Corporate Governance

    PCG Entertainment Plc. (“PCGE”) Code of Corporate Governance”

     

    The new AIM Rules for Companies came into effect on 30 March 2018. One of the key new requirements for AIM companies is to disclose on its website (in accordance with AIM Rule 26) details of how it complies with a recognised corporate governance code chosen by the board of directors or explain where it does not comply and why.

    Although AIM has not prescribed a list of recognised codes (particularly as companies with a listing in their home jurisdiction may wish to report using an appropriate standard in that jurisdiction) we believe that the majority of AIM companies will choose to adopt the Quoted Companies Alliance (“QCA”) Corporate Governance Code, which is aimed at small to mid-size quoted companies, rather than the UK Corporate Governance Code published by the Financial Reporting Council (the “FRC”), the code with which companies listed on the Official List and Main Market are required to adhere.

    PCGE is registered in Gibraltar but, in the absence of a Corporate Governance Code for Gibraltar, has adopted in principle the QCA Corporate Governance Code except where stated in the Corporate Governance Statement below. This statement of Corporate Governance is intended to meet both AIM listing requirements and, since PCGE is also listed on the NEX Market, Corporate Governance requirements of the NEX Market. The Corporate Governance Code will also apply to any subsidiaries or companies in which PCGE has a majority voting interest unless otherwise stated.

    The Statement on the Code of Corporate Governance is set out below and on the Company website (www.pcge.com ).The Code of Corporate Governance will be reviewed annually. Subsequent amendments to the Code of Corporate Governance will be set out in future Annual Reports and on the website.

    Below “PCGE” sets out how its application of the ten principles of the QCA Code in support of its strategic development:

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

     

    PCGE does not currently operate a trading business so our strategy and business model to promote long-term value for shareholders is in transition. In terms of leadership the past financial year has been focused on setting and developing plans for a new strategic direction for PCGE. This has been established by identifying industrial and commercial sectors where new and emerging technology applications can be used in the media, trade and environmental sectors. The main geographic focus is in the Asia Pacific Region, where the Company has been commercially active, historically. Detailed business plans, budgets and funding requirements are being formulated. Key people to lead and resource the developments in the new sectors are being identified. It is the intention of the Board to have identified and developed a strategy and business model to promote long-term value for shareholders, in accordance with Principle 1 for inclusion in the annual report and accounts for the year to 31 March 2019; a limited statement, not in accordance with Principle 1, covering this was included in the annual report and accounts for the year to 31 March 2018.

     

    2. Seeks to understand and meet shareholder needs and expectation

     

    The Board encourages constructive feedback from its shareholders on their needs and expectations for the Company through question and answer sessions at its annual general meeting and at other online and in-person presentations by board members that the Company organise; we have undertaken [ ] such presentations during 2018. The Company also maintains a Twitter account to provide communications with shareholders. The Chairman and the Board have been mindful of the importance of communication with shareholders and have been successful by communicating about the new strategic direction and on other matters including the change of broker and admission to NEX during the year by the issue of new bulletins (via RNS when appropriate), periodic media interviews and attendance at the UK Investor Show. In addition, the Chief Financial Officer and one of the Non-executive Directors attended and presented at the annual UK Investor Show for listed small cap companies in April 2018 in London, where the Director met some of the Company Shareholders and discussed the recently published updated trading report. We seek at all times to provide open and realistic communications with shareholders while ensuring compliance with our regulatory obligations.

    The primary point for investor relations contacts is Damson PR, which can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it..

     

    3. Takes into account wider stakeholder and social responsibilities and their implications for longer term success

    In its current stage or re-development, the Company has a reduced set of stakeholders. The Company has an open and compliant approach to its dealings with the regulators concerned with the admission of the Company’s shares to trading on the AIM and NEX Exchange Growth Markets. The Board seeks to identify suppliers that provide the right balance of capabilities and cost and are identified purely on an arms-length commercial basis. The Company’s suppliers will be paid in line with agreed payment terms and the Board will act in an ethical manner in all dealings and expect the same from its suppliers. The Company recognises that as it formulates, approves and implements its strategies, there will be wider stakeholder and social responsibilities which will have to be taken into account, in particular in relation to employees (currently there are none) and the communities in which it becomes active. The Board will seek constructive feedback from all its stakeholders and [Bob McDowall] has been designated as the Non-Executive director to whom any stakeholder may provide open and confidential feedback.

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

     

    The Board is responsible for the systems of risk management and internal control, as well as reviewing their suitability and effectiveness. The Board identifies and addresses all risks based on a considered assessment of the likelihood of a risk occurring and the magnitude of the risk to the Company were it to occur, from both an upside and downside perspective. Currently the Company’s risks primarily relate to supplier selection and treasury functions. The Board take a collegiate approach to risk management to avoid problems with risks being placed in silos. The approach of the Board to risk management will be refined as the Board develops its business strategy. It is the intention of the Board to provide an updated risk management approach, in accordance with Principle 4, for inclusion in the annual report and accounts for the year to 31 March 2019; a limited statement, not in accordance with Principle 4, covering this was included in the annual report and accounts for the year to 31 March 2018.

    5. Maintain the Board as a well functioning, balanced team lead by the Chairman

    The Board currently comprises an Executive Chairman and three non-executive directors. The Chairman assisted by the Senior Independent Director (Bob McDowall) take a position of leadership on all matters of Corporate Governance. They are supported in this by the Company Secretary, who ensures that the Board (and any Board Committees) are provided with high quality information on a timely manner in order to facilitate a proper assessment of the matters requiring a decision or insight.

    The following directors are regarded as independent:

    • Bob McDowall;

    • Michael Mainelli;

    • Alan Gravett

    Alan Gravett and Michael Mainelli are considered by the Board to be independent Non-Executive Directors, notwithstanding that under their respective letters of appointment each may be paid in Ordinary Shares as an alternative to cash, at the election of the Company, and they each have common directorships with other members of the Board. This matter of independence will be re-visited by the Board on a periodic basis.

    With the Company in its current state of re-development, the Board believes that the single executive director is appropriate, while the three non-executive directors provide a good balance of skills and experience.

    Concurrently with the implementation of the new business initiatives, the Board will review its blend and range of skills and experience to oversee the development and implementation and make changes and additions if necessary.

    The Board of Directors is scheduled to meet 12 times a year.

    The Company has an Audit Committee. The members of the Audit Committee are Michael Mainelli and Richard Poulden. The Audit Committee is scheduled to meet as necessary to conclude the audit, and met twice in the year to 31 March 2018, at which all members attended..

    The Company has a Remuneration Committee. The members of the Remuneration Committee are Alan Gravett and Richard Poulden. The Remuneration Committee is scheduled to meet a minimum of once a year, and met once in the year to 31 March 2018, at which all members attended.

    The Company has an AIM Rules Committee. The members of the AIM Rules Committee are Alan Gravett and Richard Poulden. The AIM Rules Committee is scheduled to meet a minimum of once a year, and met once in the year to 31 March 2018, at which all members attended.

    The Company does not currently have a Nomination Committee, but the Board will consider whether one is needed once its future business strategy is decided.

    It is the intention of the Board to provide an update on Principle 5 for inclusion in the annual report and accounts for the year to 31 March 2019; a limited statement, not in accordance with Principle 5, covering this was included in the annual report and accounts for the year to 31 March 2018.

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

    The Board considers that with reference to the current financial risk and operation scale of the Company’s activities the company has sufficient current experience, skills and capabilities but is mindful that its nascent business strategies and plans will require continual review and evaluation of experience, skills and capabilities. As the Company develops its new business strategy, then these matters will need to be reviewed, as will the diversity and gender balance of the Board.

    The Board of Directors consists of:

    • Richard Poulden, Executive Chairman

    • Professor Michael Mainelli, Non-Executive Director

    • Alan Gravett, Non-Executive Director and Company Secretary

    • Bob McDowall, Senior Non-Executive Director

    Details of each director’s relevant experience , skills and personal qualities can be found here (https://pcge.com/index.php/company-profile/directors-management). Each board member keeps their skills up to date through a combination of courses, continuing professional development through professional bodies and reading.

    It is intended that the Company will include a statement in accordance with Principle 6 in the annual report and accounts for the year to 31 March 2019; no statement in accordance with Principle 6 was included in the annual report and accounts for the year to 31 March 2018.

    7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

    As the Company formulates, approves and implements new business strategies, the Board will as part of that process, develop performance evaluation criteria through expansion of the role of the remuneration committee and the addition of additional committees if applicable to the Company’s stage of development.

    The performance of the Board is evaluated through reviews of board processes against companies at a similar stage of development. The criteria against which board, committee and individual effectiveness is considered through comparison of skill levels and processes at companies of a similar stage of development

    These evaluations were not undertaken in previous years. It is intended that these evaluations shall be undertaken annually, after the end of each financial year but prior to the publication of the respective annual report and accounts.

    The Company does not consider a formal approach to succession planning is necessary at the current stage of development.

    It is intended that the Company will include a statement in accordance with Principle 7 in the annual report and accounts for the year to 31 March 2019; no statement in accordance with Principle 7 was included in the annual report and accounts for the year to 31 March 2018.

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

    The Board seeks to maintain high standards of transparency and integrity in conduct business. The Company currently does not have any employees. As the Company develops a future business strategy, the Board understands the importance of developing an ethical corporate strategy alongside this.

    The Board ensures that ethical values and behaviours are recognised and respected through an ethical review of the Company’s activities at each board meeting.

    It is intended that the Company will include a statement in accordance with Principle 8 in the annual report and accounts for the year to 31 March 2019; no statement in accordance with Principle 8 was included in the annual report and accounts for the year to 31 March 2018.

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

    Board Meetings are held monthly. The agenda has been equally focused on reviewing the plans for new strategic direction, evaluating the key risks and high-level review of financial performance vs. budgets month by month and cumulatively.

    The Company currently has an Executive Chairman; it does not currently have a Chief Executive Officer. The Executive Chairman’s Role is to develop the strategy of the Company in conjunction with the Board and to execute that strategy. The Role of the Senior Independent Non-Executive Director is to ensure the application of relevant corporate governance standards and the implementation of the agreed Board Committee structure.

    Currently there are three Board Committees, an Audit Committee, Remuneration Committee and AIM Rues Committee. Other Committees will be established if and when the business requires. Membership of these committees can be found in the statement regarding Principle 5. The roles of these committees, as well as what matters are respectively reserved for the Board, can be found in the terms of reference of these committees on the Company’s website. The inclusion of Mr Poulden, an executive director, on both committees is not regarded as best practice by the QCA, but his inclusion is regarded as important by the board due to his expertise and experience.

    The Board intends to evolve its approach to Corporate Governance alongside the development of its business strategy.

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

    The Executive Chairman of PCGE has overall responsibility for Corporate Governance. The principles* of corporate governance are satisfied through discharge of specific responsibilities for Leadership, Board Management Relationships, Board Committees, Board Meetings and any other duties, which the Board may request from time-to-time. The Chairman assumed an executive role in 2017 to lead the development of a new strategic direction following the dismissal of the Chief Executive. A non-executive director has joined the Board in 2017.

    The votes at all general meetings of the Company from 2018 will be published on the Company’s website.

    If any significant proportion of votes (>20% of independent votes) cast are against a resolution, the Board will provide an explanation on the same page of the action it intends to take.

    Notices of all general meetings and annual report and accounts published by the Company for the last five years can be viewed on the Company’s website.

    It is intended that the Company will include a statement in accordance with Principle 10 in the annual report and accounts for the year to 31 March 2019; no statement in accordance with Principle 10 was included in the annual report and accounts for the year to 31 March 2018.


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