Corporate Governance

The Board of Directors support high standards of corporate governance and the guidance set out in the Combined Code on Corporate Governance (the “Combined Code”). As a Company that is quoted on AIM, it is not required to comply with the Combined Code but all the Directors intend to comply with its main provisions as far as is practicable having regard to the size and composition of the Group.

The Board and its Committees

The Board of the Company consists of three Executive Directors and three Non-Executive Directors; with the latter all being considered to be independent. The senior independent director is John Bryant and biographies of all the Directors are included here.

The Board retains full and effective control over the Group. The Board meets regularly at least eight times a year to consider reports on the operational and financial performance of the Group and to decide on matters reserved unto itself, which include formulating, reviewing and approving the Group’s strategy, budgets, major items of capital expenditure and senior personnel appointments.

The Chairman of the Board, who is executive, has a second casting vote in the event of deadlock at Board Meetings; so long as the three Executive Directors collectively hold shares representing more than 75 per cent of the outstanding voting rights comprised in the issued ordinary share capital.

The Directors have established separate committees each chaired by a Non-Executive Director as follows:

Audit Committee

The committee comprises only Non-Executive Directors; being chaired by Richard Armstrong and having as other members: John Bryant and Peter Redmond. The Chairman and Chief Executive Officer may attend only at the invitation of the committee.

The committee receives and reviews reports from management and the Group’s auditors relating to the Group’s annual report and accounts and interim results announcements. The committee focuses particularly on compliance with legal requirements, accounting standards and the AIM Rules and on ensuring that effective systems of internal financial and non-financial controls (including for the management of risk and whistle-blowing) are maintained. However, the ultimate responsibility for reviewing and approving the annual report and accounts remains with the Board of Directors. The committee is also responsible for making recommendations to the Board of Directors on the appointment of the external auditors and their remuneration. The committee keeps under review the external auditors’ independence and considers the nature, scope, and results of the auditor’s work and develops policy on and reviews (reserving the right to approve) any non-audit services that are provided by the external auditors.

The committee normally meets at least three times a year and meets the external auditors at least annually without the presence of the Executive Directors.

Remuneration Committee

The Committee comprises only Non-Executive Directors; being chaired by John Bryant and having as other members Richard Armstrong and Peter Redmond. The committee, which normally meets at least twice a year, has responsibility for making recommendations to the Board of Directors on the Company’s policy on the remuneration of the Chairman, Executive Directors and other senior executives (as is delegated to the committee to consider) and for determining, within agreed terms of reference, specific remuneration packages for each of them, including pension rights, any compensation payments and the implementation of executive incentive schemes. In accordance with the committee’s terms of reference, no Director may participate in discussions relating to their own terms and conditions of service or remuneration.

Nomination Committee

The nomination committee is chaired by the Senior Independent Non-Executive Director, John Bryant, and its other members are the Non-Executive Director, Richard Armstrong, and the Chairman, Francis Gugen. The committee, which normally meets not less than twice a year, has responsibility for considering the size, structure and composition of the Board of Directors, retirements and appointments of additional and replacement directors and making appropriate recommendations to the Board of Directors. The committee is also tasked with ensuring that plans are in place for orderly succession to the Board of Directors and senior management positions, so as to maintain an appropriate balance of skills and experience within the Group and the Board of Directors. The Chief Executive Officer of the Company will be invited to attend meetings of the committee when the committee is discussing matters related to executive management and such other matters as the committee chairman deems appropriate.

At each Annual General Meeting at least one-third of the Directors for the time being shall retire from office by rotation. The Directors to retire by rotation shall include, firstly, any Director who wishes to retire at the meeting and not offer himself for re-election and, secondly, those Directors who have been longest in office since their last appointment or reappointment, provided always that each director shall be required to retire and offer himself for re-election at least every three years. Directors appointed by the Board hold office only until the dissolution of the annual general meeting of the Company next following such appointment.

Internal Control

The Board acknowledges that it is responsible for establishing and maintaining the Group’s system of internal controls and reviewing its effectiveness. The procedures that include, inter alia, financial, operational and compliance matters and risk management are reviewed on an ongoing basis. The internal control system can only provide reasonable and not absolute assurance against material misstatement or loss.  The Board has considered the need for a separate internal audit function but, bearing in mind the present size and composition of the Group, does not consider it necessary at the current time.

Relations with Shareholders

Communications with shareholders are considered important by the Directors. The primary contact with shareholders, investors and analysts is the Chief Executive Officer.  The other Executive Directors, however, regularly speak to investors and analysts during the year. Company circulars and press releases have also been issued throughout the year in relation to various proposals and for keeping investors informed about the Group’s progress.