The Board has four principal committees as follows:-
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Audit Committee | Terms of Reference  |
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Audit Committee – Terms of Reference
The Audit Committee is formally constituted with written terms of reference which are available from the Company Secretary at the Company’s registered office and which are also available on the Company’s website. All members of the Committee are Non-Executive Directors of the Company. During the year ended 31 December 2009, Robert Burrow continued to chair this Committee with Eric Sanderson and David Marshall being the other members of the Committee. By invitation, the Finance Director attends certain parts of the Audit Committee meetings where reviews of information being presented to Shareholders are considered, as do the external auditors KPMG Audit Plc.
The Committee has at least two independent members possessing what the Smith Report describes as “recent and relevant experience”. Eric Sanderson has had experience over many years of serving on the Boards of public or quasi public companies. He is currently on the Board of First Milk Limited and is a member of the Court of the University of Dundee. Prior to his appointment to the Board of the Company, he was chairman of the listed company MyTravel Group PLC, where he had previously been its senior non-executive director. Prior to that he was the senior non-executive director of English and Overseas Properties Plc, a listed property company. He also has relevant business experience from previous executive roles and many years as an investment banker advising both listed and unlisted companies.
Robert Burrow is an experienced corporate lawyer who has many years experience advising companies across a wide range of sectors, and has particular experience in the property, hotel and retail sectors.
David Marshall, the third member of the Committee is the chairman of London Finance & Investment Group P.L.C., Western Selection P.L.C., Finsbury Food Group Plc and Creston plc, and a non-executive director of Northbridge Industrial Services Plc. He brings a wide range of experience from his positions in other companies operating in the UK.
The Committee is responsible for monitoring the effectiveness of the external audit process and making recommendations to the Board in relation to the re-appointment of external auditors. It is responsible for ensuring that an appropriate business relationship is maintained between the Group and the external auditors, including reviewing non-audit services and fees. Under its terms of reference, the Audit Committee monitors, amongst other matters, the integrity of the Group’s financial statements. The Committee meets with Executive Directors and Management, as well as meeting privately with the external auditors.
During the year ended 31 December 2009, the Audit Committee discharged its responsibilities by:
The Audit Committee may examine any matter relating to the financial affairs of the Group or of the Group’s external audit. The Board can also request the Committee to consider other matters that are relevant to the accounting, reporting and audit functions of the Group. The Group’s “whistle blowing” procedures are designed to enable employees to raise matters in confidence with members of the Audit Committee and to ensure that subsequent follow up action is taken.
Internal audit functions with specific terms of reference operate in the Group’s hotel operation. Their work in the division is reviewed by the Malmaison finance director, who implements changes as appropriate. The divisional finance director also advises the Finance Director of MWB Group Holdings Plc of any matters that are material to the Group. Formal review and internal checking procedures are also in place in the Group’s Business Centre Division, with direct reporting by the team responsible to the finance director of MWB Business Exchange Plc. Changes to the operational and financial controls are implemented by the finance directors of MWB Business Exchange Plc and MWB Malmaison Holdings Ltd as appropriate, who discuss those matters that could be material to the Group with the Finance Director of the Group.
During each financial year, members of the Audit Committee meet with the external auditors without members of the management team being present. When reviewing the Company’s half-yearly and annual financial statements, the Audit Committee receives detailed analytical reports on the results and financial position of the Group, prepared on a divisional and overall Group basis.
KPMG Audit Plc had been auditors to the Company since its incorporation in 2008 and of the previous holding company Marylebone Warwick Balfour Group Plc, since 1995. In common with other suppliers to the Group, this appointment is kept under review, and it is also formally considered by the Board on an annual basis. In May 2010, on the recommendation of the Audit Committee, the MWB audit was put out to competitive tender. Following formal proposals and presentations from three firms, BDO was successful in this process. KPMG Audit PLC has consequently resigned as auditor of MWB and as required by section 519(3) of the Companies Act 2006 (the “Act”), has deposited with MWB a statement of the circumstances connected with its resignation. A copy of this statement will be submitted to the UK Listing Authority and is available for inspection at the UK Listing Authority’s viewing facility which is situated at the Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS.
Other services provided by the auditors are reviewed to ensure that an appropriate balance is maintained between quality of service, objectivity and value for money. During the year ended 31 December 2009, KPMG were engaged to prepare the review of the working capital relating to the Placing announced in December 2009 in accordance with normal appointments for this type of work. Further details of this are set out below.
The Audit Committee meets with the auditors to discuss with them the scope and conclusions of their work. The Audit Committee is specifically charged under its terms of reference with considering matters relating to external audit appointment, the independence and objectivity of the auditors, and reviewing the results and effectiveness of the audit.
An analysis of fees paid to the auditors is set out in note 9 to the financial statements. With respect to other services provided to the Group by the auditors, the following framework is in place:
The individual arrangements with the auditors and the valuers are formally reviewed by the Audit Committee every six months, in light of the service received by the Group, changing requirements in the market and acknowledged best practice.
The Committee has at least two independent members possessing what the Smith Report describes as “recent and relevant experience”. Eric Sanderson has had experience over many years of serving on the Boards of public or quasi public companies. He is currently on the Board of First Milk Limited and is a member of the Court of the University of Dundee. Prior to his appointment to the Board of the Company, he was chairman of the listed company MyTravel Group PLC, where he had previously been its senior non-executive director. Prior to that he was the senior non-executive director of English and Overseas Properties Plc, a listed property company. He also has relevant business experience from previous executive roles and many years as an investment banker advising both listed and unlisted companies.
Robert Burrow is an experienced corporate lawyer who has many years experience advising companies across a wide range of sectors, and has particular experience in the property, hotel and retail sectors.
David Marshall, the third member of the Committee is the chairman of London Finance & Investment Group P.L.C., Western Selection P.L.C., Finsbury Food Group Plc and Creston plc, and a non-executive director of Northbridge Industrial Services Plc. He brings a wide range of experience from his positions in other companies operating in the UK.
The Committee is responsible for monitoring the effectiveness of the external audit process and making recommendations to the Board in relation to the re-appointment of external auditors. It is responsible for ensuring that an appropriate business relationship is maintained between the Group and the external auditors, including reviewing non-audit services and fees. Under its terms of reference, the Audit Committee monitors, amongst other matters, the integrity of the Group’s financial statements. The Committee meets with Executive Directors and Management, as well as meeting privately with the external auditors.
During the year ended 31 December 2009, the Audit Committee discharged its responsibilities by:
- reviewing the appropriateness of the Group’s publicly stated and internal accounting policies;
- reviewing the external auditors’ plan for the audit of the Group financial statements, which includes key areas of work, material items in the financial statements and confirmations of auditor independence;
- reviewing the potential impact on the Group’s financial statements of certain matters such as impairments of values of property, plant and equipment;
- reviewing possible changes to the nature of, and detail in, annual financial information provided to shareholders as a result of proposed new International Accounting Standards;
- reviewing compliance, areas of management judgement and estimates;
- acting as a forum for discussion on internal control issues and reporting to the Board on the effectiveness of the Group’s systems of internal control;
- aiming within reasonable levels of assurance, to ensure that satisfactory control procedures are in place and are followed, recommending corrective action to be implemented as appropriate;
- considering matters relating to external audit appointment, independence and objectivity of the auditors and reviewing the results and effectiveness of the audit; and
- reviewing in detail the Group’s draft half-yearly and annual financial results, related statements and detailed notes prior to their consideration by the Board, and reviewing the external auditors’ reports thereon. These reviews involve detailed assessment of the results proposed, the way in which they are presented to shareholders and in depth analyses of all major items in the financial statements.
The Audit Committee may examine any matter relating to the financial affairs of the Group or of the Group’s external audit. The Board can also request the Committee to consider other matters that are relevant to the accounting, reporting and audit functions of the Group. The Group’s “whistle blowing” procedures are designed to enable employees to raise matters in confidence with members of the Audit Committee and to ensure that subsequent follow up action is taken.
Internal audit functions with specific terms of reference operate in the Group’s hotel operation. Their work in the division is reviewed by the Malmaison finance director, who implements changes as appropriate. The divisional finance director also advises the Finance Director of MWB Group Holdings Plc of any matters that are material to the Group. Formal review and internal checking procedures are also in place in the Group’s Business Centre Division, with direct reporting by the team responsible to the finance director of MWB Business Exchange Plc. Changes to the operational and financial controls are implemented by the finance directors of MWB Business Exchange Plc and MWB Malmaison Holdings Ltd as appropriate, who discuss those matters that could be material to the Group with the Finance Director of the Group.
During each financial year, members of the Audit Committee meet with the external auditors without members of the management team being present. When reviewing the Company’s half-yearly and annual financial statements, the Audit Committee receives detailed analytical reports on the results and financial position of the Group, prepared on a divisional and overall Group basis.
KPMG Audit Plc had been auditors to the Company since its incorporation in 2008 and of the previous holding company Marylebone Warwick Balfour Group Plc, since 1995. In common with other suppliers to the Group, this appointment is kept under review, and it is also formally considered by the Board on an annual basis. In May 2010, on the recommendation of the Audit Committee, the MWB audit was put out to competitive tender. Following formal proposals and presentations from three firms, BDO was successful in this process. KPMG Audit PLC has consequently resigned as auditor of MWB and as required by section 519(3) of the Companies Act 2006 (the “Act”), has deposited with MWB a statement of the circumstances connected with its resignation. A copy of this statement will be submitted to the UK Listing Authority and is available for inspection at the UK Listing Authority’s viewing facility which is situated at the Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS.
Other services provided by the auditors are reviewed to ensure that an appropriate balance is maintained between quality of service, objectivity and value for money. During the year ended 31 December 2009, KPMG were engaged to prepare the review of the working capital relating to the Placing announced in December 2009 in accordance with normal appointments for this type of work. Further details of this are set out below.
The Audit Committee meets with the auditors to discuss with them the scope and conclusions of their work. The Audit Committee is specifically charged under its terms of reference with considering matters relating to external audit appointment, the independence and objectivity of the auditors, and reviewing the results and effectiveness of the audit.
An analysis of fees paid to the auditors is set out in note 9 to the financial statements. With respect to other services provided to the Group by the auditors, the following framework is in place:
- Audit-related – includes formal reporting relating to borrowings as required by the Company’s Loan Stock Trust Deed, as well as confirmatory reports required prior to the issue of financial and other information to shareholders in circulars, the issue of regulatory reports and work in respect of acquisitions and disposals. Where the external auditors are required to carry out this work because of their position as auditors to the Company, or where they are best placed to do so, the auditors are selected to perform such functions. In other circumstances, the selection depends on which financial advisory firm is best suited for the work to be performed. No fees were paid for such non-audit services during the year ended 31 December 2009 (2008: £14,000).
- Tax advisory – all the Group’s external tax advisory services are provided by organisations other than the Company’s auditors. The selection of which financial advisory firm will undertake a particular assignment depends on which is best suited to provide the services for the matter in question.
- General consulting – if the auditors were chosen to perform such services, it would only be after consideration that they were best placed to provide the service and that their independence and objectivity would not be compromised. During the year ended 31 December 2009 the Auditors reported on the working capital position of the Group in relation to the Placing, announced in December 2009. Their remuneration for this work was £0.5m. No general consultancy services were provided by the Auditors to the Group in the previous year.
The individual arrangements with the auditors and the valuers are formally reviewed by the Audit Committee every six months, in light of the service received by the Group, changing requirements in the market and acknowledged best practice.
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Remuneration Committee | Terms of Reference |
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Remuneration Committee – Terms of Reference
The Remuneration Committee is formally constituted with written terms of reference which are available from the Company Secretary at the Company’s registered office and which are also available on the Company’s website. All members of the Committee are Non-Executive Directors of the Company. The Committee is chaired by David Marshall with Eric Sanderson and Robert Burrow being the other members of the Committee.
The Committee’s principal responsibilities are:
The Report on Remuneration of Directors from the Remuneration Committee appears on pages 55 to 60 of the Group’s 2009 Annual Report.
The Committee’s principal responsibilities are:
- setting, reviewing and recommending to the Board for approval, the Group’s overall remuneration policy and strategy;
- setting, reviewing and approving individual remuneration arrangements on appointment of each Executive Director, including terms and conditions of employment, and all subsequent amendments to these arrangements These terms are reviewed at least once in each financial year, including a review of salary levels, bonuses, incentives and other arrangements;
- reviewing the remuneration payable by the Company to the Chairman; and
- approving the rules and launch of any new Group, share option cash based or other incentive scheme.
The Report on Remuneration of Directors from the Remuneration Committee appears on pages 55 to 60 of the Group’s 2009 Annual Report.
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Nominations Committee | Terms of Reference |
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Nominations Committee – Terms of Reference
The Nominations Committee is formally constituted with written terms of reference which are available from the Company Secretary at the Company’s registered office and which are also available on the Company’s website. All members of the Committee are Non-Executive Directors of the Company. The Nominations Committee is chaired by Eric Sanderson with David Marshall and Robert Burrow being the other members of the Committee.
The Committee, which meets at least once a year and more frequently if conditions so require, considers the composition of the Board, retirements and appointments of additional or replacement Directors and makes appropriate recommendations to the Board.
The Nominations Committee considers the mix of skills and experiences that the Board requires. It seeks appointments of Directors to meet its assessment of what is required to ensure the Board is effective in discharging its responsibilities at the date of assessment and will be expected to be so in the future. No new appointments to the Board were required during the year ended 31 December 2009.
Details of the minimum time commitments required from each Non-Executive Director are included in their individual letters of appointment.
The Committee, which meets at least once a year and more frequently if conditions so require, considers the composition of the Board, retirements and appointments of additional or replacement Directors and makes appropriate recommendations to the Board.
The Nominations Committee considers the mix of skills and experiences that the Board requires. It seeks appointments of Directors to meet its assessment of what is required to ensure the Board is effective in discharging its responsibilities at the date of assessment and will be expected to be so in the future. No new appointments to the Board were required during the year ended 31 December 2009.
Details of the minimum time commitments required from each Non-Executive Director are included in their individual letters of appointment.
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Conflicts Committee | Terms of Reference |
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Conflicts Committee – Terms of Reference
Under the 2006 Companies Act, Directors have a legal obligation to disclose to the Board details of any proposed or existing contract, transaction or arrangement involving the Group in which they have an interest. These obligations are also reflected in the Articles of Association of the Company. In addition, the Board has established procedures to formally manage any issues that may arise involving potential conflicts of interest through the establishment of the Conflicts Committee of the Board, which was formed in 2004.
The Conflicts Committee is formally constituted with written terms of reference which are available from the Company Secretary at the Company’s registered office and which are also available on the Company’s website. All members of the Committee are Non-Executive Directors of the Company. The Committee is chaired by Eric Sanderson with Robert Burrow and David Marshall being the other members of the Committee. The Committee considers any issues that are referred to it, or where it considers that a potential or actual matter may result in a conflict or potential conflict, for any Director and/or their connected persons and/or major shareholders in the Company. The Committee then takes decisions on behalf of the Board in connection with such issues.
The Board also operates under strict internal guidelines to ensure compliance with the AIM Rules for Companies by the board of Business Exchange and to ensure they do not adversely affect MWB causing a conflict or potential conflict for those Directors who are also on the board of Business Exchange. The Board similarly operates in accordance with internal publicity guidelines relating to dealing with press and market speculation.
Through the Conflicts Committee, the Board also considers all transactions and relationships between the Company and the Directors, and between the Company and ServCo, an entity controlled by the Executive Directors, the financial relationships with which was approved by Independent Shareholders in May 2002. The Committee ensures that these transactions and relationships are undertaken at arm’s length and in accordance with their contractual terms, that they have been fairly disclosed in the half-yearly and annual financial statements of the Company and where appropriate that they have been approved in advance by independent shareholders. The Committee considered all such transactions and proposed transactions during the year ended 31 December 2009, and in all cases no adverse conditions for the Group arose. Independently from this review and as a result of the changes to be implemented announced with the Placing in December 2009, the arrangement with ServCo ceased with effect from 31 December 2009.
The Conflicts Committee is formally constituted with written terms of reference which are available from the Company Secretary at the Company’s registered office and which are also available on the Company’s website. All members of the Committee are Non-Executive Directors of the Company. The Committee is chaired by Eric Sanderson with Robert Burrow and David Marshall being the other members of the Committee. The Committee considers any issues that are referred to it, or where it considers that a potential or actual matter may result in a conflict or potential conflict, for any Director and/or their connected persons and/or major shareholders in the Company. The Committee then takes decisions on behalf of the Board in connection with such issues.
The Board also operates under strict internal guidelines to ensure compliance with the AIM Rules for Companies by the board of Business Exchange and to ensure they do not adversely affect MWB causing a conflict or potential conflict for those Directors who are also on the board of Business Exchange. The Board similarly operates in accordance with internal publicity guidelines relating to dealing with press and market speculation.
Through the Conflicts Committee, the Board also considers all transactions and relationships between the Company and the Directors, and between the Company and ServCo, an entity controlled by the Executive Directors, the financial relationships with which was approved by Independent Shareholders in May 2002. The Committee ensures that these transactions and relationships are undertaken at arm’s length and in accordance with their contractual terms, that they have been fairly disclosed in the half-yearly and annual financial statements of the Company and where appropriate that they have been approved in advance by independent shareholders. The Committee considered all such transactions and proposed transactions during the year ended 31 December 2009, and in all cases no adverse conditions for the Group arose. Independently from this review and as a result of the changes to be implemented announced with the Placing in December 2009, the arrangement with ServCo ceased with effect from 31 December 2009.