Terms of Reference for the Disclosure Committee
Membership of the Committee
The members of the Committee shall be the Chairman, the Chief Executive Officer, the Chief Financial Officer and one Non-executive Director.
The quorum necessary for the transaction of the business of the Committee shall be three members, such quorum to include the Chairman or one Non-executive Director. It is not necessary for all members to be present in the same physical location, provided that each member can communicate with other members. Decisions shall be taken on a majority basis.
The Secretary of the Company shall be the Secretary of the Committee.
Frequency of Meetings
The Committee will meet as necessary, when called by the Company Secretary. Any Committee member, or any member of the Disclosure Panel, may request a meeting of the Committee. The Company Secretary or the Assistant Company Secretary will convene meetings of the Committee when they are requested.
Role of the Committee
The role of the Committee is (1) on an ad hoc basis to determine in accordance with the Disclosure Policy whether specified information is inside information which should be disclosed to the market and (2) to perform certain tasks on an on-going basis as set out below.
The Committee is authorised to take external professional advice as necessary, including, but not limited to, advice from the Company’s external auditors, brokers and legal advisers.
Ad hoc evaluation of information by the Disclosure Committee
The Disclosure Committee's primary role is to evaluate whether information communicated to it by members of the Disclosure Panel, members of staff of the Company or the wider group is inside information.
The Company is allowed to delay disclosure of inside information provided that all of the following conditions are met: (a) immediate disclosure is likely to prejudice the legitimate interests of the Company; (b) delay of disclosure is not likely to mislead the public; and (c) the Company is able to ensure the confidentiality of that information. The Disclosure Committee must make an informed assessment, on advice from internal and external advisers (as appropriate) on whether the information is inside information and then evaluate whether the above conditions are met to permit delayed disclosure. If the conditions are not met, the Company must announce the inside information without delay. If the conditions are met, the Company must prepare a holding announcement for immediate release if the confidentiality of that inside information can no longer be ensured. The Company must monitor satisfaction of the conditions on an ongoing basis.
In certain limited circumstances, the Company is permitted to selectively disclose inside information prior to announcement of the information to the market. The Disclosure Committee will make an informed assessment (taking advice from internal and external advisers (as appropriate)) as to whether selective disclosure is justified (for example, to seek shareholder support and/or bank financing for a major transaction) and ensure that it is undertaken in compliance with applicable regulation including that recipients are bound by a duty of confidentiality.
The Market Abuse Regulation imposes a number of record-keeping requirements, for example, records must be kept of the time and date that confidential information crystallises into inside information, and by whom the decision was made.
The Board of Directors of the Company shall retain ultimate responsibility for the Company's compliance with its disclosure obligations and the Committee shall refer to the Board of Directors as it sees fit. The Board of Directors shall consider any matter referred to it provided that there is sufficient time to convene a Board meeting. If there is insufficient time, the Chairman may consider any matter referred to the Board by the Disclosure Committee.
The following tasks shall be performed by the Disclosure Committee on an on-going basis:
(a) if it is decided that an announcement relating to inside information is to be made by the Company to the market:
- (i) supervise the preparation of the announcement;
- (ii) oversee the verification process (if considered appropriate) to be undertaken in respect of the contents of the announcement;
- (iii) review and amend, where appropriate, the text of the announcement to avoid any inaccurate or misleading statements being made to the market; and
- (iv) approve such announcement (unless the announcement has already been approved by the Board;
(b) if other action is appropriate, for example, to agree a delay in announcing the information, to prepare a holding announcement or seek a suspension from listing pending clarification of uncertainties, decide to take that action;
(c) liaise with external advisers, in particular the Company's corporate brokers and legal advisers, where appropriate, to determine whether an announcement is required and the content of that announcement;
(d) monitor compliance with the Disclosure Policy;
(e) monitor analysts' expectations as to the performance of the Group and any research recommendations or suggestions produced by third parties and recommend any required action;
(f) review and amend as necessary all communications to employees, shareholders and other stakeholders in respect of inside information;
(g) review and amend as necessary the Group's procedures for communicating with the market, including with analysts, shareholders and the media and ensure that all members of staff are aware of these procedures;
(h) monitor the Company's share price and review market rumours and press speculation about the Group and decide whether any response or announcement is required;
(i) maintain a central list of all current projects which could involve inside information;
(j) identify areas and sources from which inside information may arise and allocate responsibility for monitoring and reviewing these areas and sources;
(k) monitor on-going developments in, or changes to, the business of the Group (including reviewing internal management information) to determine whether any disclosures need to be made or any disclosures previously made by the Company need to be updated, such as any profit forecasts or estimates;
(l) monitor on-going developments in the defence, security and aerospace industries which might affect the Group and determine whether any disclosure to the market is needed;
(m) report on an occasional basis to the Board of Directors on the work of the Disclosure Committee;
(n) review the Disclosure Policy and how it operates in practice on an occasional basis (and arrange for it to be reviewed by internal audit) and propose appropriate recommendations to the Board of Directors;
(o) review these Terms of Reference annually and, if applicable, propose appropriate amendments to the Board of Directors;
(p) review the arrangements for the control of inside information and make appropriate recommendations to the Board of Directors;
(q) assess training needs regarding the treatment of inside information and organise training as appropriate;
(r) ensure compliance by the Company with all record-keeping requirements under the Market Abuse Regulation;
(s) keep records of all of its meetings, material discussions and key decisions made, together with copies of all announcements made to the market regarding inside information, copies of any advice received and allocation of responsibilities. For the avoidance of doubt, the Disclosure Committee shall not be required to maintain a verbatim record of all meetings; and
(t) carry out all such other actions as are considered by the Board of Directors to be required in order for the Disclosure Committee to operate effectively.
The Disclosure Committee may delegate these tasks as it thinks necessary.