The Board has overall responsibility for the Group’s internal control system and for monitoring its effectiveness. Implementation and maintenance of the internal control systems are the responsibility of the executive directors and senior management. The effectiveness of internal control is reviewed regularly by the Audit Committee and the Board. Where failings or weaknesses are identified, actions are taken to remedy those failings or weaknesses. The Board regularly reviews actual and forecast performances of its businesses against their one year plans and other [key performance indicators]. Lines of responsibility and delegated authorities are clearly defined. The Group’s control policies and procedures are published on a dedicated intranet site, which is regularly updated and accessible throughout the Group. Senior managers are required to confirm compliance with these policies throughout the year. The results of this confirmation process are considered by the Audit Committee on behalf of the Board. These procedures, which are in accordance with Turnbull Guidance, have been in place during 2010 and up to the date this report was approved.

The Code requires directors to review and report to shareholders on the Group’s internal control systems, which include financial, operational and compliance control, and risk management. The system of internal control is designed to manage rather than eliminate risk and can only provide reasonable and not absolute assurance against material loss. Further details on the way in which we manage risk can be found in the Risk Management section. The internal control and risk management systems cover the Company’s financial reporting process and the Group’s process for preparation of consolidated financial statements.

For 2010, the Board was able to conclude, with reasonable assurance, that appropriate internal control and risk management systems were maintained throughout the year.