Corporate Governance - Committees

There are three Board committees with formal terms of reference.

• The Nomination Committee
• The Remuneration Committee
• The Audit Committee

Nomination Committee 

The Nomination Committee consists of the Non-Executive Chairman and Non-Executive Directors. The Committee did not meet during 2007. The main responsibilities of the Committee include:

• identifying and nominating for the approval of the Board, candidates to fill Board vacancies as a when they arise;
• before making an appointment, evaluate the balance of skills, knowledge and experience on the Board and, in light of this evaluation, prepare a description of the role and capabilities required for a particular appointment;
• review periodically the time required from a Non-Executive Director. Performance evaluation is used to assess whether the Non-Executive Director is spending enough time to fulfil their duties;
• give full consideration to succession planning in the course of its work, taking into account the challenges and opportunities facing the Company and what skills and expertise are therefore needed on the Board in the future;
• regularly review the structure, size and composition (including the skills, knowledge and experience) of the Board and make recommendations to Board with regard to any changes;
• keep under review the leadership needs of the organisation, both executive and non-executive, with a view to ensuring the continued ability of the organisation to compete effectively in the marketplace;

The standard terms of the letter of appointment of Non-Executive Directors are available, on request, from the Company Secretary.

Remuneration Committee 

The Remuneration Committee consists of the Non-Executive Chairman and Non-Executive Directors. The main responsibilities of the Committee include:

• to determine and agree with the Board the framework for the remuneration of the Chief Executive and such other members of the executive management as it is designated to consider. At a minimum, the committee have delegated responsibility for setting remuneration for all Executive Directors to maintain and assure their independence, the Company Secretary. The remuneration of Non-Executive Directors shall be a matter for the Chairman and Executive members of the Board. No Director or manager are involved in any decisions as to their own remuneration;
• to determine targets for any performance-related pay schemes operated by the Company;
• to determine the policy for and scope of pension arrangements for each Executive Director;
• to ensure that contractual terms on termination, and any payments made, are fair to the individual and the Company, that failure is not rewarded and that the duty to mitigate loss is fully recognised;
• within the terms of the agreed policy, to determine the total individual remuneration package of each Executive Director including, where appropriate, bonuses, incentive payments and share options;
• in determining such packages and arrangements, give due regard to the contents of the Code as well as the Listing Rules and associated guidance;
• be aware of and advise on any major changes in employee benefit structures throughout the Company or Group;
• agree the policy for authorising claims for expenses from the Chief Executive and Chairman;
• be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the committee; and;

The Company has fully complied with the Irish Stock Exchange's requirement in relation to the disclosure of Directors' remuneration and its Best Practice provisions as contained in Section A of the Listing Rules. The philosophy of the Remuneration Committee in determining Executive Directors' remuneration is to ensure that individuals are appropriately rewarded relative to their responsibility, experience and value to the Group.

In framing Remuneration Policy the Remuneration Committee has had regard to Section B of the provisions of the Code of Best Practice, published in December 1992 by the Cadbury Committee on the Financial Aspects of Corporate Governance, annexed to the Listing Rules.

Except for a contract with Vico Properties Plc to provide the services of M. Carvill, service contracts with A. Brown, I. Egan and T. McCluskey, agreements between Non-Executive Directors and Congolone Heavy Minerals Limited a subsidiary of Kenmare Resources Plc for advice supplied in relation to the Moma Project none of the Directors had a beneficial interest in any contract in which the Company was a party during the financial year.

Notice period on rolling service contracts with Executive Directors is two years.

Audit Committee 

The Audit Committee consists of the Non-Executive Directors as detailed on page 27. The Committee has determined that Mr. I. Egan, as a Fellow of the Australian Society of Certified Practising Accountants (CPA Australia), is the Committee’s financial expert. As outlined in the Directors’ biographical details, members bring considerable financial and accounting experience to the work of the Committee. The main responsibilities of the Committee include:

• monitor the integrity of the financial statements of the Group and any formal announcements relating to the Group’s financial performance, reviewing significant financial reporting judgements contained in them;
• review the Group’s internal financial controls and internal control and risk management systems;
• monitor and review whether a dedicated internal audit function is required;
• make recommendations to the Board, for it to put to the shareholders for their approval in general meeting, in relation to the appointment of the external auditor and to approve the remuneration and terms of engagement of the external auditor;
• review and monitor the external auditors’ independence and objectivity and the effectiveness of the audit process, taking into consideration relevant professional and regulatory requirements;
• develop and implement policy on the engagement of external auditors to supply non-audit services, taking into account relevant ethical guidance regarding the provision of non-audit services by an external audit firm;
  and
• report to the Board, identifying any matters in respect of which it considers that action or improvement is needed, and making recommendations as to the steps to be taken.

These responsibilities were discharged as follows:

• the Committee reviewed the preliminary and interim results issued by the Company in April and September 2007 respectively;
• the Committee reviewed the 2006 Annual Report in May 2007 and the 2007 Interim Report in September 2007. As part of these reviews the Committee received a report from the external auditors on their audit of the annual report and their review of the interim report;
• the Committee appointed KPMG as external auditors of two subsidiary companies during the year;
• the Committee considered a report from the external auditors on their review of the effectiveness of controls at the Moma Titanium Minerals Mine and reviewed management action taken in response;
• the Committee agreed the fees to be paid to the external auditors for their audit of the 2006 Annual Report and Accounts and 2007 Interim Report;
• the Committee considered the need for a dedicated internal audit function. The Committee concluded that based on the internal controls in place and periodic internal audits carried out by members of the Head Office finance team, the establishment of a dedicated internal audit function was currently not necessary;
• the Committee evaluated the performance of the external auditors; and
• the Committee reviewed the safeguards to avoid the possibility that the auditors’ objectivity and independence could be compromised. The Committee is satisfied that the appropriate policy is in place in respect of services provided by external auditors.

The Company Secretary and the external audit lead partner attend meetings at the invitation of the Committee. During these meetings, the Committee and the external auditor discuss, without management present, matters relating to its remit and any issues arising from the audit. The external auditors have unrestricted access to the Chairman of the Audit Committee.

The Audit Committee Chairman, Mr. P. McAleer, can receive in confidence, complaints on accounting, risk issues, internal controls, auditing issues and related matters for reporting to the Audit Committee.