b'Mercia asset Management PLc67Annual Report and Accounts 2021governance principles compliant explanation Further reading9.Maintain governance The Board is collectively responsible for the long-term success ofPages 63 to 65 of this structures andMercia. It has a schedule of matters reserved for its approvalAnnual Report and processes that are fitwhich covers key areas of management and governance of thethe AIM Rule 26 for purpose andGroup. This Annual Report details the composition and terms ofsection of the Groups support goodreference of the Board and its Committees. These are alsowebsitedecision making byincluded within the Investor Relations section of Mercias website.the BoardBuild 10. Communicate how Mercias Annual Report includes disclosure of Board Committees,Pages 23 and 63 to 65 trust the Company istheir composition and where relevant, any work undertakenof this Annual Report governed and isduring the year. It includes a detailed Remuneration Report.and the AIM Rule 26 performing byMercias website includes all historic Annual Reports, resultssection of the Groups maintaining aannouncements, results presentations, and other governance- websitedialogue withrelated material, including notices of all AGMs. These can be shareholders andfound in the Investor Relations section, under Regulatory News. other relevantThis section of the website also includes the results of all AGMs.stakeholdersInternal controls Strategic report Financial statementsThe Board acknowledges its overall responsibility for the Groups system of internal controls and the ongoing review of their effectiveness. These controls are designed to safeguard the Groups assets and are considered appropriate for an AIM company ofthe size and complexity of Mercia Asset Management. However, systems of internal control can only identify and manage risks, not eliminate them. Consequently, such controls do not provide an absolute assurance against misstatement or loss. The main features Governanceof the Groups internal controls system are as follows:A control environment exists through the close daily management of the business by the Executive Directors. The Group has a defined organisation structure with delineated investment approval limits. Controls are implemented and monitored by senior staff with the necessary qualifications and experienceA list of matters specifically reserved for Board approvalRegular detailed management reporting with comparisons and explanations of any material variances against budget or forecasts Financial and custodial asset controls operate to ensure that the assets of the Group are safeguarded and that appropriate accounting and FCA-related records are maintained.Share dealing, anti-bribery and whistleblowingThe Group has adopted a share dealing code in conformity with the requirements of Rule 21 of the AIM Rules. All employees, including new joiners, are required to agree to comply with the code. The Group has also adopted anti-bribery and whistleblowing policies, which are included in the Groups internal policies, communicated to all employees. The Group operates an open and inclusive culture and employees are encouraged to speak up if they have any concerns. The aim of such policies is to ensure that no blurred lines exist and to encourage all employees, regardless of seniority, to bring matters which cause them concern to the attention of either the Executive or Non-executive Directors. The Group has also adopted the requirements of the Market Abuse Regulations, to the extent required by AIM companies.Investor relationsThe Group is committed to developing and maintaining open channels of communication with its shareholders and the www.mercia.co.uk website provides up-to-date information on the Group. The Executive Directors are available to meet with shareholders and sector analysts at regular intervals throughout the year and the Non-executive Directors are also available for informal discussions if required. Shareholders will have an opportunity to raise questions with the Board at the Groups Annual General Meeting, which this year will be held on 14 September 2021.Ian R. MetcalfeNon-executive Chair5 July 2021'