Business Conduct and Ethics

Internal Control

The Board has overall responsibility for the Group's system of internal control and for reviewing its effectiveness. However, such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss.

In accordance with the Turnbull Guidance for directors on internal control , Internal Control: Guidance for Directors on the Combined Code , the Board confirms that there is an ongoing process for identifying, evaluating, and managing the significant risks faced by the Group, that it has been in place for the year under review and up to the date of approval of the financial statements, and that this process is regularly reviewed by the Board.

The key risk management and internal control procedures, which are supported by detailed controls and processes, include:

•  an organisation structure with clearly defined lines of authority and accountability;

•  skilled and experienced Group and divisional management;

•  a comprehensive system of financial reporting involving budgeting, monthly reporting and variance analysis;

•  a Group Risk Management function (incorporating Internal Audit); and

•  a formally constituted Audit Committee which reviews the operation of the Group Risk Management function, the Internal Audit function, liaises with the external auditors and reviews the Group's internal control systems.

The Board has reviewed the effectiveness of the Group's system of internal control. The review covered all controls including financial, operational, and compliance controls and risk management.