Board Responsibilities and Committees

The Board

The Board at 31 March 2007 comprised five members: the non-executive Chairman, two executive Directors and two independent non-executive Directors.

Directors are subject to election by shareholders at the first opportunity after their appointment. In addition, one third of Directors are subject to retirement by rotation at each Annual General Meeting. The posts of Chairman and Chief Executive are separately held. The Chairman, Bernard Cragg, is responsible for the running of the Board and ensures that all Directors receive sufficient relevant information on financial, business and corporate issues prior to meetings. The Chief Executive, Jim Morrison, has responsibility for running the Group’s business and implementing Group strategy. The Board believes that this separation results in a clear division of responsibilities at the head of the Company which, with the presence of two independent non-executive Directors, ensures a balance of power and authority such that no one individual has unfettered powers of decision.

The Board places a high priority on reviewing and improving how it operates on an ongoing basis. As part of this a structured mechanism was put in place during the year for all Board members to anonymously provide feedback on the Board’s effectiveness. The output of this process is reviewed at Board meetings and appropriate actions agreed and implemented.

Board Committees

There are three Board Committees: Audit, Remuneration and Nomination, all comprising the Chairman and the independent non- executive Directors. The Chief Executive also sits on the Nomination Committee. The Company Secretary acts as secretary to all committees.

Audit Committee

The Audit Committee meets at least twice per year and overviews the monitoring of the Group’s internal controls, accounting policies and financial reporting and provides a forum through which the external auditors report. It meets at least once a year with the external auditors without executive Board members present.

The Audit Committee has written terms of reference which define its objectives to be:

• To maintain shareholder confidence in the credibility and objectivity of published financial information.
• To monitor the management of any significant risks identified within the Group.
• To ensure adequate internal controls are in place throughout the Group.
• To ensure the financial performance, position and prospects of the Group are properly monitored and reported on.
• To assist the Board of Directors in meeting its financial reporting responsibilities and to ensure that the Company’s published financial statements comply with all applicable statutory requirements and accounting standards.
• To review the performance of the auditors.

Remuneration Committee

The Remuneration Committee is responsible for determining the Group’s policy for executive remuneration and the terms and conditions of employment for the individual executive Directors. It is also responsible for considering management’s recommendations for remuneration and employment terms of the Group’s staff, including incentive arrangements for bonus payments and grant of share options.

The Committee has access to professional advice, both inside and outside the Group, as required. During the year to 31 March 2007, no material assistance was provided to the Remuneration Committee by third parties.

The Remuneration Committee has written terms of reference which define its objectives to be:

• To review the performance of the executive Directors and senior executives of the Group.
• To ensure that the Group’s executive Directors and senior executives are fairly rewarded for their individual contributions to the Group’s overall performance by determining their pay, any bonuses and other remuneration.
• To consider the allocation of share options together with any attached performance targets to Directors and employees.
• To demonstrate to all shareholders that the remuneration of the senior executive members of the Group is set using a formal and transparent procedure by a committee of the Board members who will give due regard to the interests of all shareholders and to the financial and commercial position of the Group.

Nomination Committee

The Nomination Committee reviews the structure and composition of the Board and, where appropriate, recommends changes to the Board. It is responsible for nominating, for Board approval, candidates for appointment to the Board having regard to the overall skills and composition of the Board. The Nomination Committee has written terms of reference which define its objectives to be:

• To make plans for succession for both executive and non-executive Directors.
• To make recommendations regarding the appointment of non-executive Directors on completion of their specified term of office.
• To make recommendations regarding the re-election by shareholders of any Director under the retirement by rotation.
• Provisions contained in the Company’s Articles of Association.
• To make recommendations relating to any matters pertaining to the continuation in office of any Director at any time.
• To make recommendations concerning the appointment of any Director to executive or other office other than to the positions of Chairman and Chief Executive of the Company.

Relations with Shareholders

The Company encourages dialogue with both its institutional and private investors and responds promptly to all questions verbally or in writing. The Chief Executive Officer and the Chief Financial Officer are the principal spokesmen for the Company and attend meetings with analysts and institutional shareholders throughout the year. The Annual General Meeting is used as an opportunity to communicate with private investors, as is the Company’s website (www.imate.com) which includes Company announcements, information on the Group’s activities and products and details of the Company’s share price. All shareholders have at least 21 days’ notice of the Annual General Meeting.