The duties of the Audit and Risk Committee in discharging its
responsibilities are outlined in the table overleaf. The Audit and
Risk Committee is also responsible for monitoring the objectivity
and effectiveness of the audit process, with particular regard to
terms under which the auditor is appointed to perform non-audit
services. In advance of non-audit work being undertaken by the
Company's Auditors, any potential threats to independence are
identified and if they cannot be suitably dealt with an alternative
audit firm would be engaged.
In respect to its risk management function, the Audit and Risk
Committee is also responsible for reviewing the Company's risk
management framework including in connection with the acquisition
and disposal of assets, the valuation of assets and ensuring that
the risk management function of the Investment Adviser,
Administrator and other third party service providers are adequate
and to seek assurance of the same.
The Audit and Risk Committee, having reviewed the performance of
the Auditor, has recommended to the Board that the Auditor be
proposed for re-appointment at the Annual General Meeting of the
Company.
The Audit and Risk Committee spent time performing a more
detailed risk review of the Company during the period, focussed on
identification of new emerging risks that could affect the Company
and the robustness of processes in place to mitigate those risks.
During this review, the Committee identified and discussed a number
of emerging global risks, for example those driven by technological
advances (such as Cybercrime) and new industry risks as a result of
increased external regulation. Of significance the committee
considered it important to more specifically raise with
shareholders the new emerging risk of OECD proposals to restrict
the tax deductibility of interest payments. More detail is provided
within the Risk and Mitigation section of this Annual Report. The
Audit and Risk Committee were satisfied that the key risks that
could impact the Company and its investments were effectively
mitigated and were also in line with the Company's peer group.
Management Engagement Committee
The Management Engagement Committee is comprised of the full
Board, with the exception of Mr Frost, and is chaired by Ms
Whittet. The duties of the Management Engagement Committee in
discharging its responsibilities are outlined in the table
above.
The Management Engagement Committee carries out its review of
the Company's advisers through consideration of a number of
objective and subjective criteria and through a review of the terms
and conditions of the advisors' appointments with the aim of
evaluating performance, identifying any weaknesses and ensuring
value for money for the Company's shareholders.
The Management Engagement Committee formally reviewed the
performance of Investment Adviser and other key service providers
to the Company. During the 2014 review, no material weaknesses were
identified. Overall the Committee confirmed its satisfaction with
the services and advice received. The external evaluation of the
Board referred to above also considered the effectiveness of the
Board's relationship with the Company's advisers including the
Investment Adviser and concluded positively on the these
relationships.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee is comprised of the
full Board with the exception of Mr Frost as the non-independent
director, and will be chaired by Mr Stares. As noted earlier the
Committee was established in September 2014 to formalise the
arrangements that had previously existed to consider matters
relating to Board appointments, structure and remuneration.
The Committee intends to hold its first meeting during 2015.
Investment Committee
The Investment Committee is comprised of the full Board with the
exception of Mr Frost as the non-independent director, and is
chaired by Mr Dorey. The Committee was established in September
2014 to formalise the arrangements that had previously existed to
consider items relating to the acquisition and disposal of
investments by the Company. Previously such decisions were taken by
the full board (excluding Mr Frost who is not independent) and
therefore the Committee was not required to meet during 2014.
The Committee will meet as necessary when new investment or
divestment opportunities are recommended by the Investment
Adviser.
Board and Committee Meeting Attendance
The full Board meets at least four times per year and in
addition there is regular contact between the Board, the Investment
Adviser, the Administrator and the Company Secretary. The agenda
and supporting papers are distributed in advance of quarterly Board
and Committee meetings to allow time for appropriate review and to
facilitate full discussion at the meetings.
As part of its ongoing oversight of the Company's portfolio in
June 2014 the Board visited the Federal German Ministry of
Education and Research facility in Berlin. It also met with the
German-based members of the Investment Adviser's team together with
the construction partner on that project, BAM Deutschland. In
conjunction with the Investment Adviser, the Board also took the
opportunity to take a step back from its usual tasks to spend time
considering the Company's broader strategic approach including its
position within the markets and future areas of focus for
growth.
The table below lists directors' attendance at Board and
Committee meetings during the year, to the date of this report.
Audit Management
Quarterly Ad-hoc and Risk Engagement
Directors Board Board Committee Committee
============== ========== ======= =========== ============
Max
no. 4 6 5 1
============== ========== ======= =========== ============
R Dorey 4 5 5 1
K Dorrian(1) 1 3 - 1
G Frost(2) 4 - - -
J Whittle 4 6 5 1
C Whittet 4 5 5 1
J Stares 4 6 5 1
============== ========== ======= =========== ============
(1) Mr Dorrian retired from the Board on 12 June 2014.
(2) Mr Frost is not a member of the Audit and Risk Committee or
Management Engagement Committee. Mr Frost does not attend Ad-hoc
Board Meetings as a director where recommendations from the
Investment Adviser are under consideration.
The Nomination and Remuneration Committee was established on 3
September 2014 and intends to hold its first meeting during 2015.
The Investment Committee was also established on 3 September 2014
but no matters came forward that needed to be considered by the
Committee during the period.
Relationship with Administrator and Company Secretary
Heritage International Fund Managers Limited acts as
Administrator and Company Secretary and is responsible to the Board
under the terms of the Administration Agreement. The Administrator
is also responsible for ensuring compliance with the Rules and
Regulations of Guernsey Law, London Stock Exchange listing
requirements, anti-money laundering regulations and observation of
the Reserved Powers of the Board and in this respect the Board
receives detailed quarterly reports.
The Directors have access to the advice and services of the
Company Secretary who is responsible to the Board for ensuring that
Board procedures are followed and that it adheres to applicable
legislation, rules and regulations under Guernsey Law, the Guernsey
Financial Services Commission and the London Stock Exchange.
Relationship with the Investment Adviser
The Directors are responsible for the overall management and
direction of the affairs of the Company. Under the Investment
Advisory Agreement, Amber Fund Management Limited acts as
Investment Adviser to the Company to review and monitor investments
and advise the Company in relation to strategic management of the
investment portfolio. Details of the Investment Adviser's
relationship with the Company are provided within the Strategic
Report.
In accordance with its normal practice the Board continues to
hold discussions relating to the future strategy of the Company
with the Investment Adviser and regular formal and informal
discussions are held on this subject. The Directors confirm that
they believe that it is in shareholder's best interests to continue
the appointment of Amber Fund Management Limited ('AFML') as the
Company's Investment Adviser.
Making New Investments
The Investment Committee, comprised only of independent
directors of the Company, make investment decisions with respect to
new investments after reviewing recommendations made by the
Company's Investment Adviser. The Investment Adviser has a detailed
set of procedures and approval processes in relation to the
recommendation of new investments to the Board.
It is expected that further investments will be sourced by the
Investment Adviser. It is likely that some of these investments
will have been originated and developed by, and in certain cases
may be acquired from other members of the Investment Adviser's
group. Where that is the case the conflicts management process
summarised below is followed.
Managing Conflicts of Interest
The Company has established detailed procedures to deal with
conflicts of interest that may arise on investments acquired from
the Investment Adviser's group, and manage conduct in respect of
any such acquisitions. As previously mentioned, the Company's Board
has a majority of independent members and a Chairman who is
independent of the Investment Adviser. Each Director is required to
inform the Board of any potential or actual conflicts of interest
prior to Board discussions.
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