NorlandAnnualReview2013

Annual Review 2012-13

EXCEPTIONALSERVICE,EXCEPTIONALPEOPLE...

Norland Managed Services Annual Review 2012-13

Contents1 We are Norland2 Operational highlights3 Financial highlights4 Our mission & strategy5 Our business6 Chairman’s report8 Chief Executive’s review

12 Corporate Services14 UK Services16 Critical Environment Services18 International20 People22 Projects & capital works24 Quality, health, safety &

environmental report

25 Energy26 Procurement27 Business systems28 Corporate social responsibility

& sustainability29 Corporate governance30 Directors’ biographies32 Consolidated profit and loss

statement33 Consolidated balance sheet34 Consolidated cash flow statement35 Five year record36 Officesibc Glossary

Our mission:To be a market leaderthrough exceptionalservice andexceptional people

The sectors we work in:Data Centres EducationFinancial MarketsGovernment HealthcareHeritage IndustrialManufacturing ManagingAgents MediaPharmaceutical ProfessionalServices Public BuildingsEntertainment Public SectorRetail Utilities

The services we offer:Mechanical & ElectricalEnergy Facilities MgtCleaning CriticalEnvironments Fit-OutServices Fabric Catering ICTInternational ProjectsSecurity Front-of-HouseGrounds Waste Mgt

WE ARENORLAND

Norland Managed Services Annual Review 2012-13 1

We are a leading provider of facilities, energyand project management services operatingfrom a strategic network of regional officesthroughout the UK, Ireland, Europe andthe US.

Our integrated delivery of hard and softservices drives performance and best practiceacross each service stream.

We work for major national and globalbusinesses delivering an exceptional, single-source solution to their building infrastructuremanagement requirements.

Whether it’s one floor in a multi-occupiedbuilding or many different buildings within asubstantial property estate, we maintain andenhance these assets for our customersleaving them free to focus on their corebusiness.

We manage 4.5 million square feet of datacentre facilities which makes us the marketleader for FM in white space.

We have an extensive project managementteam for large capital works and specialistenergy management advisors workingalongside our contract teams.

We use our extensive buying power, anddedicated supply chain, to deliver best valuewhilst ensuring the highest quality of service,health, safety and sustainability.

Our key asset is our highly-trained andcustomer-focused people. Their exceptionalperformance is why our customers choose tostay with us year-on-year.

“We wanted to find anorganisation whose levelof expertise in their fieldmatches our own.”

Brian PellDirector of Operations

NEC Group

OPERATIONALHIGHLIGHTS

2 Norland Managed Services Annual Review 2012-13

We continue to pave the way inQHSE and for the 6thsuccessive year have beenawarded a RoSPA Gold award forsafety.

We continue to invest in ourexpanding US data centrebusiness from where we offerour market-leading maintenanceservice for critical environments.

Despite the current recession,our business in Ireland hasgrown by 40% over the pastyear. The market has beenreceptive to our solutions.

Our first group of apprenticeshave qualified as engineersfollowing an intensive, four-yearapprentice training scheme.Integral to our growth plans andoverall sustainability approach,we now have 45 apprenticesat various stages of qualificationand learning.

We were named ‘Contractorof the Year’ at the 2013 CIBSEawards for our work with aglobal telecommunicationsprovider to retrofit a large officebuilding and a call centre.

Appointed by Santander todeliver improvements in theway the bank’s facilities aremanaged and maintained.Norland are providing TFMincluding engineering, cleaning,security equipment, fabric, pestcontrol, landscaping andcompliance.

One of 13 suppliers in theMayor of London’s RE:FIT energyefficiency refitting programme.RE:FIT covers over 400 buildingsinvolving over 59 organisations.

Norland has jumped 34 placesand is now ranked 102nd onthe Sunday Times HSBC TopTrack 250 league table, whichranks Britain’s leading mid-market private companies withthe biggest sales.

We won the contract tomaintain Astrium’smanufacturing facilities. Our‘Critical Environment’ team willprovide facilities and engineeringmaintenance services to Astrium’sclean-room manufacturingfacilities. Such controlledenvironments must be managedto tight tolerances.

FINANCIALHIGHLIGHTS


Revenue £ million Revenue by segment %

Revenue by division %

Underlying operating profit of £23.7 million,up from £18.2 million in 2012.

Underlying operating profit £ million

Cash £ million

Sales at £384.8 million (2012: £312.1 million),an increase of 23% on last year.

Ï Ï+23% +30%

OUR MISSION& STRATEGY


Our behavioursWe have identified the five keybehaviours demonstrated by ourpeople which are at the core ofour exceptional performance.We believe these make usexceptional and our missionachievable.

All of our staff are recruited,appraised and have their trainingneeds based upon the Norlandbehaviours

Our strategy Total solutions for customers’ needs in thehard services-led FM market

Understanding customer needsThe ability to understand, anticipate anddeliver customer needs while buildingeffective relationships

ResponsivenessTo positively and immediately respond toboth internal and external clients througheffective communication

Competence to deliverTo maintain up-to-date knowledge of technicaland professional aspects of the work and theability to apply an appropriate level of expertise

AccessibilityTo always be personally accessible to staff and customers

InnovationTo continually review and improve workingpractices and technology used

Focused on exceptional performance

Sell at a price to deliver the customers’ requirementswithout compromising our quality standards

Empowered and accountable people

Customer and employee loyalty

To be a market leader throughexceptional service andexceptional people‘‘ ’’

OURBUSINESS


Corporate Services

Resident teamsResident on-site teams providemechanical and electricalengineering, building fabricmaintenance and a portfolio ofsoft services which we either selfdeliver, or deliver as a managedservice

We have a number of specialistunits targeted at specific marketsincluding education, health, realestate and stadia

A mobile maintenanceworkforceThe ideal solution for clientsrequiring a high-performing FMservice with a mix of mobile andresident engineers

Our national capability is deliveredlocally from 13 regional hubs andincludes a full set of soft services

Depending on the needs of eachclient, we can manage the contractfrom any client site or, if preferred,out of one of our regional offices.Either way our leading-edge logisticsand technology platform getsNorland’s engineers to where theyneed to be – fast.

Specialist 24/7technical supportWe maintain the mission-criticalenvironments and infrastructurefacilities fundamental to business;facilities whose failure would have amajor impact on an organisation’sbrand through loss of profit,revenue and reputation

> Critical Environment RiskManagement (CERM™)

> CERMview™: secure portal formanaging risk

> Complete ICT & M&E fit-out> Data centre fit-out

UK Services CriticalEnvironment Services

EnergyServices

Projects ICT Fabric Services

Fit-OutServices

InternationalServices

Mechanical& ElectricalServices

Soft Services

Our Services

Complementary specialismsNorland offers a full suite of facilities, energy and project management services. Weprovide mechanical & electrical engineering, building fabric maintenance and all softservices (front-of-house, cleaning, security, grounds, waste mgt, pest control, catering etc)delivered as a managed service. We also provide specialist maintenance services for criticalenvironments such as data centres and clean-rooms. Norland’s integrated FM solution is a‘best-in-class’ service. This flexible model gives customers choice even down to whichsupply partners they work with. That way the customer stays in control and gets to swapout any part of the contract if they feel it is underperforming

The strength of our order book, ourexceptional people and our range of servicescombined with our strong balance sheetgives me confidence that our growthwill continue

CHAIRMAN’SREPORT


I am pleased, on behalf of the Board, to report onanother good year for Norland, against abackground of difficult economic conditions.

Financial resultsWe have delivered turnover for the year of£385 million representing an increase of 23% onthe previous year, with underlying profit up 30%to £23.7 million.

The economic climate continues to be challengingand the level of tendering, which we have referredto over the last couple of years, continues withcustomers looking for improved services at lowercosts. Our focus has therefore been, not only onwinning new contracts, but on continuing to buildlong-term professional relationships with our clientsand providing them with innovative and cost-effective solutions. As a result, our customerretention rate has remained at more than 90%. Ourtwo-pronged approach of cost containment and thedelivery of extremely high levels of service havetranslated into significant levels of new contracts.

Business approachLast year I reported that two new business unitshad been created in the healthcare and universitysectors and I am pleased to confirm that ourcontinuing work in these areas has paid off withfurther contracts from these sectors. This year wewere appointed by Astrium, the number onecompany in Europe for space technologies, toprovide facilities and engineering maintenanceservices at their manufacturing facilities inStevenage and Portsmouth. The manufacturingsector is an emerging market for us with increasingnumbers of companies with critical facilitiesrecognising the power of our critical environmentoffer.

In my last review I referred to our intention tosupport our customers at an international level. Iam pleased to confirm that we have now openedour first office in the USA and we have alreadywon significant contracts there as a result. We willbe extending our presence in other countries tofurther support our clients on a global basis. Onthat note, this year has also been excellent for our

Irish business where, despite the difficult economicconditions, the business has grown 40% over thepast year.

Last year I referred to the merger of RelianceFacilities Management, a leading provider ofintegrated facilities management services tocustomers across the private and public sectors.This merger has meant we have been able toexpand our managed services offer providing theability for Norland to act as a single sourceprovider for all essential building services. TheReliance FM contracts are now fully novated andintegrated into the divisional structure.

Our peopleWe could not have achieved this year’s excellentresults without our teams of people responsiblefor delivering an exceptional service to ourcustomers. We continue to invest in our staff via aseries of training programmes from induction rightthrough to our ‘Tomorrow’s Leader’ programme.Our Management and Development programme isrecognised by the Institute of Learning andManagement (ILM) and continues to receiveindustry recognition. This year, for the second yearrunning, it has been shortlisted in the‘Contribution to Training’ category of the 2013Building Controls Industry Association Awards.

I believe our commitment to what is an historicand ongoing strategy of staff development is clearlysupported by the results we continue to achieve. Itis also essential that we provide our workforce withgood processes and advanced technology to enablethem to perform effectively and efficiently.

OutlookThe company continues to be strong financially,with a clear strategy for the future.

Whilst the market conditions continue to bechallenging, the strength of our order book, ourexceptional people and our range of servicescombined with our strong balance sheet gives meconfidence that our growth will continue.

Paul LesterChairman

I believe ourcommitment towhat is an historicand ongoingstrategy of staffdevelopment isclearly supportedby the results wecontinue to achieve

‘‘ ’’


Norland’s comprehensive suite of FM servicesincludes M&E and fabric maintenance as well assoft services such as cleaning, security, catering,pest control, waste management, moves andchanges, front-of-house and garden services

We deliver our soft services, either ourselves oras a managed service drawing on our team of‘best-in-class’ suppliers. This flexible model givescustomers choice even down to which supply

partners they work with. That way the customerstays in control and gets to swap out any part ofthe contract if they feel it is underperforming

Integrated hard & soft services

Norland provides behavioural analyst company,dunnhumby, with a bundled service of hard FM, fire& security, building fabric maintenance and softservices. “In Norland we have found a companythat gives us scale and demonstrates the valuesthat makes it an ideal partner within our FMmodel”. Simon Booth, UK & Europe FacilitiesManager, at dunnhumby

CHIEF EXECUTIVE’SREVIEW


I am delighted to say that 2012/13 has beenanother successful year for Norland. Despite atough economic climate, we remain ahead of ourplan, turning in strong growth and once againincreasing our market share.

We believe that overall the market is becomingincreasingly polarised. Whilst some companiesremain focused purely on price, with others weare witnessing a ‘flight back to quality’. This trendmeans a growing number of companies are nowprioritising quality as one of their mainrequirements. Quality delivery is exactly what setsus apart and it’s our ability to meet those needs byproviding an ‘exceptional service’ which is largelyresponsible for Norland’s 23% growth this year.

Whilst Norland has always been known for thestrength of its hard services offering I am reallypleased to say that we have won significant FMbusiness over the last 12 months. One example isour work with Santander to deliver significantimprovements in the way that the bank’s facilitiesare managed and maintained. We are providingSantander with an integrated FM solutioncomprising engineering, cleaning, security, fabricmaintenance, pest control, landscaping andcompliance across a portfolio of 24 UK corporateoffices. We will continue to invest in this area asan essential part of our overall service offering.

We’ve secured and grown some really excitingbusiness in the year including Astrium, the NECGroup and Birmingham Airport. We have beenappointed as one of 13 suppliers in the Mayor ofLondon’s RE:FIT energy efficiency retrofittingprogramme for public sector buildings in Londonand also to the NHS framework for energyefficient lighting which is estimated to save theNHS millions of pounds.

Our international business has gone fromstrength to strength over the last 12 months andwe will continue to invest in, and expand, this areaof our business. Our US and Irish criticalenvironment offer appeals to our data centrecustomers which often have a global footprint.

We also secured some larger UK-wide contractswith multiple sites. These clients like how ourCAFM and helpdesk work together with ourhand-held technologies to deliver new efficiencies.

Structuring the businessAs a result of our Business Unit structure we arenow more agile, able to scale our business asneeded and respond to new opportunities in themarketplace. Each of our business units now hasproject managers, energy advisors and softservices specialists so that all of our clients get thebenefit of local expertise in these important areas.

We have continued to invest in Norland’s‘Major Projects’ business which has seen solidgrowth. A high-profile project in this area is ourwork with a global telecommunications providerto retrofit a large office building and a call centre.This project won the accolade of CIBSE‘Contractor of the Year’.

Norland continues to pave the way in QHSEand for the 6th successive year we have beenawarded a RoSPA Gold award for safety. We’veintroduced new technology in this area in theform of a QHSE dashboard and doubled thenumber of on-site QHSE audits. We’ve also beenrecognised by the industry for extending QHSEbest practice throughout our entire supply chain.

Norland jumped 34 placesin the Sunday Times TopTrack 250 listing this year

534


We were awarded the RoSPA Gold Medalaward for the 6th consecutive year ofexceptional health and safetyperformance. Norland has oneof the UK’s largest teams of‘Gas Safe’ registered engineerswho are qualified to worksafely and legally on gasappliances

Paving the way in QHSE

Our 300 energy engineers andconsultants help our customers negotiatetheir way through the mire of energylegislation, cost increases and worryabout supplies. They deliver quickpayback and long-term savings day in,day out

Energy Savings

Jones Lang LaSalle instructs Norland on behalfof more than 30 separate clients. Norlandmanages M&E, fabrics, projects and energyservices across more than 60 sites. The broadproperty portfolio includes shopping centres,commercial buildings and retail parks, as wellas iconic buildings such as BridgewaterPlace in Leeds and Barbirolli Square inManchester

CHIEF EXECUTIVE’SREVIEW CONTINUED


New business areasIn his address, our chairman mentioned our workwith Astrium. Space and satellite technology is anexciting sector and one in which we have a highlycompelling offer in the form of our market-leadingservice for ‘critical environments’. The Astriumcontract joins other new business secured in thissector and we will continue to invest to expandour offering to industrial and manufacturingfacilities.

Last year we created new Business Units inhealthcare, education and managing agents.These units have grown strongly in the year byfocusing on the needs of their respective markets.Recent successes include Jones Lang LaSalle,Anglia Ruskin and London South Bank University.

Business systemsWe continue to seek out ways to apply technologyto improve the customer experience. We haverolled out ‘Concept Evolution’, a state-of-the-art‘Computer-Aided Facilities Management’ systemallowing us to dynamically manage PPM andreactive works.

Our new ‘Performance Portal’ providescustomers with all the information needed to runan FM contract.

We continue to invest in our CERM™ criticalengineering platform to make this a truly globalproduct. Further development of our hand-heldtechnologies has enabled us to provide anexceptional FM service to companies with largeand dispersed estates.

Looking aheadThis coming year we will continue to carefullylisten to our customers and be uncompromising inour work to exceed their expectations and retaintheir custom. The current climate means there isno room for complacency so we must ensure weare truly deserving of our customers’ business atevery level. Ultimately, quality service must remainan integral part of how we deliver our services toeach customer. To do this we will continue tostructure the business as close to the customer aspossible, invest in exceptional operations andprovide world-class support and systems to ourbusiness units.

We will also continue to invest in our supplychain partners, QHSE, systems and, above all, ourpeople, to deliver a great service that enables us tocontinue to grow.

Ian EntwisleChief Executive

‘‘’’

We will continue to structurethe business as close to thecustomer as possible, investin exceptional operationsand provide world-classsupport and systems to ourbusiness units


Planned, preventative M&Emaintenance and reactiveworks

Robust working practicesadhere to the Health BuildingNote publications (HBN) andHealth Technical Memoranda(HTM)

We work with owners, theiragents and tenants to createand maintain the mostcompelling, safe and compliantoffice space possible

Norland is strong across many sectorswith market specialists coveringhealthcare, education, heritage, datacentres, manufacturing and research aswell as retail, logistics, stadia, financial,media, managing agents and realestate...

Depth & breadth

CORPORATESERVICES


Norland’s Corporate Services capability is ourproposition for large corporate organisationsrequiring a resident and dedicatedmanagement and FM team on-site. Weprovide a full range of FM services includingmechanical and electrical engineering,building fabric maintenance and a portfolioof soft services which we either self-deliver,or deliver as a managed service.

Clients may wish to take M&E maintenanceor a bundled package of hard and softservices. Our integrated FM service is aflexible model giving our customers choice –even down to which supply partners theywork with.

Corporate Services includes a number ofvertical market specialist teams such aseducation, healthcare and managing agents.

Our services include:> mechanical and electrical> planned and preventative> all soft services> energy efficiency services> extensive web-based information systems> building fabric maintenance

Corporate Services has had another successfulyear in which we have worked closely with bothnew and existing customers to make a realdifference to their businesses. We are proud aboutthe contribution we make to Norland’s strongname in the market and our absolute focus onexceptional service.

Customer interactionThe total commitment we show to our client basehas continued to attract new customers. Ourstrong reputation for working in public-facingenvironments was a key factor in the NEC Groupappointing us in a £multi-million contract. We areproviding services to, not only the NEC itself, butalso the International Convention Centre, the LGArena and the National Indoor Arena. No twodays are the same at these venues and it is veryexciting to be part of such an amazing team.

Industry knowledge Over the last year we have continued to developour business offer in a number of marketsincluding managing agents, healthcare andeducation. We already work with some of themost prestigious properties in the world and wehave recently added to this portfolio with ourappointment by 30 St Mary Axe (the Gherkin) toprovide services to their tenants and to thelandlord, Knight Frank.

Education is another sector in which wecontinue to go from strength to strength. As anexample we secured a contract with SouthamptonSolent University for their 32 academic buildingsand 8 halls of residence. As with many of ourclients, Norland will be looking to introduce arange of innovations.

Norland provide British Airways with aprofessionally-managed service at Heathrowterminal 3 & 5, Gatwick, regional sites inManchester & Newcastle as well as BA’scorporate offices and data centres‘‘ ’’

CORPORATESERVICES CONTINUED


Customer loyaltyA true test of how well any organisation is doing isarguably its level of customer retention. We prideourselves on delivering exceptional service which, inturn, translates into high levels of customer loyalty.We have many examples of customers like KPMGwith whom we have worked since 2004 and whohave recently renewed and expanded their contractwith us after a competitive bid.

People and processesHealth & Safety remains vitally important. We haverun a number of ‘safety clinics’ and ‘log-book’workshops and by having a safety champion ateach site helps to ensure we embed QHSE ineverything that we do.

We continue to recruit the best and are proudthat all the Corporate Services business unit leadershave been promoted into their roles from within thecompany. All our staff benefit from the company-wide commitment to coaching and training.

As a result of our willingness to always go theextra mile, total commitment to compliance andnot ever being satisfied with ‘one-size-fits-all’,Corporate Services has made a significantcontribution to the company’s overall growth andprovided our customers with dedicated qualityservices for their businesses.

Kevin LynnManaging Director – Corporate Services

Norland clearly understandsit’s all about the customerexperience…. We wanted tofind an organisation whoselevel of expertise in their fieldmatches our own in eventsand Norland certainly providethisBrian Pell, Director of OperationsNEC Group

Good quality, well-maintainedbuildings are essential toexcellence in teaching andresearch. Good FM is key toattracting new, and satisfyingexisting, students

UKSERVICES


Norland’s UK Services capability is the idealsolution for clients with multiple, dispersedsites and who require a high-performing FMservice with a mix of mobile and residentteams. Our national capability is deliveredlocally from 13 regional hubs.

Depending on the needs of each client, wecan manage the contract from any client siteor, if preferred, out of one of our regionaloffices. Either way our leading-edge logisticsand technology platform gets Norland’sengineers to where they need to be – fast.

We offer M&E and building fabricmaintenance right through to TFM includinga full set of soft services like security,cleaning, waste, front-of-house, catering andgrounds maintenance.

Our services include:> mobile engineers & on-site team if

required> latest handset & mapping/logistics

technology> real-time customer management

information> planned and preventative M&E> soft services and integrated FM> national coverage across UK & Ireland> 12 regional hubs> energy managers/engineers

New winsOver the last year we have continued tostrengthen our national service capability to meetthe needs of those clients with hundreds of sitesspread throughout the country. As a result wewere appointed by a high-profile, public sectorclient with 386 different sites located throughoutthe UK. The mix of buildings within this client’sestate is varied and includes four data centres withspecialist maintenance needs. The contract gaveus a wonderful opportunity to showcase the fullscope of our offering.

The healthcare sector continues to go throughconsiderable reform. We have helped our NHSclients to novate over to the new NHS propertyservices body set up by the Department of Healthand maintained the high levels of service theyhave come to expect.

Nationwide coverageWe have reduced the amount of time ourengineers spend on the road. More sophisticatedroute planning has led to labour savings, reducedfuel costs and less wear and tear. It has alsoallowed us to meet increasingly tight SLAs andprovide better value and keener pricing to ourcustomers as well as reduce our attendance timesand improve first-time fix rates.

Capital worksProjects work has taken off this year with moreand more of our clients wanting to make use ofour detailed knowledge of their estates in theplanning and execution of large capital works.One key success was a £3.5 million capital projectfor an NHS body along with the EverythingEverywhere project for which we won CIBSE‘Contractor of the Year’.

PeopleWe have continued to invest in our people. Sixteenmembers of the UK Services team have taken partin the ‘Institute of Leadership’ managementawards and we have invested in five apprenticeswhich are currently working their way through theNorland-wide scheme.

‘‘I would like to express the thanks of the NHSBlood and Transplant facilities team... for thefantastic work and response provided by youand the whole Norland team to the majorflooding incident last week. The time tobring the facility back into operationhas been remarkableWayne Tannahill, Regional Estates and Facilities ManagerNHS Blood & Transplant ’’

UKSERVICES CONTINUED


SystemsWe have taken full advantage of Norland’scommitment to business systems. The contractmanagement portal provides our clients andcontract staff with single log-on to keymanagement documents and access to otherNorland systems. Originally implemented for oneof our large retail accounts, we have furtherdeveloped it for other clients including EverythingEverywhere and Scottish Power.

Webquote is Norland’s well-regarded and easy-to-use system for preparing quotes for extraworks. We have tailored the system to the needsof a number of UK Services clients who have beenusing it extensively and added some additionalfunctionality, including the ability to attachspecifications and drawings and improvements tothe way information is exported. Mobiletechnologies and PDAs are vital to our ability toprovide a responsive service and we have made anumber of upgrades in this area too.

Industry participationNorland is a sponsor of the Home Counties regionof the British Institute of Facilities Management(BIFM) with one of the UK Services Business UnitDirectors acting as a BIFM non-executive BoardDirector. This increases our voice in addressing keyissues in the industry and driving forward bestpractice.

Tommy MeikleManaging Director – UK Services

State-of-the-art handsettechnology provides ourengineers with theinformation they need andworks with CAFM in real-time

Controlled from a centralhelpdesk, Norland’s fleet ofmobile engineers providenational coverage throughoutthe UK and Ireland

CRITICAL ENVIRONMENTSERVICES


Our Critical Environment Services capabilitymaintains the mission-critical environmentsand infrastructure facilities fundamental tobusiness; facilities whose failure would havea major impact on an organisation’s brandthrough loss of profit, revenue andreputation.

Often 24/7 operations, our highly skilledteams oversee and maintain the complextechnical infrastructure of leading bankingand financial institutions, data centres,manufacturing facilities, research centres andbroadcasting production.

Our services include:> Critical Environment specialists> Critical Environment Risk Management

(CERM™)> CERMview™: secure portal for managing

risk> Complete ICT & M&E fit-out> Data centre fit-out

During 2012/13, the Critical Environment Servicesdivision continued to build upon its reputation ofbeing a premium provider for mission-criticalenvironments. We support some of the world’sleading enterprise data centres and co-locationfacilities, global banking headquarters and leadingresearch and manufacturing facilities.

New initiativesSteady growth this past year is set to continue aswe expand into new market areas. This year hasseen Norland advance in the critical manufacturingand networks market, with both Astrium andEricsson choosing Norland to provide their facilitiesmaintenance. We are now offering a mobileversion of our critical service which will helpcustomers with geographically-diverse criticalenvironments to maintain their sites.

ICT fit-out and converged servicesWe are investing in major ‘InformationCommunication Technology’ (ICT) fit-out projectsled by our dedicated ICT projects team. Our largestfit-out to date has been a £3.5 million programmewithin a global financial services data centre. Theproject included the design, procurement,installation, testing, and project management ofthe complete ICT infrastructure.

Our ICT fit-out service is part of our convergedCE360 service which integrates mechanical andelectrical maintenance with the management ofthe IT infrastructure. This converged approachprovides the command, control and monitoringnecessary to manage all aspects of the data centre.

Human factorsWe continue to develop our product; our people.This year has seen some of the highest traininghours completed by our employees. We prideourselves on our tailored training programmes forengineers operating in critical environments. Weoffer specific courses such as Human Factorstraining, as well as a broad range of technical skillstraining. We also partnered with the UptimeInstitute to deliver ‘Accredited Tier Rating’ training.

Our working methodology is based on risk

Right Culture

Effective CERM™

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Critical Environment RiskManagement (CERM™) is aboutinstilling the right culture andbehaviours to effectivelymitigate risk

Norland has vast experience of managingdata centre facilities and importantlyunderstanding the critical importance ofzero downtime in these environmentsStuart Sutton, CEOInfinity SDC‘‘ ’’

CRITICAL ENVIRONMENTSERVICES CONTINUED


management, with our bespoke ‘CERMview™’risk management platform being used across ourcustomer portfolios to help reduce operational riskby up to 80%.

Industry participationWe continue to influence and work with thecritical market, hosting various seminars aroundthe subject of tier rankings and risk mitigation.These have been attended by key industry peers,with speakers including the Uptime Institute,Speechly Bircham and Terry Vergon. We look setto continue these seminars in 2013/14.

Finally to keep as close as we can to ourcustomers, we have opened up a new office in theThames Valley – an area with the highestconcentration of data centres, IT and computingcompanies in Europe. This allows us to continue toprovide excellent customer service, with ourNorland infrastructure more accessible than ever.

Tony SmithManaging Director – Critical Environment Services

“Norland has considerableexperience in data centremobilisation.... Norland fitexcellently with our own teamof professionals.”Richard BortonOperations DirectorArk Continuity

We are experts in working incontrolled settings where theenvironment must bemanaged to tight tolerances

A global financial servicescompany selected Norland forthe £3.5m fit-out of their newdata centre. The 14 weekproject covered design,installation, testing andproject management of acomplete ICT infrastructure

INTERNATIONAL


We operate bespoke country-specific deliverymodels, taking the existing success ofNorland’s customer experience and tailoringit to local markets. Norland’s Internationalbusiness has implemented this approachacross Europe and the US and as a result, ithas made a positive contribution to thegroup’s impressive overall growth.

In Ireland, the company provides world-classfacilities maintenance services to the largenumber of major multi-national businessesthe Republic attracts.

We provide a pan-European service via ourcarefully-selected, like-minded, FM partnersbased in EMEA.

Additionally, Norland has taken its marketleading services for critical environments tothe US – a country which has only recentlybegun to really embrace the benefitsresulting from specialist services within thedata centre market.

Our capabilities meet the requirements forinnovation, proactivity, flexibility andtransparency expressed by US clients. Theinternational business includes a broadportfolio of ICT, FM, data centre management,project management and M&E services.

Our business operations in both Ireland and theUS saw a very successful year and significantgrowth.

Internationally, Norland ensure stronggovernance, compliance, supply chainperformance and risk management whilstdelivering operational consistency and enhancedservice levels across geographical boundaries. Weemploy state-of-the-art business systems and IT togive customers total visibility across their globalestate.

Country-specificNorland works to country-specific delivery modelswhich build on the existing success of the UKbusiness and tailors it to the needs of othernational markets. Our unique offerings, IT systems,world-class QHSE and supply chain practices are allrolled out in these new jurisdictions.

Norland is well known for a culture whichempowers its staff. Strong management and in-country leadership has helped to establish thesame cultural qualities in Ireland and in the US.

IrelandOur Irish business grew by approximately 40% thisyear with significant customers added in themanufacturing, technology, banking, software,data centre, commercial offices and professionalservices sectors. We offer the full Norland portfolioof services from our offices in Ireland. This year,growth has come from FM, engineering, majorprojects and energy management. The market hasbeen highly receptive to Norland’s focus oninnovation and solutions built around quality.

We have continued to raise our profile throughsupporting key industry conferences and tradeshows on topics such as energy management,data centre best practice and FM models. We havealso worked to proactively build strong industryrelationships. We were founding exhibitors andinfluencers of the FM Ireland Show and we alsoopened and chaired the Data Centre Irelandconference.

We continue to see a trend towards procuringdata centre services on an internationalbasis. Norland is uniquely placed tomeet that requirement‘‘ ’’

INTERNATIONALCONTINUED


USAOur US business has been running for over a yearand is rapidly establishing itself with some highprofile global organisations in its customer base.

Norland identified an unsatisfied niche in themarket for world-class facilities management andengineering services in the US. It was clear thatthe existing data centre capacity in the US was notadequate to cope with the region’s increasingneed for growth in technology services. As a resultthe US saw a 50% growth in data centre facilitiesin 2012. We understand the opportunities and theappetite for our market-leading engineering andmaintenance solution for data centres in thisregion.

Historically, the market has lacked a nationwidequality service provider. Our market researchshowed a clear need for greater levels ofinnovation, proactivity, flexibility and transparency.Customers wanted access to a broader data centrespecific solution encompassing ICT, FM, datacentre operations and engineering support.

We have headhunted local data centre talentwith a good track record in the industry andtrained them in those processes, services andpeople behaviours which set us apart. As a resultwe have seen strong order book growth and havea very healthy pipeline going into next year.

We have every confidence about our ability toseize the opportunities presented by the US andbecome the market-leading national provider ofmission critical support solutions.

Paul Saville-KingManaging Director – International

Our membership ofECSynergy meansNorland is well-placedto meet all our clients’needs on a pan-European basis.ECSynergy is aninternational FMconsortium from whichwe partner with like-minded, best-in-classFM providers across38 countries.

Norland Managed Services haswon a major contract tomanage critical environmentservices for a 120 megawattdata centre. The appointmentwill involve support for a700,000 square foot facilityfor a Fortune 10 company

PEOPLE


Supporting our business growth with exceptionalpeople continues to be a key priority. We focus onthree main areas: recruitment, talent developmentand retention.

Business as usualIn the process of taking on new contracts it is vitalthat Norland successfully integrates transferringstaff into our business. Over a third of all our newemployees have joined us through the TUPEprocess so we make every effort to ensure ourapproach is structured, sensitive and wellcommunicated. Our tailored transition programmeengages early with employees and uses a joined-up approach with clients and supply partners. Thefeedback we get from transitioning employees isvery positive and the vast majority of employeesremain with us after they have transferred.

Recruiting & developing exceptional peopleNorland’s business model is all about localempowerment and accountability and this hasalways proved to be highly attractive to potentialemployees seeking real responsibility in theircareers. Over the last 12 months we havedeveloped the way we recruit our contractmanagers and apprentices. Use of assessmentcentres and personality profiling have helped us toidentify people that match the skills we seek andwho emulate our Norland behaviours.

We have continued to invest heavily in trainingand development. Fourteen managementprogrammes were run throughout the year andover 180 managers participated. We have alsobuilt on the success of our Apprentice Programmeand now have 45 apprentices across the business.

We continue to develop today’s employees fortomorrow’s opportunities. We understand theimportance of good succession planning and wehave an impressive history of developing talentfrom within the company. Our ‘talentprogrammes’ include a new fast-trackmanagement programme which help us to meetfuture needs.

A new dimension The increasingly international dimension to ourbusiness has brought new challenges. Country-specific people policies replicate the Norland wayof working and provide flexibility for countryleadership to meet local and cultural needs. Wehave recruited in-country human resourcespecialists to help manage the ‘bedding-in’ of theNorland culture. UK employees are sent onsecondments to show the ‘Norland way’ and ourinduction programme for international managersincludes visits to the UK and buddying withexperienced Norland managers.

Retention & reward Our ‘Exceptional Awards’ programme has givenpublic recognition to seven finalists who wererewarded for their stand-out achievements.

The ‘Chief Executive Awards’ has also been ahuge success this year, with 15 winners recognisedfor a broad range of achievements across thebusiness. In addition we have held a number of‘Celebrate Success’ events to reward our teams forwhat they have achieved.

We place a good deal of emphasis on ensuringNorland is a great place to work. Our new benefitsportal has been hugely successful and is availableto all employees and we are currently preparingfor our auto enrolment obligations, which takeeffect from 1st November.

The year aheadOne of the main reasons why our business issuccessful is because of the quality of our people.The only way we will maintain our competitiveedge is by continuing to recruit the best peopleand provide them with good career progressionand development opportunities. With a number ofnew initiatives already underway, coupled with ourultimate aim of being the employer of choice, webelieve we are in a good place to support, whatwill no doubt be, another very successful year forNorland.


Our development programmes havebeen shortlisted for a number of awardsincluding the 2013 Building ControlsIndustry Association Awards and H&VNews awards where one of ourapprentices was highly recommended inthe ‘Apprentice of the Year’ category

Apprentices

Over a third of our employeesjoin us through the TUPEprocess and the feedback weget about our structuredprocess is very positive

14 management programmeswere run throughout the yearand over 180 managersattended

Norland is the CIBSE ‘Contractor of the Year’for 2013 for its work with a digitalcommunications company to retrofita large office and call centre

PROJECTS &CAPITAL WORKS


Norland’s ‘Project Management’ capability is adesign, construction, fit-out and refurbishmentservice available across all of the markets thatNorland delivers its maintenance services. It coversprojects valued from £30,000 to over £12 million.

Strong growthDuring the past financial year our project businesshas shown strong growth.

Market conditions for the project industry as awhole remain tough. But our focus on innovativeand cost-effective solutions is ensuring that thebusiness is well placed for the medium term. Wehave a successful history of delivering projects upto a value of £2 million. These still form the coreof our project delivery business.

CIBSE ‘Contractor of the Year’This year we were delighted to be made‘Contractor of the Year’ by CIBSE for our workwith a global telecommunications giant to retrofita large office building and a call centre. Norlandhandled the design, all aspects of the ConstructionDesign Management (CDM) and building control.The project was managed as a phasedimplementation of works across two buildings,8,500m2, five floors and 1,000 staff. It includedreplacement of an existing HVAC system, newlighting, ceilings, lifts and the introduction of aheat recovery system, environmentally-friendlycoolants and fresh air movement. Norland alsodesigned and built a new video conferencing suitefor the client and fully decorated both buildings.

Norland CONSTRUCTWe are regularly being approached by customerswanting us to apply the Norland disciplines tohigher-value, more complex projects. This year weinvested in a major project capability for thedesign, installation and commissioning of largecapital works. We call it Norland CONSTRUCT.What makes Norland CONSTRUCT different is thephilosophy we adopt which essentially takes a‘whole life’ perspective to the project and ensuresthat facilities are specified for usability, efficiencyand operability and designed to suit the ‘real life’

needs of their eventual occupier. We employ theBSRIA ‘soft landings’ approach in conjunction with‘Building Information Modelling’ software tobridge the gap between design and constructionand ease the project’s transition into use.

Major fit-outAn early success was winning the first stage fit-outof an 11,475ft2. data centre hall on the CobaltData Centre campus. This included ground workto construct the plant bases, chiller gantry andplant installation as well as wall erection, fitting ofdoors and isolation chambers. We installed raisedaccess floors with plinths to accept the CRACunits and assembled and tested LV switchgear. Theproject also included installing, integrating, testingand commissioning the mechanical and electricalsystems.

With its focus on risk management andstringent adherence to best practice QHSE,Norland CONSTRUCT is particularly suitable forcapital works involving live environments.

‘‘ ’’


“Norland offers a unique combination ofdata centre fit-out project capabilitieswith engineering risk managementservices and facilities management.Norland has been able to demonstratevery clearly how its systems and processeswill support our high-quality environmentand deliver value to our tenants.”Guy Marsden, DirectorHighbridge

Our approach seamlesslyintegrates the project into theongoing maintenance regime

At Norland we design andbuild differently. Weemphasise in-use performanceand bridge the gap betweendesign and delivery

QUALITY, HEALTH, SAFETY& ENVIRONMENTAL


A world-class culture We have delivered another year of strong QHSEperformance.

We retained our full suite of internationalstandards verified by our UKAS accredited body,BSI. These were PAS 99; an integratedmanagement system for managing all our certifiedsystems; ISO 9001 for quality management; ISO14001 for environmental management and BSOHSAS 18001 for occupational Health & Safety.

We also won a ‘RoSPA Gold Award’ for sixconsecutive years of exceptional Health & Safety.

More and more of our customers are asking forsecurity services as part of an integrated FMsolution and we became part of the SecurityIndustry Association (SIA) approved contractorscheme. This accreditation provides purchasers ofprivate security services with independent proof ofa contractor’s commitment to quality.

Our ‘Electrical’, ‘Refrigeration’ and ‘Gas Safe’registrations were retained. In fact Norland hasone of the UK’s largest teams of ‘Gas Safe’registered engineers who are qualified to worksafely and legally on gas appliances.

We have continued to extend QHSE bestpractice across our supply chain. Our initiative‘Managing Risk – a Joint Responsibility’ came tothe attention of the industry with Norlandreaching the finals of a number of industryawards.

The Scottish Power contract team successfullyretained the British Safety Council Internationalaward.

Practical solutions, exceptional service,exceptional peopleQHSE is at the core of our business. It is a cultureforged from the Norland behaviours and all ourteams play a significant role in maintaining ourcontinued success. Over the last 12 months wehave continued to expand our international offer.It has therefore been important to ensure that theteam based in the USA have had the same robustQHSE systems and processes available in the UKand Ireland.

We have worked with our in-house businesssystems team to build a new US ‘EHS Gateway’using the very latest applications. This web-basedsystem provides a portal for our US team to viewand access ‘all things QHSE’. This is backed up bya comprehensive suite of ‘e-learning’ tools.

We have built our own bespoke database tocapture the specific federal and state-wide QHSErequirements which exist in the US. We have alsorolled out a set of QHSE applications which enableus to share data in a real-time ‘live’ environmentwith our customers and suppliers.

Specialist support and communicationsEngaging our people, and our suppliers, has beenkey to sustaining our success in QHSE. Our ‘QHSEChampions’ initiative has resulted in moreproactive hazard identification and, importantly,the ability to manage and control those potentialrisks.

To share experiences, we publish updates andcase studies which are available as briefings fromour QHSE intranet and we introduced the ‘EHSblog’ to provide a live global environment for ourteams to interact on line.

The future – sustainable successWith solid foundations to build on, the comingyear will see us launch a number of newinnovations:> intelligence-led QHSE performance forecasting > an integrated hazard analysis application> deployment of a behaviour-based positive

reinforcement processWe will continue to actively engage employees

via our ‘QHSE Champions’ initiative as well as viateam training, workshops and seminars whichfoster best practice.

This is all designed to sustain our exceptionalservice and exceptional people.

Steve BookerDirector of QHSE

ENERGY


Twelve months on since the last annual review andthe energy world feels in many ways, as though itis in an even more difficult place.

Market round up The Energy Bill is still awaiting Royal Assent. Thegoal is to find ways to achieve a stable electricitysupply as coal-fired power stations are retired andthis delay is causing significant uncertainty formany of our customers. Utility prices are stillincreasing. In March 2013 the Office for BudgetResponsibility (OBR) warned that consumers couldbe hit with bigger than normal increases. Finally,perhaps more worryingly, Ofgem has stated thatthe combination of UK power plants closing,foreign gas supplies shrinking and demand rising,has made British energy reserves “uncomfortablytight”.

From a carbon management and reductionperspective, whilst carbon allowances are stablethis year, the government is proposing that CRCphase 2 prices increase to £16/tonne.

The last CRC league table was published tolittle fanfare, but the government is keeping itsfocus on greenhouse gases by legislating that allUK companies on the London, European & NewYork stock exchanges commence reporting onthem from 1st April.

Helping our clientsThe Norland energy team has been helping ourcustomers negotiate their way through this mire oflegislation, cost increases and worry about supplies.

We achieve all of this through the application ofour extensive technical knowledge, practicalbuilding expertise and understanding of the carbonmanagement business to deliver both economicand environmental benefits to our customers.

We have invested in the necessary systems,processes and people to enable us to providesustainable solutions for all our customers’ needsin the built environment. Our Energy Engineerswork on our customers’ sites to reduce energy andcarbon emissions through the optimisation ofheating and cooling controls. We now have over300 Energy Engineers delivering quick payback

and long-term savings for our customers day inand day out.

The Energy Bureau provides 24/7 energyreporting, monitoring & targeting, bill validationand utility procurement. In addition, we can activelymanage your energy consumption by continuouslymonitoring your facilities and, if an agreed energylevel is exceeded, we can raise an immediate alarmfor our Energy Engineers to investigate.

Our project teams will design, build, operateand maintain significant energy infrastructures.We can also arrange the funding if required, be itgovernment or private. We are not embeddedwith any one supplier and so we are able toproduce innovative and effective solutions to meetour customers’ requirements.

Energy frameworksNorland has been chosen as a RE:FIT frameworkpartner following a rigorous tender process. RE:FITis the Mayor of London’s innovative scheme toreduce carbon emissions in Greater London.

Norland has also been successful in winning theNHS CPC framework to finance and supply LEDlighting to over 50 hospitals in the North East ofEngland.

By continuously reviewing technologies andinnovation, we have been able to advise manycustomers on the most effective approaches togain the most significant savings and quantifiablepaybacks. For example using EC fans in criticaldata space has enabled customers to save anastonishing 50% against previous technologies.

Energy management is fully embedded in allthat we do and Norland will continue to seek tobe a market leader.

Gary PerryDirector of Sustainability, Energy & Projects

PROCUREMENT


Over the last year we have taken supplier relationshipmanagement (SRM) to an entirely new level withinthe industry. We looked closely at successful modelsused in manufacturing where long and complexsupply chains, similar to the FM industry exist. Ourapproach involves close engagement with oursupply chain and the adoption of a collaborativepartnership. We will even assist some of ourpreferred suppliers with aligning their businessesmore closely with our own to help improveefficiency and streamline the customer experience.

EfficienciesAn example is the work we did with Tyco Fire &Integrated Solutions, the UK’s largest and longest-established fire protection company. There was avery clear potential to develop our relationshipwith Tyco and work strategically to deliver benefitsto both parties and ultimately our customers.These are benefits that are over and above whatwe would typically receive from a standardagreement and included a closer focus on costand service delivery.

We have taken a similar approach with otherpartners including one global organisation that isnow able to meet two hour response times toNorland sites when the industry standard is four.

Norland is receiving recognition for its supplychain approach. We have been featured in FMJournal and Supply Management magazine andalso been shortlisted in the ‘Industry Collaboration’category in the H&V awards.

Supply partner eventOur annual supplier event in October was, onceagain, a huge success with over 700 delegatesattending. This included 65 exhibitors and over200 customers. We invite our suppliers to exhibitto all our contract teams. Given Norlandempowers its contract managers as businessmanagers with decision-making responsibility, it isvital they are completely familiar with the fullstrength of the supply chain at their disposal. Theday included a number of speakers, including akeynote from a motivational speaker on Health &Safety which was well received by the audience.

EmpowermentWe now have a well-established ‘Procurement’capability across the company. In keeping with ourcompany culture, which is focused on downstreamdecision-making, we have trained many of ourmanagers so that the business can manage itsown procurement. This has been highly successfulwith customers seeing the benefit of contractmanagers at their site with the appropriate skills tomake the right procurement decisions.

TechnologyOver the last 12 months we have implementedAriba, a leading-edge procurement technology.The new platform means we are able to managerisk throughout our supply chain. It is also used byour business managers to provide feedback onsupplier performance. Because this feedback isvisible to both suppliers and Norland staff, it isresulting in improved service levels and providesan incentive for both parties to ‘up their game’.

What is quite unique is the way we are usingAriba as a sourcing tool. We have implemented itas a tool for our business managers to use. Thetool helps our managers to make appropriatesourcing decisions on behalf of our customers andwe can use this as a means of demonstrating toour customers how we are achieving best value ontheir behalf.

Our procurement approach continues to evolveand adapt as the requirements of Norland and ourcustomers change. Because our supply chain iscritical to our business, building relationships andcollaborating remains a founding principle.

Rachel LeeGroup Procurement Director

BUSINESSSYSTEMS


Keeping the focus on the customerAt Norland, we believe that IT innovation is a keyway of supporting our customers. That is why inrecent years we have developed a unique suite ofsoftware apps, designed to put the customer incontrol.

Our IT and Business Systems specialists alwaysstrive to understand the unique requirements ofour customers and have a wealth of experience inapplication integration, bespoke reporting and allaspects of Computer-aided Facilities Management(CAFM) systems.

Our goal is to meet and, if possible, exceedexpectations so that IT becomes an enabler – andnever a barrier.

Safeguarding your assetsOur CAFM application underpins the plannedmaintenance and reactive service provided tomany of our customers. Over the last 12 monthsNorland has updated this vital system, combiningthe latest CAFM application with Microsoftcollaboration, business intelligence and mobiletechnology solutions.

However, it’s not just about the technology –it’s the people who use it who make thedifference. Over the last year we have put all ofour CAFM users through specific training andgiven them the support they need to help themget the most out of the new system. Ourdedicated in-house team of CAFM specialists arealso on hand to support our employees andcustomers in using this software.

Efficiency through innovation‘Norland Apps’ are built in-house to deliver adistinctive customer experience. This can clearly beseen in the high customer uptake of ourWebquote system or by the excellent feedback wehave received about our Performance Portal andeLogbooks apps.

This year has seen the introduction of our new‘Project Delivery System’ (PDS) which has quicklybecome a vital tool in helping us to support oursuccessful projects business. This new system helpsus to ensure effective risk management and

project review processes throughout the life of aproject.

We deployed an ‘eTrading’ solution whichenabled us to improve our handling of supplierpayments. These efficiency gains are alreadyimproving speed and accuracy at the same time asreducing running costs.

Resilience and reliabilityAll of our business-critical applications are hostedat a highly secure and resilient data centre facilitycomplete with ISO 27001 & ISO 20000-1accreditation as well as 24/7 monitoring &alerting. Sophisticated software is used tocontinuously check the health of our critical ITinfrastructure and performance of our systems.

Over the last 12 months, Norland hassignificantly upgraded its, already strong, ITresilience and business continuity with a fulldisaster recovery (DR) site and real-time datareplication. All DR and Business Continuity planshave been reviewed and revised accordingly.

Scalability and flexibilityThe selection of software tools and applications istaken with the utmost seriousness at Norland, aswe believe only well-engineered solutions andtechnology components will enable us to supportthe needs of a fast-growing business such as ours.By sticking to a well-defined technology strategy,our IT platform has been robust and flexibleenough to support our move into newinternational markets and manage numerousgrowth challenges within the company.

Business-driven ITAll Norland ‘IT and Systems’ projects are led by asenior executive, helping us to ensure that theseprojects are kept focused on business needthroughout the entire project lifecycle. Our Prince2certified Project Managers provide continuousmonitoring of costs, timescales and quality ofproject deliverables, preventing any seriousoverrun and maintaining the focus on deliveringgenuine business benefit.

Our CAFMapplication helps usto manage morethan 190,000customer assetsspread acrossapproximately4,000 buildings inthe UK alone.

Business Integrity Integrity, honesty and fairness are requirements for all Norland employees at alllevels across the company. We expect no less of those with whom we choose todo business. Our policies, processes and controls have been designed to ensureour standards are understood, followed and maintained.

Sustainable Development Norland believes that sustainable development is the key to future prosperity.We are committed to balancing short and long-term interests and integratingeconomic, environmental and social priorities into our business decision-making.

Community Involvement Norland continuously seeks to find ways of contributing positively to thewell-being of the communities in which we, and our customers, work. We aremotivated by making a difference and by building strong community relationships.

Our People Norland is an equal opportunity employer. We oppose and take positive steps toeliminate all discrimination on the grounds of colour, nationality, gender, sexualorientation, age, status, religious belief or disability. We encourage equalopportunities for all employees and promote their development to enable themto make the most of their talents within an inclusive working environment.

Supply Chain Norland adopts the highest standards of personal integrity and honesty inselecting and working with suppliers and sub-contractors. We work closely toestablish good, commercial long-term relationships – based on fair practices,innovation, costs and added value and we expect them to adopt sound social,environmental and ethical policies.

Our Customers We compete for business and deal fairly and ethically with customers. Throughexceptional performance and growth we have created a profitable business.Our long-term profitability and the strong financial foundation this provides areessential, both to the achievement of our own goals and our ability to maintainthe capacity to fulfil our responsibilities to customers.

CORPORATE SOCIAL RESPONSIBILITY& SUSTAINABILITY


CORPORATEGOVERNANCE


The Board

In addition to the Chairman and the executiveteam, the Board has two Non-executive Directors.The Remuneration and Audit Committees arestanding committees of the Board and havewritten terms of reference approved by the Board.

The Chief Executive is responsible for therunning of the Company. The Chairman isresponsible for the running of the Board andtogether with the Non-executive Directors ensuresthat the executive team delivers the Company’splans.

The Board of Directors holds regular meetingsduring the year to review the operating andfinancial performance of the business.

The Board has a number of matters reserved forits approval including major capital expenditureand the development of financial plans.

The Executive Directors are collectivelyresponsible for proposing strategy and for makingand implementing operational decisions. Non-executive Directors are responsible for exercisingtheir skill and judgment and contributing to theformulation of strategy, policy and decisionmaking.

The Board has responsibility for, and reviews ona regular basis, the Company’s systems of internalcontrols. These are designed to provide reasonableassurance that assets are safeguarded.

The Board is responsible for identifying,evaluating and managing risks faced by theCompany which are considered to be significant.The process for managing these risks requires theCompany to consider operational, financial,strategic and compliance risks and theeffectiveness of the mitigating controls it has putin place. The principal risks identified from thisprocess are recorded on the Company’s riskregister which is maintained by the FinanceDirector. This register is regularly reviewed by theAudit Committee.

DIRECTORS’BIOGRAPHIES


Paul Lester, CBEChairmanPaul Lester, CBE, isChairman ofGreenergyInternational, SurvitecGroup, John LaingInfrastructure Fund,

Norland Managed Services, Peverel andParabis. He is also a Non-executivedirector of Invensys plc. Previously ChiefExecutive of VT Group plc, the supportservices company. Paul also held theposition of Group Managing Director,and Chief Executive of Graseby plcfollowing senior management positionsat Schlumberger and the Dowty Groupplc. He is a Chartered Engineer, a Fellowof the Institute of Mechanical Engineersand was awarded an Honorary Doctor ofLaws and is a lifelong West BromwichAlbion supporter.

Ian EntwisleChief ExecutiveAppointed ManagingDirector for NorlandManaged Services Ltdin 2002 and ChiefExecutive in 2007. Ianwas originallyappointed to theBoard in 1997. Prior to 1997 Ian was UKGeneral Manager of Satchwell ControlSystems Ltd, before which he wasDivisional Director for the UK, Middle Eastand Southern Europe.

Edward BrownNon-executive DirectorAppointed to the Board as Non-executiveDirector in April 2009. Chairman of theRemuneration Committee and member ofthe Audit Committee. Main Board Directorof Rentokil Ltd, following a 25 year careerat Rentokil, rising to the position of ChiefOperating Officer, as well as other Non-executive directorships with MorrisonFacility Services, SITPRO (trade facilitation),Moat Homes, Brogdale Horticultural Trustand Chief Executive Officer of MorganEverett Ltd. Previousexperience withBritish Steel,Kwikform and, in theinsurance sector,specialising in riskmanagement, withBland Payne andSedgwick Limited.

Mike BurdettNon-executive DirectorNon-executive Director appointed to theBoard in September 2004. Chairman ofthe Audit Committee and member of theRemuneration Committee. He is alsoChairman of the Electoral ReformServices, Fusion Internet Solutions and aNon-executive director of Health Watch,West Sussex. His previous experienceincludes founding LSI Computer Systemsplc in 1984, acquired in 1997 by Scala

Business Solutions.He was Presidentand Chief ExecutiveOfficer of Scala untilits acquisition in2004 by EpicorSoftware.

Duncan GreenFinance DirectorAppointed to theBoard as FinanceDirector in September2001. Before joiningNorland ManagedServices, Duncanworked for Hays Distribution Services forfive years as Commercial Director. Prior tothis he worked for nine years with Marks& Spencer in a variety of senior financialpositions.

DIRECTORS’BIOGRAPHIES CONTINUED


John MaidmentGroup ServicesDirectorJohn joined NorlandManaged Services in2002 and wasappointed to theBoard in February

2012. Prior to joining Norland, John heldthe position of Sales Director for G S HallLimited and Specification Sales Managerfor Toshiba Carrier UK.

Kevin LynnManaging Director,Corporate ServicesKevin joined NorlandManaged Services inMarch 2009 and wasappointed to theBoard in March 2010as Divisional Managing Director forCorporate Services. Prior to joiningNorland Kevin worked for JohnsonControls where he held the position ofRegional Director for North-West Europe.Prior to this he worked for YorkInternational in various seniormanagement roles.

Tommy MeikleManaging Director,UK ServicesJoined NorlandManaged Services asOperations Managerin 2001 withresponsibility for theNorthern region and the Scotland office.He was promoted to Regional Managerfor Scotland in 2004, Business UnitDirector for Scotland in 2006, DivisionalOperations Director for the CorporateServices Division in 2007 and to hispresent position of Divisional ManagingDirector for UK Services in 2008. Tommywas appointed to the Board in March2009. Prior to working for Norland,Tommy was with PME/Carillion in variousoperational and management roles.

Paul Saville-KingManaging Director, InternationalJoined Norland Managed Services in 2002and was appointed to the Board in May2006 as Managing Director, CriticalEnvironment Services. In April 2011 Paulwas appointed as Divisional Director forManaged Services. Prior to joiningNorland, Paul worked for HoneywellControls, a globalblue chip controlscompany for 16years, culminating ingeneral managementof a key subsidiaryacquisition.

Tony SmithManaging Director, Critical EnvironmentServicesTony joined Norland Managed Services asContract Manager in March 2003 and wasappointed as Divisional Managing Directorfor Critical Environment Services in March2011. Tony was appointed to the Board in

September 2011.Prior to joiningNorland, Tony workedin the manufacturingindustry forHoneywell Controls.

CONSOLIDATED PROFIT& LOSS STATEMENTYEAR ENDED 5 APRIL 2013


5 April 2013 30 March 2012 Actual Actual Growth £000’s % to sales £000’s % to sales %

Revenue 384,838 100.0 312,089 100.0 23.3

Gross margin 54,870 14.3 45,095 14.4 21.7Overhead costs (39,427) 10.2 (34,752) 11.1 13.5

Profit before exceptionals 15,443 4.0 10,343 3.3 49.3Exceptional costs (1,375) 0.4 – – –

Profit before taxation 14,068 3.6 10,343 3.3 36.0

> Sales increased 23.3% in the year; a compound growth rate of 20.6% over the last five years.> Gross margin was 14.3%.> Exceptional costs relating primarily to the restructuring of RFM.> Profit before tax was £14.1 million.

The figures include results of Norland Managed Services Ltd 100%-owned subsidiaries: Norland Managed Services(Ireland) Ltd, Norland Managed Services (Netherlands) BV, Reliance Facilities Management Limited, Norland ManagedServices (Germany) GmbH, and Norland Managed Services Incorporated. The summary Accounts do not constitutestatutory accounts within the meaning of Section 435 of the Companies Act 2006. Full annual accounts andauditors’ report are available on request.

CONSOLIDATEDBALANCE SHEETYEAR ENDED 5 APRIL 2013


5 April 2013 30 March 2012 £000’s £000’s

Fixed assets 5,891 2,478

Current assetsWork in progress 10,546 10,343Debtors 87,609 73,501Cash at bank 21,670 12,142

119,825 95,986

Creditors: amounts falling due within one year (87,643) (70,567)

Total assets less current liabilities 38,073 27,897

Creditors: amounts falling due after more than one year (15,024) (8,066)

Net assets 23,049 19,831

Capital and reservesShare capital 62 62Share premium account 3,754 3,754Capital contribution reserve 6,961 6,961Profit and loss account 12,272 9,054

Total equity 23,049 19,831

> Debtors remain tightly monitored, with the increase of 19.2% over the prior year being mainly downto the increased sales.

> Cash at £21.7 million (2012: £12.1 million) reflects excellent working capital management andindicates strong quality of earnings in the year.

> Creditors increased to £87.6 million (2012: £70.6 million) with the increase of 24.2% over the prioryear being mainly due to the growth of trade creditors and accruals in line with sales volumeincrease.

The figures include results of Norland Managed Services Ltd 100%-owned subsidiaries: Norland Managed Services(Ireland) Ltd, Norland Managed Services (Netherlands) BV, Reliance Facilities Management Limited, Norland ManagedServices (Germany) GmbH, and Norland Managed Services Incorporated. The summary Accounts do not constitutestatutory accounts within the meaning of Section 435 of the Companies Act 2006. Full annual accounts andauditors’ report are available on request.

CONSOLIDATED CASHFLOW STATEMENTYEAR ENDED 5 APRIL 2013


5 April 2013 30 March 2012 £000’s £000’s

Net cash inflow from operating activities 12,823 6,275

Returns on investments and servicing of financeInterest received 72 179Interest paid – –

Net cash inflow from return on investments and servicing of finance 72 179Taxation paid (1,214) (5,280)Capital expenditure and financial investment 2,624 (8,449)Equity dividend paid (4,777) (6,898)

Net cash inflow/(outflow) before financing 9,528 (14,173)

Financing – –

Increase/(decrease) in cash 9,528 (14,173)

FIVE YEARRECORD


2013 2012 2011 2010 2009 £000s £000s £000s £000s £000s

Revenue 384,838 312,089 250,705 210,212 190,493

Underlying operating profit (note 1) 23,669 18,240 18,079 11,526 8,404

Profit before tax 14,068 10,343 13,297 5,754 7,508

Operating assets employed (note 2) 17,531 13,917 4,296 4,405 8,764

Cash 21,670 12,142 26,315 13,843 6,943

Equity shareholder’s funds 23,049 19,831 18,184 12,426 15,179

% % % % %

Return on operating assets employed (note 3) 135.0 131.1 420.8 261.7 95.9

£000s £000s £000s £000s £000s

Turnover per employee 113 123 117 111 114

2013 2012 2011 2010 2009Note 1 – Underlying operating profit £000s £000s £000s £000s £000s

Operating profit 14,003 10,001 13,200 5,727 7,278Plus FRS20 charge 6,958 8,066 4,801 5,799 2,333Plus stamp duty – – 78 – –Less other income – – – – (34)Less profit on sale of building – – – – (1,173)Plus amortisation 336 – – – –Plus mobilisation costs 1,080 – – – –Plus US costs 1,292 173 – – –

23,669 18,240 18,079 11,526 8,404

2013 2012 2011 2010 2009Note 2 – Operating assets employed £000s £000s £000s £000s £000s

Net assets 23,049 19,831 18,184 12,426 15,179Less cash (21,670) (12,142) (26,315) (13,843) (6,943)Less deferred tax asset (1,345) (868) (1,890) (1,638) (657)Less unpaid share capital – – – (3,329) (3,329)Plus corporation tax 2,482 (970) 2,868 806 420Plus FRS20 accrual 15,024 8,066 7,733 9,983 4,094Plus stamp duty – – 78 – –Plus dividend proposed – – 3,638 – –

17,531 13,917 4,296 4,405 8,764

Note 3Being underlying operating profit/operating assets employed.

OFFICES


Head OfficeNorland Managed Services LtdCity Bridge House57 Southwark StreetLondonSE1 1RU

Telephone: 020 7871 9100

BristolNorland Managed Services Ltd130 AztecAztec WestBristolBS32 4UB

Telephone: 01454 629666

CardiffNorland Managed Services LtdRegus HouseMalthouse AvenueCardiff Gate Business ParkCardiffCF23 8RU

Telephone: 029 2026 3630

DublinNorland Managed Services (Ireland) Ltd 118 Lower Baggot StreetDublin 2

Telephone: 00 353 (0)1 829 3987

LeedsNorland Managed Services LtdUnit 1, Cliffe ParkBruntcliffe RoadMorleyLeedsLS27 ORY

Telephone: 0113 259 7136

LutonNorland Managed Services Ltd725 Capability GreenLutonLU1 3LU

Telephone: 01582 635081

ManchesterNorland Managed Services LtdNorth West Business UnitTrafford PlazaSeymour GroveOld TraffordManchesterM16 OLD

Telephone: 0161 877 0218

MidlandsNorland Managed Services LtdColeshill House1 Station RoadColeshillB46 1HT

Telephone: 01675 432 150

North EastNorland Managed Services LtdUnit 1, Suite 8Meadowfield CourtMeadowfield EstatePontelandNorthumberlandNE20 9SE

Telephone: 01661 825010

ScotlandNorland Managed Services LtdSuite 3G, International HouseHamilton International Technology ParkStanley BoulevardHigh BlantyreG72 0BN

Telephone: 01698 404720

South WestNorland Managed Services Ltd Swan HouseNorthcroft Lane NewburyBerkshireRG14 1BN

Telephone: 01635 277999

West LondonNorland Managed Services LtdWest London Business Unit115 Whitby RoadSloughBerkshireSL1 3DR

Telephone: 01753 698850

GLOSSARY

Norland Managed Services Annual Review 2012-13

BC Business Continuity

CAFM Computer Aided Facilities Management

CDM Construction, Design & Management

CE360 Norland’s range of services for critical environments

CERM™ Critical Environment Risk Management

CES Norland’s Critical Environment Services capability

CRAC Computer Room Air Conditioning

CIBSE Chartered Institute of Building Services Engineers

CS Norland’s Corporate Services capability

DR Disaster Recovery

EMEA Europe, Middle East and Africa

FM Facilities Management

H&V Heating & Ventilation

HVAC Heating, Ventilation and Air Conditioning

ICT Information and Communications Technology

ILM Institute of Leadership & Management

M&E Mechanical and Electrical

PPM Planned Preventative Maintenance

QHSE Quality, Health, Safety and Environment

RoSPA Royal Society for the Prevention of Accidents

TUPE Transfer of Undertakings (Protection of Employment)

UKAS United Kingdom Accreditation Service

UKS Norland’s UK Services capability

Printed on revive 50:50 Silk, a recycled paper containing 50% recoveredwaste and 50% virgin fibre and manufactured at a mill accredited withISO14001 environmental management standard.

The pulp used in this product is bleached using a Totally Chlorine Free(TCF) process.

The use of the FSC logo identifies products which contain wood fromwell-managed forests certified in accordance with the rules of theForest Stewardship Council.

Designed by Benjamin Rowntree Design

www.benrown.co.uk

Totally ChlorineFree

ISO14001 Fully recyclable 50% recycled

Norland Managed Services LimitedCity Bridge House57 Southwark StreetLondonSE1 1RUT: 020 7871 9100www.norlandmanagedservices.co.ukCompany number: 1799580

www.linkedin.com/company/52690

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NorlandAnnualReview2013

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