Investor Relations.

Statement of Corporate Governance.

As a Company whose shares are traded on AIM, the company is not required to comply with all the requirements of the UK Corporate Governance Code published by the Financial Reporting Council in September 2012.  

However, the Board is committed to the highest standards of Corporate Governance commensurate with its size and stage of development and fully supports the use of the guidelines set out in a publication by the Quoted Companies Alliance (QCA) entitled “Corporate Governance Guidelines for Smaller Quoted Companies” which was published in September 2010.

Please click here to view the 12 essential guidelines set down by the QCA and an explanation of how the company has applied those guidelines.

The Board

As Chairman of the Board it is my responsibility to ensure that the Group has both an effective corporate governance and Board leadership. As our Company’s shares are listed on AIM, we are not required to, and do not, comply with all the requirements of the UK Corporate Governance Code published by the Financial Reporting Council in 2014. The Group follows the Corporate Governance Code for Small and Mid-size Quoted Companies 2013 recommendations on corporate governance for AIM companies (the ‘QCA Code’) issued by the Quoted Companies Alliance (‘QCA’) and this report follows the structure of these guidelines and explains how we have applied the guidance. Our primary objective is to present an Annual Report and Financial Statements that are fair, balanced and understandable.

QCA Principles

Setting out the vision and strategy

The Group’s vision, mission and values are stated set out below our strategy and business model are explained in detail in the Strategy and Business Model section of or our website.

Managing risk and internal control

The Board formally reviews its risks and mitigating actions each quarter and the principal risks are outlined in the strategic report section of our annual report.

During the year the Group has invested significantly in Quality Assurance and Regulatory Affairs and have introduced more rigorous quality control systems and processes to meet the increasing needs of the stringent legal and regulatory regimes, both in the European Union and globally. Our system of internal control is described in the audit committee report which is provided in our annual report and elsewhere in the statement of Corporate Governance section of our website.

Articulating strategy externally

The Group has a range of institutional and private investors and ensures high quality, consistent communication of strategy and progress. Shareholder presentations, which include information on our markets and strategy, are available to all stakeholders on the Group’s website. An investor open day was held in August 2017. In addition to statutory reporting of material matters the Group publishes general news on products, appointments and attendance at trade shows both on social media and the Group’s website.

Meeting the needs of shareholders

Relationships with our shareholders are important to us and we seek to provide effective communications through our Interim and Annual Reports along with Regulatory News Service announcements. We also use the Group’s website, for both financial and general news relevant to shareholders. The Chief Executive Officer supported by the other Executives meet shareholders and other investors/ potential investors from time to time.

The Annual General Meeting (AGM) is regarded as an opportunity to meet, listen and present to shareholders and their participation is encouraged; all Directors attend the AGM and are available to meet shareholders individually or as a group. All 2017 AGM resolutions were passed comfortably.

The Senior Independent Director, Bob Beveridge, is available to meet shareholders who wish to raise any concerns that they have been unable to resolve through other channels and to attend meetings between management and major investors.

During the year the Board was updated on shareholder expectations by its NOMAD, Cenkos. In August 2017 the equity capital was restructured, providing the flexibility to distribute future profits to shareholders as dividends as appropriate.

Meeting stakeholder and social responsibilities

The Group has a strong social purpose, to improve patient outcomes in critical care, particularly with respect to the new-born. Its main customers are NHS hospitals in the UK and, via distributors, equivalent hospitals in other countries. The highest level of ethics and social responsibility is integral to the achievement of our strategy. We are a Living Wage employer, accredited by the Living Wage Foundation. We offer equal opportunities regardless of race, gender, gender identity or reassignment, age, disability, religion of sexual orientation.

Using cost effective and value-added arrangements

The Group has a single ERP system, covering procurement, logistics, customer service and sales and this is complemented by our Quality Management system, QPulse. The Executive Directors are closely involved in the day to day operations and report in detail to the Board.

Developing structures and processes

The Board believes that corporate governance is more than just a set of guidelines; rather it is a framework which underpins the core values for running the business in which we all believe. The Board has formal responsibilities and agendas and three sub-committees; in addition, strong informal relations are maintained between Executive and Non-executive Directors. Non-executive Directors meet with other senior managers and give advice and assistance between meetings. Board dinners are held four times per year to provide opportunities for broader discussions.

Being responsible and accountable

The role of the Board is to ensure the Group delivers long term value for shareholders and stakeholders. The Board is also charged with establishing the governance, values and strategic aims of the Group and is responsible for its management, direction and performance.

The Board provides entrepreneurial leadership within a framework of prudent and effective controls for risk assessment and management. The Chairman takes a strong lead on corporate governance matters and there is a clear split of responsibilities between the Chairman and Chief Executive, which is documented in writing and approved by the Board.

The Board has a formal list of matters reserved for its decisions and these include:

› overall business strategy;

› review of key operational and commercial matters;

› review of key finance matters, including approval of financial plans, changes to capital structure, acquisitions and disposals of businesses, material capital expenditure and dividends;

› governance, including the appointment and removal of Board members, remuneration of Directors, set up and delegation of matters to committees and the reviewing of reporting back thereof;

› approval of financial statements;

› stock exchange related issues including the approval of communications.

Having balance on the Board

The Board is made of up three Executive Directors and three independent Non-executive Directors and is chaired by Mark Abrahams who has held this post for 16 years, including time served at Inditherm plc. Our Senior Independent Nonexecutive Director, Bob Beveridge, acts as a sounding board to the Chairman and other Directors when necessary.

The Board is not dominated by one person or group; there is a good balance with two founders, an experienced CFO, two independent Nonexecutive Directors and the well-respected plc Chairman who is regarded as independent as Inspiration Healthcare Group plc is substantially larger and different to Inditherm plc. Meetings are open and constructive, with every Director participating fully.

Having appropriate skills and capabilities on the Board

The Non-executive Directors are considered by the Board to be independent of management and have both a breadth and depth of skills and experience to fulfil their roles. Details of the Directors’ experience and areas of expertise are outlined in the Director section of our website. They met during the year without Executives present and maintain ongoing communications with Executives between formal meetings.

Terms of reference for the committees are published on the Group’s website. The committees have the necessary skills and knowledge to discharge their duties effectively.

Board performance

The Chairman is responsible for the leadership of the Board and ensuring its effectiveness in all aspects of its role. He is also responsible for creating the right board dynamic and for ensuring that all important matters, in particular strategic decisions, receive adequate time and attention at Board meetings. The Executive Directors are responsible for the day-to- day running of the business and developing corporate strategy while the Non-executive Directors are tasked with constructively challenging the decisions of Executive management and satisfying themselves that the systems of business risk management and internal financial controls are robust.

The open nature of board relations has enabled board effectiveness to develop during the year. The Board met 15 times in the year; a calendar of meetings and principal matters to be discussed is agreed at the beginning of each year. In addition to regular agenda items, in 2017 the Board has reviewed in depth plans and actions to strengthen the Group’s Quality Management Systems and has met regularly with the Head of Quality Assurance and Regulatory Affairs. It has discussed in depth strategic options and acquisition opportunities. Development plans have been agreed for the Group Sales Director and Chief Financial Officer.

Providing information and support

Comprehensive Board papers, covering Health & Safety report, Management Accounts, Sales report, CEO report, R&D report are circulated one week before meetings, allowing time to consider and clarify key matters in advance of meetings if necessary. There is a positive, constructive relationship between Non-executive and Executive Directors, and Non-executive Directors have access to a broad range of people and information inside the Group.

If required, the Directors are entitled to take independent legal advice and if the Board is informed in advance the cost of the advice will be reimbursed by the Group. Due to the current size of the Group the roles of Chief Financial Officer and Company Secretary are carried out by one person.

Board Committees

The Board delegates authority to three committees to assist in meeting its business objectives while ensuring a sound system of internal control and risk management. The committees meet independently of Board meetings.

Audit Committee

The Audit Committee has two members, Bob Beveridge (Chairman) and Brook Nolson. The Chief Financial Officer and external auditors attend meetings by invitation. The Audit Committee’s responsibilities include the review of the scope, results and effectiveness of the external audit, the review of half-year and Annual Financial Statements and the review of the Group’s risk management and internal control systems. The committee met twice during the year with full attendance. A separate report of the Audit Committee activities is provided elsewhere in this section of our website.

Remuneration Committee

The report of the Remuneration Committee is set out on pages 42 to 46. The Remuneration Committee has two members, Brook Nolson (Chairman) and Bob Beveridge. The Committee is responsible for setting the remuneration arrangements, including short term bonus and long-term incentives, for Executive Directors as well as approving, the remuneration principles for senior staff. The committee met four times during the year.

Nominations Committee

The Nominations Committee has four members, Mark Abrahams (Chairman), Bob Beveridge, Brook Nolson and Neil Campbell. The Nominations Committee considers succession planning, reviews the structure, size and composition of the Board and nominates candidates to fill Board vacancies. It did not meet this year.

Membership of the committees is as follows:










 Nominations Committee

Chair Member Member Member

 Remuneration Committee

n/a Chair n/a Member

 Audit Committee

n/a Member n/a Chair*

Internal Control

The system of internal control is structured around an assessment of the various risks to the business and is designed to address those risks that the Board considers to be material, to safeguard assets against unauthorised use or disposition and to maintain proper accounting records which produce reliable financial and management information. The key features of the Group’s system of internal control are as follows:

› An ongoing process of risk assessment to identify, evaluate and manage business risks.

› Management structure with clearly defined responsibilities and authority limits.

› A comprehensive system of reporting financial results to the Board.

› Quality Management Systems certified to ISO 13485 and CMDCAS.

› Appraisal and authorisation of capital expenditure and research & development projects.

› Dual signatories on all bank accounts.

Going Concern

The Group has prepared a budget for the year ended 31 January 2018 and financial projections for the following two years. Having due consideration of these projections and available cash at 31 January 2018 of £2.1 million, it is the opinion of the Board that the Group has adequate resources to continue to trade as a going concern.

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