Corporate governance

As a Guernsey incorporated company, the Company is not required to comply with the Code of Best Practice published by the Committee on the Financial Aspects of Corporate Governance (Combined Code). However, the Company recognises the importance of corporate governance and seeks to implement the best practice provisions of the Combined Code in its corporate governance structure and Articles.

The Board meets at least quarterly and at other unscheduled times when necessary. At such meetings they receive reports from its advisers, including the Investment Adviser and Administrator. The responsibilities of the Board include: setting the strategic direction of the Group; oversight of the Group including its governance; reviewing and approving plans for the Group; monitoring implementation of strategy, business performance and results and ensuring appropriate resources are available; approving business proposals.

The directors have established an audit committee with formal delegated duties and responsibilities. The audit committee comprises a minimum of three nonexecutive directors and meets at least twice a year.

The current members are Christopher Bennett (Chairman), David Staples and Shelagh Mason. The audit committee determines the terms of engagement of the Group's internal and external auditors and meets with them relating to interim and annual accounts and the accounting and internal control systems in use by the Group. The audit committee also supervises monitors and advises the Board on risk management and control systems and the implementation of codes of conduct.

There is no formal process for evaluation of the performance of the Board, each member of which is subject to removal without notice under the Articles. As each Director's letter of appointment allows for termination on three months' notice, in cases of poor performance the Chairman or shareholders could remove a director without incurring a substantial compensation liability. The Board did, however conduct a self-review during the year.

Apart from the absence of a remuneration committee and nomination committee, the Company seeks to comply in all respects with the Combined Code. The Board do not consider such committees appropriate because the Company has no employees and all directors are non-executive.