Corporate Governance

The Company is listed on AIM and is subject to the ‘City Code on Takeovers and Mergers’.
Although companies quoted on AIM are not required to comply with the Quoted Companies Alliance’s Corporate Governance guidelines for small and medium-sized companies (“the Guidelines”), the Board is committed to high standards of corporate governance as appropriate to the Company’s size and activities:
Details of compliance with the Guidelines

The Board

The Board consists of the following four members. Peter Hallett is the Non-Executive Chairman, Shaun Parker is the Chief Operating Officer, Martin Varley is the Chief Executive Officer and Richard Sowerby is the Non-Executive Director. The Company considers the combined role to be appropriate given the Group’s size and structure. The Board meets regularly throughout the year with additional ad hoc meetings and calls being held as required.

In the furtherance of their duties on behalf of the Company, the Directors also have access to independent professional advice at the expense of the Company.

Committees

The Board has established the following committees:

Audit Committee

The Audit Committee, consists of two non-executive directors and one executive director and is chaired by Peter Hallett, has specific terms of reference and meets with the auditors at least three times a year. The Committee reviews the financial statements prior to their recommendation to the Board for approval and assists the Board in ensuring that appropriate accounting policies are adopted and internal financial controls and compliance procedures are in place.

Remuneration Committee

The Remuneration Committee consists of three executive directors and is chaired by Richard Sowerby. It is responsible for determining the remuneration arrangements of the Executive Directors, for advising the Board on the remuneration policy for senior executives and invites participation in the Company’s long-term incentive share scheme.

Nominations Committee

Due to its size, the Company does not consider a nominations committee is necessary; appointments to the Board are made directly by the Board.

Investor relations and communications

The Board recognizes the importance of providing shareholders with clear and transparent information on the Group’s activities, strategy and financial position. The Board encourages engagement with all shareholders including two-way communications with institutional investors, analysts and private investors. Regular meetings with larger shareholders and analysts are held as appropriate. The Board regards the Annual Report and the Annual General Meeting as important methods of communicating with shareholders to participate by submitting questions in advance of the Annual General Meeting.

Internal Controls

The Board is responsible for the Group’s system of internal controls and for reviewing its effectiveness. Such a system 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. The Group highlights potential financial and non-financial risks which may impact on the business as part of the monthly management reporting procedures. The Board receives these monthly management reports and monitors the position at Board meetings. The Board confirms that there are ongoing processes for identifying, evaluating and mitigating the significant risks faced by the Group.

The Group’s internal financial control and monitoring procedures include:

  • Clear responsibility on the part of line and financial management for the maintenance of good financial controls and the production of accurate and timely financial management information;
  • The control of key financial risks through appropriate authorisation levels and segregation of accounting duties;
  • Detailed monthly budgeting and reporting of trading results, balance sheets and cash flows, with regular review by management of variances from budget;
  • Reporting on any non-compliance with internal financial controls and procedures;
  • Review of reports issued by the external auditors

The Company does not have an Internal Audit function as the Board presently considers that the size and nature of the business does not require it. The Audit Committee, on behalf of the Board, reviews reports from the external auditors together with management’s response regarding proposed actions.