Corporate Governance

Statement of compliance

As  an  AIM  listed  company,  compliance  with  the  2008  FRC  Combined  Code  is  not  required.  However, the directors seek to comply with the Combined Code and Code of Best Practice to the extent that it is practicable and appropriate for a group of our size.

Board and board committees

Board members are listed below. Both non-executive directors are considered to be independent.

In 2010, Board members attended the following meetings:

The  Board  determines  the  overall  strategic  direction  of  the  Group,  oversees  the  development  and control  of  the  Group  and  reviews  financial  and  operational  performance.  The  Board  approves  acquisitions  and  disposals,  annual  budgets  and  monthly  forecasts  and  reviews  monthly  management  accounts.  Day-to-day  and  business  management  control  is  delegated  to  the  executive  directors  who are responsible for performance and the implementation of Group policy.

Audit committee

The  members  of  the  audit  committee  are  the  non-executive  directors;  Steve  Bodger,  who  chairs  the committee, and Keith Cameron. The auditors and the executive directors also attend the meetings at the  invitation  of  the  chairman  of  the  committee.  The  audit  committee  reviews  and  approves  the  Annual  report  and  interim  statement.  It  also  reviews  the  Group’s  scope  of  the  audit  and  the independence and objectivity of the auditors. The auditors have direct access to the chairman of the committee,  if  required.  The  audit  committee  is  responsible  for  recommending  the  appointment,  reappointment  or  removal  of  auditors.  The  committee  is  also  responsible  for  monitoring  the  level  of non-audit  services  provided  by  the  auditors  to  ensure  that  objectivity  and  independence  is maintained.

Nominations committee

We do not consider that a nominations committee is necessary in a group of our size.

Remuneration committee

The members of the remuneration committee are Keith Cameron and Steve Bodger, the independent non-executive directors. Keith Cameron chairs the committee. The remuneration committee agrees with the Board the framework and policy for executive remuneration in the Group and specifically determines the remuneration packages of the executive directors.

Internal control

The  Board  has  overall  responsibility  for  internal  control  systems  and  the  executive  directors  are  charged with implementing and maintaining them.

The  Group  has  comprehensive  systems  for  financial  reporting  and  forecasting  profits,  cash  flows,  assets  and  liabilities.  The  systems  include  regular  monitoring  of  cash,  monthly  reporting  of  financial results,  reviews  of  forecasts  and  comparisons  with  budgets.  Budgets  and  business  plans  are  prepared  annually  by  each  division  and  reviewed  by  management  and  the  Board.  Monthly  management meetings are held to monitor performance against budget, progress in implementing planned changes and the operational efficiency of the business.

At  present  the  directors  do  not  consider  there  is  a  justifiable  need  for  a  dedicated  internal  audit function given the size of the Group.

Operational risks are identified and assessed by management and any significant risks are reported to the Board. Financial and commercial risks are reviewed by the Board.

The  Group’s  internal  control  systems  are  designed  to  provide  directors  with  reasonable  assurance that  any  problems  are  identified  on  a  timely  basis  and  dealt  with  appropriately.  The  Board  considers  the  internal  controls  to be effective but no system of  internal control  can provide absolute assurance against material misstatement or loss.

Relationship with shareholders

It  is  a  high  priority  for  the  Board  to  establish  relationships  with  shareholders.  The  chairman  and finance  director  hold  regular  briefings  with  institutional  shareholders  and  investment  managers  and invitations  are  afforded  to  institutional  shareholders  to  attend  presentations  by  directors  and  senior management. Feedback from these meetings is given to the other directors. The Board welcomes the opportunity to meet individual shareholders at the annual general meeting.

Directors' qualifying third party indemnity provisions

No  qualifying  third  party  indemnity  provision  was  in  force  for  the  benefit  for  any  of  the  directors  of  the Group.