Statement of Corporate Governance

08/08/2014

Croma Security Solutions Group plc (“CSSG”) has considered the best practice guidance in the QCA Code on Corporate Governance, and whilst it feels that some measures are not appropriate for the Group, it has adopted the majority of recommendations as detailed below.

The company is subject to the UK City Code on Takeovers and Mergers.

Information Summary 

CSSG is governed by the Board of Directors, comprising The Chairman, The Chief Executive, Finance Director, and three non-executive directors.

The Board meets monthly in person or by telephone to review monthly management accounts, sales and operations developments and personnel and HR matters.  In addition, the Board will review strategy and the business plan on a half yearly basis.

Strategy

CSSG is a full service comprehensive security provider, offering manned guarding, access and intruder controls and alarms, physical locks and devices and biometric identity systems in the UK and abroad.

Our strategy is to pursue organic growth to gain market share based upon a differentiated service which emphasises reliability, quality and efficiency and seeks to give customers ongoing peace of mind.

Progress in all four operating divisions of the Group is measured both financially, with performance against budget of Turnover, Gross Margin, debtor days and cash generation, and non-financially, through review of customer satisfaction, staff retention, website activity, and  sales pipeline and enquiry levels.

The Board continues to keep under review the composition of the management team to ensure sufficient resource is in place to deliver the increasing activity. 

The Board is looking closely at expansion into overseas markets.

Risk Management

The Board has put in place a framework of identified risks and risk management processes.  

Area of Risk

Specific Risk

Management Process

Economic & Regulatory

The Group operates in a highly regulated sector and must at all times adhere to the highest levels of best practice.

The Group is impacted by prevailing economic conditions.

The Group is actively involved in research and development of new security technologies which will need to comply with legislative requirements.

Internal review of processes

Annual NSI audit

Operational

There is a risk of a shortfall of trained engineers / planners, and a subsequent risk of subcontractors not maintaining the high standards of the group.

Ongoing review of staffing and manning levels.

Audit of sub-contractors

Financial

The Group has set policies which mitigate financial risk without impacting on competitiveness and flexibility.  

The Group’s financial position is reviewed by the Board each month to assess the following key areas:

Credit Risk – The risk that clients will not pay on time, increasing our cash requirements.

Liquidity Risk – The risk that the Group has insufficient cash to meet obligations as they fall due. 

Fair Value Risk – The risk that assets and liabilities on the Group’s Balance sheet are misstated.  

All new clients are subject to credit checks and debtor days are monitored.

The Group maintains sufficient cash or cash equivalents to meet 45 days of forecast liabilities.

The Group keep the Fair Value of all long term assets and liabilities under review to identify any potential alterations required.

Roles

The Group adheres to the requirements of the Code to keep the roles of Chairman and Chief Executive separate,

Chairman – Sebastian Morley.   Mr Morley is responsible for the overall direction of the Group, for ensuring the Board operates efficiently, and is responsible for shareholder relations and for Corporate Governance.

In addition, Mr Morley oversees the daily operations of Vigilant Sevcurity Limited, the Group’s manned guarding arm.

Chief Executive – Roberto Fiorentino.    Mr Fiorentino is responsible for overseeing the implementation of the Group’s strategy, and for delivering the coordinated service approach which is the Group’s USP.

In addition, Mr Fiorentino oversees daily operations of Croma Security and Croma Locksmiths, and is leading the development and launch of the Group’s biometric identity product FastVein™.

Finance Director  -  Alexander Tetley.  Mr Tetley is responsible for overall financial strategy and for ensuring timely and efficient production of management and statutory information.

In addition, Mr Tetley is company secretary and implements all matters of corporate governance as directed by the Chairman.

Non-Executive Directors

Mr Nicholas Hewson – Chairman Audit Committee, member of the remuneration committee

Mr Charles McMicking  -  Chairman Remuneration Committee, member of the audit committee

Lord James Percy  -  Member of the audit committee

Matters Reserved for the Board

The Board reserves formulation, dissemination and implementation of strategy.  It also handles stakeholder relations, dividend policy, and oversight of cash management.

Other operational matters are devolved to directors and managers, with the exception of investment – level decisions involving material balances which require Board consideration.

Non-Executive Appointment Terms  

Non-executive directors are appointed for a term of three years, and may be re-appointed for a total of three terms.