Memorandum of Understanding

Tanfield Group PLC
28 February 2005


                Tanfield Group Plc ('Tanfield' or the 'Company')

                          Memorandum of Understanding

The Board of Tanfield is pleased to announce that its subsidiary Smiths Electric
Vehicles ('SEV') has signed a Memorandum of Understanding ('MOU') with Azure
Dynamics Corporation (TSX - AZD & LSE - ADC) ('Azure') a leading developer of
hybrid electric powertrains for commercial and military vehicles.

The intent of the MOU is to integrate Azure Dynamics power train technology
including, inverters, traction motors, and agreed upon auxiliaries for
application in electric vehicles SEV currently builds as well as the next
generation design of this vehicle. The first vehicle is expected to be available
in May 2005 with production units becoming available in early summer. The next
generation vehicle, with significantly higher performance parameters, is
expected to be available from January 2006.

Roy Stanley, Chief Executive of the Tanfield Group, said: 'Against a background
that has seen very little change in electric vehicle technology over the years,
our partnership with Azure will enable us to respond to the considerable market
opportunities that exist by improving both the performance and the broader
perception of electric commercial vehicles.'

Campbell Deacon, Azure's CEO said, 'We are very pleased with this MOU as SEV
Group has over seventy years of experience designing, manufacturing and selling
electric vehicles for a wide range of industrial and commercial applications.
These vehicles have proven to be very quiet, environmentally sound, economical
and reliable.

SEV Group Limited is a UK based manufacturing company providing a complete range
of electric vehicles, aerial access platforms, and materials handling equipment
with comprehensive product support through their fleet maintenance operations
and worldwide dealer network. It has a customer base of over 500 users of
electric vehicles.

Azure Dynamics Corporation and its group of companies is a world leader in the
development and production of hybrid electric and electric commercial and
military vehicles and systems. The group estimates it has over 25 million miles
of vehicle experience.  Azure Dynamics' operations are based in North America
and Europe.

For further information call:

Tanfield Group Plc
Roy Stanley - Chief Executive - 01207 521 111

Daniel Stewart & Co
Ruari McGirr - 020 7374 6742


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