Corporate governance procedures
The Directors are aware of the UK Corporate Governance Code (the «Code»), which was published by the UK Financial Reporting Council in September 2012 and is applicable to all companies admitted to the premium segment of the Official List. Since the Company is listed on the standard segment of the Official List, it is not required to comply with the Code. However, the Company has adopted certain corporate governance procedures which the Directors believe are appropriate for the size of the Company.
For example, the Board of Directors includes four Non-Executive Directors and has established an Audit Committee that meets at least twice a year and a Remuneration Committee that meets at least once a year. In addition, the Company has entered into a relationship agreement with its controlling shareholder.
Directors and their responsibilities
The Board of Directors of Altyn Plc comprises a Chairman, two Executive Directors and four Non-Executive Directors. The current Directors, together with their biographical details, are set out in the “Board” section. The Directors are responsible for formulating, reviewing and approving the Group’s strategy, budgets, major items of capital expenditure and senior personnel appointments.
Board structure and its committees
The Board comprises the Chairman, Chief Executive Officer, Chief Technical Officer and three other Non-Executive Directors. The Board meets regularly throughout the year and whenever issues arise that require the attention of the Board. The Chief Executive Officer conducts Board and shareholder meetings and ensures that all Directors are properly briefed. The Directors are responsible for formulating, reviewing and approving the Company’s strategy, budgets (including for major items of capital expenditure) and appointments of senior personnel. The Directors have access to independent professional advice at the Company’s expense and to the Company Secretary. At each Annual General Meeting, one third of the Directors must retire by rotation, whereupon they can offer themselves for re-election if eligible. The Directors have responsibility for the overall corporate governance of the Company and recognise the need for the highest standards of behaviour and accountability. The Directors are committed to the principles underlying best practice in corporate governance and intend to comply with the principles of the Code to the extent they consider appropriate for a company of a size and nature similar to the Company. The Board has a wide range of experience directly relevant to the Company’s business. The structures and procedures of the Company ensure that no individual or group dominates the decision-making. The Company has established an Audit Committee and a Remuneration Committee.
The Audit Committee comprises Ashar Qureshi, Neil Herbert. Its prime tasks are to review the scope of the external audit, to receive regular reports from the Company’s auditor and to review the half-yearly and annual accounts before they are presented to the Board, focusing in particular on accounting policies and areas of management judgment and estimation.
The Committee is responsible for monitoring the controls which are in force to ensure the integrity of the information reported to the shareholders. The Committee acts as a forum for discussion of internal control issues and contributes to the Board’s review of the effectiveness of the Company’s internal control and risk management systems and processes.
The Committee also considers annually the need for an internal audit function. It advises the Board on the appointment of external auditors and on their remuneration for both audit and non-audit work, and discusses the nature and scope of the audit with the external auditors. The Committee, which meets formally at least twice a year, provides a forum for reporting by the Company’s external auditors. Meetings are also attended, by invitation, by the Company’s Chairman, Chief Executive Officer and Chief Financial Officer.
The Audit Committee also undertakes a formal assessment of the auditors’ independence each year which includes:
— a review of non-audit services provided to the Company and related fees;
— discussion with the auditors of a written report detailing all relationships with the Company and any other parties that could affect independence or the perception of independence;
— a review of the auditors’ own procedures for ensuring the independence of the audit firm and partners and staff involved in the audit, including the regular rotation of the audit partner;
— obtaining written confirmation from the auditors that, in their professional judgement, they are independent.
An analysis of the fees payable to the external audit firm in respect of both audit and non-audit services during the year is set out in note 11 on page 41 of the financial statements.
The quorum necessary for the transaction of business by the Committee is two. In the event that a meeting of the Audit Committee is required but a quorum might not be secured, an existing member of the Audit Committee shall be empowered to appoint an additional Non-Executive Director(s) to attend such meeting.
Meetings shall be held at least two times a year, and also at such other times as the Chairman of the Committee requires. Only members of the Committee have the right to attend. Other non-members may be invited. Members may participate in a meeting by means of a conference telephone, video conferencing facility or other suitable communicating equipment. The Secretary shall minute the proceedings and resolutions of all meetings as well as keep appropriate records. Minutes of the meetings shall be circulated promptly to all members of the Audit Committee.
Terms of Reference
The duties of the audit committee as follows:
- that due consideration is given to laws and regulations, the provisions of the Code (as amended from time to time) and the requirements of the UK Listing Authority’s Listing Rules as appropriate, including the requirement for explanation in the event of any permitted non-compliance with the provisions of the Code;
- that the external auditors’ comply with relevant ethical and professional guidance on the rotation of audit partners, the level of fees paid by the Company compared to the overall fee income of the firm, office and partner and other related requirements;
- that there are no relationships (such as family, employment, investment, financial or business) between the external auditors and the Company (other than in the ordinary course of business);
- that a tendering process in respect of the external auditor contract is conducted at least every 5 years;
- the maintenance of a sound system of internal control and risk management;
- that the Committee reports annually to the Board on how it has discharged its’ responsibilities; and
- that the Committee’s terms of reference are made publicly available.
- and monitor the integrity of the financial statements of the Company, including its annual and interim reports, preliminary results announcements and any other formal announcement relating to its financial performance, and discuss with the auditors as appropriate, including the consideration of representation letters requested by the external auditors prior to signing by management;
- annually, the external auditors qualifications, expertise and resources, their independence and objectivity and the effectiveness of the audit process; and
- annually, the Company’s internal controls (including financial, operational and compliance controls) and risk management systems as well as the policies and procedures for preventing and detecting fraud.
To approve a statement for inclusion in the annual report on its duties and activities.
To recommend to the Board:
- the approval of the financial statements of the Company, including its annual and interim reports, and any other formal announcement relating to its financial performance;
- for approval at the AGM, the appointment, re-appointment and removal of the Company’s external auditors. The Audit Committee shall oversee the selection process for new auditors, and if auditors resign the Audit Committee shall investigate the issues and circumstances leading to this and decide whether any action is required; and
- the external auditor to this and decide whether any action is required; and the the start of each audit (ensuring that it has been updated to reflect changes in the circumstances arising since the previous year) and the scope of the audit.
The Remuneration Committee currently comprises of two Directors – Ashar Qureshi and Neil Herbert. The Committee, which meets as required, is responsible for determining the contract terms, remuneration and other benefits of the Executive Directors. The remuneration of the Non-Executive Directors is determined by the Board within the limits set out in the articles of association. None of the Committee members has any personal financial interest in the matters to be decided (other than as shareholders), potential conflicts of interest arising from cross-Directorships, or any day-to-day involvement in running the business. The Committee has access to professional advice from inside and outside the Company at the Company’s expense.
Policy on Executive Directors' remuneration
The Company operates within a competitive environment and its performance depends on the individual contributions of the Directors and employees.
Executive remuneration packages are designed to attract, motivate and retain Directors of the calibre necessary to manage the Company’s operations and to reward them for enhancing shareholder value. The performance review of the Chief Executive Officer and the determination of his annual remuneration package is undertaken by the Remuneration Committee.
(a) basic annual salary;
(b) health insurance for the Executive Director and his family;
(c) share options; and
The Remuneration Committee establishes the performance levels required for a bonus to be paid or share options to be exercisable. The Remuneration Committee believes that the award of any bonuses should be tied to the interests of the Company’s shareholders.
The Chief Executive Officer may participate in share incentive schemes recommended by the Remuneration Committee.