InTechnology plc is an unlisted public company and is not therefore required to comply with the provisions of the UK Corporate Governance Code (the “Code”). The following disclosures are made voluntarily.
Principles of Corporate Governance
The Board recognises the value of good corporate governance as a positive contribution to the well-being of the business and believes in applying these principles in a sensible and pragmatic manner that are considered appropriate to the nature and size of the Group.
Board of Directors
The Board of Directors consists of four members, including one non-executive Director.
The role of the Chief Executive Officer is clearly defined and the activities of the Company are controlled by the Board, which meets throughout the year.
There is a formal schedule of matters specifically reserved for the full Board’s decision, together with a policy enabling Directors to take independent advice in the furtherance of their duties at the Company’s expense. The Board programme is designed so that Directors have regular opportunity to consider the Company’s strategy, policies, budgets, progress reports and financial position and to arrive at a balanced assessment of the Company’s position and prospects.
Re-election of Directors
As required by the Company’s Articles of Association, Directors offer themselves for re-election at least once every three years. Any Director appointed during the year is required to seek re-appointment by shareholders at the next Annual General Meeting.
The board receives reports from the following committee:
The Executive Operating Boards
This comprises the executive Directors and certain senior business managers of each operating Subsidiary, and is chaired by the Group Chief Executive Officer. It acts as a general operating management committee and meets regularly for most of the year. It authorises recruitment and capital expenditure and reviews operational and financial performance.
Relations with shareholders
The Company seeks to ensure that all shareholders are kept informed about the Company and its activities.
A comprehensive annual report is sent to shareholders. The annual report is put on the websites of Asset Match (www.assetmatch.com) and the Company (www.intechnologyplc.com).
The Annual General Meeting is a forum for shareholders’ participation with the opportunity to meet and question Board members.
The Board of Directors acknowledges its overall responsibility for the Company’s systems of internal control and for monitoring their effectiveness. The Board has control over strategic, financial and compliance issues and has introduced a structure of responsibility with appropriate levels of authority.
The Company’s Directors and varying levels of management have clear responsibilities in ensuring that the control environment operates efficiently. Clear lines of responsibility are developed through the Company’s organisational structure. Ethical policies are communicated through all forms of personnel training and via
appropriate procedures in establishing a code of ethics.
Although no system of internal control can provide absolute assurance against material misstatement or loss, the Company’s systems are designed to provide reasonable assurance that problems are identified on a timely basis and are dealt with appropriately.
The principal features of the Company’s internal financial control structures can be summarised as follows:
• Preparation of budgets and forecasts approved by the Board;
• Monthly management accounts are reviewed by the Board and the Executive Operating Boards; and:
• The Company’s cash flow is monitored monthly.
The Executive Operating Boards authorise capital expenditure.
The Board has continued to enhance its risk control programme, in particular, those elements which relate to ensuring that risk reviews are formally embedded in control systems rather than being the subject of formal
Where lapses in internal control are detected, these are rectified.
Potential risks and uncertainties
There are a number of potential risks and uncertainties that could have an impact on the Company’s long term prospects.
All our businesses operate in a competitive environment.
To mitigate these competitive pressures, the Company targets niche sectors of the Digital Health, Wi-Fi systems and telecoms markets, and develops and refines its services to demonstrate a competitive edge to its existing and potential customers.
All businesses contract with agreed Service Level Agreements (“SLA’s”). Adherence by the Company to operating within such SLAs is crucial to maintaining customer satisfaction and the renewal of a contract. Internal procedures ensure that SLAs are constantly monitored and resources allocated to maintain levels of service of at least a minimum of that contracted with customers.
As a services business, total staff costs are approximately 42% of our total operating costs. The Company could be hindered by a shortage or inability to recruit and retain qualified and experienced staff.
To mitigate this risk, the Company constantly seeks to structure its recruitment and retention strategies to attract and retain the right people.
Any economic downturn can detrimentally affect the Company’s level of demand for its services.
To mitigate this risk, the Company will, when possible, contract for all services for a minimum of twelve months in order to have contracted future revenues.
The Board is made aware of all risks to the Company by the executive Directors who are members of the Executive Operating Boards.
The Executive Operating Boards has established an ongoing process for identifying, evaluating and managing the significant risks faced by each operating subsidiary.