Throughout the year to 31 March 2008, the Company complied with the provisions of the revised Combined Code on corporate governance issued by the Financial Reporting Council in June 2006 (as amended) (“the Combined Code”).
The structure of the Board and its standing committees is as follows:
The Board
Currently the Board consists of three Executive Directors, two Non-Executive Directors and a Chairman. All Non- Executive Directors, excluding the Chairman, are considered to be independent of management and free from any business or other relationship which could interfere with the exercise of their independent judgement for the purposes of the Code. The Chairman is also considered by the Board to be independent. The Non-Executive Directors, excluding the Chairman, met once during the year without the Executive Directors being present.
The Senior Independent Non-Executive Director was Eric Hutchinson who was chosen due to his Executive Board experience with other companies.
All the Non-Executive Directors have the authority to meet with shareholders without first seeking approval from the Chief Executive or the Chairman.
The Board met six times during the period with attendance as follows:
| A V Allen |
6 |
| J C Barker (resigned 31.5.07) |
1 |
| S Lawson |
6 |
| G P Budd |
6 |
| S Auld |
6 |
| E G Hutchinson |
6 |
| A Cripps (resigned 31.3.08) |
6 |
| S Tan (non-UK based) (resigned 7.1.08) |
1 |
| B Wilson (appointed 8.1.08) |
1 |
Upon appointment the Directors are required to seek election at the first AGM following appointment. All Directors are required to submit themselves for re-election at regular intervals and at least every three years.
The Company has separate posts of Chairman and Chief Executive. The Chairman leads the Board and the Chief Executive is responsible for the management of the Company, implementing policies and strategies determined by the Board.
The Board has for many years had a significant Non-Executive membership. The Non-Executive Directors have full access to the external Auditors and to management and there is a formal procedure for Directors to obtain independent professional advice in the furtherance of their duties should this be necessary. All Directors have access to the advice and services of the Company Secretary.
Appropriate and relevant training is provided to the Directors as and when required.
The Board meets a minimum of five times, and is supplied as early as practicable with an agenda and appropriate papers. Further ad hoc meetings of the Board are held as and when required. Directors are appointed by the Board on recommendation from the Nominations Committee. The Board monitors the financial performance of the Group, and approves and reviews major projects and acquisitions. The Board has formally adopted a schedule of matters which are reserved to the Board for decision, thus ensuring that it maintains control over appropriate strategic, financial, organisation and compliance issues.
The Board undertakes annual evaluation of its own performance and that of its Committees using questionnaires and continues to train and evaluate Senior Managers below Board level in order to maintain its continuous succession policy.
The Board has delegated specific responsibilities to Committees, as described below:
The Audit Committee
The Audit Committee consists entirely of independent Non-Executive Directors. It is chaired by Eric Hutchinson and has met twice in the year. It provides a line of communication between the Board and the external Auditors. The Committee reviews the Group’s interim and annual financial statements before submission for approval by the Board, reviews the effectiveness of internal controls and considers any matters raised by the Auditors.
The Committee is considered adequately qualified with all members having strong financial backgrounds and the Chairman (Eric Hutchinson) is a qualified FCCA, currently working in industry as a Group Finance Director.
For remuneration details, click here.
It is Group policy to ensure auditor independence by carefully considering any non-audit work carried out by the Auditors. The Group uses a number of accounting advisers and has a specific policy not to use current Auditors for any accounts preparation work.
During the period the Committee felt that, given the size of the Group, it was valuable having the Group Chairman attending the committee meetings.
The Remuneration Committee
The Remuneration Committee comprises independent Non-Executive Directors and was chaired during the year by Andrew Cripps. Andrew Cripps resigned on 31 March 2008 and subsequently the chair was taken by Bill Wilson. They meet as required during the year to review and determine the terms and conditions of employment of the Executive Directors and senior management, including levels of remuneration and other benefits. During the period the Committee met on five occasions.
The Nominations Committee
The Nominations Committee comprises all the Non-Executive Directors and the Chief Executive and meets at least once a year. The Committee is responsible for reviewing the Board structure, size and composition and for nominating candidates for Executive and Non-Executive positions. It will also ensure that any newly appointed Director receives a full and proper induction into the Company’s affairs.
Shareholder relations
The Group has a website, which is continually updated to ensure that shareholders are fully aware of the Group’s activities: www.trifast.com. The Group’s registrar, Computershare, is also linked to the Trifast website and offers services for the shareholders.
The Group also works with City Specialists to ensure all levels of Shareholders receive Trifast information, such as:
Fairfax — Institutions
Smithfields — Press and Analysts
Redleaf — Specialist, focusing on Private Client Brokers (PCBs)
Edison — Analyst information available to everyone
The members of the Audit, Remuneration and Nomination Committees will normally be available to speak to shareholders at the AGM. In addition, shareholders can contact them at any time by writing to Trifast plc, Trifast House, Bellbrook Park, Uckfield, TN22 1QW.
Going concern report
After making enquiries, the Directors have reasonable expectations that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.
Internal control
The Combined Code requires that Directors review the effectiveness of the Group’s system of internal controls which includes controls over financial, operational, compliance and risk management. The Audit Committee has reviewed the effectiveness of the system of internal control and reported its positive conclusions to the Board.
In addition, the Board takes required account of the significance of social, environmental and ethical matters in regard to the business of the Group and seeks to take an ethical view of its responsibilities in providing business opportunities.
Further details can be found in our Corporate Social Responsibility Statement which can be found on our website, www.trifast.com.
The Board has overall responsibility for the Group’s controls. However, such a system is designed to manage rather than eliminate the risk of failure in order to achieve business objectives, and can only provide reasonable and not absolute, assurance against material misstatement or loss regarding:
- The safeguarding of assets against unauthorised use or disposition.
- The maintenance of proper accounting records and the reliability of financial information used within the business or for publication.
The key elements of the system are as follows:
- Full detailed reviews of the business risks undertaken as part of the ongoing day-to-day procedures of the business.
- An organisational structure with clearly defined lines of responsibility and delegation of authority.
- Group policies for financial reporting, accounting, financial risk management, information security, capital expenditure appraisal and Corporate Governance are all well documented.
- Detailed annual budgets and rolling forecasts are prepared for all operating units and reviewed/approved by the Board.
- Regular ‘Healthcheck’ reviews are undertaken at each site to cover both operational and financial controls with reports reviewed by the Audit Committee.
- Performance against budget is monitored closely and material variances are reported to the Board on a monthly basis. Rolling forecasts are updated quarterly and reviewed accordingly.
- The control system is operated with the full co-operation of all Company Directors in a controlled manner. Risk assessments are done at all levels from local divisional right up to Main Board with the summaries all being fed up to Main Board for review.
- The Audit Committee deals with any significant control issues raised by the external Auditors.
- Well-structured reporting lines to the Board. There is a formal schedule of matters specifically reserved for decisions by the Board.
- Investment approval, controlled by the budgetary process with authorisation levels in place. Any single capital expenditure over £50,000 goes to the Board with detailed written proposals and financial analysis of expected returns.
A formalised internal review process has been set up to routinely review the operational and financial controls within the Group. These reviews are conducted by senior personnel who are independent from the entity which is under review. Whilst the Board recognises that this does not constitute a fully independent internal audit function, it believes that due to the size of the Group, this process provides appropriate comfort as to the operational and financial controls in place.
The Board and Audit Committee continually review the effectiveness of the Group’s internal control systems. No significant failings or weaknesses were identified as a result of this review process. As such, the Board and Audit Committee are comfortable that they meet the requirements of the Turnbull Report.