Corporate Governance

Introduction

Although the rules of AIM do not require the Company to comply with the Combined Code on Corporate Governance ("the Code"), the Company fully supports the principles set out in the Code and will attempt to comply wherever possible, given both the size and resources available to the Company. Details are provided below of how the Company applies the Code.

The Board

The Board of Directors comprises the Executive Chairman and two Executive Directors together with three independent Non-executive Directors.

The Alchemy Plan has the right to nominate a Non-executive Director but has chosen not to do so. If the Alchemy Plan's shareholding in the Company falls below 10% of the issued share capital, the right to appoint ceases.

The Board generally meets each month and receives a Board pack comprising individual reports from each of the Executive Directors, together with any other material deemed necessary for the Board to discharge its duties. It is the Board's responsibility for formulating, reviewing and approving the Group's strategy, budgets, major items of expenditure and acquisitions.
During the year ended 4 October 2009 the Board met a total of twelve times.

Board committees

The Board has established three committees: Audit, Remuneration and Nominations, all having written terms of delegated responsibilities.

Audit Committee

The Audit Committee comprises the two Non-executive Directors and the Executive Chairman and is scheduled to meet twice a year. It is the Audit Committee's role to provide formal and transparent arrangements for considering how to apply the financial reporting and internal control requirements of the Code, whilst maintaining an appropriate relationship with the independent auditors of the Group. In order to comply with the requirement of the Code that at least one member has relevant financial experience, the Chairman of the Board sits on the Audit Committee.

During the year ended 4 October 2009 the Audit Committee met on two occasions.

Remuneration Committee

The Remuneration Committee comprises the two Non-executive Directors and the Executive Chairman and meets at least once a year, normally in June. It is the Remuneration Committee's role to establish a formal and transparent policy on Executive remuneration and to set remuneration packages for individual Directors.

During the year ended 4 October 2009 the Remuneration Committee met on four occasions.

Nominations Committee

The Nominations Committee comprises the Non-executive Directors, the Executive Chairman and the Chief Executive and meets as required to consider and make recommendations on the appointment of Directors to the Board.

Shareholder relations

The Company meets with its institutional shareholders and analysts as appropriate and encourages communication with private shareholders via the Annual General Meeting. In addition, the Company uses the Annual Report and Accounts, Interim Statement and website (www.ath.co.uk) to provide further information to shareholders.

The Board considers Mr Vaughan Williams to be the Senior Independent Director.

Internal control and risk management

The Board is responsible for the system of internal control and for reviewing its effectiveness. Such systems are designed to manage rather than eliminate risks and can provide only reasonable and not absolute assurance against material misstatement or loss. Each year, on behalf of the Board, the Audit Committee reviews the effectiveness of these systems. This is achieved primarily by considering the risks potentially affecting the Group and discussions with the external auditors.

The Group does not currently have an internal audit function due to the small size of the administrative function and the high level of Director review and authorisation of transactions.

A comprehensive budgeting process is completed once a year and is reviewed and approved by the Board. The Group's results, as compared against budget, are reported to the Board on a monthly basis and discussed in detail at each meeting of the Board.

The Group maintains appropriate insurance cover in respect of legal actions against the Directors as well as against material loss or claims against the Group and reviews the adequacy of the cover regularly.

 

Page last up-dated: 16 August 2010