Investors

Corporate governance

As a closed-ended investment company registered in Guernsey, the Company is eligible for exemption, under the Listing Rules of the UK Listing Authority, from the requirements of the Combined Code on Corporate Governance published in June 2008 by the Financial Reporting Council ("the Code"), which establishes best practice for good governance. However, the Board has put in place a corporate governance framework following the Association of Investment Companies ("AIC") guidelines that are suitable for an investment company and facilitates voluntary compliance with the Code.

The Company has complied with the relevant provisions of the Code throughout the year except where detailed below. The Company's Board, of which David Staples is Chairman, is comprised solely of non-executive directors meaning the Code provisions relating to executive directors' remuneration are not relevant to the Company. All directors are independent of the Investment Adviser, MedicX Adviser Ltd and directors' independence is subject to annual review as part of the Board's annual performance review. New directors receive an induction from the Investment Adviser and Company Secretary on joining the Board and all directors receive relevant training as necessary. Directors are required under their letters of appointment to be reappointed every three years.

There is no formal third party process for evaluation of the performance of the Board. Each member of the Board is subject to removal without notice under the Articles. As each director's letter of appointment allows for termination on three months' notice, in cases of poor performance the Chairman or shareholders could remove a director without the Company incurring a substantial compensation liability. The Board did, however, conduct an evaluation of its performance during the year, following AIC guidelines.

The Company does not maintain nomination or remuneration committees. A nomination committee is not considered necessary, as all the non-executive directors are contributors to nomination discussions regarding the appointment of new members. Similarly, all directors are party to remuneration reviews and are paid fees as determined by service agreements.

There are no executive directors or employees of the Company. The Investment Adviser agreement establishes the areas of authority that have been delegated to the Investment Adviser and the limits on the Investment Adviser's scope of operation whereby Board approval must be sought. All other areas outside the agreement remain under Board authority. These areas include all strategy matters, investment and divestment policies, financing and dividend policies and corporate governance processes. The Board meets at least five times a year and receives full information on financial performance and financial position along with other relevant information ahead of meetings.

Appropriate directors' and officers' liability insurance is maintained by the Company.

The numbers of scheduled and ad-hoc Board and Audit Committee meetings held during the year to 30 September 2009 along with the attendance of the directors were:

	Board of Directors				Audit Committee
	Scheduled		Ad hoc		Scheduled		Ad hoc
	Held	Attended	Held	Attended	Held	Attended	Held	Attended
D Staples	6	6	5	5	4	4	1	1
C Bennett	6	6	5	4	4	4	1	1
S Mason	6	6	5	4	4	4	1	1
J Hearle²	6	6	5	3	4	4	–	–
A Simpson¹	3	3	–	–	–	–	–	–

A Simpson resigned on 13 February 2009
J Hearle was not a member of the audit committee, but was in attendance

The Audit Committee (the "Committee") has been in operation during the year. Christopher Bennett chairs the Committee and the other members are David Staples and Shelagh Mason. The Committee operates within its terms of reference as determined by the Board and as published on the Company website. During the year, the audit committee carried out its duties as laid out in the terms of reference including the reappointment and appointment of external and internal auditors, monitoring the performance of the auditors, reviewing the financial statements of the Company, the results and scope of the audit, setting and monitoring the Company's system of internal controls. It is within the Committee's terms of reference for the directors to seek independent professional advice, at the Company's expense, as required in the furtherance of their duties.

The Committee meets three times a year and meets the auditors at least annually without the Investment Adviser. The Committee review the performance and continued suitability of the Fund's external auditors on an annual basis. They assess the external auditors' independence, qualification, extent of relevant experience, effectiveness of audit procedures as well as the robustness of their quality assurance procedures. In advance of each audit, the Committee obtains confirmation from the external auditors that they are independent and of the level of nonaudit fees earned by them and their affiliates. Where non-audit fee levels are considered significant, the Committee considers the appropriateness of the independence safeguards put in place by the auditors. Note 4 details the total fees paid to PKF (UK) LLP in the financial year to 30 September 2009. The Committee considers PKF (UK) LLP to be independent of the Company and that the provision of non-audit services does not threaten the objectivity and independence of the audit.

As part of its annual review procedures, the Committee has obtained sufficient assurance from their own evaluation, the audit feedback documentation and from discussion with the Audit firm's senior partner. Based on the assurance obtained, the Committee has recommended to the Board that PKF (UK) LLP is reappointed and that a resolution to this effect be proposed at the forthcoming AGM. PKF (UK) LLP, who succeeded PKF Guernsey, have held office as statutory auditors in respect of the Fund's last two statutory reporting periods and, consequently auditor rotation is not required.

There is no formal third party process for evaluation of the performance of the Committee. The Committee did, however, conduct an evaluation of its performance during the year, following the AIC guidelines.

Health and safety

Health and Safety is of prime importance to the Group and is considered equally with all other business management activities to ensure protection of our stakeholders, be they tenants, developers, advisers, suppliers, visitors or others.

The Group is committed to fostering the highest standards in health and safety as it believes that all unsafe acts and unsafe conditions are preventable. All our stakeholders have a responsibility to support the aim of ensuring a secure and safe environment, and all our stakeholders are tasked with the responsibility for achieving this commitment.

Corporate responsibility

The Fund regards corporate responsibility as integral to how it conducts its business. It is committed to being a good corporate citizen and behaving responsibly with a demonstrated transparency of approach.

The Fund pays particular attention to energy consumption, water consumption, greenhouse gas emissions, waste generation and reducing the proportion of its wastes which are disposed of to landfill, all being aspects where improvements offer commercial as well as environmental benefits.

The Fund recognises that its external stakeholders are nowadays looking for independent assurance or verification that Corporate Responsibility and Environmental Health and Safety reports have been properly prepared.