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Corporate Governance

The Company will not be subject to the UK Corporate Governance Code applicable to companies listed on the Official List. The Company does, however, intend, in so far as is practicable given the size and nature of the Company and the constitution of the Board, to comply with the QCA Corporate Governance Code for Small and Mid-size Quoted Companies (the “QCA Code”) as published by the Quoted Companies Alliance (the “QCA”).

The QCA Code was devised by the QCA, in consultation with a number of significant institutional small company investors, as an alternative corporate governance code applicable to AIM companies. An alternative code was proposed because the QCA considered the UK Corporate Governance Code to be inappropriate to many AIM companies.

The QCA Code sets out a code of best practice for AIM companies. Those guidelines require, among other things, that:

(a)    certain matters be specifically reserved for the board’s decision;

(b)    the board should be supplied in a timely manner with information (including regular management financial information) in a form and of a quality appropriate to enable it to discharge its duties;

(c)    the board should, at least annually, conduct a review of the effectiveness of the Company and its subsidiaries’ system of internal controls and should report to shareholders that they have done so;

(d)    the roles of chairman and chief executive should not be exercised by the same individual or there should be a clear explanation of how other board procedures provide protection against the risks of concentration of power within the company;

(e)    a company should have at least two independent non-executive directors and the board should not be dominated by one person or group of people;

(f)     all directors should be submitted for re-election at regular intervals subject to continued satisfactory performance;

(g)    the board should establish audit, remuneration and nomination committees; and

(h)    there should be a dialogue with shareholders based on a mutual understanding of objectives.

The Board consists of two Executive Directors, being John W Barr, the Executive Chairman, and Andrew Carroll, the Technical Director, and one non-executive Director being John Young. Major corporate decisions of the Company are subject to Board approval.

An audit committee, comprising John W Barr and John Young has been established to operate with effect from Admission. The audit committee will determine the application of financial reporting and internal control principles, including reviewing the effectiveness of the Group’s financial reporting, internal control and risk management procedures and the scope, quality and results of the external audit. The audit committee will be chaired by John W Barr.

A remuneration committee, comprising John Young and Andrew Carroll has also been established to operate with effect from Admission. It will review the performance of the executive directors and will set their remuneration, determine the payment of bonuses to executive directors and consider bonus and option schemes. Each of the executive directors will take no part in discussions concerning their remuneration. The remuneration committee is chaired by John Young. The remuneration of all directors will be reviewed by the board.

The Company will ensure, in accordance with and subject to the provisions of Rule 21 of the AIM Rules, that the Directors and applicable employees shall not deal in any of the Ordinary Shares during a close period (as defined in the AIM Rules) and will take all reasonable steps to ensure compliance by the Directors and applicable employees with this Rule 21 including the adoption of a share dealing code.