Taken from the Annual Report 2008

Statement of compliance

The Board considers that it has complied with the Code throughout the year ended 31 December 2008. The Company regularly reviews and revises its procedures, as necessary, to take account of the requirements of the Code.

The Board

The Board is accountable to shareholders for the creation and delivery of strong sustainable performance and the creation of long term shareholder value. The Board meets regularly and is responsible for organising and directing the affairs of the Company and the Group in a manner that will promote the success of the Company and is consistent with good corporate governance practices and for ensuring that in carrying out its duties the Company and the Group meets legal and regulatory requirements. The Board is also responsible to the Financial Services Authority (FSA) for ensuring compliance with the Group's UK regulatory obligations.

The business of the Company is managed by the directors, who may exercise all the power of the Company subject to the Company's articles of association, relevant law and any directions as may be given by the Company in general meeting. The directors may delegate any of their powers or discretions to committees consisting of one or more members of their body and (if thought fit) one or more other persons co-opted so long as the majority of committee members are directors.

Unless authorised in advance by the Board of Directors and with the respective director abstaining from any such authorisation, a director shall not vote in respect of any contract or other proposal in which he or she (or any person connected with the director) has a material interest otherwise than by virtue of his or her interests in securities of the Company. However, a director shall be entitled to vote in certain limited circumstances which are set out in full in the articles of association.

The Board has formally adopted a procedure for dealing with conflicts or potential conflicts of interest. The Board is satisfied that the procedure for dealing with conflicts is operating effectively.

The directors shall restrict the borrowings of the Company so as to secure that the aggregate amount of all monies borrowed by the Group and owing to persons outside the Group shall not at any time, without the previous sanction of an ordinary resolution of the Company, exceed a sum equal to twice the aggregate of (i) the amount paid up on the issued share capital of the Company; and (ii) the amount standing to the credit of the reserves of the Group (subject to certain adjustments).

The Company can increase its share capital and authorise the directors to allot further securities by ordinary resolution. Resolutions seeking to increase the authorised share capital and seeking authority for the directors to allot securities are being put to the Company’s Annual General Meeting on 19 May 2009. Details on the respective authorities are set out in the Notice of the Annual General Meeting. The directors may offer, allot, grant options over or otherwise dispose of shares to such persons, at such times and for such consideration and upon such terms and conditions as the directors may determine, provided that no shares shall be issued at a discount.

Subject to the provisions of the Companies Acts the Company may purchase its own shares. Authority was given at the 2008 Annual General Meeting for the Company to make market purchases of up to 4.2 million shares. That authority expires at the conclusion of the 2009 Annual General Meeting. A renewal of this authority is being sought at the 2009 Annual General Meeting. During the year ended 31 December 2008, the Company purchased 150,000 shares in the market under this authority at an average price of £4.53. These shares are held in treasury and are not counted in the Analysis of Shareholdings given on page 99.

The Board had six scheduled meetings during the year ended 31 December 2008 and one meeting at short notice. There is a formal schedule of matters and levels of authority which are delegated to the executive directors, all other matters and powers being reserved to the Board or to its Committees. Full details of matters reserved to the Board may be viewed on the Company’s website.

During the year, all directors attended all six scheduled Board meetings, except for Simon Beresford-Wylie who was unable to attend the December 2008 Board meeting due to another commitment. Apart from the scheduled Board meetings, there was one Board meeting held at short notice. Due to a conflict of interest, neither Gareth Rhys Williams nor Alastair Hewgill attended this Board meeting.

At 1 January 2008, the Board consisted of a Chairman (Michael Harper), a Chief Executive (Gareth Rhys Williams), a Finance Director (Alastair Hewgill) and four non-executive directors (Simon Beresford-Wylie, Nigel Moore, Maria Richter and Will Wyatt). Mr Wyatt is also the Senior Independent Director. On 30 September 2008, Mr Rhys Williams stood down as Chief Executive and was replaced with Mr Hewgill as Interim Chief Executive. Mr Rhys Williams continued as a director of the Company until 29 October 2008 when he resigned. On 3 November 2008, Richard Cotton was appointed as Finance Director. As at 31 December 2008 the Board therefore comprised a Chairman (Mr Harper), an Interim Chief Executive (Mr Hewgill), a Finance Director (Mr Cotton) and four non-executive directors (Mr Beresford- Wylie, Mr Moore, Ms Richter and Mr Wyatt).

The Board has announced that, on 14 April 2009, Stephen Bird will be appointed a director and Chief Executive of the Company. Mr Hewgill will cease to be a director of the Company at the conclusion of the Annual General Meeting on 19 May 2009.

The non-executive directors bring independent character and judgement to bear on strategic matters, the performance of the Group, the adequacy of resources and standards of conduct. The Board considers that Simon Beresford-Wylie, Maria Richter, Nigel Moore and Will Wyatt are independent in accordance with the recommendations of the Combined Code. The roles of the Chairman (who is non-executive) and of the Chief Executive are separate and they each have a clear written division of responsibilities approved by the Board. Full details of which may be viewed on the Company’s website.

Directors, having notified the Chairman, are able to take independent professional advice at the Company's expense in furtherance of their duties. All new directors are given an extensive introduction to the Group, including meeting with senior executives and visiting the Group's principal operations both in the UK and overseas. All directors have access to the advice and services of the Group Company Secretary.

Ongoing training for new directors and existing directors is available at the request of the director. Each director receives details of relevant training and development courses from both the Secretary and from external bodies such as KPMG and Watson Wyatt. The requirement for training is regularly discussed at meetings of the Board and of its Committees.

The papers supplied for consideration by the Board are provided on the basis that it gives all Board members adequate time to read and, where appropriate, ask questions prior to the meeting about the information supplied. The information includes budgets, strategy papers, reviews of the Group's financial position and operating performance and annual and half yearly reports. Further information is supplied from time to time as and when requested by the Board.

The Board has an Audit Committee, a Nominations Committee and a Remuneration Committee. Each Committee has formal terms of reference which may be viewed on the Company's website. The terms of reference and the effectiveness of the Board and of each Committee are regularly reviewed and changes made where necessary. Any issues arising from the reviews of effectiveness are summarised and tabled at subsequent Board meetings at which they are discussed and action plans agreed.

Performance evaluations of each of the directors took place during the year in accordance with the provision contained in the Combined Code. In the case of the executive directors this evaluation takes place by the non-executive directors regularly throughout the year against achievement of specific objectives. Evaluation of the Chairman was carried out by the Senior Independent Director. Evaluation of each of the other non-executive directors was carried out by the Chairman. Each evaluation was carried out by using written questionnaires and the results were discussed individually with each of the relevant non-executive directors. Evaluations of the effectiveness of the Board and each of the Committees were also carried out by the full Board and the relevant Committee members respectively. The 2008 evaluation process concluded that the Board, its Committees and individual members were performing to a good standard. Improvements identified include the development of greater exposure of the independent non-executive directors to senior management below Board level. Similar evaluations are planned to take place each year in the future.