Report on Corporate Governance

The board has considered its policies and practices in relation to corporate governance in the light of recommendations contained in the Code of Best Practice ("the Code") issued in December 1992 by the Cadbury Committee on the financial aspects of corporate governance. The board supports the highest standards in corporate governance but is of the opinion that certain of the recommendations of the Code are not applicable or appropriate for the company at this time. The board believes it has substantially complied with the Code throughout the accounting period after taking into account the recommendations on the Code by The City Group for Smaller Companies, CISCO. However the company has not complied with paragraphs 2.3, 2.4, 3.3 and 4.3 of the Code which relate to the selection of non-executive directors and the setting up of formal remuneration and audit committees. There are no formal selection or re-appointment procedures for non-executive directors. The current non-executive directors were not appointed for specific terms but are subject to retirement from the board by rotation at annual general meetings. The directors do not presently receive any regular remuneration. Informal committees are appointed from time to time to review financial statements and meet with the auditors. All significant matters are reserved for decision by the board.

The board of directors is responsible for and has reviewed the effectiveness of the company's systems of internal financial control. Such systems provide reasonable and not absolute assurance of the safeguarding of assets, the maintenance of proper accounting records and the reliability of financial information. The key feature of the company's control system is that board members directly monitor all payments and transactions as well as budgets and annual accounts. The company's strategy is determined by the whole board.

The company has entered into a controlling shareholder agreement with Juno Limited which is available for inspection at the registered office.

The company's compliance with the Code has been reviewed by the auditors and their report is set out in the Auditors Report