The Directors recognise the importance of sound corporate governance and intend to comply with the QCA's Corporate Governance Guidelines for AIM Companies published in 2005. The Company achieves this through admission, audit, nominations and compensation committees with formally delegated duties and responsibilities. Non-executive director’s Laurie Mutch and Michael Ian Duckels are members of each committee. Ian Williams is a member of the nominations committee.
The Board intends at all times to comply with Rule 21 of the AIM Rules relating to Directors' dealings as applicable to AIM companies and will also take all reasonable steps to ensure compliance by the Company's applicable employees. The Company has adopted a share dealing code for this purpose.
The Board regularly meets and is responsible for strategy, performance, approval of major capital projects and the framework of internal controls. The Board has a formal schedule of matters specifically reserved to it for decision, including matters relating to management structure and appointments, strategic and policy considerations, transactions and finance.
To enable the Board to discharge its duties, all of the Directors receive timely information. Briefing papers are distributed to all Directors in advance of Board meetings. All Directors have access to the advice and services of the company secretary, who is responsible for ensuring that the Board procedures are followed and that applicable rules and regulations are complied with.
The Articles of Association of the Company provide that the Directors will subject themselves to re-election at the first opportunity after their appointment and one third of the Board members will voluntarily resubmit themselves for re-election at each annual general meeting of the Company.
Audit, Compensation and Nominations Committees
The audit committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company is properly measured and reported on. In addition, it receives and reviews reports from the Company's management and auditors. The audit committee meets not less than three times in each financial year and has unrestricted access to the Company's auditors.
The compensation committee, amongst other things, makes recommendations to the Board on matters relating to the remuneration of the executive Directors. The compensation committee also makes recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any share option scheme or equity incentive scheme in operation from time to time.
The nominations committee has responsibility for leading the process of Board appointments and will make recommendations to the Board.
Internal Financial Control
The Board is responsible for establishing and maintaining the Company’s system of internal financial control and places importance on maintaining a strong control environment.
The key procedures which the Directors have established, with a view to providing effective internal financial control, include the following:
- The Company has a monthly management reporting process to enable the Group Directors to monitor performance. Fully consolidated management information is prepared on a regular basis, at least quarterly. Each year the Board will review and adopt a comprehensive annual budget for the Company. Monthly results will be examined against the budget and deviations will be closely monitored by the Board.
- The Board is responsible for identifying major business risks faced by the Company and for determining the appropriate course of action to manage those risks. The Directors recognise, however, that such a system of internal financial control can only provide reasonable, not absolute, assurance against material misstatement or loss. The effectiveness of the system of internal financial control operated by the Company will therefore be subject to continuing review by the Directors.