UK Corporate Governance Code
We do not seek to comply with the UK Corporate Governance Code and this is not a statement of compliance with the Code; however, the Board recognises that the UK Corporate Governance Code represents best practice for AIM-listed companies and regulates its activities with regard to the principles and provisions contained therein.
The Board of Directors, which leads and controls the Company, has a formal schedule of matters reserved for it and consists of:
- Non-executive Chairman
- Chief Executive
- Finance Director
- Non-executive senior independent Director
The Chairman and the senior independent Director provide the appropriate balance between the Executive and non-executive Directors for a company of this size.
The Board of Directors takes independent professional advice where necessary, at the Company’s expense. The Board meets monthly and the monthly management accounts and other relevant information are circulated to all Board members in advance of these meetings. The consolidated Group management accounts allow the performance of individual businesses to be monitored against budget, previous forecasts and prior year actual results.
Existing Directors are required to retire and submit themselves for re-election at least every three years or at the first Annual General Meeting (AGM) after appointment. The appointment of new Directors is delegated to a Nominations Committee, which makes recommendations to the Board.
The Remuneration Committee consists entirely of the non-executive Directors and its policy and the details of each Director’s remuneration are clearly explained in its annual report on page 36 and in Note 4 to the accounts.
A proportion of the Executive Directors’ remuneration is structured so as to link rewards to corporate and individual performance. The Board will consider every year whether the report of the Remuneration Committee should be an item on the AGM agenda.
Relations With Shareholders
After the announcement of the interim and final results the Directors meet the major institutional and private shareholders to discuss trading and future developments. The Board encourages all shareholders to participate at the AGM. Corporate news and financial information is provided on the Company’s website.
The system of internal controls established by the Directors is intended to be comprehensive, although the limitations of any system of control are such that it is designed to manage rather than eliminate the risk of failure to achieve business objectives and it provides a reasonable, rather than absolute, level of assurance against material misstatement or loss.
The principal features of the system of internal financial controls are:
- budgetary control over all operating units, measuring performance against pre-determined targets on at least a monthly basis;
- regular forecasting and reviews covering trading performance, assets, liabilities and cash flows;
- delegated limits of authority covering key financial commitments including capital expenditure and recruitment;
- identification and management of key business and inherent risks; and
- implementation and annual review of a Group compliance manual.
The Board continually reviews the effectiveness of other internal controls, including financial, operational, compliance controls and risk management.
Legislation in the UK concerning the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Audit Committee, which comprises the non-executive Directors, meets to consider the scope and key issues in planning the external audit. The external auditor reports their findings and any recommendations to the Audit Committee prior to the approval of the financial statements.
By order of the Board
15 March 2016