This report explains the Company’s approach to corporate governance, and contains a summary of how the Board has complied with the principles set out in the Financial Reporting Council’s (‘FRC’) Combined Code on Corporate Governance.

Throughout the year ended 30 September 2008 the Company has been in compliance with the Code provisions set out in Section 1 of the 2006 FRC Combined Code on Corporate Governance with the exception that:

Dillie Malherbe was appointed as a member of the Remuneration Committee in September 2004 and is not considered to be independent due to his executive role at VenFin Limited. Peter Liddiard was appointed as a member of the Audit Committee in September 2007 and is also not considered to be independent due to his executive role at VenFin Limited.

The Board considered the implications of the roles of both Dillie Malherbe and Peter Liddiard at VenFin Limited and concluded that this would not compromise the independence of their input to these committees. As at 30 September 2008 VenFin Limited held 25.4% of the Company’s share capital.

The Board including the Chairman comprises five executive directors and eight non-executive directors. The Board considers all non-executive directors, with the exception of Dillie Malherbe and Peter Liddiard, to be independent. Rupert Barclay is the senior independent non-executive director.

The Board met seven times during the past year. A table indicating attendance by directors at Board and Committee meetings is set out below. The non-executive directors have met separately twice during the year, and in addition communicate on a regular basis.

On appointment directors participate in a Group induction programme and receive guidance on their responsibilities. Directors are able, at the Company’s expense, to obtain independent professional advice on Board matters. They also have access to the services of the Company Secretary.

Directors also receive ongoing briefings, including updates on corporate governance, regulatory issues and information relevant to the industry.

The performance of the executive directors is evaluated annually using the performance management system implemented throughout the Group, with the CEO reviewing the executives and the Chairman reviewing the CEO. The nonexecutive directors, led by Rupert Barclay, the senior independent director, reviewed the leadership and performance of the Chairman. An evaluation of the effectiveness of the nonexecutive directors, the Board and its principal committees was commenced during September 2008, using a revised and updated series of questionnaires designed by the Chairman and the Company Secretarial Department. The results of this evaluation are still under consideration.

In terms of the Articles of Association directors are obliged to retire in the third calendar year following the year in which they were elected or last re-elected by the Company, after which they may be available for re-election.

The Board is accountable to shareholders for determining strategy and for the conduct of the business of the Group. A corporate governance framework in the form of an authorities matrix defines the roles and responsibilities of the constituent elements of the Group’s management structure. This enables the Board to plan, execute, control and monitor the Group’s activities in accordance with the strategic objectives.

Matters reserved for the Board include:

• approval of the Group’s strategy and annual budget;
• review of Group performance;
• approval of major capital expenditure or disposals, material contracts, material acquisitions and developments;
• maintenance and monitoring of the Group’s internal controls and risk management system;
• changes to the Company’s capital structure and the Memorandum and Articles of Association;
• recommendation of dividends;
• communication with shareholders, including approval of all circulars, prospectuses and major public announcements;
• determination of the terms of reference of Board committees;
• appointment, removal and remuneration of directors and the Company Secretary;
• changes to retirement benefit schemes, employee share plans and long term incentive programmes;
• approval of the interim statement and annual report and accounts (including review of critical accounting policies and judgements and assessment of the Company’s position and prospects); and
• appointment of the external auditors.

Financial reporting is performed according to a strict schedule. The non-executive directors are provided with information to enable them to reach independent conclusions on the matters brought to their attention at Board meetings. The Board ensures that each director is provided with appropriate and timely information in order to exercise his or her judgement.

Executive Committee

The Executive Committee, which meets fortnightly, has responsibility for the day-to-day running of the business and the execution of the Group’s strategy. It is chaired by Brett Dawson. All executive directors, other than Jeremy Ord, are members. The members of the Executive Committee .

Audit Committee

Rory Scott (Chairman)
Rupert Barclay
Leslie Bergman (appointed 30 September 2008)
Peter Liddiard
Derek Irish (resigned 30 September 2008)

During the year ended 30 September 2008 the Audit Committee comprised three non-executive directors, two of whom are independent, and Derek Irish, a chartered accountant and a senior partner in an independent accounting practice. A table showing attendance at committee meetings is available on page 41. On 30 September 2008 Derek Irish resigned as a member of the committee and Leslie Bergman was appointed. Rory Scott, Rupert Barclay, Derek Irish and Peter Liddiard are all qualified chartered accountants.

The main duties and activities of the Audit Committee in the period under review can be summarised as follows:

The Audit Committee reviews the effectiveness of the Group’s internal controls, including financial, operational and compliance controls, as well as its procedures for identification, assessment and reporting of risks.

Internal audit

The Group’s internal audit work is performed by the internal audit team as well as PricewaterhouseCoopers. The Audit Committee approves the internal audit programme and reviews its results. The heads of the PricewaterhouseCoopers internal audit team and the Internal Audit team have direct access to the Chairmen of both the Audit Committee and the Board. The PricewaterhouseCoopers internal audit team met with the Audit Committee twice during the period under review and once separately with the Chairman of the Audit Committee.

External audit

The Audit Committee reviews the performance and independence of the external auditors. When considering their independence, the safeguards and procedures undertaken by the external auditors are reviewed to ensure their independence and objectivity. Based on this review, the Audit Committee has recommended the continued appointment of Deloitte & Touche for the coming financial year. During the period the Audit Committee reviewed the scope of the audit including the Group materiality level. To ensure independence, approval must be obtained from the Audit Committee at the end of the financial year for audit and tax services provided. Non-audit services exceeding $50,000 on an individual basis or $250,000 in total must be separately approved by the Audit Committee. Details of the split between audit and non-audit work can be found in Note 6 of the annual financial statements.

The Audit Committee considers that the approvals required for audit and non-audit services, together with the other controls in place within the Group, are sufficient to ensure the objectivity and independence of the external auditors. During the period, the Audit Committee met with the external auditors four times and once informally without management present. The chairman also met with the auditors on two further occasions.

The Audit Committee has reviewed the financial statements for the period, and has considered matters such as the appropriateness of the accounting policies, decisions requiring a major element of judgement, compliance with accounting standards, a review of business and key performance indicators, the going concern assumption and the statement on internal control.