LIVE COMPANY GROUP PLC –
AIM RULE 26 COMPLIANCE

CORPORATE GOVERNANCE & COMMITTEES

The Directors recognize the importance of good corporate governance and have chosen to apply the Quoted Companies Alliance Corporate Governance Code (the “QCA Code”). The QCA Code was developed by the QCA in consultation with a number of significant institutional small company investors, as an alternative corporate governance code applicable to AIM companies. The correct application of the QCA Code requires us to apply the principles set out in the QCA Code and also to publish certain related disclosures; these may appear in our Annual Report, be included on our website or we can adopt a combination of the two approaches. Recommended locations for each disclosure are specified in the QCA Code and we intend to follow these from the publication of the Company’s Annual Report and Accounts for the period ending 31 December 2018.

The corporate governance framework which the Group operates is based upon practices which the board considers appropriate for the size, risks and operations of the business. To see how the Company addresses the key governance principles defined in the QCA Code, please refer to the information set out below.

David Ciclitira, Chairman

This information was last reviewed on 28th September 2018

STRATEGY AND BUSINESS MODEL

QCA Code Principle: Establish a strategy and business model which promote long-term value for shareholders:-

The purpose of the Company is to create partner-driven shows to showcase the benefits of LEGO® as an educational tool worldwide. The Company works closely with each of its licensee partners to ensure the staging and operation of successful BRICKLIVE shows and brand extensions such as cafés and educational centres, providing the best quality content available. The Company provides content, know-how and support to its licensee partners, while the licensee partners stage and manage the shows, centres or cafés at their own cost and risk, thereby reducing the Group’s exposure to risk.

The Company has license partners throughout the world, in China, Japan, Korea, Asia, South America, Europe and the United States, and is constantly seeking to expand its global network of partners.

The key to the Company’s success is to establish strong relationships with reliable licensee partners who have a track record of staging events, and to source and supply the best quality content to our licensee partners. 

SHAREHOLDER NEEDS AND EXPECTATIONS

Seek to understand and meet shareholder needs and expectations:- 

The Board is committed to communicating effectively with its shareholders and responds quickly to queries received. The Chairman is primarily responsible for communicating with shareholders, and speaks regularly with the Company’s major shareholders to ensure that their views are communicated to the Board. The Board attempts to ensure that, where possible, all Directors are present at Company AGMs to meet with and listen to the views of shareholders. To the extent that voting decisions are not in line with expectations, the Board will engage with shareholders to understand and address any issues. 

WIDER RESPONSIBILTIES

Take into account wider stakeholder and social responsibilities and their implications for long-term success:-

Employees: the Company has a small, but dynamic team. Good communication is essential, and the management team holds weekly calls to discuss matters of importance affecting the team and the business.

Suppliers: the Company engages a number of freelancers to support the team of permanent staff, enabling the business to scale up or down the level of support that is required at any time. Freelancers are considered part of the family, and are an important resource of the business.

Licensee partners: the Company has strong relationships with each of its licensee partners, meeting regularly and working closely with those partners to ensure that they are provided with the necessary levels of support. Representatives of the Company regularly attend the shows, and the Company seeks to provide improvements and enhancements where possible, including making available content that is relevant and of the best quality.

Shareholders: the Company communicates regularly with its shareholders, and provides information updates via regulatory and non-regulatory news releases, keeping the investor section of the website up to date, and posting regular blogs and updates from shows on the Company’s website.

RISK MANAGEMENT

Embed effective risk management, considering both opportunities and threats, throughout the organisation:-

The Company has an established Audit Committee, whose Chair has recent and relevant experience, which is responsible for overseeing risk management. During the annual audit process, specific risks are identified and evaluated in detail.

A whistle blowing policy is in place to enable employees to report to the Board, in confidence, any risks or threats to the operations of the business.

The principal risks of the business are set out in the Admission Document published in November 2017, a copy of which is available on the Company’s website. The Audit Committee reviews and assesses these risks on an annual basis.

THE BOARD

Maintain the board as a well-functioning, balanced team led by the chair:-

The Board consists of the following Directors:

David Ciclitira – Chairman (executive Director)
Andrew Smith – Managing Director (executive Director)
Ranjit Murugason – non-executive Director and Chair of the Remuneration Committee
Serenella Ciclitira – non-executive Director

The Directors are seeking to appoint two additional non-executive Directors, at least one of which would add listed company experience, and a Finance Director. This would further strengthen the Board and provide a good balance of executive Directors and non-executive Directors, of whom at least two would be independent.

The Board meets at least quarterly throughout the year, and each of the committees meets at least once during the year. Since the Company was readmitted to trading in December 2017 and its reporting year end is 31 December, the number of Board and committee meetings and director attendance for the year ending 31 December 2018, will be set out in full in the Company’s Annual Report and Accounts for the year ending 31 December 2018 and will be published here on the Company’s website after the current financial period has come to an end.

THE BOARD - EXPERIENCE

Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities:- 

The Board considers that David Ciclitira, who acts as Chairman of the Company and also fulfills the role of chief executive, is best placed to lead the Company and to deliver on the Company’s strategy. David founded the Company in 2017, and has the necessary skills, expertise and global network of contacts to lead the Company through its next phase of expansion.

Each Director brings different skillsets and capabilities to the Board, resulting in a balanced Board with the necessary blend of relevant experiences, skills and personal qualities to deliver the strategy of the Company. The Company will ensure, where necessary, that all Directors receive the necessary updates and training to keep their skillset up to date.

For biographical details of each of the Directors, please see here.

THE BOARD - PERFORMANCE EVALUATION

Evaluate board performance based on clear and relevant objectives, seeking continuous improvement:-

The Board intends to carry out an annual evaluation of its performance and effectiveness. The Company was re-admitted to trading in December 2017. Simon Bennett (independent non-executive Director) recently resigned from the Board, and the Company is seeking to strengthen the Board with the appointment of two additional non-executive Directors, at least one of whom will have listed company experience, as well as a Finance Director. As a result of these proposed changes in the composition of the Board, it is anticipated that the Company’s first Board evaluation will take place during 2019, and annual evaluations will be conducted thereafter.

CORPORATE CULTURE

Promote a corporate culture that is based on ethical values and behaviours:-

The Company recognises its responsibility to be socially responsible and (where possible) contribute to social value, community development, local employment, apprenticeships and training schemes. The Group endeavours to follow sustainable and responsible management practices in protecting the long-term interests of the business, its employees and community stakeholders.

Ethics and human rights: the Company aims to conduct its business with honesty and integrity, respecting human rights and the interests of its employees, partners and third parties. The Company advocates high ethical standards in carrying out its business activities and has policies for dealing with gifts, bribery, corruption, whistleblowing and inside information. The Company does not make political donations, and any charitable donations are made where legal and ethical according to local law and practices.

Relationships with suppliers, partners and contractors: the Company expects its suppliers and partners to adhere to business principles consistent with its own and to implement appropriate polices and codes of conduct. The Company is committed to maintaining positive relationships with its suppliers, partners and contractors.

Child safety and health and safety: we are fully aware of our, and our partners’ health and safety and child safety responsibilities. All of our partners are obliged to comply with all local health and safety legislation, and detailed information is provided to each of our partners regarding the implementation of procedures to ensure the safety of all children attending BRICKLIVE® events, centres and cafes.

Our people: due to the nature of the business, the Company has a small but dynamic team, which is highly valued. The Company intends to put in place a share incentive scheme for its key staff to ensure that they are able to participate in the long-term success of the Company.

Local communities: the Company is committed to being a responsible neighbour, with investment in local communities and in charitable causes wherever appropriate. For example, the Saatchi Christmas Show 2017, which was managed and operated by Brick Live Group, operated in partnership with several local hospitals to raise funds for their charitable causes.

GOVERNANCE STRUCTURES AND PROCESSES

Maintain governance structures and processes that are fit for purpose and support good decision- making by the board:-

The Chairman has overall responsibility for corporate governance and promoting high standards throughout the Group. He chairs the Board and leads in the development of strategy and setting objectives, and oversees communication between the Company and its shareholders. The corporate governance framework which the Group operates is based upon practices which the Board considers appropriate for the size, risks and operations of the business.

The Board is, amongst other things, responsible for:

• establishing and maintaining the Group’s system of internal controls;
• setting strategic objectives and policies for the Company;
• setting annual budgets and monitoring performance against budget;
• the preparation and approval of the Company's annual report and accounts and interim results;
• ensuring the financing needs of the Group are met;
• approving the key terms of any significant contracts and significant expenditure;
• employee welfare; and
• shareholder communications.

The non-executive Directors provide a robust sounding board and challenge management where necessary.

The Audit Committee monitors the integrity of financial statements, oversees risk management and internal controls, and reviews the independence of the external auditors. The Terms of Reference of the Audit Committee can be found at the bottom of this page. The members of the Audit Committee are: Ranjit Murugason (Chair) and Serenella Ciclitira.

The Remuneration Committee sets and reviews the remuneration of executive Directors, and is responsible for the implementation of any share-based incentive schemes, including the setting of targets and performance frameworks relating to any such share-based incentive schemes. The Terms of Reference of the Remuneration Committee can be found at the bottom of this page. The members of the Remuneration Committee are: Ranjit Murugason (Chair) and Serenella Ciclitira.

The Nomination Committee is responsible for succession planning and reviewing the Board composition to ensure the Board has an effective blend of skills and experience. The Terms of Reference of the Nomination Committee can be found  at the bottom of this page.  The members of the Nomination Committee are: David Ciclitira (Chair), Ranjit Murugason and Serenella Cicilitira.

The Company shall continually monitor and review its governance processes to ensure compliance with the QCA Code and any updates thereto. As the Company grows, if considered appropriate, it may choose to voluntarily adopt certain elements of the UK Combined Code.

DIALOGUE WITH SHAREHOLDERS AND STAKEHOLDERS

Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders:-

The Board is committed to communicating effectively with its shareholders and responds quickly to queries received. The Chairman is primarily responsible for communicating with shareholders, and speaks regularly with the Company’s major shareholders to ensure that their views are communicated to the Board. The Board attempts to ensure that, where possible, all Directors are present at Company AGMs to meet with and listen to the views of shareholders. To the extent that voting decisions are not in line with expectations, the Board will engage with shareholders to understand and address any issues.

In addition to the investor relations activities carried out by the Company as set out above, and other relevant disclosures included on this Investor Relations section of the Company’s website, reports on the activities of each of the Committees during the year will be set out in the Annual Report and Accounts for the year ending 31 December 2018.

Terms of Reference for the Audit Committee

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1. Constitution

The committee has been established by a resolution of the board of directors of the Company (the “Board”) and is to be known as the Audit Committee (the “Committee”).

2. Membership

2.1 The members of the Committee shall be appointed by the Board from amongst the directors of the Company, on the recommendation of the Nomination Committee in consultation with the Chairman of the Committee, and shall consist of not less than two members. A majority of the members of the Committee shall be independent non-executive directors of the Company at least one of whom shall have recent relevant financial experience.
2.2 The Chairman of the Committee shall be appointed by the Board and shall not be the Chairman of the Board.
2.3 The Committee may at each meeting appoint one of their number to be the Secretary of the Committee.
2.4 Each member of the Committee shall disclose to the Committee:
(a) any personal, financial or other interest in any matter to be decided or discussed by the Committee; and/or
(b) any potential conflict of interest arising from a cross-directorship or otherwise; and
any such member shall abstain from voting on resolutions of the Committee in relation to which such interest exists and from participating in the discussions concerning such resolutions and (if so required by the Board) shall resign from the Committee or absent himself from all or part of the meeting of the Committee in question.
2.5 Care should be taken to minimise the risk of any conflict of interest that might be seen to give rise to an unacceptable influence. Appointment to the Committee shall be for a period of up to three years, which may be extended for further periods of up to three years, provided the director still meets the criteria for membership of the Committee.
2.6 Membership of the Committee shall be noted in the annual directors’ report of the Company.

3. Attendance at Meetings

3.1 Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the Chairman of the Board, Chief Executive Officer, Finance Director, other directors, Company Secretary and representatives from the finance function and/or external advisers may be invited to attend all or part of any meeting as and when appropriate but such persons have no right of attendance.
3.2 A representative of the external auditors shall normally attend meetings. At least once in each year the members of the Committee shall meet the external auditors without the presence of any executive director or other employee of the Company and the Committee shall decide if the executive directors (or any of them) should be present or not at any other meeting attended by the external auditors.

4. Proceedings at Meetings

4.1 A quorum for a meeting of the Committee shall be two members and it is preferable for any quorum to include a member with recent and relevant financial experience. 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.
4.2 Meetings may be held by telephone.
4.3 Subject as provided in paragraph 2.4 above, each member of the Committee shall have one vote. In the event of an equality of votes, the Chairman of the Committee shall have a second or casting vote (again subject as provided in paragraph 2.4 above). In the absence of the Chairman or any appointed deputy, the remaining members present shall elect one of their number to chair the meeting.

5. Frequency of Meetings

Meetings shall be held at least [two] times in each financial reporting period at the time of the interim and year end financial statements and at such other times as the Chairman of the Committee shall require. The external auditors may request a meeting if they consider that one is necessary.

6. Notice of Meetings

6.1 Meetings of the Committee shall be called by the Secretary of the Committee at the request of any of its members or at the request of external or internal auditors (if applicable) if they consider it necessary.
6.2 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 by the Secretary of the Committee to each member of the Committee, any other person required to attend, the external auditors and all other non-executive directors no later than five working days (which notice may be waived by any director) before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees as appropriate, at the same time.

7. Minutes of Meetings

7.1 The Secretary of the Committee shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance.
7.2 The Secretary of the Committee shall ascertain, at the beginning of each meeting, the existence of any conflicts of interest and minute them accordingly.

8. Annual General Meeting

The Chairman of the Committee shall attend the annual general meeting of the Company and be available to answer shareholder questions on the Committee’s activities.

9. Authority

9.1 The Committee is authorised by the Board to investigate and undertake any activity within its terms of reference. It shall have unrestricted access to the auditors, is authorised to seek any information it properly requires from any director, employee or professional adviser of the Company and all directors, employees and professional advisers are directed to co operate with any request made by the Committee.
9.2 The Committee is authorised by the Board to obtain outside legal, accounting or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary. The cost of obtaining such advice or services shall be borne by the Company within such limits as may be authorised by the Board from time to time.

10. Duties

The duties of the Committee are to:
(a) consider the appointment, re appointment and terms of engagement of the external auditors, the auditors’ remuneration and any question of resignation or dismissal of the auditors and to make recommendations to the Board on the same, to be put to shareholders for approval. The Committee shall oversee the selection process for new auditors and if an auditor resigns the Committee shall investigate the issues leading to this and decide whether any action is required;
(b) keep under review and oversee the relationship with the external auditors including (but not limited to):
(i) approval of their remuneration, whether fees for audit or non-audit services should be paid and that the level of fees is appropriate to enable an adequate audit to be conducted;
(ii) approval of their terms of engagement, including any engagement letter issued at the start of each audit and the scope of the audit;
(iii) satisfying itself that there are no relationships (such as family, employment, investment, financial or business) between the auditor and the Company (other than in the ordinary course of business);
(iv) the nature and extent of non-audit services supplied by the auditors (where they supply a substantial volume of such services to the Company), seeking to balance the maintenance of objectivity and value for money;
(v) develop and implement policy on the engagement of the external auditors to supply non-audit services, taking into account relevant ethical guidance regarding the provision of non-audit services by the external auditors and to report to the Board, identifying any matters in respect of which it considers that action or improvement is needed and making recommendations as to the steps to be taken;
(vi) discussions with the external auditors concerning such issues as compliance with accounting standards and any proposals which the external auditors have made vis-à-vis the Company’s internal auditing standards, if applicable;
(vii) ensuring that the external auditors report in a timely manner to the Committee on:
(A) all accounting policies and practices used or to be used;
(B) all alternative disclosures and treatments of financial information within generally accepted accounting principles that have been discussed with management, the ramifications of the use of such alternative disclosures and treatments and the treatment preferred by the external auditor; and
(C) all other material written communications between the external auditors and management, such as any management letter or schedule of unadjusted differences;
(viii) ensuring that procedures are in place for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters;
(ix) monitoring the external auditor’s compliance with relevant ethical and professional guidance on the rotation of audit partners, the level of fees paid by the Company compared to the overall fee income of the firm, office and partner and other related requirements;
(x) the co-ordination with the activities of the internal audit function, if applicable;
(xi) review the findings of the audit with the external auditor. This shall include but not be limited to, the following:
(A) a discussion of any major issues which arose during the audit;
(B) any accounting and audit judgements; and
(C) levels of errors identified during the audit;
(xii) assessing annually their qualifications, expertise and resources and the effectiveness of the audit process which shall include a report from the external auditor on their own internal quality procedures; and
(xiii) reviewing the effectiveness of the audit;
(b) report formally to the Board on proceedings after each meeting on all matters within its duties and responsibilities;
(c) make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed;
(d) monitor and review, in discussion with the auditors, the integrity of the financial statements, including the half-year financial statements and annual accounts and reports to shareholders and any other public announcement concerning the Company’s financial position which has not previously been reviewed by the Board or a committee of the Board before submission to the Board;
(e) keep under review the consistency of accounting policies both on a year-to-year basis and across the Company;
(f) discuss problems, reservations and recommendations arising from audits and any matters the external auditors may wish to discuss (in the absence of executive directors and other management, where necessary);
(g) review any representation letter(s) requested by the external auditors before they are signed by management and the external auditors’ management letter and response;
(h) monitor and review the internal audit programme (or where there is no internal audit function, consider annually whether there is a need for an internal audit function and make recommendations to the Board), ensure co-ordination between the internal and external auditors, and ensure that the internal audit function, if applicable, is adequately resourced and has appropriate standing within the Group;
(i) keep under review and challenge where necessary the effectiveness and adequacy of the Company’s internal financial controls, and, unless expressly addressed by a separate Board risk committee composed of independent directors, or by the Board itself, to review the Company’s internal control and risk management systems;
(j) review the effectiveness of the Company’s internal control system and to review any statement on internal control and risk management to be included in the directors’ report before submission to the Board for its approval;
(k) review arrangements by which employees of the Company may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters and ensure that arrangements are in place for the proportionate and independent investigation of such matters with appropriate follow-up action;
(l) review the Company’s procedures for detecting fraud;
(m) review the Company’s systems and controls for the prevention of bribery and receive reports on non compliance;
(n) consider the major findings of internal investigations and management’s response;
(o) have access to sufficient resources in order to carry out its duties, including access to the Company Secretary for assistance as required;
(p) be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members; and
(q) consider other topics, as requested by the Board.

11. The Committee

11.1 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.
11.2 The Committee shall make available its terms of reference for inspection at the registered office of the Company.

12. General

12.1 The recommendations of the Committee minutes must be approved by the Board before they can be implemented.
12.2 Any of the terms set out in this document may be varied by a majority resolution of the Board.

Adopted at a meeting of the Board held on 28 November 2017.

Terms of Reference for the Nomination Committee

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1. Constitution

The committee has been established by a resolution of the board of directors of the Company (the “Board”) and is to be known as the Nomination Committee (the “Committee").

2. Membership

2.1 The members of the Committee shall be appointed by the Board from amongst the directors of the Company in consultation with the Chairman of the Committee and shall consist of not less than two members. The members of the Committee shall consist of a majority of independent non-executive directors of the Company.
2.2 The Chairman of the Committee shall be appointed by the Board.
2.3 The Committee may at each meeting appoint one of their number to be the secretary of the Committee.
2.4 Each member of the Committee shall disclose to the Committee:
(a) any personal, financial or other interest in any matter to be decided or discussed by the Committee; and/or
(b) any potential conflict of interest arising from a cross-directorship or otherwise; and
any such member shall abstain from voting on resolutions of the Committee in relation to which such interest exists and from participating in the discussions concerning such resolutions and (if so required by the Board) shall resign from the Committee or absent himself from all or part of the meeting of the Committee in question.
2.5 Care should be taken to minimise the risk of any conflict of interest that might be seen to give rise to an unacceptable influence. Appointments to the Committee shall be for a period of up to three years, which may be extended for further periods of up to three years, provided the director still meets the criteria for membership of the Committee.
2.6 Membership of the Committee shall be noted in the annual directors’ report of the Company.

3. Attendance at Meetings

Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the Chief Executive Officer, the head of human resources, any other member of the Board and external advisers may be invited to attend for all or part of any meeting, as and when appropriate but such persons shall have no right of attendance.

4. Proceedings at Meetings

4.1 The quorum for a meeting of the Committee shall be two members of the Committee. 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.
4.2 Meetings may be held by telephone.
4.3 Subject as provided in paragraph 2.4 above, each member of the Committee shall have one vote. In the event of an equality of votes, the Chairman of the Committee shall have a second or casting vote (again subject as provided in paragraph 2.4 above). In the absence of the Chairman or any appointed deputy, the remaining members present shall elect one of their number to chair the meeting.

5. Frequency of Meetings

Meetings shall be held at least [twice] a year and at such other times as the Chairman of the Committee shall require.

6. Notice of Meetings

6.1 Meetings of the Committee shall be called by the Secretary of the Committee at the request of the Chairman of the Committee.
6.2 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 by the Secretary of the Committee to each member of the Committee, any other person required to attend and all other non-executive directors no later than five working days (which notice may be waived by any director) before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees as appropriate at the same time.

7. Minutes of Meetings

7.1 The Secretary of the Committee shall circulate the minutes of meetings of the Committee to all members of the Board, including the names of those present and in attendance.
7.2 The Secretary of the Committee shall ascertain, at the beginning of each meeting, the existence of any conflicts of interests and minute them accordingly.

8. Annual General Meeting

The Chairman of the Committee shall attend the annual general meeting to answer shareholder questions of the Committee’s activities.

9. Authority

9.1 The Committee is authorised by the Board to investigate and undertake any activity within its terms of reference. It is authorised to seek any information it properly requires from any director, employee or professional adviser and all directors, employees and professional advisers are directed to co operate with any request made by the Committee.
9.2 The Committee is authorised by the Board to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary. The cost of obtaining such advice or services shall be borne by the Company within such limits as may be authorised by the Board from time to time.

10. Duties

10.1 The duties of the Committee are as follows:
(a) to be responsible for identifying and nominating for the approval of the Board, candidates to fill board vacancies as and when they arise save that the appointments as Chairman of the Board or Chief Executive Officer should be matters for the whole Board;
(b) before making an appointment, evaluate the balance of skills, knowledge and experience on the Board and, in the light of this evaluation, prepare a description of the role and capabilities required for a particular appointment;
(c) to obtain details of and review any interests a candidate for a vacancy may have which conflict or may conflict with the interests of the Company. The Committee shall consider whether, despite any such conflict, there are nevertheless grounds for recommending the candidate for appointment and for the Board to authorise the relevant conflict;
(d) review annually the time required from a non-executive director. Performance evaluation should be used to assess whether the non-executive director is spending enough time to fulfil their duties;
(e) use open advertising or the services of external advisers to facilitate the search for appropriate candidates;
(f) consider candidates from a wide range of backgrounds and look beyond the “usual suspects”;
(g) consider candidates on merit and against objective criteria, taking care that appointees have enough time available to devote to the position;
(h) keep up to date and fully informed about strategic issues and commercial changes affecting the Company and the market in which it operates;
(i) give full consideration to succession planning for both executive and non-executive directors and other senior management in the course of its work, taking into account the challenges and opportunities facing the Company and what skills and expertise are therefore needed on the Board in the future;
(j) regularly review the structure, size and composition (including the skills, knowledge and experience) required of the Board compared to its current position and make recommendations to the Board with regard to any changes;
(k) keep under review the leadership needs of the organisation, both executive and non-executive, with a view to ensuring the continued ability of the organisation to compete effectively in the marketplace;
(l) make a statement in the Company’s annual report and accounts about its activities; the process used for appointments and explain if external advice or open advertising has not been used; the membership of the Committee; number of Committee meetings and attendance over the course of the year;
(m) make available its terms of reference for inspection at the registered office of the Company which explain clearly the Committee’s role and the authority delegated to it by the Board;
(n) ensure that on appointment to the Board, non-executive directors receive a formal letter of appointment setting out clearly what is expected of them in terms of time commitment, committee service and involvement outside Board meetings;
(o) 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;
(p) consider such other matters as may be requested by the Board; and
(q) the Committee shall make recommendations to the Board:
(i) as regards plans for succession for both executive and non-executive directors;
(ii) as regards the re-appointment of any non-executive director at the conclusion of their specified term of office having given due regard to their performance and ability to continue to contribute to the Board in the light of the knowledge, skills and experience required;
(iii) membership of the Audit and Remuneration Committees, in consultation with the chairmen of those committees;
(iv) concerning the re-election by shareholders of any director under the ‘retirement by rotation’ provisions in the Company’s articles of association having given due regard to their performance and ability to continue to contribute to the Board in the light of the knowledge, skills and experience required;
(v) concerning suitable candidates for the role of senior independent director (if applicable);
(vi) concerning any matters relating to the continuation in office of any director at any time including the suspension or termination of service of an executive director as an employee of the Company subject to the provisions of the law and their service contract; and
(vii) concerning the terms and conditions on which authorisation of any conflicts of interest should be given by the Board upon appointment of any director.

11. Reporting Procedures

11.1 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.
11.2 The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.

12. General

12.1 The recommendations of the Committee minutes must be approved by the Board before they can be implemented.
12.2 Any of the terms set out in this document may be varied by a majority resolution of the Board.

Adopted at a meeting of the Board held on 28 November 2017.

Terms of Reference for the Remuneration Committee

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1. Constitution

The committee has been established by resolution of the board of directors of the Company (the “Board”) and is to be known as the Remuneration Committee (the “Committee”).

2. Membership

2.1 The members of the Committee shall be appointed by the Board from amongst the directors of the Company, on recommendation of the Nomination Committee in consultation with the Chairman of the Committee and shall consist of not less than two members. All members of the Committee shall be non-executive directors of the Company, a majority of whom shall be independent.
2.2 The Chairman of the Committee shall be a non-executive director who shall be appointed by the Board and shall not be the Chairman of the Board where he or she is employed in an executive capacity.
2.3 The Committee may at each meeting appoint one of their number to be the Secretary of the Committee.
2.4 Each member of the Committee shall disclose to the Committee:
(a) any personal, financial or other interest in any matter to be decided or discussed by the Committee; and/or
(b) any potential conflict of interest arising from a cross-directorship or otherwise; and
any such member shall abstain from voting on resolutions of the Committee in relation to which such interest exists and from participating in the discussions concerning such resolutions and (if so required by the Board) shall resign from the Committee or absent himself from all or part of the meeting of the Committee in question.
2.5 Care should be taken to minimise the risk of any conflict of interest that might be seen to give rise to an unacceptable influence. Appointments to the Committee shall be for a period of up to three years, which may be extended for further periods of up to three years, provided the director still meets the criteria for membership of the Committee.
2.6 Membership of the Committee shall be noted in the annual directors’ report of the Company.

3. Attendance at Meetings

3.1 Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the Finance Director, Chief Executive Officer, any other member of the Board and external advisers may be invited to attend for all or part of any meeting as and when appropriate, but such persons have no right of attendance.
3.2 No member of the Board shall participate at a meeting of the Committee (or during the relevant part) at which any part of his remuneration (including his options) is being discussed or participate in any recommendation or decision concerning his remuneration (including his options).

4. Proceedings at Meetings

4.1 A quorum for a meeting of the Committee 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.
4.2 Meetings may be held by telephone.
4.3 Subject as provided in paragraphs 2.4 and 3.2, each member of the Committee shall have one vote. In the event of an equality of votes, the Chairman of the Committee shall have a second or casting vote (again subject as provided in paragraphs and 2.4 and 3.2 above). In the absence of the Chairman or any appointed deputy, the remaining members present shall elect one of their number to chair the meeting.

5. Frequency of Meetings

Meetings shall be held not less than [twice] a year and at such other times as the Chairman of the Committee shall require. The chairman of the Board may request a meeting if he/she reasonably considers that one is necessary.

6. Notice of Meetings

6.1 Meetings of the Committee shall be summoned by the Secretary of the Committee at the request of any of its members.
6.2 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 by the Secretary of the Committee to each member of the Committee, any other person required to attend and all other non-executive directors, no later than five working days (which notice may be waived by any director) before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees as appropriate, at the same time.

7. Minutes of a Meetings

7.1 The Secretary of the Committee shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance.
7.2 The Secretary of the Committee shall ascertain, at the beginning of each meeting, the existence of any conflicts of interest and minute them accordingly.

8. Annual General Meeting

The Chairman of the Committee shall attend the annual general meeting of the Company and be available to respond to any shareholder questions on the Committee’s activities.

9. Authority

9.1 The Committee is authorised by the Board to investigate and undertake any matter within its terms of reference. It is authorised to seek any information it properly requires from any director, employee or professional adviser and all directors, employees and professional advisers are directed to co-operate with any requests made by the Committee.
9.2 The Committee is authorised by the Board to obtain outside legal, accounting or other professional advice and the advice of independent remuneration consultants and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary. It is envisaged that in obtaining outside advice the Committee will act in conjunction with the chairman of the Board. The cost of obtaining such advice or services shall be borne by the Company within such limits as may be authorised by the Board from time to time.

10. Purpose

The purpose of the Committee is to:
(a) ensure that the executive directors and other key employees of the Company (together, “Executives”) are fairly rewarded for their individual contribution to the overall performance of the Company; and
(b) demonstrate to the shareholders of the Company that the remuneration of the Executives are set by a committee of the Board whose members have no personal interest in the outcome of the decisions of the Committee and who will have due regard to the interests of shareholders of the Company.

11. Duties

The duties of the Committee are:
(a) to determine and agree with the Board the framework or broad policy for the remuneration of the Chief Executive Officer, the Finance Director, the Chairman of the Board (where executive), and other Executives as it is designated to consider. No director or manager shall be involved in any decisions as to their own remuneration;
(b) in determining such policy, to take into account all factors which it deems necessary. The objective of such policy shall be to ensure that Executives 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;
(c) to provide the packages needed to attract, retain and motivate Executives of the quality required (but avoid paying more than is necessary for this purpose) and to co-ordinate closely with the Company’s nomination committee (if any) in relation to the remuneration to be offered to any new Executive;
(d) within the terms of the agreed policy and in consultation with the Chairman of the Board and/or the Chief Executive Officer 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;
(e) approve the design of, and determine targets for, basic salary and fees, any performance related pay schemes, discretionary payments including compensation payments, pension contributions, benefits in kind and all forms of long term incentive schemes operated by the Company and approve the total annual payments made under such schemes;
(f) to consider whether the Executives should be eligible for annual bonuses and, if so, to consider an upper limit for such bonuses;
(g) to consider where to position the Company relative to other companies and to be aware what comparable companies are paying, taking account of relative performance and using such comparisons with caution;
(h) to be sensitive to the wider scene, including pay and employment conditions elsewhere in the Company’s group, especially when determining annual salary increases;
(i) to approve the terms of any service agreement to be entered into with any Executive, bearing in mind that the performance-related elements of remuneration should form a significant proportion of the total remuneration package of Executives and should be designed to align their interests with those of the shareholders of the Company;
(j) review the ongoing appropriateness and relevance of the remuneration policy;
(k) review the design of all share incentive plans for approval by the Board and shareholders. For any such plans, determine each year whether awards will be made, and if so, the overall amount, timing, exercise price and conditions of such awards, the individual awards to executive directors and other senior executives and the performance targets to be used and to consider whether the Executives should be eligible for benefits under long-term incentive schemes and to weigh traditional share option schemes against other kinds of long-term incentive schemes;
(l) to approve any amendments to be made to the rules of the share options schemes or the adoption of a new replacement scheme of the Company or its subsidiaries (except where such amendments require shareholder approval);
(m) determine the policy for, and scope of, pension arrangements for each Executive director and other senior Executives and to consider the pension consequences and associated costs to the Company of basic salary increases and other changes in remuneration, especially for Executives close to retirement;
(n) 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 fully recognised;
(o) to consider and determine what compensation commitments (including pension contributions) the Executives’ service agreements, if any, would entail in the event of early termination. Particular consideration should be given to the advantages of providing explicitly in the initial contract for such compensation commitments except in the case of removal for misconduct;
(p) in early termination cases where the initial contract does not explicitly provide for compensation commitments, to tailor its approach (within legal constraints) to the circumstances. The Committee should ensure that poor performance is not rewarded, while dealing fairly with cases where departure is not due to poor performance and to take a robust line on reducing compensation to reflect departing Executives’ obligations to mitigate loss;
(q) in determining such packages and arrangements, give due regard to any relevant legal requirements, including the provisions and recommendations in the UK Corporate Governance Code and associated guidance and any published guidelines regarding the remuneration of directors of companies whose shares are traded on AIM (as applicable);
(r) oversee any major changes in employee benefits structures throughout the Company or group;
(s) vet, authorise and agree the policy for authorising claims for expenses from the directors;
(t) ensure that all provisions regarding disclosure of remuneration packages, structures, policy, including pensions are fulfilled;
(u) be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the Committee;
(v) make available the Committee’s terms of reference for inspection at the registered office of the Company which should set out the Committee’s delegated responsibilities and be reviewed and, where necessary, updated annually; and
(w) to consider other matters as referred to the Committee by the Board.

12. Exclusions

The remuneration of the Company’s non-executive directors (including the Chairman of the Board if a non-executive) shall be a matter for the Chairman of the Board (if executive) and the Company’s executive directors. Further, no director or manager of the Company shall be involved in any decisions as to their own remuneration.

13. The Committee

13.1 The Committee shall have access to sufficient resources in order to carry out its duties, including access to the Company Secretary for assistance as required.
13.2 The Committee shall be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members.
13.3 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.

14. Reporting Procedures

14.1 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.
14.2 The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.

15. General

15.1 The recommendations of the Committee minutes must be approved by the Board before they can be implemented.
15.2 Any of the terms set out in this document may be varied by a majority resolution of the Board.
Adopted at a meeting of the Board held on 28 November 2017.