The Board has appointed a sub-committee of the board consisting of two members, the Chairman and the Senior Independent Director, to monitor the Company's compliance with the AIM Rules.
- The Appointment will be until the next Annual General Meeting (AGM) of the Company following the third anniversary of your Appointment. The final day of this period shall be known as the Termination Date. Unless the Appointment is renewed on or prior to the Termination Date, you undertake to resign as a Director of the Company immediately after the Termination Date.
The Appointment will be subject to the Company's Articles of Association and any necessary resolution of shareholders. You will put yourself up for re-appointment in accordance with the Articles of Association of the Company, as amended from time to time, or in line with Company practice if rotation is more frequent than required by the Articles of Association of the Company.
- Notwithstanding the other provisions of this letter, the Appointment may be terminated at any time by the Company in accordance with the Company's Articles of Association, or the Companies Act 2006, or upon your resignation. Upon such termination or resignation for any reason, you shall not be entitled to any damages for loss of office and no fee will be payable to you in respect of any unexpired portion of the term of the Appointment.
- It is anticipated that following the appointment as a Non-Executive director you will be asked to serve on certain Board Committees.
- You are considered to be an independent Non-Executive Director and will be identified as such in the annual report and other documentation. If circumstances change, and you believe that your independence may be in doubt, you should discuss this with the Chairman as soon as practicable.
- The Company anticipates a time commitment of 12 days per year, but you are aware that the nature of the role makes it impossible to be specific about the time commitment. This will include attendance at monthly and emergency Board meetings, the AGM, two annual board away days, and at least one site visit per year. You may also be required to attend regular meetings of any Board committee of which you are a member. In addition, you will be expected to devote appropriate preparation time ahead of each meeting. It is anticipated the AGM will be held in or about May each year.
- By accepting the Appointment, you confirm that you are able to allocate sufficient time to perform your role.
- As a Non-Executive Director you have the same general legal responsibilities to the Company as any other Director.
- The Board as a whole is collectively responsible for promoting the success of the Company by directing and supervising the Company's affairs. The Board:
- provides entrepreneurial leadership of the Company within a framework of prudent and effective controls which enable risk to be assessed and managed;
- sets the Company's strategic aims, ensures that the necessary financial and human resources are in place for the Company to meet its objectives, and reviews management performance; and
- sets the Company's values and standards and ensures that its obligations to its shareholders and others are understood and met.
- In addition to these requirements of all Directors, the role of the Non-Executive has the following key elements:
- Strategy: Non-Executive Directors should constructively challenge and contribute to the development of strategy;
- Performance: Non-Executive Directors should scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance;
- Risk: Non-executive Directors should satisfy themselves that financial information is accurate and that financial controls and systems of risk management are robust and defensible; and
- People: Non-executive Directors are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing, and where necessary removing, senior management and in succession planning.
- You will be paid a fee per annum, which will be subject to annual review by the Board. The fee is inclusive of your position as a Non-Executive Director and of your Chairmanship and membership of any Board committees. The fee will be paid every four weeks in arrears to your bank account (subject to such deductions for income tax and social security contributions as the Company may be required by law to deduct). Alternatively, it may be paid gross to your service company, if applicable.
- You will have no entitlement to any bonus during the Appointment.
- In addition to the fee described in 10 above, the Company will reimburse you for all reasonable and properly documented expenses you incur in performing your role. You should submit any details of expenses incurred to the Company Secretary.
- During the Appointment, circumstances may arise in the furtherance of your duties as a Director when it will be appropriate for you to seek advice from independent advisors at the Company's expense. The Company will reimburse the full cost of expenditure incurred in accordance with this policy.
Other directorships and business interests
- The Company acknowledges that you have business interests other than those of the Company and that you have declared any conflicts that are apparent at present. In the event that you become aware of any potential conflicts of interest, these should be disclosed to the Chairman and Company Secretary as soon as they become apparent.
- During the Appointment you will consult with the Chairman prior to accepting any other (or further) directorships of publicly quoted companies or any major external appointments.
Code of conduct
- During the Appointment you will comply with any relevant regulations as may be issued by the AIM, including its Model Code for Securities Transactions by Directors of Listed Companies, and the Company's Share Dealing Code and such other requirements as the Board of Directors may from time to time specify.
- You must apply the highest standards of confidentiality and not disclose to any person or company (whether during the course of the Appointment or at any time after its termination) any confidential information concerning the Company and any Group Companies with which you come into contact by virtue of your position as a Non-Executive Director of the Company.
- Your attention is drawn to the requirements under both legislation and regulation as to the disclosure of price-sensitive information. Consequently you should avoid making any statements that might risk a breach of these requirements without prior clearance from the Chairman or Company Secretary.
- On termination of the Appointment you will deliver to the Company all books, documents, papers and other property of or relating to the business of the Company or any Group Company that are in your possession, custody or power by virtue of your position as a Non-Executive Director of the Company. The Company is able to arrange the disposal of papers that you no longer require.
- The performance of individual Directors and the whole Board and its committees is evaluated annually. If, in the interim, there are any matters that cause you concern about your role you should discuss them with the Chairman as soon as is appropriate.
- The Company has directors' and officers' liability insurance and it is intended to maintain such cover for the full term of the Appointment. You will be provided with details of this insurance.
For the purposes of this letter Group Company shall mean the Company and any of its subsidiaries or holding companies from time to time (and any other subsidiary of any of its holding companies), and holding company and subsidiary shall be as defined in section 1159 Companies Act 2006.
The members of the Committee will be Independent Non-Executive Directors appointed by the board on the recommendation of the Nomination Committee. Committee membership will initially be for 3 years and can be subsequently extended by up to 2 additional 3 year periods, as long as members continue to remain independent. The Committee shall consist of at least three members and the quorum shall be two. The Chairman of the Board shall not be a member of the Committee.
At least one member of the Committee should have recent and relevant financial experience.
The Company Secretary will act as Secretary to the Committee, ensuring papers are distributed and minutes of decisions are maintained.
The Committee shall invite members of management, external Auditor to attend its meetings as it thinks fit.
Examine all formal announcements relating to financial performance including annual and half yearly financial statements and preliminary announcements before submission to the Board including:
- Considering the appropriateness and application of accounting policies, compliance with accounting standards, stock exchange, legal and regulatory requirements, including any changes in accounting standards in the period
- Considering any significant adjustments proposed by the Auditor during their review and any matters of significant disagreement between Auditor and management
- Considering and concluding on the treatment of any other major judgmental items
- Considering the appropriateness of the going concern assumption
- Reviewing the disclosure of the principal risks in the business and the associated corporate governance statement regarding internal controls and compliance with the UK Corporate Governance Code
- Reviewing the clarity and completeness of disclosures in the financial statements and considering whether the disclosures made are set properly in context
- Considering whether the financial statements provide a true and fair view
Recommend to the board for approval by the shareholders the appointment of the external Auditor and monitoring thereafter the relationship including :
- Considering the audit fee, and fees for non-audit work
- Considering any questions of resignation, dismissal and independence, including investigation of any issues arising and considering whether any action is required
- Approving their engagement letter, including any issued at the start of an audit
- Considering the nature, scope and materiality of the audit, ensuring that there are no restrictions on the audit scope
- Reviewing the external Auditor's management letter and management's response
- Agreeing with the Board a policy on the employment of former employees of the Auditor
- Monitoring the Auditor's compliance with relevant ethical and professional guidance on the rotation of partners
- Seeking reassurance that the auditors and their staff have no financial, business, employment or family and other personal relationship with the company which could adversely affect the auditor's independence and objectivity
- Reviewing any representation letters requested by the Auditor before they are signed by management
- Defining a formal policy specifying the types of non-audit work that the Auditor is excluded from; can be engaged without referral to the Committee; and for which a case by case decision is necessary
- Reviewing the effectiveness and objectivity of the audit process on an annual basis, the quality control procedures and consider the expertise and resources of the Auditor. The annual transparency report of the audit firm should also be considered, when published
- Meeting at least annually with the external Auditor, without management being present, to discuss their remit and any issues arising from the audit
- Considering communications from the external Auditor on audit planning and findings and on any material weaknesses in accounting and internal control systems that came to the Auditor's attention
- Assessing periodically the risks associated with the possible withdrawal of the Auditor from the market and consider whether any mitigating action is appropriate
Monitoring and reviewing the company's internal controls and risk management including:
- Reviewing the internal control and risk management systems
- Considering reports from the management on the effectiveness of the systems they have established and the conclusion of any testing carried out by external auditors.
Ensure compliance with laws, regulations, ethical and other issues including:
- Evaluating the effectiveness of processes for determining risks and exposures to litigation and claims and from non-compliance with laws and regulations
- Considering the appropriateness and treatment of any non-standard financing structures
- Reviewing with the group's lawyer and others any legal, tax or regulatory matter that may have a material impact on the group's operations or financial statements
- Ensure that the Company maintains suitable arrangements for its employees to raise concerns, in confidence, about possible wrongdoings in financial reporting, or other matters and that these arrangements provide for independent investigation, appropriate follow up action and appropriate escalation to the Committee for its review
- Considering fraud or ethical issues
- In areas where the Audit Committee has responsibility for monitoring compliance with internal policies and procedures reviewing the relevant policies annually or when there is a significant change and assessing compliance with those policies on an annual basis
- Considering other topics as defined by the Board
Monitoring and evaluating the performance of the Audit Committee and making recommendations to the Board with regard to any necessary adjustments.
Reporting its activities to the Board on a regular basis and reviewing these terms of reference on an annual basis.
Prepare a report for inclusion in the Annual Report detailing:
- a summary of the role of the Audit Committee;
- the names and qualifications of all members of the Audit Committee during the period;
- the number of Audit Committee meetings;
- the way the Audit Committee has discharged its responsibilities;
- how the policy for non-audit services was applied to safeguard the Auditor's objectivity and independence; and
- how the Audit Committee reached its recommendation to the board on the appointment, reappointment or removal of the Auditor, with supporting information on tendering frequency, the tenure of the incumbent Auditor and any contractual obligations that acted to restrict the Committee's choice of external Auditor.
The majority of the members should be Independent Non-Executive Directors and chaired by the Chairman. The quorum shall be three. For specific assignments the Chief Executive may be a member of the Committee.
The Company Secretary will act as Secretary to the Committee, ensuring papers are distributed and minutes of decisions are maintained.
- Prior to appointment evaluate the balance of skills knowledge and experience and prepare an appropriate description of the role and capabilities for a particular appointment.
- Be responsible for identifying and nominating for Board approval, suitable candidates to fill Board vacancies, taking into consideration the benefits of diversity on the Board, including gender.
- Annually review the structure, size and composition of the Board and make recommendations of any changes required.
- Review the succession plans for the Board so as to maintain an appropriate balance of skills and experience on the Board and to ensure progressive refreshing of the Board.
- Make recommendations to the Board on the membership of the Remuneration and Audit committee, including chairmanship thereof.
- Recommend to the Board re-election of Directors either when required by rotation or at the completion of the term of office for a Non-Executive Director.
- Consider the time commitment that any Non-Executive Director will need to give to the Company on appointment.
- Review formal appointment letters for Non-Executive Directors.
- Prepare an annual statement of activities of the Committee for inclusion in the Annual Report
• Ensuring that procedures, resources and controls are in place to ensure AIM Rule compliance within the company are operating effectively from time to time;
• Each meeting of the full board should include a discussion of AIM matters, in particular a briefing of the Committee by the executive directors and issues raised with the Nomad and advice given. These discussions should be minuted and made available to the Nomad on request;
• Ensuring that the executive directors are communicating as necessary with the company’s Nomad regarding ongoing compliance with the AIM Rules and in relation to proposed or potential transactions;
• Ensuring that advice received from the Nomad is recorded and taken into account;
• Ensuring that all announcements made have been verified and approved by the Nomad whose name must be on all material announcements to RNS;
• Monitor press coverage to ensure that executives are not including price sensitive information in any press briefings;
• Question the executive board to ascertain the reasons for any unusual, substantial movement in the company’s share price;
• Ensuring that the Nomad is supplied with information on the company’s financial condition on a regular and timely basis and of any other key developments in the company from time to time;
• Assess whether the executive directors are aware of their AIM responsibilities from time to time and, where any deficiencies are noted, arrange for the Nomad to brief the director(s) concerned;
• To ensure that the Nomad is maintaining contact with the company on a regular basis. Where this is not the case, the Committee should contact the Nomad and remind them of their responsibilities under the AIM Rules for Nomads to the company;
• The Nomad will circulate any rule changes to the Chairman of the Committee and it will be his responsibility to circulate these changes to the rest of the board;
• Meet with the executive directors at least every 6 months to discuss and confirm that the AIM Rules have been complied with in the period. Keep minutes of these meeting and send a copy of these minutes to the Nomad;
• In the event that the meeting with the executive directors has identified any actual or possible non-compliance issues, these should be discussed immediately with the Nomad to determine the course of action to be taken;
• Ensure the executive directors comply with advice given by the Nomad from time to time;
• Be responsible for any investigation launched by the AIM Team into the company’s affairs;
• Approve a statement on AIM Rule compliance for inclusion in the company’s interim statement and annual accounts.
The Committee will consist of Independent non-executive directors exclusively, appointed by the Board on the recommendation of the Nomination Committee with a minimum of three to be a quorum. The Chairman of the Company may also be a member of the Committee, provided he/she was considered to be independent on appointment as Chairman. The Company Secretary will act as Secretary to the Committee, ensuring papers are distributed and minutes of decisions are maintained.
- Determine the salary and incentive payments for the Specified Individuals within the agreed policy, in relation to directors taking into account remuneration policy and practice across the Group, and review the ongoing appropriateness.
- Design, implement and manage performance related pay and share incentive schemes for the Specified Individuals to include target setting and approve all incentive schemes which include any share element, giving due regard to any relevant legal requirements, the provisions and recommendations in the UK Corporate Governance Code, the UK Listing Authority's Listing Rules and associated guidance. Performance criteria should be challenging and should reflect the Company's objectives and include non-financial performance metrics where appropriate.
- Regard should also be given to the risk-related aspects of remuneration policy to avoid incentivising excessive risk-taking and to ensure that the committee has oversight of any associated risks throughout the Group, which may arise as a result of remuneration.
- Determine the policy and scope of pension arrangements for each executive director.
- Determine the total individual remuneration for each Specified Individual.
- Ensure that contractual terms on termination and any payments made are fair to the individual and Company, that failure is not rewarded and that the duty to mitigate the loss is considered.
- Be aware of and advise the Board on any major changes in employee benefit structures applicable to the Group and note annually remuneration trends across the Group.
- Set the policy for authorising expense claims from the Chief Executive and Chairman.
- Remain exclusively responsible for establishing the selection criteria and management of the Remuneration consultants who advise the Committee.
- Prepare a Remuneration Report for approval by the board, in line with existing regulation for publication in the Annual Report
- Report its activities to the Board on a regular basis and review these terms of reference on an annual basis.
The senior non-executive director will be expected to contribute to:
- entrepreneurial leadership of the company within a framework of prudent and effective controls.
- definition of the Company's strategic aims, ensuring the necessary financial and human resources are in place for the Company to meet its objectives and review management of performance.
- Setting the Company's values and standards and ensuring that its obligations to shareholders and others are understood and met.
- Upholding high ethical standards of integrity and probity.
- Supporting executives in their leadership of the business, whilst monitoring their conduct.
- Promoting high standards of corporate governance and compliance with the provisions of the Combined Code whenever possible.
- Act as "deputy" to the Chairman of the Board as and when required.
- Chair meetings with the other non-executive directors (without the Chairman being present) encouraging open dialogue, particularly regarding the Chairman's performance.
- Be available to shareholders in case they have concerns which cannot, or should not, be addressed by the Chairman or Executive Directors.
- Act on the results of any performance evaluation of the Chairman.
- Maintain sufficient contact with major shareholders, when requested, to understand their issues and concerns thereby assisting the Board to develop a balanced understanding.
- Attend the Company's AGM and be available for discussion with shareholders.
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