corporate governance
The Board recognises the importance of good corporate practice and is committed to maintaining high standards of corporate governance throughout the Group. The Group aims to comply with the Combined Code issued by the Financial Reporting Council in 2003 and updated in June 2006, even though it is not obliged to do so.
- The Board and its make-up
- Remuneration Report
- Human Resources & Personnel aspects
- Internal Financial Control
- International Financial Reporting Standards ("IFRS")
- Other Aspects
- Risk Management
- Directors and Officers Insurance
- Charitable and Political Donations
- Research and Development
- Press Releases
the board and its make-up
For the year up to 8 August 2006 when Attica was purchased, the Board consisted of 2 Executive Directors and 5 Non-Executive Directors. Since then the Board has consisted of 2 Executive and 7 Non-Executive Directors.
The Board is responsible for the proper management of the Group and for its system of corporate governance. The Board normally meets at least four times a year and prior to significant decisions being taken.
The Board is accountable to shareholders for the financial and operational performance of the Group. These responsibilities include the following:
- the overall strategy of the Group
- the investment, disinvestment and acquisition policy undertaken by the Group
- the approval of the annual budget and significant items of expenditure
- the consideration of significant financing matters pertaining to the Group.
rumuneration report
The remuneration of Directors is determined on behalf of the Board by the Remuneration Committee. The aim of the remuneration policy is to provide, in the context of the Group's business strategy, remuneration which will attract and retain high calibre executives and staff. In order to achieve this, total rewards are set at levels that are competitive within the relevant market. Potential rewards are earned through the achievement of objectives based on measures consistent with shareholder interests. The terms of reference of the Remuneration committee include (but are not limited to) the following:
- determining and agreeing with the Board the framework or broad policy for the remuneration of the company's Chief Executive, the Chairman, the executive directors, the company secretary and such other members of the executive management as it is designated to consider
- reviewing the ongoing appropriateness and relevance of the remuneration policy
- approving the design of and determining targets for, any performance related pay schemes operated by the Company and approving the total annual payments made under such schemes
- reviewing the design of all share incentive plans and share option schemes and arrangements for approval by the Board and shareholders
- overseeing any major changes in employee benefits structures throughout the Company or group.
The remuneration committee was made up of John Booth, Mark Segall and Norman Epstein and met twice during 2006.
tophuman resources & personnel aspects
Integrated Asset Management plc and its subsidiaries operate a policy of equal opportunities in recruitment, promotion and training for all its employees. The Group believes that all individuals should be treated fairly, with respect and are correctly valued due to their contribution to the organisation. The Group has put into place processes and procedures to ensure its employees are kept informed of matters affecting them and the business operations of the Group.
topinternal financial control
The Board recognises its responsibility for the Company's system of internal control. In accepting that no system of internal control can provide absolute assurance against material loss or mis-statement, the current system of control is designed to manage risks which are inherent in the Group's business. The Board confirms that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the Group.
The audit committee is responsible for the review of the Group's system of internal financial control for the financial year and the period up to the date of approval of the financial statements. The committee is responsible for the following:
- monitoring the integrity of the financial statements of the company, including its annual and interim reports, preliminary results' announcements and any other formal announcement relating to its financial performance, reviewing significant financial reporting issues and judgements which they contain
- reviewing and challenging where necessary:
- the consistency of, and any changes to, accounting policies both on a year on year basis and across the company/group
- the methods used to account for significant or unusual transactions where different approaches are possible
- whether the company has followed appropriate accounting standards and made appropriate estimates and judgements, taking into account the views of the external auditor
- the clarity of disclosure in the company's financial reports and the context in which statements are made
- all material information presented with the financial statements, such as the operating and financial review and the corporate governance statement (insofar as it relates to the audit and risk management).
The Board has reviewed the operation and effectiveness of the Group's system of internal financial control for the financial year and the period up to the date of approval of the financial statements.
The audit committee was made up of Norman Epstein, John Booth and George Rob. The Committee met 3 times during 2006.
topinternational financial reporting standards ("IFRS")
Due to the fact that the Group is AIM listed, it was required to adopt IFRS on 1 January 2007. The interim results for the half year ended 30 June 2007 are the first under these standards.The Group has been monitoring the changes that the developments in this area will bring about. The largest impact to the Group associated with the change from reporting under UK GAAP to IFRS is expected to be in the area of Goodwill Amortisation. The Group historically followed a fairly aggressive policy in this respect in that it wrote goodwill off over a five to 10 year period. Under IFRS there will only be an associated charge in the Income Statement (Profit and Loss account), if there is considered to be impairment in the underlying asset. Under IFRS there will be a yearly charge for the amortisation of items to be considered intangible assets (not goodwill) at the time of acquisition of the associated business. The goodwill charge in the 2006 accounts amounted to £728,167 (2005: £1,047,207). top
other aspects
The Group does not operate any defined benefit pension schemes and currently only undertakes hedging in respect of forward exchange rates between the Pound and the US Dollar. Trail commissions are paid to intermediaries as long as an investment is maintained within the fund or funds that they are associated with. Under UK GAAP, these commissions are reflected in the profit and loss account in the operating expense line. Under IFRS this treatment may well differ and is an area that still needs to be resolved under the Group's IFRS convergence project.
toprisk management
The group's fund management subsidiaries employ a full time risk officer to identify, evaluate and manage key risks to the managed assets. This assists the investment management department in fulfilling its responsibilities relating to the adequacy and effectiveness of its risk management policies. The risk officer prepares monthly risk reports on all portfolios and funds managed by the group.
topdirectors and officers insurance
The Group currently holds an annual Professional Indemnity and Directors and Officers insurance policy to protect the Group and its principals/employees, for claims made against it arising out of wrongful acts as defined in the policy. In line with best practice, the insurance policy has been reviewed and updated with increased limits put in place for the 2007 financial period. All Directors and Officers within the Group are covered by this policy.
topcharitable and political donations
During the year the Group made charitable donations of £67,500 (2005: £275). Of the £67,500 of donations accrued and paid for the year ended 31 December 2006, £35,000 is in respect of a bonus that the Chief Executive Officer has foregone, in favour of a payment to a registered charity.
No political donations were made in 2005 or 2006.
topresearch and development
The company continually undertakes research and development in respect of new funds. Development costs relate to directly attributable costs incurred in the development of new funds/products. If the fund comes to fruition then all research and development costs, whether incurred through third party suppliers or internal staff costs, will be capitalised and subsequently written off to the profit and loss account over a 5 year period in accordance with our global policy on intangible assets. If the fund being worked on is not launched, then the amount deferred for accumulated development costs will be immediately charged to the profit and loss account.
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