Aim Rule 26

There have been no significant votes against resolutions at previous AGMs.

As the companies within the Group expand, we continually review the risks and uncertainties facing the Group to ensure we identify any new key risks and how we implement appropriate action to manage these risks.

The Board encourages open dialogue and commitment to providing the best service possible to the Group’s customers and considerate interactions with suppliers.

The Company monitors feedback from all of its stakeholders as reported by the Group companies and the Board uses this to develop future policy. Being a participant in the textile industry, the Board is keenly aware of environmental and labour considerations and is actively working to ensure that it is at the forefront of meeting the standard expected over the coming years.

Each Group company has defined authorisation levels for expenditure, the placing of orders and signing authorities. The daily cash movements of the Group companies are reconciled and monitored by their finance departments. The Group’s cash flow is monitored by the Board.

Each year on behalf of the Board, the Company Secretary attends audit review meetings at which the auditors present their findings including a comprehensive review of risks/potential risks which cover both financial and non-financial issues potentially affecting a Group company.

Group Board meetings are held in the UK, Germany, Sweden or via the internet.

The full Board is responsible and accountable to the shareholders for the management and success of the Group and to provide effective controls to assess and manage risks in the Company.

The Board currently comprises the Executive Chairman and two Non-Executive Directors, one of whom is an independent non-executive director. As the Company has no trading activities, the Board is comprised entirely of Non-Executive Directors.

The Non-Executive Directors are considered to be independent of the management. However, the Executive Chairman and one of the other Non-Executive Director are representatives of significant shareholders and so do not meet the definition of Independent Directors.

Each is aware of his statutory responsibilities to act in the interests of all shareholders and they consider their interests to be aligned to promote the long term success of the company.

Thus, the Board only has one Independent Non-Executive Director rather than two as recommended by the QCA code. The Directors believe that the current Board structure has the necessary range of skills, objectivity and diversity to manage what is a simple structure business and that to increase the number of Independent Non-Executive Directors would add cost rather than benefit. The Board continually keeps this position under review and has identified triggers that it believes would lead to additional appointments. These include proposed diversification into new business areas; a significant acquisition; significant organic growth into new territories.

The Board has established procedures to identify and monitor potential or actual conflicts of interest.

The Board is supported by the Audit, Remuneration and Nominations Committees, each of which has access to information, resources and advice that it deems necessary, at the Company’s cost, to enable the committee to discharge its duties.

The Committees’ Terms on Reference are posted on the AIM rule 26 page of Company’s website.

The Audit Committee is comprised of all the Directors and is chaired by the independent Non-Executive Director. The Group Company Secretary/Finance Manager attends the meetings by invitation.  The Audit Committee meets at least twice a year and is responsible for ensuring that the financial performance of the Group is properly reported and monitored and for meeting the auditors and reviewing the reports from the auditors relating to accounts and internal control systems.  The external auditors will attend all meetings.

The Remuneration Committee comprises the Non-Executive Directors and is chaired by the Chairman.  No director is permitted to participate in discussions or decisions concerning his own remuneration. The Remuneration Committee meets as and when necessary.

The Nominations Committee comprises all members of the Board and is chaired by the Chairman. The Nomination Committee reviews and, if appropriate, approves recommendations for the appointment of additional Directors or replacement of current Directors and for succession planning for the Company.

The Board and its Committees receive appropriate and timely information and minutes are kept of all relevant committee meeting matters.

Any Director can challenge proposals with decisions being taken after discussion. Any director can ask for a concern to be formally noted.  Specific actions arising from meetings are agreed by the Board or relevant committee and then followed up by management.

Directors have access to advice or services needed to enable them to carry out their roles and duties.

In 2023/24, there were eleven internet Board meetings and two other Board meetings which were attended by all Directors.

In 2023/24 all Directors attended the one remuneration committee meeting and Dave Cooper attended the one audit committee meeting.

All Directors are subject to reappointment by shareholders at the first Annual General Meeting following their appointment and thereafter by rotation. The Directors spend such time as is necessary to ensure that their roles and duties are carried out effectively.

In addition, the Company’s Directors have held senior executive positions for a number of years in UK plc companies and therefore are fully aware of their corporate responsibilities and the need to ensure compliance with the AIM regulatory requirements.

The Directors of the Company and their responsibilities on the Board are:

Role of the Non-Executive Chairman – Jan Holmstrom:

The Non-Executive Chairman has overall responsibility for corporate governance and in promoting high standards throughout the Company.  As well as leading and chairing the Board, the Non-Executive Chairman’s responsibilities are:-

• Committees are properly structured and operate with appropriate terms of reference;
• The Company has a coherent strategy and sets objectives against this; and
• There is effective communication between the Company and its shareholders.

Jan Holmstrom has held a number of positions as Chairman of private and plc companies and has considerable textile and corporate finance experience.

Role of the Group Finance Manager and Company Secretary – Dawn Henderson:

The roles of Group Finance Manager and Company Secretary are combined.  The Board acknowledges the QCA guidelines on this matter and consider the joint roles appropriate for the Company’s size.

The Group Finance Manager is responsible for providing financial oversight of the Group, preparing the accounts, monitoring the performance of the Group companies and reporting on financial matters to the Board.  Providing financial input on acquisitions.

The Company Secretary is responsible for providing clear and timely information flow to the Board and its Committees and supports the Board on matters of corporate governance and risk.  The Company Secretary has direct access to the Chairman on matters of Corporate Governance.

Dawn Henderson is a qualified Chartered Accountant who qualified with KPMG in 1988.  She has held various Finance Director and Company Secretary roles both within the private and plc environment.

Role of the Independent Non-Executive Director – David Cooper:

The role of the Independent Non-Executive Director is to contribute independent thinking and judgement through the application of their external experience and knowledge, scrutinise the performance of the management of Hemmers, provide constructive challenge and ensure that the Company is operating within the governance and risk framework approved by the Board.

David Cooper is a qualified Chartered Accountant with considerable corporate and accounting experience and has also worked in the textile industry for many years.

Role of the Non-Executive Director – Johan Claesson:

The role of the Non-Executive Director is to scrutinise the performance of the management of Hemmers, provide constructive challenge and ensure that the Company is operating within the governance and risk framework approved by the Board.

Johan Claesson has held a number of positions as Non-Executive Director of private and plc companies and has also worked in the textile industry for many years.  He also has considerable experience in the IT and property.

Each director is responsible for maintaining the level of skill set required by the role and this is achieved by continuing professional education, technical updates from professional bodies and advisors and an active role assisting the existing Group companies.

Whenever required the Directors seek legal, regulatory and audit advice from external advisors.

The Board as a whole is well placed to implement the Company’s strategy.

There are a wide range of matters reserved for the Board. These include strategy, finance, corporate governance, approval of significant capital expenditure, appointment of key personnel and compliance with legal and regulatory requirements.

The Company’s governance framework is reviewed to maintain the highest levels of business performance.

The Annual General Meeting is the principal opportunity for private shareholders to meet and discuss the Group’s business with the Directors. There is an open question and answer session during which shareholders may ask questions both about the resolutions being proposed and the business in general. The Directors are also available after the meeting for an informal discussion with shareholders.

The Committees of the Board have not published committee reports . They will consider whether to do so in the future.

The Board is supported by the Audit and Remuneration Committees, each of which has access to information, resources and advice that it deems necessary, at the company’s cost, to enable the Committee to discharge its duties. These duties are set out in the Terms of Reference which are available on the website.

The Audit Committee

The Audit Committee has met with the external auditors during the course of the year to monitor progress and discuss any issues arising.

The Remuneration Committee

The Remuneration Committee reviews and determines on behalf of the Board and shareholders of the Company the pay, benefits and other terms of service of the Directors of the Company.

Remuneration Policy

The objective of the Company’s remuneration policy is to develop remuneration packages which motivate Directors and support the business objectives in the short, medium and long term; to align the interests of Directors with the interests of long term shareholders; encourage executives to operate within the risk parameters set by the Board and ensure that the company can recruit and retain high quality executives through packages which are fair and attractive but not excessive.

Matters reserved for the Board

Management structure and appointments

• Senior management responsibilities
• Board and other senior management appointments or removals
• Board and senior management succession, training, development and appraisal
• Appointment or removal of Company Secretary
• Appointment or removal of internal auditor
• Remuneration, contracts, grants of options and incentive arrangements for senior management
• Delegation of the board’s powers
• Agreeing membership and terms of reference of board committees and task forces
• Establishment of managerial authority limits for smaller transactions
• Matters referred to the board by the board committees

Strategic/Policy considerations

• Business strategy
• Diversification/retrenchment policy
• Specific risk management policies including insurance, hedging, borrowing limits and corporate security
• Agreement of codes of ethics and business practices
• Receipt and review of regular reports on internal controls
• Annual assessment of significant risks and effectiveness of internal controls
• Calling of shareholders’ meetings
• Avoidance of wrongful or fraudulent trading

Transactions

• Acquisitions and disposals of subsidiaries or other assets over, say 5% of net assets/profits
• Investment and other capital projects over a similar level
• Substantial commitments including;

i.      Pension funding

ii.      Contracts in excess of one year’s duration

iii.      Giving securities over significant Company  assets (including mortgages and charges over the Company’s property)

• Contracts not in the ordinary course of business
• Actions or transactions where there may be doubt over property
• Approval of certain announcements, prospectuses, circulars and similar documents
• Disclosure of directors’ interests
• Transactions with directors or other related parties

4.      Finance

• Raising new capital and confirmation of major financing facilities
• Treasury policies including foreign currency and interest rate exposure
• Discussion of any proposed qualification to the accounts
• Final approval of annual and interim reports and accounts and accounting policies
• Appointment/proposal of auditors
• Charitable and political donations
• Approval and recommendation of dividends
• Approval before each year starts of operating budgets for the year and periodic review during the year

General

• Governance of company pension schemes and appointment of company nominees as trustee
• Allotment, calls or forfeiture of shares

Notices of all general meetings for the past 5 years are contained within the Annual Accounts. These are included here.

There have been no significant votes against any resolution proposed at a general meeting in the past 5 years. Significant means more than 20% of those who voted, voting against a resolution.