The Directors seek to apply the principles set out in the Combined Code issued by the committee on Corporate Governance as far as practicable and appropriate for a relatively small company.
The Directors acknowledge the importance of the Principles set out in the Combined Code issued by the committee on Corporate Governance. Although the Combined Code is not compulsory for AIM companies, the Directors seek to apply these principles as far as practicable and appropriate for a relatively small company as follows:
The Board of Directors
The Board meets regularly and is responsible for supervising the overall strategy, performance, approval of investments and the framework of internal controls. The Board has appointed an investment manager ("Investment Manager") to provide management, investment, administrative and introductory services to the Company. To enable the Board to discharge its duties, all Directors receive appropriate and timely information from the Investment Manager. This includes management accounts, investment cases for prospective investment opportunities, quarterly reports detailing the performance of the Company's portfolio and the calculated NAV.
Briefing papers are distributed to all Directors in advance of Board meetings. All Directors have access to the advice and services of the Company Secretary, who is responsible for ensuring that Board procedures are followed and that applicable rules and regulations are complied with. The Articles provide that Directors will be subject to re-election at the first opportunity after their appointment and the Board will voluntarily submit to re-election at intervals of three years.
The Investment Manager
The Investment Manager is Desmond Holdings Ltd ("Desmond"). Desmond is an unquoted investment company established in Hong Kong. The management of Desmond have over 15 years' experience of investing in emerging and frontier markets, and have managed gross assets of over $500million. Over this period, Desmond has established an extremely wide network of relationships across the globe, which now generate a high volume of prospective investment opportunities, in particular, but not exclusively, in South America, China and Sub-Saharan Africa. Desmond's track record and the access they provide to relationships in the Company's target markets make Desmond an ideal strategic partner for the Company. Mark Pajak is a director and shareholder of Desmond.
The Role of the Chairman
The Chairman leads the Board in the determination of its strategy and in the achievement of its objectives. The Chairman is responsible for organising the business of the Board, ensuring its effectiveness and setting its agenda. The Chairman facilitates the effective contribution of Non-Executive Directors and ensures Directors receive accurate, timely and clear information from the Investment Manager. The Investment Manager has direct charge of the Company on a day-to-day basis and is accountable to the Board for the strategic, financial and operational performance of the Company.
Directors and Directors' Independence
The Board currently comprises the Chairman and two further Independent Non-Executive Directors. The names of the Directors together with their biographical details are set out under 'Management & Board of Directors'.
The Nomination Committee
The Nomination Committee comprises the members of the Board under the Chairmanship of the Chairman. The Committee's role is to consider board appointments, the continuance of the non-executive directors and other matters relating to the Board.
The Remuneration Committee
The Remuneration Committee currently comprises the members of the Board under the Chairmanship of the Chairman. The Committee's role is to consider and approve the remuneration and benefits of the Directors and the Investment Manager.
In framing the Company's remuneration policy, the Remuneration Committee has given full consideration to Section B of The Combined Code.
The Committee's principal responsibilities are:
- Setting, reviewing and recommending to the Board for approval the Company's overall remuneration policy and strategy.
- Setting, reviewing and approving individual remuneration packages for directors, including terms and conditions of employment and any changes to the packages.
- Reviewing the salary structure and terms, conditions and benefits of employment of the Investment Manager.
The Compliance Committee currently comprises the members of the Board under the Chairmanship of the Chairman. It meets regularly to ensure the Company is complying with all relevant statutory legislation, such as the Companies Act 2006 and Bribery Act 2010, as well as the AIM Rules for Companies. Compliance Committee meetings are specifically called when the Company is planning a corporate action that will need careful adherence to the rules, such as an investment or related party transaction.
The Company is committed to running a professional business free from discreditable behaviour of any kind, and in particular to preventing bribery by any persons associated with it. The Company has put in place procedures to prevent bribery which are proportionate to the risks it faces, and to the nature and scale of its existing activities. These will be reviewed periodically by the Compliance Committee.
The Audit Committee comprises the members of the Board under the Chairmanship of one of the independent Non-Executive Directors. The Audit Committee meets at least twice a year and considers the appointment and fees of the external auditors and discusses the scope of the audit and its findings. The Committee is also responsible for monitoring compliance with accounting and legal requirements and for reviewing the annual and interim financial statements prior to their submission to the Board.
Auditors' Independence and Objectivity
The Audit Committee reviews all services being provided by the external auditors to review the independence and objectivity of the external auditors, taking into consideration relevant professional and regulatory requirements, so that these are not impaired by the provision of permissible non-audit services.
The Company Secretary
The Company Secretary is responsible for advising the Board, through the Chairman, on all governance matters. The directors have access to the advice and services of the Company Secretary. The Company's Articles of Association and the schedule of matters reserved for the Board's decision provide that the appointment and removal of the Company Secretary is a matter for the full Board.
The Company maintains this website (www.cravenhousecapital.com) containing certain information of interest to institutional and private investors.
Internal Financial Controls
The Board is responsible for establishing and maintaining the Company's system of internal financial control and places importance on maintaining a strong control environment.
The key procedures which the Directors have established with a view to providing effective internal financial control are as follows:
- The Company's organisational structure has clear lines of responsibility between the Investment Manager and the Board.
- The Investment Manager will produce quarterly reports detailing the performance of the Company's portfolio against various market indices, which will be closely monitored by the Directors.
- On each Valuation Date, the Investment Manager will calculate and prepare a report to the Board on the Net Asset Value of the Company.
- The Board is responsible for identifying the major business risks faced by the Company and for determining the appropriate courses of action to manage those risks. The Directors recognise, however, that such a system of internal financial control can only provide reasonable, not absolute, assurance against material misstatement or loss.
The Directors review the effectiveness of the system of internal financial control on an ongoing basis.
After making enquiries, the directors have a reasonable expectation that the Company 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.
This information is disclosed for the purposes of Rule 26 of the AIM Rules for Companies.