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 admitted to trading 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, the QCA Guidelines, 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 take account of the Corporate Governance Code (and the QCA Guidelines), to the extent they consider it appropriate and having regard to the size, current stage of development and resources of the Company.
The Corporate Governance Code provides that the board of directors of a public company should include a balance of executive and non-executive directors, with independent non-executive directors comprising at least one-half of the board (excluding the Chairman). The Corporate Governance Code states that the board should determine whether a director is independent in character and judgement and whether there are relationships or circumstances which are likely to affect, or could appear to affect, the director’s judgement.
The Board is comprised of four directors consisting of two executive Directors and two non-executive Directors, neither of which can be considered to be independent within the meaning of the Corporate Governance Code.
The Directors will monitor the composition of the Board on an ongoing basis and appoint further executive and/or non-executive directors as appropriate.
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 include 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
- Fully 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 in respect of the affairs of the Group.
The audit committee
The audit committee will comprise Constantine Gonticas and Roberto Tello on Admission. It shall meet not less than three times a year. The audit committee receives and reviews reports from management and from the Company’s auditors relating to the interim and annual accounts and to the internal control procedures in use throughout the Group. It is responsible for ensuring that the financial performance of the Group is properly reported with particular regard to legal requirements, accounting standards and the AIM Rules. The ultimate responsibility for reviewing and approving the annual report and accounts and the half-yearly reports remains with the Board.
The remuneration committee
The remuneration committee will comprise Constantine Gonticas and Roberto Tello on Admission. It shall meet not less than twice a year. It is responsible for determining and reviewing the terms and conditions of service (including remuneration) and termination of employment of executive directors and senior employees and the grant of options implemented from time to time. The Directors comply with Rule 21 of the AIM Rules relating to directors’ and applicable employees’ dealings in the Company’s securities. Accordingly, the Company has adopted a Share Dealing Code for directors and applicable employees and the Company takes all reasonable steps to ensure compliance by its directors and applicable employees with the provisions of the AIM Rules relating to dealings in securities.