Governance

The Directors recognise the value and importance of high standards of corporate governance and intend, given the Company’s size, stage of development and constitution of the Board, to comply with the main provisions of the Combined Code. The Company also proposes to follow the recommendations on corporate governance of the Quoted Companies Alliance for Companies with shares traded on AIM.

The Board currently comprises the Chairman (who is non-executive), three executive directors and three non-executive directors who the Company believes to be independent (within the meaning of the Combined Code). The senior independent non-executive director is Dr Noonan.

The Directors have adopted terms of reference for and have an audit committee, a remuneration committee and a nominations committee.

Audit Committee

The audit committee is chaired by Mr Riley and its other members are Dr Vernon and Dr Noonan. It will normally meet not less than twice a year. The audit committee has responsibility for, amongst other things, the planning and review of the Company’s annual report and accounts and half-yearly reports and the involvement of the Company’s auditors in that process. The audit committee focuses in particular on compliance with legal requirements and accounting standards and on ensuring that an effective system of internal financial controls is maintained. The ultimate responsibility for reviewing and approving the annual report and accounts and the half-yearly reports remains with the Board. The terms of reference of the audit committee cover such issues as membership and the frequency of meetings, as mentioned above, together with the role of the secretary and the requirements of notice of and quorum for and the right to attend meetings. The duties of the audit committee covered in the terms of reference are: financial reporting, internal controls and risk management systems, whistle blowing, internal audit, external audit, and reporting responsibilities. The terms of reference also set out the authority of the committee to exercise its duties. Dr Vernon’s membership of the Audit Committee does not comply with provision C.3.1 of the Combined Code.

Remuneration Committee

The remuneration committee is chaired by Mr Reade and its other member is Dr Noonan. It will normally meet not less than twice a year. The remuneration committee has responsibility for making  recommendations to the Board on the Company’s policy on the remuneration of certain senior executives, the implementation and operation of share incentive schemes and for the determination, within agreed terms of reference, of specific remuneration packages for each of the Executive Directors, including pension rights, contracts of employment and any compensation payments. The terms of reference of the remuneration committee cover such issues as membership and frequency of meetings, as mentioned above, together with the role of secretary and the requirements of notice of and quorum for and the right to attend meetings. The duties of the remuneration committee covered in the terms of reference relate to the following: determining and monitoring policy on and setting level of remuneration, contracts of employment, early termination, performance-related pay, pension arrangements, authorising claims for expenses from the chief executive and chairman, reporting and disclosure, and remuneration consultants. The terms of reference also set out the reporting responsibilities and the authority of the committee to exercise its duties. The remuneration committee’s general philosophy is that executive compensation should be aligned with the Company’s business objectives and simultaneously reward performance in the attainment of these objectives. As a result, a greater portion of the compensation of executives is based on equity and incentive plans than the compensation of other employees of the Company. The Company will use competitive industry data for determination of compensation levels for its management and employees.

Nominations Committee

The nominations committee is chaired by Dr Vernon and its other members are Mr Reade and Mr Riley. It will meet when appropriate. The nominations committee considers the composition of the Board, retirements and appointments of additional and replacement directors and makes appropriate recommendations to the Board.

The Directors intend to comply, and procure compliance with, Rule 21 of the AIM Rules relating to dealings by directors and other applicable employees in the Company’s securities and, to this end, the Company has adopted an appropriate share dealing code.