Corporate Governance

Corporate governance is a high priority for Cirata plc (the Company). In accordance with the recent changes to the AIM Rules for Companies (the AIM Rules), the Company is required to maintain on its website details of a recognized corporate governance code, how the Company complies with its chosen code and an explanation of any deviations.

The Company has adopted the Quoted Companies Alliance Corporate Governance Code 2018 (the Code) and sets out how it complies within this statement.

The original statement was approved by the board of the Company on 23 March 2019.

To ensure it reflects the most up to date corporate governance position within the Company, annual updates will continue to be made to this statement.

In addition, the Company has instigated an internal program of “Excellence in Governance”.

Further information relating to compliance with the Code will be in the Company’s annual report.

Principle 1: Establish a strategy and business model that promotes long term value for investors

The vision of the Company is to shape the future of data infrastructure with its Data platform by enabling companies to put all of their data to work for a business at any time and at scale. The Company has a differentiated solution to the replication of continuously changing live data, at scale, between locations with guaranteed consistency.

The Company’s differentiated technology ensures that real time data is:

• always available as a shared logical pool of data
• always accurate, with full integrity and mathematical consistency
• always protected, with all nodes active no single source of failure; and
• always run with a fundamentally lower cost structure than traditional IT infrastructure.

The Company’s strategy includes a focus on developing its indirect sales channels, in particular, the OEM channel, resellers and online marketplaces, co-development partnerships and consulting and systems integrator partners. These partnerships are significant as they allow the Company access to larger sales teams which add significant global and horizontal market reach, allow more bookings at lower costs and enhance the Company’s brand.

Principle 2: Seek to understand and meet shareholder needs and expectations

The Company is committed to communicating effectively with shareholders to ensure that the Company’s strategy and business model are clearly understood, and shareholder views are noted. Accordingly, during the year, activities are regularly undertaken to engage with shareholders.

The Company communicates with shareholders through its full-year and half-year announcements and quarterly trading updates. The Company invites institutional shareholders and analysts to view the full-year and half-year announcements. The presentation slides and a webcast of the presentations are made available at www.Cirata.com/investors/reports-and-presentations on the day of announcement.

The Chief Executive Officer and the Chief Financial Officer regularly meet with institutional shareholders to foster a mutual understanding of objectives. In particular, an extensive program of meetings with analysts and institutional shareholders is held following the interim and preliminary results announcements. Feedback from these meetings and market updates prepared by the Company’s Nomad are presented to the board to ensure it has an understanding of shareholders’ views. The other non-executive directors are available to shareholders to discuss strategy and governance issues.

The Company considers that the Annual General Meeting of the Company is a key forum in which the board and shareholders have an opportunity to communicate. The Notice of the Meeting is sent to shareholders at least 21 days before the meeting.

Any significant developments of the Company are communicated via stock exchange announcements via RNS which can be found on the Company’s website. The website also contains a range of corporate information on our business, results and financial performance, including copies of our Annual Report and Accounts, announcements and presentations.

To request any meetings or for general shareholder enquiries please contact: investor.relations@cirata.com.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success

The Company is committed to wider stakeholder engagement as well as living up to its social responsibilities, viewing these as crucial to business success.

Aside from the Company’s shareholders and customers, the Company’s employees are a key stakeholder group and the board closely monitors employee relations. The Company is committed to providing competitive employment conditions as well as challenging and stimulating work.

At this time the Company’s broader commitments to corporate social responsibility (CSR) and environmental, social and governance responsibility (“ESG”) are under review. The principle of aligning strong commercial performance with our CSR and ESG initiatives will be adhered to going forward.

The Company holds regular “town hall” meetings throughout the year where the Chief Executive Officer and other members of the management team provide information on the current state of the technology, the health of the Company and other important information, including recognizing employee achievements. These meetings also provide an opportunity for employees to ask questions, seek additional information and provide feedback.

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organization

The board is responsible for the Company’s risk management and believes that effective risk management underpins the delivery of the Company’s strategy and objectives. The risk management process involves the identification and prioritization of key risks, together with appropriate controls and plans for mitigation, which are then reported to the board as part of the quarterly management reporting procedures. A risk register is maintained and regularly updated.

The Group’s internal financial control and monitoring procedures include:

• clear responsibility on the part of line and financial management for the maintenance of good internal controls and the production of accurate and timely financial management information
• the control of key business and financial risks through appropriate authorization levels and segregation of accounting duties
• detailed monthly budgeting and reporting of trading results, balance sheets and cash flows, with regular review by management of variances from budget
• reporting on any non-compliance with internal controls and procedures and review of reports issued by the external auditor

The Audit and Risk Committee is responsible for ensuring that the Company’s financial statements are in compliance with appropriate accounting standards, the law and the AIM Rules. In addition, the Audit and Risk Committee monitors and reviews the effectiveness of the Company’s internal controls. The board has concluded that an internal audit function is an important element of the internal control environment and a co-sourced arrangement with an appropriately qualified third party is being established.

Principle 5: Maintain the board as a well-functioning, balanced team led by the Chair

The board is comprised of the Non-Executive Chair, two executive directors (the Chief Executive Officer and Chief Financial Officer) and three non-executive directors, all of which are independent. One of the non-executive directors is designated as the Senior Independent Non-Executive Director.

Ken Lever currently fulfils the role of Non-Executive Chair.

The four non-executive directors (including the Chair), who are considered to be independent of the management and are free to exercise independent judgement.

Each new director, on appointment to the board, is briefed on the activities of the Company. Induction training is also given as appropriate. The Chair briefs non-executive directors on issues arising at board meetings if required and non-executive directors have access to the Chair at any time. Ongoing training is provided as needed. Directors are updated on a frequent and regular basis on the Company’s business.

The Chair and the Company Secretary work together to ensure that board papers are clear, accurate, delivered in a timely manner to directors and of sufficient quality to enable the board to discharge its duties. Specific business-related presentations are given by members of the Executive Team when appropriate and external speakers also attend board meetings to present on relevant topics as required. As well as the support of the Company Secretary, any director may take independent professional advice at the Company’s expense in the furtherance of their duties, where considered necessary.

The Company expects all non-executive directors to devote such time as is necessary for the proper performance of their duties. Furthermore, directors are expected to attend all board meetings and Committee meetings of which they are members.

Principle 6: Ensure that between them, the directors have the necessary up-to-date experience, skills and capabilities

The directors have a broad range of experience and skills. Full biographical details of the directors are included on the Company website.

Directors are subject to annual re-election at the AGM.

An annual review of the required skills, experience, tenure, diversity (in its widest sense) and competencies of the board is conducted by the Nomination Committee to ensure there is an appropriate balance and that the board remains independent.

Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

The board evaluates its performance with reference to all aspects of its operation on an ongoing basis with a formal review performed annually. The review includes but is not limited to the appropriateness of its skill level; the way its meetings were conducted and administered (including the content of those meetings); the effectiveness of the various Committees; whether corporate governance issues were handled in a satisfactory manner; and whether there is a clear strategy and objectives.

In addition, each director’s performance is appraised through the annual appraisal process. The Chair is evaluated by the Chief Executive Officer and non-executive directors, the executive directors by the Chair and the non-executive directors, and the non-executive directors by the Chair and Chief Executive Officer.

The Chair, continuously monitors how board members participate and contribute to the board and its activities. Of particular importance is ensuring that members of the board are committed to the Group and its shareholders and stakeholders, and that actions and decisions are made taking into account the obligations of directors as set out in S172 of the Companies Act.

Principle 8: Promote a corporate culture that is based on ethical values and behaviors

The board is responsible for the long-term success of the Group. It sets the Group’s values, standards and strategic aims and oversees implementation within a framework of prudent and effective controls, ensuring only acceptable risks are taken. It provides leadership and direction and is also responsible for corporate governance and the overall financial performance of the Group.

Through regular in-person and remote board meetings the Chair communicates with the board to ensure the Group’s goals are being met and are being updated or revised to meet the ever-changing business landscape. These meetings give the board the opportunity to discuss and address ethical values and behaviors important to the board and the industry and community as a whole and to determine if any changes to policies and procedures are necessary.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision making by the board

The board has a schedule of matters reserved for its decision, that includes the following:

• ensuring that the necessary financial and human resources are in place to meet its obligations to stakeholders
• the approval of acquisitions and disposals of businesses
• approving major contracts, financial commitments and agreements and expenditure as set out in the delegated authorities
• approving strategy, business plans, forecasts, and budgets
• approving any commitments made not in the ordinary course of business
• approving any share transactions
• setting the level of dividend (if any)

An Executive Committee supports the board in implementing strategy and reports relevant matters to the board for its consideration and approval. This Executive Committee comprises two executive directors and seven members of senior management (sales, marketing, product, human resources, finance, legal and operations).

The board is supported by four committees: the Audit and Risk Committee; the Remuneration Committee; the Nomination Committee; and the Disclosure Committee. Regular meetings are scheduled to coincide with the requirements of the business and formal business agendas prepared.

Audit and Risk Committee

The Audit and Risk Committee ensures:

• there is an effective system of internal and financial controls
• there is an effective risk management process for the identification and mitigation of business and financial risks; and,
• the Company’s financial statements are fair, balanced and understandable ensuring compliance with appropriate accounting standards, the law and the AIM Rules.

The Audit and Risk Committee meets as required (formally at least four times a year) and interacts with the external auditor as required.

Nomination Committee

The Nomination Committee:

• reviews the structure, size and composition of the board and recommends any required changes
• conducts a review of succession planning for the board and the executive and senior management
• manages the process for identifying and recruiting any additional or replacement members of the board
• conducts the annual board performance evaluation process; and,
• conducts the formal review of board effectiveness

The Nomination Committee meets as required.

Remuneration Committee

The Remuneration Committee:

• sets the remuneration policy for executive directors
• ensures compliance with the remuneration policy
• oversees and approves the reward structure for direct reports of the Chief Executive on the Executive Committee
• approves the salary reviews, bonuses and share awards for executive directors and approves the Chief Executive recommendations for salaries, bonuses and share awards for the members of the Executive Committee
• reviews and considers the results of annual employee engagement surveys undertaken by executive management
• oversees remuneration polices and structures for the Company as a whole

Disclosure Committee

The Disclosure Committee:

• reviews and approves all external announcements of the company through the Regulatory News Service.

Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Company maintains a dialogue and communicates with its shareholders through the full year, half year, and quarterly trading announcements; shareholder meetings (including the Annual General Meeting); roadshows; and conferences. In addition, the company website provides a range of corporate information on the business, and records of company results and financial performance.

Results from all general meetings are communicated to shareholders via the stock exchange announcements via RNS and on the Company’s website.

External announcements are the subject of review and approval by the Disclosure Committee.

Any shareholder enquiries can be directed to investor.relations@cirata.com.

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QCA Corporate Governance Code

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