The Company, being listed on AIM, is not required to comply with the Combined Code. However, the Company has given consideration to the code provisions set out in Section 1 of the Combined Code ("the Code") on Corporate Governance annexed to the Financial Services Authority Listing Rules. The directors support the objectives of the Code and intend to comply with those aspects which they consider relevant to the Group's size and circumstances. Details of these are set out below. Below is a brief description of the role of the Board and its committees, including a statement regarding the Group's system of internal financial control.

The Workings of the Board and its Committees

The Board of Directors

The Board currently comprises two executive and two non-executive directors. The non-executive directors are considered independent of management and free from any business or other relationship, which could materially interfere with the exercise of their independent judgment.

The Board meets on average every two months and is responsible, inter alia, for setting and monitoring Group strategy, reviewing trading performance, ensuring adequate funding, examining major acquisition opportunities, formulating policy on key issues and reporting to the shareholders.

The Audit Committee

The Audit Committee comprises the following directors:

• Melissa Sturgess
• Roger Harris

The committee provides a forum for reporting by the Group's external auditors. Meetings are held on average once a year. The present Committee Chairman is Melissa Sturgess.

The Audit Committee is responsible for reviewing a wide range of financial matters including the annual and half year financial statements and accompanying reports before their submission to the Board and monitoring the controls which ensure the integrity of the financial information reported to the shareholders.

The Remuneration Committee

The Remuneration Committee comprised the following directors during the period:

• Melissa Sturgess
• Roger Harris

The present Committee Chairman is Roger Harris.

The Committee is responsible for recommending to the Board the terms and conditions of employment of the executive directors.

Internal Financial Control

The Board is responsible for establishing and maintaining the Group's system of internal financial controls. Internal financial control systems are designed to meet the particular needs of the Group and the risk to which it is exposed, and by their very nature can provide reasonable, but not absolute, assurance against material misstatement or loss.

The directors are conscious of the need to keep effective internal financial control, particularly in view of the limited cash resources of the Group. Due to the relatively small size of the Group's operations, the directors are very closely involved in the day-to-day running of the business and as such have less need for a detailed formal system of internal financial control. The directors have reviewed the effectiveness of the procedures presently in place and consider that they are still appropriate to the nature and scale of the operations of the Group.