Statement by the directors on compliance with the provisions of the Combined Code
The workings of the board and its committees
Performance evaluation
Relations with shareholders
Internal control
Corporate Responsibility Report
Audit Committee Terms of Reference
Remuneration Committee Terms of Reference
Nominations Committee Terms of Reference
The board remains committed to maintaining high standards of corporate governance throughout the group. The board is accountable to the company’s shareholders for good corporate governance. This statement describes how the principles of corporate governance are applied to the company and the company’s compliance with the Code provisions set out in Section 1 of the Combined Code on Corporate Governance (‘Combined Code’) issued by the Financial Reporting Council in 2006. Section 1 of the Combined Code establishes main and supporting principles of good governance in four areas: Directors; Remuneration of Directors; Accountability and Audit; and Relations with Shareholders. The following sections, together with the Remuneration Report, give details of how the principles of the Combined Code have been applied.
Statement by the directors on compliance with the provisions of the Combined Code
The board considers that the company has been in full compliance with the provisions set out in the Combined Code throughout the year.
The directors’ statement regarding compliance with requirements relating to internal control is dealt with below.
The workings of the board and its committees
The Board
The board comprises the Chairman, two Executive Directors and two independent Non-Executive Directors. J Hewitt has acted as Deputy Chairman and Senior Independent Director until his retirement. R Jeens became Senior Independent Director on 1 September 2007. The Board has announced that it is searching for a further Non-Executive director with lighting industry experience to achieve a composition which reflects an appropriate balance of Executive and Non-Executive directors. All of the Non-Executive Directors are considered to be independent, provide a solid foundation for good corporate governance for the Group, and ensure that no individual or group dominate the board’s decision making process. The Non-Executive directors are independent of management and are free from any relationship which could affect the exercise of their independent judgement and therefore meet the criteria set out in the Combined Code. Their biographies are elsewhere on this website. These demonstrate a range of experience and sufficient calibre to bring independent judgement on issues of strategy, performance, resources and standards of conduct which is vital to the success of the Group. Each Non-Executive Director continues to demonstrate that he has sufficient time to devote to the Company’s business.
The Non-executive directors constructively challenge and assist in developing the strategy of the Group. They scrutinise the performance of management against the Group’s objectives and also monitor the reporting of performance. The Board is provided with regular and timely information on the financial performance of businesses within the Group, and of the Group as a whole, together with reports on trading matters, markets and other relevant matters.
Directors are encouraged to update their knowledge and familiarity with the Group through visits to the individual businesses both in the UK and overseas as well as receiving presentations from senior management.
There are clearly defined roles for the Chairman and Chief Executive. The Chairman is responsible for leadership of the Board, ensuring the effectiveness of the Board in all aspects, conducting Board meetings and the effective and timely communication of information to shareholders. The Chairman is also available to provide advice, counsel and support to the Chief Executive. The Chief Executive has direct charge of the Group’s day to day activities, prepares and presents to the Board strategic options for growth in shareholder value and sets the operating plans and budgets required to deliver the agreed strategy. The Chief Executive is also responsible for ensuring that the Group has in place appropriate risk and management and control mechanisms.
The Executive Directors, led by the Chief Executive, have been delegated responsibility by the Board for the management of the Group within the control and authority framework set by the Board.
The Board is collectively responsible for the performance of the Company and is responsible to shareholders for the proper management of the Group.
The board has a formal schedule of matter specifically reserved to it for decision including the approval of annual and interim results and recommendation of dividends, approval of annual budgets, review of Group Strategic plans, approval of larger capital expenditure and investment proposals, review of the overall system of internal control and risk management and review of corporate governance arrangements. Other responsibilities are delegated to the board committees, being the Audit, Remuneration and Nominations committees, which operate within clearly defined terms of reference, and which report back to the Board. All Directors have access to the advice and services of the Company Secretary, who is responsible to the board for ensuring that board procedures are followed and that applicable rules and regulations are complied with. In addition, the Company Secretary ensures that the Directors receive appropriate training as necessary.
Relevant papers are distributed to members in advance of Board and Committee meetings. Directors’ knowledge and understanding of the Group is enhanced by visits to the operations and by receiving presentations by senior management on the results and strategies of the business units. Directors may take independent professional advice on any matter at the company’s expense if they deem it necessary in order to carry out their responsibilities. No such advice was taken during the year. The Company has continued to secure appropriate insurance cover for directors and officers.
Performance evaluation
For the third successive year the Chairman issued a board questionnaire to all Board members for the purposes of evaluating the Board’s corporate governance procedures and compliance. The questionnaire covered such topics as (i) the role of directors, (ii) the performance of the Board, the Chairman and the Non-Executive Directors, (iii) Board Committees, (iv) leadership and culture, (v) Corporate Governance, (vi) relations with shareholders and (vii) Board accountability and audit. The responses from the questionnaires were collated independently and a summary report distributed to all directors. The Board discussed the summary findings at the February Board meeting from which a list of actions was agreed.
The process confirmed that all directors continue to contribute effectively and with proper commitment including of time to their roles.
Board Committees
The following committees deal with the specific aspects of the Group's affairs.
Nomination committee
The nomination committee comprises the Chairman and the two Non-Executive Directors. The Committee is responsible for proposing candidates for appointment to the board, having regard to the balance and structure of the board. In appropriate cases, recruitment consultants are used to assist the process. Non-executive directors are appointed for an initial three year term. The committee is also involved in the selection and recruitment of managing directors of the operations. Terms of reference of the Committee are available on the Company’s website at www.dialight.com.
Remuneration committee
The Group’s remuneration committee was chaired by J Hewitt until his retirement when W Whiteley was appointed as Chairman. The other member is the independent non-executive director, R Jeens. The Committee is responsible for making recommendations to the board, within agreed terms of reference, on the company’s framework of executive remuneration and its cost. The Committee determines the contract terms, remuneration and other benefits for each of the executive directors, including performance related bonus schemes, pension rights and compensation payments. The committee calls for advice by leading firms of remuneration consultants as they consider appropriate.
During the year the work of the Committee included approving the 2007 Remuneration Report, reviewing and approving the performance criteria for the annual cash bonus plan, approving the annual award under the Performance Share Plan and reviewing the base salary of the Executive Directors and senior managers of the Group.
The board itself determines the remuneration of the non-executive directors.
A copy of the Terms of Reference for the Remuneration Committee can be found on the Company’s website at www.dialight.com.
Audit committee
The audit committee, which is chaired by R Jeens, comprises the non-executive directors and meets not less than twice annually and more frequently if required.
The Board considers that each of the members of the Audit Committee has recent and relevant financial experience, and an understanding of accounting and financial issues relevant to the industries in which Dialight operates. The committee provides a forum for reporting by the Group’s external auditors. Meetings are also attended by invitation to the Chairman and executive directors.
The audit committee is responsible for reviewing a wide range of matters including the half-year and annual accounts before their submission to the board, and monitoring the controls which are in force to ensure the integrity of the information reported to the shareholders. The audit committee makes recommendations to the board on the appointment and responsibilities of external auditors and on their remuneration both for audit and non-audit work, and discusses the nature, scope and results of the audit with external auditors.
The audit committee is responsible for monitoring risk management and internal control processes which include overseeing the internal audit function for which an independent firm is used. The primary function of the internal audit is to review the systems and controls for financial reporting. The Audit Committee receives copies of the reports prepared by the internal audit firm. The internal audit firm will attend the audit committee as requested to report directly on any significant findings.
The committee is also responsible for monitoring the cost effectiveness, independence and objectivity of KPMG Audit Plc, the external auditor, and agreeing the level of remuneration and extent of non-audit services. The scope of the external audit for each business, together with the audit fees were presented by KPMG Audit Plc at the September 2007 Committee meeting. Both the audit scope and related fees were approved at the meeting.
Terms of reference for the Audit Committee are available on the Company’s website at www.dialight.com.
Audit Independence
The Board and Audit Committee place great emphasis on the objectivity of the Group’s auditors, KPMG Audit Plc. Audit Committees are attended by the auditors to ensure full communication of matters relating to the audit and The Audit Committee meets with the auditors without the Executive Directors present to discuss, amongst other matters, the adequacy of controls and any material judgemental areas.
The Group Finance Director must give prior approval any non-audit work before it is undertaken by the Auditors. Part of this review is to ensure that other potential provides of the service have been adequately considered. For fees over £20,000, the approval of the Audit Committee is required.
The auditors annually confirm their policies on ensuring auditor independence and provide the Committee with a report on their own internal quality control procedures.
Attendance at meetings in 2007
The number of scheduled Board and Committee meetings attended by each director during 2007 was as follows:
Board |
Audit Committee |
Remuneration Committee |
Nominations Committee |
|
Number of meetings held |
8 |
3 |
2 |
1 |
Harry Tee |
8 |
N/A |
N/A |
1 |
Rob Jeens |
8 |
3 |
2 |
1 |
Bill Whiteley |
8 |
3 |
2 |
1 |
Roy Burton |
8 |
N/A |
N/A |
N/A |
Cathy Buckley |
8 |
N/A |
N/A |
N/A |
Jeff Hewitt(1) |
5 |
1 |
1 |
1 |
(1) Retired 31 August 2007
Retirement of Directors by rotation
All directors are required to submit themselves for re-election at least every three years. Additionally new directors are subject to election by shareholders following their appointment.
The service contracts of the Executive Directors and the terms and conditions of appointment of the Non-Executive directors are available for inspection at the registered office of the Company during normal business hours on any weekday (except bank holidays ) and at the Annual General Meeting.
Communications with shareholders are given high priority. The Chairman of the Board has overall responsibility for ensuring that there is effective communication with investors including the views of major shareholders on matters such as corporate governance.
On a day to day basis the Board’s primary contact with major shareholders is via the Chief Executive and Finance Director, who have regular dialogue with individual institutional shareholders and deliver presentations to analysts after the full and half year results. Such dialogue is controlled by written guidelines to ensure protection of share price sensitive information that has not already been made available generally to the company’s shareholders. Similar guidelines also apply to communications between the company and parties such as financial analysts, brokers and the press. Copies of the shareholder presentations are made accessible on the Company’s website.
The Senior Independent Director and other members of the Board are also available to meet major investors on request.
The Board uses the Annual General Meeting to communicate with private and institutional investors and welcomes their participation. The Chairman aims to ensure that the chairman of the audit, remuneration and nomination committees are available at these meetings to answer questions. Details of resolutions to be proposed at the Annual General Meeting on 7 May 2008 can be found in the Notice of the Meeting.
Internal control
The board has overall responsibility for establishing and maintaining the Group’s system of internal control and for reviewing its effectiveness in accordance with the guidance set out in “Internal Control: Guidance for Directors on the Combined Code” (the Turnbull Guidance). The Directors have reviewed the effectiveness of the system of internal controls in operation throughout the year. The role of the Group’s management is to implement Board policies on risk and control. Internal control systems are designed to meet the particular needs of the business concerned and the risks to which it is exposed and by their nature can provide reasonable but not absolute assurance against material misstatement or loss.
The Group’s management operates an ongoing risk management process for identifying, evaluating and managing the significant risks faced by Dialight. The process is reviewed by the Board during the year.
The key procedures, which the directors have established to review and confirm the effectiveness of the system of internal control, include the following:
Management structure
The board has overall responsibility for the Group and there is a formal schedule of matters specifically reserved for decision by the board. Each executive director has been given responsibility for specific aspects of the Group’s affairs. The executive directors also meet regularly with the managing directors and management teams of the subsidiary businesses.
Risk Assessment
Each business is required to maintain a Risk Register. The Risk Register identifies the key risks facing the business, the probability of those risks occurring, the impact should the risk occur, and the actions being taken to manage those risks to the approved level. Each business must submit the register to the Board on an annual basis. The risk assessment is performed on a continual basis and reports are submitted to the Board on a periodic basis to update them on progress as appropriate.
Corporate accounting and procedures manual
Responsibility levels are communicated throughout the Group as part of the corporate accounting and procedures manual which sets out, inter-alia, the general ethos of the Group, delegation of authority and authorisation levels, segregation of duties and other control procedures together with accounting policies and procedures. The manual is updated regularly.
Quality and integrity of personnel
The integrity and competence of personnel is ensured through high recruitment standards and subsequent training courses. High quality personnel are seen as an essential part of the control environment and the ethical standards expected are communicated through the corporate accounting and procedures manual.
Financial information
There is a comprehensive strategic planning, budgeting and forecasting system. Each year the board approves the annual budget and updated business strategic plan. Key risk areas are identified and reported to the Board. Performance is monitored on a monthly basis against budget and prior year and relevant actions identified.
The business produces detailed three year business plans. The plan will include consideration of the financial projections and the evaluation of business alternatives. The Business Plans are presented by each management team to the Board as part of the Strategic Review meeting.
The Board receives and reviews monthly management accounts together with full year forecasts which are updated monthly. Performance against forecast and budget is closely monitored.
The Chief Executive prepares a monthly report for the Board on key developments, performance and issues in the businesses.
Investment appraisal
Capital expenditure and research and development projects are regulated by budgetary process and authorisation levels. For expenditure beyond specified levels, detailed written proposals have to be submitted to the board. Reviews are carried out after the acquisition is complete, and for some projects, during the acquisition period, to monitor expenditure; major overruns are investigated.
Due diligence work is carried out if a business is to be acquired.Audit committee
The audit committee monitors, through reports to it by the senior financial personnel and Internal Auditors, the controls which are in force and any perceived gaps in the control environment. The audit committee also considers and determines relevant action in respect of any control issues raised by these reports or the external auditors.
The Group does not have an in-house internal audit function, but engages a firm of independent auditors to perform internal audit reviews at each of the main businesses. The programme of visits to each of the main sites has continued throughout the year and reports issued to the audit committee. The firm of independent auditors does not provide any other services to the Group and their appointment is considered to enhance the monitoring process already in place. A process of control risk self-assessment is used in the Group where senior managers are required to detail and certify controls in operation to ensure the control environment in their business area is appropriate. They also confirm monthly, in writing, that risk management processes and appropriate controls are in place and are operating effectively.
Terms of reference for the Audit Committee are available on the Company’s website at www.dialight.com.
Corporate Responsibility Report
We believe that good corporate responsibility is integral to the successful operation of a business. Corporate responsibility in this context would incorporate our manner and approach to employees, customers, suppliers, shareholders and of course the impact of certain environmental and ethical considerations on decisions and actions taken.
Health and safety
Dialight is committed to achieving and maintaining highest reasonable standards of health and safety across all its businesses so as to provide a safe environment for employees, customers and visitors. The management of each business is responsible for ensuring compliance with the Group’s policy and relevant local health and safety regulations. At Board level the Chief Executive has overall responsibility on Health and Safety.
Each business has staff who have received the appropriate level of training to manage the local policy and who report to the General Manager on a regular basis. The business procedures and systems are designed to:
- Run training programmes for employees on health and safety matters whilst reinforcing the importance of a culture which is focused on safe working procedures.
- Monitor and assess work procedures and to implement changes where required
- Communicate with all employees to develop a work culture which recognises the importance of health and safety procedures
The businesses conduct a continuous self assessment of their operating systems and controls. A report on health and safety matters is included in the monthly reports submitted to the Chief Executive by the businesses.
In 2006 an independent firm of Health and Safety Consultants were engaged to perform random visits to each of the business sites and to submit a report of their findings to both local management and Dialight’s Board. The programme of random visits will continue throughout 2007. The independent reviews have not produced any significant findings.
Environment
We do not consider that our manufacturing sites have a significant environmental impact as our products do not require capital-intensive manufacturing processes. The Group policy in respect of the manufacturing sites is to operate within systems which monitor, control and where practical minimise any environmental effect. Emissions of gases, chemicals and water are well below government thresholds and, in most cases undetectable. Principal areas of focus are the reduction of waste, and the minimisation of water and energy consumption. All sites operate to increase re-use and recycle materials including packaging.
The other key area of focus is the quantity and type of material used in the products manufactured. The engineering department performs an important role in progressing the programme to reduce the amount of material used in the products and, where practical, to substitute out hazardous material. This action covers own purchases and material used by suppliers. Dialight works to meet and exceed internationally recognised regulations such as RoHS-2002/95/EC, WEEE-2002/96/EC, ELV-200/53/EC dated 27 June 2002, JGPSSI dated 22 July 2003.
The Group’s products are WEEE compliant and compliance with the regulation has not had a material impact on the Group. Many of the Group’s products have a positive impact on the global environment, particularly our Signals products, as they are proven to reduce significantly energy consumed compared with a similar product using other technology such as fluorescence. Further details on the importance of the energy savings resulting from Dialight’s products are set out in the Operating and Financial Review on pages XX to XX.
The Workplace
Dialight’s culture is one of openness, honesty and accountability and recognition that all employees play a part in delivering the Group’s business performance in a safe and efficient environment.
Regular communication with employees is key to ensuring that employees understand their role in improving the Group’s business performance. Local management teams hold quarterly meetings on site to discuss performance and strategy. This is in addition to regular meetings held within functional teams. All employees are encouraged to contribute to discussions.
Group employment policies are designed to attract, retain and motivate the best people. The policies cover performance management, employee development, succession planning, and recruitment. Staff appraisals and consultations take place between individuals and local management with training and development undertaken locally. All employees are given equal opportunities to develop their experience and their careers.
The Group gives full and fair consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a handicapped or disabled person. Employees who become disabled are provided, where practicable, with continuing employment under normal terms and conditions and are provided with training and career development wherever appropriate.
Audit Committee Terms of Reference
1. Membership
| 1.1 | The Committee shall be appointed by the Board on the recommendation of the Nominations Committee and in consultation with the Committee Chairman. The Committee shall comprise at least three members, all of whom are independent non-executive directors of the Company and at least one shall have recent and relevant financial experience. |
| 1.2 | The quorum necessary for the transaction of business shall be two members. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee. |
| 1.3 | The Board shall appoint the Committee Chairman who shall be an independent non-executive director. In the absence of the Committee Chairman, and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting. |
| 1.4 | The Committee shall appoint the Company Secretary as Secretary of the Committee. |
2. Attendance at meetings
| 2.1 | Only members of the Committee have the right to attend Committee meetings. Other individuals, however, such as the Chairman of the Board, Chief Executive, Finance Director and representatives may be invited to attend all or any part of any meeting as and when appropriate. |
| 2.2 | The external auditors should be invited to attend meetings of the Committee on a regular basis. Where an internal audit function is discussed at a meeting, the internal audit firm may be asked to attend that meeting. |
| 2.3 | There should be at least one meeting a year, or part thereof, where the external auditors attend, without executive management present. |
3. Frequency of meetings
| 3.1 | The Committee shall meet at least three times a year at appropriate times in the reporting and audit cycle and otherwise as required |
4. Minutes
| 4.1 | The Secretary shall minute the proceedings and resolutions of all Committee meetings, including recording the names of those present and in attendance. |
| 4.2 | The Secretary shall circulate the minutes of the meetings to all members of the Committee. |
5. Authority
| 5.1 | The Committee is authorised by the Board: |
| 5.1.1 | to investigate any activity which falls within these terms of reference and to make whatever recommendations to the Board it deems appropriate in any area within its remit. |
| 5.1.2 | It is authorised to seek any information it requires from any employee of the Company and all employees are directed to co-operate with any requests made by the Committee. |
| 5.1.3 | The Committee is authorised by the Board to obtain, at the Company’s expense, external legal or other independent professional advice and such advisers may attend meetings as necessary. |
6. Responsibilities
| 6.1 | In carrying out its duties the Committee shall give due consideration to all applicable laws and regulations, the provisions of the Combined Code and the requirements of the Listing Rules. |
| 6.2 | Financial Reporting | ||||||||||||||||||||||||||||||||||||||||||||||
The Committee shall: |
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| 6.2.1 | review, and challenge where necessary, the actions and judgements of management, in relation to the company’s financial statements, operating and financial review, interim reports, preliminary announcements and related formal statements before submission to, and approval by, the Board, and before clearance by the external auditor. Particular attention should be paid to: | ||||||||||||||||||||||||||||||||||||||||||||||
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And to consider other topics as defined by the Board |
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| 6.2.2 | Internal Controls and Risk Management | ||||||||||||||||||||||||||||||||||||||||||||||
The Committee shall: |
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Internal Audit |
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The Committee shall: |
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| 6.2.3 | External Audit | ||||||||||||||||||||||||||||||||||||||||||||||
The Committee shall: |
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| 6.2.4 | Reporting | ||||||||||||||||||||||||||||||||||||||||||||||
The audit committee shall review annually its terms of reference and its own effectiveness and recommend any necessary changes to the board. The Committee Chairman should attend the AGM prepared to respond to questions raised by shareholders relating to matters within the Committee’s area of activities and responsibilities. The Committee shall compile a report to shareholders on its activities to be included in the Company’s Annual Report. The members of the Committee shall be identified in this report, as well as the frequency of, and individual attendance by members at, Committee meetings. The report should also identify the role of the committee and how the audit committee has discharged its responsibilities. Where disagreements between the audit committee and the board cannot be resolved, the audit committee shall report the issue to the shareholders as part of the report in the company’s annual report. |
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Remuneration Committee Terms of Reference
1. Membership and Chairman| 1.1 | Members if the Committee shall be appointed by the Board on the recommendation of the Nominations Committee and in consultation with the Committee Chairman. The Committee shall consist of at least three members, all of whom are independent non-executive directors. For the purpose of transacting business a quorum of the Committee shall be not less than two members of the Committee. |
| 1.2 | Only members of the Committee have the right to attend Committee meetings. No individual is present when their own remuneration is being considered. The Chairman and Group Chief Executive, and external advisers may be invited to attend for all or part of any meeting, as and when appropriate. |
| 1.3 | The Board shall appoint the Committee Chairman (the ‘Chairman’) who shall be an independent non-executive director. In the absence of the Chairman and/or an appointed deputy, the remaining members present shall elect one of themselves to chair any duly convened meeting. |
2. Secretary
| 2.1 | The Company Secretary of the Company will act as the Secretary of the Committee. |
3. Meetings
| 3.1 | The Committee shall meet at least twice a year and at such other times as the Chairman shall require. The Chairman shall call a meeting of the Committee if so requested by any Committee member or by the Board. The Chairman and Chief Executive shall have the right to address any meeting of the Committee. |
4. Notice of Meetings
| 4.1 | Meetings of the Committee shall be summoned by the Secretary of the Committee at the request of any of its members. |
| 4.2 | Unless otherwise agreed, notice of each meeting confirming the venue, time and date, together with an agenda of items to be discussed, shall be forwarded to each member of the Committee, any other person required to attend and all other non-executive directors, no later than three working days before the date of the meeting. Supporting papers shall be sent to Committee members, and to other attendees as appropriate, at the same time. |
5. Minutes of Meetings
| 5.1 | The Secretary shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance. Minutes if the Committee signed by its Chairman shall be sufficient evidence that the matters referred to therein had been fully discussed and agreed. |
| 5.2 | Minutes of Committee meetings shall be circulated to all members of the Committee and to the Chairman of the Group. If the Executive Directors require to see the minutes of the Remuneration Committee in order to discharge their duties as Directors, copies will be made available provided the Committee is satisfied that no conflict of interest arises. |
6. Annual General Meeting
| 6.1 | The Chairman shall attend the Annual General Meeting prepared to respond to any shareholder questions on the Committee’s activities. |
7. Duties
| 7.1 | The Committee shall: |
| 7.2 | determine and agree with the Board the framework or broad policy for the remuneration of the Company’s Chairman, Chief Executive, the Executive Directors, the Company Secretary and such other members of executive management as it is designated to consider. The remuneration of non-executive directors shall be a matter for the Chairman of the Board and other executive directors. No director or manager shall be involved in any decisions as to their own remuneration; |
| 7.3 | in determining such framework or policy, take into account all factors which it deems necessary. The objective shall be to ensure that members of the executive management of the company are provided with appropriate incentives to encourage enhanced performance and are, in a fair and responsible manner, rewarded for their individual contributions to the success of the company; |
| 7.4 | review the ongoing, appropriateness and relevance of the remuneration policy; |
| 7.5 | approve the performance targets for Executive Directors annual and long-term incentive plans and assess their performance against these targets. |
| 7.6 | review the design of all share incentive plans requiring approval by the Board and shareholders. For any such plans, the Committee shall determine each year whether awards will be made and, if so, the amount of such awards, the individual awards to executive directors and other senior executives and the performance targets to be used; |
| 7.7 | ensure that contractual terms on termination, and any payments made, are fair to the individual and the company, that failure is not rewarded and that the duty to mitigate loss is recognised; |
| 7.8 | within the terms of the agreed policy, and in consultation with the Chairman of the Board and/or Chief Executive as appropriate, determine the total individual remuneration package of each executive director and other senior executives including bonuses, incentive payments and share options or other share awards; |
| 7.9 | in determining such remuneration packages and arrangements, give due regard to any relevant legal requirements, the provisions and recommendations in the Combined Code and the UK Listing Authority’s Listing Rules and associated guidance; |
| 7.10 | ensure that all provisions regarding disclosure of remuneration (including pensions), as set out in legislation (including but not limited to the Directors’ Remuneration Report Regulations 2002) and the Combined Code are fulfilled; and |
| 7.11 | be exclusively responsible for: |
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| The Committee shall have full authority to commission any reports or surveys that it deems necessary to help it fulfil its obligations. |
8. Reporting Responsibilities
| 8.1 | The Chairman of the Committee shall report formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities. |
| 8.2 | The Committee shall produce an annual report of the company’s remuneration policy and practices for approval by the Board. The report will form part of the Company’s Annual Report and be put to shareholders for approval at the AGM. |
9. Other
| 9.1 | The Committee shall, at least once a year, review its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval. |
10. Authority
10.1 |
The Committee is authorised to seek any information it requires from any employee of the company in order to perform its duties. |
| 10.2 | In connection with its duties the Company is authorised by the Board to obtain, at the company’s reasonable expense, any outside legal or other professional advice. |
Nominations Committee Terms of Reference
1. Membership and Chairman| 1.1 | The committee shall comprise the Chairman of the Board, and at least two independent non-executive directors who shall be appointed by the Board. |
| 1.2 | Only members of the Committee have the right to attend Committee meetings. Other individuals such as the Chief Executive and external advisers may be invited to attend for all or part of any meeting, as and when appropriate. |
| 1.3 | The Board shall appoint the Committee Chairman who may be the Chairman of the Board. |
| 1.4 | In the absence of the Committee Chairman and/or an appointed deputy, the remaining members present at any meeting shall elect one of their number to chair any duly convened meeting. The Chairman of the Board shall not chair the Committee when it is considering succession to chairmanship of the Board. |
2. Secretary
| 2.1 | The Company Secretary shall act as the Secretary of the Committee. |
3. Quorum
| 3.1 | The quorum for meetings of the Committee shall be two members, one of whom must be an independent non-executive director. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretion’s vested in or exercisable by the Committee. |
4. Frequency of Meetings
| 4.1 | The Committee shall meet not less than twice a year and at such other times as the Chairman of the Committee shall require. |
5. Notice of Meetings
| 5.1 | Unless otherwise agreed, notice of each meeting confirming the venue, time and date, together with an agenda of items to be discussed, shall be forwarded to each member of the Committee, any other person required to attend and all other non-executive directors, no later than three working days before the date of the meeting. Supporting papers shall be sent to Committee members, and to other attendees as appropriate, at the same time. |
6. Minutes of Meetings
| 6.1 | The Secretary shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance. |
| 6.2 | Minutes of Committee meetings shall be circulated to all members of the Committee and, be available, to all other members of the Board, unless a conflict of interest exists. |
7. Annual General Meeting
| 7.1 | The Chairman of the Committee shall attend the Annual General Meeting prepared to respond to any shareholder questions on the Committee’s activities. |
8. Duties
| 8.1 | The Committee shall: | ||||||||||||||||
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| 8.2 | The Committee shall also make recommendations to the Board concerning: | ||||||||||||||||
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9. Reporting Responsibilities
| 9.1 | The Chairman of the Committee shall report formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities. |
| 9.2 | The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed. |
| 9.3 | The Committee shall make a statement in the annual report about its activities, the process used to make appointments and explain if external advice or open advertising has not been used. |
10. Other
| 10.1 | The Committee shall, at least once a year, review its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval. |
11. Authority
| 11.1 | The Committee is authorised to seek any information it requires from any employee of the company in order to perform its duties. |
| 11.2 | The Committee is authorised to obtain, at the company’s expense, outside legal or other professional advice on any matters within its terms of reference. |