JKX Oil & Gas plc Annual Report 201173At a glance01-17Board statements18-23Operational review24-36Financial review37-47CSR review48-61Directors' reports62-83Financial statements84-136Board. The Nomination Committee supports the Board in this process, both by reviewing requests from Directors for authorisations of situations of actual or potential conflict and making recommendations to the Board and by reviewing any situations of actual or potential conflict that have been previously authorised by the Board, and making recommendations regarding whether the authorisation remains appropriate.Board diversityFollowing the appointment of Cynthia Dubin during the year 11% of the Board members are women.The Board supports the longer term aspirations of Lord Davies's report regarding gender diversity on appointment of directors to boards. Gender is only one aspect of diversity, and there are many other attributes and experience that can improve the board's ability to act effectively. We will continue to search for the highest quality people with the most appropriate experience for the requirements of the business, be they men or women. Going concernThe Board closely monitors and manages its liquidity risk. Cash flow forecasts are regularly produced and sensitivities run for different scenarios including, but not limited to, changes in commodity prices, different production and tax rates in relation to the Group's producing assets and delays to development projects.The Directors have reviewed the Group's forecast cash flows for the next twelve months and through to the end of 2013. Having considered the sensitivities and potential outcomes relating to the Ukrainian and Russian business environments, the future expectations regarding country and currency risks, the Group's ability to change the timing and scale of its discretionary capital expenditure if required and the Group's ability to draw up to net $10m on the credit facility in Ukraine which is currently available until 30 June 2012, the Directors consider that the Company and Group have adequate resources to continue for the foreseeable future. The going concern basis for the accounts has therefore continued to be adopted.On behalf of the BoardSir Ian ProsserChairman27 March 2012

74This report has been prepared in accordance with the relevant requirements of Schedules 420-422 to the Companies Act 2006, the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, the provisions of the UK Corporate Governance Code (the 'Code') and the Listing Rules of the Financial Services Authority. As required by the regulations the report will be approved by the Board of the Company and signed by a Director or Company Secretary on behalf of the Board. Unaudited informationRemuneration CommitteeThe Remuneration Committee (the 'Committee') operates under the delegated authority of the Board. The Committee's primary role is to review, agree and approve, or as required under the Code to make recommendations to the Board, on:. the Company's remuneration policy for Executive Directors and senior management. service contracts of the Executive Directors. remuneration of the Executive Directors. remuneration of senior management identified by the Committee and. participation in, and operation of, the Company's long-term incentive plans.The full terms of reference are available from the Company Secretary.None of the Committee has any personal financial interest (other than as a shareholder as detailed on page 66, which given the level of holdings the Board accepts as not impairing independence), conflicts of interests arising from cross-directorships or day-to-day involvement in running JKX. No Director plays a part in any discussion regarding his own remuneration. Committee meetings are attended by the Chief Executive by invitation but he is not able to vote and is not present when his own remuneration arrangements are discussed.The Committee retains Kepler Associates ('Kepler') as its independent executive remuneration advisers. Kepler provides no other services to the Group. During the year, Mercer Limited provided information on remuneration levels at comparator oil and gas companies. Mercer provides no other services to the Group.The Committee met formally on two (2010: two) occasions during 2011 and the meeting attendance record is set out in the Corporate Governance report on page 71.Committee activities during 2011The Committee's activities during 2011 were as follows:. review and approval of payments to be made under the 2010 Annual Bonus Scheme. approval of executive salary levels for 2011. confirmation of lapse of share option awards made in 2008 due to failure to achieve vesting criteria in 2011. review and approval of performance targets for the 2011 Annual Bonus Scheme . review and approval of the allocation of, and performance conditions applicable to, performance shares and share option awards made in 2011.The topic of senior executive remuneration has generated considerable interest with a number of consultations by various bodies in 2011. The Committee has followed these consultations closely with a view of ensuring it remains abreast of any movements in best practice for remuneration.Remuneration policyThe Company's overall approach to pay and benefits is to reward employees competitively, taking into account Company and individual performance, market value and competitive pressures in the independent oil and gas sector. The Company does not seek to maintain any strict market position but aims to ensure that total Remuneration report* Michel-Marc Delcommune and Lord Oxford resigned from the Remuneration Committee during 2011.Table 1: Independent Non-Executive Directors who served on the Remuneration Committee during 2011Member From ToDipesh Shah OBE (Chairman) 1 June 2008 to dateLord Oxford*10 November 1997 31 December 2011Nigel Moore26 June 2007 to dateMichel-Marc Delcommune*1 March 2010 31 December 2011Sir Ian Prosser 1 March 2011 to date