and were repaid on I March 2014,with the remaining notes maturing in March 2017($200m),March 2019($145m)and March 2022($105m). The group issued further fixed rate loan notes in the US Private Placement market totalling US$514m(£329m)and£69m on 15 July 2008. $65m of these notes matured and were repaid on 15 July 2013,with the remaining notes maturing in July 2015($150m),July 2016(£25m), July 2018($224m)and(£44m),and July 2020($75m). The group issued its inaugural public note of£350m using its European Medium Term Note Programme on 13 May 2009.The note matures in May 2019. During 2012 the group issued two further public notes,a€600m note issued in May 2012 maturing May 2017 and a€500m note issued in December 2012 maturing December 2018. The committed bank facilities and the private loan notes are subject to one financial covenant(net debt to EBITDA ratio where EBITDA is calculated as underlying group PBITA plus depreciation and amortisation of non-acquisition related intangible assets)and non-compliance with the covenant may lead to an acceleration of maturity.The group complied with the financial covenant throughout the year to 31 December 2014 and the year to 3 I December 2013.The group has not defaulted on,or breached the terms of,any material loans during the year. Bank overdrafts,bank loans,the loan notes issued in July 2008(with the exception of£44m),€5 10m of the loan notes issued in May 2012 and€380m of the loan notes issued in December 2012 are stated at amortised costThe loan notes issued in March 2007,£44m of the loan notes issued in July 2008,the loan notes issued in May 2009,€90m of the loan notes issued in May 2012 and€1 20m of the loan notes issued in December 2012 are stated at amortised cost recalculated at an effective interest rate current at the balance sheet date as they are part of a fair value hedge relationship. US$200m(£1 28m)of the loan notes issued in July 2008 have a fair value market gain of£28m(2013:gain£21 m)resulting from the cross currency swaps fixing the sterling value of this portion of the loan notes at an exchange rate of 1.975. 134 G4S plc Annual Report and Accounts 2014 E325m(f252m)of the loan notes issued in May 2012 have a fair value market loss of£14m(2013:gain£5m)predominately resulting from the cross currency swaps fixing the sterling value of this portion of the loan notes at an exchange rate of 1.222 and partly resulting from the cross currency swaps fixing the sterling and euro interest rates. €350m(£272m)of the loan notes issued in December 2012 have a fair value market loss of£5m(2013:gain£16m)predominately resulting from the cross currency swaps fixing the sterling value of this portion of the loan notes at an exchange rate of 1.233 and partly resulting from the cross currency swaps fixing the sterling and euro interest rates. 28.Obligations under finance leases - -------- Present Present value of Minimum Value of minimum Minimum lease minimum lease lease payments lease payments payments 2013 payments 2013 2014 Restated 2014 Restated Em Em Em Ern Amounts payable under finance leases: Within one year 16 23 14 2I In the second to fifth years inclusive 29 3I 24 28 After five years 3 3 2 3 48 57 40 52 Less:future finance charges on finance leases 8) (5) Present value of lease obligations 40.. 52 tre A.,,S1 daT. AI Less:amount due for settlement within 12 months(shown under current liabilities) (114). (21) Amount due for settlement after 12 months 26 3 I • It is the group's policy to lease certain of its fixtures and equipment under finance Ieases.The weighted average lease term is seven years. For the year ended 31 December 2014,the weighted average effective borrowing rate was 8.2%(2013:7.3%).Interest rates are fixed at the contract date.All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. The group's obligations under finance leases are secured by the lessors'charges over the leased assets. 29.Trade and other payables I 2013 2014 Restated Notes Em £m a Within current liabilities: Trade creditors I85 209 Amounts due to construction contract customers 24 '2 2 Other taxation and social security costs 185 200 Holiday pay accruals 318 313 Other creditors 108 132 Accruals and deferred income 280 308 Derivative financial instruments at fair value 30 25 2 Total trade and other payables included within current liabilities 1,103 1,166 Within non-current liabilities: Derivative financial instruments at fair value 30 12 2 Other creditors _ I I 11 Total trade and other payables included within non-current liabilities 23 13 Trade and other payables comprise principally amounts outstanding for trade purchases and ongoing costs.The average credit period taken for trade purchases is 36 days(2013:36 days). Annual Report and Accounts 2014 G4S plc 135 • • Notes to the consolidated financial statements continued • • 30.Derivative financial instruments • , The carrying values of derivative financial instruments at the balance sheet date are presented below. Assets Assets Liabilities Liabilities 2014 2013 2014 2013 £m - Em £m £m Cross currency swaps designated as cash flow hedges 28 42 19 — Interest rate swaps designated as cash flow hedges — — I 2 Interest rate swaps designated as fair value hedges 61 46 12 Foreign exchange forward transactions I — — — Commodity swaps _ —, 1 5 • 90 89 37 4 Less:non-current portion (57) (74) (12) (2) Current portion 33 15 25 2 Derivative financial instruments are stated at fair value,measured using techniques consistent with Level 2 of the valuation hierarchy(inputs other than quoted prices in active markets that are observable for the asset and liability,either directly or indirectly).The source of the market prices is Bloomberg and in addition the third party relationship counterparty banks.The relevant currency yield curve is used to forecast the floating rate cash flows anticipated under the instrument which are discounted back to the balance sheet date.This value is compared to the original transaction value giving a fair value of the instrument at the balance sheet date. • The mark to market valuation of the derivatives has fallen by£32m during the year. The interest rate,cross currency,foreign exchange and commodity swaps treated as cash flow hedges have the following maturities: . Assets Assets Liabilities Liabilities 2014 2013 2014 2013 Cm Em Cm £m Within one year 2I I 4 In the second year • — 16; 2 In the third year — - 14 2 In the fourth year . 7 5 5 — In the fifth year or greater — 21 — — Total carrying value 28 43 25 3 The projected settlement of cash flows(including accrued interest)associated with derivatives treated as cash flow hedges: —`— i---Assets Assets Liabilities Liabilities 2014 2013 2014 2013 • - Cm £m Cm Em Within one year 22! 1 ' 9 6 In the second year — 16 6, - 4 In the third year — 7 4 In the fourth year 7 I I I , — In the fifth year or greater — 26 — — Total cash flows 29 54 23 14 • • • • • • 136 G4S plc Annual Report and Accounts 2014 • • • • • • 31.Financial risk • Capital management Post the year end the group refinanced its£1.1 bn mufti-currency revolving credit facility with a£I.Obn facility that was signed on 7 January 20 l 5.The new facility is for five years with two extension options exercisable by the banks that potentially results in the facility having a life of seven years. In August 2014,Standard&Poors confirmed the group's long term credit rating of BBB-Stable.The group will continue to manage its capital structure so that it retains an investment grade rating. The group's policy is to maintain a net debt to EBITDA ratio of less than 2.5 times.At the end of 2014 the ratio was 2.8 times which reflects the Electronic Monitoring contract settlementThe ratio is expected to steadily decline as the benefits from the restructuring and business transformation programmes take effect. At 31 December 2014 the group had£998m of available and undrawn facilities from its committed£1.1 bn bank facility.Following the successful refinancing of its committed bank facility in January 2015,the group has no significant maturity until May 2017 and has a medium to long-term debt maturity profile.The group is currently well placed to access finance from the debt capital markets and the bank market if required.Borrowings are principally in sterling,US dollars and Euros reflecting the geographies of significant operational assets and profits. • Liquidity risk The group mitigates liquidity risk by ensuring there are sufficient undrawn committed facilities available to it For more details of the group's bank overdrafts,bank loans and loan notes see note 27. The percentage of available,but undrawn committed facilities during the course of the year was as follows: 31 December 2013 32% 3I March 2014 32% 30 June 2014 33% 30 September 2014 32% 31 December 2014 34% To reduce re-financing risk,group treasury obtains finance with a range of maturities and hence minimises the impact of a single material source of finance terminating on a single date. Re-financing risk is further reduced by group treasury opening negotiations to either replace or extend any major medium-term facility at least 12 months before its termination date. • • • • • • • 3 Annual Report and Accounts 20 14 G4S plc 137 • Notes to the consolidated financial statements continued • 3 I.Financial risk(continued) Maturity profile of loans and borrowings The contractual maturities of financial assets and liabilities,together with the carrying amounts in the statement of financial position, including interest payments,estimated based on expectations at the reporting date,are shown below. Total Carrying Fair contractual Within I 2-5 Over 5 31 December 2014 Notes Amount Value cash flows year years years Investments 22 60 60 60 60 — — Derivative financial instruments(interest rate swaps) 30 49 49 65 18 43 4 Financial assets designated at fair value through profit or loss 109 109 125 78 43 4 Derivative financial instruments (foreign exchange forwards) 30 I I 1 I — — Derivative financial instruments (cross currency swaps) 30 28 28 28 21 7 — Financial assets designated as cash flow hedges 29 29 29 22 7 — Net trade receivables 23 1,079 1,079 1,079 1,079 — — Cash and cash equivalents 26 409 409 409 409 — — Loans and receivables 1,488 1,488 1 488 1,488 - . Loan notes (issued May 2009,7.75%,maturing 2019) 27 (354) (354) (486) (27) (459) — Loan notes (issued March 2007,5.86%-6.06%,maturing 2014-22) 27 (330) (330) (363) (17) (268) (78) Financial liabilities designated as fair value hedges (684) (684) (849) (44) (727) (78), Derivative financial instruments(cross currency swaps) 30 (19) (19) (17) (4) (13) — Derivative financial instruments(interest rate swaps) 30 (I) (I) (I) (I) — — Derivative financial instruments(commodity swaps) 30 (5) (5) (5) (4) (1) — Financial liabilities designated as cash flow hedges (25) (25) (23) (9) (14) — Loan notes (issued July 2008,6.09%-7.56%,maturing 2015-20)* 27 (357) (385) (439) (121) (267) (51) Loan notes (issued May 20 12,2.875%,maturing 20 17)' 27 (467) (478) (506) (13) (493) — Loan notes . (issued December 2012,2.625%,maturing 2018)' 27 (391) (399) (429) (10) (419) Bank loans 27 (165) (165) (165) (60) (105) — Overdrafts 27 (18) (18) (18) (18) — — Finance lease liabilities 28 (40) (40) (40) (I 4) (24) (2) Trade payables 29 (185) (185) (185) (185) — — Other liabilities _ 29 (I I) (I I) (I I) — (I I) — Financial liabilities measured at amortised cost (1,634) (1,681) (1,793) (42 1) (1,319) (53) • £44m of July 2008 loan notes,€90m(£70m)of May 2012 loan notes and E 120m(£93m)of December 2012 loan notes are recorded at fair value through profit or loss. 138 G4S plc Annual Report and Accounts 2014 — — -- Total Carrying Fair contractual Within I 2-5 Over 5 Amount Value cash flows year years years 31 December 2013 Notes Restated Restated Restated Restated Restated Restated Investments 22 39 39 39 39 — — . Derivative financial instruments(interest rate swaps) 30 46 46 53 16 35 2 Financial assets designated at fair value through profit or loss 85 85 92 55 35 2 Derivative financial instruments(commodity swaps) 30 I I I I — — Derivative financial instruments (cross currency swaps) 30 42 42 42 (3) 45 — ' Financial assets designated as cash flow hedges 43 43 43 (2) 45 — Net trade receivables 23 1,085 1,085 I,085 1,085 — — Cash and cash equivalents 26 532 532 532 532 — — Loans and receivables I,617 1,617 1,617 1,617 — — Loan notes )•:' k; (issued March 2007,5.77%-6.06%,maturing 2014-22) 27 (377) (377) (420) (78) (175) (167) Derivative financial instruments(interest rate swaps) 30 (1) (1) (I) I (2) — `` Financial liabilities designated as fair value hedge (378) (378) (421) (77) (177) (167) Derivative financial instruments(interest rate swaps) 30 (2) (2) (3) (2) (I) — '� Derivative financial instruments(commodity swaps) 30 (I) (I) (I) — (1) — Financial liabilities designated as cash flow hedges (3) (3) (4) (2) (2) — Loan notes (issued July 2008,6.09%-7.56%,maturing 2015-20) 27 (340) (381) (418) (23) (344) (51) • Loan notes(issued May 2009,7.75%,maturing 2019) 27 (350) (376) (513) (27) (109) (377) "a`' Loan notes I (issued May 2012,2875%,maturing 2017)' 27 (500) (508) (556) (14) (542) — i Loan notes (issued December 2012,2.625%,maturing 2018)' 27 (415) (410) (471) (I I) (460) — Bank loans 27 (167) (167) (167) (27) (140) — Overdrafts 27 (9) (9) (9) (9) — — Finance lease liabilities 28 (52) (52) (52) (21) (28) (3) Trade payables 29 (209) (209) (209) (209) — — Other liabilities 29 (I I) (I I) (I I) — (I I) — Financial liabilities measured at amortised cost (2,053) (2,123) (2,406) (341) (1,634) (431) The gross cash flows disclosed in the tables above represent the contractual undiscounted cash flows relating to derivative financial assets and liabilities held for risk management purposes and which are usually not closed out before contractual maturity.The disclosure shows net cash flow amounts for derivatives that are net cash-settled and gross cash inflow and outflow amounts for derivatives that have simultaneous gross cash settlement—e.g.forward exchange contracts. • E90m(£75m)of May 2012 loan notes and E 1 20m(E I OOm)of December 2012 loan notes are recorded at fair value through profit or loss. Annual Report and Accounts 2014 G4S plc 139 Notes to the consolidated financial statements continued 3 I.Financial risk(continued) Market risk Currency risk and forward foreign exchange contracts The group conducts business in many currencies.Transaction risk is limited since,wherever possible,each business operates and conducts its financing activities in local currency.However,the group presents its consolidated financial statements in sterling and it is in consequence subject to foreign exchange risk due to the translation of the results and net assets of its foreign subsidiaries.The group hedges a substantial proportion of its exposure to fluctuations in the translation into sterling of its overseas net assets by holding loans in foreign currencies. Translation adjustments arising on the translation of foreign currency loans are recognised in equity to match translation adjustments on foreign currency equity investments as they qualify as net investment hedges. At 3 I December 2014,the group's US dollar and Euro net assets were approximately 78%and 74%respectively hedged by foreign currency loans(2013:US dollar 82%,Euro 59%). Cross currency swaps with a nominal value of£101m are in place hedging the foreign currency risk on US$200m of the second US Private Placement notes issued in July 2008,effectively fixing the sterling value of this portion of debt at an exchange rate of 1.9750. Cross currency swaps with a nominal value of£266m were arranged to hedge the foreign currency risk on€325m of the Euro public notes issued in May 2012,effectively fixing the sterling value of this portion of debt at an exchange rate of 1.2217. Cross currency swaps with a nominal value of£284m were arranged to hedge the foreign currency risk on€350m of the Euro public notes issued in December 2012,effectively fixing the sterling value of this portion of debt at an exchange rate of 1.2332. Assuming a 1%appreciation of sterling against the US dollar and the Euro,the fair value net gain on the cross currency swaps which hedge part of the currency loan notes would be expected to fall by£6m. Interest rate risk and interest rate swaps Borrowing at floating rates as described in note 27 exposes the group to cash flow interest rate risk,which the group manages within policy limits approved by the directors.Interest rate swaps and,to a limited extent,forward rate agreements are utilised to fix the interest rate on a proportion of borrowings on a reducing scale over forward periods up to a maximum of five years.At 3 I December 2014 the nominal value of such contracts was£103m(in respect of US dollar)(2013:£97m)and£54m(in respect of Euro)(2013:£37m);their weighted average interest rate was 1.3%(US dollar)(2013:1.3%)and 0.6%(Euro)(2013:2.8%),and their weighted average period to maturity was three years.All the interest rate hedging instruments are designated and fully effective as cash flow hedges and movements in their fair value have been deferred in equity. The US Private Placement market is predominantly a fixed rate market,with investors preferring a fixed rate return over the life of the loan notes.At the time of the first issue in March 2007,the group was comfortable with the proportion of floating rate exposure not hedged by interest rate swaps and therefore rather than take on a higher proportion of fixed rate debt arranged fixed to floating swaps effectively converting the fixed coupon on the Private Placement to a floating rate.Following the swaps the resulting average coupon on the US Private Placement is LIBOR+60bps.These swaps have been documented as fair value hedges of the US Private Placement fixed interest loan notes,with the movements in their fair value posted to profit and loss at the same time as the movement in the fair value of the hedged item. The interest on the US Private Placement notes issued in July 2008,the GBP public notes issued in May 2009,5 I Om of the Euro public notes issued in May 2012 and 380m of the Euro public notes issued in December 2012 was initially kept at fixed rate.In April 2014,the interest rate on£44m of the US Private Placement notes issued in July 2008 and on all the GBP public notes issued in May 2009 was swapped from fixed to floating for a period of three years using derivatives. All three public notes have a coupon step up of 1.25%which is triggered should the credit rating of G4S plc fall below investment grade. The core group borrowings are held in US dollar,Euro and sterling.Although the impact of rising interest rates is largely shielded by fixed rate loans and interest rate swaps which provide certainty on the vast majority of the exposure,some interest rate risk remains.A 1% increase in interest rates across the yield curve in each of these currencies with the 31 December 2014 debt position constant throughout 2015,would lead to an expectation of an additional interest charge of£I I m in the 2015 financial year. • 40 G4S plc Annual Report and Accounts 2014 Commodity risk and commodity swaps The group's principal commodity risk relates to the fluctuating level of diesel prices,particularly affecting its cash solutions businesses. Commodity swaps and commodity options are used to fix synthetically part of the exposure and reduce the associated cost volatility. Commodity swaps hedging 23 million litres of projected 2015 diesel consumption and I 0 million litres of projected 2016 diesel consumption were in place at 3 I December 2014. Counterparty credit risk The group's strategy for credit risk management is to set minimum credit ratings for counterparties and monitor these on a regular basis. For treasury-related transactions,the policy limits the aggregate credit risk assigned to a counterparty.The utilisation of a credit limit is calculated by applying a weighting to the notional value of each transaction outstanding with each counterpart>'based on the type and duration of the transaction.The total mark-to-market value outstanding with each counterparty is also closely monitored against policy limits assigned to each counterparty.For short-term transactions(under one year),at inception of the transaction,the financial counterpart>' must be investment grade rated by either the Standard&Poor's or Moody's rating agencies.For long-term transactions,at inception of the transaction,the financial counterparty must have a minimum rating of BBB+/Baa I from Standard&Poor's or Moody's. Treasury transactions are dealt with the group's relationship banks,all of which have a strong investment grade rating.At 3 I December 2014 the largest two counterparty exposures related to treasury transactions were£33m and£21 m and both were held with institutions with a long-term Standard&Poor's credit rating of A.These exposures represent 43%and 27%of the carrying values of the treasury transactions,with a fair value gain at the balance sheet date.Both of these banks had significant loan commitments outstanding to G4S plc at 31 December 2014. The group operates a mufti-currency notional pooling cash management system with a wholly owned subsidiary of an A rated bank.At year end credit balances of£300m were pooled with debit balances of£301m,resulting in a net pool overdraft balance of£I m.There is legal right of set off under the pooling agreement and an overdraft facility of£3m. At an operating level the minimum investment grade rating criteria applies.Exceptionally,where required by local country circumstances, counterparties with no,or a non-investment grade,rating can be approved as counterparties for a period of up to 12 months.Due to the group's global geographical footprint and exposure to multiple industries,there is minimal concentration risk. 32.Retirement benefit obligations The group operates a wide range of retirement benefit arrangements which are established in accordance with local conditions and practices within the countries concerned.These include funded defined contribution,mufti-employer and funded and unfunded defined benefit schemes. Defined contribution arrangements The majority of the retirement benefit arrangements operated by the group are of a defined contribution structure,where the employer . contribution and resulting income statement charge is fixed at a set level or is a set percentage of employees'pay.Contributions made to defined contribution schemes and charged to the income statement totalled£96m(2013:£99m). In the UK,following the closure of the defined benefit schemes to new entrants in 2004,the main scheme for new employees is a contracted-in defined contribution scheme. The group disposed of its interest in G4S Government Solutions,Inc.during the year.G4S Government Solutions,Inc.was the administrator of several defined benefit schemes and was responsible for making periodic cost-reimbursable deposits to the various defined benefit schemes as determined by independent actuaries.In each instance,the US Department of Energy('DOE')acknowledged within the contract entered between the DOE and G4S Government Solutions,Inc.its responsibility for all unfunded pension and benefit liabilities. Therefore,these schemes were accounted for as defined contribution schemes up until the date of disposal in November 2014. Multi-employer arrangement In the Netherlands,most of the employees are members of the Security Industry Wide Pension Fund(IWPF).This is a career-average defined benefit plan.Pensionable salary is subject to a cap,and minus an offset that reflects social security Ievels.Withdrawal from the scheme is only possible under certain strict conditions determined by Dutch law and by the pension fund board of the IWPF. The plan is funded by a premium that is set by the IWPF board in line with the financing rules that state that the premium should cover the cost of the annual accrual of pension benefits.Historically,the premium has been 30%of pensionable salaries and the employer pays 60% of this premium and the employees the remaining 40%. The financing rules specify that an employer is not obliged to pay any further premiums in respect of previously accrued benefrts.This means that in case of insufficient funding,the benefits of participants could,in theory,be reduced.The current solvency ratio is 1 11.7% (December 2014).The required solvency ratio according to Dutch law is 122.3%(as at 31 December 2012).Should a surplus appear within the scheme the board will decide if a reduction in premium is possible although this would only be possible at much higher solvency levels. Annual Report and Accounts 2014 G4S plc 14 I Notes to the consolidated financial statements continued 32.Retirement benefit obligations(continued) Premiums paid to the scheme by the group and charged to the income statement in 2014 totalled am(2013:£8m).The estimated amounts of contributions expected to be paid to the schemes during the financial year commencing I January 2015 in respect of the on-going accrual of benefits is approximately£8m including allowance for members of the Securicor Staff Pension Plan who have now joined this multi-employer plan.The premium that the IWPF received in 2014 is not yet available,in 2013 this amounted to E57.4m of which approximately€8m was paid by the group and€5m by G4S employees.The total number of employees is approximately 22,500 at the end of 2013.The number of employees working for the group is approximately 5,000 as at 31 October 2014. The scheme is not accounted for as a defined benefit scheme under IAS 19'Employee Benefits'as it is not possible to identify the group's share of the scheme's assets and liabilities.As a result,and in line with general practice for such schemes,the scheme is accounted for as if it were a defined contribution scheme under IAS 19. During 2014 the assets and past and future service liabilities of the Netherlands Securicor Staff Pension Plan were transferred to the Security Industry Wide Fund.This led to a settlement gain of€26m(£21m). Defined benefit arrangements The group operates several funded defined retirement benefit schemes where the benefits are based on employees'length of service. Whilst the group's primary scheme is in the UK,it also operates other material schemes in the Netherlands and other less material plans elsewhere.Under funded arrangements,the assets of defined benefit schemes are held in separate trustee-administered funds or similar structures in the countries concerned. The amounts recognised in the income statement in relation to the material funded schemes are included within the following categories: 2014 2013 Cm £m Amounts recognised in the income statement :.. :-,•.; Cost of sales (8) (5) Administration expenses (2) (2) Specific items 21 — Net finance costs (20) (20) Total for material funded defined benefit schemes (9) (27) There are also various less material unfunded arrangements,for these the group does not hold related assets separate from the group. In aggregate,other unfunded arrangements incurred£1m of cost of sales,£2m finance costs and included a£5m actuarial loss recognised in other comprehensive income. During the year,the unfunded severance scheme liability of£13m in Saudi Arabia was re-classified from employee benefits provisions into retirement benefits obligation. The defined benefit obligation(DBO),assets and balance sheet provisions for defined benefit schemes are as follows: DBO Assets Provision 2014 £m Cm £m UK (2,222) 1,983 (239)' Netherlands (73) 48 125). Other _ (9) 9 — Total for material funded defined benefit schemes (2,304) 2,040 (264) Total provision for unfunded and other funded defined benefit schemes 55), Total provision for all defined benefit schemes (319) DBO Assets Provision 2013 £n Crn UK (2,011) 1,562 (449) Netherlands (III) 88 (23) Other (10) 10 — Total for material funded defined benefit schemes (2,__ (2,132) 1,660 (472) Total provision for unfunded and other funded defined benefit schemes _ (32) Total provision for all defined benefit schemes (504) 142 G4S plc Annual Report and Accounts 2014 UK Defined Benefit Scheme The defined benefit scheme in the UK accounts for 91%of the net balance sheet liability for material funded defined retirement benefit schemes.it comprises three sections:the Group 4 section which is the pension scheme demerged from the former Group 4 Falck NS,the Securicor section,responsibility for which the group assumed on 20 July 2004 with the acquisition of Securicor plc,and the GSL section, responsibility for which the group assumed on 12 May 2008 with the acquisition of GSL The UK scheme is closed to future accrual apart from some sub-sections of the GSL section,and for most members defines the pension based on final salary.The GSL section has historically remained open to provide a facility to accept former public-sector employees who join G4S through outsourcings.In the Group 4 and Securicor sections,members retain their link to final salary where appropriate on their benefits accrued up to closure in 201 I. As at the latest actuarial funding valuation,the participants of the UK pension scheme sections can be analysed as follows: Group 4 GSL Securicor At 5 April 2012 section section section Total • Active participants • Number — 808 — 808 • Average age — 47.1 — 47.1 Deferred participants • Number 4,390 1,318 9,973 15,681 • Average age 51.5 • 50.0 51.3 51.2 • Pensioner participants , • Number 3,024 581 8,891 12,496 • Average age 69.9 63.6 71.2 70.5 There is a mix of fixed and inflation-dependent pension increases(in payment and deferment)which vary from member to member according to their membership history and the section of the scheme. The discounted weighted average duration of the accrued liabilities of the sections are respectively 18 years(Group 4 section),20 years (GSL section)and 19 years(Securicor section).As at 3 I December 2013 the discounted weighted average duration of the accrued liabilities of the sections were 17 years(Group 4 section), 18 years(GSL section)and 18 years(Securicor section). The scheme is set up under UK law and governed by aTrustee company which is responsible for the scheme's investments,administration and managementThe Board of the Trustee Company is comprised of an independent chairman and further independent,group and scheme membership representatives. 3 The current schedule of deficit recovery contributions provides for a contribution of approximately£44m during 2015.In addition,the company has pledged a share of any material disposal proceeds to the pension scheme(to be shared in the same proportion as the pension scheme deficit bears to overall group indebtedness)and has agreed that additional contributions would be made in the event that the average annual dividend payment to ordinary shareholders over the three financial years 2014,2015,2016 exceeds a certain threshold or in the event that the company makes a significant special dividend payment(or equivalent capital return),to its ordinary shareholders over the same period. A funding valuation is carried out for the scheme's Trustee every three years by an independent firm of actuaries.Depending on the outcome of that valuation a schedule of future contributions is negotiated;the group has guaranteed any contributions due from its subsidiaries.The next valuation will have an effective date of 5 April 2015. Other material Defined Benefit Schemes Apart from the mufti-employer scheme referred to above,the group operated two material pension schemes in the Netherlands which apply to different employee populations;they are known as the Securicor Staff and Cash Solutions schemes.Both schemes define pensions in terms of average career pay,are open to new entrants and are funded in accordance with Dutch requirements. Pension increases in the Securicor Staff scheme are conditional on the funding level and so are only required if there is a funding surplus. The Securicor scheme has a risk sharing arrangement whereby members pay 50%of the cost of the scheme but the group has opted to record 100%of the deficit as a company liability due to uncertainties as to the practicalities of applying the scheme's provisions in this respect;for example in 2012 benefits were reduced rather than increasing members'contributions. During 2014 the assets and past and future service liabilities of the Netherlands Securicor Staff Pension Plan were transferred to the Security Industry Wide Fund.This led to a settlement gain of€26m(£21 m). The Cash Solutions scheme is required to provide benefits at least equivalent to the industry-wide mufti-employer scheme,and in particular pension increases in payment and deferment,as well as revaluation of active members'rights in the Cash Solutions scheme have to follow the mufti-employer scheme(which also applies a conditional approach).The Cash Solutions scheme is insured,so longevity risk on the base level of insured pension(that is before increases)is carried by the insurer and any bonuses from the insurer's returns may defray the cost of pension increases.Accordingly,there is a counterparty risk against the insurer. Annual Report and Accounts 2014 G4S plc 143 Notes to the consolidated financial statements continued 32.Retirement benefit obligations(continued) During the year the plan was amended to decrease the annual accrual rate from 2.00%to 1.87%for future service benefrts.This resulted in a past service credit of Lim that has been recognised as a specific item in the group's consolidated income statement The discounted weighted average duration of the accrued liabilities of the Cash Solutions scheme is 3 I years(2013:28 years). In 2013 the group had a material scheme in Canada.The sponsoring business sold on 17 January 2014 and the entire liabilities and assets of the scheme are now the responsibility of the purchaser. Expected contributions The estimated amounts of contributions expected to be paid to the material schemes during the financial year commencing I January 2015 in respect of the ongoing accrual of benefits should be approximately£6m(split£5m UK Kim Netherlands)and it is anticipated that these will remain at a similar level in the medium term subject to changes in financial conditions. Principal risks The group's pension schemes create a number of risk exposures.Annual increases on benefits are,to a varying extent from scheme to scheme,dependent on inflation so the main uncertainties affecting the level of benefits payable are future inflation levels(including the impact of inflation on future salary increases)and the actual longevity of the membership.Benefits payable will also be influenced by a range of other factors including member decisions on matters such as when to retire and the possibility to draw benefits in different forms. A key risk is that additional contributions are required if the investment returns fall short of those anticipated when setting the contributions to the pension plans.For the UK funding valuation those assumed investment returns(for funding valuations)are set based on fixed margins over the LIBOR swap curve.The management of the pension fund assets has been delegated to an asset manager which manages the assets against a liability benchmarkThe key parameters of this mandate can be summarised as follows: • An asset mix which is managed dynamically over time rather than a set strategic allocation • Interest rate and inflation risk is managed with the benchmark of hedging 100%of these risks as a percentage of the asset value through the use of debt instruments(government bonds)and derivatives • Currency risk is managed with the objective of hedging at least 70%of the overseas currency exposure in the portfolio through the use of forward foreign currency contracts All pension schemes are regulated by the relevant jurisdictions.These include extensive legislation and regulatory mechanisms that are subject to change and may impact G4S'pension schemes. Regarding financial reporting measures,the IAS 19 liability measurement(DBO)and the service cost are sensitive to the actuarial assumptions made on a range of demographic and financial matters that are used to project the expected benefit payments,the most important of these assumptions being about future inflation and salary growth levels and the assumptions made about life expectation.The DBO and service cost are also very sensitive to the IAS 19 discount rate,which determines the discounted value of the projected benefit payments.The discount rate depends on market yields on high-quality corporate bonds.Investment strategies are set with funding rather than IAS 19 considerations in mind and do not seek to provide a specific hedge against the IAS 19 measurement of liabilities.As a result the difference between the market value of the assets and the IAS 19 liabilities may be volatile. Assumptions and sensitivities The weighted average principal assumptions used for the purposes of the actuarial valuations were as follows: UK Netherlands Key assumptions used at 31 December 2014 Discount rate 3.7% 2.3% Expected rate of salary increases 3.1% 1.8% Pension increases in payment(for the UK,at RPI*with a limit of 5%pa.) 2.8%. 1.1% Inflation 3.0% 1:8% Key assumptions used at 31 December 2013 Discount rate 4.4% 3.7% Expected rate of salary increases 3.5% 2.0% Pension increases in payment(for the UK at RPI with a limit of 5%pa.) 3.2% 1.4% Inflation 3.4% 2.0% • The CPI assumption used for the UK valuation in 2014 was 2%. IAS 19 specifies that pension liabilities should be discounted at appropriate high-quality corporate bond rates.The group considers that it is appropriate to consider AA-rated corporate bonds as high quality and therefore have used discount rates based on yields on such bonds corresponding to the liability profile of the schemes. 144 G4S plc Annual Report and Accounts 2014 Assumptions and sensitivities(continued) The effect of a movement in the discount rate applicable in the UK alters reported liabilities(before associated deferred tax adjustments) by approximately the amounts shown in the table below Increase/(decrease)in the Increase/(decrease)in the DBO of the UK Scheme DBO of the UK Scheme 2014 2013 Sensitivity analysis Em £m Discount rate assumption being 0.5%higher (186) (163) Discount rate assumption being 05%lower 21 I 181 The effect of a movement in RPI inflation applicable in the UK alters reported liabilities(before associated deferred tax adjustments)by approximately the amounts shown in the table below Increase/(decrease)in the Increase/(decrease)in the DBO of the UK Scheme DBO of the UK Scheme 2014 2013 Sensitivity analysis _ Em Err, Inflation assumption being 0.5%higher 87 79 Inflation assumption being 0.5%lower (80) (70) The above sensitivities allow for inflation-dependent assumptions such as salary growth and relevant pension increases to vary corresponding to the inflation assumption variation.Due to the caps and floors on pension increases a certain movement in the inflation assumption will not generally result in the same movement in the pension increase assumption. In addition to the above,the group uses appropriate mortality assumptions when calculating the schemes'obligations.The mortality tables used for the scheme in the UK are:Birth year table S I P[M/F]A Base with future improvements in line with CMI_2013 Core projections, based on a long-term improvement rate of 1.25%p.a and allowing for individual scaling factors based on the majority analysis carried out as part of the last funding valuation. The resulting assumed life expectancy of a male member of the UK schemes currently aged 65 is 22 years.The assumed life expectancy at 65 of a male currently aged 52 is 23 years.At those ages,the assumed life expectancy for a female member is between 2 and 3 years longer than for a male member. The effect of a one year change in this UK life expectancy assumption is to alter reported liabilities(before associated deferred tax adjustments)by approximately£105m(2013:£88m). The selection of these movements to illustrate the sensitivity of the DBO to key assumptions should not be interpreted as the group expressing any specific view of the probability of such movements happening. • Annual Report and Accounts 20 14 G4S plc 145 Notes to the consolidated financial statements continued 32.Retirement benefit obligations(continued) The amounts recognised on the balance sheet in respect of the material funded defined benefit schemes and the various components of income,OCI and cash flow are as follows: -_---- - - ----- DBO Assets Provision 2014 _ . Em Em Em Amounts recognised on the balance sheet at beginning of the year (2,132) 1,660 (472) Amounts recognised in income Current service cost (8) — (8) Settlements and past service costs 80 (59) 21 Interest on obligations and assets (92) 72 (20) Administration costs paid from plan assets — (2) (2), Total amounts recognised in income (20) 11 (9) Remeasurements Actuarial loss—change in financial assumptions (231) — (231) Actuarial loss—change in demographic assumptions (2) — (2) Actuarial gain—experience 4 — 4 Return on assets in excess of interest — 392 392 Remeasurement effects recognised in OCI' (229) 392 163 Cash Employer contributions — 50 50 Employee contributions (4) 4 — Benefits paid from plan assets 72 (72) — Net cash ---------�----- 68 (18) 50 Other Exchange rates _ 9 (5) 4 Amounts recognised on the balance sheet at end of the year (2,304) 2,040 (264) • Total remeasurements recognised in OCl of E 155m are shown net of remeasurements relating to non-controlling interests of£3m and other unfunded schemes of£Sm. 146 G4S plc Annual Report and Accounts 2014 1 . • • DBO Assets Total 2013 fJn Em Em Amounts-recognised on the balance sheet at beginning of the year (2,025) 1,589 (436) • Amounts recognised in income Current service cost (9) — (9) Settlements and past service costs Interest on obligations and assets (90) 70 (20) Administration costs paid from plan assets — (2) (2) Transfers in (II) 14 3 Total amounts recognised in income (109) 82 (27) Remeasurements Actuarial loss—change in financial assumptions (80) - (80) Actuarial loss—change in demographic assumptions (22) — (22) Actuarial loss—experience (4) — (4) Return on assets in excess of interest — 46 46 Remeasurement effects recognised in OCI (106) 46 (60) Cash Employer contributions — 49 49 Employee contributions (4) 4 — Benefrts paid from plan assets 79 (79) — Net cash. 75 (26) 49 Other. _ Exchange rates 2 I 3 Transfer of Canada scheme to held for sale 31 (32) (I) Amounts recognised on the balance sheet at end of the year (2,132) 1,660 (472) . In 2011 G4S won the managed prisons bid in respect of HMP Birmingham and relevant employees have accrued benefits in the GSL section since I October 201 1.New employees had the option to transfer accrued pension rights.This occurred as at I March 2013 and a the effect of this transfer is presented in the'Transfers in'line of the above breakdown. The contribution from sponsoring companies in 2014 included£42m(2013:£38m)of additional contributions in respect of the deficit in the UK schemes. • • • Annual Report and Accounts 2014 G4S plc 147 Notes to the consolidated financial statements continued 32.Retirement benefit obligations(continued) The composition of the scheme assets at the reporting date is as follows: UK Netherlands Total 2014 £m Cm Cm Equity 491 9 500 Bonds 351 39 390 Other _ 1,141 — 1,141 Total 1,983 48 2,031 UK Netherlands Total 2013 Em £m £m Equity 413 25 438 Bonds 63 44 107 Other 1,086 19 1,105 Total 1,562 88 1,650 A more detailed split of assets of the UK scheme at 31 December 2014 is presented in the table below. 2014 2013 £m Em Equity 424 367 Private equity 67. 46 Government bonds 35.1 63 Credit 283 274 Property 57 42 Macro-oriented 278 296 Mufti-strategy 55 48 Derivatives 263 15 C ash and cash equivalents _ 205 411 1,983! 1,562 Within the UK pension fund,the Equity,Credit,Macro-orientated and Mufti-strategy sub-categories consist of pooled vehicles investing predominantly in assets with quoted prices in active markets.All government bonds are issued by the UK government and have quoted prices in active markets.Other UK investments are predominantly not quoted. Derivatives include a range of interest rate and inflation linked swaps,forward currency contracts,equity index total return swaps,equity options,and futures.Investing in interest rate and inflation linked swaps is designed to mitigate the impact of future changes in interest rates and inflation. None of the pension scheme assets are held in the group's own financial instruments or in any assets held or used by the group. 148 G4S plc Annual Report and Accounts 2014 33.Provisions and contingent liabilities Employee Claims Contract benefits Restructuring provisions provisions Total Em Em Em Em Em At I January 2014 26 33 57 143 259 Additional provision in the year 29 33 54 53 169 Utilisation of provision (16) (49) (24) (128) (217) Unused amounts reversed (3) — — (5) (8) Transfers and reclassifications (I 3) I 2 2 (8) Translation adjustments — (I) 2 (I) — At 31 December 2014 23 17 91 64 195 Included in current liabilities 90 Included in non-current liabilities 105 - -------- -- 195 Employee benefits The provision for employee benefits is in respect of any employee benefits which accrue over the working lives of the employees,typically including items such as long service awards and termination indemnity schemes. The group's net obligation in respect of long-term service benefits other than retirement benefits represents the present value of the future benefit that employees have earned at the balance sheet date,less the fair value of scheme assets out of which the obligations are to be settled directly. During 2014 a liability of£1 3m relating to the severance scheme in Saudi Arabia was reclassified to retirement benefit obligations to more accurately reflect the substance of the scheme and to allow for IAS 19(R)accounting. Restructuring Restructuring provisions include amounts for redundancy payments,and the costs of closure of activities in acquired businesses and discontinued operations.Settlement of restructuring provisions is highly probable.The timing is uncertain but is generally likely to be short term.In the year the group incurred restructuring costs of£29m within specific items relating to the group wide transformation and a further£4m associated with costs incurred in the normal course of business. Claims provision Claims provisions represent any outstanding litigation claims against the group that are likely to lead to the outflow of funds in the future, including provisions within the captive insurance companies to cover(where appropriate)anticipated claims incurred as at the balance sheet date,based on actuarial assessments to calculate the liabilities. a Legal claims are recognised based on past experience of similar items and other known factors and represent management's best estimate of the likely outcome.In the year the group provided£21 m in relation to claims on legacy acquisitions and disposals. The claims reserves are held by the wholly-owned captive insurance subsidiaries in Guernsey and the US which underwrite part of the group's cash solutions,general liability,workers'compensation and auto liability policies.In the year the group provided£19m in relation to these claims.The provisions are subject to regular actuarial review and are adjusted as appropriate.Settlement of these provisions is highly probable but both the value of the final settlements and their timing is uncertain,dependent upon the outcome of ongoing processes to determine both liability and quantum in respect of a wide range of claims or possible claims. Contract provisions Contract provisions include provisions for onerous contracts including future liabilities for loss-making contracts,for all properties sub-let at a shortfall,for the cost of replacing assets where there is a present contractual requirement and for long-term idle,leased properties.Whilst the likelihood of settlement of these obligations is considered probable,there is uncertainty over their value and duration. Contract provisions are based on the present value of future net cash outflows and includes£45m of provisions for legacy UK government contracts that were recorded in the year within specific items.The group are continuing to work with the relevant customers to recover these potential losses. On 12 March 2014 the group announced that it had reached agreement with the UK Ministry of Justice(MoJ)on a settlement in respect of claims arising in relation to Electronic Monitoring services provided between 2005 and 2013.The agreement also concluded outstanding matters relating to two UK facilities management contracts. The total settlement amount was£109m and is included in utilisation of provisions,having been provided for as at 31 December 2013. Contingent liabilities Contingent liabilities exist in respect of agreements entered into in the normal course of business,none of which are individually or collectively significant '<.- r-t and Accouns LG!+ G4S plc 49 Notes to the consolidated financial statements continued 34.Deferred tax The following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current and prior reporting periods: Retirement Other benefit Intangible temporary obligations assets Tax losses differences Total £m £m £m £m £m At I January 2014 99 (42) 30 62 149 (Charge)/credit to the income statement (3) 26 11 13 47 Disposal of subsidiaries — 4 — (19) (15), (Charge)/credit to equity - (32) — — 6 (26) Transfers/other — — — 4 4 At 31 December 2014 64 (12) 41 66 159 At I January 2013—restated 104 (61) 28 56 127 (Charge)/credit to the income statement (5) 20 2 15 32 Acquisition of subsidiaries — (3) — 2 (I) Credit to equity — — — (4) (4) Translation adjustments — 2 — (4) (2) Transfers/other — — — (3) (3) At 3 I December 20 13—restated 99 (42) 30 62 149 Certain deferred tax assets and liabilities have been offset where permitted.The following is the analysis of the deferred tax balances (after offset): -- - 2013 2014 Restated _ £m £m Deferred tax liabilities (17) (45) Deferred tax assets 176 184 Net deferred tax asset included held for sale — 10 Total deferred tax position 159 149 At 3 I December 2014,the group had unutilised tax losses of approximately£771 m(2013:£705m)potentially available for offset against future profits.A deferred tax asset of£41 m(2013:£30m)has been recognised in respect of approximately£I 66m(2013:£120m)of gross losses based on profitability from approved budgets and business plans.No deferred tax asset has been recognised in respect of the remaining£605m(2013:£585m)of gross losses due to the unpredictability of future profit streams in the relevant jurisdictions and the fact that a significant proportion of such losses remains unaudited by the relevant tax authorities.Included in unrecognised tax losses are gross losses of£19m which will expire between 2015 and 2024.Other losses may be carried forward indefinitely. At 31 December 2014,the aggregate amount of temporary differences associated with undistributed earnings of non-UK subsidiaries for which deferred tax liabilities have not been recognised is£1,102m(2013:£1,220m).No liability has been recognised in respect of these gross differences on the basis that the group is in a position to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in the foreseeable future. At 3 I December 2014,the group had total unprovided contingent tax liabilities of approximately£53m(2013:£58m)relating to unresolved tax issues in various jurisdictions. 150 G4S plc Annual Report and Accounts 2014 35.Share capital --- -- – -- -- — 2014 2013 G4S plc £ £ Issued and fully paid ordinary shares of 25p each 387,898,609 387,898,609 2014 2013 Ordinary shares in issue Number Number At I January 2014 1,551,594,436 1,410,668,639 New shares issued for cash — 140,925,797 At 31 December 2014 1,551,594,436 1,55 I,594,436 In August 2013 the group issued 140,925,797 ordinary shares as a result of the 9.99%placing.The group received gross proceeds of£348m and paid related costs of£5m. 36.Other reserves Hedging Translation Merger Reserve for Total other reserve reserve reserve own shares reserves £m £m £m £m £m At I January 2014 (21) (59) 734 (18) 636 Total comprehensive loss attributable to equity shareholders of parent (31) (5) — — (36) Transfer to retained earnings — — (308) — (308) Recycling of translation reserves on disposal — (13) — (13) At 31 December 2014 i52) (77) 426 (18) 279 At I January 2013—restated (34) 50 426 (20) 422 Total comprehensive income/(loss)attributable to equity shareholders of parent 13 (109) — — (96) Shares issued — — 308 — 308 Own shares awarded — — — 2 2 At 31 December 2013—restated (21) (59) 734 (18) 636 r Other reserves include: . Hedging reserve The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow instruments related to the s hedged transactions that have not yet occurred(net of tax). Translation reserve The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations,as well as from the translation of liabilities that hedge the company's net investment in foreign operations(net of tax). Merger reserve The merger reserve comprises reserves arising upon the merger between the former Group 4 Falck NS and the former Group 4 Securitas BV in 2000 and the acquisition of Securicor plc by the group in 2004.In accordance with Section 612 of the Companies Act 2006 the £308m premium on ordinary shares issued in the group's 9.99%share placement in August 2013 was initially recorded in the merger reserve,and has subsequently been transferred to retained earnings. Reserve for own shares An employee benefit trust established by the group held 6,408,450 shares at 31 December 2014(2013:6,934,564 shares)to satisfy the vesting of awards under the performance share plan and performance-related schemes.During the year no shares were purchased by the trust,whilst 526,114 shares were used to satisfy the vesting of awards under the schemes.At 31 December 2014,the cost of shares held by the trust was£17,060,185(20 13:£18,460,753),whilst the market value of these shares was£17,809,083(2013:£18,203,23 I).Shares held by the trust are treated as treasury shares,are deducted from equity,do not receive dividends and are excluded from the calculations of earnings per share. Anruai 1,:.,:cr .ark.Ac.c runts'?' • G4S plc i i Notes to the consolidated financial statements continued 37.Analysis of net debt A reconciliation of net debt to amounts in the consolidated statement of financial position is presented below. 2013 2014 Restated £m £m Cash and cash equivalents------ --- 409 532 Investments 60 39 Net cash and overdrafts included within assets held for sale — 15 Net debt included within assets held for sale (I) (17) Bank overdrafts (18) (9) Bank loans (165) (167) Loan notes (1,899) (1,982) Obligations under finance leases (40) (52) Fair value of loan note derivative financial instruments 76 89 Total net debt - (1,578) (1,552) An analysis of movements in net debt in the year is presented below. 2013 2014 Restated £m £m (Decrease)/increase in cash,cash equivalents and bank overdrafts per consolidated cash flow statement (136) 127 (Purchase)/sale of investments 17 (13) Movement in debt and lease financing 110 197 Change in net debt resulting from cash flows (9) 311 Borrowings acquired with subsidiaries — (4) Net additions to finance leases (9) (12) Movement in net debt in the year (18) 295 Translation adjustments (8) (18) Net debt at the beginning of the year _ (1,552) -- (1,829) Net debt at the end of the year (1,578) (1,552) 38.Operating lease arrangements The group as lessee As at 31 December 20 14,the group had outstanding commitments under non-cancellable operating leases,which fall due as follows: 2013 2014 Restated £m £m Within one year 105 121 In the second to fifth years inclusive 231 285 After five years 151 198 Total o•eratin:lease commitments 487 604 The group leases a number of its office properties,vehicles and other operating equipment under operating leases.Property leases are negotiated over an average term of eight years,at rates reflective of market rentals.Periodic rent reviews take place to bring lease rentals in line with prevailing market conditions.Some but not all lease agreements have an option to renew the lease at the end of the lease term. Leased vehicles and other operating equipment are negotiated over an average lease term of four years. Certain leased properties have been sub-let by the group.Sub-leases are negotiated on terms consistent with those of the associated property.The total future minimum sub-lease payments expected to be received by the group from sub-let properties amount to£6m (20 13:£I Om). i 5 G4S plc ,,‘; jrd Acccunts 2014 39.Share based payments In June 2014 a new long-term incentive plan replaced the previous performance share plan(the performance share plans),as detailed in the Directors'remuneration report from page 70.Shares allocated conditionally fall under either the group's performance share plans or the group's performance-related bonus scheme.Shares allocated conditionally under the performance-related bonus scheme vest three years following the date of grant provided certain non-market performance conditions are metThose allocated under the group's performance share plans vest after three years,to the extent that(a)certain non-market performance conditions are met and(b)certain market performance conditions are metThe proportion of the allocation of awards to these criteria is described in the remuneration reportVesting occurs on the third anniversary of the date the shares were allocated conditionally. The number of shares allocated conditionally is as follows: - ----- -- ----— — -—--- - - Performance- Performance- related - bonus Share related bonus Share scheme award Total scheme award Total 2014 2014 2014 2013 2013 2013 Number Number Number Number Number Number Outstanding at I January 375,734 16,033,822 1 6,409,556 812,200 15,589,225 16,401,425 Allocated during the year 275,928 8,739,114 9,015,042 58,026 7,385,392 7,443,418 Transferred during the year (388,305) (137,809) (526,1 14) (494,492) (161,948) (656,440) Forfeited during the year (25,863) (2,219,929) (2,245,792) — (2,546,129) (2,546,129) Expired during the year — (5,018,721) (5,018,721) — (4,232,718) (4,232,718) Outstanding at 31 December 237,494 17,396,477 17,633,971 375,734 16,033,822 16,409,556 The weighted average remaining contractual life of conditional share allocations outstanding at 31 December 2014 was 17 months (2013: 16 months).The weighted average share price at the date of allocation of shares allocated conditionally during the year was 240.3p(2013:29 I.7p)and the contractual life of all conditional allocations was three years. Under the group's performance share plans,the vesting of 30%(2013:50%)of the shares allocated conditionally depends upon Total Shareholder Return(a market performance condition)over the vesting year measured against a comparator group.25%of the allocation vests upon the group's Total Shareholder Return equalling median performance amongst the comparator group.The fair value of the shares allocated subject to this market performance condition has therefore been reduced by 75%. The income statement is charged with an estimate for the vesting of shares conditionally awarded subject to non-market performance conditions.The charge for 2014 was£5m(2013:£nil). Annual -tot are.AccoLnts 20:4 G4S plc 13 3 Notes to the consolidated financial statements continued 40.Related party transactions Transactions and balances with joint ventures and associated undertakings Transactions between the company and its subsidiaries have been eliminated on consolidation and are not disclosed in this note.Details of transactions between the group and other related parties are disclosed below.All transactions with related parties are entered into in the normal course of business. Transactions with joint ventures included revenue recorded of£48m(2013 restated:£43m).Amounts due to related parties include £30m(2013 restated:£25m)to joint ventures and£2m(2013 restated:£2m)to associates.Amounts due from related parties include £37m(2013 restated:£30m)from joint ventures and£1m(2013 restated:£nil)from associates. No expense has been recognised in the year for bad and doubtful debts in respect of amounts owed by related parties. The group has a legal interest in a number of joint ventures and joint arrangements,where the economic interest was divested by the Global Solutions Group prior to its acquisition by G4S plc in 2008.Transactions with these entities during the year comprised: — —---_— 2014 2013 Services/sales Services/sales to to Lm fin White Horse Education Partnership Limited 2 2 Integrated Accommodation Services plc 48 39 Fazakerley Prison Services Limited 36 33 Onley Prison Services Limited 15 14 ECD Cookham Wood Limited 12 12 ECD Onley Limited o-° °«I 3 13 Stratus Integrated Services Limited 8 8 UK Court Services(Manchester)Limited 2 2 East London Lift Company Limited _ I Total 137 124 The group had outstanding balances of E 14m(2013:£9m)with these entities as at 31 December 2014. Transactions with post-employment benefit schemes Details of transactions with the group's post-employment benefit schemes are provided in note 32.Unpaid contributions owed to schemes amounted to£0.5m at 31 December 2014(2013:E0.5m). Transactions with other related parties In the normal course of the group's business the group provides services to and receives services from certain non-controlling interests on an arm's length basis. Remuneration of key management personnel The group's key management personnel are deemed to be the non-executive directors and those individuals,including the executive directors,whose remuneration is determined by the Remuneration Committee.Their remuneration is set out below.Further information about the remuneration of individual directors included within key management personnel is provided in the audited part of the Directors' Remuneration Report on pages 70 to 84. 2014 2013 Short-term employee benefits 10,813,463 10,887,469 Post-employment benefits 155,178 217,937 Other long-term benefits 48,087 56,682 Share-based payment 2,886,813 93 I,197 Total 13,903,541 12,093,285 41.Events after the balance sheet date In January 2015 the revolving credit facility was refinanced.The new facility is£1,000 million and matures in January 2020,with two one year extension options exercisable with majority lending bank consent on the facility's first and second anniversary.If exercised the maturity date would extend to January 2021 and January 2022 respectively. No other significant post-balance sheet events have affected the group since 31 December 2014. 154 G4S plc Annual Report and Accounts 2014 42.Significant investments The companies listed below are those which were part of the group at 31 December 2014 and which,in the opinion of the directors, significantly affected the group's results and net assets during the yearThe directors consider that those companies not listed are not significant in relation to the group as a whole.A comprehensive list of all subsidiaries will be disclosed as an appendix to the group's annual return. The principal activities of the companies listed below are indicated according to the following key: Secure solutions S Cash solutions C These businesses operate principally in the country in which they are incorporated. Product Country of Ultimate segment incorporation ownership Subsidiary undertakings G4S Soluciones de Seguridad S.A. S Argentina 75% G4S Australia Pty Limited S Australia 100% G4S Custodial Services Pty limited S Australia 100% G4S Secure Solutions AG(Austria) S Austria 100% G4S Secure Solutions SA/NV S Belgium 100% G4S Cash Solutions(Belgium)NV C Belgium 100% G4S Interativa Service Ltda S Brazil 100% Vanguarda Seguranca a Vigilancia Ltda S Brazil 100% G4S Secure Solutions(Canada)limited S Canada 100% ithi G4S Security Services Regiones S.A. S Chile I00% G4S Secure Solutions Colombia S.A. S+C Colombia 100% G4S Security Services A/S S Denmark 100% G4S Aviation Services(UK)Limited S England 100% G4S Care and Justice Services(UK)Limited S England 100% G4S Cash Centres(UK)Limited C England 100% G4S Cash Solutions(UK)Limited C England 100% G4S Facilities Management(UK)Limited S England 100% G4S Risk Management Limited S England 100% G4S Secure Solutions(UK)limited S England 100% G4S Security Services(UK)Limited S England 100% i G4S Utility and Outsourcing Services(UK)Limited S England 100% AS G4S Baltics S+C Estonia 100% G4S Security Services Oy S Finland 100% G4S Keszpenzlogisztikai Kft C Hungary 100% G4S Secure Solutions(India)Pvt.Limited" S India 49% G4S Secure Solutions(Ire)Limited S Ireland 100% G4S Secure Solutions(Israel)Limited S Israel 92% G4S SecurityTechnologies(Israel)Limited S Israel 100% G4S Kenya Limited S+C Kenya 100% G4S Security Solutions SAR.L S+C Luxembourg 100% Safeguards G4S Sdn Bhd" S+C Malaysia 49% G4S Cash Solutions BV C Netherlands 100% G4S Beheer BV S Netherlands 100% G4S Peru S.A.C. S+C Peru 100% Al Majal Service Master LLC S Saudi Arabia 49% G4S Cash Solutions(SA)(Pty)Limited C South Africa 75% G4S Secure Solutions(SA)(Pty)Limited S South Africa 72% G4S Secure Solutions(Thailand)Limited S Thailand 100% G4S Secure Solutions(USA)Inc. S USA 100% G4S Technology LLC S USA 100% G4S Youth Services LLC S USA 100% 1. G4S Secure Solutions(India)Pvt.Limited has a year end of 3 I March 2. Safeguards G4S Sdn Bhd has a year end of 30 June 3. By virtue of shareholder agreements,options,pre-emption rights and other contractual arrangements,the group has the power to govem the financial and operating policies,so as to obtain the benefits from the activities of these companies.These are therefore consolidated as full subsidiaries Annual Report and Accounts 2014 G4S plc 155 Parent company balance sheet At 31 December 2014 2014 2013 Notes £m Fixed assets Intangible assets (b) 9 I I Investments (c) 3,045 3,055 3,054 3,066 Currents assets Debtors (d) 2,898 2,992 Cash at bank and in hand I 56 2,899 3,048 Creditors—amounts falling due within one year Bank overdraft(unsecured) — (5) Borrowings(unsecured) (e) (96) (61) Other creditors (f) (2,93I) (2,856) (3,027) (2,922) Net current assets (128) 126 Total assets less current liabilities 2,926 3,192 Creditors—amounts falling due after more than one year Borrowings(unsecured) (e) (I,040) Net assets 1,983 2,152 Capital and reserves Called up share capital 35 388 388 Share premium and reserves 1,595 1,764 Equity shareholders'funds 1,983 2,152 The parent company financial statements were approved by the board of directors and authorised for issue on 26 March 2015. They were signed on its behalf by AshleyAlmanza Himanshu Raja Director Director • 156 G4S plc Annual Report and Accounts 2014 Parent company reconciliation of movement in equity shareholders'funds For the year ended 31 December 2014 2014 2013 Em £m (Accumulated loss)/retained profit for the year (43) 15 Changes in fair value of hedging derivatives 8 (8) Shares issued — 343 Dividends declared (138) (130) Equity settled transactions 5 — Tax on equity movements (I) 2 Net(decrease)/increase in shareholders'funds (169) 222 Opening equity shareholders'funds 2,152 1,930 Closing equity shareholders'funds 1,983 2,152 • 21 , ! 3 • • Annual Report and Accounts 2014 G4S plc 157 Notes to the parent company financial statements (A)Significant accounting policies Basis of preparation The separate financial statements of the company are presented as required by the Companies Act 2006.They have been prepared under the historical cost convention except for the revaluation of certain financial instruments and in accordance with applicable United Kingdom Accounting Standards(UK GAAP). The financial statements have been prepared under the going concern basis. Exemptions Under section s408 of the Companies Act 2006 the company is exempt from the requirement to present its own profit and loss account The company has taken advantage of the exemption from preparing a cash flow statement under the terms of FRS I'Cash Flow Statements'.The cash flows of the company are included within its consolidated financial statements. The company is also exempt under the terms of the revised FRS 8'Related Party Disclosures'from disclosing related party transactions with wholly owned subsidiaries within the group. Intangible fixed assets Intangible fixed assets are stated at cost net of accumulated amortisation and any provision for impairment Intangible fixed assets are amortised on a straight-line basis over their expected economic life.Software is amortised over periods up to a maximum of eight years. Fixed asset investments Fixed asset investments,which comprise investments in subsidiary undertakings,are stated at cost less amounts written off. Financial instruments Financial assets and financial liabilities are recognised when the group becomes a party to the contractual provisions of the instruments. External debtors Debtors do not carry interest and are stated initially at their fair value.The company provides for bad debts based upon an analysis of those that are past due in accordance with local conditions and past default experience. Cash at bank and in hand and bank overdrafts Cash at bank and in hand and bank overdrafts comprise cash balances and call deposits. Interest-bearing borrowings Interest-bearing bank overdrafts,loans and loan notes are recognised at the value of proceeds received,net of direct issue costs.Finance charges,including premiums payable on settlement or redemption and direct issue costs,are recognised in the profit and loss account on an accrual basis using the effective interest method. External creditors Creditors are not interest-bearing and are stated initially at their fair value. Amounts owed to/from subsidiary undertakings Amounts owed to/from subsidiary undertakings bear interest at prevailing market rates. Equity instruments Equity instruments issued by the company are recorded at the value of proceeds received,net of direct issue costs. Derivative financial instruments and hedge accounting In accordance with its treasury policy,the company only holds or issues derivative financial instruments to manage the group's exposure to financial risk,not for trading purposes.Such financial risk includes the interest risk on the group's variable-rate borrowings,the fair value risk on the group's fixed-rate borrowings,commodity risk in relation to its diesel consumption and foreign exchange risk on transactions,on the translation of the group's results and on the translation of the group's net assets measured in foreign currencies.The company manages these risks through a range of derivative financial instruments,including interest rate swaps,commodity swaps,commodity options,forward foreign exchange contracts and currency swaps. Derivative financial instruments are recognised in the balance sheet as financial assets or liabilities at fair value.The gain or loss on remeasurement to fair value is recognised immediately in the profit and loss account,unless they qualify for hedge accounting.Where derivatives do qualify for hedge accounting,the treatment of any resultant gain or loss depends on the nature of the item being hedged 7 as described below. Fair value hedge The change in the fair value of both the hedging instrument and the related portion of the hedged item is recognised immediately in the profit and loss account Cash flow hedge The change in the fair value of the portion of the hedging instrument that is determined to be an effective hedge is recognised in equity and subsequently recycled to the profit and loss account when the hedged cash flow impacts the profit and loss accountThe ineffective portion of the fair value of the hedging instrument is recognised immediately in the profit and loss account 158 G4S plc Annual Report and Accounts 2014 Foreign currencies The financial statements of the company are presented in sterling,its functional currency.Transactions in currencies other than sterling are translated at the rates of exchange prevailing on the dates of the transactions.At each balance sheet date,monetary assets and liabilities which are denominated in other currencies are retranslated at the rates prevailing on that date.Non-monetary assets and liabilities carried at fair value which are denominated in other currencies are translated at the rates prevailing at the date when the fair value was determined.Non-monetary items measured at historical cost denominated in other currencies are not retranslated.Gains and losses arising on retranslation are included in the profit and loss account Taxation Current tax is provided at amounts expected to be paid(or recovered)using tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is recognised in respect of all material timing differences that have originated,but not reversed,by the balance sheet date. Deferred tax is measured on a non-discounted basis at tax rates that are expected to apply in the periods in which the timing differences reverse based on tax rates and laws enacted or substantively enacted at the balance sheet date.Deferred tax assets are recognised where their recovery is considered more likely than not in that there will be suitable taxable profits from which the future reversal of underlying timing differences can be deducted. Pensions The company participates in mufti-employer pension schemes in the UK which provide benefits based on final pensionable pay.The company is unable to identify its share of the schemes'assets and liabilities on a consistent and reasonable basis.In accordance with FRS 17 'Retirement Benefits',the company treats the schemes as if they were defined contribution schemes and recognises charges as and when contributions are due to the scheme.Details of the schemes are included in note 32 to the consolidated financial statements. Share-based payments . The company grants equity-settled share-based payments to certain employees.The fair value of share-based payments is determined at the date of grant and expensed,with a corresponding increase in equity on a straight-line basis over the vesting period,based on the company's estimate of the shares that will eventually vestThe amount expensed is adjusted over the vesting period for changes in the estimate of the number of shares that will eventually vest,save for changes resulting from any market-related performance conditions. Developments expected in future accounting periods FRS 100'Application of Financial Reporting Standards',FRS 101'Reduced Disclosure Framework'and FRS 102'The Financial Reporting Standard Applicable in the UK and Republic of Ireland'.FRS 100 sets out the application of financial reporting requirements in the UK and Republic of Ireland and FRS 101'IFRS with reduced disclosures'outlines the reduced disclosure framework available for use by qualifying entities choosing to report under IFRS.FRS 102 is applicable in the UK and Republic of Ireland and is known as'new UK GAAP'.The mandatory effective date for the new framework of reporting is for accounting periods beginning on or after I January 2015.In the absence of material objections,the company intends to adopt FRS 101 ('IFRS with reduced disclosures'). Dividends Dividends are recognised as distributions to equity holders in the period in which they are paid.Dividends proposed but not declared are not recognised but are disclosed in the notes to the consolidated financial statements. Financial guarantees The company enters into financial guarantee contracts to guarantee the indebtedness of other companies within the group.The company considers these to be insurance arrangements and accounts for them as such.The company therefore treats such contracts as a contingent liability unless and until such time as it becomes probable that the company will be required to make a payment under the guarantee. Own shares held by employee benefit trust Transactions of the company-sponsored employee benefit trust are included in the parent company financial statements.In particular,the trust's purchases of shares in the company are debited directly to equity. Annual Report and Accounts 2014 G4S plc 159 Notes to the parent company financial statements continued (B)Intangible fixed assets ----------------- — ---------------------- Software Em Cost ---- - ------- — At I January 20I 4 13 At 31 December 2014 13 Amortisation At I January 2014 (2) Amortisation charge (2) At 31 December 2014 4) Net book value At I January 2014 At 3 I December 2014 9 (C)Fixed asset investments The following are included in the net book value of fixed asset investments: Total Subsidiary undertakings Shares at cost jowl At 1 January 2014 3;055' Additions 19 Impairments (29) At 3 I December 2014 3;045 The impairment within the carrying value of investments in the year is primarily due to a reduction in the net asset value of certain subsidiary undertakings. Full details of significant investments held by the parent company and the group are detailed in note 42 to the consolidated financial statements. (D)Debtors 2014 2013 Em Em Amounts owed by group undertakings 2,807 2,918 Other taxation and social security costs I - Other debtors 6 8 Derivative financial instruments at fair value _ 84 66 Total debtors 2,898 2,992 Included within derivative financial instruments at fair value is£53m due after more than one year(2013:£52m). See note(g)for further details. Included in other debtors is£1m(2013:£I m)with regard to deferred tax comprised as follows: 2014 2013 Em £m Timing differences in relation to the performance share plan and deferred share awards I - Changes in fair value of hedging derivatives _ - I Total deferred tax I I The reconciliation of deferred tax balances is as follows: • Total Em At January 2014 1 Credited to profit and loss in relation to the performance share plan and deferred share awards Charged to equity in relation to changes in fair value of hedging derivatives _ _ • (I) At 3 I December 2014 160 G4S plc Annual Report and Accounts 2014 (E) Borrowings(unsecured) 2014 2013 £m £m Sterling 422 419 Euro — 37 US do llar _ 617' 645 Total unsecured borrowings 1,039 1,101 The payment profile of the unsecured borrowings is as follows: 2014 2013 £m £m Repayable within one year 96 61 Repayable within two to five years 813 469 Repayable after five years _ 130. 571 Total unsecured borrowings 1,039 1,101 Undrawn committed facilities mature as follows: 2014 2013 £m £m Within one year 998 — Wrthin two to five years — 965 Total undrawn committed facilities :—.---9-94,3.. 965 **e Borrowings,£1,039m,consist entirely of fixed rate loan notes(2013:£1,064m).The loan notes issued in July 2008(with the exception of £44m)are stated at amortised costThe loan notes issued in March 2007,£44m of the loan notes issued in July 2008 and the loan notes issued in May 2009 are stated at amortised cost recalculated at an effective interest rate current at the balance sheet date as they are part of a fair value hedge relationship.US$200m(£I 28m)of the loan notes issued in July 2008 have a fair value market gain of£28m(2013:£21 m). The fair value of the remaining notes approximates to their book value. The management of interest rate risk is detailed in note(h).There were no financial liabilities upon which no interest is paid. (F)Other creditors . s 2014 2013 , £m £m Amounts falling due within one year: 1 Amounts owed to group undertakings 2,903 2,821 a Other taxation and social security costs — 4 Other creditors 2 1 Accruals and deferred income 15 29 Derivative financial instruments at fair value _ _ _ I 1 ` 1 Total creditors—amounts falling due within one year 2,931 2,856 Annual Report and Accounts 2014 G4S plc 161 Notes to the parent company financial statements continued (G)Derivative financial instruments The carrying values of derivative financial instruments at the balance sheet date are presented below. — ----— ---— — -- ----- -----— - - Assets --- Assets Llabilltles Liabilities 2014 2013 2014 2013 £m £m £m £m Cross currency swaps designated as cash flow hedges 28 21 - - Interest rate swaps designated as cash flow hedges Interest rate swaps designated as fair value hedges 56 45 I I - 84 66 II Less:amounts falling due after more than one year (53) (52) - - Amounts falling due within one year 31 14 I I 1 Derivative financial instruments are stated at fair value,based upon market prices where available or otherwise on discounted cash flow valuations. The mark to market valuation of the derivatives has increased by£8m(2013:decreased£33m)during the year The interest rate,cross currency and commodity swaps treated as cash flow hedges have the following maturities: Assets Assets Liabilities Liabilities 2014 2013 2014 2013 £m Em £rn £m Within one year 21 - - 1 In the second year - 15 - - In the fourth year 7 - - - In the fifth year or greater - 6 - - Total carryin:value 28 21 - I Projected settlement of cash flows(including accrued interest)associated with derivatives: Assets Assets Liabilities Liabilities 2014 2013 2014 2013 £m £m £m £m Within one year 21 - - I In the second year - 16 - - In the fourth year 7 - - - In the fifth year or greater - 5 - - Total cash flows 28----- 21 -- ----- (H)Financial risk Currency risk and forward foreign exchange contracts The group conducts business in many currencies.The group presents its consolidated financial statements in sterling and as a consequence is subject to foreign exchange risk due to the translation of the results and net assets of its foreign subsidiaries.The company together with G4S International Finance plc hedges a substantial portion of the group's exposure to fluctuations in the translation into sterling of its overseas net assets by holding loans in foreign currencies.Translation adjustments arising on the translation of foreign currency loans are recognised in the profit and loss account Cross currency swaps with a nominal value of£101m were arranged to hedge the foreign currency risk on US$200m of the second US Private Placement notes issued in July 2008,effectively fixing the sterling value on this portion of debt at an exchange rate of 1.9750. Assuming a I%appreciation of sterling against the US dollar,the fair value net gain on the cross currency swaps which hedge part of the currency loan notes would be expected to fall by£I m. Interest rate risk and interest rate swaps The company is exposed to interest rate risk,which the company manages within policy limits approved by the directors.When fixed/ floating interest rate debt in the preferred mix is unavailable directly from investors,interest rate swaps are utilised to create the desired blend and meetTreasury policy,with the proportion of fixed interest rate held reducing on a sliding scale over forward periods up to a maximum of five years.The quantity of interest rate swaps outstanding in the company is expected to continue to decline as Treasury activity is increasingly conducted by G4S International Finance plc. 4i G4S plc a-d Accounts 204 (H) Financial risk(continued) The US Private Placement market is predominantly a fixed rate market with investors preferring a fixed rate return over the life of the loan notes.At the time of the first issue in March 2007,the group was comfortable with the proportion of floating rate exposure not hedged by interest rate swaps and therefore rather than take on a higher proportion of fixed rate debt arranged fixed to floating swaps effectively converting the fixed coupon on the Private Placement to a floating rate.Following the swaps the resulting average coupon on the US Private Placement is LIBOR+60bps.These swaps have been documented as fair value hedges of the US Private Placement fixed interest loan notes,with the movements in their fair value posted to profit and loss at the same time as the movement in the fair value of the hedged item. The interest on the US Private Placement notes issued in July 2008 and the GBP public notes issued in May 2009,was initially kept at fixed rate.In April 2014,the interest rate on£44m of the US Private Placement notes issued in July 2008 and on all the GBP public notes issued in May 2009 was swapped from fixed to floating for a period of three years using derivatives. The GBP public notes have a coupon step up of 1.25%which is triggered should the credit rating of G4S plc fall below investment grade. The core company borrowings are held in US dollar and sterling.Although the impact of rising interest rates is largely shielded by fixed rate loans some interest rate risk remains on the element swapped to floating.A I%increase in interest rates across the yield curve in each of these currencies with the 31 December 2014 debt position constant throughout 2015,would lead to an expectation of an additional interest charge of am in the 2015 financial year Commodity risk and commodity swaps The group's principal commodity risk relates to the fluctuating level of diesel prices,particularly affecting its cash solutions businesses.The company acts as a market intermediary,arranging commodity swaps and commodity options with its relationship banks with back to back deals on identical terms with its subsidiaries to fix synthetically part of the exposure and reduce the associated cost volatility.The company will no longer perform this market intermediary role from January 2015. Counterpart,/credit risk The company's strategy for credit risk management is to set minimum credit ratings for counterparties and monitor these on a regular basis. For treasury-related transactions,the policy limits the aggregate credit risk assigned to a counterparty.The utilisation of a credit limit is calculated by applying a weighting to the notional value of each transaction outstanding with each counterparty based on the type and duration of the transaction.The total mark to market value outstanding with each counterparty is closely monitored against policy limits assigned to each counterparty.For short-term transactions(under one year),at inception of the transaction,the financial counterparty must be investment grade rated by either the Standard&Poor's or Moody's rating agencies.For long-term transactions,at inception of the transaction,the financial counterparty must have a minimum rating of BBB+/Baal from Standard&Poor's or Moody's. Treasury transactions are dealt with the company's relationship banks,all of which have a strong investment grade rating.At 3 I December 5 2014 the largest two counterparty exposures relating to treasury transactions were£33m and£20m and both were held with institutions with a long-term Standard&Poor's credit rating of A.These exposures represent 45%(20 13:42%)and 27%(20 13:30%)of the carrying values of derivative financial instruments,with a fair value gain at the balance sheet date.Both of these banks had significant loan commitments outstanding to G4S plc at 31 December 2014. The company participates in the group's mufti-currency notional pooling cash management system with a wholly owned subsidiary of an A rated banlcThere is legal right of set off under the pooling agreement (I)Share premium and reserves --l— --—-- —_- Share Merger Profit and —_— Own —premium reserve loss account shares Total Cm Cm Cm £m Cm -- ------------------------------------------ — -------- At January 2014 258 308 1,216 (18) 1,764 Accumulated loss — — (43) — (43) Changes in fair value of hedging derivatives — — 8 — 8 Dividends declared — — (138) — (138) Own shares awarded — — 3 2 5 Tax on equity movements — — (I) — (I) Transfer — (308) 308 — — At 31 December2014 258 — 1,353 (16) 1,595 In 2013 the£308m addition to the merger reserve resulted from the group's 9.99%share placement in August 2013.In accordance with section 612 of the Companies Act 2006 the£308m premium on ordinary shares has been transferred to the profit and loss account Included in the company profit and loss account is£258m(2013:£443m)of realised distributable reserves. Annual Report and Accounts 2014 G4S plc 163 Notes to the parent company financial statements continued (J)Auditor's remuneration Fees paid to KPMG Audit Plc and its associates for non-audit services to the company itself are not disclosed in its individual accounts because the company's consolidated financial statements are required to disclose such fees on a consolidated basis. (K)Share-based payments The group has one type of equity-settled,share-based payment scheme in place being the conditional allocations of G4S plc shares.An employee benefit trust established by the group holds shares to satisfy the vesting of conditional allocation awards.Reserve for own share disclosures relevant to the company are presented within note 36 to the consolidated financial statements.Share-based payments disclosures relevant to the company are presented within note 39 to the consolidated financial statements. (L)Related party transactions Certain disclosures relevant to the company are presented within note 40 to the consolidated financial statements.Company transactions with group undertakings primarily consist of royalty charges,central service charges,group insurance recharges and loan transactions. There were no material transactions with non-wholly owned group undertakings in 2014(2013:none). (M)Contingent liabilities To help secure cost effective finance facilities for its subsidiaries,the company issues guarantees to some of its finance providers.At 31 December 2014 guarantees totalling£370m(2013:£479m)were in place in support of such facilities. The company also guarantees the debt obligations of G4S International Finance plc.At 31 December 2014 contingent liabilities of£956m (2013:£I,012m)were outstanding in support of such debt obligations. The company is included in a group registration for UKVAT purposes and is therefore jointly and severally liable for all other UK group companies'unpaid debts in this connection.The liability of the UK group registration at 31 December 2014 totalled£14m(2013:£1 7m). 164 G4S plc Annual Report and Accounts 2014 Notice of Annual General Meeting • THIS DOCUMENT IS IMPORTANT AND REQUIRESYOUR Directors'Authority to Allot IMMEDIATE ATTENTION. 15. That the directors be and are hereby generally and If you are in any doubt about the contents of this document unconditionally authorised pursuant to and in accordance with or the action you should take,you should immediately consult section 55 I of the Companies Act 2006(the"Act")to exercise your stockbroker,bank manager,solicitor,accountant or other all the powers of the company to allot shares in the company independent professional advisor authorised under the Financial or grant rights to subscribe for,or convert any security into, Services and Markets Act 2000 if you are resident in the United shares in the company: Kingdom or,if not,from another appropriately authorised (i) up to an aggregate nominal amount of£I 29,299,000;and independent financial advisor.If you have sold or otherwise transferred all your shares in G4S plc,please send this notice and (ii) comprising equity securities(as defined in section 560 of the accompanying documents to the person through whom the the Act)up to a further aggregate nominal amount of sale or transfer was effected so that it can be passed on to the £129,299,000 provided that they are offered by way of purchaser or transferee. a rights issue to holders of ordinary shares on the register Notice is hereby given that the Annual General Meeting of G4S plc of members at such record date(s)as the directors may will be held atThe Platinum Suite,ExCeL London,One Western determine where the equity securities respectively Gateway,Royal Victoria Dock,London E 16 1 XL on Thursday,4 June attributable to the interests of the ordinary shareholders are 2015 at 11.00 am in order to consider and,if thought fit,to pass the proportionate(as nearly as may be practicable)to the following Resolutions: respective numbers of ordinary shares held or deemed to be held by them on any such record date(s),subject to such Resolutions I to 15 and Resolution 18 will be proposed as exclusions or other arrangements as the directors may ordinary resolutions.Resolutions 16,17 and 19 will be proposed deem necessary or expedient to deal with treasury shares, as special resolutions. fractional entitlements,record dates,shares represented by Report and Accounts depositary receipts,legal or practical problems arising under 1. To receive the financial statements of the company for the year the laws of any territory or the requirements of any relevant ended 31 December 2014 and the reports of the directors regulatory body or stock exchange or any other matter; and auditor thereon. provided that this authority shall expire on the date of the Remuneration next Annual General Meeting of the company,save that the company shall be entitled to make offers or agreements before 2. To approve the Directors'Remuneration Report,other than the the expiry of such authority which would or might require part containing the summary of the Directors'Remuneration relevant securities to be allotted after such expiry and the Policy,as set out in the company's annual report and accounts directors shall be entitled to allot relevant securities pursuant for the year ended 31 December 2014. to any such offer or agreement as if this authority had not Dividend expired;and all unexpired authorities granted previously to the 3. To declare a final dividend for the year ended 31 December directors to allot relevant securities under section 551 of the 2014 of 5.82p(DKK 0.6041)for each ordinary share in the Act shall cease to have effect at the conclusion of this Annual capital of the company. General Meeting(save to the extent that the same are exercisable pursuant to section 551(7)of the Act by reason Directors of any offer or agreement made prior to the date of this 4. To re-elect Ashley Almanza as a director. Resolution which would or might require shares to be allotted 5. To re-elect John Connolly as a director or rights to be granted on or after that date). 6. To re-elect Adam Crozier as a director. 16. That the directors be and are hereby empowered,pursuant to section 570 of the Act,subject to the passing of Resolution 15 7. To re-elect Mark Elliott as a director above,to allot equity securities(as defined in section 560 of the 8. To re-elect Winnie Kin Wah Fok as a director. Act)for cash pursuant to the authority conferred by Resolution 15 above as if section 561 of the Act did not apply to any such 9. To re-elect Himanshu Raja as a director. allotment,provided that this power shall be limited to: 10. To re-elect Paul Spence as a director. (i) the allotment of equity securities in connection with an I I. To re-elect Clare Spottiswoode as a director offer or issue of equity securities(but in the case of the authority granted under paragraph(ii)of Resolution 15 12. To re-electTim Weller as a director above,by way of rights issue only)to or in favour of the Auditor holders of shares on the register of members at such 13. To appoint PricewaterhouseCoopers LLP as auditor of the record date(s)as the directors may determine where the company to hold office until the conclusion of the next Annual equity securities respectively attributable to the interests General Meeting of the company. of the shareholders are proportionate(as nearly as may be practicable)to the respective numbers of shares held 14. To authorise the audit committee of the board to determine by them on any such record date(s),but subject to such the remuneration of the auditor exclusions or other arrangements as the directors may deem necessary or expedient in relation to fractional entitlements,treasury shares,record dates,shares represented by depositary receipts,legal or practical problems arising under the laws of any territory or the requirements of any relevant regulatory body or stock exchange or any other matter;and Annual Report and Accounts 2014 G4S plc 165 Notice of Annual General Meeting continued (ii) the allotment(otherwise than pursuant to sub-paragraph of the company provided that the authorised sum referred to (i)above)of equity securities pursuant to the authority in paragraphs(i),(ii)and(iii)above may be comprised of one granted under Resolution I 5(i)above up to a maximum or more amounts in different currencies which,for the nominal amount of£38,788,000; purposes of calculating the said sum,shall be converted into and shall expire on the expiry of the authority conferred by pounds sterling at the exchange rate published in the London Resolution 15 above unless previously renewed,varied or edition of the Financial Times on the date on which the revoked by the company in general meeting,save that the relevant donation is made or expenditure incurred(or the first company shall be entitled to make offers or agreements before business day thereafter)or,if earlier,on the day in which the the expiry of such power which would or might require equity company enters into any contract or undertaking in relation securities to be allotted,or treasury shares to be sold,after to the same. such expiry and the directors shall be entitled to allot equity Notice Period for General Meetings Other Than AGMs securities or sell treasury shares pursuant to any such offer or 19. That a general meeting of the company,other than an Annual agreement as if the power conferred hereby had not expired. General Meeting,may be called on not less than 14 clear All previous unutilised authorities under section 570 of the Act days'notice. shall cease to have effect at the conclusion of this Annual General Meeting. By order of the board Authority to Purchase Own Shares Peter David 17. That the company be and is hereby generally and unconditionally Company Secretary authorised for the purposes of section 701 of the Act,to make market purchases(within the meaning of section 693(4)of the 26 March 2015 Act)of ordinary shares of 25p each in the capital of the company on such terms and in such manner as the directors The Manor may from time to time determine,provided that Manor Royal Crawley (i) the maximum number of such shares which may be West Sussex RH 10 9UN purchased is 155,159,000; Company No.4992207 (ii) the minimum price which may be paid for each such share is 25p(exclusive of all expenses); Notes (iii) the maximum price which may be paid for each such share 1. Shareholders are entitled to appoint a proxy to exercise all . is an amount equal to 105%of the average of the middle or any of their rights to attend and to speak and vote on their market quotations for an ordinary share in the company behalf at the meeting.A shareholder may appoint more than as derived from The London Stock Exchange Daily Official one proxy in relation to the Annual General Meeting provided List for the five business days immediately preceding the that each proxy is appointed to exercise the rights attached day on which such share is contracted to be purchased to a different share or shares held by that shareholder.A proxy (exclusive of expenses);and need not be a shareholder of the Company.A proxy form (iv) this authority shall,unless previously revoked or varied, which may be used to make such appointment and give proxy expire at the conclusion of the Annual General Meeting instructions accompanies this notice or will have been sent of the company to be held in 2016(except in relation to to you separately by post unless you have elected to receive the purchase of such shares the contract for which was shareholder communications electronically.Proxy instructions entered into before the expiry of this authority and which may also be given by using the registrar's share portal at th might be executed wholly or partly after such expiry). wwwcapitasharepor tal.com. Authority to Make Political Donations 2. Details of how to appoint a proxy are set out in the notes to the proxy form.In order to be valid,an appointment of proxy 18. That in accordance with sections 366 and 367 of the Act, must be returned with any power of attorney or any other the company and all companies which are subsidiaries of the authority under which it is executed,by one of the following company during the period when this Resolution 18 has methods:in hard copy form by post to Capita Asset Services, effect be and are hereby unconditionally authorised to: PXS I,34 Beckenham Road,Beckenham,Kent BR3 4ZF;in hard (i) make political donations to political parties or copy form to that address by courier or by hand during usual independent election candidates not exceeding business hours;or,in the case of CREST members,by utilising £50,000 in total; the CREST electronic proxy appointment service as described in paragraphs 8 and 9 below.In each case the form of proxy (ii) make political donations to political organisations other must be received by the company no later than 11.00 am on than political parties not exceeding£50,000 in total;and 2 June 2015.To change your proxy instructions you may return (iii) incur political expenditure not exceeding£50,000 in total; a new proxy appointment using the method set out above. The deadline for receipt of proxy appointments also applies (as such terms are defined in the Act)during the period in relation to amended instructions.Persons listed on the VP beginning with the date of the passing of this Resolution and Securities register should follow the instructions on their ending at the conclusion of the next Annual General Meeting Voting Request Form. 166 G4S plc Annual Report and Accounts 2014 3. The return of a completed proxy form,other such instrument 10. CREST members and,where applicable,their CREST sponsors or any CREST Proxy Instruction will not prevent a shareholder or voting service providers should note that Euroclear UK& attending the Annual General Meeting and voting in person if Ireland Limited does not make available special procedures in he/she wishes to do so. CREST for any particular message.Normal system timings and 4. Any person to whom this notice is sent who is a person limitations will,therefore,apply in relation to the input of nominated under section 146 of the Act to enjoy information CREST Proxy Instructions.it is the responsibility of the CREST rights(a"Nominated Person")may,under an agreement member concerned to take(or,if the CREST member is a between him/her and the shareholder by whom he/she was CREST personal member,or sponsored member,or has nominated,have a right to be appointed(or to have someone appointed a voting service provider,to procure that his CREST else appointed)as a proxy for the Annual General Meeting. sponsor or voting service providers)take(s))such action as If a Nominated Person has no such proxy appointment right shall be necessary to ensure that a message is transmitted by or does not wish to exercise ft,he/she may,under any such means of the CREST system by any particular time.In this agreement,have a right to give instructions to the shareholder connection,CREST members and,where applicable,their as to the exercise of voting rights. CREST sponsors or voting system providers are referred,in particular,to those sections of the CREST Manual concerning 5. The statement of the rights of shareholders in relation to the practical limitations of the CREST system and timings. appointment of proxies in paragraph I above does not apply I I. The company may treat as invalid a CREST Proxy Instruction to Nominated Persons.The rights described in that paragraph in the circumstances set out in Regulation 35(5)(a)of the can only be exercised by shareholders of the company. Uncertificated Securities Regulations 2001. 6. To be entitled to attend and vote at the Annual General 12. Voting on all Resolutions will be conducted by way of a Meeting(and for the purpose of the determination by the poll rather than a show of hands.This is a more transparent company of the votes they may cast),shareholders must be method of voting as shareholders'votes are to be counted registered in the Register of Members of the company at according to the number of shares held.As soon as practicable 5.30pm on 2 June 2015(or,in the event of any adjournment, following the Annual General Meeting,the results of the voting on the date which is two working days before the time of the at the meeting and the numbers of proxy votes cast for and adjourned meeting).Changes to the Register of Members after against and the number of votes actively withheld in respect the relevant deadline shall be disregarded in determining the of each of the Resolutions will be announced via a Regulatory rights of any person to attend and vote at the meeting. Information Service and also placed on the company's 7. As at 25 March 2015(being the latest practicable date prior website:www.g4s.com. to the publication of this Notice)the company's issued share 13. Any corporation which is a shareholder can appoint one capital consisted of 1,551,594,436 ordinary shares,carrying or more corporate representatives who may exercise on its one vote each.Therefore,the total voting rights in the company behalf all of its powers as a shareholder provided that they as at 25 March 2015 was 1,551594436. do not do so in relation to the same shares. 8. CREST members who wish to appoint a proxy or proxies 14. Under section 527 of the Act,members meeting the threshold through the CREST electronic proxy appointment service may requirements set out in that section have the right to require do so by using the procedures described in the CREST Manual the company to publish on a website a statement setting out (available via www.euroclear.com/CREST).CREST Personal any matter relating to:(i)the audit of the company's accounts Members or other CREST sponsored members,and those (including the auditor's report and the conduct of the audit) CREST members who have appointed a service provider(s), that are to be laid before the Annual General Meeting, (or(ii) should refer to their CREST sponsor or voting service provider(s),who will be able to take the appropriate action any circumstance connected with an auditor of the company on their behalf. ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance with 9. In order for a proxy appointment or instruction made using section 437 of the ActThe company may not require the the CREST service to be valid,the appropriate CREST message shareholders requesting any such website publication to pay (a"CREST Proxy Instruction")must be properly authenticated in its expenses in complying with sections 527 or 528 of the Act. accordance with Euroclear UK&Ireland Limited's specifications, Where the company is required to place a statement on a and must contain the information required for such instruction, website under section 527 of the Act,it must forward the as described in the CREST Manual.The message,regardless of statement to the company's auditor not later than the time whether it constitutes the appointment of a proxy or is an when it makes the statement available on the website.The amendment to the instruction given to a previously appointed business which may be dealt with at the Annual General proxy must,in order to be valid,be transmitted so as to be Meeting includes any statement that the company has been received by the issuer's agent(ID RA 10)by 11.00am on 2 June required under section 527 of the Act to publish on a website. 2015.For this purpose,the time of receipt will be taken to be the time(as determined by the time stamp applied to the message by the CREST Application Host)from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. Annual Report and Accounts 2014 G4S plc 167 Notice of Annual General Meeting continued 15. Any shareholder attending the meeting has the right to ask Important Information about Attending the questions.The company must cause to be answered any such Annual General Meeting question relating to the business being dealt with at the If you are a shareholder and you have received an admission card, meeting but no such answer need be given if(a)to do so you should bring it with you if you wish to attend the Annual would interfere unduly with the preparation for the meeting General Meeting.If you do not have an admission card you should or involve the disclosure of confidential information,(b)the bring photographic proof of identity. answer has already been given on a website in the form of an answer to a question,or(c)it is undesirable in the interests If you are attending as a proxy of a shareholder,your appointment of the company or the good order of the meeting that the as a proxy must be with our registrar,Capita Asset Services,no question be answered. later than 1 1.00 am on 2 June 2015.If you are attending as a representative of a corporate shareholder,you must bring a 16. Under sections 338 and 338A of the Act,members meeting currently dated corporate letter of representation as evidence of the threshold requirements in those sections have the right to your entitlement to attend on behalf of that corporate shareholder require the company(i)to give,to members of the company In either case you should bring photographic proof of identity entitled to receive notice of the meeting,notice of a resolution and evidence of your appointment to represent that shareholder, which those members intend to move(and which may properly including their admission card if possible.If you hold your shares be moved)at the meeting and/or(ii)to include in the business through a nominee,you must bring photographic proof of identity to be dealt with at the meeting any matter(other than a and evidence of your share ownership in the form of a currently proposed resolution)which may properly be included in the dated latter from your nominee. business at the meeting.A resolution may properly be moved,or a matter properly included in the business,unless(a) in the case The Annual General Meeting is a private meeting of the of a resolution only)it would,if passed,be ineffective(whether shareholders and their properly authorised representatives. by reason of any inconsistency with any enactment of the Guests are not entitled to attend the meeting as of right but they company's constitution or otherwise);(b)it is defamatory of may be permitted entry at the absolute discretion of the company any person;or(c)it is frivolous or vexatious.A request made Shareholders wishing to bring a guest must notify the company pursuant to this right may be in hard copy or electronic form, in advance by contacting the registrar;Capita Asset Services, must identify the resolution of which notice is to be given or the The Registry,34 Beckenham Road,Beckenham,Kent BR3 4Th matter to be included in the business,must be authenticated by (shareholdersenquiries @capita.co.uk)who will advise of the the person(s)making it and must be received by the company company's decision on the request.Any permitted guests will be not later than 22 April 2015,being the date six clear weeks required to bring photographic proof of identity and to enter the before the meeting and(in the case of a matter to be included meeting venue at the same time as the shareholder in the business only)must be accompanied by a statement Behaviour that may interfere with anyone's security or safety or the setting out the grounds for the request good order of the meeting will not be permitted.Security checks 17. A copy of this notice,and other information required by will be carried out on those attending the meeting.Please arrive in section 311 A of the Act,can be found at www.g4s.com good time before the meeting commences to allow sufficient time for checks to be carried out.Those wishing to attend should be 18. Any electronic address or web site address is provided in prepared to have any bags or briefcases inspected.Please do not this Notice of Meeting solely for the purpose stated expressly bring suitcases,large bags or rucksacks.If you do,you may be asked herein and may not be used to communicate with the to leave them in the cloakroom. company other than for such purpose.Notwithstanding any telephone number;fax number or email address that appears Cameras,recording equipment and electronic communication on this document or elsewhere,neither the company nor equipment(including mobile phones,tablets and laptops)will not Capita Asset Services will accept voting instructions received be permitted in the meeting.There will be secure storage facilities via media other than by post,courier or hand,or by CREST available where mobile phones and other small items of personal Proxy Instruction in accordance with the notes above. equipment may be deposited. 19. An explanation of the Resolutions is given in the Recommendation and Explanatory Notes to the Resolutions which are set out after the Important Information about Attending the Annual General Meeting. 168 G4S plc Annual Report and Accounts 2014 L Recommendation and explanatory notes relating to business to be conducted at the Annual General Meeting on 4 June 20 I 5 The board of G4S plc considers that the Resolutions set out in the 5.Appointment of auditor and auditor's remuneration Notice of Annual General Meeting are likely to promote the success (Resolutions 13 and 14) of the company and are in the best interests of the company and its Resolution 13 relates to the appointment of PricewaterhouseCoopers shareholders as a whole.The directors unanimously recommend jp("P ')as the company's auditorto hold office until the next that you vote in favour of the Resolutions as they intend to do in Annual General Meeting of the company.PwC was selected by the respect of their own beneficial holdings. board upon the recommendation of the audit committee following a Explanatory notes in relation to the business to be conducted at formal tender process which is described on page 68 ofthe company's the Annual General Meeting are set out below. 2014 Annual Report,and consequently KPMG Audit plc,the company's current auditor,has confirmed that they will not seek reappointment The ordinary resolutions(Resolutions I to 15 and 18)will be Their term of office will therefore expire at the conclusion of the 2015 passed if there are more votes cast for the resolution than those Annual General Meeting. cast against itThe special resolutions(Resolutions 16, 17 and 19) will be passed if at least 75%of the votes cast for and against the Resolution 14 authorises the Audit Committee to set the auditor's resolution are in favour. remuneration. I.Financial statements of the company(Resolution I) 6.Authority to allot shares(Resolution 15) The chairman will present the financial statements of the company Resolution 15 seeks shareholder approval for the directors to be for the year ended 3 I December 2014 and the reports of the authorised to allot shares. directors and auditor thereon to the Annual General Meeting. At the last Annual General Meeting of the company held on 5 June 2.Remuneration(Resolution 2) 2014,the directors were given authority to allot ordinary shares in Resolution 2 is the resolution to approve the directors' the capital of the company up to a maximum nominal amount of remuneration report,other than the part containing a summary £258,598,OOO.This authority expires at the end of this year's Annual of the directors'remuneration policy(pages 72 to 77)which was General Meeting.Of this amount 517,1 96,000 shares could only be approved by shareholders at the 2014 Annual General Meeting. allotted pursuant to a rights issue. As this is an advisory resolution,it does not affect the future Resolution 15 will,if passed,renew this authority to allot on the remuneration paid to any director. same terms as last year's resolution.The board considers it 3.Final dividend(Resolution 3) appropriate that the directors be granted the same authority to A final dividend of 5.82p(DKK 0.6041)per ordinary share for the allot shares in the capital of the company up to a maximum nominal amount of£258,598,000,representing a little under two thirds of year ended 31 December 2014 is recommended for payment by the the company's issued ordinary share capital as at 25 March 2015 directors.If the recommended final dividend is approved,it will be (the latest practicable date prior to publication of the Notice of paid on Friday 12 June 2015 to all ordinary shareholders who were Annual General Meeting).Of this amount,517,196,000 shares, on the register of members at the close of business on 8 May 2015. representing a little under one third of the company's issued 4.Election and re-election of directors(Resolutions 4 to 12) ordinary share capital can only be allotted pursuant to a rights issue. Resolutions 4 to 12 deal with the re-election of the directors in The authority will last until the conclusion of the next Annual accordance with the requirements of the UK Corporate General Meeting in 2016. Governance Code which provides for all directors of FTSE 350 The directors do not have any present intention of exercising this companies to be subject to re-election by shareholders every year. authority.In accordance with best practice,if the directors were to Grahame Gibson and Mark Seligman will retire from the board at exercise this authority so as to allot shares representing more than the conclusion of the Annual General Meeting and so they are not one third of the current capital of the company,they would all offer seeking re-election. themselves for re-election at the following Annual General Meeting, Biographies of each of the directors seeking re-election are set out although it is the directors'current intention to stand for election on pages 52 to 53 of the company's 2014 Annual Report.The annually in any event in accordance with the requirements of the board has confirmed following a performance review that all UK Corporate Governance Code. directors standing for re-election continue to perform effectively As at the date of the Notice of Annual General Meeting,the and demonstrate commitment to their roles. company does not hold any ordinary shares in the capital of the company in treasury.However,the 6,408,450 shares held within the G4S Employee BenefitTrust and referred to on page 15 I (note 36 to the consolidated financial statements)are accounted for as treasury shares. Annual Report and Accounts 2014 G4S plc 169 Recommendation and explanatory notes related to business to be conducted at the Annual General Meeting on 4 June 2015 continued 7.Disapplication of statutory pre-emption rights 8.Purchase of own shares(Resolution 17) (Resolution 16) Resolution 17 seeks to renew the company's authority to buy back Resolution 16 seeks shareholder approval to give the directors its own ordinary shares in the market as permitted by the ActThe authority to allot equity securities in the capital of the company authority limits the number of shares that could be purchased to a pursuant to the authority granted under Resolution 15 for cash maximum of 155,159,000(representing a little less than 10%of the without complying with the pre-emption rights in the Companies company's issued ordinary share capital as at 25 March 2015(the Act 2006(the"Act')in certain circumstances.This authority will latest practicable date prior to publication of the Notice of Annual permit the directors to allot General Meeting))and sets minimum and maximum prices.This authority will expire at the conclusion of the company's Annual (a) equity securities up to a nominal amount of£258,598,000 General Meeting in 2016. (representing a little under two thirds of the company's issued share capital)on an offer to existing shareholders.However The directors have no present intention of exercising the authority unless the shares are allotted pursuant to a rights issue(rather to purchase the company's ordinary shares but will keep the matter than an open offer),the directors may only allot shares up to a under review,taking into account the financial resources of the nominal amount of£129,299,000(representing a little under company,the company's share price and future funding one third of the company's issued share capital)(in each case opportunities.The authority will be exercised only if the directors subject to any adjustments,such as for fractional entitlements believe that to do so would result in an increase in earnings per and overseas shareholders,as the directors see fit);and share and would be in the interests of shareholders generally.No shares were purchased pursuant to the equivalent authority granted (b) equity securities up to a maximum nominal value of to the directors at the company's last Annual General Meeting. £38,788,000 representing approximately 10%of the issued ordinary share capital of the company as at 25 March 2015 As at 25 March 2015(the latest practicable date prior to the (the latest practicable date prior to publication of the Notice publication of the Notice of Annual General Meeting),there were of Annual General Meeting)otherwise than in connection with no options over the ordinary shares in the capital of the company. an offer to existing shareholders. 9.Political donations(Resolution 18) This disapplication authority is in line with institutional shareholder Resolution 18 deals with the rules on political donations contained guidance,and in particular with the Pre-emption Group's Statement in the Act.Under these rules,political donations to any political of Principles(the"Pre-emption Principles").The Pre-emption parties,independent election candidates or political organisations Principles were revised in 2015 to allow the authority for an issue or the incurring of political expenditure are prohibited unless of shares otherwise than in connection with a pre-emptive offer authorised by shareholders in advance.What constitutes a political to be increased from 5%to 10%of the company's issued ordinary donation,a political party,a political organisation,or political share capital,provided that the company confirms that it intends expenditure is not easy to decide,as the legislation is capable to use the additional 5%authority only in connection with an of wide interpretation.Sponsorship,subscriptions,payment of acquisition or specified capital investmentThe directors therefore expenses,paid leave for employees fulfilling public duties,and confirm,in accordance with the Pre-emption Principles that,to the support for bodies representing the business community in policy extent that the authority in paragraph(ii)of Resolution 16 is used review or reform,may fall within this. for an issue of ordinary shares with a nominal value in excess of Therefore,notwithstanding that the company has not made political £1 9,394,000(that is approximately 5%of the company's issued donations requiring shareholder authority in the past,and has no ordinary share capital as at 25 March 2015),they intend that it will intention either now or in the future of making any such political only be used in connection with an acquisition or specified capital donation or incurring any such political expenditure in respect of investment which is announced contemporaneously with the issue, any political party,political organisation or independent election or which has taken place in the preceding six-month period and is candidate,the board has decided to put forward Resolution 18, disclosed in the announcement of the issue. which is the same as the resolution on this subject which was The directors also confirm,in accordance with the Pre-emption passed at the company's Annual General Meeting held on 5 June Principles,that they do not intend to issue shares for cash 20 14.This will allow the company to support the community and representing more than 7.5%of the company's issued ordinary put forward its views to wider business and government interests share capital in any rolling three-year period other than to existing without running the risk of being in breach of the law.This authority shareholders,save as permitted in connection with an acquisition will cover the period from the date Resolution 18 is passed until or specified capital investment as described above,without prior the conclusion of the next Annual General Meeting of the company. consultation with shareholders. As permitted under the Act,Resolution 18 also covers political As noted in relation to Resolution 15 above,the directors have donations made,or political expenditure incurred,by any no current intention of exercising this authority subsidiaries of the company. The authority contained in Resolution 16 will expire upon the expiry of the general authority conferred by Resolution 15(i.e. at the end of the next Annual General Meeting of the company). 170 G4S plc Annual Report and Accounts 2014 r 10.Period of notice for calling general meetings (Resolution 19) Resolution 19 is a resolution to allow the company to hold general meetings(other than Annual General Meetings)on 14 days'notice. The minimum notice period permitted by the Act for general meetings(other than Annual General Meetings)is 21 days. However the Act allows companies to reduce this period to 14 days(other than for Annual General Meetings)provided that two conditions are metThe first condition is that the company offers a facility for shareholders to vote by electronic means.This condition is met if the company offers a facility,accessible to all shareholders, to appoint a proxy by means of a website.The second condition is that there is an annual resolution of shareholders approving the reduction of the minimum notice period from 21 days to 14 days. The board is therefore proposing Resolution 19 as a special resolution to approve 14 days as the minimum period of notice for all general meetings of the company other than Annual General Meetings.The approval will be effective until the company's next Annual General Meeting,when it is intended that the approval be renewed. The board will consider on a case by case basis whether the use of the flexibility offered by the shorter notice period is merited,taking into account the circumstances,including whether the business of the meeting is time sensitive,and will balance that against the need for shareholders to consider their voting decisions,particularly where the proposals concerned are complex and may require more time for proper evaluation. Annual Report and Accounts 20I 4 G4S plc 171 r Group financial record G4S plc was formed in 2004 from the merger of the security business of Group 4 Falck and Securicor.Since that time,the group has delivered robust shareholder returns and its five year financial performance is shown by the following financial record. Revenue'at constant exchange rates Group revenue(£bn) £6.8bn 8 6.5 6.8 G4S revenue has grown consistently during the last five years. __6 5.4 5.7 61 * Prior years have been restated for businesses that have been 4 discontinued,sold or ceased and for IFRS I 0 and I I. 2010 2011 20i2 2013 2014 PBITA'at constant exchange rates PBITA(£m) f.l) ) 500 424 400 378 379 386 393 Operating profit,defined as profit before interest,tax and amortisation and excluding specific items,increased 8%to£424m(2013:393m). 300 300 * Prior years have been restated for businesses that have been 1 discontinued,sold or ceased and for IFRS I 0 and I I. — 0 2010 2011 2012 2013 2014 Dividend (pence per share) Pence per share 10 7.90 8.53 8.96 8.96 9.24 8 9.2.4p 6 In the five years since 2010,G4S has delivered 4 average dividend per share growth of 4%. 2 0 2010 2011 2012 2013 2014 172 G4S plc Annual Report and Accounts 2014 Cash generated from operating businesses* (£m) 526m 600 526 501 402 420 Cash generated from operating businesses was£526m 400 328 which is a 25%increase compared to£420m in 2013. * Prior years have been restated for businesses that have been — discontinued and the impact of IFRS I 0 and I I. 200 2010 2011 2012 2013 2014 Share price 2004—2014 Share price performance(E) From the merger in July 2004 to the end of 2014,the G4S share price has increased 127%,outperforming the FTSE 100 by 76%(see page 82 for the comparativeTSR performance). + I 27/0 share price increase since 2004 .3 2.0 G4S share price CAGR' —f-8. 1 ./0 from 2004 to 2014 15 1.0 * CAGR is compound average growth rate. 1 05 1 0 04 05 06 07 08 09 10 11 12 13 14 '0'G4S ♦' FTSE 100 index Employee numbers As at 31 December('000) 700 586 618 607 618 623 623,000 600 (including joint ventures) 500 400 300 200 100 0 2010 2011 2012 2013 2014 Annual Report and Accounts 2014 G4S plc 173 I • r CSR performance in 2014 2014 CSR hi hI� hts A snapshot of some of our key g g CSR achievements during 2014 Securing our environment Securing our communities G4S total carbon footprint in 2014 was Conducted studies of the economic impact of G4S 538,303 t e to economy thin the demonstrating total contribution to the UK economy of I .74bn Achieved a carbon intensity of 76.3 t/CO2e per £m revenue in 2014,representing a reduction of 60/. Invested approximately since 2013. I '9 ---- --------- ---------- Measured 56%of the waste generated by the group, in charitable community programmes totalling 1 0,400 tonnes of mixed waste with I 8% and welfare programmes for employees. diverted from landfill. Matched Measured 64%of the group's water usage with 3 Q 000 a total consumption of 1,678,000 litres. (_. 8 Installed telematics technology into a further 114 of employee fundraising for local community good causes. UK-based vehicles,bringing the total number of UK-based Supported more than 1,000 community projects vehicles fitted with telematics to almost 2,000.The use across 74 countries,including: of this technology helps to reduce fuel and maintenance costs,while improving driver safety. • Bhubesi Pride(Africa) — — — — — • IndiaVision Foundation(India) Achieved an Energy Star rating at the headquarters • Bromley by Bow Centre(UK). of G4S North America.Energy Star-certified buildings generate lower greenhouse gas emissions than typical buildings. iiiir 474, 6, • ,7.:. .,: . f _r r°' ' 4 ' 174 G4S plc Annual Report and Accounts 2014 r Safeguarding our integrity Securing our people Initiated a programme to reinvigorate our group Established'Safety first'as a new group value. values across all business practices. o ,,-!,a — — — Developed a health and safety management framework Continued embedding our human rights framework into the on which businesses can base their approach to business,including risk assessment and due-diligence processes ensure that they embed health and safety into their Implemented a governance,risk and compliance system . business practices. and process which includes human rights,business w it Implemented performance objectives related ethics and labour rights reviews. 1 ' to health and safety for all senior business leaders. Completed a planned reorganisation of Group Risk C Extended the Driving Force Rules campaign and Internal Audit departments,increasing the resources -a to all regions. z available and expanding the remit to reflect a risk-based Provided health and safety training to our global audit approach providing assurance on key risk areas leadership team. and adherence to the updated enterprise risk -- — "- management systems. Completed six health and safety critical country reviews in countries where serious incidents Commissioned an independent human rights and legal occurred during the year review of G4S operations in Israel and the West Bank - Enhanced the monitoring of health and safety key Completed a review of the group's whistleblowing performance indicator(KPI)performance,particularly policy and processes against the principles of the in respect of incident investigations. UKWhistleblowing Commission's Code of Practice. Completed Implemented a new senior management onboarding tool. 1 2 Extended our talent management system to capture more data on the wider employee population. • on-site internal audits,including measurement of compliance with business ethics standards. Launched a new senior leadership development — — programme with attendance from all six regions. Conducted i >,m Continued to support businesses embedding 20 ..: ,1 cultural awareness training. Ongoing implementation of the actions arising from the human rights country risk assessments 2013 global employee engagement survey,such as a as part of regular'heatmap'reviews. values based leadership programme in the UK Signed a commitment to the UN Global Compact Business for Peace platform,promoting the positive change that business may bring to former conflict environments by enabling stability,development and advancement of peace. . .. , 4b„pp.. ., ; 4, .f, , T. t, e.,,, .. fal I, 1 For more information,visit:wv w.g4s.com/csr Annual Report and Accounts 2014 G4S plc 175 Application of FRS I 0 I On I January 2015 old UK GAAP used in the preparation of the parent company financial statements ceased to exist We have the option to adopt one of three reporting regimes: I)the EU endorsed International Financial Reporting Standards(IFRS),already used for the preparation of the group's consolidated financial statements;2)a new reporting regime known as the FRS 101 Reduced Disclosure Framework permitting entities that otherwise apply the recognition,measurement and disclosure requirements of IFRS to adopt a reduced level of disclosure for their individual financial statements;or 3)FRS 102,which is a modification of FRS for small and medium enterprises. We are proposing that the FRS 101 Reduced Disclosure Framework will be applied for the individual financial statements of the company (i.e.the parent company financial statements)for financial years beginning on and after I January 2015,allowing the parent company to use the same accounting framework as is utilised in the consolidated financial statements for the group. The framework permitted by FRS 101 reduces disclosures covering a wide range of topics including cash flow statements,financial instruments,fair value measurement,share-based payments and related party transactions, which would already be provided in the group's consolidated financial statements.A brief narrative summary of the disclosure exemptions adopted under FRS 101 will be disclosed in the notes to the individual financial statements of the company.There may also be some presentational changes in the individual financial statements of the parent company. The parent company's accounts will still be prepared to meet the requirements of the Companies Act 2006 including giving a true and fair view of the company's assets,liabilities,financial position and profit or loss. This means the parent company will therefore always be required to include in its accounts all information relevant to shareholders and necessary to show a true and fair view. For further information about FRS 101 please visit http://www.icaew.com/en/technical/financial-reporting/reduced-disclosure- framework Before an entity can apply the reduced disclosure framework it is required to inform its shareholders and provide a reasonable opportunity for its shareholders to object.The company will not be able to adopt the reduced disclosure framework if a shareholder or shareholders holding in aggregate 5%or more of the total allotted shares in the company object. If you have any objections to the company applying the FRS 101 Reduced Disclosure Framework to the individual financial statements of the parent company,please notify us in writing to the Company Secretary,G4S plc atThe Manor,Manor Royal,Crawley,West Sussex RH I 0 9UN on or before 29 May 2015. 7: G4S plc Annual Report and Accounts 2014 General information Financial calendar Corporate addresses General shareholder information Results announcements Registered office Registrars and transfer office Half-year results—August The Manor All enquiries relating to the administration Final results—March Manor Royal of shareholdings should be directed to: Crawley Dividend payment West Sussex RH I0 9UN Capita Asset Services Interim paid— 17 October 2014 The Registry Final payable— 12 June 2015 Telephone+44(0) 1 293 554 400 34 Beckenham Road Annual General Meeting Registered number Beckenham 4 June 2015 4992207 Kent Auditor(until 2015 AGM) BR3 4TU KPMG Audit Plc Telephone:within the UK 0871 664 0300 15 Canada Square (calls cost I Op per minute plus network London E 14 5GL extras);from outside the UK +44 20 8639 3399 Stockbrokers Fax:+44(0) 1484 600 91 I J.P.Morgan Cazenove Email:shareholderenquiries @capita.co.uk 25 Bank Street Secure share portal: Canary Wharf www.capitashareportal.com London E 14 5JP Please note that beneficial owners of shares Citigroup Global Markets Limited who have been nominated by the registered Citigroup Centre holder of those shares to receive Canada Square,Canary Wharf information rights under section 146 of the London E 14 5LB Companies Act 2006 are required to direct Financial advisors all communications to the registered holder J.P.Morgan Cazenove of their shares rather than to the company 25 Bank Street or the company's registrar Canary Wharf Capita share portal London E 14 5JP The share portal is an online facility Barclays Capital provided by the company's registrars,Capita 5 The North Colonnade Asset Services,for shareholders to manage Canary Wharf their holding securely online reducing the London El4 46B need for paperwork.By registering for a free portal account,shareholders are able to G4S website access a range of online facilities 24 hours www.g4s.com a day including those described below. View account holding details Allows shareholders to access their personal account,shareholding balance, share transaction history,indicative share valuation and dividend payment history. It also enables shareholders to buy and sell shares. Change of address,bank mandates, downloadable forms Allows shareholders to update their postal address and complete,change or delete bank mandate instructions for dividends. A wide range of shareholder information, including downloadable forms such as stock transfer forms,is also available. Dedicated helpline Capita Asset Services also has a helpline to help users with all aspects of the service. Telephone(from the UK):0871 664 0391 Calls cost 10p per minute plus network extras,lines are open 8.30am to 5.30pm Monday to Friday. Telephone (outside the UK):+44(0)20 8639 3367 Email:shareportal @capita.co.uk Annual Report and Accounts 2014 G4S plc 177 1 www.g4s.com G4S plc ® Printed by Park Communications on FSC®certified paper. The Manor Manor Royal Park is an EMAS certified company and its Environmental Crawley F'SC Management System is certified to ISO 14001. www.fsc.org 100%of the inks used are vegetable oil based,95%of press West Sussex MIX chemicals are recycled for further use and,on average 99% RH109UN Paper from of any waste associated with this production will be recycled. United Kingdom responsible sources FSC"C001785 This document is printed on Cocoon 50 Silk;a paper containing Telephone:+44(0)20 8770 7000 50%recycled fibre from genuine waste paper and 50%virgin fibre Email:investor@g4s.com sourced from well managed,responsible,FSC®certified forests. Registered in England No.4992207 Designed and produced by Black Sun Plc. ATTACHMENT D INSURANCE REQUIRMENTS APPENDIX F m MAMBEACH Insurance Requirements 2015-013-YG SECURITY OFFICER SERVICES PROCUREMENT DIVISION 1700 Convention Center Drive Miami Beach, Florida 33139 PFP 201 5-01 3-YG Page 44 M1AMIBEACH INSURANCE REQUIREMENTS PROFESSIONAL SERVICES The provider shall furnish to the Human Resources Department, Risk Management Division, City of Miami Beach, 1700 Convention Center Drive, 3rd Floor, Miami Beach, Florida 33139, Certificate(s)of Insurance which indicate that insurance coverage has been obtained which meets the requirements as outlined below: A. Worker's Compensation and Employer's Liability Insurance for all employees of the provider as required by Florida Statute 440. B. Commercial General Liability on a comprehensive basis in an amount not less than $1,000,000 combined single limit per occurrence, for bodily injury and property damage. City of Miami Beach must be shown as an additional insured with respect to this coverage. C. Automobile Liability Insurance covering all owned, non-owned and hired vehicles used in connection with the work, in an amount not less than $1,000,000 combined single limit per occurrence for bodily injury and property damage. D. Professional Liability Insurance in an amount not less than $1,000,000 with the deductible per claim, if any, not to exceed 10% of the limit of liability. The insurance coverage required above must include a waiver of subrogation in favor of the City. The insurance coverage required shall include those classifications, as listed in standard liability insurance manuals,which most nearly reflect the operations of the provider. All insurance policies required above shall be issued by companies authorized to do business under the laws of the State of Florida, with the following qualifications: Thea company must be rated no less than "B+" as to management, and no less than "Class VII" as to financial strength, by the latest edition of Best's Insurance Guide, published by A.M. Best Company, Oldwick, New Jersey, or its equivalent, subject to the approval of the City Risk Management Division. Certificates will indicate no modification or change in insurance shall be made without thirty(30)days advance notice to the certificate holder. CERTIFICATE HOLDER MUST READ: CITY OF MIAMI BEACH 1700 CONVENTION CENTER DRIVE 3rd FLOOR MIAMI BEACH, FL 33139 n relieve Compliance with the foregoing requirements shall lI a not el eve the vendor of his liability and obligation under this section or under any other section of this agreement. RFP 2015-013-YG Page 45