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Corporate Governance

Tungsten Corporation Plc (“Tungsten” or the “Company)

(The information in this statement was last reviewed on 26th September 2018)

Rule 26 Disclosure

Chairman’s Governance Statement

Introduction

This Statement is issued in compliance with Rule 26 of the AIM Rules. Tungsten Group plc is incorporated in England and Wales and its shares are listed on the Alternative Investment Market of the London Stock Exchange (“AIM”).

The Principles of Corporate Governance

I am the chairman of Tungsten and I am responsible for upholding the highest levels of integrity, probity and corporate governance throughout the Company and particularly at Board level. As a Board we recognise the importance of high standards of corporate governance and their importance and support to our strategic goals and long term success.

Compliance with the QCA Code:

The Company is listed on AIM and is therefore required from September 2018 to provide details of a recognised corporate governance code that the Board of directors have decided to apply. We have, since listing, measured our governance policies and structure against the Quoted Companies Alliance corporate governance code for small and mid-sized companies 2013 (the QCA Code) as we consider that the QCA Code is more applicable for small and mid-sized companies. We continue to apply this code and its replacement The QCA Corporate Governance Code that was published in April 2018 (the New QCA Code). We believe we apply the ten principles of the New QCA Code. The policies and procedures put in place at the time of admission to AIM in October 2013 gave us a firm foundation for our governance structures and we continue to build on and evolve these each year. These structures are described in our 2018 Annual Report (available to download here). The Board regularly reviews the structure to ensure that it develops in line with the growth and strategic plans of the group.

Deliver Growth

The Board has collective responsibility for setting the strategic aims and objectives of the Group. These growth aims are articulated in the CEO’s statement in the Annual Report and on our website along with our business model. In the course of implementing these strategic aims the Board takes into the account expectations of the Company’s shareholder base and also its wider stakeholder and social responsibilities.

The Board also has responsibility for the Group’s internal control and risk management systems and structures. Our risk management process is embedded into the business and starts at the Board but is delivered throughout the Group.

Dynamic Management Framework

As Chairman, I consider the operation of the Board as a whole and the performance of the directors individually regularly. During the year we undertook a formal external Board evaluation process as part of our aim to seek continuous improvement as a Board. This process is described more fully in our governance report. As we have done with previous appointments, future appointments will consider diversity, including gender. Any such appointments must complement the current balance of skills on the Board.  We currently have a globally diverse board and workplace which reflects our customers and our markets.

Responsibility for the overall leadership of the Group and setting the Group’s values and standards sits with the Board.

Build Trust

During the year Tungsten has undertaken a number of investor relations activities. These include investor roadshows, participation at investor conferences and attending other events where investors have the opportunity to meet and talk to the Executive Directors and senior management. Investors are actively encouraged to attend our AGM and all our Board see this as an important event in the annual calendar to meet and talk to shareholders.

During the year the Board has continued to review governance and the Group’s corporate governance framework. We reviewed our governance against the new QCA Code in June 2018 and will do so annually as required by AIM Rule 26.

The table appended to this Statement sets out details of our disclosures as required by the QCA Code, all of which we will continue to review and evolve.

 

Nick Parker

Non-Executive Chairman

Tungsten Corporation plc

26th September 2018

 

Application of the QCA Corporate Governance Code published in April 2018 (“the New QCA Code”)

DELIVER GROWTH

 

Principle

Application

1

Establish a strategy and business model which promote long-term value for shareholders

An explanation of the Group’s business model and strategic objectives is included in the Strategic Report on pages 1 to 29 of the Tungsten Corporation plc Annual Report and Accounts for the year ended 30 April 2018 (“2018 Annual Report”).  This is also available on our website:

https://www.tungsten-network.com/media/16605208/tungsten-corporation-plc-annual-report-fy18.pdf

2

Seek to understand and meet shareholder needs and expectations

The Board is committed to maintaining regular and clear communication with its shareholders. The Board receives regular reports on investor relations matters. The Directors are keen to build a mutual understanding of objectives with its institutional shareholders and a regular dialogue with institutional investors has been maintained throughout the year. The Directors also encourage communications with private shareholders and encourage their participation in the Company’s Annual General Meeting. The Company uses its corporate website (www.tungsten-network.com) to communicate with institutional shareholders and private investors. It contains the latest regulatory announcements, press releases, published financial information, current projects and other information about the Company.

Webcasts from the CEO and CFO are also on the website at: https://www.tungsten-network.com/uk/about/investor-relations/

The Company welcomes contact with its shareholders and the contact details of the CFO and the Company’s Financial PR advisers are set out at the foot of this page.

The Annual Report and financial statements is a key communication document and is also available on the Company’s website. This year’s Annual General Meeting of the Company was held on 21 September 2018. The Notice of Annual General Meeting is available on the Company’s website at www.tungsten-network.com. Separate resolutions were provided on each issue so that they can be given proper consideration. 

3

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

The Company’s business model which is available on our website and on page 3 of our 2018 Annual report describes the key resources and relationships on which the business relies.

Our goal is to be the world’s most trusted business transaction network. Our resources and relationships will make this goal achievable. This includes our global network of collaborating customers and other strong partnerships. We are customer facing and listen and respond to their needs.

we are keenly aware of our responsibilities to all our stakeholders –­ including customers, shareholders, employees, suppliers and local communities – as well as to the environment and to this end our passion is to rid the world of paper invoices.

We maintain a clear internal policy to support environmentally-conscientious activities. These activities span our entire organisation: from the way we create and distribute marketing materials and a company-wide limit on office printing, to our approach to ensuring all IT equipment is energy efficient.

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

The Group has an established framework of risk management and internal control systems, policies and procedures.  The Audit Committee is responsible for reviewing this framework to ensure that it operates effectively. 

Principal Risks and our risk management framework are set out on pages 24 and 29 of our 2018 Annual Report. 

 

MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK

 

Principle

Application

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

The names of the directors who served during the year ended 30 April 2018 are set out on page 47 of our 2018 Annual Report.

The names of the current directors are available on our website:

https://www.tungsten-network.com/uk/about/investor-relations/the-board/

The Board consists of eight Directors: the Non-Executive Chairman, two Executive Directors, and five Non-Executive Directors.

Our 2018 Annual Report sets out the time commitment required by directors and confirms the number of board and committee meetings during the year and the attendance of directors at those meetings. 

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

The names, background and experience of the current directors is available on our website:

https://www.tungsten-network.com/uk/about/investor-relations/the-board/

Our 2018 Annual Report includes disclosures on the skills and experience each director brings to the Board, director training, how the directors keep their skillset up to date and any other internal advisory roles.

7

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

The Chairman considers the operation of the Board and performance of the Directors on an ongoing basis as part of his duties and will bring any areas of improvement he considers are needed to the attention of the Board. A formal external Effectiveness Review of the Board and its Committees was undertaken during the year.  Independent Audit were engaged to carry out the Board review. The process took the format of a number of interviews by Independent Audit with each of the Directors individually and members of the Senior Management. Independent Audit also attended and observed a Board meeting and the meetings of the Board Committees. Independent Audit then presented their findings to the Board and facilitated a discussion around their findings. Overall it was found that the Board had many strengths and were well placed to contribute to the Company’s continued development. A number of practical enablers were suggested to improve the efficiency of the meetings and to achieve a more consistently value-adding role.  Further suggestions and actions included the need for diversity and succession planning as well as developing the senior management team further.

Succession planning will continues to be an area for consideration and focus by the Nomination and Remuneration Committee and the Board during the year. 

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

The Board recognises that a corporate culture based on sound ethical values and behaviours is an asset.  The Company endeavours to conduct its business with integrity, in an ethical, professional and responsible manner, treating our employees, customers, suppliers and partners with courtesy and respect.

The Company ensures that ethical values and behaviours are followed with a set of internal policies and procedures on matters such as an anti-corruption and whistleblowing. The Group’s anti-corruption procedures state that the Company and its subsidiaries intend to conduct business in an honest and ethical manner. A zero-tolerance approach is taken to bribery and corruption and the Company is committed to acting professionally, fairly and with integrity in all its business dealings and relationships wherever it operates and to implementing and enforcing effective systems to counter bribery and corruption. The Company has a whistleblowing procedure under which staff may report any suspicion of fraud, financial irregularity or other malpractice to any Executive Director. An amended policy, recommended by the Audit Committee was adopted by the Board during the year.

The Board intends to further develop its assessment of the recognition of corporate culture and ethical values during the year, and will enhance disclosures in these areas on our website and in our 2019 Annual Report.

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

The Board continues to develop procedures to ensure effective corporate governance of the Group.

The Chairman and Chief Executive Officer have separate, clearly defined roles. The Chairman is responsible for overseeing the Board and upholding the highest levels of probity and corporate governance throughout the Company, particularly at Board level. The Chief Executive is responsible for running the business of the Group within the authorities delegated to him by the Board. Further details of the division of these responsibilities can be found on pages 36 and 37 of the 2018 Annual Report.

The Board has responsibility for the overall leadership of the Company and setting the Company’s values and standards and for approving the Group’s strategic aims and objectives The Board has a schedule of matters reserved for the Board which requires the following key matters to be carried out by the Board:

  • Approvals of the annual operating and capital expenditure budgets and any material changes to them;
  • Oversight of the group’s operations ensuring competent and prudent management, sound planning, maintenance of sound management and internal control systems, adequate accounting and other records and compliance with statutory and regulatory obligations;
  • Review of performance in light of the group’s strategic aims, objectives and business plans and budgets and ensuring that any necessary corrective action is taken;
  • Extension of the group’s activities into new areas;
  • Decisions to cease to operate any material part of the group’s business;
  • Changes to the group’s capital structure;
  • Approval of the financial statements, annual report and accounts, material contracts and major projects;
  • Approval of the dividend policy and dividend payments;
  • Approval of the group’s internal control and risk management systems and structures;
  • Approval of major capital projects, contracts and investments;
  • Approval of communications with shareholders and the market;
  • Approval of Board membership and other senior appointments and any changes

The Board has an Audit Committee and a Nomination and Remuneration Committee, which operate under written terms of reference.

Audit Committee

The main duties of the Audit Committee are set out in its Terms of Reference and include the following:

  • To monitor the integrity of the financial statements of the Company, including its annual and half-year reports
  • To review and challenge where necessary any changes to, and consistency of, accounting policies, whether the Company has followed appropriate accounting standards and made appropriate estimates and judgements, taking into account the views of the external auditor, the going concern assumption and all material information presented with the financial statements
  • To keep under review the effectiveness of the Company’s internal control systems (including financial, operational and compliance controls and risk management) and to review and approve the statements to be included in the Annual Report concerning internal controls and risk management
  • To review the adequacy of the Company’s compliance, whistleblowing and procedures for detecting fraud
  • To consider and make recommendations to the Board, to be put to shareholders for approval at the Annual General Meeting, in relation to the appointment, reappointment and removal of the Company’s external auditor
  • To oversee the relationship with the external auditor including approval of their remuneration, approval of their terms of engagement, annual assessment of their independence and objectivity taking into account relevant professional and regulatory requirements and the relationship with the auditor as a whole, including the provision of any non-audit services
  • To meet regularly with the external auditor and at least once a year, without any Executive Director or other member of management present to discuss any issues arising from the audit
  • To review and approve the Audit Plan and review the findings of the audit

Nomination and Remuneration Committee

The main duties of the Nomination and Remuneration Committee are set out in its Terms of Reference and include the following:

Remuneration:

  • Setting the remuneration policy for the Executive Directors and the Company’s Chairman, including pension rights and compensation payments
  • In determining such policy, to take into account relevant legal and regulatory requirements, and the provisions and recommendations of the QCA Code, the QCA’s Remuneration Committee Guide and associated guidance
  • Recommending and monitoring the level and structure of remuneration for senior management
  • When setting the remuneration policy for Executive Directors, to review and have regard to pay and employment conditions across the Group
  • To review the appropriateness and relevance of the remuneration policy
  • To appoint and determine the terms of reference for any remuneration consultants who advise the committee
  • To approve the design of and determine the targets for any schemes of performance related remuneration and approve the total remuneration paid under such schemes
  • To review the design of all share incentive plans for approval by the Board
  • To determine the policy and scope of pension arrangements for Executive Directors and other designated senior executives
  • To oversee any major changes in employee benefits structure throughout the Group

Nomination:

  • To 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
  • To keep up to date and fully informed about strategic issues and commercial changes affecting the Company and the market in which it operates
  • To be responsible for identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise
  • To formulate plans for succession for both Executive and Non-Executive Directors and in particular for the key roles of Chairman and Chief Executive
  • To assess the reappointment 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 light of the knowledge, skills and experience required
  • To assess the re-election by shareholders of any Director having due regard to their performance and ability to continue to contribute to the Board in light of the knowledge, skills and experience required and the need for progressive refreshing of the Board

The Schedule of Matters Reserved for the Board and the Board committees’ Terms of Reference are available on our website:

https://www.tungsten-network.com/uk/about/investor-relations/downloads-reports/

The Board will continue to develop its governance framework as the Company evolves.

BUILD TRUST

  Principle Application
10

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

Copies of previous Annual Reports and information about shareholder voting at previous Annual General Meetings of the Company are set out on our website:  https://www.tungsten-network.com/uk/about/investor-relations/

Our 2018 Annual Report includes an Audit Committee report and a Nomination and Remuneration Committee report which give details of the work undertaken by these Committees during the year.

At our 2018 AGM a significant proportion of votes were cast against several resolutions. The Company is currently investigating the reasons behind the vote results and will provide an explanation of the actions it has taken to understand the reasons behind this vote result and any action it will take as a result of this vote.

Country of incorporation and operation

Tungsten Corporation plc is a public limited company incorporated and domiciled in the UK, with registered number 07934335.

The address of its registered office is Pountney Hill House, 6 Laurence Pountney Hill, London, EC4R 0BL.

Its main country of operation is the UK.

Exchanges and Trading Platforms

Tungsten Corporation plc’s ordinary shares are admitted to trading on AIM, a marketplace regulated by the London Stock Exchange.

Tungsten Corporation plc has not applied or agreed to have any of its securities (including its AIM securities) admitted or traded on any other exchange or trading platforms.

UK City Code on Takeovers and Mergers

As an AIM-traded, UK-registered company, Tungsten Corporation plc is subject to the UK City Code on Takeovers and Mergers Legislation.

Shares in issue

There are 126,088,147 shares of £0.00438 each in issue.

Restrictions on Transfer

None.

Advisers

Nominated Adviser Broker
Panmure Gordon & Co
One New Change
London
EC4M 9AF
Canaccord Genuity Limited
88 Wood Street
London
EC2V 7QR
Registrar
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA

Enquiries:

Tungsten Corporation plc

Richard Hurwitz, Chief Executive Officer

David Williams, Chief Financial Officer

 

+44 20 7280 7713

 

Panmure Gordon (Nominated Advisor)

Dominic Morley

+44 20 7886 2500

 

 

Canaccord Genuity Limited (Broker)

Simon Bridges/Emma Gabriel

+44 20 7523 8000

 

 

Neustria Partners

Robert Bailhache/Nick Henderson/Charles Gorman [email]

+44 20 3021 2580