AIM Rule 26 Compliance

CVS Group Plc

Incorporated and registered in England and Wales under the Companies Act 1985 (as amended) with registered number 06312831

Aim Rule 26 Compliance

  • You can find a description of our business on our About Us page and a list of our key personnel on the Our People page (including the names of the CVS Group Plc Company Directors their biographies and responsibilities);
  • CVS Group Plc is not an Investing Company within the definition of the AIM rules;
  • CVS Group Plc is a company incorporated in England;
  • The company mainly operates in England although we have sites in both Wales, Scotland and Northern Ireland;
  • You can find our current constitutional documents on the Articles of Association page
  • CVS Group Plc is solely listed on the AIM and not on any other trading platform
  • You can find details of our securities not in public hands on our Shareholders page and we provide regular updates of our total shares in issue via the London Stock Exchange and on our RNS News feed page;
  • There are no restrictions on the transfer of any CVS Group Plc AIM securities;
  • All Annual Reports and Half Yearly reports can be found on the Annual Reports page and you can view our Investor Presentations on the Investors Presentations page.
  • All company notifications can be found on our RNS News feed page
  • The AIM admission document can be found on the AIM Rule 26 Compliance page
  • Details of our Nominated Advisors can be found on the Investor Relations page
  • CVS Group Plc is subject to the UK City Code on takeovers and mergers.

Corporate Governance

The directors of CVS Group plc (the Group) are committed to maintaining high standards of corporate governance and, have adopted the UK Corporate Governance Code. This report has been prepared on 28 September 2018 and will be reviewed on a regular basis and at least annually.

The Board

The Board of Directors consists of five members, including a Non-Executive Chairman, Richard Connell, and a two Non-Executive Directors, Mike McCollum (senior independent director) and Deborah Kemp, with a balance between executive directors and independent non-executive directors (excluding the chairman). The Chairman and the Non-Executive Directors were each considered to be independent at appointment and each continues to demonstrate their independence. The Board presents a wide range of experience including customer-facing multi-site companies, mergers and acquisitions, financial, operational and organisational, and no one individual or small group of individuals dominates the Board’s decision making process. The articles of association require the Directors to be put up for re-election every three years, however, the directors agreed that each will stand for election or re-election annually at the AGM.

The board’s responsibilities include:

  • setting the strategy of the Group and making major strategic decisions;
  • approving other significant operational matters;
  • agreeing annual budgets and monitoring results;
  • monitoring funding requirements and forecasting;
  • reviewing the risk profile of the Group and
  • ensuring adequate internal controls are in place;
  • approving acquisitions of more than £1m and all major capital expenditure;
  • proposing dividends to shareholders;
  • assess and monitor the Group Culture, please see page 22 of the Annual Report 2018 for further details.

Richard Connell, the non-executive chairman is responsible for the overall effectiveness in directing the Group; he is an experienced chairman with the ability to involve all of the directors, both executive and non-executive directors in the discussions surrounding board matters. Eleven meetings are scheduled for each year and the chairman and non-executive directors make themselves available for additional meetings and calls to discuss specific acquisitions or projects.  Details of the attendance at meetings are set out on page 35 of the report and accounts for the year to 30 June 2018.

The non-executive directors are responsible for challenging and scrutinising the performance of the executive directors and senior executives in line with the Group’s strategy, and performance objectives, including the KPIs set out on pages 12-13 of the Annual Report 2018.  The non-executive directors meet with the chairman in the absence of the executive directors in advance of each board meeting and at other times throughout the year.

The chief executive is responsible for implementing the strategy and the operational management of the business. The finance director is responsible for the financial performance of the Group.

Board papers are circulated in advance of all meetings to facilitate informed discussion on the matters to be considered. The contributions from all members of the board mean that no individual or small group of individuals dominates the decision making process. All of the directors have access to the advice of the Group secretary and solicitor as required on all board or committee matters and may receive specialist independent advice at the Group’s expense if required.

 

Committees

The operation of the board is supported by the work of three committees; an audit committee, remuneration committee and nomination committee. The members and key responsibilities of each committee are set out below.

 

Nomination Committee

Members

  • Deborah Kemp (chair)
  • Richard Connell
  • Mike McCollum

Key responsibilities

  • Monitor and review the Board composition.
  • Co-ordination of annual evaluation of the Board and Committees.
  • Make recommendations on all Board  appointments and succession planning.

The nomination committee reviews the composition of the board and the committees and the performance of the individual directors and makes recommendations accordingly. A combination of formal tools, reflective appraisal and informal discussions are used to measure the performance of the board members and senior executives.  The committee recognises the importance of a diverse board and workforce and encourages reviewing ways of working to ensure candidates from all backgrounds can apply. Each appointment of a board member or senior executive is made on merit and the best candidate will be appointed. The board recognises that further steps can be taken to improve the diversity of the group at all levels and across all business streams; details of the group’s gender pay gap is available here.

The nomination committee recognises that Richard Connell has served as chairman for 11 years but, mindful of his experience, expertise and continuing ability to act with independence when performing his role, the directors are confident that Richard Connell remains the best person to lead the board.

As well as an ongoing review of the performance and composition of the board and committees by the nomination committee, the non-executive directors, led by the senior independent director meet regularly to review the performance of the chairman. External reviews of the board have not been carried out but the nomination committee will consider on a regular basis whether or not to engage an external evaluator.

Further details of the work carried out by the nomination committee during the last financial year are set out on page 36 of the Annual Report 2018.

 

Audit Committee

Members

  • Richard Connell (chair)
  • Mike McCollum
  • Deborah Kemp

Key responsibilities

  • Review and monitor financial reporting.
  • Internal control and risk management.
  • Whistleblowing procedures.
  • Monitor internal and external audit arrangements.

Details of the audit committee and the work undertaken during the last financial year are set out on pages 35 to 36 of the Annual Report 2018. Although the Richard Connell is a member and chair of the audit committee, his recent and relevant financial experience, and the presence of two non-executive directors on the committee ensures that the committee can perform its responsibilities effectively and diligently. Mike McCollum also adds recent and relevant financial experience to the board.

 

Remuneration committee

Members

  • Mike McCollum (chair)
  • Richard Connell
  • Deborah Kemp

Key responsibilities

  • Review Executive Director performance.
  • Monitor and review executive remuneration.
  • Makes recommendations regarding LTIP awards.

The remuneration policies have been developed in conjunction with h2glenfern (an independent adviser to the Group) to attract and retain high calibre executives with the skills, experience and motivation necessary to direct and manage the affairs of the Group. The introduction of new LTIP rules, approved by shareholders at the 2017 AGM, further enhanced the link between personal performance and the interests of the shareholders as part of this, malus and claw-back will be introduced from 2018/19 to ensure that decisions are taken in the long term interest of the Group. Further details of the remuneration policy and the remuneration report are set out on pages 37 to 42 of the Annual Report 2018.

 

Policy on Non-Executive Directors’ remuneration

The Chairman and the other Non-Executive Directors’ remuneration comprises only fees. They are reviewed annually with changes effective from 1 January each year. The Chairman’s and the Non-Executive Directors’ fees are approved by the Board on the recommendation of the CEO. The Non-Executive Directors are not involved in any decisions about their own remuneration. The Chairman and the other independent Non-Executive Directors are entitled to be reimbursed for reasonable expenses. Details of the chairman and non-executive director’s fees are set out on page 41 of the Annual Report 2018.

 

Financial reporting and risk

The directors consider that the Annual Report 2018 is fair, balanced and understandable, as set out on page 44.

Deloitte were appointed as external auditors in 2016 and are subject to annual re-appointment at the AGM. To ensure continuing auditor independence, the board has implemented a policy against using the current auditor for non-audit services.  Details of all payments to Deloitte are set out in the notes to the annual report and accounts. The independent auditor’s report is set out on pages 45 to 48 of the Annual Report 2018.

In 2016 an internal audit function was created with a mandate to review the practice division in the first instance. Reporting directly to the audit committee and through the finance director the internal audit function provides reassurance over the financial operations of the practices in particular.  The function continues to develop and refine processes and with a plan to increase the scope of audit work across more business units.

The principal risks identified across the group are set out on pages 24 to 26 of the Annual Report 2018. The risks are reviewed regularly across the divisions and feed into the group risk register.  The audit committee reviews risks on a regular basis.

 

Stakeholder Engagement

The annual general meeting represents the main opportunity for engagement with the Group’s shareholders. At the 2017 AGM, there were no resolutions that received 20% or more of the votes against the board’s recommendation. In addition to the AGM, the chief executive and finance director meet with investors on a regular basis and the chairman and senior independent director make themselves available.  Significant shareholders have recently been consulted in relation to the revised LTIP rules, approved at the 2017 AGM, and in relation to the share placing during February 2018. Our nominated adviser and broker, N+1 Singer, provides regular feedback from shareholders.

The Group runs an annual conference for senior vets, senior veterinary nurses, practice manages and senior support office staff which is also attended by the chairman and non-executive directors. The conference provides an opportunity to meet others from within the group, share knowledge and ways of working, attend CPD courses, and ask questions and raise issues with the Chief Executive and members of the executive.  Technology has been used to provide real-time interaction with the executive panel and identify key themes or issues raised by colleagues.  There is also a colleague engagement forum, MiVoice, in place giving colleagues to discuss issues directly with the executive directors.

In addition, Deborah Kemp has been appointed to be the designated non-executive director to facilitate engagement between colleagues and the board. In addition, whistleblowing procedures are in place to allow colleagues to raise concerns across the group.

Aim Admissions Document

Download the AIM Admission Document

AIM Admission Document