The Board is committed to the principles of corporate governance and although, as an AIM listed company, is not bound by corporate governance rules and codes, the directors have applied them in a manner which it considers appropriate for the size of the Group.
Internal Control
The Board is responsible for the Group’s system of internal control and for reviewing its effectiveness. In the context of the Group’s business any such system can only reasonably be expected to manage rather than eliminate risks arising from its operations. It can therefore only provide reasonable and not absolute assurance against material loss or misstatement.
Key features of the internal control system are as follows:
• The Group has an organisational structure with clearly established responsibilities and lines of accountability. The Group promotes the values of integrity and professionalism. The members of the Board are available to hear, in confidence, any individuals concerns about improprieties.
• The Board has a schedule of matters expressly reserved for its consideration. This schedule includes acquisitions, major capital projects, treasury, risk management policies and approval of budgets and health and safety.
• An ongoing risk management process has been implemented which identifies the key business risks facing the Group including both financial and operational risks. This process and the key business risks are reviewed by the Board at least once a year.
• The controls in place to minimise the occurrence of the risk are documented and analysed for effectiveness. These include procedures for the approval of major expenditure or commitment of resources.
• The Board monitors the activities of the Group through the management accounts, monthly forecasts and other reports on current activities and plans. The executive management regularly monitors financial and operational performance in detail and takes any necessary corrective action.
• The Group operates a ‘whistle-blowing’ policy enabling any individual with a concern to approach the non-executives in confidence.
The Board reviews and continues to review the effectiveness of the Group’s procedure in managing risk and, therefore, believes it meets the requirements of the Guidance.