Governance

The Company intends, so far as is practicable for a company of its size and nature, to comply with the provisions of the Combined Code which applies to companies which are admitted to the Official List and also the Quoted Companies Alliance guidelines published on 13 July 2005. The Company has appointed two non-executive Directors, John Read and David Gutteridge. Both of the non-executive Directors has been appointed to the audit committee, the remuneration committee and the nominations committee of the Board, which were established in November 2005. The Audit Committee and Remuneration Committee is chaired by David Gutteridge and the Nominations Committee is chaired by John Read.

The audit committee will meet at least twice a year and will be responsible for ensuring that the appropriate financial reporting procedures are properly maintained and reported on and for meeting the auditors and reviewing their reports relating to the Group's accounts and internal control systems.

The remuneration committee will meet at least twice a year and will be responsible for reviewing the performance of the executive Directors and other senior executives and for determining appropriate levels of remuneration.

The nominations committee will make recommendations on all new Board appointments.

The guidance published by the Institute of Chartered Accountants in England and Wales (commonly known as the Turnbull Report) concerning the internal control requirements of the Combined Code has been brought to the attention of the Directors. In line with the Turnbull Report, the Board expects to keep under regular review key business risks in addition to the financial risks facing the Group in the operation of its business.

The Directors intend to comply with Rule 21 of the AIM Rules relating to Directors' and applicable employees' dealings in the Company's securities and to this end the Company has adopted an appropriate share dealing code.