Shareholder Information 

Significant Shareholders

Major Investors

            Oppenheimer Funds v1

The Company’s issued share capital consists of 74,424,771 ordinary shares with a nominal value of 1 penny each (“Ordinary Shares”), each share having equal voting rights.

The Company does not hold any Ordinary Shares in treasury and therefore the total number of Ordinary Shares with voting rights is 74,424,771.

As of  6 December 2018 the Company had been made aware of the following shareholdings amounting to 3% or more of the ordinary share capital of the Company:

 

Shareholder No. of Ordinary Shares
% Issued Share Capital
Dr. Stuart A. Green* 11,524,002
15.48
Herald Investment Management Ltd. 8,617,011
11.58
Canaccord Genuity Group Inc. (Hargreave Hale Ltd.) 7,429,140 9.98
OppenheimerFunds Inc. 5,099,380 6.85
Kinderhook Partners LLC 2,298,642
3.09

 

In accordance with the AIM Rules (Rule 26), in so far as the Company is aware, as of 6 December 2018, the percentage of the Company’s issued share capital that is not in public hands is 28.13%.


*Total shareholding excludes shares held in the ZOO Digital Group Share Incentive Plan (SIP).

 

 

Directors’ Interests

The directors who held office at 9 August 2018 have the following beneficial interests, including family interests, in the 1p ordinary shares of ZOO Digital Group plc: 

Name of Director No. of Ordinary Shares
Roger D. Jeynes 342,222
Mickey Kalifa 50,000
Dr. Stuart A. Green 11,531,235
Phillip Blundell 0
Gordon Doran 6,033

 

 

 

 

Total beneficial interest includes shares held in the ZOO Digital Group Share Incentive Plan (SIP).

The directors also have the following interest in 7.5% convertible unsecured loan stock, including family interests. 

Name of Director £’000
Roger D. Jeynes 25
Mickey Kalifa -
Dr. Stuart A. Green 615
Phillip Blundell
Gordon Doran

 

 

  

 

 

Capital Structure

The Company’s issued share capital consists of 74,424,771 ordinary shares with a nominal value of 1 penny each (“Ordinary Shares”), each share having equal voting rights.

The Company has Convertible Unsecured Loan Stock (CULS) in issue in the amount of £2.56m due on 31 October 2020 carrying a coupon of 7.5% and at a conversion price of 48p.

 

 

Corporate Governance

The Chairman and Company Secretary review the status of corporate governance within the group against the QCA Code on an annual basis. Copied below is the Chairman’s Corporate Governance statement, published by the board on 2nd July 2018. The board considers that it does not depart from any of the principles of the QCA Code.

All members of the board believe strongly in the value and importance of good corporate governance and in our accountability to all of ZOO’s stakeholders, including shareholders, staff, clients, our growing network of freelance workers and other suppliers. In the statement below, we explain our approach to governance, and how the board and its committees operate.

Changes to AIM rules on 30 March 2018 require AIM companies to apply a recognised corporate governance code by 28 September 2018. Although ZOO is not yet obliged to comply with the new requirements of AIM Rule 26, I am pleased to report that the board has decided to disclose information in accordance with these earlier than has been mandated.

The corporate governance framework which the group operates, including board leadership and effectiveness, board remuneration, and internal control is based upon practices which the board believes are proportional to the size, risks, complexity and operations of the business and is reflective of the group’s values. Of the two widely recognised formal codes, we have therefore decided to adhere to the Quoted Companies Alliance’s (QCA) Corporate Governance Code for small and mid-size quoted companies (revised in April 2018 to meet the new requirements of AIM Rule 26).

The QCA Code is constructed around ten broad principles and a set of disclosures. The QCA has stated what it considers to be appropriate arrangements for growing companies and asks companies to provide an explanation about how they are meeting the principles through the prescribed disclosures. We have considered how we apply each principle to the extent that the board judges these to be appropriate in the circumstances, and below we provide an explanation of the approach taken in relation to each. The board considers that it does not depart from any of the principles of the QCA Code.

Board composition and compliance

The QCA Code requires that the boards of AIM companies have an appropriate balance between executive and non-executive directors of which at least two should be independent. During the period under review we have strengthened the board and have consequently satisfied this requirement since October 2017 following the appointment of Mickey Kalifa as an independent non-executive director. Mickey is a chartered accountant with nearly 30 years' experience across the technology, media and gaming sectors. He is CEO of betPawa Group Holdings, and was formerly CFO of Sportech PLC. Mickey brings strong experience in our sector, having held positions in some of the world's largest media and technology companies, including Liberty Global, Sky, Time Warner, Disney and Young & Rubicam, as well as having played an executive role with a technology company listed on the AIM market. On his appointment, Mickey has assumed the role of chair of the Audit Committee and member of the Remuneration Committee. He joins me as the group’s second independent non-executive director.

On 14 February 2018 Helen Gilder, CFO of the group, announced her intention to leave the company. The board considers that the size of the group does not justify the establishment of a formal nominations committee, and consequently all of the directors have played an active part in the search for a replacement CFO, and are pleased to be joined by Phillip Blundell who joins in the role in July 2018.

Board evaluation

For many years we have supported the QCA Code’s principle to review regularly the effectiveness of the board’s performance as a unit, as well as that of its committees and individual directors. I led the most recent review in August 2017, prior to Mickey’s appointment, and a number of refinements in working practices were identified as a result of this exercise and have since been adopted. We will be considering the use of external facilitators in future board evaluations.

Shareholder engagement

We have made significant efforts to ensure effective engagement with both institutional and private shareholders. In addition to the usual roadshows following the release of full year and interim results, each of which was expanded to include a greater number of existing and potential new investors, we have actively promoted our AGM as a forum to present to and meet with investors, delivered our first capital markets event in October 2017, and presented at an investor exhibition and conference. The company has also instigated a periodic shareholder newsletter, to which investors can subscribe via email, to provide investors with an easy to access source of information on operational activities taking place within the group.

The board is aware that following the introduction of the Markets in Financial Instruments Directive II (MiFID II) regulations at the start of 2018, private investor access to research on public companies has been restricted. In response to this, in April 2018 post the year end, the board commissioned Progressive Equity Research to produce and provide private investors with independent research on the group.

The board has ultimate responsibility for reviewing and approving the Annual Report and Accounts and it has considered and endorsed the arrangements for their preparation, under the guidance of its audit committee. The directors confirm that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the group’s position and performance, business model and strategy.

The following paragraphs set out ZOO’s compliance with the ten principles of the QCA Code. 

Establish a strategy and business model which promote long-term value for shareholders

The purpose of the group is encapsulated in the expression of its mission, which is to provide services for fast and cost-effective localisation and digital distribution of TV and movie content through the power of our world-class cloud technology. Our business model is to provide media localisation and digital packaging services to content owners and distributors. Our strategy is to deliver these through a combination of proprietary software technology that acts as a competitive differentiator, and a large global network of linguistic professionals engaged on a freelance basis. This will deliver a profitable and highly-valued business and competitive advantages over other providers of similar services, leading to faster turnaround of projects, to a consistently high quality at an attractive price point.

The key challenges we face include: 

  • Maintaining consistently high levels of quality – very high standards are now expected by the digital distributors who influence much of the localisation that is commissioned by industry players. We have implemented automated testing wherever possible, and our system-driven workflow management ensures that manual linguistic quality control is engaged as necessary. In the case of dubbing operations, we have developed software to analyse the acoustic performance of recording environments to ensure they meet minimum specifications.
  • Ensuring security of client assets – the safekeeping of materials is of paramount importance. Our production facility in Los Angeles is audited for security annually by the Motion Picture Association of America, and similarly the Sheffield facility by the Content Delivery & Security Association. Features to prevent the copying of assets and provide effective deterrents are implemented throughout our proprietary software and systems.
  • Delivering continuous availability – a failure in the group’s systems could lead to an inability to deliver services. This is addressed by operating redundant systems across multiple availability zones, a comprehensive disaster recovery programme and assigning staff from both UK and US facilities on each project.
  • Operating a large freelancer network – the group’s capacity for processing orders is dependent, in part, on the network of freelance workers. The cloud software is enhanced on an ongoing basis to make the group’s systems increasingly attractive to freelance workers. Financial processes are designed to ensure that all freelancers are paid on time. A process of peer review is implemented in the group’s production systems to ensure that all work undertaken by freelancers is independently checked and verified and its quality is assured.
  • Recruiting and retaining suitable staff – the group’s ability to execute its strategy is dependent on the skills and abilities of its staff. We undertake ongoing initiatives to foster good staff engagement and ensure that remuneration packages are competitive in the market.

We believe we have the right strategy and service in place to deliver strong growth in sales over the medium to long term. We expect the gross profit of our localisation segment to improve in future periods as our dubbing service and software mature, which will result in improving EBITDA margins or provide us with scope for additional investment in new services. This will enable us to deliver sustainable shareholder value.

Seek to understand and meet shareholder needs and expectations

Responsibility for investor relations rests with the CEO, supported by the CFO. During the period under review the following activities were pursued to develop a good understanding of the needs and expectations of all constituents of the group’s shareholder base:

Date

Description

Participants

Comments

Apr 17

Presentations to institutional investors regarding fundraising

RJ, SG, HG

Successfully completed a fundraising

May 17

EGM*

RJ, SG, HG

To approve the fundraising; attended by private investors

Jun 17

Preliminary results roadshow

RJ, SG, HG

 

Jul 17

Various analyst and shareholder meetings

SG, HG

Initiated coverage in morning newsflash by an analyst

Aug 17

Various shareholder meetings

SG

 

Sep 17

Media and shareholder meetings

SG

 

Sep 17

AGM*

RJ, SG, HG

Actively invited shareholders to attend; provided presentations and software demonstrations

Oct 17

Shareholder site visits and meetings

SG, HG

 

Oct 17

Capital Markets Day

RJ, SG, HG, GD

The group’s first capital markets event to which analysts and fund managers were invited

Nov 17

Interim results roadshow

RJ, SG, HG

Extended to institutions in Edinburgh

Nov 17

Interim results private investor meeting and video*

SG

Video disseminated via piworld to private investors and available on piworld website

Nov 17

Various media, analyst and shareholder meetings

SG, HG

 

Dec 17

Shareholder site visit and meetings

SG, HG

 

Jan 18

Various analyst and shareholder meetings

SG, HG

 

Jan 18

Growth and Innovation Forum*

SG, HG

Investor show and conference

Mar 18

Various media, analyst and investor meetings

SG

 

 

Key: RJ: Roger Jeynes; SG: Stuart Green; HG: Helen Gilder; GD: Gordon Doran

* indicates private shareholder activities

 

The group is committed to communicating openly with its shareholders to ensure that its strategy and performance are clearly understood. We communicate with shareholders through the Annual Report and Accounts, full-year and half-year announcements, trading updates and the annual general meeting (AGM), and we encourage shareholders’ participation in face-to-face meetings. A range of corporate information (including all ZOO announcements) is also available to shareholders, investors and the public on our website.

Private shareholders: The AGM is the principal forum for dialogue with private shareholders, and we encourage all shareholders to attend and participate. The Notice of Meeting is sent to shareholders at least 21 days before the meeting. The chairs of the board and all committees, together with all other directors whenever possible, attend the AGM and are available to answer questions raised by shareholders. Shareholders vote on each resolution, by way of a poll. For each resolution we announce the number of votes received for, against and withheld and subsequently publish them on our website.

Institutional shareholders: The directors actively seek to build a mutual understanding of objectives with institutional shareholders. Our CEO and CFO make presentations to institutional shareholders and analysts immediately following the release of the full-year and half-year results. We communicate with institutional investors frequently through a combination of formal meetings, participation at investor conferences, roadshows and informal briefings with management. The majority of meetings with shareholders and potential investors are arranged by the broking team within the group’s nominated advisor. Following meetings, the broker provides anonymised feedback to the board from all fund managers met, from which sentiments, expectations and intentions may be gleaned.

In addition, we review analysts’ notes to achieve a wide understanding of investors’ views. This information is considered by the board and has contributed to the preparation of the group’s investor relations strategy which was approved in March 2018.

Since the period end, the group has engaged with Progressive Equity Research from which it has commissioned the preparation of research that can be made available to all shareholders, and with a provider of corporate access services to reach wealth managers and private client investment managers.

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

Stakeholder

Reason for engagement

How we engage

Staff – our ability to fulfil client services and develop and enhance the cloud software platforms on which they depend relies on having talented and motivated staff.

Good two-way communication with staff is a key requirement for high levels of engagement, fostering a culture of innovation.

Monthly staff briefings.

Invitation to staff to ask questions of management that are answered in the briefings.

Annual engagement survey.

These have provided insights that have led to enhancement of management practices and staff incentives.

Clients – our success and competitive advantage are dependent upon fulfilling client requirements, particularly in relation to quality of service, its speed of delivery and security.

Understanding current and emerging requirements of clients enables us to develop new and enhanced services, together with software to support the fulfilment of those services.

Seek feedback on services and software systems.

Obtain fulfilment metrics employed by clients to measure performance.

Obtain requests for new services and service enhancements.

These have led to the group securing approved vendor status with a number of large media organisations.

Suppliers – a key supplier group is our network of freelancers who fulfil linguistic services.

Freelance workers will provide similar services to other organisations, including our competitors, so we must ensure they are available to us and accommodating.

We optimise our systems to simplify the work of freelancers as much as possible, including in relation to administration of projects.

We operate systems to ensure that supplier invoices are processed and paid promptly.

These have led to a large, growing and supportive freelancer network.

Shareholders – as a public company we must provide transparent, easy-to-understand and balanced information to ensure support and confidence.

Meeting regulatory requirements and understanding shareholder sentiments on the business, its prospects and performance of management.

Regulatory news releases.

Keeping the investor relations section of the website up to date.

Periodic investor newsletters.

Participation at investor events.

Publish videos of investor presentations and interviews.

Annual and half-year reports and presentations.

AGM.

Capital markets events.

We believe we successfully engage with our shareholders: over the past 12 months this engagement has led to support for the group, increased liquidity of trading and higher valuation.

Industry bodies – the services we provide must meet certain requirements.

The views of certain industry groups, including the Motion Picture Association of America(MPAA) and the Content Delivery & Security Association (CDSA) are influential in the way the group is perceived by certain clients.

Membership of MPAA and CDSA and participation in security programs.

Annual audit of security.

These have resulted in audit reports that have led to certain clients commencing engagement.

Communities– what we do impacts communities in the places where we operate and elsewhere.

It is important to be perceived as a reputable business that makes a positive contribution to local economies and is attractive as an employer and partner.

Multiple activities to support fundraising for local charities and good causes.

Participation in apprenticeship and other schemes to support and provide opportunities to young people.

Three directors are trustees of registered charities.

These have led to an improved profile for the group in the local areas of its major operations.

 

Embed effective risk management, considering both opportunities and threats, throughout the organisation

The CFO has prepared a risk register for the group that identifies key risks in the areas of corporate strategy, financial, clients, staff, environmental and the investment community. All members of the board are provided with a copy of the register. The register is reviewed periodically and is updated as and when necessary.

Within the scope of the annual audit, specific financial risks are evaluated in detail, including in relation to foreign currency, interest rates, liquidity and credit. 

Staff are reminded on a monthly basis to report, anonymously or otherwise, any security risks or threat they perceive in the operations of the business. On receipt of any such notification, a security incident team is assembled to assess and take remedial action as appropriate in the circumstances.

Staff are reminded on a monthly basis that they should seek approval from the CFO if they, or their families, plan to trade in the group’s equities.

Maintain the board as a well-functioning, balanced team led by the chair

The members of the board have a collective responsibility and legal obligation to promote the interests of the group, and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the chair of the board.

The board consists of five directors of which three are executive and two are independent non-executives, one of whom was appointed during the period. The board is supported by two committees: audit and remuneration. The board does not consider that it is of a size at present to require a separate nominations committee, and all members of the board are involved in the appointment of new directors. The board intends to appoint additional non-executive directors as its business expands.

Non-executive directors are required to attend 10-12 board and board committee meetings per year (in Sheffield, London or Los Angeles) and to be available at other times as required for face-to-face and telephone meetings with the executive team and investors.

Meetings held during the period under review and the attendance of directors is summarised below:

 

 

Board meetings*

Audit Committee

Remuneration Committee

 

Possible

Attended

Possible

Attended

Possible

Attended

Executive directors

 

 

 

 

 

 

Dr Stuart A Green

10

10

Helen P Gilder

10

10

Gordon Doran

10

10

Non-executive directors

 

 

 

 

 

 

Roger D Jeynes

10

10

2

2

2

2

Mickey Kalifa (appointed 5 October 2017)

5

4

1

1

1

1

* There was one further meeting called and held by conference call for the sole purpose of approving the interim results announcement

 

The board has a schedule of regular business, financial and operational matters, and each board committee has compiled a schedule of work to ensure that all areas for which the board has responsibility are addressed and reviewed during the course of the year. The chairman is responsible for ensuring that, to inform decision-making, directors receive accurate, sufficient and timely information. The company secretary compiles the board and committee papers which are circulated to directors prior to meetings. The company secretary provides minutes of each meeting and every director is aware of the right to have any concerns minuted and to seek independent advice at the group’s expense where appropriate.

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

All five members of the board bring relevant sector experience in media and technology, all have at least nine years of public markets experience and two members are chartered accountants. One director is female and four are male. The board believes that its blend of relevant experience, skills and personal qualities and capabilities is sufficient to enable it to successfully execute its strategy. Directors attend seminars and other regulatory and trade events to ensure that their knowledge remains current.

Roger D Jeynes, Independent Chairman

Term of office: Appointed as Chairman on 28 April 2010; Chair of the Remuneration Committee and a member of the Audit Committee.

Background and suitability for the role: Roger has had a long executive career in the technology and corporate finance sectors, including sales and general management roles with large corporations in Europe and the USA. More recently he has held non-executive roles with a number of listed and venture-backed technology companies as well as with several fully listed investment trusts. He therefore brings long experience of governance and public markets, and is able to empathise with the sometimes differing views of investors and executive directors.

Roger is an FCA approved person for controlled functions CF30: Customer (FCA register ref. no. RDJ01021).

Current external appointments: Non-executive director of Downing THREE VCT plc, Development Bank of Wales plc, mxData Ltd and Charborough Capital Limited, and trustee of a charity, The Lloyd Reason Foundation.

Time commitment: one to two days per month.

Mickey Kalifa, Independent Non-Executive Director

Term of office: Joined as Non-Executive Director on 5 October 2017; Chair of the Audit Committee and member of the Remuneration Committee.

Background and suitability for the role: Mickey is a chartered accountant and finance professional with nearly 30 years’ experience across the technology, media and gaming sectors. Mickey was appointed CEO of the betPawa Group in May 2018, a privately held, online sports betting business. Previously he was CFO of Sportech PLC. where he led a transformation in the company’s financial strength and played a prominent role in driving Sportech’s global expansion. He brings a combination of financial expertise, knowledge of public markets as well as a wide range of sector experience gained from a career spent in the technology, media and gaming sectors with some of the world’s largest media and technology companies, including Liberty Global, BSkyB plc, Time Warner, Disney and Young & Rubicam.

Time commitment: one to two days per month.

Dr Stuart A Green, CEO

Term of office: A co-founder from the group’s inception in 2001, originally in the role of Chief Technical Officer, and appointed CEO on 1 February 2006.

Background and suitability for the role: Stuart brings over 25 years of experience of team building and executive management in the software industry to his role as CEO. Stuart established ZOO’s business strategy and difference in the marketplace by using software technology to deliver disruptive innovation. With a PhD in Computer Science he brings expertise in software technology, a track record of innovation having secured 30 software patents, experience of leading innovative technology businesses as a result of having co-founded and sold three private software companies, and experience of capital markets gained from 18 years as a main board director of AIM-quoted companies.

Current external appointments: Trustee of registered charity Friends of the Rowan School.

Time commitment: full time.

Helen P Gilder, CFO and Company Secretary

Term of office: Appointed as Group Financial Controller in 2001 and became CFO and Company Secretary on 29 September 2006.

Background and suitability for the role: Helen assisted with the flotation in 2000 of Kazoo3D plc which was subsequently merged with a private company and re-admitted to AIM as ZOO Digital Group plc in 2001. She also fulfils the role of Company Secretary. After qualifying as a chartered accountant in 1991 she moved into more commercially focussed roles. A qualified Chartered Accountant since 1991 with 26 years’ experience in industry, Helen brings financial expertise and sector experience, having worked in the technology and services industry since 1993 where she gained managerial and transaction experience in finance director roles, and 12 years as CFO and company secretary with an AIM-quoted business.

Current external appointments: Trustee of registered charity Asperger’s Children and Carers Together.

Time commitment: 80% time.

Gordon Doran, Commercial Director

Term of office: Originally engaged as a commercial consultant in 2005 to establish the group’s US operations and appointed Commercial Director on 28 July 2009.

Background and suitability for the role: Gordon has spent his career in commercial roles with technology businesses in the UK and USA. As Commercial Director and President of ZOO’s US operation, Gordon is responsible for all global operations and has been pivotal in establishing relationships with a number of large US entertainment companies including the ‘Big Six’ Hollywood studios. Based on the West Coast of the USA, Gordon brings significant experience of sales and marketing in the software industry since the early 1990s, having held senior positions in a number of companies, including as COO for MedioStream Inc., and capital markets experience as a main board director for nine years.

Current external appointments: None

Time commitment: full time.

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

A board evaluation process led by the chairman took place August 2017. All then current directors began by completing questionnaires about the effectiveness of the board and a self-assessment of their own contributions which were returned to the chairman. The chairman then reviewed this information and used it as the basis for an individual discussion with each director, followed by a collective discussion with the board.

The review considers effectiveness in a number of areas including general supervision and oversight, business risks and trends, succession and related matters, communications, ethics and compliance, corporate governance and individual contribution.

A number of refinements in working practices were identified as a result of this exercise and have since been adopted.

We will be considering the use of external facilitators in future board evaluations.

As the business expands, the executive directors will be challenged to identify potential internal candidates who could potentially occupy board positions, and set out development plans for these individuals. 

Promote a corporate culture that is based on ethical values and behaviours

Our long-term growth is underpinned by our five core values, which were defined following a staff consultation process in 2009. They are:

  1. We place our customers first, putting ourselves in their shoes to understand the current and future needs of those who use our products and services, and always striving to exceed their expectations.
  2. We have an enduring positive attitude that stems from being self-motivated, adaptable and agile and feeling fully empowered to make a difference, speaking out with ideas and suggestions to make things better.
  3. We are team players who recognise that ZOO is a company worth much more than the sum of its parts, we are passionate about communicating with colleagues and with our customers and are committed to learning from one another.
  4. We are committed to innovation in what we do and how we do it, and to working smarter rather than harder to reduce costs, increase efficiency and make lives easier by being creative, pragmatic and different.
  5. We respect one another and are courteous, honest and straightforward in all our dealings, we honour diversity, individuality and personal differences, and are committed to conducting our business with the highest personal, professional and ethical standards.

The culture of the group is characterised by these values which are communicated regularly to staff through internal communications and forums. A staff recognition programme operates on an ongoing basis by which any employee can nominate any of his/her colleagues for a contribution that is in keeping with the five core values. All nominees are recognised at company-wide staff briefings that take place monthly at the Sheffield and Los Angeles offices, presented by executive directors and senior managers. The core values are communicated to prospective employees in the group’s recruitment programmes and are considered as part of the selection process.

The board believes that a culture that is based on the five core values is a competitive advantage and consistent with fulfilment of the group’s mission and execution of its strategy. 

The culture is monitored through the use of a widely-used satisfaction and engagement survey that is operated on an annual basis and to which all permanent staff are invited to contribute. The board reviews the findings of the survey and determines whether any action is required.

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

The Board provides strategic leadership for the group and operates within the scope of a robust corporate governance framework. Its purpose is to ensure the delivery of long-term shareholder value, which involves setting the culture, values and practices that operate throughout the business, and defining the strategic goals that the group implements in its business plans. The board defines a series of matters reserved for its decision and has approved terms of reference for its audit and remuneration committees to which certain responsibilities are delegated. The chair of each committee reports to the board on the activities of that committee.

The Audit Committee monitors the integrity of financial statements, oversees risk management and control, monitors the effectiveness of the internal audit function and reviews external auditor independence.

The Remuneration Committee sets and reviews the compensation of executive directors including the setting of targets and performance frameworks for cash- and share-based awards.

The Executive Board, consisting of the executive directors, operates as a management committee, chaired by the CEO, which reviews operational matters and performance of the business, and is responsible for significant management decisions while delegating other operational matters to individual managers within the business.

The Chairman has overall responsibility for corporate governance and in promoting high standards throughout the group. He leads and chairs the board, ensuring that committees are properly structured and operate with appropriate terms of reference, ensures that performance of individual directors, the board and its committees are reviewed on a regular basis, leads in the development of strategy and setting objectives, and oversees communication between the group and its shareholders.

The CEO provides coherent leadership and management of the group, leads the development of objectives, strategies and performance standards as agreed by the board, monitors, reviews and manages key risks and strategies with the board, ensures that the assets of the group are maintained and safeguarded, leads on investor relations activities to ensure communications and the group’s standing with shareholders and financial institutions is maintained, and ensures that the board is aware of the views and opinions of employees on relevant matters.

The Executive Directors are responsible for implementing and delivering the strategy and operational decisions agreed by the board, making operational and financial decisions required in the day-to-day operation of the group, providing executive leadership to managers, championing the group’s core values and promoting talent management. 

The Independent Non-Executive Directors contribute independent thinking and judgement through the application of their external experience and knowledge, scrutinise the performance of management, provide constructive challenge to the executive directors and ensure that the group is operating within the governance and risk framework approved by the board.

The Company Secretary is responsible for providing clear and timely information flow to the board and its committees and supports the board on matters of corporate governance and risk.

The matters reserved for the board are:

  • Setting long-term objectives and commercial strategy.
  • Approving annual operating and capital expenditure budgets.
  • Changing the share capital or corporate structure of the group.
  • Approving half-year and full-year results and reports.
  • Approving dividend policy and the declaration of dividends.
  • Approving major investments, disposals, capital projects or contracts.
  • Approving resolutions to be put to general meetings of shareholders and the associated documents or circulars.
  • Approving changes to the board structure.

The board has approved the adoption of the QCA Code as its governance framework against which this statement has been prepared and will monitor the suitability of this code on an annual basis and revise its governance framework as appropriate as the group evolves.

Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

In addition to the investor relations activities described above, the following audit and remuneration committee reports are provided.

Audit Committee Report

During the year, the Audit Committee has continued to focus on the effectiveness of the controls throughout the group. The Audit Committee consists of Mickey Kalifa, Chair, and Roger D Jeynes. The committee met twice, and the external auditor and CFO were invited to attend these meetings. Consideration was given to the auditor’s pre- and post-audit reports and these provide opportunities to review the accounting policies, internal control and the financial information contained in both the annual and interim reports. The committee also met with the auditors with no executives present.

Download the PDF: Audit Committee – Terms of Reference

Remuneration Committee Report

The remit of the Remuneration Committee is to determine the framework, policy and level of remuneration, and to make recommendations to the board on the remuneration of executive directors. In addition, the committee oversees the creation and implementation of all-employee share plans. The Remuneration Committee consists of Roger D Jeynes, chair, and Mickey Kalifa. The committee met twice.

In setting remuneration packages the committee ensured that individual compensation levels, and total board compensation, were comparable with those of other AIM-listed companies.

During the period under review the Remuneration Committee has granted options over ordinary shares in the company to executive directors and employees of the company of which a proportion were to replace certain options previously issued under the ZOO Digital Group plc EMI scheme and the ZOO Digital Group plc USA Unapproved scheme.

In granting these options, the Remuneration Committee’s objective was to attract, motivate and retain key staff over the long term, designed to incentivise delivery of the company's growth objectives.

At the same time that this grant of options was made, the company cancelled certain previous options granted to the executive directors in 2008. Options have been granted to directors and key management personnel to replace those options that have been cancelled. The 2008 options, which were fully vested and were without performance conditions, were due to lapse in September 2018 and therefore have been replaced by options that vested in September 2017, subject to certain performance conditions. Large shareholders were consulted before the issuance of major option awards. 

Download the PDF: Remuneration Committee – Terms of Reference

Directors’ Share Dealings

 

Date Director Transaction No. of Shares Price (p) Total Share- holding* % Holding
5 July 2018 HP Gilder Transfer from SIP 11,868 0.0 67,887 0.09
5 July 2018 HP Gilder Sale 409,349 115.0 56,019 0.08
5 July 2018 HP Gilder Exercise of Options 49,349 15.25 465,368 0.63
5 July 2018 HP Gilder Exercise of Options 360,000 15.0 416,019 0.56
7 March 2018 HP Gilder Sell 40,000 73.26 56,019 0.08
7 March 2018 HP Gilder  Exercise of options 40,000 15.0 96,019 0.13
5 Oct 2017 MM Kalifa Buy 50,000 39.0 50,000 0.07
4 May 2017 Dr. SA Green Buy 6,666,667 9.0 11,524,002 15.68
4 May 2017 RD Jeynes Buy 222,222 9.0 342,222 0.47
9 Jan 2012 JA Livingston Buy 4,240 11.0 4,240 0.01
5 Jan 2012 RD Jeynes Buy 100,000 9.3 120,000 0.37
6 Sep 2011 Dr. SA Green Buy 250,000 40 4,857,335 14.9
6 Sep 2011 Dr. SA Green Conversion 427,500 40 4,607,335  
6 Dec 2010 IC Stewart Buy 30,000 15 1,705,365 7.17
26 Nov 2010 HP Gilder Buy 9,176 58 56,019 0.24
5 Jul 2010 RD Jeynes Buy 20,000 40.5 20,000 0.08
15 Jul 2009 HP Gilder Buy 46,450 0 46,843 0.22
6 Oct 2008 Dr. SA Green Buy 1,333,333 15 4,179,835 19.6
11 Apr 2008 Dr. SA Green Buy 100,000 17 2,846,502 15.89
24 Aug 2007 Dr. SA Green Buy 2,540,000 25 2,746,502 15.33
24 Aug 2007 IC Stewart Buy 800,000 25 1,675,365 9.35
23 Oct 2006 75:1 share consolidation          
27 Sep 2006 Dr. SA Green Buy 5,846,154 0.65 15,487,654 3.49
27 Sep 2006 IC Stewart Buy 4,615,385 0.65 65,152,540 14.69
16 Feb 2006 IC Stewart Buy 500,000 3.75 60,537,155 19.07
1 Feb 2006 IC Stewart Buy 714,000 3.5 60,037,155 18.92
9 Jun 2004 Dr. CHB Honeyborne Buy 100,000 11.0 100,000 0.04
12 Dec 2003 IC Stewart Buy 7,142,857 10.5 59,323,155 21.26
18 Aug 2003 IC Stewart Buy 1,000,000 3.0 52,180,298 23.96
16 Sep 2002 IC Stewart Buy 1,004,260 3.0 51,180,298 32.44

 

* Total shareholding excludes shares held in the ZOO Digital Group Share Incentive Plan (SIP).

ZOO is subject to the UK City Code on Takeovers & Mergers.

 

 

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