Board committees

The Board has established a number of standing committees and has delegated certain responsibilities to each of those committees. The principal Board committees are

• Remuneration
• Audit
• Nomination

Remuneration Committee

The Remuneration Committee is appointed by the Board and comprises only Non-executive Directors, including the Non-executive Chairman. The Committee meets regularly to determine, on behalf of the Board, the framework of executive remuneration.

During the year to 30th September 2007, the membership of the Committee comprised: Kenneth McGeorge (Chairman), Tony Caplin and Timothy Holland-Bosworth. The members of the Committee are considered by the Board to be independent Non-executive Directors.

During the year to 30th September 2007, the Committee met on three occasions, with the attendance of all members.

The Committee’s terms of reference are reviewed regularly and approved by the Board. These are available for inspection at the Group’s registered address. The members of this Committee do not have any personal financial interests (other than as disclosed in the full report) or any conflicts from cross-directorships that relate to the business of the Committee. The members do not have any day-to-day involvement in the running of the Group. Kenneth McGeorge is the sole member not regarded as being independent, as defined by the Combined Code on Corporate Governance, for the reason that he is the Group’s Non-executive Chairman. However, he is considered to be independent by the Board.

To assist the work of the Committee, the views of the Chief Executive Officer, Chief Financial Officer and Head of Human Resources are also invited where appropriate. These individuals did not however participate in any decision related to their own remuneration.

Audit Committee

During the year to 30th September 2007, the membership of the Committee comprised: Tony Caplin (Chairman), Timothy Holland-Bosworth and Kenneth McGeorge. The members of the Committee are considered by the Board to be independent Non-executive Directors.

Role of the Audit Committee

The Board has delegated to the Committee responsibility for overseeing, on behalf of the Board, the financial reporting and internal control of the Group.

To this end, the Committee is responsible for:

• Reviewing the form and content and monitoring the integrity of the Group’s financial statements
• Reviewing the effectiveness of the Group’s internal control system (including financial, operation and compliance controls and risk management)
• Reviewing the effectiveness of the Group’s internal audit function
• Selecting and recommending to the Board the appointment, re-appointment or removal of the external auditor
• Reviewing the independence and objectivity of the external auditor and the effectiveness of the audit process
• Approving the remuneration and terms of engagement of the external auditor
• Approving and subsequently reviewing a policy on the engagement of auditors to supply non-audit services and
• Agreeing annually with the auditor the nature and scope of the audit process

Audit Committee meetings

The Committee met on two occasions during the financial year. Attendees at Committee meetings held included: Chief Financial Officer, Financial Controller, and representatives of the external auditors. All of these attended at the invitation of the Chairman of the Committee.

Main activities of the Audit Committee in the year to 30 September 2007

On one of the two occasions the Committee met with the Group’s external auditors in the absence of executive management.

The principal issues addressed by the Committee during 2006/07 were:

• The external auditors’ year end report for 2006, the review of the Group’s preliminary results and annual report disclosures
• The external audit plan for the 2007 financial statements which included a review of the audit objectives, scope, timetable, deliverables and audit fee
• The Group’s risk management process
• The impact of International Financial Reporting Standards, which are to be adopted by the Group for the next year’s interim and annual reports
• The re-appointment of PricewaterhouseCoopers LLP as external auditors
• The Group’s internal audit activities and the effectiveness of internal controls, including the consideration of the internal auditor’s findings and recommendations and
• The external auditor’s observations on internal financial controls arising from their annual audit and interim review

Independence of external auditors

The Committee has adopted a policy on non-audit services designed to ensure that the provision of such services by the external auditors does not impair the auditors’ objectivity and independence. The policy is based on the ICAEW Guidance for Audit Committees and defines both the type and value of services that require prior authorisation of
the Committee and the services that the external auditor is prohibited from providing. The Committee annually reviews all non-audit services provided by the external auditors to ensure compliance with the policy. The Committee remains satisfied with the objectivity and independence of the Group’s external auditors.

Nomination Committee

During the year, the membership of the Committee comprised: Timothy Holland-Bosworth (Chairman), Tony Caplin and Kenneth McGeorge. The members of the Committee are considered by the Board to be independent Non-executive Directors.

During the year to 30th September 2007, the Committee met on one occasion and the Chief Executive Officer and Chief Financial Officer were invited to attend. The Committee meets as necessary to make recommendations to the Board on all new Board appointments and to consider executive and Board succession planning. The Committee has written terms of reference which are available from the Company Secretary.