Corporate Governance

The Quoted Companies Alliance Corporate Governance Code (2018) (the “QCA Code”)

The Board recognises the importance of good corporate governance and have chosen to apply the QCA Code. The QCA Code was developed by the Quoted Companies Alliance (the “QCA”), the independent membership organisation that champions the interests of small to mid-size quoted companies, in consultation with several significant institutional small company investors, as a suitable corporate governance code applicable for small and mid-sized publicly quoted companies.

As stated by the QCA, good corporate governance is about “having the right people (in the right roles), working together, and doing the right things to deliver value for shareholders as a whole over the medium to long-term”. This is achieved through a series of decisions made by the Board, which needs to be kept dynamic, diverse and engender a consistent corporate culture throughout Tertre Rouge Assets PLC (the “Company”).

Our values are based on “Doing the right thing” for our stakeholders, which includes our shareholders. The Board believes this is vital to creating a sustainable business and is a key responsibility of the Company. This culture supports the Company’s objectives to grow the business through making one or more suitable acquisitions in compliance with the Company’s investment strategy. It is the Board’s job to ensure that the Company is managed for the long-term benefit of all shareholders, with effective and efficient decision-making. Corporate governance is an important part of that job, reducing risk and adding value to our business.

To see how we address the key governance principles defined in the QCA Code please refer to the below table.

Steven Schapera

Chairman

 

THE PRINCIPLES OF THE QCA CODE

DELIVER GROWTH

QCA Code Principle Application What we do and why
1.       Establish a strategy and business model which promote long-term value for shareholders The board must be able to express a shared view of the Company’s purpose, business model and strategy. It should go beyond the simple description of products and corporate structures and set out how the company intends to deliver shareholder value in the medium to long term. It should demonstrate that the delivery of long-term growth is underpinned by a clear set of values aimed at protecting the company from unnecessary risk and securing its long-term future. The Company’s strategy is explained in our audited financial statements for the most recent financial year (the “Annual Report”). Our strategy is also set out on the Company’s website.

It is the overarching strategy of the Company to acquire a company, business, project, or asset involved in the classic car sector.

The principal risks and uncertainties to the business and how these are mitigated are detailed in the Annual Report.
2.       Seek to understand and meet shareholder needs and expectations Directors must develop a good understanding of the needs and expectations of all elements of the Company’s shareholder base.

The board must manage shareholders’ expectations and should seek to understand the motivations behind shareholder voting decisions.

 The Company remains committed to listening and communicating openly with its shareholders to ensure that its strategy, business model and performance are clearly understood. Understanding what investors think about us and, in turn, helping this audience understand our business, is a key part of driving our business forward.

The Board recognises the AGM as an important opportunity to meet shareholders. The Directors are available to listen to the views of shareholders informally immediately following the AGM.

The AGM is the main forum for dialogue with retail shareholders and the Board. The notice of AGM is sent to shareholders at least 21 days before the meeting. It is always the intention that all the Directors of the Company will attend the AGM and are available to answer questions raised by shareholders. For each vote, the number of proxy votes received for, against and withheld is announced at the meeting. The results of the AGM will be subsequently published on the Company’s website.

The person at the Company with principal responsibility for liaising with shareholders is Steven Schapera.
3.       Take into account wider stakeholder and social responsibilities and their implications for long-term success Long-term success relies upon good relations with a range of different stakeholder groups both internal (workforce) and external (suppliers, customers, regulators and others).

The Board needs to identify the Company’s stakeholders and understand their needs, interests and expectations.

Where matters that relate to the Company’s impact on society, the communities within which it operates or the environment have the potential to affect the company’s ability to deliver shareholder value over the medium to long-term, then those matters must be integrated into the Company’s strategy and business model.

Feedback is an essential part of all control mechanisms. Systems need to be in place to solicit, consider and act on feedback from all stakeholder groups.

 Engaging with our stakeholders strengthens our relationships and helps us make better business decisions to deliver on our commitments. The Board stays abreast of stakeholder insights into the issues that matter most to them and our business, which enables the Board to understand and consider these issues in decision-making.

Aside from our shareholders and the professional advisers that we work with, the Company does not have any other stakeholders that it engages with or needs to engage with. Once the Company identifies and completes a suitable acquisition, it is likely that the Company will, either directly or indirectly via the acquired target, have employees. Employees are one of the most important stakeholder groups for any organisation and the Company will be no different. The Board will need to closely monitor any feedback it receives from the Company’s future employees to ensure an alignment of interests.
4.       Embed effective risk management, considering both opportunities and threats, throughout the organisation The Board needs to ensure that the Company’s risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy; companies need to consider their extended business, including supply chain, from key suppliers to end-customer.

Setting strategy includes determining the extent of exposure to the identified risks that the Company is able to bear and willing to take (risk tolerance and risk appetite).

 Principal risks and uncertainties section in the Annual Report detail risks to the business and how these are mitigated.

The Board considers risk to the business at Board meetings (which are scheduled to take place at least quarterly). The Company formally reviews and documents the principal risks to the business at least annually.

The Board is responsible for reviewing and evaluating risk. Once the Company completes its first acquisition, it is likely that the Board, specifically any executive directors appointed to the Board from time to time, will review ongoing trading performance, discuss budgets and forecasts, and new risks associated with ongoing trading.

 

MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK

5.       Maintain the board as a well-functioning, balanced team led by the chair The Board members have a collective responsibility and legal obligation to promote the interests of the Company and are collectively responsible for defining corporate governance arrangements. Whereas ultimate responsibility for the quality of, and approach to, corporate governance would typically lie with the chairperson of a board of directors, the Company does not currently have one but anticipates appointing a person to perform such role once the Company completes its first acquisition.

The Board (and any committees thereof) should be provided with high quality information in a timely manner to facilitate proper assessment of the matters requiring a decision or insight.

The Board should have an appropriate balance between executive and non-executive directors and should have at least two independent nonexecutive directors. Independence is a board judgement.

The Board should be supported by committees (e.g. audit, remuneration, nomination) that have

the necessary skills and knowledge to discharge their duties and responsibilities effectively.

Directors must commit the time necessary to fulfil their roles.

 The Board comprises three Non-Executive Directors, including the Chairman, and one Executive Director. The Board considers the Non-Executive Directors bring an independent judgment to bear.

The Board is satisfied that it has a suitable balance between independence on the one hand, and knowledge of the Company on the other, to enable it to discharge its duties and responsibilities effectively. All Directors are encouraged to use their independent judgement and to challenge all matters, whether strategic or operational. The Board intends to continue to assess and monitor the Company’s requirements in this regard, and expect to review the situation on an ongoing basis.

Relevant information is circulated to the Directors in advance of meetings. In addition, minutes of the meetings of the Directors are circulated to the Board for approval.

The Board has a formal schedule of matters reserved to it and is supported by the Acquisitions Committee. Details pertaining to this Committee are contained in the Company’s prospectus, a copy of which is available on the Company’s website.

Until the Company makes its first acquisition, it will not have separate audit, nomination or remuneration committees. The Board as a whole will instead review audit and risk matters, as well as the Board’s size, structure and composition, taking into account the interests of shareholders and the performance of the Company. The Board will take responsibility for the appointment of auditors and payment of their audit fee, monitor and review the integrity of the Company’s financial statements and take responsibility for any formal announcements relating to its financial performance. Concurrent with completion of the Company’s first acquisition, the Board intends to put in place audit and risk, nomination and remuneration committees.
6.       Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities The Board must have an appropriate balance of sector, financial and public markets skills and experience, as well as an appropriate balance of personal qualities and capabilities. The Board should understand and challenge its own diversity, including gender balance, as part of its composition.

The Board should not be dominated by one person or a group of people. Strong personal bonds can be important but can also divide a board.

As companies evolve, the mix of skills and experience required on the board will change, and board composition will need to evolve to reflect this change.

 The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience, including in the areas of classic cars, finance, capital markets, the scale up of businesses. Relevant information is circulated to the Directors in advance of meetings.

The Directors’ service contracts are available for inspection at the Company’s registered office and at each AGM.

All Directors retire by rotation at regular intervals in accordance with the Company’s articles of

association.

Appointment, removal and re-election of Directors

The Board makes decisions regarding the appointment and removal of Directors, and there is a formal, rigorous and transparent procedure for appointments. The Company’s articles require that at least one-third of the Directors stand for re-election by shareholders annually in rotation; that all Directors must stand for re-election at least once every three years; and that any new Directors appointed during the year must stand for election at the AGM immediately following their appointment.

Independent advice

All Directors are able to take independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense. In addition, the Directors have direct access to the advice and services of the Company Secretary, who is a qualified senior corporate lawyer.
7.       Evaluate board performance based on clear and relevant objectives, seeking continuous improvement The Board should regularly review the effectiveness of its performance as a unit, as well as that of its committees and the individual directors.

The Board performance review may be carried out internally or, ideally, externally facilitated from time to time. The review should identify development or mentoring needs of individual directors or the wider senior management team.

It is healthy for membership of the Board to be periodically refreshed. Succession planning is a vital task for boards. No member of the Board should become indispensable.

 The individual contributions of each of the members of the Board are regularly assessed to ensure that: (i) their contribution is relevant and effective; (ii) that they are committed; and (iii) where relevant, they have maintained their independence.

The Board intends to review the performance of the team as a unit to ensure that the members of the Board collectively function in an efficient and productive manner.

At a minimum, one-third of the Directors must stand for re-election by shareholders annually in rotation and all Directors must stand for re-election at least once every three years.
8.       Promote a corporate culture that is based on ethical values and behaviours The Board should embody and promote a corporate culture that is based on sound ethical values and behaviours and use it as an asset and a source of competitive advantage.

The policy set by the Board should be visible in the actions and decisions of the chief executive and the rest of the management team. Corporate values should guide the objectives and strategy of the Company.

The culture should be visible in every aspect of the business, including recruitment, nominations, training and engagement. The performance and reward system should endorse the desired ethical behaviours across all levels of the Company.

The corporate culture should be recognisable throughout the disclosures in the annual report, website and any other statements issued by the Company.

 

 The Corporate Social Responsibility statement contained in the 2022 Annual Report details the ethical values of the Company.

The Company aims to conduct its business with honesty, integrity and openness, respecting human rights and the interests of our stakeholders. The Company aims to provide timely, regular and reliable information on the business to all its shareholders and conduct its operations to the highest standards.

The Company will strive to create a safe and healthy working environment for the wellbeing of future staff and create a trusting and respectful environment, where all members of staff are encouraged to feel responsible for the reputation and performance of the Company.

The Company aims to establish a diverse and dynamic workforce with team players who have the experience and knowledge of the business operations and markets in which it operates. Through maintaining good communications, staff will be encouraged to realise the objectives of the Company and their own potential.
9.       Maintain governance structures and processes that are fit for purpose and support good decision-making by the board The company should maintain governance structures and processes in line with its corporate culture and appropriate to its: (i) size and complexity; and (ii) capacity, appetite and tolerance for risk.

The governance structures should evolve over time in parallel with its objectives, strategy and business model to reflect the development of the Company.

 Our Corporate Governance Statement in the Annual Report details the Company’s governance structures and why they are appropriate and suitable for the Company.

 

BUILD TRUST

10.     Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders A healthy dialogue should exist between the board and all of its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the Company.

In particular, appropriate communication and reporting structure should exist between the Board and all constituent parts of its shareholder base. This will assist: (i) the communication of shareholders’ views to the Board; and (ii) the shareholders’ understanding of the unique circumstances and constraints faced by the Company.

It should be clear where these communication practices are described (annual report or website).

 The Company encourages two-way communication with its shareholders and responds quickly to all queries received. The Chairman is the director currently designated by the Board to liaise with the Company’s major shareholders, which he does. He ensures their views are communicated fully to the Board.

The Board recognises the AGM as an important opportunity to meet private shareholders. The Directors are available to listen to the views of shareholders informally immediately following the AGM.

 

This disclosure was last reviewed and updated on 16 July 2023