The Board fully supports the underlying principles of corporate governance contained in the Combined Code, notwithstanding that, as its securities are not listed on the Official List; it is not required to comply with such recommendations. It has sought to comply with the provisions of the Combined Code, insofar as is practicable and appropriate for a public company of its size and nature, and recognises its overall responsibility for the Group's systems of internal control and for monitoring their effectiveness.
The main features of the Company's corporate governance procedures, which do not constitute full compliance with the Combined Code, are as follows:
- The Board has one independent Non-executive Director and one non-independent Non-executive Director, who take an active role in board matters.
- The Company has a Nominations Committee, an Audit Committee and a Remuneration Committee, each of which consists of the Non-Executive directors and, in the case of the Nominations and Remuneration Committee, the Chief Executive Officer also attends. The Audit Committee has unrestricted access to the Company's auditors and ensures that auditor independence has not been compromised.
- All business activity is organised within a defined structure with formal lines of responsibility and delegation of authority, including a schedule of "matters referred to the board".
- Regular monitoring of key performance indicators and financial results together with comparison of these against expectations.
Nominations Committee
The Nominations Committee comprises the Chairman, Howard Bell (who chairs this Committee), the Non-executive Director, Bob Lewis and the Chief Executive Officer, David Macmillan. The Committee is responsible for proposing candidates to the Board having regards to the balance and structure of the Board.
Audit Committee
The Audit Committee comprises the Chairman and the Non-executive Director, Bob Lewis (who chairs this Committee). The Audit Committee shall meet at least two times in every year and any other time as required by either the chairman of the Audit Committee, the Finance Director of the Company or the external auditors of the Company. In addition, the Audit Committee shall meet with the external auditors of the Company (without any of the executives attending) at least once a year.
The Audit Committee shall, inter alia:
- monitor the financial reporting and internal control principles of the Company
- maintain appropriate relationships with external auditors including considering the appointment and remuneration of external auditors
- review all financial results of the Company, including all announcements in respect thereof before submission of the relevant documents to the Board
- review and discuss (where necessary) any issues and recommendations of the external auditors including reviewing the external auditors' management letter and management's response
- consider all major findings of internal operational audit reviews and management's response to ensure co-ordination between internal and external auditors
- review the Board's statement on internal reporting systems and keep the effectiveness of such systems under review
- consider all other relevant findings and audit programmes of the Company
The chairman of the Audit Committee shall report annually to the Board on behalf of the Company's shareholders on all matters within its duties and responsibilities. The Audit Committee shall compile a report to SHAREHOLDERS on its activities to be included in the Company's annual report.
The Audit Committee is authorised to:
- investigate any activity within its terms of reference
- seek any information it requires from any employee of the Company
- obtain, at the Company's expense, outside legal or other independent professional advice and to secure the attendance of such persons to meetings as it considers necessary and appropriate
Remuneration Committee
The Remuneration Committee comprises the Chairman, Howard Bell (who chairs this Committee) and the Non-executive Director, Bob Lewis. The Chief Executive of the Company, David Macmillan will normally be invited to meetings of the Remuneration Committee to discuss the performance of other executive directors but shall not be involved in any of the decisions. The Remuneration Committee shall meet at least two times in every year and any other time as required by either the chairman of the Remuneration Committee, the Finance Director of the Company or the external auditors of the Company.
The Remuneration Committee:
- ensure that the executive directors are fairly rewarded for their individual contributions to the overall performance of the Company
- consider the remuneration packages of the executive directors and any recommendations made by the Chief Executive Officer for changes to their remuneration packages including in respect of bonuses (including associated performance criteria), other benefits, pension arrangements and other terms of their service contracts and any other matters relating to the remuneration of or terms of employment applicable to the executive directors that may be referred to the Remuneration Committee by the Board
- oversee and review all aspects of any share option schemes adopted by the Company including the selection of eligible directors and other employees and the terms of any options granted
- demonstrate to the Company's shareholders that the remuneration of the executive directors is set by an independent committee of the Board
- consider and make recommendations to the Board about the public disclosure of information about the executive directors' remuneration packages and structures in addition to those required by law or by the London Stock Exchange
The chairman of the Remuneration Committee shall report formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities. The Remuneration Committee shall produce an annual report which will form part of the Company's annual report and consider each year whether such report should be put to the Company's SHAREHOLDERS for approval at the annual general meeting.
The Remuneration Committee is authorised to:
- investigate any activity within its terms of reference
- seek any information it requires from any employee of the Company
- assess the remuneration paid by other UK listed companies of a similar size in any comparable industry sector and to assess whether changes to the executive directors' remuneration is appropriate for the purpose of making their remuneration competitive; and
- obtain, at the Company's expense, outside legal or other independent professional advice and to secure the attendance of such persons to meetings as it considers necessary and appropriate
