As a company listed on the Alternative Investment Market (AIM) of the London Stock Exchange Millbrook is committed to a high standard of corporate governance. It therefore intends to comply with the main provisions of the Combined Code (as appended to the Listing Rules of the FSA) in so far as they are appropriate to smaller companies. At present the areas of compliance are:

Directors.
The Board consists of a Non-Executive Chairman, a Chief Executive, two Executive Directors and one Non-Executive Director. The Board meets monthly throughout the year and there are a number of matters that are reserved for its decision. These include material capital and revenue expenditure and appointments to the boards of subsidiary companies. Directors may take independent professional advice at the Company’s expense and each director has access to the Company Secretary. The Company Secretary is charged with ensuring compliance with all relevant regulations. The Board receives reports from the Chief Executive and the other Executive Directors at its monthly meetings.

Reappointment.
Any Director appointed during the year is required, in accordance with the Company’s Articles of Association, to retire and seek appointment by shareholders at the next annual general meeting. The Articles also require that one third of the Directors retire by rotation each year and seek re-appointment at the Annual General Meeting. The Directors required to retire will be those who have been longest in office since their last appointment or re-appointment.

Directors’ remuneration.
The Remuneration Committee reviews the performance of the Executive Directors and sets the scale and structure of their remuneration including bonus arrangements. The Remuneration Committee also administers the Millbrook Scientific Instruments PLC Enterprise Management Incentive Scheme (the Share Option Scheme) and sets the allocation of share options to Directors and other employees. As a small company it is not possible for the Committee to comply fully with the Combined Code. Accordingly membership of the Committee comprises Malcolm Fortnam (Independent Non-Executive Director) as Chairman and Stephen Blank (Independent Non-Executive Chairman). The Group’s policy provides for a competitive package that reflects the Group’s performance and is designed to attract and retain high calibre executives. The package currently consists of a base salary, bonuses linked to financial performance and longer-term rewards in the form of share options.

Communication with shareholders
The Company makes use of the RNS service to communicate with shareholders throughout the year. The Annual General Meeting, normally held in July, gives shareholders the opportunity to question the Board.

Accountability
The Board of Directors has overall responsibility for the system of internal financial control which is designed to provide reasonable, but not absolute, assurance against material mis-statement or loss. The key procedures are: -

• an annual budget for each operating subsidiary is approved by the Board;
  
• actual results are monitored quarterly;
  
• the Audit Committee, which comprises Malcolm Fortnam (Independent Non-Executive Director) as Chairman and Stephen Blank (Independent Non-Executive Chairman), meets with the external auditors at least twice a year.