Governance

The Directors recognise the importance of sound corporate governance.

Adoption of new articles of association (resolution 9)

It is proposed to adopt new articles of association (the "New Articles") with effect from 1 June 2008. The New Articles update the Company's current articles of association (the "Current Articles") primarily to take account of changes in English company law brought about by certain provisions of the Companies Act 2006 that will be in force by or on 1 October 2008. The principal changes introduced in the New Articles are set out in Appendix 1 behind the Notice of Annual General Meeting. The changes, which are of a minor, technical or clarifying nature and also some more minor changes which merely reflect changes made by the Companies Act 2006 have not been noted. Resolution 9 will be proposed as a special resolution.

The Board

The Board currently comprises two executive and two non-executive directors.

Audit Committee

The Board has established an audit committee with formally delegated duties and responsibilities. The audit committee comprises the Non-executive Director Beatrice Hollond and James Ede-Golightly. The audit committee is chaired by Beatrice Hollond.

Remuneration Committee

The Company established a remuneration committee in March 2007 which will meet as and when required. The remuneration committee comprises the Non-executive Director Beatrice Hollond and James Ede-Golightly with James as Chairman.

The policy of the committee is to reward executive Directors in line with the current remuneration of Directors in comparable businesses in order to recruit, motivate and retain high quality executives within a competitive market place.

There are two main elements of the remuneration packages for executive Directors and senior management:

Nominations Committee

The Directors do not consider that, given the size of the Board, it is appropriate at this stage to have a nomination committee. However, this will be kept under regular review by the Board.

Internal Control

The Board is responsible for maintaining a sound system of internal control. The Board's measures are designed to manage, not eliminate risk, and such a system provides reasonable but not absolute assurance against material misstatement or loss.

Some key features of the internal control system are:

  1. Management accounts information, budgets, forecasts and business risk issues are regularly reviewed by the Board who meet at least 6 times per year;
  2. The Company has operational, accounting and employment policies in place;
  3. The Board actively identifies and evaluates the risks inherent in the business and ensures that appropriate controls and procedures are in place to manage these risks; and
  4. There is a clearly defined organizational structure and there are well-established financial reporting and control systems.

Going Concern

The Directors confirm that they are satisfied that the Company and Group have adequate resources to continue in business for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

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