Company Information

Company Information

The information in this section is disclosed pursuant to AIM Rule 26; it was last reviewed/updated: 1 February 2021.

LPA is subject to the City Code on Takeovers and Mergers.

Company Profile

Our ‘Company profile’ together with further information about the Group is in the ‘About LPA’ section of the website.

Directors

The present Directors of the Company are Peter Pollock (Chairman), Robert B Horvath (Non-Executive Director & Chair Elect), Paul Curtis (Chief Executive Officer), Chris Buckenham (Chief Financial Officer), Len Porter (Senior Non-Executive Director) and Gordon Wakeford (Non-Executive Director).  Biographical details of ‘The Board’ are included in the ‘About LPA’ section of the website.

Details of the operation of the Board and its Committees are set out in the Governance section below.

Company Secretary

Chris Buckenham

Company registration number

686429

Country of incorporation and main place of operation

England and Wales

Registered office

Light & Power House
Shire Hill
Saffron Walden
CB11 3AQ

Website

www.lpa-group.com

Nominated adviser

Cairn Financial Advisers LLP
62-63 Cheapside
London
EC2V 6AX

 

 

Bankers

Barclays Bank plc
Po Box 885
Mortlock House,
Vision Park
Histon, Cambridge
CB24 9DE

Broker

finnCap
One Bartholomew Close
London
EC1A 7BL

 

Registrars

Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL

Auditors

RSM UK Audit LLP
2nd Floor
North Wing East
City House
Hills Road
Cambridge
CB2 1RE

Solicitors

Eversheds Sutherland (International) LLP
115 Colmore Row
Birmingham
B3 3AL

 

 

Governance and Policies

Governance

Corporate Governance 

The Group adopted the Quoted Companies Alliance Corporate Governance Code in 2018 and, unless otherwise stated, adheres to it. This provides that the Chairman is responsible for oversight, adoption, and communication of the Group’s Corporate Governance Model.

The Group’s Annual Report is considered to be a document of record and together with the Group’s website www.lpa-group.com suitable for recording the Group’s statements on compliance with the Code. Compliance is reviewed every six months and updated as necessary and appears within the Annual Report and on the website www.lpa-group.com

Section 172

Major shareholders have been represented on the Board for many years. Thus, the conduct of the board has reflected the long term goals of delivering shareholder value while maintaining and enhancing the reputation of the Group. Involved as the Group is, in long term contracts and exports, good customer relationships have to be long term, and the maintenance of good relations is dependent upon the good conduct of the Group’s employees.

The Board also considers it helpful to have a statement on the Group’s North Star or Guiding Light. This forms part of our Corporate Governance and is set out in the Annual Report, which is also available together with other information on the Group’s website www.lpa-group.com. The Guiding Light, together with our mantra ‘Long Life reliability does not cost the earth’ has somewhat pre-empted the new focus on Environment, Social Responsibility and Governance. These are factors which have been important to our Corporate Culture for many years.

During the year, the Group has continued to foster a culture which is consistent with the Group’s objectives, strategy, and business model, and which recognises the principal risks and uncertainties facing the Group, which are contained in the Strategic Report within the Annual Report.  The Board has long recognised that it is in the Company’s shareholders’ and employees’ best interest that the defined benefit pension scheme should be appropriately funded, thus a voluntary contribution of £100k per year has been made to the scheme to maintain and grow the surplus and the Board has agreed to continue the payment for a further three years.  The Board have considered this a prudent approach over the past decade to mitigate levy and associated costs and risks, whilst striving to achieve solvency after full provision and fully satisfy the schemes commitments to cessation.

We continue to be committed to a long term capital investment programme with enhanced capabilities and investment in the skills of our workforce. The quality of our facilities, our technology and the skills of our people we believe to be recognised by our customers to be exceptional in the UK.

Peter Pollock
Chairman
25 January 2021

Corporate Governance Report

Despite being a micro-cap company with large founder family shareholders, the Group has consistently applied high standards of Corporate Governance for a number of years.  Following changes to the AIM Rules on 30 March 2018, together with changes introduced under Article 26 of the London Stock Exchange rules applicable to AIM listed entities, which required AIM listed companies to apply a recognised Corporate Governance Code from 28 September 2018, the Group adopted and complies as far as is practicable with the Quoted Company Alliance’s Corporate Governance Code (the Code) and where we fall short of full compliance, explain what is required to achieve full compliance.  This document is an integral part of the Company’s Annual Report, which the Board considers to be a ‘Document of Record’ subject to six monthly reviews, which will be recorded on the Group’s website, www.lpa-group.com.

The Code comprises ten principles, which are listed below together with a statement of the Group’s current position and, where this deviates from the code, an element of a Road Map to full compliance.

In addition, the Group has adopted a ‘North Star’ or ‘Guiding Light’ principle, which may be considered to be a precis of the corporate governance principle.

LPA Group Plc is subject to the UK City Code on Takeovers and Mergers.

North Star Guiding Light

  • Conduct our business honestly, ethically and in sympathy with the environment
  • Innovate, design, procure and manufacture for long life, reliability and sustainability
  • Base our business in the UK
  • Provide employment, training and personal development
  • Engage with local communities
  • Engage with organisations representing the industries we serve and local and national government
  • Endeavour to be a good citizen

Principle 1

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

The code requires a disclosure of this Principle in the Annual Report.

The Group operates in markets dominated by large multinational corporates, with a wide supplier base populated by small and medium sized enterprises, both privately owned and quoted. The Group has grown organically and by acquisition and has always recognised that it will either be a consolidator of similar SME’s by acquisition or consolidated by a larger multinational enterprise through being acquired. Brexit and the uncertainty that has created, at least in the short term, has disturbed that scenario. The Group has rejuvenated the Board to equip the business with the management team necessary to continue to deliver a strategy which is responsive to changing market conditions.

The Executive Directors are responsible for the leadership and day-to-day management of the Group. This includes formulating and recommending the Group’s strategy for Board approval once approved, executing the strategy.

Principle 2

Seek to understand and meet shareholder needs and expectations

The Group’s shareholder base is dominated by founding family shareholders, current and former members of the board, a very limited number of Institutions and approximately five hundred private or relatively small holdings. The market in the shares is illiquid and there is usually a wide spread between the bid and offer price, making dealing in the shares challenging. Having rejuvenated the Board, the Group is committed to improving liquidity and the nature of the shareholder base to better equip the business with sources of equity funding. In recent years the Group has relied upon debt funding.

The founding families are no longer represented on the board.

Investor liaison is the responsibility of the Chairman, supported by the CEO and the CFO.

The Group gives regular updates on progress through the year and publishes significant events via the Regulated News Service of the Stock Exchange. The Preliminary Announcement is made in late January and the Annual Report is published shortly thereafter. The Chairman normally gives an update at the Annual General Meeting in March. The Interim Announcement for the first half to 31 March is made, and the Interim Report published, in late June. It has become recent practice to give an update on trading early in the first quarter, following the close of the financial year at 30 September. Copies of all announcements are published on the website, www.lpa-group.com

The Group’s brokers prepare analyses of the Group’s performance and make these available to their clients, normally together with their trading expectations.

Sponsored by the Group’s brokers, the Chairman and senior executives usually meet with Institutional Shareholders and other interested parties, immediately after the Interim and Final Announcements. The Chairman will endeavour to ensure that founding family shareholders, and other substantial shareholders, are similarly treated.

The Board is well aware of its responsibility to ensure that there is no false market in the Group’s shares and to ensure the market is properly informed of changes in expectations and significant events in a timely way.

Voting at recent Annual General Meetings has been overwhelmingly in favour of all resolutions.

Principle 3

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

The Board recognises that our people are our most valuable asset. Staff turnover across the Group remains low.   Staff surveys at each of the Group’s Sites are undertaken to monitor and engage with our Staff and ensure their needs are being met.  Apprenticeships, degree and other courses, support, training, and personal development are offered. At the outset of Covid-19 the board and the executive together prepared a Covid Policy, which was described in the interim report in June and published on the Group website. This has served the Group well thus far.

The Group’s customer base is mainly comprised of large multinationals who demand quality, reliability, value for money and on-time delivery. We endeavour to engage with our customers on many levels to ensure that we understand what is expected of us. We seek customer feedback, and we use metrics to monitor our own performance.

We have developed our supplier base over many years and measure their performance using KPI’s. In difficult market conditions close relationships are essential to maintain timely, cost effective and quality supplies.

We rely on partners in our export markets to represent us between our own visits to customers. Many of these partnerships are long term and our export success reflects our collective response to changing local market conditions.

We are responsive to our local communities, engaging with schools and universities and supporting local youth sports organisations and other charitable organisations.

The Group’s mantra is ‘Long Life Reliability does not cost the Earth’, which means that we commit to the concept of whole life cost not only in terms of currency but also in the use of scarce resources including materials, energy and labour, designing in long life rather than obsolescence.

Principle 4

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

The Principal Risks and Uncertainties are identified in the Business and Strategy Report, published within the Annual Report. Each trading entity includes a Successes, Opportunities, Failures and Threats (SOFT) Report within its monthly progress report, which is incorporated into the Group Performance Review, which is circulated to the board each month. Risk registers for entities identify key risks. Risk is considered at the monthly Executive Meetings comprising the Managing Directors or General Managers of the entities, the CEO and the CFO.  The CEO and the CFO include comment on identified changes in risk in their reports to Board Meetings.  Internal Controls are detailed in the Directors Report within the Annual Report.

Principle 5

Maintain the Board as a well-functioning, balanced team led by the Chair

A biography of each of the Directors which identifies whether they are executive or non-executive, together with a Directors’ responsibilities statement is included on the Group’s website and within the Annual Report, which also describes the Board Composition, Responsibility, Independence and the number of Board Meetings during the year, the nature and composition of the two board committees and details the time commitment and attendance record of directors at board and committee meetings.

After a long period of stability, the board continues in transition following the retirement of the long serving Finance Director and the Senior Non-Executive Director in March 2018 and the retirement of The President and Non-Executive Director, Michael Rusch after over fifty years of service to the Group in June 2020 on attaining the age of 75 years.

The continuing Non-Executive Director was appointed Senior Non-Executive Director in March 2018. The Chief Financial Officer and Company Secretary was appointed in March 2018, succeeding the retiring Finance Director.

The Chief Executive succeeded to the Chair on a part-time basis on 1 October 2018. The Chief Operating Officer, appointed on 1 October 2018, was promoted to Chief Executive Officer with effect from 1 April 2020.

The proposed appointment of an additional non-executive director was completed following the Annual General Meeting in March 2020.  The Chairman will retire in September 2021, when he will have reached 75 years of age. An additional NED has been recruited to succeed him as Chair and who will join the board as NED and Chair elect on 1 February 2021.   The Board Composition and Responsibility are set out in the Directors Report, within the  Annual Report.

Principle 6

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

The Board has a broad balance of skills and experience as well as personal qualities.  Recent Board appointments have reinforced this balance, including the appointment of a new Chair elect from 1 February 2021 and a rotation of Committee Chair, with Gordon Wakeford assuming the role of Audit Committee Chair from 1 April 2021.

The Board recognises that its small size limits the opportunity for gender balance and diversity. Future appointments may allow this to be corrected. The board is not dominated by any one person or group of people.

The Chair will continue to evaluate the strengths and weaknesses of the board and seek to address these together with other needs as the company evolves in any future appointments and in succession planning.

This Annual Report, which is included on the website, identifies each Director with their biography, which outline the relevant skills, qualifications and previous roles that each have held.  Annual Reports will demonstrate the adequacy of the board and identify any additional experience, skills, personal qualities, gender balance and capabilities necessary to deliver the strategy for the benefit of shareholders and show how directors are maintaining their skill sets.

The Director’s achieve this requirements through participation and reporting on activities outside of the Company to develop and maintain their skills.  Participation in Continuing Professional Development courses to maintain professional qualifications and development of knowledge; industry and market forums; holding additional NED appointments to broaden knowledge and engagement with bodies including the QCA and The Deloitte Academy are both monitored and actively encouraged.  The Group considers this approach compliant in this area to the Code.

Annual Reports will detail significant matters requiring external advice and describe any significant advice provided internally to the Board by the Company Secretary or Senior Independent Director.  Adherence to the new and rapidly changing principles of furlough leave and HR consultancy represented the key area of advice for the Company during the year.

Principle 7

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

The board is in a period of development and transition. A new NED and Chair elect, to succeed the current Chair, has been recruited and will join the board on 1 February 2021. New members are proceeding up a steep learning curve and substantial progress has been made. The object is to create a board with the necessary skills and experience to deliver the Group’s strategy over the medium term. The maintenance of the board skills matrix will assist in this process having been developed in the year and forming the basis of the Board rejuvenation process and recruitment, the skills and qualities of the Board have been assessed to ensure the recruitment process targeted those which would be lost through retirements and those the Company required for the future.  A full assessment of the current and future Board skill sets has been undertaken by the Chairman who has concluded these to be adequate and aligned with the Group’s requirements.  The Group considers this approach compliant to the Code.

As described in the Directors Report within the Annual Report, Board Composition and Responsibility, the Directors are adjudged to have performed at least as expected and individual performances reviewed accordingly.

Principle 8

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

The Board, led by the Chair, promotes a sound ethical culture through its own behaviour and this is visible through the actions of the non-executive and executive teams.

Corporate values guide the objectives and strategy of the business and the conduct of all aspects of business, including disclosures in this Annual Report.

The Chair’s corporate governance statement in the Annual Reports comments upon how the culture is consistent with the Group’s objectives, strategy and business model contained in the strategic report, the principal risks and uncertainties, how these are monitored and how a healthy corporate culture is promoted and assessed.

The Group has a Code of Ethics and a Code of Conduct, which Directors and other officers of the Group are expected to comply with and to record such instances as required, as part of the Group’s anti-bribery procedures. These are published on the website.

Principle 9

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

The Group maintains governance structures and processes in line with its corporate culture and appropriate to its size and complexity, and capacity, appetite and tolerance, for risk. Its processes develop over time as the needs of the business and its development require.

It is expected that given the small size of the Group there will be little difference between, the Chair’s high-level explanation of the application of the Code in the Corporate Governance Statement in the Annual Report, and any other description of the roles and responsibilities of the Chair, Chief Executive Officer, Chief Financial Officer or any other director with particular responsibilities.

The Directors’ Report within the Annual Report describes the roles and terms of reference of any Committees, as well as matters reserved for the board and how these might evolve in line with the Group’s plans for growth.

Principle 10

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

The Board believes that a healthy dialogue does exist between the Group and its stakeholders and shareholders, which should allow interested parties to come to informed decisions about the Group.

The Board believes that through appropriate use of the Stock Exchange Regulated News Service (“RNS”) for announcements and the timely posting of all such announcements on the Group website appropriate communication and reporting structures exist between the Group and all constituent parts of the shareholder base.

The Preliminary Announcement, the Annual Report, the Chairman’s remarks at the Annual General Meeting, the Interim Announcement, the Interim Statement, any Closing Update in October after the financial year end, together with announcements of any significant events, are all timely published via the RNS and posted on the website, and routinely inform all shareholders of the Group’s progress.

All shareholders are invited to the Annual General Meeting where there is both a formal and informal opportunity to ask questions either on the business of the meeting or specific matters of interest.

This Annual Report, which is posted on the website, describes the work of the Board committees undertaken during the year. It includes a remuneration report.

Should the Group be unable to comply with any disclosure requirements of Principles 1-9 and omit them from the Annual Report or the website, they will be disclosed, and their omission explained.

All votes at the Group’s General Meetings are announced on the RNS immediately after the close of the meeting and posted on the website.

Should there be a significant proportion of votes cast against a resolution at a General Meeting the Group would announce in a timely way by way of the RNS and on the website, the result, what action it intends to take to understand the reasons for the negative vote and what action, if any, it intends to take in the light of that vote.

Annual Reports, including the Notice of any General Meetings published during the last five years are included on the website: www.lpa-group.com

Reviewed: January 2021

LPA Group Plc Board Committees

Allotment Committee

The Allotment Committee comprises no less than two members of the Board of Directors, or one member and the Company Secretary and must comprise one or both of the Chairman or Company Secretary, who are otherwise authorised, under the Group’s Share Dealing Policy (the “Policy”), to authorise transactions that are governed under the Market Abuse Regulations covered within the Policy.

The Allotment Committee is convened on an adhoc basis to approve the allotment and allocation of shares.

Audit Committee

The Audit Committee consists of Gordon Wakeford (NED and Committee Chairman) and Len Porter, Senior NED, who meet periodically to oversee risk management, monitor the effectiveness of internal controls and review external auditor independence.  Periodically the Committee meets with the auditors to ensure that the financial performance of the Group is properly recorded and monitored and to review the reports from the auditors relating to accounts and internal control systems.

Remuneration Committee

The Remuneration Committee consists of Len Porter (Senior NED and Committee Chairman) and Gordon Wakeford, NED. The purpose of the Committee is to review the performance of the full time Executive Directors and to set the scale and structure of their remuneration and the basis of their service agreements with due regard to the interests of the shareholders. It is a rule of the Committee that no Director shall participate in discussions or decisions concerning their own remuneration.

The Committee also oversees the remuneration of the members of the Group’s Executive, who report directly to the CEO and the site Executive team’s performance incentives, together with the Group’s governance of current benefit arrangements including defined contribution pension scheme; group life assurance and well-being provisions.

Peter Pollock
Chairman

Reviewed and issued: December 2020

 

Code of Conduct

Code of Conduct

1. Background

It has always been an LPA objective to conduct its business honestly and ethically and, irrespective of changing obligations brought about by new legislation, LPA does not condone (and has never condoned) corrupt practices.

2. Definitions

  • LPA, the Group: – LPA Group Plc, its subsidiaries, directors, officers, employees and others acting on their behalf
  • Active corruption: the offering, promising or giving a bribe or any undue financial or other advantage
  • Passive corruption: soliciting, demanding or extorting a bribe or any undue financial or other advantage
  • Public corruption: the bribing of a national, foreign or international public official in order to obtain or retain business or other improper advantage
  • Private-to-private corruption: corruption between private commercial or non-commercial entities, in order to obtain or retain business or other improper advantage

3. Legal compliance

It is LPA policy to act in accordance with all applicable laws and regulations of the countries in which it operates.

4. Condemnation of corrupt practices

Corruption in all its forms, distorts competition, should be banned from business life, is a criminal offence and is therefore condemned.

In all situations it is LPA policy not to offer, promise, give, nor seek, corruptly any benefit, directly or indirectly, in connection with the performance of its business.

5. Gifts and hospitality

The Group recognises the courtesy of giving and receiving gifts and hospitality of modest value in the course of business. The Group rules with regard to such courtesy are that the giving or receiving of a gift or hospitality must:

  • be locally acceptable in principle and common in practice
  • be in accordance with applicable local laws and regulations
  • not be made with a view to anyone obtaining any form of improper advantage
  • be appropriately recorded

6. Third party considerations – agents and other intermediaries

Agents and other intermediaries can be an effective means of conducting business. Poorly selected or managed, though, they have the capacity to damage business reputation and may result in legal proceedings being taken against a business, even where the business is unaware of any wrong doing.

The Group shall have regard to the integrity of a potential agent or other intermediary.

Before finalising an agreement with a potential agent or other intermediary LPA will make an assessment of the business and the key individuals involved. Such an assessment may be periodically reviewed.

The potential agent or other intermediary shall be made aware of the Group’s integrity policies and the applicable laws and regulations under which the Group operates, in particular the UK Bribery Act 2010.

Any written agreement between LPA and the agent or other intermediary shall provide that the latter agrees to comply with the Group’s integrity policies and specifically that payments received from the Group will not be passed on as a bribe. LPA shall be entitled to terminate the agreement in the event that this provision is breached.

Fees payable to an agent or other intermediary shall be commensurate with the services offered and calculated by reference to objective criteria.

Payments should:

  • not be made in cash
  • usually be made in the territory where the agent or other intermediary is registered
  • be properly recorded

LPA reserves the right to seek verification that an agent or other intermediary is complying with their obligations.

7. Political donations

The Group does not make donations or contributions for political purposes.

8. Integrity programmes

LPA attaches great importance to proper compliance with its integrity standards.

LPA is committed to assisting all employees in such compliance.

The Chairman is the Board Member with responsibility for the Group’s anti-corruption programme.

Employees can seek advice and guidance concerning these issues and if necessary report issues of concern

No-one reporting a genuinely-held concern will be subject to any disadvantage.

9. Discipline

LPA regards any non-compliance with its integrity standards as a serious issue which may result in damage to its business and reputation.

Breaches of the standards will be dealt with as a serious disciplinary matter which may lead to reprimand, dismissal or criminal prosecution.

Reviewed: September 2020

Code of Ethics

Code of Ethics

1. Business conduct

LPA Group Plc, its subsidiaries, directors, officers, employees and others acting on their behalf are committed to conducting business honestly and ethically. It is LPA policy to act in accordance with all applicable laws and regulations, concerning business relationships and international trade, of the countries in which it operates.

2. Prohibition of corruption

LPA does not offer, promise, give, nor seek, corruptly any benefit, directly or indirectly, in connection with the performance of its business.

3. Competition

LPA competes fairly in its chosen markets.

4. Personal integrity

LPA expects its employees to act with integrity at all times. Group employees with access to privileged information must not use it for personal gain and no employee shall pursue personal objectives which might give rise to a conflict of interest with the Group, or which might affect their ability to carry out their job responsibly.

5. Customer relationships

LPA seeks to provide value for its customers through the development of innovative products and services.

6. Employees

LPA recruits and develops employees on the basis of their abilities and treats its employees with respect. Harassment is unacceptable. LPA complies with all anti-discriminatory legislation and regulations in the countries in which it does business.

7. Health and safety

LPA is committed to conducting its activities in accordance with current legislation and regulations to achieve the highest practicable standards of health and safety.

8. Environment

LPA is committed to supplying quality products with a long life, a policy which reduces energy consumption and the usage of valuable raw materials.

9. Reporting and internal controls

LPA records business transactions accurately and transparently in accordance with accounting, quality and other standards and has a system of internal control designed to provide reasonable assurance that business risks are effectively managed and that reported results are accurate. LPA will retain and review all records of gifts and benefits, whether accepted or not.

10. Application and compliance

This Code of Ethics applies throughout the Group. Disregard or breach of the code may result in disciplinary action against an employee and sanctions for third parties representing LPA. LPA seeks, wherever possible, to ensure that its key suppliers and business partners, comply with the LPA Code of Ethics or has in place a similar code of its own. The Group expects employees to bring any suspected or actual breach of the Code promptly to management attention. Any employee making such information known to management through the appropriate procedures will not face any unfavourable treatment for such disclosure.

 

Reviewed: September 2020

Corporate Social Responsibility

Corporate Social Responsibility – LPA Group company policy

Policy brief and purpose

Our Corporate Social Responsibility (“CSR” or the “Policy”) company policy refers to our responsibility toward our people and our environment. We recognise our company’s existence is part of a bigger system of people, values, other organisations and natural resources. The social responsibility of a business is to assist manage and develop these resources to ensure they are sustainable.

What is corporate social responsibility?

Our CSR company policy outlines our efforts to maintain the environment as we find it, to nurture and develop people who work for us, maintain a sustainable supply chain and work within our communities and environment.

Scope

This policy applies to our company and its operating units. It may also refer to suppliers and partners.

Policy elements

We want to be a responsible business that meets the highest standards of ethics and professionalism.
Our company’s social responsibility falls under two categories: compliance and proactiveness. Compliance refers to our company’s commitment to legality and willingness to observe community values. Proactiveness is every initiative to promote human rights, help communities, protect our natural environment and resources.

Compliance

Legality

Our company will:

  • Respect the law, standards, permits and corporate governance across all its operations
  • Apply its internal policies
  • Keep every partnership and collaboration open and transparent

Business ethics

We will always conduct business with integrity and with respect to human rights. We will promote:

  • Safety and fair dealing
  • Respect toward our Employees, Stakeholders and Business Partners
  • Apply anti-bribery and anti-corruption practices
  • Long life reliability within its products to reduce the need of replacement

Examples of Corporate Social Responsibility:

Protecting the environment

Our company recognises the need to protect the natural environment. Keeping our environment clean and unpolluted is a benefit to all. We’ll always follow best practices when disposing of waste and seek to use sustainable and recyclable materials where ever possible, reduce waste and packaging within our processes.

Protecting people

We’ll ensure that we:

  • Don’t risk the health and safety of our employees, visitors and environment
  • Avoid harming the lives of local and indigenous people
  • Support diversity and inclusion

Human rights

Our company is dedicated to protecting human rights. We are a committed equal opportunity employer and committed to eliminating the risk of forced labour and human trafficking occurring in our direct operations and supply chain. We welcome the requirements set out in the UK Modern Slavery Act 2015. We will continue to comply with the legislation and ensure our culture and actions reflect a no tolerance approach to modern slavery, including child labour.

Proactiveness

Our products seek to reduce waste and their impact on the environment through their long life and reliability and ell efforts are made to promote and develop products to these specifications.

Donations and charitable events

Our company promotes and engages in events to support charitable causes both for its local communities and national charitable events.

Volunteering

Our company will encourage its employees to volunteer. They can volunteer through programs organised internally or externally. Our company may sponsor volunteering events from other organisations.

Preserving the environment

Apart from legal obligations, our company will proactively protect the environment. Examples of relevant activities include:

  • Recycling
  • Conserving energy
  • Using environmentally-friendly technologies

Supporting the community

Our company may initiate and support community investment and educational programs through work experience, training and apprenticeships.

Learning

We will actively invest in R&D. We will be open to suggestions and listen carefully to ideas. Our company will try to continuously improve the way it operates.

Stewardship and monitoring

Management must communicate this policy on all levels. Managers are also responsible for resolving any CSR issues.
Our Chairman is responsible for our policy, which is monitored within our Corporate Governance procedures.

 

Reviewed: September 2020

Criminal Finances Act 2017 Policy

LPA Group and its subsidiaries (together, the “Group” or “LPA”) are committed to the prevention, deterrence and detection of criminal tax evasion and the criminal facilitation of tax evasion. This document sets out the Group’s policy for preventing the criminal facilitation of tax evasion and the standards and procedures required to ensure compliance with the policy.

Introduction

  • The Criminal Finances Act 2017 was introduced and became effective on 30 September 2017 to demonstrate the UK government’s commitment to preventing tax evasion in all its forms. The purpose of the legislation is to set out that companies and partnerships will be criminally liable where they fail to prevent those who act for them, or on their behalf, from criminally facilitating tax evasion.
  • As an employer, if we fail to prevent our employees, workers, agents or service providers from facilitating tax evasion, LPA can face criminal sanctions including an unlimited fine, as   well as exclusion from tendering for public contracts and reputational damage. We therefore take our legal responsibilities seriously and take a zero tolerance approach to all forms of tax evasion, whether under UK law or the law of foreign countries in which we operate.
  • LPA is committed to preventing the facilitation of tax evasion by associated individuals or businesses (an “Associated Person”) anywhere within its operations. An “Associated Person” is defined as a firm’s employee or agent, or someone who performs services for, or on behalf of the business. It may include suppliers, contractors, sub‐contractors and intermediaries.  A written contract is not necessarily required, association is defined based on actual events and behaviour.  This commitment governs all our business dealings, and the conduct of all persons or organisations who are appointed to act on our behalf. All LPA employees who have, or seek to have, a business relationship with LPA must familiarise themselves with this policy and are required to act at all times in a way which is consistent with the policy.
  • We expect the highest standards of integrity and conduct in all business matters from our employees, and all Associated Persons. We look to our employees and Associated Persons to exercise scrupulous care in their business conduct at all times, particularly in relation to the prevention of tax evasion.
  • We are committed to acting professionally, fairly and with integrity in all our business dealings and relationships wherever we operate; and to implementing and enforcing effective systems to counter tax evasion facilitation.
  • We will uphold all laws relevant to countering tax evasion in all the jurisdictions in which we operate.
  • The risks for our business are identified through reviews undertaken by each division. To address these risks, each risk is recorded in the LPA Risk Register alongside the appropriate control required to ensure a “reasonable prevention procedure” is in place.  Subsidiaries Finance Directors/Controllers are responsible for monitoring and managing the risks identified in their areas and ensuring appropriate training is given to the relevant employees.  Employees who have direct contact with an Associated Person are responsible for ensuring that the Associated Person reviews, understands, and agrees to their full compliance with this policy.

Purpose and scope of this policy

The purpose of this policy:

  • Set out our responsibilities, and the responsibilities of those working for us, in observing and upholding our position on preventing the facilitation of tax evasion; and
  • Provide information and guidance to those working for us on how to recognise and avoid tax evasion.

Who must comply with this policy?

This policy applies to all persons working for LPA or on LPA’s behalf in any capacity.  This includes; employees at all levels, directors, officers, agency workers, seconded workers, volunteers, interns, agents, contractors, external consultants, third‐party representatives and business partners, or any other person associated with LPA, wherever located.

Who is responsible for the policy?

  • The Group’s Chief Financial Officer has overall responsibility for this Policy and for reviewing the effectiveness of actions taken in response to concerns raised under this Policy.
  • The Subsidiary Finance Directors/Controllers are responsible for implementing this policy in their Business, monitoring its use and effectiveness, and dealing with any queries about it.

What is the facilitation of tax evasion?

For the purpose of this policy:

  • UK tax evasion offence means;
    • an offence of cheating the public revenue; or
    • an offence under the law of any part of the United Kingdom consisting of being knowingly concerned in, or in taking steps with a view to, the fraudulent evasion of tax (1).
  • UK tax evasion facilitation offence means an offence under the law of any part of the United Kingdom consisting of;
    • being knowingly concerned in, or taking steps with a view to, the fraudulent evasion of a tax by another person; or
    • aiding, abetting, counselling or procuring the commission of a UK tax evasion offence; or being involved in any part of the commission of an offence consisting of being knowingly concerned in, or in taking steps with a view to, the fraudulent evasion of a tax.(2)
  • Foreign tax evasion offence means conduct which;
    • amounts to an offence under the law of a foreign country,
    • relates to a breach of a duty relating to a tax imposed under the law of that country, and
    • would be regarded by the courts of any part of the United Kingdom as amounting to being knowingly concerned in, or in taking steps with a view to, the fraudulent evasion of that tax (3).
  • Foreign tax evasion facilitation offence means conduct which;
    • amounts to an offence under the law of a foreign country;
    • relates to the commission by another person of a foreign tax evasion offence under that law; and
    • would, if the foreign tax evasion offence were a UK tax evasion offence, amount to a UK tax evasion facilitation offence (4).

1 CFA 2017, s. 45(4)
CFA 2017, s. 45(5)
3 CFA 2017, s. 46(5)
4 CFA 2017, s. 46(6)

Under the Criminal Finances Act 2017, a separate criminal offence is automatically committed when all three of the following elements apply;

  • Fraudulent tax evasion by a taxpayer (either an individual or a legal entity) under existing law;
  • Criminal facilitation of the tax evasion by an Associated Person of the Relevant Body, who is acting in that capacity; and
  • The Relevant Body failed to prevent the Associated Person from committing the criminal facilitation act.

The “Relevant Body” is the company or partnership which could be found liable of a Criminal Corporate Offence (LPA).  The Relevant Body does not have to have deliberately or dishonestly facilitated the tax evasion itself; the fact that the Associated Person has done so, creates the liability for the company or partnership.

However, if the Associated Person accidentally, ignorantly, or negligently facilitates the tax evasion, then the corporate criminal offence will not have been committed.

  • Tax evasion is not the same as tax avoidance or tax planning. Tax evasion involves deliberate and dishonest conduct. Tax avoidance is not illegal and involves taking steps, within the law, to minimise tax payable (or maximise tax reliefs).
  • Tax means all forms of taxation, including but not limited to corporation tax, income tax, value added tax, stamp duty, stamp duty land tax, national insurance contributions (and their equivalents in any non‐UK jurisdiction) and includes duty and any other form of taxation (however described).

What you must not do

It is not acceptable for you (or someone acting on your behalf) to:

  • engage in any form of facilitating tax evasion or foreign tax evasion;
  • aid, abet, counsel or procure the commission of a tax evasion offence or foreign tax evasion offence by another person;
  • fail to promptly report any request or demand from any third party to facilitate the fraudulent evasion of tax (whether UK tax or tax in a foreign country), or any suspected fraudulent evasion of tax (whether UK tax or tax in a foreign country) by another person, in accordance with this policy;
  • engage in any other activity that might lead to a breach of this policy;
  • threaten or retaliate against another individual who has refused to commit a tax evasion offence or a foreign tax evasion offence or who has raised concerns under this policy; or
  • seek to obstruct any investigation into suspected breaches of this policy.

Your responsibilities

  • You must ensure that you read, understand and comply with this policy.
  • The prevention, detection and reporting of tax evasion and foreign tax evasion are the responsibility of all of LPA’s Associated Persons. You are required to avoid any activity that might lead to, or suggest, a breach of this policy.
  • You must notify your line manager, or their line manager, as soon as possible if you believe or suspect that a breach of this policy has occurred, or may occur in the future. Should you feel you are unable to report a breach of this policy to either your line manager or their line manager, the reporting procedure outlined within the “Whistleblowing” policy should be followed.  Further details for this policy can be found in Section 13.
  • Examples of behaviours that would require reporting are: if an employee or supplier asks to be paid into an offshore bank account, without good reason; or a supplier asks to be paid in cash, indicating that this will mean the payment is not subject to applicable tax. Further “red flags” that may indicate potential tax evasion are set out in section 10.
  • You must comply fully with any investigation into suspected tax evasion or any breach of this policy. A failure to comply with an investigation may result in disciplinary action, which could   result in dismissal for misconduct or gross misconduct.

Training and communication

  • Line managers of all levels are responsible for identifying individuals who report directly to them that require the necessary training. Such training may form part of wider financial crime detection and prevention training or form part of the Groups corporate governance training.
  • Our zero‐tolerance approach to tax evasion and foreign tax evasion must be communicated to all business partners, including suppliers, contractors, associates and customers at the outset of our business relationship with them and as appropriate after.

Breaches of this policy

  • Any employee who breaches this policy may face disciplinary action, which may result in dismissal for misconduct or gross misconduct.
  • We may terminate our relationship with other individuals and organisations working on our behalf if they breach this policy or there is good reason for the Group to believe the Policy is not being adhered to through the supply chain.

Potential risk scenarios: “Red Flags”

The following is a list of possible red flags that may arise while you work for LPA and which may raise concerns related to tax evasion or foreign tax evasion.  The list is not intended to be exhaustive and is for illustrative purposes only.

If you encounter any of these red flags (or other activity likely to fall under this policy) while working for the LPA, you must report them promptly to your Line Manager or the Business FD/FC:

  • you become aware, in the course of your work, that a third party has made or intends to make a false statement relating to tax; has failed to disclose income or gains to, or to register with, HMRC (or the equivalent authority in any relevant non‐UK jurisdiction); has delivered or intends to deliver a false document relating to tax; or has set up or intends to set up a structure to try to hide income, gains or assets from a tax authority;
  • you become aware or suspicious, in the course of your work, that a third party has deliberately failed to register for VAT (or the equivalent tax in any relevant non‐UK jurisdiction) or failed to account for VAT;
  • a third-party requests payment in cash and/or refuses to sign a formal commission or fee agreement, or to provide an invoice or receipt for a payment made;
  • you become aware, in the course of your work, that an employee asks to be treated as a self‐employed contractor, but without any material changes to their working conditions;
  • a third-party requests that payment is made to a country or geographic location different from where the third party resides or conducts business;
  • a third party to whom LPA have provided goods or services requests that their invoice is addressed to a different entity, where LPA did not receive goods or services from such entity directly;
  • a third party to whom LPA have provided services asks for the description of services rendered on an invoice in a way that seems designed to obscure the nature of the services provided;
  • you receive an invoice from a third party that appears to be non‐standard or customised;
  • a third party insists on the use of side letters or refuses to put terms agreed in writing or asks for contracts or other documentation to be backdated;
  • you notice that LPA has been invoiced for a commission or fee payment that appears too large or too small, given the service stated to have been provided;
  • a third party requests or requires the use of an agent, intermediary, consultant, distributor or supplier that is not typically used by or known to LPA.

Associated policies

This policy should be read in conjunction with the Group or Business:

  • Code of Conduct (Anti‐Bribery & Corruption Policy);
  • Business Expenses Policy;
  • Gifts and Hospitality Policy;
  • Code of Ethics;
  • Corporate Social Responsibility Policy;
  • Whistleblowing Policy;
  • Disciplinary Policy.

Raising concerns

  • You are encouraged to raise concerns about any issue or suspicion of tax evasion; foreign tax evasion; or tax evasion facilitation at the earliest possible stage.
  • If you become aware of any fraudulent evasion of tax (whether UK tax or tax in a foreign country) by another person in the course of your work, or you are asked to assist another person in their fraudulent evasion of tax (whether directly or indirectly), or if you believe or suspect that any fraudulent evasion of tax has occurred or may occur, whether in respect to UK tax or tax in a foreign country, you must notify your line manager as soon as possible.
  • If you are unsure about whether or not a particular act constitutes tax evasion, or foreign tax evasion, raise it with your line manager as soon as possible. You should note that the corporate offence is only committed where you deliberately and dishonestly take action to facilitate the tax evasion or foreign tax evasion.  However, a deliberate failure to report suspected tax evasion or foreign tax evasion, or “turning a blind eye” to suspicious activity, could amount to tax evasion facilitation.

Procedure for making a disclosure – whistleblowing

  • Should you become concerned that a fellow employee or an Associated Person is facilitating tax evasion, you should immediately report the incident via one of the following;
    • your line manager;
    • your line manager’s line manager;
    • the appropriate individual outlined in the Appendix of the “Whistleblowing“ Policy.

Protection

  • Individuals who raise concerns or report another’s wrongdoing are sometimes worried about possible repercussions. We aim to encourage openness and will support anyone who raises genuine concerns in good faith under this Policy, even if they turn out to be mistaken.

LPA is committed to ensuring no-one suffers any detrimental treatment as a result of:

  • refusing to take part in, be concerned in, or facilitate tax evasion or foreign tax evasion by another person;
  • refusing to aid, abet, counsel or procure the commission of a tax evasion offence or a foreign tax evasion offence by another person; or
  • reporting in good faith their suspicion that an actual or potential tax evasion offence or foreign tax evasion offence has taken place, or, may take place in the future.

Detrimental treatment includes dismissal, disciplinary action, threats or other unfavourable treatment connected with raising a concern. If you believe that you have suffered any such treatment, you should inform HR immediately. If the matter is not remedied, and you are an employee, you should raise it formally using our Grievance Procedure, which can be found in the Employee Handbook for your Business.

Reviewed: September 2020

Whistle Blowing Policy

The Public Interest Disclosures Act 1999 provides legal protections to employees against being penalised or dismissed by their employers as a result of disclosing certain serious concerns.  The Group endorses these provisions.   The aim of this procedure is to encourage employees to raise any genuine concerns they may have about certain wrongdoings within the Company without fear of reprisal, to provide guidance on how to raise those concerns and to enable the Company to investigate such concerns and deal with them appropriately.

Eligibility

This procedure applies to all employees of the Group.  Each LPA Business (“Site”) operates a variant of this Policy and provides definition on the points of contact at the Site.

Scope

The procedure is not for complaints relating to personal circumstances, such as the way an employee has been treated at work.  In those cases, use of the grievance procedures in place, including bullying and harassment procedures is appropriate. This procedure is for making a disclosure of wrongdoing or malpractice where an employee reasonably believes that disclosure is in the public interest.  If an employee is uncertain whether or not something is within the scope of this policy, advice should be sought from the Finance Director or Managing Director at their Site.

Types of wrongdoing addressed by this procedure

If an Employee genuinely believes that the Company, or any of its workers, has taken, is intending to take, or has failed to take action that they reasonably believe could lead or amount to:

  • a criminal offence including bribery and corruption or tax evasion;
  • a failure to comply with any legal obligations;
  • a miscarriage of justice;
  • danger to the health and safety of any individual;
  • damage to the environment, or
  • the deliberate concealment of information concerning any of the matters listed above

They should disclose this information verbally or in writing to their Line manager/director; Finance Director or the Managing Director.  If such a disclosure is made, it should provide full details and, where possible, supporting evidence.  Anonymous disclosures are not encouraged as they may undermine the credibility of such disclosures.

Any concerns covered by this procedure should be raised with the Company.  This procedure should not be bypassed, concerns should not be aired externally, other than in exceptional circumstances, for example if you have good reason to believe that evidence would be destroyed.  Social media sites such as YouTube and Facebook are public rather than private spaces, and they are not the appropriate channel for raising concerns of this nature.

This procedure is provided in support of other Polices, in particular, but not confided to those safeguarding against breaches of the Bribery Act 2010 or the Criminal Finances Act 2017 or the Health & Safety at Work Act 1974.

Investigating allegations of wrongdoing

Wherever reasonably practicable the disclosers identity will be kept confidential.

The Company will investigate allegation’s promptly, assistance by the disclose may be required.

The Company aims to keep the disclose informed of the progress of the investigation and its likely timescale, however due to the need for confidentiality by all, this may prevent specific details being provided, particularly where o disciplinary action may result.

While the outcome of an investigation cannot be guaranteed and may not achieve the expectations of the discloser, the Company will try to deal with concerns fairly and in an appropriate way.  Use of this policy will help the Company achieve this.

If an employee is not content with the way their concern has been handled, they may elevate the matter to a Board Director, equally if they believe their concerns are not being heard at Site level or by raising at Site Level would be detrimental.

The Company will inform of the outcome of the investigation as soon as practicable and will take whatever action considered to be appropriate.

Possible actions

No action will be taken against anyone who raises a genuine concern in accordance with this procedure.

The Company may take appropriate action against any person found to be:

  • victimising another person for using this procedure;
  • deterring any person from reporting genuine concerns under this procedure, or

(Employees should report such instances to their Line Manager; if unresolved utilise the Grievance)

For employees this action may involve us taking disciplinary action, which may result in dismissal.

We may also take disciplinary action against a person who does not act in accordance with this procedure.

Status of this procedure

This procedure does not give contractual rights to individual employees, workers or contractors. The company reserves the right to alter any of its terms at any time although we will notify you in writing of any changes.

Reviewed: September 2020

Member of the QCA

Pension

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17 February 2021