The Directors recognise the importance of sound corporate governance commensurate with the size and nature of the Company and the interests of its Shareholders.
The Corporate Governance Code does not apply to companies quoted on AIM and there is no formal alternative for AIM companies. The Quoted Companies Alliance has published a set of corporate governance guidelines for AIM companies, which include a code of best practice for AIM companies, comprising principles intended as a minimum standard, and recommendations for reporting corporate governance matters. However, the Directors intend to implement steps to comply with the Corporate Governance Code, so far as it is practicable having regard to the size and current stage of development of the Company.
Set out below is a description of the Company’s proposed corporate governance practices.
The Board will meet regularly and be responsible for strategy, performance, approval of any major capital expenditure and the framework of internal controls. The Board will have a formal schedule of matters specifically reserved to it for decision, including matters relating to major capital expenditure, management structure and appointments, strategic and policy considerations, corporate transactions and finance.
The Board will be responsible for establishing and maintaining the Group’s system of internal financial controls and importance is placed on maintaining a robust control environment. The key procedures which the Board intends to establish with a view to providing effective internal financial control includes the following:
- the Company will institute a monthly management reporting process to enable the Board to monitor the performance of the Group;
- the Board will adopt and review a comprehensive annual budget for the Group. Monthly results will be examined against the budget and deviations will be closely monitored by the Board;
- the Board will be responsible for maintaining and identifying major business risks faced by the Group and for determining the appropriate courses of action to manage those risks; and
- full consolidated management information will be prepared on a regular basis, at least half yearly.
The Board recognises, however, that such a system of internal financial control can only provide reasonable, not absolute, assurance against material misstatement or loss. The effectiveness of the system of internal financial control operated by the Group will therefore be subject to regular review by the Board in light of the future growth and development of the Company and adjusted accordingly.
To enable the Board to discharge its duties it is intended that all of the Directors will receive timely information.
The Board includes two non-executive directors. If necessary, the non-executive directors may take independent advice. The Board has delegated specific responsibilities to the committees referred to below.
The audit committee
The members of the audit committee are Marcus Stanton and Frank Moxon. The audit committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Group is properly measured and reported on. In addition, it receives and reviews reports from the Group’s management and auditors. The audit committee meets at least twice a year and has unrestricted access to the Group’s auditors.
The remuneration committee
The members of the remuneration committee are Marcus Stanton and Frank Moxon. The remuneration committee will, inter alia, determine the remuneration of the executive directors and grant share options and any other equity incentives pursuant to any share option scheme or equity incentive scheme in operation from time to time. The remuneration committee will meet at least twice a year.
The members of the nomination committee are Marcus Stanton and Frank Moxon. The nomination committee will have primary responsibility for making recommendations to the Board on matters relating to the nomination of directors of the Company. The nomination committee will meet at least twice a year.