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Letter from the Chairman of the Board

Dear Shareholder,

On behalf of the Board, I am pleased to update you on the Group’s commitment to good corporate governance, which should be read in conjunction with our annual report and the accompanying pages of our website.

The Board is ultimately responsible for corporate governance, which is the way in which companies are directed and controlled. We believe that good corporate governance is vital to support long-term growth in shareholder value and to achieve this, companies require an efficient, effective and dynamic management framework that is accompanied by clear communication, which helps to promote confidence and trust.

Responsibilities of the Board

The Board sets the strategic aims of the Group and its values; provides the leadership required to put them into effect; supervises and constructively challenges management, who are responsible for the day to day running of the Group; and reports to shareholders on their stewardship. To assist with this, the Board has set up three committees comprising the Audit Committee, the Remuneration Committee and the Nomination Committee. An explanation of the responsibilities and composition of these committees can be found here.

The Board is also responsible for risk management, and we have set out our approach to risk management in the Managing Risk section of our website.

Corporate Governance Code

Companies listed on the main market of the London Stock Exchange are required to comply with the Financial Reporting Council’s UK Corporate Governance Code. NAHL Group Plc’s shares are traded on AIM and as such are not subject to the same level of regulation. However, on 30 March 2018 the London Stock Exchange implemented new rules for companies listed on AIM which required all companies to adopt a recognised corporate governance code.

The Board have decided to adopt the Quoted Companies Alliance (“QCA”) Corporate Governance Code (April 2018 edition). We believe that the QCA code is a pragmatic, principles-based tool that enhances the Group’s ability to explain its approach to corporate governance and is appropriate for the needs and circumstances of small and mid-sized quoted companies on a public market, such as ourselves. It is based around a set of ten principles to which the Group must either comply or explain why it does not comply.

Compliance with the QCA Corporate Governance Code

The ten principles of the code are set out in the table below. I can confirm that we are in compliance with the requirements of the code and the table provides signposts to the relevant disclosures and explanation.

Shareholder Engagement

An important part of the QCA code concerns engagement and communication with our shareholders. Our Investors section of our website explains how we have sought to do this, including meeting investors at our annual general meeting. I would like to extend an invitation to all shareholders to attend this meeting and to engage with the Board and other members of our senior leadership team who will be in attendance.

Caroline Brown, Chair

31st September 2019

How we have complied with the QCA Corporate Governance Code

Please refer to the 2019 Annual Report for page references.

Deliver Growth
Governance principles Reference
1. Establish a strategy and business model which promote long-term value for shareholders See Our Business Model (page 21) and divisional overviews (pages 39–46)
2. Seek to understand and meet shareholder needs and expectations See Chair’s Introduction to Governance (page 73)
3. Take into account wider stakeholder and social responsibilities and their implications for long- term success See Our Business Model (page 21) and Section 172 Statement (page 53)
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation See Principal Risks and Uncertainties (page 47)See Governance Statement (page 75)
Maintain a dynamic management framework
Governance principles Reference
5. Maintain the Board as a well-functioning, balanced team led by the Chair See Governance Statement (page 75)
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities See Governance Statement (page 75)
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement See Governance Statement (page 75)
8. Promote a corporate culture that is based on ethical values and behaviours See Our Culture (pages 55–66)
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board See Governance Statement (page 75)
Build trust
Governance principles Reference
10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders See Governance Statement (page 75) and Section 172 Statement (page 53)