OUR CLUB OUR BUSINESS OUR RESULTS
A procedure has been established by which Directors are able to take independent professional advice and obtain the appropriate training, deemed necessary in the pursuance of their duties, at the expense of the Company.
The Audit Committee (Chairman: Sir K E Mills), which met on three occasions during the year, has responsibility for, among other things, reviewing the scope and results of the audit, the overview of the Annual Report, considering compliance with legal requirements, accounting standards, the AIM rules of The London Stock Exchange, for advising the Board on the requirement to maintain an effective system of internal control and for reviewing the arrangements by which staff of the Company may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. The Audit Committee meets the external auditors independently from the Executive Directors and reviews matters brought to its attention by the external auditors. The Committee also reviews the objectivity, approach and cost effectiveness of both their audit and non-audit services. In accordance with best practice, the external auditors have confirmed their audit independence in writing to the Committee. The Committee recommended to the Board that Deloitte LLP be proposed for reappointment at the forthcoming Annual General Meeting. This recommendation has been accepted and will be proposed to the shareholders.
The Remuneration Committee (Chairman: Sir K E Mills), which met on two occasions during the year, has responsibility for making recommendations to the Board, within agreed terms of reference, on the Company’s policy on remuneration and the individual remuneration packages for the Executive Directors, including any compensation payments. Remuneration packages are established when the Directors are appointed. The Executive Directors may attend meetings at the invitation of the Committee but are not included in discussions concerning their own remuneration package. A report on Directors’ remuneration is set out on pages 29 and 30.
The Board complies with the Combined Code recommendations and revised guidance on internal control and maintains a sound system of internal control to safeguard shareholders’ investments and Company assets. The Board is responsible for the Group’s system of internal control. A process of identifying, evaluating and managing the significant risks faced by the Group was in place from the start of the year and to the date of approval of the Annual Report, and is in accordance with Turnbull guidance. Any system of controls can, however, only provide reasonable and not absolute assurance against material misstatement and loss. The key features of the financial controls of the Group, which have been in place throughout the year ended 30 June 2010 and up to the date of approval of this Annual Report, include a comprehensive system of financial reporting, budgeting and forecasting, and clearly communicated accounting policies and procedures. Financial control is monitored centrally and authorisation of expenditure is closely monitored by the Executive Directors. The Executive Directors receive selected information daily. Income statement, balance sheet and cash flow information is prepared each month and reviewed by relevant Executives. The Board is furnished with regular financial information. The public release of the Annual and Interim Reports is not made until it has been reviewed by the Board. In addition to financial controls, there is an established ‘whistle blowing’ procedure in place where employees may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. Working groups have also been established involving management, external consultants and operational staff at all levels. Cross-group meetings take place to ensure that the risks arising are reviewed, communicated and clearly understood and steps have been taken