Governance

Directors and Board

The Group is controlled on behalf of its shareholders by the Board of Directors. The Board is made up of two Executive Directors and three Non-executive Directors including the Chairman.

The roles of Chief Executive Officer and Chairman are separate and there is a clear division of their responsibilities.

The Non-executive Directors bring their independent judgement to all issues related to strategy, performance, key appointments and resources.

The Board has considered whether the warrants issued in the prior year to one of the Non-executive Directors who served during the year as described in the remuneration report impacts their independence. The Board is of the view that their strength of character and judgement are such that this in no way impairs their independence and the cost of providing alternative remuneration would not be in the best interests of shareholders and the Company at the present time.

The Company Secretary is responsible for ensuring that Board procedures are followed and that applicable rules and regulations are complied with. The Directors have access to the Company Secretary for advice on Board procedures.

All Directors have the ability to take independent professional advice at the Group's expense should they consider it necessary.

The Board meets regularly, usually monthly. In the year ended 30 June 2009, the Board met 15 times.

Board papers including management accounts and matters for approval are produced and circulated to the Board in advance of the meeting by the Company Secretary. Formal minutes are produced and circulated for comment and formally approved. In the event that a Director has concerns that cannot be resolved about the running of the Group or a proposed action, they have the right to have their concerns minuted. In the event of a Director's resignation, they are encouraged to write to the Board confirming whether they have any such concerns.

Committees

The Board has established three committees, the Nominations Committee, the Audit Committee and the Remuneration Committee. There are written terms of reference for all the committees.

The Nominations Committee consists of William Hughes (Chairman of the Committee) and Andrew Fearon and considers appointments to the Board in consultation with the other Directors as appropriate. The Nominations Committee has committed to considering how the performance of the Board will be evaluated together with reviewing the roles and capabilities with job specifications within the next year.

The Audit Committee, comprising William Hughes (Chairman of the Committee) and Andrew Fearon, has been established to determine the application of the financial reporting and internal control principles, including reviewing the effectiveness of the Group's financial reporting, internal control and risk management procedures and the scope, quality and results of the external audit.

The Audit Committee meets at least twice a year with the external auditors.

The Remuneration Committee, comprising Robin Saunders (Chairman of the Committee), William Hughes and Andrew Fearon, has been established to review the performance of the Executive Directors and will set their remuneration and consider bonus and share option schemes. No Director will participate in discussions relating to their own remuneration.

The Report of the Remuneration Committee is set out in the 2009 Annual Report.

Risk management and internal control

The entire Board is responsible for managing the risks of the Group and employs senior employees with appropriate knowledge and skills to effectively manage the operational and financial risks of the business.

Internal audit

The Board considers an internal audit function to be inappropriate for a Group the size of Cashbox.

The Audit Committee will review this position annually with a view to establishing such a function when the Group is of appropriate size and complexity.

Relations with Shareholders

The Board recognises the importance of the effective communication with the Group's owners. The Group communicates to investors through its interim and annual results and also press releases issued via the London Stock Exchange.

The Group regularly updates its website, at www.cashboxplc.co.uk, with information including press releases and is compliant with AIM rule 26.

The Board uses the Annual General Meeting to communicate with private and institutional shareholders and welcomes their participation.

All shareholders will have at least 21 days' clear notice of the Annual General Meeting at which the Directors will be available to discuss aspects of performance and management in more detail.

All Directors are subject to re-election by Shareholders at the first Annual General Meeting after their appointment and thereafter at three yearly intervals.