DIRECTORS’ REPORT

The directors present their report and the audited financial statements of the Group for the year ended 31 December 2007.

CONVERTIBLE LOAN NOTE TRANSACTION

On 5 February 2007, HAMC and the HAMC Noteholders entered into a deed of termination, cancellation, waiver, release and reissue relating to a loan note instrument (dated 4 August 2006 consisting of $15.3 million 10% fixed rate convertible unsecured loan notes due on 4 August 2009) with Noventa. Under the deed HAMC and the HAMC Noteholders agreed, conditional on admission, to the cancellation of the Notes, in return for the issue to them of new loan notes by Noventa on similar terms as the Notes (the “New Notes”). The New Notes would upon issue immediately be converted into fully paid ordinary par value shares in Noventa at a predetermined discount to the market value of Noventa on Admission.

With the admission of Noventa onto AIM, the convertible loan note transaction was put into effect. The convertible loan notes were converted into 6,430,563 fully paid ordinary shares of £0.0004 each in Noventa.