Tanfield Group Plc is classified as an Investing Company. The Company has a 49% membership interest in Snorkel International Holdings and a 5.76% interest in the shares of Smith Electric Vehicles Corp.

Investing Policy

The holdings in Snorkel International Holdings and Smith Electric Vehicles are passive investments. It is the intention that where distributions or realisations of such holdings are made (or there is a receipt of marketable securities) that these are distributed to shareholders, subject to compliance with any legal requirements associated with such distributions. There is presently no anticipated limit on the amount of time the holdings are to be held by the Company.

The Company does not have and will not make cross holdings and does not have a policy on gearing.

Board of Directors

Daryn Robinson
Chairman

Daryn Robinson was invited to join the board in November 2015 following several years of involvement with Tanfield Group dating back to 2002 and was appointed Chairman in May 2017. He was a key member of the senior management team during the acquisitions of Smith Electric in 2004, Upright Powered Access in 2006 and Snorkel in 2007. More recently he was appointed Company Secretary in 2014. With a strong background in finance, mergers and acquisitions, he went on to provide business consultancy services to a number of other companies both privately owned and publicly listed on the AIM and ISDX markets. This included an interim CFO role with Darwen Group who in 2007 acquired the former bus manufacturer East Lancashire Coachbuilders and listing the Company on the AIM market as Darwen Holdings Plc. In 2008 he worked with Darwen on the acquisition of Optare and following the merger and restructuring the Company become the enlarged AIM listed company Optare Plc, employing 830 people with a £80 million turnover. In 2010 he assisted Optare to secure an initial investment from Ashok Leyland which culminated in the disposal of 75% of the share capital to Ashok in 2012. Daryn is Chairman of Tanfield's Remuneration Committee and sits on the Audit Committee.

Martin Groak
Non-Executive Director

Martin Groak joined the board of Tanfield in June 2005. He qualified as a chartered accountant in 1978 (now retired) after completing a degree in economics from the University of London and has 40 years of international business experience. Martin is multi-lingual, with a strong background in finance and financial control, predominantly in the oil and gas, steel, logistics and energy sectors. He has previously held five other directorships of publicly quoted companies and is an active member of the Institute of Directors, where he is participating in a strategic consultation aimed at raising standards of corporate governance in SMEs. Martin is Chairman of Tanfield's Audit Committee and sits on the Remuneration Committee.

Investments

Tanfield owns 5.76% of the shares in Smith Electric Vehicles Corp, a leading designer and producer of all-electric commercial vehicles for short haul urban fleets. Smith produces zero-emission vehicles that deliver a significantly superior performance to traditional diesel trucks, at greater operational efficiency and significantly lower cost. The Smith mission is to be the leading producer of high efficiency, zero-emissions vehicles in the commercial transportation industry, utilising its unique platform to partner with world-class brands to transform their entire fleets, help them operate more profitably and return energy to the grid.

www.smithelectricvehicles.com

Tanfield has a 49% membership interest in Snorkel International Holdings LLC, subject to the provisions of the agreement with its partner Xtreme Manufacturing LLC (further details of which are set out in the circular to shareholders dated 20 September 2013).

Tracing its roots back to 1946, Snorkel is a global producer of self-propelled, towable and push-around aerial lifts, including diesel and electric scissor lifts, mast lifts, telescopic boom lifts and articulating booms. Snorkel's comprehensive range of aerial lifts delivers safer and more efficient working at heights from 10ft to 132ft (3m to 40m). Snorkel offers machines for almost any application, from compact electric lifts for interior building maintenance through to big diesel booms and scissors for the toughest construction job sites.

Snorkel's philosophy is "keep it simple" - the company manufactures robust, reliable machines that take workers off the ground in a safe and efficient manner. Snorkel lifts are simple to use, simple to maintain and simple to repair; a philosophy that makes them ideal for demanding rental applications.

www.snorkellifts.com

Corporate Governance

Chairman’s Statement

As a listed company traded on the AIM market of the London Stock Exchange we recognise the importance of sound corporate governance throughout our organisation giving our shareholders, other stakeholders and the wider community confidence in our business. We endeavour to deliver on our Investment Policy in an ethical manner.

In my capacity as Chairman, I have a responsibility for ensuring the Board adopts and implements a recognised corporate governance code in accordance with our stock market listing. Accordingly, the Board have committed to the adoption of, and working to implement, the Quoted Companies Alliance (QCA) Corporate Governance Code 2018. The Board as a whole has responsibility for the implementation of governance throughout our organisation, commensurate with our size of business and our status as a passive investment Company.

The QCA Corporate Governance Code 2018 has ten key principles and we set out below how we apply those principles, where applicable, to our business.

Daryn Robinson
Chairman

QCA Corporate Governance Code 2018

Principle 1
Business Model and Strategy
Business Description

Tanfield Group is a passive investment Company with two investments, as described in the Investing Policy below:

"The holdings in Snorkel International Holdings and Smith Electric Vehicles are passive investments. It is the intention that where distributions or realisations of such holdings are made (or there is a receipt of marketable securities) that these are distributed to shareholders, subject to compliance with any legal requirements associated with such distributions. There is presently no anticipated limit on the amount of time the holdings are to be held by the Company.

The Company does not have and will not make cross holdings and does not have a policy on gearing."

The Company's interest in these investments came from selling operational control in Smith Electric in January 2011 and from entering in to a joint venture in October 2013 which resulted in Xtreme Manufacturing having operational control in Snorkel International Holdings.

Strategy

As a passive investment Company, we do not have operational control over or an operational input in to either of the investments named in the Investment Policy. The strategy is that where distributions or realisations of such holdings are made (or there is a receipt of marketable securities) that these are distributed to shareholders, subject to compliance with any legal requirements associated with such distributions.

The Company does not currently intend to make any further investments in the future.

Principle 2
Understanding Shareholder Needs and Expectations

The Board is committed to maintaining good communications and having a constructive dialogue with both its institutional and private shareholders. Whilst recognising that as a passive investment Company the information that can be discussed is often limited, the Company endeavours to maintain a dialogue and keep shareholders informed via its public announcements. The Board believes that it has successfully engaged with shareholders to date, keeping them abreast of the Company's strategy and progress.

The Company encourages all shareholders to attend its Annual General Meeting where they can meet and question the Directors and express ideas or concerns. Shareholders are welcome, by appointment, to talk with Directors, subject to commercial confidentiality and regulatory restrictions. In addition, shareholder communication is answered, where possible or appropriate, by Directors. Any communication can be sent to Daryn Robinson via the Contact section of the website.

Principle 3
Stakeholder and Social Responsibilities
Stakeholder Relations:

As a passive investment Company, the Board recognises that its stakeholders are limited to external stakeholders (which includes its investments), with the exception of the Directors, and are therefore not as extensive as many operational businesses.

The Company maintains a dialogue with its external stakeholders as appropriate and as the need arises. In relation to its investment in Snorkel, the contract requires quarterly accounts to be provided to the Company, allowing for the performance of the investment to be monitored. The Company works closely with its advisors to ensure it operates in conformity of its listing regulations as well as the social, legal, religious and cultural requirements.

Social Responsibilities:

Whilst we are a passive investment Company, we still consider it important that our behaviour is socially responsible and we will endeavour to:

  1. be accountable for our actions and activities;
  2. be transparent about our activities and decisions that affect society, the economy and the environment;
  3. operate in an ethical, professional and responsible manner;
  4. be mindful of and respect our stakeholder interests;
  5. respect the rule of law; and
  6. respect human rights in whatever we do.
Principle 4
Risk Management

The Board is mindful of and monitors its corporate risks. Risks are categorised by both probability and impact and appropriate measures are identified to monitor and mitigate any potential impact.

The main risks associated with the business strategy is that the investments may not achieve their operational goals, resulting in no distribution or realisation event and the potential for disputes with the controlling shareholders pertaining to the terms of a realisation event should one occur. The Board discusses any identified risks at its Board meetings and, if necessary, seeks advise from an appropriate professional. As a passive investment Company, the Board is not able to influence the decision making or strategy of the investment companies and so its ability to mitigate some risks is limited.

Principle 5
Board Structure

The Company operates as a passive investment Company and as such has put in place a board structure that can best provide the strategic advice, leadership and continuity required. The board structure consists of two non-executive directors, Daryn Robinson and Martin Groak, both sitting on the PLC Board. Due to the nature of the business, executive directors and an operational Board are not deemed necessary.

Principle 6
Board Composition, Experience and Dynamics

The Board considers the Board composition in terms of skills, experience and balance. Its committees will seek external expertise and advice from its Nominated Advisor & Broker, Auditor or Solicitor where required. With only two Board members, due to the limited activities of the Company, Board cohesion is paramount and this is regularly reviewed as required. The Board members have held roles and directorships in a number of other publicly listed companies where they have gained a wealth of financial and public market experience across a variety of sectors which collectively has provided them with the balance of skills and expertise to deliver the business strategy, as well as upholding the social responsibilities of the Company. Due to the size of the Board, it is difficult to ensure there is a significant range of diversity, including gender balance, but all appointments to the Board are made based on the skills and expertise of the individual and the needs of the Company which is kept under regular review. The current members of the board, including details of skills and relevant past experience to ensure they're capable of delivering the business strategy, may be found here.

Principle 7
Board Evaluation

The Board considers evaluation of its committees and individual directors to be an integral part of corporate governance to ensure it has the necessary skills, experience and abilities to fulfil its responsibilities. The goal of the Board evaluation process is to identify and address opportunities for improving the performance of the board and to solicit honest, genuine and constructive feedback. To ensure the skills and knowledge of the Board are kept up to date, it works with its Nominated Advisor & Broker, Auditor and Solicitor to ensure that any relevant new or amended accounting standards and interpretations, AIM rules or Companies Act legislation are fully understood and implemented.

The Board considers the evaluation process is best carried out internally on an annual basis and, as a passive investment Company, does not institute formal measures but will keep this under review if and when circumstances within the Company change.

Principle 8
Corporate Culture

The Board recognises that a corporate culture based on sound ethical values and behaviours is an asset. In accordance with the Company’s stated social responsibilities it endeavours to conduct its business in an ethical, professional and responsible manner. As the Company has no control over operational matters relating to its investments, it is unable to influence the values and behaviours directly but it supports a culture of dealings with both shareholders and investee companies with integrity and respect.

Principle 9
Governance Structure

The PLC Board, which as a passive investment Company consists of two independent non-executive directors, have the responsibility of monitoring the Company investments to ensure that, where distributions or realisations are made, these can be distributed to shareholders, subject to compliance and any legal requirements associated with such distributions.

The Chairman (Daryn Robinson), with input from the other non executive director (Martin Groak), sets the Board’s agenda and ensures that adequate time is available for discussion of all agenda items, in particular strategic issues. The non-executive directors provide oversight in managing the Company investments and delivering the aims of the Investment Policy. As a passive investment Company, the time commitment from the non-executive directors can vary from month to month, usually ranging from 2 to 10 days per month, however all directors are committed to allocating additional time to the Company, if and when necessary, in order to discharge their duties.

The Board is responsible for ensuring that a system of internal control exists to safeguard shareholders’ interests and the Company’s assets. It is responsible for the regular review of the effectiveness of the systems of internal control. Internal controls are designed to manage rather than eliminate risk and therefore even the most effective system cannot provide assurance that each and every risk, present and future, has been addressed. The Board is of the view that, due to the current size and composition of the Company, that it is not necessary to establish an internal audit function. Details of the number of Board meetings, as well as the number of committee meetings, including the committee attendance, is disclosed each year in the annual report which is available from the company website.

The Board has established the following committees to assist with oversight and governance:

Audit Committee

The Audit Committee is chaired by Martin Groak and also comprises Daryn Robinson. It oversees and reviews the Company’s financial reporting and internal control processes, its relationship with external auditors and the conduct of the audit process together with its process for ensuring compliance with laws, regulations and corporate governance.

Remuneration Committee

The Remuneration Committee is chaired by Daryn Robinson and also comprises Martin Groak. The Remuneration Committee is responsible for establishing a formal and transparent procedure for developing policy on remuneration and to set the remuneration packages of individual Directors. It is furthermore responsible for determining the total individual remuneration packages of each Director including, where appropriate, bonuses, incentive payments and share options.

The Committee’s policy is to provide a remuneration package which will attract and retain Directors with the ability and experience required to manage the Company. It is the aim of the Committee to reward Directors competitively and on the broad principle that their remuneration should be in line with the remuneration paid to comparable companies. There are four main elements of the remuneration package for Directors: base salary, share options, benefits and annual bonus.

Principle 10
Stakeholder Communication

The Board is committed to maintaining good communication and having constructive dialogue with all of its stakeholders, including shareholders, providing them with access to information to enable them to come to informed decisions about the Company. The Company’s website provides all required regulatory information as well as additional information shareholders may find helpful including: information on Board Members, Advisors and Significant Shareholdings, a historical list of the Company’s Announcements, its Financial Calendar, Corporate Governance information, the Company’s publications including historic Annual Reports and Notices of Annual General Meetings, together with Share Price information and interactive Charting facilities to assist shareholders analyse performance.

Results of shareholder meetings and details of votes cast will be publicly announced through the regulatory system and displayed on the Company’s website with suitable explanations of any actions undertaken as a result of any significant votes against resolutions.

Information on the work of the various Board Committees and other relevant information are included in the Company’s Annual Report.