As a Company listed on the Alternative Investment Market (AIM) the Company is not required to adhere to the Combined Code on Corporate Governance (‘the Code’) June 2008. Whilst the Company is not required to comply with the Code, it has used the Code as best practice guidance and voluntarily presented disclosures that reflect the extent of the Company’s application of the Code.
The Board
The Company is supervised by the Board of Directors. The Board comprises three Executive Directors and two Non-executive Directors.
The Board considers, after careful review, that the Non-executive Directors bring an independent judgement to bear. All Non-executive Directors have contracts which contain six month notice clauses. These are available for inspection at the Company’s registered office and at the Annual General Meeting. All Directors retire by rotation at regular intervals in accordance with the Company’s Articles of Association and the principles of the Code. The Non-executive Directors continue to retire for re-election at least every third year. All Directors undergo a performance evaluation before being proposed for re-election to ensure their performance continues to be effective, that where appropriate they maintain their independence and that they are demonstrating continued commitment to the role.
The Board meets at least 9 times each year and has a formal schedule of matters reserved to it. It is responsible for overall Group strategy; approval of major capital expenditure projects; approval of the annual and interim results; annual budgets; dividend policy; and Board structure. It monitors the exposure to key business risks and reviews the strategic direction of all trading subsidiaries, their annual budgets, their performance in relation to those budgets and their capital expenditure.
All Directors receive regular and timely information on the Group’s operational and financial performance. Relevant information is circulated to the Directors in advance of meetings. All Directors have direct access to the advice and services of the Company Secretary and are able to take independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense.
Nomination Committee
The Nomination Committee is chaired by T Stannard and comprises F Goldsmith, the other Non-executive Director, and the Chief Executive. It makes recommendations to the Board on all new Board appointments. The Company’s Articles of Association stipulate that one third of the Directors or the nearest whole number below one third shall retire each year. The Company requires all Directors to submit themselves for re-election at least every three years. New Articles of Association will be proposed for adoption at the Annual General Meeting.
Remuneration Committee
The Remuneration Committee is chaired by T Stannard Non-executive Chairman and F Goldsmith the other Non-executive Director. The Remuneration Committee is responsible for making recommendations to the Board in relation to all aspects of remuneration for Executive Directors and designated senior managers. The Remuneration Committee believes that the presence of the Chief Executive is important when determining the remuneration of the other Executive Directors. In framing its policy the Remuneration Committee takes into account any factors which it deems necessary, including industry standard executive remuneration, differentials between executive and employee remuneration and differentials between executives. The remuneration of the Non-executive Directors is determined by the Executive Directors.
Audit Committee
The Audit Committee is chaired by F Goldsmith and comprises T Stannard, the other Non-executive Director. Although all the Committee members are considered to be appropriately experienced to fulfill their role, F Goldsmith is considered as having significant, recent and relevant experience in line with the Code. Further details of each of the independent Directors are set out on page 16. The Audit Committee meets at least twice each year. It considers any matter relating to the financial affairs of the Group and to the Group’s external audit that it determines to be relevant. In particular the Committee overviews the monitoring of the adequacy of the Group’s internal controls, accounting policies and financial reporting and provides a forum through which the Group’s external auditors report to the Non-executive Directors.
Internal control
The Board acknowledges that it is responsible for the Group’s system of internal control and for reviewing its effectiveness.
The Board intends to keep its risk control procedures under constant review particularly with regard to the need to embed internal control and risk management procedures further into the operations of business, both in the UK and overseas, and to deal with areas of improvement which come to management’s and the Board’s attention.
As might be expected in a group of this size, a key control procedure is the day to day supervision of the business by the Executive Directors, supported by the senior managers with responsibility for key operations.
The Executive Directors are involved in the budget setting process, regularly monitor key performance indicators and review management accounts on a monthly basis, noting and investigating any major variances. All significant capital expenditure decisions are approved by the Board as a whole.
The Group’s significant risks, together with the relevant control and monitoring procedures, are subject to regular review to enable the Board to assess the effectiveness of the system of internal control. During the course of its reviews the Board has not identified nor been advised of any failings or weaknesses which it has determined to be significant.
The Group’s system of internal control is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss.
Relations with shareholders
The Group encourages two way communications with both its institutional and private investors and responds in a timely fashion to all queries received. All shareholders receive notice of the Annual General Meeting at which all Committee chairmen will be available for questions.