Corporate Governance

STATEMENT OF COMPLIANCE WITH THE 2018 QCA CORPORATE GOVERNANCE CODE

Chairman’s Introduction

High standards of corporate governance are a key priority for the Board of Ultimate Sports Group Plc and, in line with the London Stock Exchange’s recent changes to the AIM Rules requiring all AIM-listed companies to adopt and comply with a recognised corporate governance code, the Board has adopted the 2018 Quoted Companies Alliance Corporate Governance Code (the &lquo;QCA Code”) as the basis of the Group’s governance framework. It is the responsibility of the Board to ensure that the Group is managed for the long-term benefit of all shareholders and stakeholders, with effective and efficient decision-making. Corporate governance is an important aspect of this, reducing risk and adding value to our business.

The Directors acknowledge the importance of the ten principles set out in the QCA Code and, in this section, the Group’s current approach to complying with those principles is set out. Further information on our compliance with the QCA Code will be provided in our next annual report.

R L Owen Chairman

QCA PRINCIPLES

DELIVER GROWTH

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

Ultimate Sports Group Plc has a long-established reputation in the field of school coaching for children and related activities. It continues to seek ways of growing this business activity in and around London.

The Board has established a strategy which seeks to promote long-term value for shareholders and has identified the following key areas of operation to focus on improving on the Group’s performance going forward;

  • Enter into new agreements with schools in the London area
  • Generate operational efficiencies and synergies
  • Growth by expansion of business activities

2. Seek to understand and meet shareholder needs and expectations

The Company recognises the importance of engaging with its shareholders and reports formally to them when its full-year and half-year results are published. The Chairman and Managing Director present the results to existing shareholders, potential investors, brokers and the media where appropriate. The Non-Executive Directors are also available to discuss any matter with shareholders.

Meetings with these different groups are reported on at monthly board meetings by either the Chairman or the Managing Director to ensure that shareholders’ views are communicated to the Board as a whole. This process enables the Board to be kept aware of shareholders’ opinions on strategy and governance, and for them to understand any issues or concerns.

Shareholders are encouraged to attend the annual general meeting at which the Group’s activities and results are considered, and questions answered by the Directors. General information about the Group is also available on the Company’s website.

The Group has not historically announced the detailed results of shareholder voting to the market, however, the Board intends to do so going forward.

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

The Group is aware of its corporate social responsibilities and the need to maintain effective working relationships across a range of stakeholder groups, which include the Group’s employees, customers, suppliers, and regulatory authorities. The Group also encourages feedback from schools, pupils and parents of pupils through ongoing dialogue.

The Group’s operations take account of the need to balance the needs of all these stakeholder groups while maintaining focus on the Board’s primary responsibility to promote the success of the Group for the benefit of its shareholders.

The Group endeavours to take account of feedback received from stakeholder groups, making amendments to working arrangements and operational plans where appropriate and where such amendments are consistent with the Group’s long-term strategy.

The Group considers its actions and likely impact that they may have on the environment and seeks to mitigate any negative impact wherever practicable. Through the various procedures and operating systems, the Group complies with health and safety and environmental legislation relevant to its activities.

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

The Board has overall responsibility for the Group’s internal control systems and for monitoring their effectiveness. The Board, with the assistance of the Audit Committee, maintains a system of internal controls to safeguard shareholders’ investment and the Group’s assets, and has established a continuous process for identifying, evaluating and managing the significant risks the Group faces.

The Board approves an annual budget which identifies the opportunities to develop the Group’s business as well as the resources required to implement its strategy. The Board reviews progress against budget on a regular basis to ensure the Group’s financial performance is on target or actions identified if it is not.

Further details of the business risks and how they are mitigated as far as possible are contained in The Strategic Report in the 2017 Annual Report and Financial Statements. Both the Board and senior management are responsible for reviewing and evaluating risk on an ongoing basis and the Executive Directors regularly review trading performance, discuss budgets and forecasts and any new risks associated with trading, the outcome of which is reported to the Board.

5. Maintain the Board as a well-functioning, balanced team led by the chair

The Chairman, Richard Owen, is responsible for leadership of the Board, ensuring its effectiveness on all aspects of its role, setting its agenda and ensuring that the Directors receive accurate, timely and clear information. The Chairman also ensures effective communication with shareholders and facilitates the effective contribution of the other Non-Executive Directors. The Company is satisfied that the current Board is sufficiently resourced to discharge its governance obligations on behalf of all stakeholders.

To enable the Board to discharge its duties, all Directors receive appropriate and timely information. Briefing papers are distributed to all Directors in advance of Board and Committee meetings. All Directors have access to the advice and services of David Hillel who is both the Finance Director and the Company Secretary and is responsible for ensuring that the Board procedures are followed and that applicable rules and regulations are complied with. In addition, procedures are in place to enable the Directors to obtain independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense.

The Board is responsible to the shareholders and sets the Group’s strategy for achieving long-term success. It is ultimately responsible for the management, governance, controls, risk management, direction and performance of the Group. Further details of the composition of the Board are given in the Group’s most recent Annual Report for the year ended 31 December 2017.

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

The Board currently comprises three Executive and two Non-Executive Directors with an appropriate balance of sector, financial and public market skills and experience. The skills and experience of the Board are set out in the Group’s 2017 Annual Report. The experience and knowledge of each of the Directors gives them the ability to constructively challenge the strategy and to scrutinise performance. The Board also has access to external advisors where necessary.

Throughout their period in office the Directors are continually updated on the Group’s business environment in which it operates, corporate social responsibility matters and other changes affecting the Group by briefings and meetings with senior personnel. They are reminded by the Company Secretary of these duties and are also updated on changes to the legal and governance requirements of the Group, and upon themselves as Directors, on an ongoing and timely basis.

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

Currently there is no formal Board performance evaluation in place, however the Board does discuss its operational efficiency as well as that of individual directors on a regular basis. As the business grows, consideration will be given to adopting a more formal process.

In view of the size of the Group, decisions that would fall within the scope of Nomination or Remuneration Committees are dealt with by the full Board.

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

The Board seeks to maintain the highest standards of integrity in the conduct of the Group’s operations. An open culture is encouraged within the Group, with communications to staff regarding the Group’s progress when appropriate.

The Group is committed to providing a safe environment for its staff and all other parties for which the Group has a legal or moral responsibility.

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

The Chairman also ensures effective communication with shareholders. Geoffrey Simmonds is the group’s Managing Director and is responsible for the operational management of the Group and the implementation of Board strategy and policy. By dividing responsibilities in this way, no one individual has unfettered powers of decision-making.

The appropriateness of the Board’s composition and corporate governance structures are reviewed on an ad hoc basis by the Chairman together with the other Directors, and these will evolve in parallel with the Group’s objectives, strategy and business model as the Group develops.

Board Committees

The Board has established an Audit Committee. Functions that would otherwise be carried out by Nomination and Remuneration Committees are dealt with by the Board as a whole.

The Audit Committee comprises the two non- executive directors John Zucker and David Coldbeck. Its primary responsibility is to monitor the quality of internal controls, ensuring that the financial performance of the Group is properly measured and reported on, and for reviewing reports from the Group’s auditors relating to the Group’s accounting and internal controls, in all cases having due regard to the interests of shareholders.

The Audit Committee meets twice a year to review the Group’s interim and final results and liaises with the Group’s Auditors.

In view of the size of the Group, decisions that would fall within the scope of a Remuneration Committee are dealt with by the full Board which includes setting the level of remuneration for both Directors and Key management personnel, determine terms and conditions of service, including the grant of share options, having due regard to the interests of shareholders.

10. Communicate how the Company is governed and is performing

Aside from the distribution to shareholders of an Annual Report and an Interim Report at the half year, shareholders are invited to attend an annual general meeting each year and other meetings where their input and approval is required.

The company website is regularly updated for announcements and information and is easily accessible on line.

Comments and written communications from Shareholders and other stakeholders are welcome.