Corporate Governance

The Company is focused on long-term value creation and robust strategic delivery. This section sets out how the Group delivers growth in accordance with the QCA Code.

1. Enable a Strategy and Business Model that Promotes Long-Term Value

Our strategic objective is to deliver sustainable long-term value for shareholders by targeting businesses where we can influence and support value creation over time. Our investment strategy is split into Listed and Strategic investments, encompassing a mix of early stage and undervalued growth orientated companies. The Listed investments are mostly passive, as these companies have independent governance. We exercise our shareholder rights as appropriate and, if the shareholding is sufficiently large and to increase our influence in the investee company’s strategic direction, we may request board representation. With the Strategic investments, our involvement is much more active, as we hold significant equity. These investments are typically earlier stage and the Group is usually represented on the board, working together to shape strategy, governance, and growth plans. Although it may involve higher short-term costs to the Group, we believe this closer involvement enables us to increase long-term value.

The Board incorporates Environmental, Social and Governance (ESG) factors into its investment review and oversight processes, ensuring that ESG risks and opportunities are considered throughout the investment lifecycle. Strategic objectives are reviewed in the context of the expectations of all key stakeholders, including shareholders and employees, to ensure that we are considering the stakeholder priorities in our investment activities and can respond to social and regulatory changes.

The two-tier investment model allows control of short-term cash flow and liquidity, enabling the potential for longer-term returns and effectively managing portfolio risk.

2. Promote a Culture that is Based on Ethical Values and Behaviours

The Board recognises that its decisions regarding strategy and risk impact the corporate culture of the Group, which influences the performance, behaviours and stakeholder trust. A strong, ethical culture is viewed as essential to delivering on the Group’s strategic goals and to executing its investment-led business model effectively and responsibly. The Board is committed to a culture based on honesty, transparency, respect, integrity and ethical conduct. Given the nature of the Group’s activities and the frequent interactions with investee companies, these values are essential for building constructive and trusted long-term relationships. These relationships need open and constructive dialogue, with ethical values and behaviour crucial to the ability of the Group to successfully achieve its corporate objectives.

As such, the tone for all interactions is set from the top by the Board and is vital to cultivating an environment where open dialogue, trust and mutual respect can thrive. The Group’s leadership reinforces this through behaviours, decision-making, and regular communication that upholds high ethical standards. The Board considers that the Group operates within a culture that values respect for individuals, constructive communication, and a service ethos. Whilst the Group has a small number of employees, the Board is committed to formalising and strengthening processes that promote and preserve these values across the organisation as the Group grows.

The Board has adopted an anti-corruption and bribery policy (Bribery Policy). The Bribery Policy applies to all Directors and employees of the Group and outlines the zero tolerance position on bribery and corruption. It provides practical guidance on recognising and responding to potential ethical breaches.

In addition, the Company has adopted a code for directors’ and employees’ dealings in securities in accordance with rule 21 of the AIM rules. This code promotes transparency and integrity in dealings involving Company securities.

Culture is monitored through regular informal engagement between directors and staff, as well as feedback from investee company interactions, external partners and advisers. These insights help the Board ensure that the desired cultural values are reflected in practice. Any behaviours inconsistent with expected standards are addressed promptly by management or the Board, with lessons shared where relevant.

3. Seek to Understand and Meet Shareholder Needs and Expectations

We are committed to maintaining an open and constructive dialogue with shareholders. We achieve this through press releases, investor meetings, and our Annual General Meeting, which all shareholders are encouraged to attend. The Board has active relationships with a number of its private shareholders and meetings are available for institutional shareholders and analysts. These exchanges allow the opportunity to discuss issues such as strategy, performance and governance, and enable the Company to understand shareholder priorities. This feedback can be considered by the Board in the future operation and strategy of the Company.

Investors also have access to current information through our website www.braveheartgroup.co.uk, where there is a variety of information, including financial statements, corporate governance and news releases. Our CEO, Trevor Brown, is available to respond to investor relations enquiries, either by direct contact or through the website.

The Company recognises that an effective, experienced board is critical to delivering sustainable growth, sound decision-making and a strong corporate culture. This section outlines how the Group will accomplish this in accordance with the QCA Code.

4. Take into Account Wider Stakeholder and Social Responsibilities

The Board recognises that the long-term success of the Group depends upon strong relationships with the key stakeholders, including employees, investors, suppliers, customers and regulators.  A range of processes and systems ensure that there is close Board oversight and contact with these stakeholders, allowing feedback and regular engagement. All employees of the Group participate in a structured Group-wide annual assessment process, designed to ensure open and confidential dialogue. This process helps to align the Group’s wider business objectives with the goals, targets and aspirations of the employees.  The feedback received allows the Board to respond to emerging issues and opportunities. Recently, staff feedback informed updates to internal governance protocols and the approach to flexible working.

The Board ensures that all key relationships, such as with suppliers, are managed by, or are closely supervised by, one of the directors or the financial controller.  These relationships are reviewed at the regular board meetings, with the financial controller present, to ensure effective oversight and early identification of any developments or risks.

These measures allow the Group to be responsive to stakeholder expectations and to incorporate broader social and governance considerations into its operations and strategy. In line with its investment strategy and purpose, the Board has identified the following environmental and social matters as material to the Group’s long-term performance:

• Responsible investment oversight, including consideration of ESG factors in strategic investment decisions,
• Anti-corruption and ethical conduct,
• Employee wellbeing and retention, and
• Diversity and inclusion (especially within investee boards and management teams).

The Group is developing forward-looking ESG goals, including a target to ensure that all strategic investee companies adopt basic ESG policies, and to collect and review diversity data to inform future policy and reporting.

5. Embed Effective Risk Management, Internal Control and Assurance Activities

The Company operates a structured and embedded risk management framework, which is reviewed annually. The Board defines the Group’s risk appetite as moderate, reflecting its strategic ambition to achieve long-term capital growth while actively managing risks to conserving capital. This appetite informs investment selection and operational decisions. Emerging risks, including climate-related and ESG risks, are discussed and overseen by the Audit and Compliance Committee. The Board is responsible for monitoring the Group’s risk appetite and regularly reviews the key risks facing the Group, including financial, operational, strategic, and regulatory risks. The Board will seek to assess the risks and then exploit, avoid or mitigate as appropriate.

The Group’s risk and control framework supports the Board’s assessment of the Group’s ongoing viability, ability to withstand operational and financial shocks, and long-term resilience.

In addition to its other roles and responsibilities, the Audit and Compliance Committee is responsible to the Board for ensuring that procedures are in place and effectively implemented to identify, evaluate and manage the significant and emerging risks faced by the Group. The risk assessment matrix below sets out those risks and the controls. This matrix is reviewed regularly and updated as necessary as changes arise in Group’s activities or external environment. Scenario testing is performed on a regular basis to consider the potential impact of key risks. The Board reviews these risks with key personnel to confirm effective policy implementation and control performance.

The Board recognises climate change as a material risk, particularly for its investee companies. As part of its ESG integration approach, climate-related risks are assessed during investment due diligence and monitored through board representation where relevant. These risks are embedded into the overall risk register and reviewed at least annually.

The directors have established procedures for an internal control system by creating a range of Group policies. These are reviewed by the Board, and training with confirmation of understanding completed by all relevant employees of the Group as required each year. Matters such as share dealing and insider legislation, conflicts of interest, social media, expenses, treasury, remuneration, risk and compliance are covered, with a standing agenda item ensuring attention at each regular board meeting. Currently the Board considers that an internal audit function is not necessary or practical due to the size of the Group and close day to day control exercised by the executive directors.  However, this position is reviewed on a regular basis.

The Audit and Compliance Committee formally assesses the independence and objectivity of the external auditors each year. This includes reviewing non-audit fees, rotation of the audit partner, and obtaining written confirmations of independence in accordance with the Ethical Standard. No concerns were raised in the reporting period.

The Board places great importance on the integrity of the Group’s financial reporting and compliance with applicable auditing and ethical standards. It is committed to ensuring that financial statements are prepared accurately and in accordance with Auditing Practices Board (APB) and Ethical Standards for Auditors. A culture of transparency, accuracy, and accountability in financial matters is expected across the Group and reinforced through its governance and control framework.

6. Maintain a Well-Functioning Balanced Board

The Board comprises four directors: the CEO Trevor Brown, the executive director Vivian Hallam and two independent non-executive directors Susan Hagan and Qu Li. This composition provides an appropriate balance of executive and independent oversight, in line with the recommendations in the QCA Corporate Governance Code.

The Board has adopted a formal statement of the division of responsibilities of the Independent Directors and Chief Executive Officer arising as a consequence of delegation by the Board.  While overall responsibility rests with the Board, the day-to-day running of the Group’s business, developing corporate strategy and primary contact with shareholders has been delegated to the Chief Executive Officer. The Independent Directors are responsible for the effectiveness of the Board as a whole and providing oversight and challenge.

The Board regularly reviews its composition to ensure that it contains the skills, experience and diversity necessary to discharge its duties and responsibilities effectively for the Group and build long-term shareholder value. All Directors are encouraged to use their judgement and to challenge matters constructively on both strategic and operational issues. Although no formal external evaluation was conducted during the year, internal reflection on individual and collective performance takes place regularly. Directors are encouraged to raise development needs, and succession planning is actively monitored.

The non-executive directors, Susan Hagan and Qu Li, are considered independent by the Board. This judgement is based on their objective oversight, lack of material relationships with the Company, their ability to challenge constructively and the absence of any conflict of interest. The Board is satisfied that their contributions are independent in character and judgement.There are no relationships or factors requiring further disclosure that might compromise, or appear to compromise, this independence.

The Board has adopted guidelines for the appointment and rotation of non-executive directors.  These provide for the orderly and constructive succession and rotation of the Chair (if one is in place) and non-executive directors with appointments of an initial term of three years. Subsequent terms can be appointed at the Board’s discretion and consideration of the best interests of the Company.  Where a Chair is appointed, they may first serve as a non-executive director.

Each director will devote sufficient time to carry out their roles and responsibilities. Generally, Trevor Brown is full time and Vivian Hallam, Sue Hagan and Qu Li are part time, but available when needed. Directors are expected to notify the Board in advance of any intention to take on external appointments, and all external commitments are reviewed to ensure no conflict of interest or time constraint arises.

Biographical details, including skills and experience relevant to Board effectiveness, are set out here. Collectively, the directors have backgrounds in investment management, finance, governance, audit, and public company leadership, which support effective oversight across the Group’s operations. The letters of appointment of all directors are available for inspection at the Company’s registered office during normal business hours.

The Board meets at least eight times per year, and more frequently if required, and is responsible for approving the Group’s strategy, approving budgets, reviewing performance, and considering major capital expenditure and corporate actions. It has established an Audit and Compliance Committee and a Remuneration Committee, particulars of which appear hereafter. Meetings are open and constructive, with every Director participating fully. No Nominations Committee is established, as the Board agrees director appointments collectively.

No non-executive director receives performance-related remuneration. Fees are reviewed by the Remuneration Committee and reflect responsibilities and usual market remuneration.

Attendance at Board and Committee Meetings

The following table summarises the number of board and committee meetings held during the year and the attendance record of individual directors:

7. Ensure Directors have Up-to-Date Experience, Skills, and Capabilities

The Company believes that its current composition covers a strong balance of commercial, financial, governance and managerial experience appropriate to the Company’s strategy. The directors bring a broad range of personal and professional backgrounds, enabling the board to provide effective oversight and contribute to the strategic and operational discussions of the varied investments of the Group.

The Non-Executive Directors maintain ongoing communications with Executives between formal Board meetings and

are encouraged to attend specific workshops or meetings aligned with their individual areas of expertise.

The Board complies with the general duties of directors in accordance with the Companies Act 2006, including:

• Acting within their powers,
• Promoting the success of the Company,
• Exercising independent judgement,
• Exercising reasonable care, skill and diligence,
• Avoiding conflicts of interest,
• Not accepting benefits from third parties, and
• Declaring any interest in a proposed transaction or arrangement.

The Company’s AIM nominated adviser (NOMAD) provides AIM Rules training as part of a new Director’s on boarding and updates the Board on relevant governance and AIM regulation developments. The NOMAD and other advisers regularly brief the Board on governance, regulatory, and compliance matters relating to the operation of the Group.

Directors are expected to stay current in their knowledge and industry developments through technical reading and attending relevant seminars and to develop their skills through their continuing experiences. The Company supports ongoing director development by providing access to relevant resources, seminars and briefings. All directors are encouraged to undertake external training aligned to their responsibilities and the Group’s strategic focus.

The Directors have unrestricted access to the Company’s NOMAD, company secretary, lawyers and auditors as and when required and are able to obtain advice from other external bodies when necessary. If required, the Directors may take independent legal advice and if prior notice is given to the Board, reasonable costs will be reimbursed by the Company.

The Board currently consists of four directors. In addition, the Group has outsourced services to GBAC Limited to provide financial control, bookkeeping services and Company Secretarial support.  Succession planning is considered on a regular basis, and the Board supports executive development programmes to ensure the continuity of leadership. Diversity, in terms of skills, experience, background, and other factors will form part of the criteria for any future director appointments.

From 2025, in line with the QCA 2023 Code, all directors will be subject to annual re-election.

The Board is committed to high standards of corporate governance and recognises its ultimate responsibility for the Group’s activities. Governance arrangements are reviewed regularly and expected to evolve, in line with the Company’s growth, complexity and strategy.

To support effective governance, the Board has established the following sub-committees:

Audit and Compliance Committee – Responsible for ensuring that the financial performance of the Group is properly measured and reported, monitoring the effectiveness of risk management and internal controls, and auditor oversight. It receives reports from the executive management and auditors relating to the interim and annual reports.

Remuneration Committee – Responsible for setting executive remuneration, evaluating performance, making recommendations to the Board on employment terms and overseeing share option schemes.

Save for the Company’s retained professional advisers (including NOMAD, legal and financial), neither the Board nor its committees have sought external advice on a significant matter during this period.

8. Evaluate Board Performance Based on Clear and Relevant Objectives

The Directors consider that the Company and Board are not yet of a sufficient size for a full external Board evaluation to make commercial and practical sense. No external review has been conducted to date, and there are currently no plans to commission one, although as the Company or Board grows, this will be reconsidered periodically. The Board promotes a culture of continuous improvement and regularly reflects on its performance and processes in the frequent Board meetings/calls. The Directors can openly discuss any areas where they feel a change would benefit the Company, with the Company Secretary providing impartial advice when necessary.

Internal evaluation of the Board, its Committees and individual directors is undertaken on an annual basis, led by the Remuneration Committee. The most recent evaluation was carried out in October 2024. This process assesses individual and collective effectiveness, contribution to strategy and oversight, skills alignment, and decision-making dynamics. In addition, each non-executive director’s continued independence is assessed annually to ensure continued objectivity and adherence to governance standards.

The review concluded that the Board and its Committees operate effectively, with a good balance of skills and a high level of engagement. Minor process improvements were recommended to improve clarity of meeting documentation and Board reporting. These have been implemented during the current year.

Progress against recommendations from prior years was also reviewed, with the Board satisfied that actions relating to improving diversity considerations and board development have been actioned or remain ongoing.

Succession planning is reviewed periodically by the Board and forms part of its forward-looking governance framework. While no specific appointments are currently anticipated, the Board continues to assess future needs in light of the Group’s evolving strategy, size, and skills requirements.

The Company builds trust through transparent reporting, effective shareholder engagement and a commitment to high standards of governance, in line with the QCA Code and as described in this section.

9. Establish a Remuneration Policy that Supports Long-Term Value Creation

The Group’s remuneration policy is designed to support its long-term strategic purpose, deliver on its business model, promote sustainable value creation and align executive interests with those of shareholders. The policy rewards performance through a mix of fixed and variable elements, including salary, discretionary bonuses, and longer-term share-based incentives, where appropriate.

The Remuneration Committee is chaired by Sue Hagan, with Qu Li as a member and is comprised entirely of independent non-executive directors. It reviews and recommends the remuneration of executive directors and senior staff, taking into account market benchmarks, Company performance and individual contribution. No director is involved in decisions relating to their own remuneration.

The Group’s share option scheme forms part of its strategy to retain and incentivise key staff and align interests with shareholders over the medium to long term. Further details of the scheme are provided in the Company’s accounts and in section ten.

Remuneration decisions reflect the Company’s values, its stage of growth, and the need to attract and retain high-calibre talent critical to executing the Company’s purpose.

10. Communicate Governance and Performance in a Transparent and Meaningful Way to Stakeholders

Shareholder Engagement

The Board is committed to maintaining strong communication with its shareholders and having constructive dialogue. The Company has close ongoing relationships with its private shareholders, and institutional shareholders and analysts are offered meetings to provide feedback and discuss performance, strategy and governance with the Company. In addition, all shareholders are encouraged to attend the Company’s Annual General Meeting and the voting results of all general meetings are published via the Company’s website.

The Investor Relations section of the Group’s website www.braveheartgroup.co.uk is regularly updated with details of relevant developments, regulatory announcements, financial reports and shareholder circulars. Shareholders with a specific enquiry can contact the board though the website, and via Trevor Brown, the CEO, who is available to answer investor relations enquiries. The Company uses electronic communications with shareholders to maximise efficiency and shareholder engagement.

Governance and Oversight

The Board is responsible for setting the Group’s strategic direction, establishing performance criteria and management policies and monitoring compliance with the objectives. This is achieved through monthly performance reporting on performance, risk and budget updates.

The current composition of the Board is two Executive Directors and two independent Non-Executive Directors. The Board provides extensive experience in advisory services and the technology sector, including the operation of public companies. The Board believes the composition of the board is appropriate for the Group’s scale and complexity at the present time.

Board Committees

Audit and Compliance Committee

During the period under review the Audit and Compliance Committee was chaired by Susan Hagan, with Qu Li as a member. Vivian Hallam was an invited observer.  It met twice during the reporting period. The Committee is responsible for:

• Reviewing the integrity of the Interim Report and Annual Reports,
• Considering the suitability and monitoring the internal control processes,
• Monitoring the valuations for the portfolio of directly held investments,
• Liaising with the external auditors and reviewing the accounting policies, internal control processes and material accounting judgements.

The Board annually reviews the membership and remit of the Audit and Compliance Committee to confirm that it is appropriate to the size of the Group, fit for purpose and operates effectively to manage the risks.

The independence and effectiveness of the external auditor is reviewed annually, and the Audit and Compliance Committee meets at least once per financial year with the auditors to discuss their independence and objectivity, the Annual Report, any audit issues arising, internal control processes, auditor appointment and fee levels and other appropriate matters. It has unrestricted access to the Company’s auditors.

Remuneration Committee

The Remuneration Committee comprises Susan Hagan (Chair) and Qu Li and met twice during the reporting period. It is responsible for:

• Reviewing the performance of Executive Directors and Senior Management,
• Making recommendations to the Board on remuneration, including performance-related cash bonuses, the award of shares in lieu of bonuses and share options granted under the Group’s share option plan,
• Making recommendations to the Board on employment terms and conditions,
• Overseeing the share option scheme,
• Ensuring alignment of remuneration with long-term shareholder interests, risk management, and regulatory expectations.

No Director took part in discussions concerning their own remuneration