PCF Group (GPW:PCF) — 2022 AGM

0:02 Good morning, ladies and gentlemen, and welcome to the PCF GROUP PLC Annual General Meeting. Throughout this recorded meeting, attendees online will be in listen only mode. Questions are encouraged and could be submitted at any time via the q and a tab situated just on the right hand corner of your screen. Please simply type in your questions and press send. The company may not be in a position to answer every question submitted today. However, all questions submitted online will be reviewed with responses published on the investment company platform where it's appropriate to do so. I'd now like to hand you over to chairman, Simon Moore. Good morning to you, sir. Jake. Morning, everybody. Thanks so much for joining us today. Welcome to all shareholders to the twenty twenty two annual general meeting for PCF GROUP. My name is Simon Moore. I'm an executive director of the company non executive director of the company.

0:47 The board of directors asked me to be chairman for today's AGM. So those of you who've attended these meetings before will know that there is a formal part of day, which we'll answer it to first. After the formal part of day is concluded, I'll open up the floor for general questions from shareholders. With me today are the executive directors, Non executive directors, Mark Brown, Christine Higgins, David Thomas. Our executive directors, Gary Strand and Caroline Richardson. Unfortunately, our non executive director, David Morgan, has had his apologies. It's now 10:00. Time to get going. I was gonna call and I declare the meeting open. You will receive the notice to the AGM on the March 2.

1:36 And as we did announce at the time, we don't have the financial report in council twenty twenty one ready to book for shareholders yet. But this is our annual general meeting, and we do have full business to be cleared. So with Michelle's permission, I'll take a note of the meeting as rep. Thanks very much. Just to run through the process, how we're gonna do this today, a little bit different to before. Voting today will be by way of poll. There'll be no voting by showing of hands. It gives all shareholders the opportunity to vote in proportion to the number of shares they hold and gives the government better insight into the shareholders' objections. In terms of the procedure, summary of the resolutions we've shown on the screen in front of us and online, together with a breakdown of the proxy votes that we've received.

2:29 It'll take a little time to complete the public procedure and to count the votes. But once we've done that, gather them in, the final results will be posted on regulatory information service and our website. Each shareholder has been given a poll card, which you've got three different options. One, you can vote for the resolution, two, vote against the resolution, and three, in the same. Or if you choose, you can withhold your vote, which is not voted law and won't be calculated to the final calculation. When you complete your public card, please tick the appropriate box next to the relevant resolution. And then once all the votes have been once the votes have been completed, ticking your boxes, please sign your public card, and I'll ask the company secretary to gather me.

3:18 If you need any help with that, please ask, and I'll be happy to do so. So turning to the purpose of today's AGM, we have a total of 11 resolutions. First, nine of those resolutions are ordinary resolutions required to suit majority of failure. There are three groups. Resolutions one to four, inclusive, are to elect me, Simon Moore, Marx Sisme Durant, current registered, and Gary Strand as directors of the company because they've been appointed since the last annual meeting. Group two resolutions five to eight inclusive, which is to reelect Mark Brown, Christian Higgins, David Morgan, and David Tickness, who are retiring as directors of corporate governance code and are seeking reelection.

4:11 And resolution nine is to authorize the directors to a lot of who share this in a capital company up to a maximum amount of approximately one third of the ticket issued. Resolution 10 is a special resolution which will require majority of not 75% of the votes cast of the company. Resolution 10 is to discipline preemption rights on the allotment of ordinary shares of the company up to a maximum normal amount of approximately 5% in total issued corporate share capital. And then the final resolution, resolution 11, will only be passed if it's approved by majority for at least 66% of its cost required under the government's parameters directed for for financial services industry.

4:59 Resolution 11 is to authorize the company to apply a ratio between fixed and variable components of total remuneration of of remuneration code staff that exceeds one to one, provided the ratio does not exceed one to two. Full details of all those resolutions are in the notice of the AGM and the the company names. So that's the purpose of the meeting and the procedure of the meeting. What I want to do now is to take questions specifically on those resolutions, and we'll use the same grouping as I described earlier. So we'll bring resolutions one to four to elect the new directors. We didn't have no questions in advance of the meeting. Tim, do we have any questions? Nope. No. Those are resolutions. Thanks so much.

5:47 On the second group, resolutions five to eight to reelect retiring directors. Again, if you no questions in regards to the meeting, and we have no questions today either. Resolution nine, to authorize the directors for lot ordinary shares. Again, we have no questions in advance, and there are questions now either. Resolution 10 is the special resolution to apply preemption to supply preemption rights. Any questions in regards? Any questions? And finally, 11, adjust the maximum remuneration ratio. We have no questions in regards? Yep. And no questions today. Good. In that case, we'll move directly to the poll.

6:35 We're gonna sit through these resolutions I've set up before, but we know asking the shareholders to complete their hold cards on all 11 resolutions. So for me, I declare the poll open. And just to remind you, these typically break box in case you use resolution for against or abstain or withhold, and then sign the when you're complete. So I'll give everyone a few moments to do that. In that case, I declare hold closed.

7:29 On the screen in front of us here and I think online as well, we can confirm the proxy votes received for each resolutions received by the company. Even 95% of the proxy votes received have been in favor of the resolutions. The poll cards now have been counted. And as I said at the beginning of this meeting, the final voting results will be announced through the regular information service and published on our website as soon as we practically can do that. That concludes the formal business of the meeting. I formally declare the annual general meeting closed. However, as promised at the beginning of the meeting, we do have some time for you to ask any general questions for the next fifteen minutes or so either here in the room or online.

8:18 So, Jim, let me know. Have you got any questions? We've got some questions. Yeah. Excellent. We've got a couple of questions regarding the upcoming results from Simon t. Is the estimate for end of for the end of May for the results still valid? Has there been any further delay? And at the general meeting in February, were the board aware that there was likely to be a further suspension? Announced just eleven days after the general meeting. Derek, do want to take a second off that first? And then Karen will question from. Okay. Yeah. So in terms of the second part of the question, clearly, the the team knew that it was a tight schedule that we were working to.

9:04 We were exploring all the avenues to deliver those results on time. And as soon as that became apparent that that wouldn't be possible, we made the appropriate announcements as you would have seen. So weren't aware of it. No. We were aware that it was tight, but both internally and and working with McIntyre Hudson, we were doing our very best to meet that deadline. Okay. Thank you. Do you want to comment on the actual first part of the question? Yeah. Just to say on the general point that the the any announcements that we've made remain valid until we, make new announcements, which might not valid.

10:17 And so I think shareholders should be aware that the board are very aware of their obligations in respect of that. Thank you, Gary. So Can this is addressed to you, Simon? Can the chair, and as far as he can and as far as appropriate, make a comment on the relationship with Summers? I all I can say about that is Summers continue to be as supportive as Summers always have been and remain a solid and dependable shareholder and have a very positive relation. Thank you. Question Question regarding the new auditors. It's aimed at Christine. Are you aware of any changes to Caroline, I'm just going on this as well. Are you aware of any changes to the accounting process interpretation or application accounting standards the new auditors will apply or that will either delay the twenty twenty one accounts or make the next accounts presented on a different basis.

11:20 Is that specifically for one direct It was addressed to Christine, but Caroline has some thoughts on it. Christine, you wanna solve? I'm gonna pass to Caroline just to start on a little sort technical aspects of the question. And so our accounting policies are largely unchanged, and we would expect the best accounts to be to the the same. Same. So we're not aware of any large changes at this point. Still relatively early days in the audit process. We're a bank, and there's always areas of focus for an audit of a bank around impairments and interest recognition under EIR. And I don't expect those to be the same focus areas for renewal. It's just the own provisions.

12:06 So I just add that from my point of view and the point of view, there's a good relationship with Becky Robertson, which continues and on the basis of no surprises. That's that's how we're seeing it at the moment. There are no surprises. Another question. Ernst and Young, in their opinion, referred to indicators of fraud. It is still unclear to shareholders what actually went wrong. Was there, in the board's opinion, actual criminality, or was it solely a systems and process failure? Yeah. The when we use the term criminality, we have to be very careful. Okay?

12:55 He as far as the board are aware at this moment in time, we are not there matters of criminal fraud, which are the board is aware of at this point. The the indicators of fraud can be taken in a couple of ways. One is the common law definition for and the other one is around the accounting standard, which defines fraud. So the question is about criminality. The answer is that currently at this moment in time, there is nothing before the board, alright, which suggests criminality. Does that answer that in full? I think it's worth just from my view referring back to the narrative and the 2020 area and in particular the audit and risk committee report where we've talked about a couple of areas which are relevant to this question, I think. So one of them one of the points made in the IRA is that there were indicators of members of the historical finance team under instruction manually adjusting certain accounting entries for reporting purposes, which appear to the board to be deliberate effort to facilitate specific results. And the other point made in that in the committee report is that the board believed there may have been some there may have been possible collusion by

14:25 some members of the historical finance team in making these adjustments. So that's how the committee and the board sees it, and we are working on that basis. Thank you, Christine, for reminding us of the discussion very last year. A question from Paul on Azul, asking, is Azul a sustainable future business area for PCF? Yeah. Azure depends what people mean by sustainable business area. The the the bank made the strategic decision to buy Azure because it's a specialist in the forecast and media section in terms of its ability to broker deals and also introduce deals to the bank to lend on its own balance sheet.

15:21 It is acknowledged as a market leader, and it's been unfortunate that because of all of the events that people are aware of, probably the strategic direction of Azure has been disproportionately impacted compared to the rest of the business. There is no doubt that we have a very skilled team in Azure, and part of the work that we're undertaking is to look at how best we can leverage those skills to be very clear that Azure is the brokerage arm of PCF Bank, not a lending arm. And secondly, how we can develop those skills, maybe take it into other areas as well as broadcast and media. So the current view of Azure is that it is an asset to the business which can be further developed to add value to the overall group, and it's an integral part of the strategy.

16:13 It's very helpful. Thank you. A couple a couple of follow-up questions on the on the accounts publication. And whether on whether the the you mentioned that the deadline for March was tight. Asking how how was it tight if you were able if the delays of two months, if you thought you could get it done in that period? So I keep the so I keep what I see as the strategic analysis of that. One of the one of the issues with it being tight was quite simply this. We had new auditors. It was a first year audit, and a first year audit is is always always naturally more more difficult, more tight. Excuse me. The the second issue is that the audit started later than you would normally expect because of the delay in the preceding year's accounts and the resignation of And so against any backdrop, it was always going to be a schedule which is tighter than normal in a situation where with new auditors, it had the potential to be more complex than usual.

17:27 So I think that's my sort of strategic overview of it, and I don't know if Caroline or Christine wants to. I think all I've done is that in a new situation, we expect expect them to be starting their procedures at least three months before the end of the year after a point of three months after year end. And therefore, it's always gonna be a challenging first year early cycle in terms of time. Okay. Anything else? Okay. Next, Tim. We also have a question, which on the 2019 board effectiveness review how that process played out and what was and your thoughts on that process in hindsight.

18:19 Well, I'm nearly the comment I can make about having not been there is that we will be running a board effectively when the time is right this year. I think that's it's the look forward element, but I think it's important that we're gonna be bored. We're We're looking looking forward forward to new executive team, new new executive team, and we're building our board as we speak now. In terms of effectiveness in the past, I think it's almost irrelevant. But is anyone colleagues who were there who should comment on looking forward to the No. Just to say we did do an earth board effectiveness review. It was undertaken by an external party, and, it was a very positive review with some recommendations which were followed up. Okay. Thanks, Christine. Thanks, Tim. And that's all the questions. Excellent. Well, there being no more questions.

19:05 I'll draw that to conclusion. Thank you, everybody, for attending. And, if you need to drop away, I wish you a safe journey. Tim, that's great. And thank you very much indeed to the board for taking the time to update investors today. Could I please ask attendees not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the board can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the board. On behalf of the board of PCF GROUP PLC, we would like to thank you for attending today's presentation, and good afternoon to you all.