Corporate Governance

The Directors recognise the value of the Principles of Good Governance and The Combined Code on Corporate Governance published in July 2003 by the Financial Reporting Council ("the Combined Code").

The Company intends to comply with the Combined Code so far as is practicable and appropriate for a public company of its size and nature. The Company also proposes to follow the recommendations on corporate governance of the Quoted Companies Alliance (QCA).

The Board has established an audit committee, a remuneration committee and a nomination committee with formally delegated duties and responsibilities. The audit committee comprises Lord Rowe-Beddoe as the chairman and Simon Gibson and the remuneration committee comprises Simon Gibson as the chairman and Lord Rowe-Beddoe.

The audit committee will receive and review reports from management and the auditors relating to the annual and interim accounts and the accounting and internal control systems in use throughout the Group. The audit committee will have unrestricted access to the auditors.

The remuneration committee will review the scale and structure of the executive Directors' remuneration and the terms of their service contracts. The remuneration and terms and conditions of appointment of the non-executive directors are set by the Board. No Director may participate in any meeting at which discussions or decisions regarding his own remuneration take place. The remuneration committee will also administer the Share Option Scheme.

The Company will take all reasonable steps to ensure compliance by the Directors and employees with the provisions of the AIM Rules relating to dealings in securities of Newport Networks and has adopted a share dealing code for this purpose.