Throughout the year ended 31st December 2008, the Company has maintained policies and procedures that ensured compliance with the code provisions set out in Section 1 of the Combined Code (2006) and the related Financial Services Authority Listing Rule disclosure requirements. The Listing Rules of the UK Listing Authority require that companies report on the extent to which they comply with the Principles of Good Governance and Code of Best Practice. The Board believes the Company has been in full compliance with the provisions set out in Section 1 of the Combined Code with the following exceptions:

•  A.3.2 Excluding the Chairman, independent Non-Executive Directors did not comprise at least 50% of the Board for the entire reporting period. Two additional Non-Executive Directors, Michel-Marc Delcommune and Dipesh Shah, were appointed on 1st June 2008. Following their appointment the Board considers that, excluding the Chairman, independent Non-Executive Directors now comprise 50% of the Board, given the Board also considers that the four other Non-Executive Directors are wholly independent.

   The Executive Directors have undertaken a review of the independence of each of the Non-Executive Directors and Chairman. The review addressed the matters highlighted at Section A.3.1 of the Code, which could appear to affect a Director’s judgment. One specific matter addressed was Lord Fraser and Viscount Asquith having both served on the Board for more than nine years. Following the review, the Executive Directors do not consider that this matter in any way influences the independent judgment of Lord Fraser or Viscount Asquith. Accordingly the Executive Directors believe each of the Non-Executive Directors and Chairman to be independent in accordance with Section A 3.1 of the Code.

•  A.7.2 The terms of appointment of the Non-Executive Directors are set out in their service contracts, which for Lord Fraser and Viscount Asquith are dated 1st January 2002, for Nigel Moore is dated 12th July 2007, and for Michel- Marc Delcommune and Dipesh Shah are dated 1st June 2008 and include a termination notice of three months by either party. However, the service contracts are for an indefinite term, not a finite term, subject to re-election on an as required basis. The Board continues to believe this is appropriate given the company size, non-executive skill set, and evaluation of performance and independence on an ongoing basis with regards to Non-executives. As stated in the 2007 annual report, the Company contracted Mercer to review the remuneration of Non-Executive Directors, including the Chairman. Mercer’s report included a review of the alignment of JKX’s non-executive remuneration with best practice corporate governance. Despite the review confirming that the unspecified term of appointment was not regarded as corporate best practice, the Company decided then, and continues to believe, the unspecified term continues to be reasonable and the Non-executive contracts remain unchanged in this regard.