Carreras Limited - Corporate Governance

Board Mission

The Board of Directors is collectively responsible for the success of the company.

The board remains committed to providing entrepreneurial leadership of Carreras
within a framework of prudent and effective controls which enables risk to be assessed and managed. The board is responsible for overseeing the company’s strategic aims; ensuring that the necessary financial and human resources are in place for the company to meet its objectives; and reviewing management’s performance. The board also upholds the company’s values and standards and ensures that its obligations to the company’s shareholders and others are understood and met.

Responsibilities of board members (Chairman, non-executive members, Company Secretary)

There is a clear division of responsibilities at the head of the company between the running of the board and the executive responsibility for the running of the company’s business.  No one individual has unfettered powers of decision.

Chairman

The Chairman is responsible for leadership of the board, ensuring its effectiveness on all aspects of its role and setting its agenda. The chairman is also responsible for ensuring that the directors receive accurate, timely and clear information. He also ensures effective communication with shareholders.

Non-Executive Directors

As part of their role as members of a unitary board, non-executive directors constructively challenge and help develop proposals on strategy. Non-executive directors also scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance. They ensure the integrity of financial information and that financial controls and systems of risk management are robust and defensible.

Directors can obtain independent professional advice in the course of their duties, if necessary, at the company’s expense.

Company Secretary

The Company Secretary plays a key role in assisting all directors to obtain the information they need to carry out their roles effectively.  She is responsible for ensuring that board processes and procedures are appropriately followed and that they support effective decision making and governance in accordance with the Companies Act.

Appointments to the Board

There is a formal, rigorous and transparent procedure for the appointment of new directors to the board.

Appointments to the board are made on merit and against objective criteria. Care is also taken to ensure that appointees have enough time available to devote to the job. This is particularly important in the case of chairmanship. The board also satisfies itself that plans are in place for orderly succession for appointments to the board and to senior management, so as to maintain an appropriate balance of skills and experience within the company and on the board.

Election and re-election

All directors are submitted for re-election at regular intervals, subject to continued satisfactory performance. The board ensures planned and progressive refreshing of the board.

Independence of Directors

Independence is based on criteria agreed by the Board and includes:

•  a  Director that has not within the last three years been an employee of the Company or a related company;
•  a  Director that has not within the last three years had a material business relationship with the Company either directly or as a shareholder, director or senior employee of a body that has a relationship with the Company either as a supplier, a customer or competitor of the Company;
•  a  Director that has not within the last three years received additional remuneration from the Company (apart from a director’s compensation) nor participated in the Company’s performance-related pay scheme;
•  a  Director whose spouse, child(ren) or dependent(s) are not advisors, directors or senior employees of the Company;
•  A Director who does not represent a significant shareholder.

The Board is not aware of any relationships or circumstances affecting the Directors’ independent judgement.

Board Committees

Audit Committee

The board has established formal and transparent arrangements for considering how they should apply the financial reporting and internal control principles and for maintaining an appropriate relationship with the company’s auditors.

The main role and responsibilities of the audit committee include:

•  to monitor the integrity of the financial statements of the company, and any formal announcements relating to the company’s financial performance, reviewing significant financial reporting judgements contained in them;
•  to review 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;
•  to monitor and review the effectiveness of the company’s internal audit function;
•  to make recommendations to the board, for it to put to the shareholders for their approval in general meeting, in relation to the appointment, re-appointment and removal of the external auditor and to approve the remuneration and terms of engagement of the external auditor;
•  to review and monitor the external auditor’s independence and objectivity and the effectiveness of the audit process, taking into consideration relevant professional and regulatory requirements;
•  to develop and implement policy on the engagement of the external auditor to supply non-audit services, taking into account relevant ethical guidance regarding the provision of non-audit services by the external audit firm; 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.
•  The audit committee should review arrangements by which staff of the company may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. The audit committee’s objective should be to ensure that arrangements are in place for the proportionate and independent investigation of such matters and for appropriate follow-up action.
•  The audit committee should have primary responsibility for making a recommendation on the appointment, reappointment and removal of the external auditors.

The audit committee of the board comprises of three members who are  non-executive directors, the majority of whom is identified by the Board as independent directors.
At least one member of the audit committee has recent and relevant financial experience.

Meetings of the audit committee

The Chairman of the audit committee, in consultation with the Company Secretary decide the frequency and timing of its meetings.

Four (4) meetings are held during the year to coincide with key dates within the financial reporting and audit cycle.  The company’s external audit lead partner is invited regularly to attend the meetings.

The audit committee met with the external auditors, without management, to discuss matters relating to its remit and any issues arising from the audit.

Relationship with the board

The role of the audit committee is for the board to decide and to the extent that the
audit committee undertakes tasks on behalf of the board, the results are reported to, and considered by, the board. In doing so it identifies any matters in respect of which it considers that action or improvement is needed, and make recommendations as to the steps to be taken. The audit committee should review annually its terms of reference and its own effectiveness and recommend any necessary changes to the board.

Nomination and Compensation Committee

The main role and responsibilities of the nomination and compensation committee include:

•  To determine the framework and policy on terms of engagement including the specific compensation of each executive director and each member of the Senior Management Team [“Leadership Team”] of the company, including entitlements where applicable under any share incentive schemes and the pensions schemes and any compensation payments.
•  To make recommendations to the board on suitable candidates for appointment as board directors and to make recommendations to the board as to the suitability of candidates for appointment as executive directors of the company.

Fees payable to non-executive directors are determined by the main board on the recommendation of the chairman and chief executive.

The Committee is authorized by the board to obtain at the company’s expense such outside legal or other independent professional advice as it considers necessary and, in particular, is responsible for the appointment of any compensation consultants, Executive Recruitment & Placement Services [head-hunters] or any other professional service provider who may advise the Committee. Where such consultants are appointed, the Committee is required to make available a statement of whether they may have any other connections with the Company.

Meetings of the Nomination and Compensation Committee

The Committee was appointed by the board on September 8, 2009 and comprises three members. The quorum is three and in the absence of a member, he will select another director to be his alternate at the meeting. The Chairman and the Managing Director of Carreras Limited are required to attend meetings of the Committee on the occasion of a discussion of compensation and to discuss the performance of the Executive Directors and other members of the Senior Management Team [except when their own compensation is under review], and to make proposals as appropriate.

Relationship with the board

The Committee shall make recommendations to the board in specific regard to the re-appointment of any Non-executive Director at the conclusion of their specified term of office after reviewing the Director’s performance; the re-election by shareholders of any director under the retirement or by rotation provisions in the Company’s Articles of Association; and the continuation in office of any Director at any time.