1An issuer must have a body which is responsible for performing the functions set out in DTR 7.1.3 R. At least one member of that body must be independent and at least one member must have competence in accounting and/or auditing.

An issuer must ensure that, as a minimum, the relevant body must:

1. (1)

   monitor the financial reporting process;

2. (2)

   monitor the effectiveness of the issuer’s internal control, internal audit where applicable, and risk management systems;

3. (3)

   monitor the statutory audit of the annual and consolidated accounts;

4. (4)

   review and monitor the independence of the statutory auditor, and in particular the provision of additional services to the issuer.

An issuer must base any proposal to appoint a statutory auditor on a recommendation made by the relevant body.

The issuer must make a statement available to the public disclosing which body carries out the functions required by DTR 7.1.3 R and how it is composed.

An issuer to which this section applies must include a corporate governance statement in its directors’ report. That statement must be included as a specific section of the directors’ report and must contain at least the information set out in DTR 7.2.2 R to DTR 7.2.7 R and, where applicable, DTR 7.2.10 R.

The corporate governance statement must contain a reference to the following, where applicable4:

1. (1)

   the corporate governance code to which the issuer is subject; 4

2. (2)

   the corporate governance code which the issuer may have voluntarily decided to apply; and4

3. (3)

   all relevant information about the corporate governance practices applied over and above 4the requirements of 4national law.

1. (1)

   An issuer which is complying with DTR 7.2.2 R (1) or DTR 7.2.2 R (2) must:

   1. (a)

      state in its directors’ report where the relevant corporate governance code is publicly available; and

   2. (b)

      where 4it departs from that corporate governance code, explain which parts of the corporate governance code it departs from and the reasons for doing so.

2. (2)

   Where DTR 7.2.2 R (3) applies, the issuer must make details of 4its corporate governance practices publicly available and state in its directors’ report where they can be found.

3. (3)

   If an issuer has decided not to refer to 4any provisions of a corporate governance code referred to under DTR 7.2.2 R (1) and DTR 7.2.2 R (2), it must explain its reasons for that decision.

The corporate governance statement must contain a description of the main features of the issuer's internal control and risk management systems in relation to the financial reporting process.

The corporate governance statement must contain the information required by paragraph 13(2)(c), (d), (f), (h) and (i) of Schedule 7 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410) (information about share capital required under Directive 2004/25/EC (the Takeover Directive)) where the issuer is subject to the requirements of that paragraph.

The corporate governance statement must contain a description of the composition and operation of the issuer's administrative, management and supervisory bodies and their committees.

An issuer may elect that, instead of including its corporate governance statement in its directors’ report, the information required by DTR 7.2.1 R to DTR 7.2.7 R may be set out in4:

1. (1)

   4a separate report published together with and in the same manner as its annual report4; or

2. (2)

   a4 document publicly available on the issuer's website to which reference is made in the directors’ report4.

   4

4Under (1) or (2), the corporate governance statement must contain the information required by DTR 7.2.6R or a reference to the directors’ report where that information is made available.

Subject to DTR 7.2.11 R, an issuer which is required to prepare a group directors’ report within the meaning of section 415(2) of the Companies Act 2006 must include in that report a description of the main features of the group’s internal control and risk management systems in relation to the financial reporting process for the undertakings included in the consolidation, taken as a whole4. In the event that the issuer presents its own annual report and its consolidated annual report as a single report, this information must be included in the corporate governance statement required by DTR 7.2.1 R.

1. (1)

   4An issuer that elects to include its corporate governance statement in a separate report as permitted by DTR 7.2.9R(1) must provide the information required by DTR 7.2.10R in that report.

2. (2)

   4An issuer that elects to include its corporate governance statement in a document publicly available on the issuer's website to which reference is made in the directors’ report as permitted by DTR 7.2.9R(2) must provide the information required by DTR 7.2.10R in that document.