Corporate Governance

 

Principles of good governance

The Board continues to support the principles of good governance. The Board has adopted such procedures as it considers practical and appropriate for a group of its size so as to affect good governance.

 

Application of principles

Directors

The Company supports the concept of an effective Board leading and controlling the Group. The Board is responsible for approving Group policy and strategy. It meets regularly and has a schedule of matters specifically reserved to it for decision.

 

Management supplies the Board with appropriate and timely information and the Directors are free to seek any further information they consider necessary. All Directors have access to advice from the Company Secretary and independent professionals at the Group’s expense. Training is available for new Directors and other Directors as necessary.

 

The Board members are:

D B Liversidge CBE - Non‑executive Chairman

N G Bowland - Chief Executive Officer

C Glass - Non‑executive Director

R Simkins - Non‑executive Director

M J McMahon - Non‑executive Director

 

Accountability and audit

The Board is responsible for maintaining a sound system of internal control to safeguard shareholders’ investments and the Company’s assets.

 

The Audit Committee comprises C Glass (Chairman), D B Liversidge CBE and R Simkins who are all Non‑executive Directors.

 

The Committee considers the appointment and terms of engagement of the external auditor and assesses the independence of the external auditor and reviews the auditor’s policy for the rotation of audit partners.

 

The terms of reference of the Committee include reviewing the scope and results of the external audit and its effectiveness.

 

Communication with shareholders

The Board is committed to effective communication between the Group and its shareholders.

 

It regards the AGM as a means of communicating directly with private investors and encourages their participation. All Directors normally attend the AGM and private investors have the opportunity to meet the Directors and discuss any issues on an informal basis. Separate resolutions are passed on each issue so that they can be given proper consideration and there is a resolution to approve the annual report and accounts.

 

The shareholders can gain access to information on the Group, as well as to the annual report and accounts, through the website, www.surginno.com 

 

Internal controls

The Board of Directors is ultimately responsible for the Group's management and internal control systems. During the financial period and to the date of approval of the financial statements, it has reviewed the operation and effectiveness of the Group's systems of internal control, which can provide only a reasonable but not absolute assurance against material misstatement or loss. 

 

The Board discharges its responsibility for internal financial control through the following key procedures:

  • the establishment of an organisational structure appropriate to the size of the business, with clearly  defined levels of authority and division of responsibilities for approval of external payments and receipt and dispatch of goods;
  • a comprehensive budgeting and financial reporting system which compares actual performance with budget on a monthly basis; and
  • the formulation by the Board of policies and of approval procedures in a number of key areas such as credit control, expenditure authorisation, stock ordering and quality assurance.

 

Going concern

On the basis of the budget for 2010 and forecasts prepared by the Directors, the Board has a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

 

On behalf of the Board

 

D B Liversidge CBE

Non-executive Chairman

31 March 2010