Structure the board to add value

Composition of the Board

The Board presently comprises four Directors, three of whom, including the Chairman, are non-executive and independent Directors. Profiles of the Directors are set out on page 8 of this Annual Report. The profiles outline the skills, experience and expertise of each Director. All Directors are subject to retirement by rotation but may stand for re-election by the shareholders every three years. The composition of the Board is determined by the Board and, where appropriate, external advice is sought. The Board has adopted the following principles and guidelines in determining the composition of the Board:

• The Majority of Directors ought to be independent. To be independent, a Director ought to be non-executive and:

(i) not be a substantial shareholder of the Company or an officer of, or otherwise associated directly with a substantial shareholder of the Company;

(ii) not be employed in an executive capacity with the Company in the last three years or been a Director after ceasing to hold such employment;

(iii) not within the last three years been a principal of professional adviser or a consultant to the Company or an employee materially associated with the service provider, whose annual billings to the Company represent more than 1% of the Company’s annual revenue or more than 5% of the professional advisor’s or consultant’s total annual billings;

(iv) not be a supplier or customer of the Company or an officer of, or otherwise associated directly with a supplier or customer whose annual billings to the Company represent more than 1% of the Company’s annual revenue or more than 5% of the supplier’s or customer’s total annual revenue;

(v) not have a material contractual relationship with the Company other than as Director of the Company;

(vi) not been on the Board for a period which could materially interfere with the Director’s ability to act in the best interests of the Company;

(vii) is otherwise free from any interest and any business or other relationships which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company.

• The Board ought to comprise a wide range of skills and competencies. The Board is responsible for ensuring that there are amongst their number, Directors with appropriate skills and experience to competently discharge their duty to the other stakeholders in the Company and to manage the Company in a manner that protects the interest of all stakeholders and maximises the return to and value of the Company for the members of the Company. In determining this matter the Board should specifically consider whether it is structured and composed in such a way that it:

(i) has a proper understanding of, and competence to deal with, the current and emerging issues of the business of the Company;

(ii) and can effectively review and challenge the performance of management and exercise independent judgement.

Director Selection

When a vacancy exists through whatever cause, or where it is considered that the Board would benefit from the services of a new Director with particular skills, the Board identifies a panel of candidates with appropriate expertise and experience. A selection procedure is then completed, which includes a review of the candidates’ independence, and the Board appoints the most suitable candidate who, in accordance with reg 3.3 of the Company’s constitution, must retire but may stand for re-election at the next annual general meeting of shareholders.

Board Committees

The Board has established an Audit Committee which operates under a formal Charter - see Principle 4. The Directors have not established separate nomination, remuneration or risk management committees as recommended in the Guidelines because these matters are appropriately addressed by the full Board.

Independent Professional

Advice A procedure has been determined for each Director to have the right to seek independent professional advice at the Company’s expense. Prior approval of the Chairman is required, but such approval is not withheld unreasonably.