The Board supports the highest standards of corporate governance appropriate for a group of this size and stage of development. We observe the voluntary guidelines issued by the Quoted Companies Alliance and the policy issued by the National Association of Pension Funds. A full compliance report is in our 2007 Annual Report and Accounts.

The Board comprises two executive Directors and three non-executive Directors. The company recognises the benefit of non-executive Directors who bring independent judgement on issues of strategy , resources, performance and standards of conduct. The Board meets monthly and has adopted a schedule of matters specifically reserved for its approval or review, including strategic operating plans, annual operating budgets, major capital expenditure and financial performance.

Management reports are produced monthly and distributed in advance of the monthly Board meetings and include strategy papers and summaries of the key features of the company’s financial position and operating performance.

The Audit Committee is chaired by Terry Donovan , the other member is David Williams. It meets at least twice a year to review the draft interim and full year accounts. It discusses the scope and planning of the audit with the company’s auditors before their audit and agrees their remuneration.

Specific responsibilities also include reviewing the effectiveness of internal controls; reviewing the scope and results of the external audit; ensuring the independence of the auditors; and the review of key management judgements and risk assessments.

The Remuneration Committee is chaired by David Williams, the other members are  Terry Donovan and Susan Ellis, and Chief Executive Andrew Fryatt attends by invitation. It meets and approves the remuneration and terms conditions of employment of the Executive Directors. Share option plans and awards are reviewed and approved by the Committee.

Details of the company’s policy on Directors’ remuneration and related disclosures are set out in the Remuneration Report in the company’s annual report and accounts.

The Nominations Committee is chaired by David Williams, the other members are Terry Donovan and Susan Ellis and Andrew Fryatt attends by invitation. The Committee is responsible for monitoring the composition and balance of the Board and making recommendations to the Board on Board appointments.

The Directors are responsible for the system of internal control and reviewing its effectiveness. However such systems are designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss.

The key elements of the group ’s system of internal controls are as follows:

• The Board has adopted a risk-based approach to establishing the system of internal control. This risk management approach is used to focus available resources on the group’s most significant areas of risk and to determine key control objectives.
• The group has in place an organisational structure with clearly defined lines of responsibility, delegation of authority and reporting requirements.
• The executive Directors are closely involved in the management of the business at a detailed level. This is supported by reviews of daily, weekly and monthly detailed analyses of the performance of the business and key performance indicators associated with the trading risks facing the group.
• Detailed annual budgets are prepared, reviewed in detail and agreed by the Board, and actual performance is reported against these budgets on a regular basis. Major commercial, technological and financial risks are assessed as part of this process.
• The group has established controls and procedures to ensure the security of the data held on is computer systems and also has in place disaster recovery plans.

It is the responsibility of the Audit Committee to review and monitor the external auditor’s independence and objectivity and the effectiveness of the audit process, taking into consideration relevant UK professional and regulatory requirements; and to develop and implement policy on the engagement of the auditor to supply non-audit services, taking into account relevant ethical guidance regarding the provision of non-audit services by the external audit firm.

The Audit Committee reviews the nature and extent of non-audit services supplied by the external auditors to the group, seeking to balance objectivity and value for money. In determining policy, the Audit Committee has taken into account relevant ethical guidance regarding the provision of non-audit services by the external audit firm. The Committee does not agree to the auditor providing a service if, having regard to the ethical guidance, the result is that:

• The external auditor audits its own firm’s work
• The external auditor makes management decisions for the company
• A mutuality of interest is created ; or
• The external auditor is put in the role of advocate for the company.