Corporate Governance

NextGen Group plc was listed on AIM on 30 December 2005. 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 the resources available to the Company. Details are provided below of how the Company applies the code.

The Board

The Board comprises two Executive Directors and two Non-executive Directors. The Group recognises the benefit of Non-executive Directors who bring objective judgement on issues of strategy, resources, performance and standards of conduct. The Board meets regularly and has adopted a schedule of matters specifically reserved for its approval or review, including strategic operating plans, annual operating budgets, major capital expenditure and financial performance.

Remuneration Committee

The Remuneration Committee comprises the Non-executive Directors and is under the chairmanship of Mr K Rosenau. It meets and approves the remuneration and terms and conditions of employment for the Executive Directors. Share option scheme plans are reviewed and approved by the committee.

Audit Committee

The audit committee comprises the Non-executive Directors and is under the chairmanship of Mr L. Hamø. It meets at least twice a year to review the draft interim and full accounts. It discusses the scope and planning of the audit with the auditors before the audit and agrees their remuneration.

Specific responsibilities also include the reviewing of effectiveness of internal controls; reviewing the scope and results of the external audit; and the reviewing of key management judgements and risk assessments.

Share holder Relations

The Company meets with its institutional shareholders and analysts as appropriate and will use the AGM to encourage communication with private shareholders. In addition, the Company intends to use the annual report and accounts, interim statement and website (www.nextgensciences.com) to provide further information to shareholders. The company uses the services of College Hill to assist in the communication with shareholders.

Internal Control

The Directors are responsible for the system of internal control and reviewing its effectiveness. However, such systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and can provide only reasonable and not absolute assurance against material misstatement or loss.

The key elements of the Groups system of internal control are as follows:

• The board has adopted a risk-based approach to establishing the system of internal control. The risk management approach is used to focus available resources on the Groups most significant areas of risk and to determine key control objectives. In particular the processes for identifying and evaluating the significant risks affecting the business and the policies and procedures by which these risks are managed and have been reviewed.
• The Executive Directors are closely involved in the management of the business at a detailed level. This is supported by reviews of daily, weekly and monthly detailed analyses of the performance of the business and key performance indicators associated with the trading risks facing the group.
• Detailed annual budgets are prepared, reviewed in detail and agreed by the Board and actual performance is reported against these budgets on a regular basis. Major commercial, technological and financial risks are assessed as part of this process.
• The Group has established controls and procedures over the security of the data held on its computer systems and is preparing detailed disaster recovery plans.
• The Group has in place an organizational structure with clearly defined lines of responsibility, delegation of authority and reporting requirements.

Articles of Association

The Articles of Association of NextGen Group PLC can be downloaded from the link below:

Articles of Association