The Directors have established procedures, as represented by this statement, for the purpose of providing a system of internal control. An internal audit function is not considered necessary or practical due to the size of the Company and the close day to day control exercised by the Executive Chairman, Rupert Labrum. However, the Board will continue to monitor the need for an internal audit function. The executive directors work closely with and has regular ongoing dialogue with the non-executive director who has responsibility for the financial reporting and controls and has established appropriate reporting and control mechanisms to ensure the effectiveness of its control systems.
5. Principle Five
A Well Functioning Board of Directors
As at the date hereof the Board is comprised of: Rupert Labrum (Executive Chairman), Matthew Beardmore (Chief Executive Officer) and Hedley Clark (Non-Executive Director). Biographical details of the current Directors are set out within Principle Six below. Executive and Non-Executive Directors are subject to re-election at intervals of no more than 3 years. The Executive Chairman and the Chief Executive Officer are considered to be full time employees whilst the Non- Executive Director is considered to be part time but is expected to provide as much time to the Company as is required. The Board elects a Chairman to chair every meeting.
The Board meets formally at least four times per annum but regular contact is maintained so that all directors are informed of relevant developments and are able to have discussions whenever required. It has established an Audit Committee and a Remuneration Committee, particulars of which appear hereafter. The Board has agreed that appoint- ments to the Board are made by the Board as a whole and so has not created a Nominations Committee. The Board considers that this is appropriate given the Company’s current stage of operations. It shall continue to monitor the need to match resources to its operational performance and costs and the matter will be kept under review going forward.
Hedley Clark is considered by the Board to be an Independent Director. The Board notes that the QCA recommends a balance between executive and non-executive Directors and recommends that there be two independent non-executives. As it has only one independent non-executive director, the Board does not currently fully comply with this requirement and will consider making further appointments as the scale and complexity of the Company grows, which is expected to be when the Company achieves a market capitalisation of over £10 million.
Attendance at Board and Committee Meetings
The Company shall report annually on the number of Board and committee meetings held during the year and the attendance record of individual Directors. In the financial year there were 12 board meetings and all the Directors attended all of the meetings. To be efficient, the Directors meet formally and informally both in person and by telephone.
6. Principle Six
Appropriate Skills and Experience of the Directors
The Board currently consists of three Directors. The Company believes that the current balance of skills in the Board as a whole, reflects a very broad range of commercial and professional skills across geographies and industries and each of the Directors has experience in public markets.
The Board recognises that it currently has a limited diversity and this will form a part of any future recruitment consideration if the Board concludes that replacement or additional directors are required.
The Board shall review annually the appropriateness and opportunity for continuing professional development whether formal or informal. Currently each of the board are involved in financial markets and increase their awareness and skills via reading and participation in commercial transactions from time to time.
Mr Rupert Labrum
Rupert Labrum is a former investment banker, who retired after a successful career in the City of London. He was involved with Treasury and funding operations of international banks and building societies. He worked as a fund manager at Gartmore Investment Management and previously ran a proprietary derivatives trading desk at Deutsche Bank. Over the last several years, Mr Labrum has been an active investor in multiple private and publicly quoted companies. He has held notifiable positions in several AIM-quoted companies, and is the Company’s largest shareholder, holding an aggregate interest in its shares of approximately 24%.
Mr Matthew Beardmore
Chief Executive Officer
Matthew Beardmore is a practising solicitor and commercial manager. He has acted on many investments, commercial transactions, property transactions and major projects amounting to several billion pounds during his career. Mr Beardmore was previously a non-executive director of AIM-quoted lnfraStrata plc, where he was instrumental in both completing and managing the company’s EU grant applications.
Mr Hedley Clark
Hedley Clark is a Fellow of the Institute of Chartered Accountants in England and Wales. After nine years working in private practice, the last five at KPMG, he left to take up senior financial and management roles in various companies where he gained a wealth of international business experience. This included two successful start-ups. Up until the sale of the business in 2021, for the previous 12 years, Mr Clark’s principal role had been as Managing Director of Credence Background Screening Limited, a successful background screening company which, since his initial involvement in 2009, saw significant revenue and profits growth.
7. Principle Seven
Evaluation of Board Performance
Internal evaluation of the Board, the Committee and individual Directors is undertaken on an annual basis in the form of informal discussions The annual report details the progress which the board and company has made for the year.
No succession planning is deemed necessary at this point due to the small size of the company.
Each director is also assessed by shareholders on a three year rotation basis at AGM when their re-appointment is due.
8. Principle Eight
The Board recognises that its decisions regarding strategy and risk will impact the corporate culture of the Company as a whole and that this will impact its performance. The Board is aware that the tone and culture set by the Board will greatly impact all aspects of the Company as a whole. The corporate governance arrangements that the Board has adopted are designed to ensure the Company delivers long term value to its shareholders and that shareholders have the opportunity to express their views and expectations for the Company in a manner that encourages open dialogue with the Board.
A large part of the Company’s activities are centered upon what needs to be an open and respectful dialogue with investee companies and investors and other stakeholders. Therefore, the importance of sound ethical values and behaviors is crucial to the ability of the Company to successfully achieve its corporate objectives. The Board places great import on this aspect of corporate life and seeks to ensure that this flows through all that the Company does.
The directors consider that at present the Company has an open culture facilitating comprehensive dialogue and feedback and enabling positive and constructive challenge. The Company has adopted a code for Directors’ and employees’ dealings in securities which is appropriate for a company whose securities are traded on AIM and is in accordance with the requirements of the retained EU law version of the Market Abuse Regulation that has applied since 31st December 2020.
9. Principle Nine
Maintenance of Governance Structures and Processes
The Board provides strategic leadership for the Company and operates within the scope of a strong corporate governance framework. Its purpose is to ensure the delivery of long-term shareholder value, which involves setting the culture, values and practices that operate throughout the business, and defining the strategic goals that the Company implements in its business plan.
The Board defines a series of matters reserved for its decision and has approved terms of reference for its audit and remuneration committees to which certain responsibilities are delegated.
The chair of each committee reports to the Board on the activities of that committee.
The Audit Committee has primary responsibility for ensuring that the financial performance of the Company is properly measured and reported on, reviewing the interim financial information and annual financial statements before they are submitted to the Board. The committee also reviews, and reports on, reports from the Company’s auditors relating to its accounting controls. It makes recommendations to the Board on the appointment of auditors and the audit fee. The committee monitors the scope, results and cost-effectiveness of the audit. It has unrestricted access to the Company’s auditors.
The current committee members are Hedley Clark (Chairman) and Rupert Labrum.
The Remuneration Committee is chaired by Hedley Clark. The Remuneration Committee reviews the performance of the executive directors and employees and makes recommendations to the Board on matters relating to their remuneration and terms of employment. The Remuneration Committee also considers and approves the granting of share options pursuant to the share option plan and the award of shares in lieu of bonuses pursuant to the Company’s Remuneration Policy.
The Board has agreed that appointments to the Board will be made by the Board as a whole and so has not created a Nominations Committee.
The Board currently has one non-executive director.
Due to the small size of the Company, it is deemed not necessary to appoint further non-executive directors until the Company’s market capitalisation exceeds £10 million.
In accordance with the Companies Act 2006, the Board complies with: a duty to act within their powers; a duty to promote the success of the Company; a duty to exercise independent judgement; a duty to exercise reasonable care, skill and diligence; a duty to avoid conflicts of interest; a duty not to accept benefits from third parties and a duty to declare any interest in a proposed transaction or arrangement. There are no plans at this stage to increase the governance framework until the Company’s market capitalisation exceeds £10 million.
10. Principle Ten
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. The Company has close ongoing relationships with its private shareholders. shareholders and analysts have the opportunity to discuss issues and provide feedback at meetings with the Company and are encouraged to attend the Company’s Annual General Meeting.
Investors also have access to current information on the Company though its website, www.primorusinvestments.com, and via Rupert Labrum, Executive Chairman, who is available to answer investor relations enquiries.
The Company is currently considering, subject to the necessary formalities, to move to electronic communications with shareholders in order to maximise efficiency. The Company’s website details various information: annual reports, AGM notice of meetings and RNS announcements detailing results of meetings and other relevant information.
The Company shall include, when relevant, in its annual report, any matters of note arising from the audit or remuneration committees.