Introduction

During the year under review, the Board has continued to support the principles of corporate governance, as advocated by the Combined Code. The Company’s approach to its application of the principles set out in the Combined Code is detailed below. Pinewood Shepperton plc has remained compliant with all requirements of the Code subject to the Chairman’s membership of the Remuneration Committee during 2007. Given the size of the Company’s Board, the Chairman’s membership of the Remuneration Committee has been considered entirely appropriate by the Board.

Membership of the Board

The Board comprises the Chairman, Michael Grade; three Executive Directors, Ivan Dunleavy, Patrick Garner and Nicholas Smith; and three independent Non-Executive Directors, Adrian Burn, Nigel Hall and James Donald.

Independence of Directors

Adrian Burn, the senior independent Director joined the Board in April 2000. Nigel Hall joined the Board at the time of the Company’s Initial Public Offering, in May 2004, and James Donald joined the Board in March 2006. Adrian Burn, Nigel Hall and James Donald continue to contribute significantly to the Board’s consideration of the Company’s strategic direction and its relationship with external stakeholders. The Board considers each of Adrian Burn, Nigel Hall and James Donald to be independent for the purposes of the Combined Code.

Meetings of Directors

During the year under review the Board held 11 scheduled Board meetings, which were attended by all serving Directors, save for one meeting not attended by James Donald, as a result of indisposition. A further six full Board meetings were held during the year (attended by all serving Directors), to discuss various corporate matters.

The Board is responsible for determining corporate strategy, treasury policy, approval of capital expenditure projects in excess of certain thresholds, dividend policy, interim and final financial statements, all regulatory communications required by the Company and appointments to the Board.

The Board is provided with comprehensive historical and forward-looking monthly financial and operational information to support its understanding of the business and related strategic and operational issues, and to enable it to fulfil its responsibilities accordingly. Directors are provided with regular access to the Company Secretary and to senior management to facilitate their understanding of significant operational issues and assessment of the Company’s prospects, including the ongoing consideration of succession planning. Procedures are in place to enable Board members to take independent professional advice if required.

Board evaluation

During the year the Chairman conducted reviews to assess the individual performance of members of the Board, and a meeting of the independent Non-Executive Directors considered the effectiveness of the Board as a whole. Additionally, the senior independent Non-Executive Director conducted a review of the performance of the Chairman. The Nomination Committee met to consider the result of these reviews and concluded that it was satisfied as to the nature and findings of the reviews which had been undertaken.

The Chairman’s commitments

During the year under review, Michael Grade has remained committed in his support of the Company and in his contribution to the effectiveness of the Board. In recognition of the Chairman’s role as Executive Chairman of ITV plc, arrangements remain in place to monitor business conducted between ITV plc and Pinewood Shepperton plc, to ensure transparency and to identify and avoid any potential conflicts of interest.

Directors’ training

Prior to their appointment to the Board, all Directors are provided with a detailed understanding of the Company, by meeting with existing Directors, and being provided with comprehensive financial and operational information. Additionally, Directors are fully briefed and kept up to date on issues impacting their role and responsibilities as Directors. Directors continue to be updated on significant financial and operational issues via Board meetings and regular communications from the Company, as well as being provided with direct access to the Company’s senior management.

Executive Directors’ contracts

All Executive Directors’ service contracts are on a rolling 12 month basis. Further information in respect of these contracts is provided in the Directors’ remuneration report.

Communication with institutional shareholders

Executive Directors maintain regular and structured dialogue with institutional shareholders via direct scheduled meetings and communication in response to ad hoc queries and requests from shareholders. In addition, the Chairman and the senior independent Non-Executive Directors are available to meet significant shareholders, as required.

Board Committees

The Board has established three committees – Audit, Nomination and Remuneration. The Chairman and members of these committees are appointed by the Board on the recommendation of the Nomination Committee, following consultation with the appropriate committee’s chairman. All meetings of the committees during 2007 were attended by all serving members of the respective committees, save for two meetings of the Remuneration Committee for which Michael Grade was unavailable.
The terms of reference of the Audit, Nomination and Remuneration Committees are contained in the ‘Corporate Governance’ section of the Company’s Investor Relations website at www.pinewoodgroup.com.