CORPORATE GOVERNANCE

The Directors recognise the importance of sound corporate governance and intend that, following Admission, the Company (having regard to the size and nature of the Group) will comply, so far as it considers practicable and appropriate, with the main provisions of the Combined Code and the Corporate Governance Guidelines for AIM Companies published by the Quoted Companies Alliance.

Board Structure

The Board has also considered the guidance published by the Institute of Chartered Accountants in England and Wales concerning the internal control requirements of the Combined Code and has established an ongoing process for identifying, evaluating and managing the significant risks faced by the Group.

The Directors will hold regular board meetings at which operating and financial reports will be considered. The Board is responsible for formulating, reviewing and approving the Group's strategy, budgets, major items of capital expenditure and senior personnel appointments.

Audit Committee

An Audit Committee, chaired by Philip Hollobone, consists of Libby Cooper and Andrew Cosentino. It meets at least twice each year and is responsible for ensuring that the financial performance of the Group is properly reported and monitored, for meeting the auditors and reviewing the reports from the auditors relating to accounts and internal control systems.

Remuneration Committee

A Remuneration Committee, chaired by Libby Cooper, consists of Philip Hollobone and Andrew Cosentino. It meets at least twice each year and has a primary responsibility to review the performance of executive Directors and senior employees and set the scale and structure of their remuneration having due regard to the interests of shareholders. It is also responsible for administering the Share Option Scheme.

Internal Financial Control and Reporting

The board has the responsibility for establishing and maintaining the Group's system of internal controls and reviewing its effectiveness. The procedures which include inter alia, financial, operational and compliance matters and risk management are reviewed on an ongoing basis. The board approves the annual budget and performance against budget is monitored and reported to the board. The board has considered the guidance published by the Institute of Chartered Accounts in England & Wales concerning the internal control requirements of the Combined Code and has established an ongoing process for identifying, evaluating and managing the significant risks faced by the Group.

Given the Group's size and the nature of its business, the Board does not consider it would be appropriate to have its own internal audit function. An internal audit function will be established as and when the Group is of an appropriate size but meanwhile the audit of internal financial controls form part of the responsibilities of the Group's finance function.

AIM Compliance Committee

A Compliance Working Group consisting of Libby Cooper and Andrew Cosentino meets at least twice each year. It is responsible for ensuring that the Company complies at all times with the AIM Rules for Companies, in particular compliance with the obligations relating to disclosure.

Relations with Shareholders

The board remains fully committed to maintaining regular communication with its shareholders. There is regular dialogue with major institutional shareholders. Press releases are issued throughout the year and the company maintains a website, www.nvirocleantech.com on which all press releases are posted and which also contains the report and accounts.

Going Concern

After making enquiries, the directors have formed a judgment, at the time of approving the financial statements, that there is a reasonable expectation that the Group has access to secure adequate resources to continue in operational existence for the foreseeable future. The Company intends to raise additional funds in 2008 from research and development grants, economic development grants, debt, equity, or a combination of sources. For this reason the directors continue to adopt the going concern basis in preparing the financial statements.