Corporate Governance

Corporate Governance Report


As an AIM company, it is not mandatory for the company to fully comply with the UK Corporate Governance Code. However, the directors have sought to comply with a number of the provisions of the Code in so far as they consider them appropriate to comply with as far as is relevant for a company of this size and nature. The directors make no statement of compliance with the Code overall and do not explain in detail any aspect of the Code with which they do not comply.
 

The Board of Directors


The company is governed by a board of directors consisting of the Chairman, Peter Latham, five other executive directors and two non-executive directors. Each director has a vote and no individual or small group of individuals dominates the board’s decision making.
 

The board meets at least six times a year and has a formal schedule of matters referred to it for decision. Agendas and board packs are discussed and circulated in advance of the meetings to ensure that all directors have adequate time to research and take part in discussions on the key issues. The board is responsible for group strategy, corporate responsibility including health and safety and environmental issues, acquisition policy, bribery policy, approval of major capital expenditure and monitoring the key operational and financial risks. It also reviews the strategy and budgets for the trading subsidiaries and monitors the progress towards their long term objectives. All directors have access to the company secretary or to independent professional advice, if required, at the company’s expense.
 

In addition to the scheduled meetings, the non-executives attended the group annual operational budget and strategy meeting, as well as making individual visits to operational sites. Key financial information is circulated to directors on a monthly basis outside of the board meetings.
 

The board has decided that the directors will retire by rotation and the executive directors will be re-elected at least every three years. The manner in which the company has applied the principles of corporate governance is set out below.
 

The Audit Committee
 

The Audit Committee is chaired by Pippa Latham and includes Meryl Bushell and Nick Latham. David Dunmow also attends the meetings of the committee. The committee meets at least three times a year to review internal controls within the group. The duties of the audit committee include, on behalf of the board, a review of effectiveness of the group’s financial reporting and internal control policies, and procedures for the identification, assessment and reporting of risk.
 

It also keeps under review the scope and results of the external audit, its cost effectiveness and the independence and objectivity of the external auditor, including recommending their re-appointment to the board. This includes a review of the non-audit work performed to ensure that such work would not impair their independence or objectivity in carrying out the audit.
 

The audit committee receives a report from the external auditor following the annual audit which provides details of the significant financial reporting estimates and judgements made during the preparation of the group’s annual accounts. No matters of material significance were identified by the external auditors during the course of the audit.
 

Once a year the auditor meets with the non-executive directors only.  
 

Remuneration and Nominations Committee
 

The Remuneration and Nominations Committee is chaired by Meryl Bushell with Pippa Latham being the other member.  Peter Latham also attends the meetings. The main function of the Remuneration and Nominations Committee is to make recommendations to the board regarding the Group's policy on the remuneration and conditions of employment of the executive directors of the Group. It also makes recommendations to the board regarding the appointment of executive directors.
 

Financial Reporting
 

The directors have a commitment to best practice in the group’s external financial reporting in order to present a balanced and comprehensible assessment of the group’s financial position and prospects to its shareholders, employees, customers, suppliers and other third parties. This commitment encompasses all published information including but not limited to the year end and half yearly accounts, regulatory news announcements and other public information.
 

Internal Controls
 

The board has established systems of internal control as appropriate for the size of the group. The day to day operation of the system of internal control is under the control of executive directors and senior management. The system is designed to manage rather than eliminate risk. Any system of internal control can however only provide reasonable, but not absolute, assurance against material misstatement and loss.
 

Risk Assessment

Procedures for identifying, quantifying and managing the risks, financial or otherwise, faced by the group have been in place throughout the year under review. The processes for identifying and managing the key risks to the business are communicated regularly to all staff, who are made aware of the areas for which they are responsible. Such processes include strategic planning, maintenance and review of a risk register, the appointment of appropriately qualified staff, regular reporting and monitoring of performance against budgets and other performance targets, and effective control over capital expenditure.
 

Whistleblowing
 

The group has established procedures whereby employees of the group may, in confidence, raise concerns relating to matters of potential fraud or other improprieties. These procedures also cover other issues affecting employees including health and safety issues. The audit committee is confident that these ‘whistleblowing’ arrangements are satisfactory and will enable the proportionate and independent investigation of such matters and appropriate follow-up action to be taken.

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