Corporate Governance

The Directors intend that the Company will comply with the main provisions of the Combined Code of Good Governance (the "Code") in so far as they are practicable for a company of its size. In this respect, in addition to a part-time finance director, the Company has appointed two non-executive directors with relevant experience to complement the executive directors and to provide an independent outlook to the Board.

An Audit Committee, comprising the non-executive Directors, other than the non-executive finance director, has been established by the Company to operate from Admission. The Audit Committee will be chaired by the non-executive Chairman and will meet at least twice each year. The Audit Committee will be responsible, among other things, for:

a) monitoring the integrity of financial statements and announcements relating to the Company's financial performance;

b) reviewing the Company's internal financial controls;

c) monitoring and reviewing the effectiveness of the internal audit function;

d) making recommendations for the appointment of an external auditor and approving terms of

engagement; and

e) identifying matters which it considers need action or improvement and reporting to the Board.

The Company has, in addition, established a Remuneration Committee, comprising the non-executive Directors, to operate from Admission. The Remuneration Committee will be chaired by a non-executive Director. The Remuneration Committee will be responsible, among other things, for:

a) determining and agreeing broad policy for the remuneration of the executive management;

b) determining targets for any performance related pay schemes operated by the Company;

c) determining the policy and scope of pension arrangements for executive directors;

d) ensuring that contractual terms on termination, and any payments made, are fair to both the

individual and the Company, that failure is not rewarded and that the duty to mitigate loss is fully recognised;

e) within the agreed policy, determining the total individual remuneration package of each executive director;

f) in determining such packages and arrangements, giving due regard to the contents of the Code as well as the AIM Rules;

g) agreeing policy for authorising claims for expenses from the executive directors; and

h) ensuring that provisions regarding disclosure of remuneration, including pensions, as set out in the Directors' Remuneration Report Regulations 2002 and the Code are fulfilled.

The Company will operate a share dealing code for Directors on the basis set out in the Model Code.

The Board has also considered the guidance issued by the Institute of Chartered Accountants in England and Wales concerning the internal requirements of the Code. The Board intends regularly to review key business as well as financial risks facing the Company in the operation of its business.

In accordance with the provisions of the AIM Rules, which require the nominated adviser and the Company to maintain regular contact so as to enable:

i) the nominated adviser to ensure the Company and the Directors continue to understand their obligations under the AIM Rules for Companies; and

ii) that the nominated adviser is kept up to date with developments at the Company

The Directors have considered it appropriate to appoint a committee to ensure compliance with those rules ("AIM Rules Compliance Committee").

The AIM Rules Compliance Committee established by the Company comprises any two Directors (initially Chris Seymour-Prosser and Ken Wills) who have been given full power and authority to perform, approve, execute, deliver and/or issue all things which the AIM Rules Compliance Committee considers necessary or expedient in connection with the Company's Admission to and subsequent trading on AIM, or any matter incidental thereto including, without limitation raising and discussing or issuing notification to the nominated adviser (currently Beaumont Cornish) of:

(a) any deals by Directors in respect of any Ordinary Shares in which they are interested;

(b) any changes to the interests of any Shareholder holding 3% or more of any Ordinary Shares which increase or decrease such holding through any single percentage;

(c) the resignation, dismissal or appointment of any Director;

(d) any change in the Company's accounting reference date, registered office address or any change in its legal name;

(e) any material change between the Company's actual trading performance or financial condition and any profit forecast, estimate or projection made public on behalf of the Company;

(f) any decision to make any payment in Ordinary Shares;

(g) the reason for the application for Admission to trading on AIM or the cancellation of any Ordinary Shares;

(h) the occurrence and number of Ordinary Shares taken into and out of treasury;

(i) the resignation, dismissal or appointment of the Company's nominated adviser or broker from time to time;

(j) any change in the website address operated by the Company including any changes in order to ensure continued compliance with Rule 26 of the AIM Rules for Companies;

(k) the admission to any other exchange or trading platform of the Ordinary Shares; and

(l) any changes relating to the Company in connection with its: financial condition, sphere of activity, performance of its business and the expectation of its performance.

Page Last Updated: 17/12/08