Ethics Committee Report

Responsibilities and role of the Ethics Committee

The main responsibilities of the Committee are:

• to advise the Board on the development of strategy and policy on ethical matters;
• to advise the Board on steps to be taken to establish a culture of integrity and honesty in all of the Company's business dealings;
• overseeing the Company's policies and procedures for the identification, assessment, management and reporting of ethical risk;
• overseeing the Company's policies and procedures to prevent persons associated with the Company from engaging in bribery; and
• monitoring and reviewing the operation of the Company's policies and procedures.

The full Terms of Reference of the Committee are available on our website at www.aggreko.com/investors/corporategovernance

Membership of the Committee

The members of the Committee throughout the year were as follows:

All members of the Committee are therefore independent Non-executive Directors. Peter Kennerley is Secretary to the Committee and during 2011 Rupert Soames attended meetings by invitation. For future meetings, this invitation will also be extended to Kash Pandya, Regional Director for Aggreko International, given that our areas of greatest ethical risk lie within that region.

The Committee met three times in 2011.

Main activies of the Committee during the year

Integrity and honesty in all business dealings are core to the reputation of Aggreko and our long term success. We have for some time published an Ethics Policy, which we expect all employees and also all third parties acting on our behalf to follow. We have also identified failure to conduct business dealings with integrity and honesty as one of the principal risks facing the business, and in the Principle Risks and Uncertainties section we set out in more detail our assessment of, and the way we address, that risk.

The main focus of the Committee's activity during 2011 has been a review of our anti-corruption strategy in light of the UK Bribery Act 2010, which came into force in July 2011, and the Guidance about procedures which relevant commercial organisations can put in place to prevent persons associated with them from bribing, published by the Ministry of Justice in March 2011 ('the MoJ Guidance'). The MoJ Guidance is based on six principles: proportionate procedures; top level commitment; risk assessment; due diligence; communication (including training); and monitoring and review, and we tested our approach, policies and procedures against the MoJ Guidance. The Committee's assessment was that although we had policies and procedures in place which we believed were broadly fit for purpose, in some areas they needed improvement, for example to address particular risks we had identified, or to ensure that they were applied consistently throughout Aggreko. In reviewing our policies and procedures, and applying and communicating them, we adopted a risk-based approach with due allowance for what is practicable. The result of our review was a manual to act as comprehensive stand alone guidance on our anti-bribery stance.

The Committee now receives regular reports on the development of Aggreko's anti-corruption strategy, including the communication of our procedures, together with associated training, legislative developments, reports of incidents and actions taken and the activities of our Sales Consultants. These reports also include, where appropriate, regular reports compiled by Internal Audit.

We recognise that, although it is the task of the Board to foster a culture of integrity, appropriate ethical behaviour is the responsibility of all employees. We were therefore encouraged by the results of the 2011 Employee Engagement Survey, which for the first time included two questions with particular relevance to ethics at Aggreko – one referring to our clearly communicating our expectations for ethical behaviour and the other referring to reporting of incidents without fear of reprisal – which received high positive scores of 85% and 75% respectively.

Philip Rogerson
Chairman of the Ethics Committee

9 March 2012