The Board recognises the importance of sound corporate governance and endorses and monitors compliance with the Quoted Companies Alliance ("QCA") Corporate Governance Guidelines for Smaller Quoted Companies. The Company has not included the annual report and accounts disclosures required by the 2018 QCA Corporate Governance Code in the Company's annual report and accounts for the financial year ended 31 March 2018, as these disclosures have not been finalised as of the date of issuance of the said annual report and accounts. The Company intends to include the annual report and accounts disclosures required by the 2018 QCA Corporate Governance Code in the Company's annual report and accounts for the financial year ending 31 March 2019. This disclosure was last reviewed and updated on 27 September 2018.
We have a dedicated email address (firstname.lastname@example.org) for inquiries and will endeavor to respond to any inquiries by our shareholders. Generally, the inquiries will be directed to the company's inquiry mailbox. The inquiries will then be directed to and addressed by the Chief Financial Officer. The Company may excercise discretion as to which shareholder questions shall be responded to, and the information used to answer questions will be information that is freely available in the public domain. If deemed necessary, the inquiries will be brought to Board's attention.
The Board believes the Company's mode of engaging with shareholders is adequate and effective as the Company seldom receives any inquiries from shareholders.
The Board uses the Annual General Meeting, to which all members are invited, to communicate with investors, and welcomes their participation. The notice of Annual General Meeting is sent to shareholders not less than 14 days before the meeting. The Chairman of the Audit and Remuneration Committees are typically available at Annual General Meetings to answer questions.
Where shareholder voting decisions are not in line with the company's expectations the Board considers and discusses this.
Aside from the Company's shareholders, on the basis of the Directors' knowledge from the operation of the Group's business, the Board considers that the Group's business relies on four (4) key stakeholders, which are: (1) the Group's customers; (2) the Group's employees; (3) the freeholder of the CX1 data centre; and (4) Vendors and other Business Partners. These four key stakeholders are considered to be most important to the Group's business and operations because the Group's sources of revenue and major expenditures are attributable to these stakeholders. In addition, the Group depends on its employees to deliver and provide the required services to its customers in order to generate revenue.
- Our Customers
We are committed to improving our service preposition to our customers through various channels of communication. We have an outsourced but dedicated helpdesk to attend to customer inquiries. Our team of two account managers frequently engage with customers and obtain feedback on any areas of services or products that require improvement. On a case by case basis, senior management will also interact with major customers and senior management will take steps for improvement, if deemed necessary. For example, management is undertaking the construction of dedicated prayer facilities at the Group's CX1 compound as a result of the requests by several customers. The regular engagement with customers also enables us to more effectively monitor and resolve overdue accounts.
- Our Employees
At CSF, our employees matter, and we strive to create an environment where our employees can align their efforts with the Company's values and vision to deliver results to our customers, shareholders and the community. We believe and practice a diverse and fair working culture. We encourage the success of our employees by providing them with equal opportunities, competitive remuneration packages and a safe and nurturing work environment. Our Chief Executive Officer also conducts scheduled "one-to-one" sessions with key executives to discuss inter-alia each employee's vision, aspirations, ambitions and key motivating factors in order to better understand each employee and to better align them to the Company's vision and goals. Based on feedback from certain key employees, the management is currently reviewing the remuneration package and training needs for all employees.
- Our Landlord, Vendors and other Business Partners
We acknowledge the importance of the support of our landlord, vendors and business partners in creating a sustainable platform for our business. We work closely with our suppliers to raise their awareness to ensure sourcing of high-quality and yet reasonably priced products and services, while screening suppliers for social and environmental aspects. Feedback from major vendors and other business partners is channeled to senior management. Our team of three account managers frequently engage with vendors and other business partners. By engaging with major vendors, the Group has been able to obtain better after sales service and support from certain vendors. The Board believes that, as a provider of data centre facilities and related services, the Group's day-to-day activities have minimal direct impact on local communities and the environment.
The effectiveness of the Board as a whole is assessed annually in terms of the size of the board, the competency, and the area of expertise and experience of each board member. This informal assessment is led by the Chair of the Nomination Committee.
The board committees are assessed based on their roles and terms of reference and the effectiveness of communicating relevant information to the Board in a timely manner, and the overall effectiveness and efficiency in discharging their duties. There were no substantive issues arising from the assessment process.
In the case of individual directors, peer and self-assessment is carried out on a yearly basis to evaluate each director's contribution, performance and competency, taking into consideration the director's ability to provide constructive suggestions, rational and honest opinions on issues deliberated, and pragmatic advice as and when necessary. In the case of independent directors, they are also assessed based their degree of independence and their ability to defend and stand through constructive deliberation where necessary, and their ability and willingness to devote time and effort to the Board and board committees.
The Company's executive directors and senior management team are given annual performance targets and are evaluated based on these pre-determined targets. Currently, the peer and self-assessment system is not formalised and structured but the Board intends to implement a more formal and structured system going forward. The Board is considering a board evaluation process which facilitated by a professional, experienced and independent party to lend greater objectivity to the assessment.
The results of the review processes described above are used to determine whether any changes should be considered at either a board or senior management level or whether any additional training would be beneficial.
Collectively, the members of the board deliberate on the composition of board members and succession planning matters. Should the need arise to recruit a new board member or to replace a retiring board member, the presiding board members, under the guidance of the Chair of the Nomination Committee, will meet and, on an extempore basis, to determine the skillsets and other criteria required of a prospective board candidate. Taking into consideration each board member's professional and social network, the Board is confident that it can expediently identify and recruit new board members when necessary.
The Board will use variety of approaches and sources to ensure that it is able to identify the most suitable candidates. This may include sourcing from a directors' registry and open advertisements or the use of independent search firms.
In accordance with the Company's Articles of Association, a number of Directors stand for re-election on an annual basis.
In general, the board and management team encourages and promotes a corporate culture that is based on ethical values such as integrity, honesty, and fairness. The Company's Employees Handbook stipulates clearly the practices that are prohibited because they are considered to be either illegal or contradictory to our corporate culture. Those who violate the standards of Code of Conduct will be subject to disciplinary action, including possible dismissal. All new employees are required to attend an orientation session which includes an overview of the general policies, employees' handbook, and operational practices.
Staff performance appraisal is undertaken annually. The performance appraisal not only focuses on measuring performance but also focuses on the evaluation of good behavior and the employees' judgment in relation to ethical standards.
The roles and responsibilities of the Board and the board committees are as follows:
- Board Roles
The Board is responsible for formulating, reviewing and approving the Group's strategy, budgets and corporate actions.
- Board Committees
The Group has established the audit, remuneration and nomination committees with formally delegated duties and responsibilities.
- Audit Committee
The Audit Committee comprises the Non-Executive Director Dato’ Ting (chairman), Phil Cartmell and Dennis Kian Jing Ow. The Audit Committee has the primary responsibility of monitoring the quality of internal controls and ensuring that the financial performance of the Group is properly measured and reported on. It receives and reviews reports from the Group’s management and external auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Group. The Audit Committee meets not less than twice in each financial year and has unrestricted access to the Group’s external auditors.
- Remuneration Committee
The Remuneration Committee comprises Dato Ting (chairman), Dennis Kian Jing Ow and Phil Cartmell. Remuneration Committee reviews the performance of the executive directors and makes recommendations to the Board on matters relating to their remunerations and terms of service. The Remuneration Committee also makes recommendations to the Board in relation to proposals for the granting of share options and other equity incentives pursuant to employee share option schemes and equity incentive plans in operation from time to time.
- Nomination Committee
The Nomination Committee comprises the entire Board, chaired by Dato’ Ting. The Nomination Committee considers the selection and re-appointment of Directors. It identifies and nominates candidates to fill Board vacancies and regularly reviews the structure, size and composition (including the skills, knowledge and experience) of the Board and make recommendations to the Board with regard to any changes.
Communication with shareholders and other stakeholder group is achieved through postings and updates made on the Group's website. Inquiries from shareholders and other stakeholders are dealt with promptly and, if deemed necessary, the senior management will communicate directly with the shareholders and other stakeholders.
The executive responsibility for the day-to-day running of the Company and our operating subsidiaries and the delivery of strategy set by the board sits with our Chief Executive Officer, Michael Leong, who is also a member of the Board.
The Chairman is responsible for corporate governance and overseeing the functions of the Board, ensuring that no individual or group dominates the Board's decision-making process, and ensuring that the Non-executive Directors are promptly and properly briefed on all relevant matters.
The Board's role and responsibilities include:
- Together with senior management, promote good corporate governance culture within the Group which reinforces ethical, prudent and professional behaviour;
- review, challenge and decide on management's proposals for the company, and monitor its implementation by management;
- ensure that the strategic plan of the company supports long-term value creation and includes strategies on economic, environmental and social considerations underpinning sustainability;
- supervise and assess management performance to determine whether the business is properly managed;
- ensure there is a sound framework for internal controls and risk management;
- understand the principal risks of the company's business and recognize that business decisions involve the taking of appropriate risks;
- set the risk appetite within which the board expects management to operate and ensure that there is an appropriate risk management framework to identify, analyze, evaluate, manage and monitor significant financial and non-financial risks;
- ensure that the company has in place procedures to enable effective communication with stakeholders;
- ensure the integrity of the company's financial and non-financial reporting.
The list of matters reserved for the Board are as follows:
- Business strategy;
- Proposed changes to share capital structure;
- Statutory and regulatory financial reporting;
- Major contracts and procurement;
- Capital expenditure budgets;
- Communications with substantial shareholders;
- Appointment of board members;
- Remuneration of executive directors payments to management outside the usual remuneration parameters;
- Appointment of board committees and review of the functions of board committees; and
- Implementation of new corporate governance policies and revisions to such policies, including review and approval of financial authority limits.
The Board believes the Group's current standard of corporate governance is adequate to support its future business plans. However, the Group's corporate governance processes will be reviewed annually.
The Board has established an Audit Committee, Remuneration Committee and Nomination Committee with respective formalised terms of reference.
Communication with Shareholder and Stakeholder
The Company communicates how it is governed and is performing through its annual report, full-year and half-year announcements, regulatory announcements and its website: http://csf-group.com. Any inquiries can be channeled to the following email address: email@example.com
The Board also recognizes the AGM as an avenue to convey to shareholders as to how the Company is governed.
The outcome of all resolutions tabled at general meetings, including details of voting, are to be posted on the Company's website and also announced via RNS. In addition, all historical annual reports and governance-related materials (including notices of all general meetings) for the last five years are maintained in the Company's website
The Group's financial reports can be viewed and/or downloaded from the following link: http://csf-group.com/index.php?sc=Financial_Reports
Notices of General Meetings of the Company can be viewed and/or downloaded from the following link: http://csf-group.com/index.php?sc=Financial_Reports
Going forward, where a significant proportion of independent votes have been cast against a resolution at any general meeting, the Board intends to identify the dissenting shareholders concerned and endeavor to appoint an officer of the Company to engage with the said shareholders in order to understand the reasons behind the vote results. The appointed officer will then be required to report his/her findings to the Board and the Board will take the appropriate action. The Board may consider making an appropriate public statement via this website ahead of undertaking this process. Following this process the Board may also make an appropriate public statement via this website regarding any different action it has taken, or will take, as a result of the vote.
CSF Group plc ("Company") has adopted a dealing policy for dealings by persons discharging managerial responsibilities and persons closely associated with them in accordance with the requirement under Rule 21 of the AIM Rule for Companies (AIM Rules") and shall use its best endeavour to ensure compliance by the said persons discharging managerial responsibilities and persons closely associated with them. This form of the revised version of the former Share Dealing Code takes into account the Company's broadened obligations, not only to a now-revised AIM Rules, but more importantly, to the Market Abuse Regulation (Regulation 596/2014), which will repeal and replace the exisiting Market Abuse Directive (2003/6/EC) and its implementing legislation with effect from 3 July 2016.