corporate governance

The Directors acknowledge the importance of the Principles set out in The Combined Code issued by the Committee on Corporate Governance. Although the Combined Code is not compulsory for AIM listed companies, the Directors have applied the principles as far as practicable and appropriate for a relatively small public company as follows:

Throughout the period since admission to AIM, the Board comprised at least a Chairman, one executive director and one non-executive director. The Board meets regularly and is responsible for strategy, performance, approval of major capital projects and the framework of internal controls. The Board has a formal schedule of matters specifically reserved to it for decision. To enable the Board to discharge its duties, all Directors receive appropriate and timely information. Briefing papers are distributed to all Directors in advance of Board meetings. All Directors have access to the advice and services of the Company Secretary, who is responsible for ensuring that Board procedures are followed and that applicable rules and regulations are complied with. The appointment and removal of the Company Secretary is a matter for the Board as a whole. In addition, procedures are in place to enable the Directors to obtain independent professional advice in the furtherance of their duties, if necessary, at the Company's expense. A nominations committee is not considered appropriate because of the small size of the Board and the Company but all appointments or potential appointments are fully discussed by all Board members. Directors are subject to re-election by the shareholders at Annual General Meetings. The Articles of Association provide that Directors will be subject to re-election at the first opportunity after their appointment and the Board will submit to re-election at intervals of three years, as required by the Articles.

The Audit Committee at 31 December 2007 consisted of Michael Walter and David Walton Masters. The Audit Committee meets at least twice a year and considers the appointment and fees of the external auditors and discusses the scope of the audit and its findings. The Committee is also responsible for monitoring compliance with accounting and legal requirements and for reviewing the annual and interim financial statements prior to their submission for approval by the Board.

The Remuneration Committee currently consists of Michael Walter and David Walton Masters. The Committee's role is to consider and approve the remuneration and benefits of the Executive Directors. In framing the Company's remuneration policy, the Remuneration Committee has given full consideration to Section B of The Combined Code.

The AIM Compliance Committee is responsible for, inter alia, monitoring the quality of internal procedures, resources and controls to enable compliance by the Company with the AIM Rules and the AIM rules for nominated advisers and to enable the Company to seek advice from its nominated adviser regarding compliance with the AIM Rules and the AIM rules for nominated advisers whenever it is appropriate to do so and to take such advice into account. In undertaking its duties, the AIM Rules compliance committee shall bear in mind the size, profitability and market capitalisation of the Company, its reputation, its performance relative to other similar companies, the performance of individuals and the best interests of shareholders. The AIM Rules compliance committee comprises of Jonathan Bobbett and Michael Walter.