Public Companies Update October 2004

2 CHANGES TO THE AIM RULES INCLUDING FAST TRACK APPLICATIONS FOR ADMISSION

The London Stock Exchange has recently published an AIM Notice adopting changes to the AIM Rules. Set out below is a summary of the principal changes:

2.1 Electronic filing of documents
The AIM Rules have been changed so that on application for admission to trading on AIM in place of supplying the Exchange with six copies of the Admission Document as part of the 3 day documents, only an electronic copy is to be provided. A further change has also been incorporated, requiring the accounts of quoted applicants to be submitted in electronic form. In addition, Rule 18, supply of information sent to shareholders, has also been amended to require copies to be sent to the Exchange in electronic form.

2.2 Supplement to Schedule 1
One problem often encountered by companies listed on an AIM Designated Market who were seeking to apply for Admission to AIM was that if their latest audited accounts had a year end which is more than nine months prior to the date of Admission, they could not apply for Admission to AIM by the fast track method and had to produce a full admission document.

Following the recent changes, such an applicant is now able to produce an audited interim statement made up to a date not less than six months from the financial year end to which the audited accounts relate to supplement its most recent audited report and accounts. This removes the artificial deadline which many companies were faced with when considering a fast-track application and makes a lot of sense as most, if not all, such applicants will already be releasing unaudited half-yearly information to their AIM Designated Market.

2.3 Half Yearly reports
The change to the AIM Rules here was to address the position where the AIM Rules required the preparation and disclosure of half yearly reports but did not give any guidance as to the format which they should take. Following the change, Rule 16 has been amended so that the half-yearly reports will have to include at least a balance sheet, an income statement and a cash flow statement, along with a comparison for the figures for the corresponding period in the preceding financial year. The half yearly information is to be presented in a form consistent with the annual accounts having regard to the accounting standards applicable to such annual accounts.

2.4 International Accounting Standards
Rule 17 of the AIM Rules requires annual audited accounts of companies to be prepared in accordance with UK GAAP, US GAAP or International Accounting Standards. Companies incorporated in the EU which are listed on an EU regulated market, which includes the London Stock Exchange, will be required to adopt IAS for financial years commencing on or after 1 January 2005. For AIM companies which are registered in the European Union, the proposal was that IAS must be adopted for financial years commencing on or after 1 January 2006. Following the consultation process, this proposal has taken the form of an amendment to the guidance notes stating that the Exchange intends to mandate IAS but that the implementation has been put back a year until 1 January 2007. The important point to note is that existing companies and new applicants to AIM should be mindful that they will eventually have to adopt IAS.

A copy of the AIM notice is available at www.londonstockexchange.com/aim

If you require further information on any matter covered in this note, please contact your principal contact at Charles Russell or Simon Gilbert, Katy Knight, Clive Hopewell or Alexander Keepin (London), Francis Rundall or Richard Norton (Cheltenham) or Catherine Drew or Geoff Sparks (Guildford) on 0207 203 5000.

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Please note that the summaries above are a general indicative guide only. They are not exhaustive. This information has been prepared by the firm as a service to our clients. As it is a general guide, we recommend that you seek professional advice before taking action. No liability can be accepted by the firm for any action taken or not taken as a result of this information. The firm is not authorised under the Financial Services and Markets Act 2000 but we are able in certain circumstances to offer a limited range of investment services to clients because we are members of the Law Society. We can provide these investment services if they are an incidental part of the professional services we have been engaged to provide.