QCA Corporate Governance Statement
As an AIM quoted company MS INTERNATIONAL plc, under AIM Rule 26, is required to adopt a recognised corporate governance code, describe how it complies with that code and provide details of where it does not comply with its chosen corporate governance code.
MS INTERNATIONAL plc has chosen to adopt as far as practical for a Group of its size the recently published (April 2018) QCA Corporate Governance Code with effect from 28 September 2018. The Chairman assumes principal responsibility for corporate governance.
The Board is reponsible for ensuring that MS INTERNATIONAL plc has the strategy, people, structure and culture in place to deliver value over the medium to long term to shareholders and other stakeholders of the Group and is committed to high standards of governance, as is appropriate for a company of its size and structure. The main features of the Group's corporate governance arrangements are set out below.
The Group's long term strategy is to invest in people, products and processes to seek continuous improvement in its four diverse operating divisions: 'Defence', 'Forgings', 'Petrol Station Superstructures' and 'Petrol Station Branding', each holding a leading position in its specialist market.
Communications with shareholders
The shareholding structure of the Company is set out on the 'Securities' page on this website: http://msiplc.com/securities. The composition of the shareholders, including the Directors, is currently primarily weighted towards private investors, with one significant institutional shareholder.
The AGM is the main forum for dialogue and discussion with private investors and the Board. The Notice of Annual General Meeting is sent to shareholders at least 21 days before the meeting and all of the Directors routinely attend the AGM and are available to answer any questions raised by shareholders. The results of each AGM are published on this website and by way of an RNS when the meeting has concluded. Copies of notice of meetings and Annual Reports [from the last five years] are kept on the Company's website.
Shareholders can engage with the Company between AGMs by contacting the Company Secretary David Kirkup (email@example.com). The board also contacts significant institutional investors as and when appropriate.
Corporate Social Responsibility and Stakeholder engagement
The Group is aware of its corporate social responsibilities and the need to maintain effective relationships with all of the stakeholders in the business including shareholders, employees, customers, suppliers and regulatory authorities. The Group's operations, processes and procedures are monitored and adapted to take account of changing stakeholder relationships whilst maintaining focus on the Board's strategic objective of delivering value over the medium to long term for the benefit of all stakeholders.
The Board aims to do what is in the best interests of the Company and seeks to maintain the highest standards of integrity in the conduct of the Group's operations.
Through the various procedures and processes the Group has adopted, each diverse operating division ensures full compliance with the health and safety and environmental legislation applicable to each division.
The Board and its committees
The Board consists of three executive directors, one of whom, Michael Bell is the Executive Chairman and three Non-Executive directors, Roger Lane-Smith, David Pyle and David Hansell. The Chairman has no other significant commitments. Day to day control in divisional operations is vested in individual managing directors, supported by their respective financial managers.
The Company's Articles and Association require that all Directors except those holding the posts of Chairman or Chief Executive retire by rotation and are subject to election by shareholders at least once every three years.
The Board considers that all 3 Non-Executive Directors are independent. In the case of all three Non-Executive Directors, the Board has considered their length of service as Directors and employees and has determined that in terms of interest, experience and judgement they all remain independent. Consequently, The Board considers itself to be compliant with the QCA code in having two or more independent Non-Executive Directors.
Roger Lane -Smith is the designated Senior Independent Director.
The Board meets at least quarterly throughout the year to direct and control the overall strategy and operating performance of the Group. To enable them to carry out these responsibilities all directors have full and timely access to all relevant information. Executive Directors, except for Company business trips and holidays, meet on a daily basis when possible. Additionally, each of the divisional operations has monthly review meetings which the Executive Chairman and the Company’s Financial Director attend.
Board Meetings are scheduled in advance. The Board meets at least quarterly throughout the year. The number of meetings and members attendance of Board and Committee Meetings during the financial year ended 27 April 2019 was as follows:
|Number of meetings||4||2|
All of the Non-Executive Directors devote sufficient time to fulfil their responsibilities to the Company.
The Chairman is responsible for the operation and strategic focus and direction of the business.
The Board is supported by an Audit Committee and a Remuneration Committee. Roger Lane-Smith and David Pyle serve on these committees.
The Audit Committee normally meets twice a year and has the responsibility for reviewing the interim statements and annual financial reports and accounts and effectiveness of the system of internal controls with the Group’s external auditors. The external auditors have direct access to the Committee without the executive directors being present. The ultimate responsibility for reviewing and approving the annual financial statements remains with the Board.
The Remuneration Committee which meets as required has the responsibility for making recommendations to the Board on the remuneration packages of each of the Executive Directors including any share incentive schemes.
Due to the size of the Group there is no Nominations Committee. The Chairman discusses the appointment or replacement of Directors with the Board as a whole. The Board are aware of the age profile of the Directors and this is under review.
Procedures are in place for directors to seek independent advice at the expense of the Company and the Company has insurance in respect of legal action against the Directors. The Company Secretary is responsible to the Board for ensuring that Board procedures are complied with and for advising the Board on all governance matters.
Board experience, skills and evaluation
Due to the size of the Group and the nature of its operations and strategic demands there is no formal Board performance evaluation process in place. However, the Chairman periodically meets with the Executive and Non-Executive Directors to ensure they are committed, their respective contributions are effective and productive and, where relevant, they have maintained their independence.
The Board has considered its structure and composition and believes it to be appropriate having taken into account the nature and characteristics of the Group.
In the opinion of the Board, the Directors as a whole have the appropriate balance of skills and experience necessary to ensure that the Group is managed for the long-term benefit of all stakeholders.
Internal control systems
The Board is responsible for establishing and maintaining the Group’s system of internal control. Internal control systems are designed to meet the particular needs of the operating company concerned bearing in mind the resources available 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 key procedures which the directors have established with a view to providing effective internal control are set out below.
The Board has overall responsibility for the Group and there is a formal schedule of matters specifically reserved for decisions by the Board which covers the key areas of the Group’s affairs, including: dividend policy, acquisitions and divestment policy, approval of budgets, capital expenditure, major buying and selling contracts and general treasury and risk management policies. There is a clearly decentralised structure which delegates authority, responsibility and accountability, including responsibility for internal financial controls, to management of the operating companies.
Responsibility levels and delegation of authority and authorisation levels throughout the Group are set out in the Group’s corporate accounting and procedures manual.
There is a comprehensive system for reporting financial results. Monthly accounts are prepared on a timely basis. They include income statement, balance sheet, cash flow and capital expenditure reporting with comparisons to budget and forecast. The budget is prepared annually and revised forecasts are provided monthly.
There is an investment evaluation process to ensure Board approval for all major capital expenditure commitments.
There is a contract evaluation process to ensure directors approval for all major sales contracts.
The Board has reviewed the effectiveness of the system of internal controls, and together with operational management, has identified and evaluated the critical business and financial risks of the Group. These risks are reviewed continually by both the Directors and operational and divisional management. Where appropriate, action is taken to manage risks facing the business.
The Group’s corporate governance environment and its embedded procedures and systems will be updated and adapted to future changes in stakeholder relationships when considered appropriate by the Board.
5 June 2019