CORPORATE GOVERNANCE

COMBINED CODE

The Directors seek to apply the principles set out in the Combined Code issued by the committee on Corporate Governance as far as practicable and appropriate for a relatively small company.

The Directors acknowledge the importance of the Principles set out in the Combined Code issued by the committee on Corporate Governance. Although the Combined Code is not compulsory for AIM companies, the Directors seek to apply these principles as far as practicable and appropriate for a relatively small company as follows:

The Board of Directors

The Board meets regularly 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 for its decisions. To enable the Board to discharge its duties, all Directors receive appropriate and 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 Board procedures are followed and that applicable rules and regulations are complied with. The Articles provide that Directors will be subject to re-election at the first opportunity after their appointment and the Board will voluntarily submit to re-election at intervals of three years.

The Roles of the Acting Chairman and Executive Directors

The division of responsibilities between the Acting Chairman of the Board, Sir Bernard Zissman and the Executive Directors, Alexandra Eavis and Andrew Fletcher, is clearly defined. The Acting Chairman leads the Board in the determination of its strategy and in the achievement of its objectives. The Acting Chairman is responsible for organising the business of the Board, ensuring its effectiveness and setting its agenda. The Acting Chairman facilitates the effective contribution of non-executive directors and ensures Directors receive accurate, timely and clear information. The Executive Directors have direct charge of the group on a day-to-day basis and are accountable to the Board for the strategic, financial and operational performance of the Group.

Directors and Directors’ Independence

The Board currently comprises the Acting Non-Executive Chairman, two Executive Directors and one further Non-Executive Director. The names of the Directors together with their biographical details are set under ‘Meet the Board’. The Non-Executive Directors are of sufficient calibre that their views carry significant weight in the Board’s decision making.

The Nomination Committee

The Nomination Committee comprises the members of the Board under the Chairmanship of the Acting Non-Executive Chairman. The Committee’s role is to consider board appointments, the continuance of the non-executive directors and other matters relating to the Board.

The Remuneration Committee

The Remuneration Committee currently comprises the members of the Board under the Chairmanship of the Acting Non-Executive Chairman. The Committee's role is to consider and approve the remuneration and benefits of the Executive Directors.

In framing the Company's remuneration policy, the Remuneration Committee has given full consideration to Section B of The Combined Code.

The Committee’s principal responsibilities are:

setting, reviewing and recommending to the Board for approval the Group's overall remuneration policy and strategy;
setting, reviewing and approving individual remuneration packages for executive directors and the Acting Chairman, including terms and conditions of employment and any changes to the packages; and
reviewing the salary structure and terms, conditions and benefits of employment of other Group Executive Committee members.

AIM Rule Compliance Committee

The AIM Rule Compliance Committee comprises one executive director and one non executive director. It meets regularly to ensure the Company is complying with the AIM Rules, and specifically when the Company is planning a corporate action that will need careful adherence to the rules, such as an acquisition, related party transaction or reverse takeover.

The Audit Committee

The Audit Committee comprises the members of the Board under the Chairmanship of one of the independent Non-Executive Directors. The Audit Committee meets at least twice a year and considers the appointment and fees of the external auditors and discusses the scope of the audit and its findings. The Committee is also responsible for monitoring compliance with accounting and legal requirements and for reviewing the annual and interim financial statements prior to their submission to the Board.

Auditors’ Independence and Objectivity

The Audit Committee reviews all services being provided by the external auditors to review the independence and objectivity of the external auditors, taking into consideration relevant professional and regulatory requirements, so that these are not impaired by the provision of permissible non-audit services.

The Company Secretary

The Company Secretary is responsible for advising the Board through the Acting Chairman on all governance matters. The directors have access to the advice and services of the Company Secretary. The Company’s Articles of Association and the schedule of matters reserved for the Board’s decision provide that the appointment and removal of the Company Secretary is a matter for the full Board.

External Relations

The Group maintains a website (www.aiminvestmentsplc.com) containing a wide range of information of interest to institutional and private investors.

Internal Financial Control

The Board is responsible for establishing and maintaining the Group’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 are as follows:

The Group’s organisational structure has clear lines of responsibility;
The Group will prepare a comprehensive annual budget for approval by the Board. Quarterly results are to be reported against the budget and variances closely monitored by the Directors; and
The Board is responsible for identifying the major business risks faced by the Group and for determining the appropriate courses 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 Directors review the effectiveness of the system of internal financial control on an ongoing basis.

The Directors review the effectiveness of the system of internal financial control on an ongoing basis.

Going Concern

After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

This information is disclosed for the purposes of Rule 26 of the AIM Rules for Companies.