The Board

The Board operates with the following objectives:

Entrepreneurial management

There is a vision of what the Company is trying to achieve, over what period, and an understanding of what is required to achieve this ambition.

A dialogue exists between shareholders and the Board, with the aim that the Board understands shareholders' objectives and the shareholders understand the Company's constraints.

Efficient management

The mechanisms by which important decisions are taken is transparent.

It is clear where the responsibility lies for the management of the Company and for the achievement of key tasks.

Procedures are in place to protect significant tangible and intangible assets. These are regularly reviewed and updated.

Effective management

The Board has the appropriate skills available to it in order to make the key decisions expected of it. The composition of the Board and the skills mixed are regularly reviewed.

The Board are provided with appropriate information on which to constructively challenge recommendations made to them before making their decisions including regular management and financial information.

The collective responsibility of the Board requires all directors to be involved in the process of arriving at significant decisions and there is a formal schedule of matters reserved for their decision.

To ensure that vested interests should not be able to act in a manner contrary to the common good of all shareholders the Board have appointed two independent non-executive directors.

The Board has a regular schedule of meetings together with further meetings when required. In addition, Directors meet as members of relevant Committees. There is a formal schedule of matters reserved specifically to the Board for decision and delegating specific responsibilities to Committees.

The formal schedule of matters reserved for the Board includes strategy, the approval of financial statements and shareholder circulars, treasury policy, major capital investments, risk management strategy and acquisitions and disposals.

The Chairman and the Non-Executive Directors meet without the Executive Directors present at least once a year.

All Directors have access to the advice and services of Tony Dyer, the Finance Director and Company Secretary, who is responsible for ensuring that Board procedures and applicable rules and regulations are observed. There is an agreed procedure for Directors to obtain independent professional advice, paid for by the Group.

In accordance with the Company's Articles of Association one third of the Board is required to retire by rotation each year. In addition, all those appointed during the year will stand for election at the next Annual General Meeting.

Non-Executive Directors

The Non-Executive Directors have letters of appointment stating their annual fee and that their appointment is subject to satisfactory performance and their re-election at forthcoming AGM's. Their appointment may be terminated within a maximum of six months written notice at any time.

Copies of the letters of appointment will be available for inspection prior to and during the AGM and are also available for inspection at the Company's registered office during normal business hours.

The remuneration of the Chairman and the Non-Executive Directors is determined by the Board within the limits set out in the articles of association, including reviewing the level of fees paid by comparator companies.

The Chairman and the Non-Executive Directors do not participate in any meeting at which discussions in respect of matters relating to their own position take place.

Group Executive

The Group Executive is responsible for the management of the business and is chaired by the Group Managing Director. Its members currently comprise Adrian Gunn the Group Managing Director, Paul Raine Group Resources Director and Tony Dyer Group Finance Director. It meets regularly throughout the year.

The principal role of the Group Executive is to ensure the Group Management Team is directed to implement the requirements of the Board and the company's shareholders.

The respective roles of the Board and Group Executive are discussed further under Internal Control below.

The Company seeks to have a development framework to assist the Chairman, Executive Directors and Non-Executive Directors in discharging their responsibilities effectively. Non-Executive Directors meet regularly with members of the Group Executive and other senior managers and receive regular business updates via scheduled presentations.