Corporate Governance
The Board supports the principles of good corporate governance, although following the move from the full listing on the London Stock Exchange to AIM on 1 October 2007 the Company is not required to apply the Combined Code ("the Code"). However, the Board believes the application of the Code is in the best interests of the Company and its shareholders and has sought to apply the spirit of the Code in a manner which is appropriate for the size of the Group and its stage of development. This report summarises the way in which the principles are currently being applied.
The Board
The Board currently comprises two Executive Directors and three Non-executive Directors and is chaired by Mr L D Goodman, with the post of
Chairman and Chief Executive separate. The Board is responsible for the Group's strategy, reviewing operational and financial matters and reporting to shareholders where appropriate. The Executive Directors meet on a regular and frequent basis and work closely with operational management to ensure the Group's objectives are achieved.
To enable the Board to discharge its duties, all Directors receive appropriate and timely information. Briefing papers are distributed in advance of Board meetings. Any of the Directors may take independent professional advice in the furtherance of their duties at the Company's expense.
The Company's Non-executive Directors are considered by the Board to be independent of management.
Shareholder relationship
The Company has a regular dialogue with institutional shareholders on a range of subjects. The Company reports formally to shareholders twice a year,
when its half year and full year results are announced and an interim and a full year report are issued to shareholders. These reports are also available
on Chapelthorpe's website (www.chapelthorpe.com).
Board and Executive Committees
Certain matters are delegated by the Board to the following committees:
Audit Committee
The Committee consists of the Chairman, Mr L D Goodman and Messrs T Russell and J G Holstrom, all Non-executive Directors. The Committee
is responsible for reviewing the Group's internal control systems, its accounting policies and the nature and scope of the external audit. The Committee
meets on average twice a year.
Remuneration Committee
The Committee consists of the Chairman, Mr L D Goodman and Messrs T Russell and J G Holstrom, all Non-executive Directors. It is responsible for determining the
Company's policy for executive remuneration on behalf of the Board. In addition, it determines appropriate performance conditions for a bonus scheme
and recommends the approval of bonus awards for the Board and senior operational management. The Committee has access to professional advice
and meets as required.
Nominations Committee
As the Board of Directors of the Company is small there is no separate Nominations Committee. All nominations to the Board are considered by all
of the Directors.
Internal control
The Board has responsibility for the systems of internal control. Such a system can provide reasonable but not absolute assurance against material
misstatement or loss. In order to meet that responsibility the Board meets regularly and maintains control over appropriate strategic, financial,
organisational and compliance issues.
There are well-established procedures for budgeting, planning and capital expenditure, together with information and reporting systems for monitoring the Group's operations. The Company has also put in place processes to deal with the identification and assessment of major business risks and these are monitored and reviewed by the Board.
The Group does not have an internal audit function. The Board has considered the need for a dedicated internal audit function but has decided that because of the Group's size and the systems and controls in place, it is not appropriate at present. The Board will review this on a regular basis.
Statement of Directors' responsibilities
The Directors are responsible for preparing the Annual Report and the Group and Parent Company financial statements in accordance with applicable laws and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group financial statements in accordance with IFRS as adopted by the EU, and the Parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- state whether IFRS as adopted by the EU and applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Group and Parent Company financial statements respectively; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Statement of disclosure information to auditors
So far as each Director is aware, there is no relevant audit information of which the Company's auditors are unaware. Relevant information is defined
as information needed by the Company's auditors in connection with preparing their report. Each Director has taken all the steps (such as making
enquiries of other Directors and the auditors and any other steps required by the Director's duty to exercise due care, skill and diligence) that he ought
to have taken in his duty as a Director in order to make himself aware of any relevant audit information and to establish that the Company's auditors
are aware of that information.
Going concern
The Directors consider the Company and the Group to have adequate resources to continue operations for the foreseeable future and have therefore
continued to adopt a going concern basis in the preparation of the financial statements.
Auditor independence
The Audit Committee's terms of reference include a responsibility to review the external auditors' independence, objectivity and the effectiveness
of the audit process. The Committee has developed and implemented a policy for the engagement of the external auditors to supply non-audit services
to the Company, with the intention of avoiding the independence and objectivity of the auditors being, or appearing to be, impaired. Details of all audit
and non-audit fees charged by PricewaterhouseCoopers LLP are disclosed in Note 6 to the consolidated financial statements.