Corporate governance

The Group is committed to a high standard of corporate governance and operates to clear principles and procedures of control appropriate to a business of its size. Whilst there is no requirement for AIM companies to comply with the Combined Code, the Company intends to comply with the main provisions in so far as they are appropriate to smaller companies. This statement describes how the Group applies the principles of governance.

The Board is responsible for approving Company policy and strategy. It meets regularly throughout the year and there are a number of matters that are reserved for its decision. Management supplies the Directors with appropriate and timely information and the Directors are free to ask for any further information they consider necessary. Copies of all press announcements made by the company are also circulated to the Board. Directors may take independent professional advice at the Company’s expense and each director has access to the Company Secretary. The Company Secretary is charged with ensuring that the Company complies with all relevant regulations.

The Board consists of a Non-Executive Chairman, one Executive (Managing) Director and three Non-Executive Directors.

Supply of information

To enable the Board to function effectively and allow Directors to discharge their responsibilities, full and timely access is given to all relevant information. The Board receives support from the Managing Director at its monthly meetings. In addition:

• an annual budget for each operating subsidiary is approved by the board; and
• actual results are monitored monthly.

Reappointment

Any Director appointed during the year is required, in accordance with the Company’s Articles of Association, to retire and seek appointment by shareholders at the next Annual General Meeting. The Articles also require that one-third of the Directors retire by rotation each year and seek re-appointment at the Annual General Meeting. The Directors required to retire will be those who have been the longest in office since their last appointment or re-appointment.

The Remuneration Committee

The Remuneration Committee reviews the performance of the Executive Directors and sets the scale and structure of their remuneration including bonus arrangements. The Remuneration Committee also sets the allocation of share options to Directors and other employees. As a small company it is not possible for the Committee to comply fully with the Combined Code. Accordingly membership of the Committee comprises Nick Allen as Chairman together with Euan Worthington and Jonathan Willis-Richards.

Statement of remuneration policy

The Group’s policy provides for a competitive package that reflects the Group’s performance and is designed to attract and retain high calibre executives. The package currently consists of base salary and long-term rewards in the form of share options. There is no bonus plan currently in place.

Communication with shareholders

The Company has made use of the London Stock Exchange PRN service to communicate with shareholders since admission to AIM. The Annual General Meeting gives shareholders the opportunity to question the Board.

Accountability

The Board of Directors has overall responsibility for the system of internal financial control which is designed to provide reasonable but not absolute, assurance against material misstatement or loss. The key procedure is:

• the Audit Committee, comprising Jonathan Willis-Richards (Chairman), Euan Worthington and Nick Allen, meets with the external auditors twice per year.