Governance

Statement of Compliance with Provisions of the Combined Code

The Board supports the principles of good corporate governance and in particular the Combined Code on Corporate Governance which is appended to the Listing Rules of the Financial Services Authority (the Combined Code), issued in June 2006. Though the Group as an AIM listed company is not required to fully comply with the current version of the Combined Code on Corporate Governance, the Board is committed to a level of compliance appropriate for a smaller public company. This report is presented in accordance with the relevant provisions of the Combined Code on Corporate Governance (the Combined Code).

The Group now considers that the Chairman, Dr. G.N. Vernon does meet the independence criteria and the Company is now in compliance with Code A.2.2.

As such, the Board considers that it has maintained an appropriate level of compliance with the provisions set out in Section 1 of the Combined Code for the year to December 31, 2008.

Board of Directors

During the year to December 31, 2008, the Board consisted of a Non-executive Chairman, two Executive Directors and three Non-executive Directors. On April 7, 2008 Mr. Brenner resigned as an Executive Director and David Szostak was appointed as a Non-executive Director.

On joining the Board, all directors received a full induction and have the opportunity to meet with shareholders at the Annual General Meeting.

Biographies of the Board members appear on the Board of Directors page. These indicate the high level and range of experience, which enables the Group to be managed effectively.

The Board has established three committees in relation to Directors' remuneration and audit matters and nominations to the Board.

The membership of all Board Committees has remained unchanged for the year and is set out below:

• Remuneration Committee: Mr. Reade (Chairman) and Dr. Noonan.
• Audit Committee: Mr. Riley (Chairman), Dr. Noonan and Dr. Vernon.
• Nomination Committee: Dr. Vernon (Chairman), Mr. Riley and Mr. Reade.

The Board is responsible to the shareholders for the proper management of the Group. The Board has adopted a formal schedule of matters specifically reserved for the Board's decision that covers key areas of the Group's affairs including overall responsibility for the business and commercial strategy of the Group, policy on corporate governance issues, review of trading performance and forecasts, the approval of major transactions and the approval of the interim management and financial statements,
Annual Report and financial statements and operating and capital expenditure budgets.

The Chairman leads the Board in the determination of its strategy and in the achievement of its objectives. The Chairman is responsible for organizing the business of the Board, ensuring its effectiveness and setting its agenda. The Chairman has no involvement in the day-to-day business of the Group. The Chairman facilitates the effective contribution of Non-executive Directors and constructive relations between Executive and Non-executive Directors, ensuring Directors receive accurate, timely and clear information. The Chairman gives feedback to the Board on issues raised by major shareholders.

The Board evaluates its own effectiveness on an annual basis by measuring performance against a standard set of objectives assessed by each member of the Board.

The Board delegates the day-to-day responsibility for managing the Group to the Chief Executive Officer who is accountable to the Board for the financial and operational performance of the Group.

The Group regards A.J. Reade, B.M. Riley and K.D. Noonan as independent Non-executive Directors and these Directors constructively challenge and help develop proposals on strategy, and bring strong independent judgment, knowledge and experience to the Board's deliberations. The Independent Directors are of sufficient calibre and number that their views carry significant weight in the Board's decision making. K.D. Noonan is the Senior Independent Director. As Senior Independent Director, he is available
to shareholders if they have concerns where contact through the normal channels of Chairman, Chief Executive or Finance Director has failed to resolve matters or for which such contact would be inappropriate.

The Board has 5 regularly scheduled meetings annually with additional meetings to discuss strategy and other pertinent issues organized as necessary during the year.

Prior to each meeting the Board members receive copies of the management accounts and are furnished with information in a form and quality appropriate for it to discharge its duties concerning the state of the business and performance compared to plan. All directors have access to the services of the Group Secretary and may take independent professional advice at the Group's expense in the furtherance of their duties.

The Non-executive Directors meet after each Board meeting without the Executive Directors being present.

Board Committees

The Remuneration Committee is responsible for establishing and monitoring appropriate levels of remuneration and individual remuneration packages for Executive Directors. No director is involved in deciding his own remuneration. The report of the Remuneration Committee is set out in the 2008 Annual Report.

The Group has an Audit Committee, whose responsibilities include reviewing the scope of the audit and audit procedures, the format and content of the audited financial statements and interim reports, including the notes and the accounting principles applied. The Audit Committee also reviews internal control, including internal financial control, in conjunction with the Board. The Audit Committee will also review any proposed change in accounting policies and any recommendations from the Group's auditors regarding improvements to internal controls and the adequacy of resources within the Group's finance function. The Audit Committee advises the Board on the appointment of external auditors and on their remuneration both for audit and non-audit work, and discusses the nature, scope and results of the external audit with the external auditors. The Audit Committee keeps under review the cost effectiveness and the independence and objectivity of the external auditors.

All directors may attend meetings and at least twice a year representatives of the Group's auditors have an opportunity to meet the Audit Committee at which time they also have the opportunity to discuss matters without any Executive Director being present.

The Audit Committee monitors fees paid to the auditors for non-audit work and evaluates on a case by case basis whether it should put the requirement for non-audit services out to tender. The Group's auditors, KPMG LLP, have been instructed to carry out non-audit work during the year. The non-audit work this year was comprised of tax advisory services. The Audit Committee believes that it is more effective for the auditors to carry out these services and the nature of such work does not impair the independence
and objectivity of the auditors. Prior approval is required before such work is contracted. Other firms of advisors were employed during the year for tax compliance services.

A "whistle blowing" policy has been implemented whereby employees may contact the Chairman of the Audit Committee on a confidential basis.

The Nomination Committee is responsible for considering and making recommendations concerning the composition of the Board, including proposed appointees to the Board, whether to fill vacancies that may arise or to change the number of Board members. The appointments during the year did not involve open advertising.

Internal Control and Risk Management

The Directors acknowledge that they are responsible for establishing and maintaining the Group's system of internal control and reviewing its effectiveness. The Group is small and the Directors are closely involved in the management of the business. At the beginning of the financial year we identified the key risks that the Group faced during the financial year. The Board has since reviewed these risks as part of the strategic planning exercise, considering the likelihood of the risk occurring and the potential impact on the business. The Board will continue to review and update the risk management process on an ongoing basis. No significant weaknesses or failings were identified; however, the internal controls are designed to manage rather than eliminate the risk of failure to achieve business objectives and the Board recognizes that any system can only provide reasonable and not absolute assurance against material misstatement or loss.

The Group operating procedures include a comprehensive system for reporting financial and non-financial information to the Directors.

The planning system produces rolling three-year strategic plans annually. The first year of the three-year plan is a proposed operating budget, phased monthly. These are approved by the Board and forecast updates are carried out quarterly. The financial projections include income statement, balance sheet and cash flows.

At each Board meeting, the Board reviews the actual financial results versus budget and forecast together with other management reports containing non-financial information.

Schedules of financial authority limits detailing management authority limits for commitments in respect of sales orders, capital and operating expenditures are circulated to relevant employees and updated at least annually.

The Board considers that there have been no weaknesses in internal financial controls that have resulted in any material losses, contingencies or uncertainties requiring disclosure in the financial statements.

The Chairman ensures that Directors take independent professional advice as required at the Group's expense in appropriate circumstances and all members of the Board have access to the advice of the Group Secretary.

Internal Audit

The Group does not have an internal audit function. However, the Audit Committee reviews annually the need for such a function and has done so during the year. The current conclusion of the Board is that it is not necessary given the modest scale and lack of complexity of the Group's activities.

Shareholder Communication

It is the Group's policy to involve its shareholders in the affairs of the Group and to give them the opportunity at the Annual General Meeting to ask questions about the Group's activities. This process enables the views of shareholders to be communicated to the Board. In addition, any direct enquiries are dealt with by the Group Secretary and communicated as appropriate to the Board. Other than in exceptional circumstances, all directors, including those newly appointed, attend the Annual General Meeting of
the Group, and make themselves available for introductions and answering shareholders' questions. Established procedures ensure the timely release of price sensitive information and the publication of financial results and regulatory financial statements. The Group also maintains a website, www.tyratech.com, which incorporates corporate, financial, product information and news.

 

Documents

Amended and restated certificate of incorporation - adopted 23 May 2007

Certificate of amendment - dated 18 August 2008