13 March 2024
Overview of how the Board performed its duties
The revised UK Corporate Governance Code (‘2018 Code’) was published in July 2018 and applies to accounting periods beginning on or after January 1, 2019. The Companies (Miscellaneous Reporting) Regulations 2018 (‘2018 MRR’) require Directors to explain how they considered the interests of key stakeholders and the broader matters set out in section 172(1) (A) to (F) of the Companies Act 2006 (‘Section 172’) when performing their duty to promote the success of the Company and its subsidiaries (“the Company”) under Section 172. This includes considering the interest of other stakeholders which will have an impact on the long-term success of the Company. The Board welcomes the direction of the UK Financial Reporting Council (the ‘FRC’). This Section 172 statement explains how the Board has engaged with employees, suppliers, customers and others; and have had regard to employee interests, the need to foster the Company’s business relationships with suppliers, customers and others, and the effect of that regards, including on the principal decisions taken by the Company during the financial year.
Decision-making at the Board
All matters, which under the Company’s governance arrangements are reserved for decision by the Directors, are presented at Board meetings. Directors are briefed on any potential impacts and risks for our customers, shareholders and other stakeholders including our suppliers, the community and environment and how they are to be managed. The Directors take these factors into account before making a final decision which together they believe is in the best interests of the Company.
Stakeholders
The Company´s stakeholders include its shareholders, its employees, its customers, its suppliers and creditors, Governments and regulatory bodies, and the local communities where the Company has a presence or markets. The Company´s Directors find it important to identify and engage with all these stakeholders in order to build positive relationships and manage potential conflicts of interest.
We aim to make sufficient profit to sustain the Company’s commercial vitality. This is balanced against the needs of our customers and other stakeholders and the community to ensure we are conducting all our business relationships with integrity. The long-term sustainability of the Company is at the forefront of decision-making, particularly in response to the current challenging conditions with the effect of global market uncertainty, inflation, and military conflicts impacting the global economy.
Employees
The Board has established policies and procedures to ensure that the Group provides a safe workplace environment, free from harassment and that fosters employee professional well-being. The Board evaluates annual remuneration and changes in the employee related policies to safeguard employees from unfair and discriminatory practices.
The CEO regularly conducts townhall meetings with employees. Occasionally, other Executive Leadership Team members will join the CEO in the townhall meetings. The Board has also established a compliance hotline where employees may report anonymously any alleged or suspected breach of the Company’s Code of Conduct and other policies.
Business partners
Customer satisfaction is paramount to the Company’s business success. To achieve high customer satisfaction, the Company continues to improve the efficiency of its supply chain, so it can deliver quality and relevant products timely.
Community and environment
The Company believes that social, environmental, and economic responsibility is the core of its business, contributing deeply to the health of an organisation. The Company’s environmental programs are focused on sustainability whereas the economic programs are focused on employee and consumer health and safety in a variety of ways.
The long-term risks posed by climate change to the Company’s operations, projects and surrounding communities could impact our ability to manufacture our products sustainably as they are set to increase both operational and capital costs. At the same time though, opportunities have also emerged through improved water and energy consumption efficiencies and transitioning towards lower carbon energy sources, with associated financial benefits.
Board decisions and their impact on stakeholders
The Board engages directly with certain stakeholders and indirectly with others on certain issues. However, due to the size and distribution of our stakeholders and of the Company, stakeholder engagement often takes place at an operational level.
The Board considers and discusses information from across the organisation to help it understand the impact of the Company’s operations, and the interests and views of its key stakeholders. It reviews strategy, financial and operational performance, key risks, and legal and regulatory compliance. This information is provided to the Board through reports sent in advance of quarterly Board meetings, and through management presentations.
As a result of these activities, the Board has an overview of engagement with stakeholders, and other relevant factors, which enables the Directors to comply with their legal duty under Section 172.
In 2022, the Company commenced its transformation journey in reshaping the organisation and aligning resources to maximise value for the business. The new structure balances global, regional, and local responsibilities and more closely aligns resources and accountability to ensure every function is fit for purpose and better aligns the teams and expertise to the long-term needs of the business.
Various new leaderships roles were added or filled to better position the Company to achieve the business objectives, identify cost savings and growth opportunities to invest our resources.
In February 2023, the Company announced a restructuring plan to take further measures to reduce costs and enhance the Company’s long-term competitive position to meet the customer needs. The plan is to consolidate certain manufacturing facilities in order to eliminate excess capacity and under-utilised assets across the Company’s global manufacturing footprint.
The restructuring is expected to generate a net income of approximately $6.5 million upon completion of the project anticipated by end of 2024. By the end of 2023, the project has generated a net income of $10.2 million which is mainly arising from a gain from the sale and leaseback transaction of a manufacturing facility.
Business conduct
The Company aims to conduct its business relationships with integrity and courtesy, and to honour our business agreements.
Long-term sustainability
We aim to make sufficient profit to sustain the Company’s commercial vitality. This is balanced against the needs of our customers and other stakeholders and the community to ensure we are conducting all our business relationships with integrity. The long-term sustainability of the Company is at the forefront of decision-making, particularly in response to the current challenging conditions with the effect of global market uncertainty, inflation, and military conflicts impacting the global economy.