Corporate Governance
The Directors recognise the value of the Principles of Good Corporate Governance and Code of Best Practice as set out in the UK Corporate Governance Code issued by the Financial Reporting Council (the “Governance Code”). The Board intends to take appropriate measures to ensure that the Company complies with the Governance Code to the extent appropriate taking into account the size of the Company and the nature of its business.
The Board directs the Company’s activities in an effective manner through its regular Board meetings and monitors performance through timely and relevant reporting procedures. It is the responsibility of the Board to ensure that there is effective stewardship of the Company’s affairs. Strategic issues and all operational matters of a material nature are determined by the Board. The members of the Board meet quarterly to review the investment performance and other high-level management information including financial reports and reports of a strategic nature. It monitors compliance with the Company’s objectives and investing policy.
The Board has established audit and nominations committees but does not consider it necessary to establish a remuneration committee. The Board as a whole will review annually the level of Directors’ fees. Nicholas Sallnow-Smith is Chairman of both the Audit Committee and the Nomination Committee.
Compliance
The Company is incorporated under the Companies Act 2006 of the Isle of Man and the rights of the shareholders may be different from the rights of the shareholders of a UK incorporated company.”
As the company shares were previously traded on AIM, it is subject to the UK’s City Code on Takeovers and Mergers.
Nomination Committee
The Nomination Committee is a sub-committee of the Board and makes recommendations to the Board which retains the right of final decision.
The terms of reference of the Nomination Committee cover the following:
Audit Committee
The Audit Committee is a sub-committee of the Board and makes recommendations to the Board which retains the right of final decision. The primary role of the Audit Committee is to review the Company’s accounting policies, the contents of the financial statements, the adequacy and scope of the external audit and compliance with regulatory and financial reporting requirements. In addition, it also reviews the provision of non-audit services by the external auditor, the risks to which the Company is exposed and the controls in place to mitigate those risks.
The terms of reference of the Audit Committee cover the following:
Auditors
The Audit Committee has direct access to the auditors, KPMG Audit LLC. The auditors attend the Audit Committee meeting to review the annual results and provide a comprehensive review of the audit of the Company.
Internal Controls and Management of Risk
The Board has overall responsibility for the Company’s systems of internal controls and for reviewing their effectiveness and ensuring the day to day operations. These controls aim to ensure that assets of the Company are safeguarded, proper accounting records are maintained and the financial information used within the business and for publication are reliable.
In common with most investment property companies of a similar size, the Company does not have an internal audit function. All of the Company’s day to day management functions are delegated to the Administrator which have their own internal audit and risk assessment and whose controls are monitored by the Board. This will be reviewed annually by the Audit Committee.