Halfords : Notice of AGM 2023

THIS DOCUMENT AND THE ACCOMPANYING DOCUMENTS ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION. If you are in any doubt as to any aspect of the proposals referred to in this document or as to the action you should take, you should seek your own advice from a stockbroker, solicitor, accountant, or other professional adviser.

If you have sold or otherwise transferred all of your shares in Halfords Group plc you should pass this document to the purchaser or transferee, or to the person who arranged the sale or transfer so they can pass these documents to the person who now holds the shares. If you sell or have sold part only of your holding of shares, please consult the bank, stockbroker or other agent through whom the sale or transfer was effected. However, this document should not be forwarded to or sent in or into any jurisdiction in which to do so would constitute a breach of the relevant laws of such jurisdiction.

Halfords Group plc

(incorporated in England and Wales with registered number 04457314)

Notice of Annual General Meeting

Notice of the Annual General Meeting of Halfords Group plc to be held at Halfords Group plc, Support Centre, Icknield Street Drive, Washford West, Redditch B98 0DE on Wednesday 6 September 2023 at 3 pm is set out on pages 8 to 10 of this document (the "Notice").

Whether or not you intend to attend the Annual General Meeting in person, you are strongly encouraged to vote on all resolutions by appointing the Chair of the meeting as your proxy in advance of the meeting. Appointing a proxy will not prevent you from attending the 2023 Annual General Meeting and voting in person, but if you appoint the Chair of the meeting as your proxy, this will ensure your votes are cast in accordance with your wishes regardless of whether you or anyone else you appoint as your proxy actually attends the meeting. You may appoint a proxy either by lodging your proxy vote online at www.signalshares.com or by requesting a hard copy Form of Proxy from Link Group ("Link") on 0371 664 0300 (if you are outside the United Kingdom, please call +44(0) 371 664 0300. Calls are charged at the standard geographical rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate) and lines are open between 9.00 am - 5.30 pm Monday to Friday excluding public holidays in England and Wales; or, for shareholders who hold their shares in CREST, appointing a proxy electronically by transmitting a CREST Proxy Instruction to Link, in each case so that the proxy instruction is received by Link no later than 3 pm on Monday 4 September 2023.

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Halfords Group plc

(Incorporated in England and Wales with registered number 04457314)

To Shareholders and, for information only, to the holders of options under the Company's share option schemes

Dear Shareholder

2023 ANNUAL GENERAL MEETING

The 2023 Annual General Meeting of Halfords Group plc (the "Company") is to be held at Halfords Group plc, Support Centre, Icknield Street Drive, Washford West, Redditch B98 0DE on Wednesday 6 September 2023 at 3 pm. The formal Notice convening the meeting is set out on pages 8 to 10 of this document.

This circular provides you with explanatory notes for each of the resolutions in the Notice and explains the action you should take. Resolutions 15, 16 and 17 will be proposed as special resolutions with the remainder being proposed as ordinary resolutions.

Should you choose to attend in person, you will be able to vote at the Annual General Meeting itself. However, you may also vote on all resolutions by appointing the Chair of the meeting as your proxy in advance of the Annual General Meeting utilising one of the methods detailed below. If you appoint the Chair of the meeting as your proxy, this will not prevent you from attending and voting in person should you wish to do so but will ensure your votes are cast in accordance with your wishes if, for any reason, you are not able to attend and avoids the need for another person to attend as a proxy in your place.

You will be able to submit questions to the Directors in advance of the Annual General Meeting via email to the Company Secretary, Tim O'Gorman at tim.ogorman@halfords.co.uk. Written answers to all questions received will be sent directly to shareholders by email and answers to frequently asked questions will, to the fullest extent practicable, be published on the Company's website ahead of the meeting or, to the extent that has not been possible, will be addressed at the meeting itself.

Finally, as announced on 20 June 2023, Helen Jones will step down from the Board at the conclusion of this year's Annual General Meeting and so will not be standing for re-election as a director. On behalf of the board, I would like to thank Helen for her overall contribution to the Board and the Company over the past nine years and wish her the very best for the future.

I am also pleased to welcome Tanvi Gokhale to the Board. Tanvi joined the Board as an independent Non-Executive Director on 20 June 2023. In accordance with the Company's articles of association Tanvi will therefore stand for election by shareholders for the first time at this year's Annual General Meeting.

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Explanatory Notes to the Resolutions

Resolution 1 - Financial Statements

The Directors are required to present to the 2023 Annual General Meeting the Company's audited annual financial statements and related reports of the Directors and auditors for the period ended 31 March 2023.

Resolution 2 - To Approve the Final Dividend

If resolution 2 is approved by shareholders, the final dividend for the period ended 31 March 2023 of 7.0 pence for each ordinary share, as recommended by the Directors, will be paid on Friday 15 September 2023 to shareholders whose names are on the register of members at the close of business on Friday 11 August 2023.

Resolution 3 - To Approve the Directors' Remuneration Report

The Directors are required to prepare an annual report detailing the remuneration of the Directors and a statement by the Chair of the Remuneration Committee (together, the "Annual Report on Remuneration") and to seek the shareholders' approval in respect of the contents of the Annual Report on Remuneration on an annual basis. Therefore, resolution 3 seeks shareholder approval in respect of the contents of the Annual Report on Remuneration, which is set out on pages 128 to 152 of the Company's 2023 Annual Report (excluding the Directors' Remuneration Policy Report set out on pages 133 to 142 of the Company's 2023 Annual Report). The Company's auditor, BDO LLP, has audited those parts of the Annual Report on Remuneration capable of being audited and its report may be found on pages 156 to 165 of the Company's 2023 Annual Report. The vote on resolution 3 is advisory only and any entitlement of a Director to remuneration is not made conditional on this ordinary resolution being passed.

Resolution 4 - To Approve the Directors' Remuneration Policy

Page 133 to 142 of the Company's 2023 Annual Report sets out the Directors' Remuneration Policy (the "Remuneration Policy"). The Remuneration Policy is forward looking and subject to a binding shareholder vote by ordinary resolution at least every three years, or earlier if changes are proposed. The Company is asking shareholders to approve the new Remuneration Policy at the 2023 Annual General Meeting as the previous Remuneration Policy was approved at the 2020 Annual General Meeting. The Remuneration Policy has been reviewed and updated to maintain appropriate focus on our strategic objectives and to ensure pay outcomes remain closely aligned with performance. The changes reflected in the new Remuneration Policy are set out in the Annual Report on Remuneration which is contained in the Company's 2023 Annual Report. If the new Remuneration Policy is approved and remains unchanged, it will be valid for up to three years without the need for further shareholder approval. If the Company wishes to change the Remuneration Policy, it must first seek the approval of that change from shareholders before it can implement the revised Remuneration Policy.

Resolutions 5 to 10 - Election and Re-Election of Directors

The Directors are committed to measures that promote good corporate governance. Tanvi Gokhale will stand for election at this year's meeting following her appointment as a Director on 20 June 2023 and, if elected, will submit herself for re-election at each subsequent annual general meeting of the Company until further notice, in accordance with the Company's Articles of Association (the "Articles") and the 2018 UK Corporate Governance Code (the "Code"). Consequently resolution 5 will be proposed in order to allow Tanvi Gokhale to retire from office at the conclusion of the 2023 Annual General Meeting and, being eligible, offer herself for election by shareholders.

In addition, in accordance with the Code and the Articles, each of the other Directors will be submitting themselves for re-election by the shareholders at the 2023 Annual General Meeting, and each subsequent annual general meeting of the Company until further notice. Consequently, resolutions 6 to 10 will be proposed in order to allow each of the Directors to retire from office at the conclusion of the 2023 Annual General Meeting and, being eligible, and in accordance with the Company's Articles of Association and the Code, offer themselves for re-election by the shareholders.

Biographical details of all the Directors who are proposed for re-election are set out on pages 90 to 91 of the Company's 2023 Annual Report and Tanvi Gokhale's biography is set out on page 4 of this Notice of Meeting. All the biographies are available for viewing on the Company's website www.halfordscompany.com. Brief summaries are set out below.

In accordance with the Code, the Board undertook a review as to whether it considered each of the Non-Executive Directors being proposed for re-election, being, Jill Caseberry and Tom Singer, to be independent, as each will have served on the Board for four years and three years respectively in September 2023. Based on this rigorous review, the Board was satisfied that Jill Caseberry and Tom Singer maintained the necessary levels of independence in accordance with the Code's independence criteria. In light of the Code, and for the reasons set out above, the Board has determined that each of Jill Caseberry and Tom Singer continue to remain independent in character and judgement, there are no relationships or circumstances likely to affect (or appear to affect) their judgment, and they continue to be effective and demonstrate a strong commitment to their roles and, therefore, the Board recommends that each of them be re-elected as a Non-Executive Director.

As Company Chair, Keith Williams' performance during the past year has been reviewed by the Non-Executive Directors led by the Senior Independent Director Helen Jones.

Keith Williams

Keith was appointed Chair of the Company and of the Nomination Committee on 24 July 2018. Keith is the Non-Executive Chair of Royal Mail Group (previously interim Executive Chair). Keith is a qualified Chartered Accountant. Keith was formerly a Non-Executive Director and Deputy Chair of John Lewis; a Non-Executive Director of Aviva plc; and Chief Executive Officer and then Executive Chair of British Airways, having previously been at Boots, Reckitt and Colman, and Apple Computers Inc. Keith was the independent Chair of the government-supported Rail Review. Keith brings extensive leadership and plc board experience. He is a highly regarded business leader with a proven record in retail and deep experience in relevant areas such as customer service and digital.

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Jill Caseberry

Jill was appointed Non-Executive Director and Remuneration Chair on 1 March 2019. Jill is currently a Non-Executive Director, Remuneration Committee Chair and member of the Audit and Nomination Committees of Bellway plc; a Non-Executive Director and member of the Remuneration and ESG Committees of C&C Group plc; the Senior Independent Director, Remuneration Committee Chair and a member of the Nomination Committees of Bakkavor Group plc; Jill is also a Senior Independent Director, Remuneration Committee Chair and member of the Audit and Nomination Committees of St Austell Brewery. Previously Jill was Non-Executive Director, Remuneration Committee Chair and a member of the Audit and Nomination Committees of Northgate plc. During her Executive career Jill gained extensive sales, marketing and general management experience across a number of blue chip companies, including Mars, PepsiCo and Premier Foods. She also founded a soft drink company and established a sales and marketing consultancy. Jill was also previously the Designated Workforce Engagement Non-Executive Director of Bakkavor Group plc. Jill brings extensive leadership experience from senior sales and marketing roles in consumer goods businesses.

Tom Singer

Tom was appointed Non-Executive Director on 16 September 2020, and Chair of the Audit Committee on 1 January 2021. Tom is a Non-Executive Director of Mukuru and a Non-Executive Director and Audit Committee Chair of Vue International Group plc. Previously Tom was the Senior Independent Director and Chair of the Audit and Remuneration Committees of DP Eurasia NV, Chair of the Audit Committee at Liberty Living and a Non-Executive Director at Mediclinic International plc. Previously, Tom served as CFO of InterContinental Hotels Group plc, Group Finance Director of British United Provident Association ("BUPA"), CFO and Chief Operating Officer of William Hill plc, and Finance Director of Moss Bros plc, having started his career in professional services and spending a total of 12 years at Price Waterhouse and McKinsey.

Tanvi Gokhale

Tanvi was appointed Non-Executive Director on 20 June 2023. Tanvi is a Trustee of English Heritage. Tanvi previously served as Managing Director, Retail Strategy and Innovation of Natwest Group, and prior to that as Strategy consultant at Booz & Co. She also previously served as Segmentation and Propositions Director for Lloyds Banking Group. Until March 2023 she also served as Chair of the Investment Committee at English Heritage. Tanvi brings extensive experience in retail strategy to the Board.

Graham Stapleton

Graham was appointed Chief Executive Officer on 15 January 2018. Previously Graham was CEO of Dixons Carphone plc's software business, Honeybee. Prior to that he was CEO of Dixon Carphone's Connected World Services Division from 2015 to 2017 and CEO of Carphone Warehouse UK & Ireland from 2013 to 2015. Graham's early career covered senior leadership roles in Kingfisher plc from 2001 to 2005 and Marks and Spencer plc from 1994 to 2001, prior to which Graham set up and ran his own business for several years. Graham was a Trustee of the Make-A-Wish charity. Graham was also previously a Non-Executive Director of The Magic Bean Co. Limited and a Non-Executive Director of Loyalty Angels Limited (known as Bink). Graham is an outstanding business leader and brings extensive skills and experience to the plc Board.

Jo Hartley

Jo joined as Chief Financial Officer on 16 June 2022. Prior to joining Halfords, Jo was the Group CFO for Virgin Active for over six years. Before that, Jo worked at Tesco plc in a number of finance roles in the UK and internationally, having qualified as a chartered accountant at Deloitte UK. Jo has extensive experience across all finance functions gained within consumer facing businesses.

The Board is satisfied that each of the Directors proposed for election or re-election has the appropriate balance of skills, experience, independence and knowledge of the Company to enable him or her to discharge the duties and responsibilities of a director effectively and that each of their contribution is, and continues to be, important to the Company's long-term sustainable success. Accordingly, the Board unanimously recommends the election or re-election of each of the Directors.

Resolutions 11 and 12 - Reappointment and Remuneration of Auditor

An auditor must be appointed at each general meeting at which the Company's accounts are presented to shareholders to hold office, from the end of that meeting until the end of the next annual general meeting. BDO LLP has advised the Company of its willingness to stand for re-appointment as the Auditor of the Company until the conclusion of the next general meeting of the Company at which accounts are laid.

The remuneration of the Auditor must be fixed by the Company in a general meeting or in such manner as the Company may determine in a general meeting. Therefore, resolution 11 authorises the Audit Committee (for and on behalf of the Board of Directors) to determine the remuneration of the Auditor.

Resolution 13 - Authority to Make Political Donations

This ordinary resolution seeks shareholder approval to renew and replace the authority granted to the Company and its subsidiaries by shareholders at the Company's 2023 Annual General Meeting to make political donations, which expires at the conclusion of the 2023 Annual General Meeting. This resolution concerns Part 14 of the Companies Act 2006 (the "Act"), which provides that political donations made by a company to political parties, to other political organisations and to independent election candidates or political expenditure incurred by a company must be authorised in advance by shareholders.

It is not the policy of the Company to make political donations and the Directors have no intention of changing that policy. However, as a result of the wide definitions in the Act, normal expenditure (such as expenditure on organisations concerned with matters of public policy, law reform and representation of the business community) and business activities (such as communicating with the Government and political parties at local, national and European level) might be construed as either political expenditure or as a donation to a political party or other political organisation and so fall within the restrictions of the Act.

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This resolution does not purport to authorise any particular donation or expenditure but is expressed in general terms as required by the Act and is intended to authorise normal donations and expenditure, which would not normally be considered to result in the making of political donations or political expenditure being incurred. If passed, resolution 13 would allow the Company and its subsidiaries to make donations to political parties, other political organisations and independent election candidates and to incur political expenditure (as defined in the Act) up to an aggregate limit of £150,000 during the period up to twelve months after the passing of resolution 13, in order to avoid inadvertent infringement of the Act. However, the authority will not be used to make political donations within the normal meaning of that expression. Any political donation made or political expenditure incurred which is in excess of £2,000 will be disclosed in the Company's Annual Report for the next year, as required by the Act.

Resolution 14 - Authority to Allot Securities

This ordinary resolution seeks shareholder approval to renew the general authority previously given to the Directors at the Company's 2022 Annual General Meeting to allot securities (such as ordinary shares in the Company), which expires at the conclusion of the 2023 Annual General Meeting. In February 2023, the Investment Association updated its Share Capital Management Guidelines on directors' authority to allot shares stating that its members will permit, and treat as routine, resolutions seeking authority to allot shares representing up to two thirds of the Company's issued share capital provided that any routine authority to allot shares representing in excess of one third of the Company's issued share capital should only be used for fully pre-emptive offers (the 2016 Guidelines stated that any such allotment in excess of one third of the Company's issued share capital should be applied to fully pre-emptive rights issues only). However, the Board considers it appropriate to follow the 2016 Guidelines at this time.

Paragraph (a) of resolution 14 would, if passed, give the Directors the authority to allot unissued shares up to a maximum nominal amount of £729,762 representing a maximum number of 72,976,245 ordinary shares of 1 pence each, or approximately one third of the Company's issued ordinary share capital as at 13 July 2023, being the latest practicable date before publication of this Notice. Paragraph (b) of resolution 14 proposes that, consistent with the Investment Association 2016 guidelines concerning directors' powers to allot share capital in the context of a rights issue fully pre-emptive offer referred to above, a further authority be given to the Directors to allot equity securities in connection with a rights issue fully pre-emptive offer to holders of equity securities (which would include ordinary shareholders), up to a maximum nominal amount of £729,762 representing a maximum number of 72,976,245 ordinary share of 1 pence each or approximately one third of the Company's issued ordinary share capital as at 13 July 2023, being the latest practicable date before publication of this Notice.

The authorities sought in paragraphs (a) and (b) of resolution 14 will, if approved, expire at the conclusion of the annual general meeting of the Company to be held in 2024, or, if earlier, on 30 September 2024. The Directors have no present intention of exercising these authorities, except in relation to the Company's share incentive schemes. As at 13 July 2023, being the latest practicable date before publication of this Notice, the Company held no treasury shares in the Company. The Directors intend to seek renewal of this authority at future annual general meetings.

Resolution 15 - Disapplication of Statutory Pre-Emption Rights

This special resolution, if passed, would renew the authority given to the Directors at the Company's 2022 Annual General Meeting to allot, pursuant to the authority given by resolution 14, equity securities (such as ordinary shares) for cash, or sell treasury shares for cash, without first offering them to existing shareholders pursuant to statutory pre-emption rights. The authority would be limited to allotments of equity securities:

• to ordinary shareholders in proportion to their existing shareholdings;
• to holders of other equity securities as required by the rights attaching to those securities or as the Directors consider necessary; and
• for cash up to a maximum amount of £109,464 representing a maximum number of 10,946,437 ordinary shares, or approximately 5 per cent. of the issued ordinary share capital of the Company as at 13 July 2023, being the latest practicable date before publication of this Notice.

The Directors will have due regard to institutional guidelines in relation to any exercise of this authority, including the Pre-Emption Group's Statement of Principles. The Board notes that, in November 2022, the Pre-Emption Group published a revised Statement of Principles. At this time the Board considers it appropriate to continue to follow the more restrictive thresholds in the previous Statement of Principles published by the Pre-Emption Group in 2015, in particular the requirement for advance consultation and explanation before making any non pre-emptive cash issue pursuant to this resolution that exceeds 7.5 per cent. of the Company's issued ordinary share capital (excluding any treasury shares) in any rolling three-year period.

The authority sought and the limits set by resolution 15 would also disapply the application of section 561 of the Act from a sale of treasury shares to the extent specified in that resolution.

This authority will, if approved, expire at the conclusion of the annual general meeting of the Company to be held in 2024, or, if earlier, on 30 September 2024. The Directors are seeking this authority in accordance with best practice and have no present intention of exercising this authority but believe it is in the interests of shareholders for the Directors to have this flexibility to allot shares for cash and to sell treasury shares for cash in those limited circumstances. The Directors intend to seek renewal of this authority at future annual general meetings and will keep emerging market practice in this area under review.

Resolution 16 - Authority to Purchase Own Shares

This special resolution, if passed, would authorise the Company to make market purchases of its own ordinary shares. If resolution 16 is approved, the Directors may utilise the authority to continue to make market purchases of the Company's shares within the meaning of section 693 of the Act. The maximum number of shares which may be purchased if resolution 16 is approved is 21,892,874 representing approximately 10 per cent. of the Company's issued ordinary share capital (excluding treasury shares) as at 13 July 2023, being the latest practicable date before publication of this Notice. The authority will, if approved, expire at the conclusion of the annual general meeting of the Company to be held in 2024, or, if earlier, on 30 September 2024.

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