INVESTOR RELATIONS

CORPORATE GOVERNANCE

 

Principles of Corporate Governance

 
The Board recognises the value of good corporate governance as a positive contribution to the well being of the business and believes in applying these principles in a sensible and pragmatic manner that are considered appropriate to the nature and size of the Group.
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Board of Directors

The Board of Directors consists of seven members, including a non-executive Chairman and two other non-executive Directors.
 
The roles of Chairman and Chief Executive Officer are separated and clearly defined. The activities of the Company are controlled by the Board, which meets throughout the year. There is a formal schedule of matters specifically reserved for the full Board’s decision, together with a policy enabling Directors to take independent advice in the furtherance of their duties at the Company’s expense. The Board programme is designed so that Directors have regular opportunity to consider the Company’s strategy, policies, budgets, progress reports and financial position and to arrive at a balanced assessment of the Company’s position and prospects.
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Re-election of Directors

As required by the Company’s Articles of Association, Directors offer themselves for re-election at least once every three years. Any Director appointed during the year is required to seek re-appointment by shareholders at the next Annual General Meeting.
 
The Board is assisted by the Company Secretary, who provides a point of reference and regular support for all Directors and senior managers. He has responsibility for ensuring that Board procedures are followed, for establishing the Company’s corporate governance policies and for assisting the Board in facilitating compliance by the Company with its legal obligations.
 
The Board receives reports from the following three committees:
 
The Audit Committee Comprises two non-executive Directors and the non-executive Chairman and is chaired by Lord Parkinson. Its duties include a comprehensive review of the annual and interim financial statements before they are presented to the Board for approval. The Audit Committee meets at least twice a year to review the findings of the external auditors, key accounting policies and judgements. It has unrestricted access to the Company’s auditors.
The Remuneration Committee Comprises the three non-executive Directors and is chaired by Charles Scott. It meets at least once a year and is responsible for making recommendations to the Board on remuneration policy for executive Directors and for setting salaries, incentive payments and the granting of share options.
The Executive Operating Board This comprises the executive Directors and certain senior business managers, and is chaired by the Chief Executive Officer. It acts as a general operating management committee and meets twice monthly for most of the year. It authorises recruitment and capital expenditure and reviews operational and financial performance.
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Relations with shareholders

The Company seeks to ensure that all shareholders are kept informed about the Company and its activities. A comprehensive annual report is sent to shareholders and both the annual and interim reports are put on the websites of Sharemark (www.sharemark.com) and the Company (www.intechnologyplc.com).
 
The Annual General Meeting is a forum for shareholders’ participation with the opportunity to meet and question Board members.
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Current Constitutional Documents

The Articles of Association can be found here
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Internal Control

The Board of Directors acknowledges its overall responsibility for the Company’s systems of internal control and for monitoring their effectiveness. The Board has control over strategic, financial and compliance issues and has introduced a structure of responsibility with appropriate levels of authority.
 
The Company’s Directors and varying levels of management have clear responsibilities in ensuring that the control environment operates efficiently. Clear lines of responsibility are developed through the Company’s organisation structure. Ethical policies are communicated through all forms of personnel training and via appropriate procedures, in establishing a code of ethics.
 
Although no system of internal control can provide absolute assurance against material misstatement or loss, the Company’s systems are designed to provide reasonable assurance that problems are identified on a timely basis and are dealt with appropriately. The principal features of the Company’s internal financial control structures can be summarised as follows:
 
»  Preparation of budgets and forecasts approved by the Board.
»  Monthly management accounts, showing comparisons of actual results against budget and prior year results, are reviewed by the Board. Variances from budget are thoroughly investigated and discussed at bi-monthly Board meetings. Where lapses in internal control are detected, these are rectified.
»  The Company’s cash flow is monitored monthly.
»  The Board authorises capital expenditure where this is significant and all capital expenditure is first authorised by the Executive Operating Board.
 
The Board has continued to enhance its risk control programme; in particular, those elements which relate to ensuring that risk reviews are formally embedded in control systems rather than being the subject of formal annual reviews.
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Risks and uncertainties

There are a number of potential risks and uncertainties that could have an impact on the Company’s long term prospects.
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Risk assessment

The Board is made aware of the risks to the Company by the executive Directors who are members of the Executive Operating Board, which includes senior managers of the Company. The Executive Operating Board usually meets two times per month.
 
The Executive Operating Board has established an ongoing process for identifying, evaluating and managing the significant risks faced by the Company.
 

Statement of Directors’ responsibilities in respect of the Annual Report and Financial Statements

The Directors are responsible for preparing the Annual Report and Financial Statements in accordance with applicable law and regulations.
 
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the group and parent company financial statements in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for that period.
 
In preparing these financial statements, the Directors are required to:
 
»  select suitable accounting policies and then apply them consistently;
»  make judgements and accounting estimates that are reasonable and prudent;
»  state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements;
»  prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
 
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
 
The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
 
So far as the Directors are aware, there is no relevant audit information of which the Company’s auditors are unaware. Each Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.
 
By order of the Board
 
Richard James
Company Secretary
13 June 2011