RTS Life Science

During the year the Board consisted of Mr Brown, Chairman, Mr Sharrock and Mr Walsh, Executive Directors, Mr Heminway, a Non-Executive Director (appointed 29 September 2009), Mr Mowinckel, a Non-Executive Director (resigned 29 September 2009) and Mr Bradford, an Executive Director (resigned 31 October 2009).

Biographies of the Board members, above, indicate the levels and range of business experience which are essential to manage effectively a business of the size and complexity of that operated by the Group.

The Board has a schedule of matters reserved to it for decision and the requirement for Board approval on these matters is communicated widely throughout the senior management of the Group. These include matters such as material capital commitments, commencing or settling major litigation, operating budgets, significant financing, business acquisitions and disposals, appointments to the Board of subsidiary undertakings, approval of business strategy, code of ethics and business practice, remuneration of senior management and corporate activities relating to all listing matters.

There were nine Board meetings during the year which were attended by all Board members, with the exception of the meeting held in August 2009 for which Mr Mowinckel was unavailable, and the meeting held in September 2009 for which Mr Bradford was unavailable.

There is an agreed procedure for Directors to take independent professional advice if necessary and at the Company’s expense. This is in addition to the access every Director has to the Company Secretary. The Secretary is charged by the Board with ensuring that Board procedures are followed.

To enable the Board to function effectively and allow Directors to discharge their responsibilities, full and timely access is given to all relevant information. In the case of Board meetings this consists of supporting documentation as appropriate, including regular business progress reports and discussion documents regarding specific matters.

The Board considers risk management and internal control on a regular basis. The risk management strategy is established and monitored by the Board with the objective of setting clear guidelines in relation to the levels of retained risk acceptable to the Group. Procedures for the Group assessment of significant business risks are subject to regular review, monitoring and improvement.

Due to the open environment in which the Company carries out its daily activities, it is anticipated that any employee would feel free to bring major matters of concern to the attention of the appropriate officers of the Company.

The Directors are responsible for the Company’s system of internal financial control which is designed to provide reasonable but not absolute assurance against material misstatement or loss. The Directors have in place internal financial controls as follows:

A detailed formal budgeting process for all Group businesses culminates in an annual budget which is approved by the Board. Results for the Company and for its constituent businesses are reported monthly against the budget to the Board and revised forecasts for the year are prepared each quarter.

The business units are subject to periodic in depth review by Group management during the year. Actual results are compared with budget, prior year and rolling financial targets, with overall performance judged on the achievement of a series of key performance indicators.

Executive management submits an annual business plan to the Board for approval. The plan is a summation of each business unit’s quantified assessment of its planned trading performance in respect of the forthcoming financial year, taking into account the economic environment and the sensitivities underlying the projections.

The Directors have reviewed the effectiveness of the Group’s internal financial controls. Due to the size of the Group it is not currently considered necessary to operate a formal internal audit function. The Audit Committee and Board will review this requirement annually as a minimum.

There are clearly defined guidelines for capital expenditure and the requirement for Board approval. These include annual budgets, detailed appraisal and review procedures, levels of authority and due diligence requirements where businesses are being acquired. Post investment appraisals are performed for major investments.

The Audit Committee, which during the year comprised of Mr Brown and Mr Mowinkel (resigned 29 September 2009), meets at least twice a year. Its objective is to give formal support to the Board in fulfilling its obligations to shareholders to maintain standards of management, financial control and reporting throughout the Group that are consistent with regulatory requirements and current best practice. Mr Heminway was appointed to the Audit Committee on 11 February 2010.

The external auditors attend meetings of the Audit Committee and have direct access to the Chairman of that committee.

The remuneration policy is set by the Board. Individual remuneration packages are determined by the Remuneration Committee within the framework of this policy. During the year the committee consisted of Mr Brown (Chairman) and Mr Mowinckel (resigned 29 September 2009). Each member has access to independent advice when it is considered appropriate. Mr Brown does not participate in Remuneration Committee decisions relating to his own remuneration. Mr Heminway was appointed to the Remuneration Committee on 11 February 2010.

Although not a requirement for AIM listed companies, the Group has prepared a Remuneration Report as though the Group was required to comply with the requirements of Schedule 8 to the Companies Act 2006.