Corporate governance

The Company's vision is to invest in and develop its operating businesses to deliver long term, sustainable growth in shareholder value. This may come from organic growth, acquisitions or divestments.

The Board has established Audit, Remuneration and Nominations Committees full details of which are contained in principle 10, below.
 
The Company also receives feedback from its external auditors on the state of its internal controls. The Audit Committee agrees that there should be no internal audit function of the Group at this time considering the size of the Group and the close involvement of senior management over the Group’s accounting systems. However, the Committee will keep this matter under review in the event that circumstances warrant an internal function for the Group in the future.
 
In addition to the activities of the Board’s sub-committees, the Board approves the annual budget each year. This process allows the Board to identify key performance targets and risks expected during the upcoming year. The Board also considers the agreed budget when reviewing trading updates and considering expenditures throughout the year. Progress against budget is monitored via monthly reporting of actual financial performance against budget. Where appropriate, forecasts are prepared to further appraise any risks arising during the year.
 
The Group has clear authority limits deriving from the list of matters reserved for decision by the Board including capital expenditure approval procedures.

The Board recognises and understands that it has a fiduciary responsibility to the shareholders. The Annual Report and Accounts’ Chairman’s Statement and Chief Executive’s Statement include detailed analysis of the Group’s performance and future expectations.
 
The Chairman is responsible for on-going dialogue and relationships with shareholders supported by the other Executive Directors.
 
As such, members of the Board meet with the larger shareholders during the year and the Annual General Meeting is always an opportunity for the Board to communicate with shareholders and the Board welcomes the attendance and participation of all shareholders.
 
The Group’s website allows shareholders access to information including; contact details, who the major shareholders are and the current share price. In addition, all announcements issued via RNS are available together with an archive of recent financial reports and accounts and interim statements.
 
The resolutions to be put to a vote at the forthcoming AGMs can be found in the Reports, Accounts and Circulars section of the Company's website. Past AGM resolutions can be found at the back of the annual report and accounts with the results published in the RNS section.

The Board is aware of the need to protect the interests of minority shareholders and balancing these interests with those of any more substantial shareholders. The Board does not consider that the Company currently has a dominant shareholder where special contractual arrangements would be necessary to protect the interests of minority shareholders.
 
The Company publishes all relevant material, according to QCA definitions, on its website. This includes annual reports and shareholder circulars.

The Company is committed to a series of Corporate Social Responsibility (CSR) principles that provide a reference point for all stakeholders on the elements that define the conduct of the Company’s business and relationships in the geographical markets in which it operates.
These principles are subject to periodic review and cover the following areas; Ethics and business conduct, Employees (including our supply chain), Health and safety, Environment and Community.
 
Greater detail on these policies may be found here.

Whilst the Group recognises the importance of high standards of Corporate Governance, the Board has sought to address the matter in a proportionate way having regard to the size and resources of the Group.
 
The principal risks faced by the Group are addressed by the appointment of an experienced Executive Board supported by an experienced Non-Executive Director and a team of appropriately qualified professional advisers.
 
The Executive Directors are closely involved in the day to day operations of the Group and the operating subsidiaries and report to the Board in detail at least monthly. Their reports include the status and trends of agreed Key Performance Indicators that are noted in the Group's Annual Report in the Strategic Report and Financial and Operational Highlights.

The Board has set up committees to specifically address the audit and remuneration and nominations to the Board as detailed in principle 10, below.
 
Eleven main Board meetings were held during 2016. The Company Secretary records attendance at all Board meetings and the table below shows attendance by each Director:
 
Raschid Abdullah: 11/11
Osman Abdullah: 11/11
Paul Negus: 10/11
Terry Connolly: 11/11

This website page provides full disclosure on the Company's corporate governance. Ultimately, the Company’s corporate governance is the responsibility of the Chairman.
 
Descriptions of the roles of Directors are included under “The Board of Directors” section, above.

There are currently four Board members, comprising three Executive Directors and one Non-Executive Director. Full biographical details of the Directors are included under “The Board of Directors” section, above.
 
The role of the Non-Executive Director is to bring independent judgement to Board deliberations and decisions. The Non-Executive has no personal financial interest, other than as a shareholder, in the matters to be decided.
 
The Board typically meets on a monthly basis to review the Company’s performance and to review and determine strategies for future growth. The Board has delegated specific responsibilities to its committees as set in principle 10, below.
 
All Directors are subject to either an executive services agreement or a letter of appointment. Notwithstanding, the Company’s Articles of Association require Directors to retire from office and submit themselves for re-election every three years at the Annual General Meeting.

Each Director has a wide range of experience available to the Group. Full biographical details of the Directors are included under “The Board of Directors” section, above. The Board has sub-committees appointed to review the specific matters of Audit, Remuneration and Nominations.

The Audit Committee is responsible for ensuring that the financial performance of the group is properly reported on and monitored and for meeting the auditors and reviewing their reports in relation to the accounts and the audit. It holds a formal meeting with the external auditors at least twice a year.

The Audit Committee evaluates the independence and objectivity of the external auditor and takes into consideration all United Kingdom professional and regulatory requirements. Consideration is given to all relationships between the Group and the audit firm including in respect of the provision of non-audit services. The Audit Committee considers whether those relationships appear to impair the auditor’s judgement or independence. The Audit Committee feels they do not.

The Audit Committee agrees that there should be no internal audit function of the Group at this time considering the size of the Group and the close involvement of senior management over the Group’s accounting systems. However, the Committee will keep this matter under review in the event that circumstances warrant an internal function for the Group in the future.

The Remuneration Committee is responsible for setting the scale and structure of the Executive Directors' remuneration. It also recommends the allocation of share options to Directors and other employees.
The responsibilities of both the Audit and Remuneration Committees are undertaken by the Company’s Independent Director, Terry Connolly, who seeks independent advice from outside advisors as he feels is appropriate and necessary.

Terry Connolly has no personal financial interest, other than as a shareholder, in the matters to be decided.

The whole Board undertakes The Nomination Committee responsibilities. The remit comprises all new appointments of Directors and senior management throughout the Group; nominations, interviewing, taking up references and considering related matters.

The Company undertakes regular monitoring of personal and corporate performance using agreed key performance indicators and detailed financial reports.
Key performance indicators include; order intake, revenues, EBITDA, pre-tax profit, cash generation, net assets and earnings per share.
 
The Board considers, via the Nominations Committee, the need for refreshing its membership. Mr Negus was the most recent appointment in September 2014. The Nominations Committee is also responsible for succession planning.

The Board is provided with detailed financial reports of the Group's financial performance on a regular monthly basis with more frequent updates if required. Reports reference comparisons to the annual budget and, where appropriate, interim forecasts. These together with detailed written reports are provided prior to the Company's regular Board meetings.
 
Recommendations from the Executive Directors are delivered in a timely manner with supporting documentation, supplemented as required by reports from external professional advisers so that the Board can constructively challenge recommendations before making decisions.
 
The Non-Executive Director may seek independent advice from outside advisors, at the Company's expense, as he feels is appropriate and necessary.