cobra:bio

Statement

The Combined Code

The Directors are committed to high standards of corporate governance. The Board is accountable to its shareholders for good corporate governance and adopts the necessary structures and procedures. Although Cobra Biomanufacturing Plc is listed on the Alternative Investment Market and therefore does not need to comply with the Combined Code, the Board has reviewed the corporate governance of the Group and has implemented the changes it has felt appropriate, given the Group's size. The Board will continue to review the corporate governance of the Company during the next financial year. This statement describes the approach of the Company and the application of the principles identified in the current code, which are being applied.

Application of the Principles of the Combined Code

 

The Board

The Board comprises three Executive Directors*, including the Chairman, three Independent Non Executive Directors and a Non Executive Director*. The Executive Directors have a clear division of duties and meet to direct and control strategy and the operating performance of the Group. This includes the approval and monitoring of budgets, reviewing trade performance and determining risk management policies. The Group also has a schedule of matters reserved for the decision of the Board. There is an agreed procedure for Directors in the furtherance of their duties to take independent professional advice if necessary, at the Company's expense.
 

The Board met seven times during the financial year with each member attending as follows:

Board Member	No of meetings held whilst a member	No of meetings attended
Peter Fothergill	7	7
David Thatcher*	7	7
Peter Coleman	7	7
Michael Gatenby	7	7
David Oxlade	7	7
Nigel Slater	7	7

*On 18 January 2008: Simon Saxby was appointed Chief Operating Officer and Board Director and David Thatcher stepped down as Chief Executive to become a Non Executive Director.

Board Committees

The following committees deal with specific aspects of the Group's affairs:

Audit Committee: comprises the three Independent Non-Executive Directors with Michael Gatenby as Chairman. The Committee meets at least three times a year and the meetings are arranged to tie in with the publication of the Company's financial statements. The Committee will also meet on an ad-hoc basis where necessary. The external auditors attend the meetings at the invitation of the Committee and report as appropriate. The Committee operates within specific terms of reference, which include reviewing the Group's accounting policies, financial reporting, internal control and risk management processes. It reviews the need to appoint an internal audit function, and also considers the appointment and the audit and non-audit fees of the external auditors together with their independence and objectivity.

View Audit Committee Terms of Reference

Remuneration Committee: comprises the three Independent Non-Executive Directors with Nigel Slater as Chairman. The Committee recommends to the Board the policy on Executive remuneration and it determines on behalf of the Board, the terms and conditions of service for each Executive Director. The Report on Directors' Remuneration is set out on pages 14 to 17.

View Remuneration Committee Terms of Reference

Nomination Committee: comprises the Chairman, Peter Fothergill and the three Independent Non-Executive Directors. Peter Fothergill is the Chairman of the Committee. The Committee operates within specific terms of reference, which includes a regular review of the Board structure, size and composition and identifying and nominating candidates to fill board vacancies, as and when they arise.
Details of all the committee's terms of reference are available on the Company's website www.cobrabio.com. The table below shows the number of committee meetings during the financial year and member's attendance.

	Audit Committee		Remuneration Committee		Nomination Committee
Committee Member	No of meetings held whilst a member	No of meetings attended	No of meetings held whilst a member	No of meetings attended	No of meetings held whilst a member	No of meetings attended
Peter Fothergill	n/a	n/a	n/a	n/a	1	1
Michael Gatenby	3	3	1	1	1	1
David Oxlade	3	3	1	1	1	1
Nigel Slater	3	3	1	1	1	1

Risk Management and Internal Control

The Board is responsible for establishing and maintaining the Group's system of internal control, which is designed to meet the particular needs of the Group and the risks to which it is exposed. Such a system is designed to manage these risks, to provide reasonable but not absolute assurance against material misstatement or loss and to maintain proper accounting records to ensure the integrity of financial information used within the business and for external publication.

The Group's established internal control procedures include the following:
 

1. A schedule of matters reserved for the Board. The Board of Directors has overall responsibility for the effective running of the Group and it has a formal schedule of matters, which are specifically reserved for decisions by the Board.
2. The Board meet to manage the affairs of the Group. The Group's financial and operating performance is closely monitored at each Board meeting with formal Board reports from the Chief Operating Officer and the Finance Director covering their areas of the business.
3. The Group's Board meet twice a year for a strategic review. The purpose of which is to formulate a long term strategy for the Group and develop a strategic framework for the achievement of the Group's financial targets.
4. The Group's Senior Management Team (the SMT) meets weekly to review and discuss the current issues facing the Group and financial performance. The SMT is comprised of the operational senior management, including the Chief Operating Officer and the Finance Director who each provide an update. Each member of the SMT operates within a clearly defined Group structure and each member is given the appropriate operational authority.
5. The Group prepares an annual budget, developed through a comprehensive operational budgeting process prior to the commencement of the financial year. A revised forecast is prepared at the half year. The budget and the revised forecast are reviewed and approved by the Board and the SMT.
6. The Board and the SMT then monitor the actual monthly financial performance of the Group against the budget and the half year revised forecast, with any significant variances highlighted and explained.

The Board has established and embedded within the Group a risk management review process, whereby major key risks facing the Group have been identified and then allocated to the appropriate member of the SMT, whose responsibility it is to manage this risk, by cascading the control and improvement measures through to the employees of the Group via the Performance Management System. This process is reviewed bi-annually by the SMT for effectiveness with a report presented to the Board.
 

Relations with Shareholders

The Board recognises the importance of continual communications with shareholders and will maintain a programme of regular dialogue with its investors, including presentations following the Company's announcements of its preliminary full year figures and of the half year results.

The Board encourages individual shareholders to attend the Company's Annual General Meeting, where there is an opportunity for them to raise general business matters with the full Board. The notice of the Company's Annual General Meeting is circulated to all shareholders at least 20 working days before such meeting. The Chairmen of the Audit, Remuneration and Nomination Committees will be available at the Annual General Meeting to answer questions. The Annual Report will be published on the Company's website www.cobrabio.com which also includes previous financial reports, press releases, presentations and other announcements made during the year.