Corporate Governance

Introduction

Although the rules of AIM do not require the Company to comply with the Combined Code on Corporate Governance ("the Code"), the Company fully supports the principles set out in the Code and will attempt to comply wherever possible, given both the size and resources available to the Company. Details are provided below of how the Company applies the Code.

The Board

The Board of Directors currently comprises of three Executive Directors, four Non-Executive Directors, one of whom is the Chairman.  The roles of Chairman and Chief Executive are split in line with recommended policy.

The Board meets regularly throughout the year and receives a Board pack comprising individual reports from each of the Executive Directors together with any other material deemed necessary for the Board to discharge its duties.  The Board also conducts telephone board meetings as issues arise which require Board attention.  It is the Board’s responsibility for formulating, reviewing and approving the Group’s strategy, budgets and major items of expenditure.  The Board sets the Group’s objectives and policies and monitors their implementation by the executive team.

The Board considers two executive directors other than the Chairman to be independent.

Audit Committee

The Audit Committee comprises Richard Round (Chair) and John Sununu and is scheduled to meet at least two times a year.  The external auditors attend the meetings and the Chief Executive and Finance Director attend on invitation.  It is the Audit Committee’s role to provide formal and transparent arrangements for considering how to apply the financial reporting and internal control requirements of the Code, whilst maintaining an appropriate relationship with the independent auditors of the Group.

Remuneration Committee

The Remuneration Committee currently comprises Khosrow Zamani (Chair) and John Sununu and meets as required.  It is the Remuneration Committee’s role to establish a formal and transparent policy on executive remuneration and to set remuneration packages for individual directors.

Nomination Committee

The Nomination Committee currently comprises of Khosrow Zamani (Chair), John Sununu and Gordon Lewis.  It is the role of the Nomination Committee to review and consider the Board structure and composition and meets as required to consider and make recommendations on the appointment of Directors to the Board.

Shareholder relations

The Company meets with its institutional shareholders and analysts as appropriate and encourages communication with private shareholders via the AGM.  In addition, the Company uses the annual report and accounts, interim statement and web site (www.aamining.com) to provide further information to shareholders.

Internal control and risk management

The Board is responsible for the system of internal control and for reviewing its effectiveness. Such systems are designed to manage rather than eliminate risks and can provide only reasonable and not absolute assurance against material misstatement or loss.  For each year, on behalf of the Board, the Audit Committee reviews the effectiveness of these systems.  This is achieved primarily by considering the risks potentially affecting the Group and discussions with the external auditors.

The Group does not currently have an internal audit function due to the small size of the administrative function.

A comprehensive budgeting process is completed once a year and is reviewed by the Board and where appropriate revised forecasts are prepared and also reviewed by the Board.  The Group’s results, as compared against budget, are reported to the Board on a monthly basis and discussed in detail at each meeting of the Board.

The Group maintains appropriate insurance cover in respect of legal actions against the Directors as well as against material loss or claims against the Group and the Board reviews the adequacy of the cover regularly.