Risk Review
The Board is of the view that an ongoing process for identifying, evaluating and managing significant risks faced by the Company was in place throughout 2007 and up to the date of approval of the Annual Report and Accounts for 2007. This process is regularly reviewed by the Board with the assistance of the Audit Committee and accords with the internal control guidance for directors as required by the Code.

A Risk Management Committee, which during 2007 consisted of the Executive Directors, the Company Secretary and General Counsel, the Director of Group Human Resources, the Head of Internal Audit and the Head of Tax and Treasury meets at least four times each year and otherwise as necessary. All Directors receive copies of the minutes from each Risk Management Committee meeting.

The Committee enhances management’s ability to review and monitor the effectiveness of risk control on a regular basis. The terms of reference of the Risk Management Committee include supporting corporate governance requirements, recommending business risk strategy and developing policies and procedures for risk management and internal controls. They also include the monitoring of the effectiveness of internal controls and the design of processes to test the effectiveness of controls.

Risk review is a continuing process embedded within the businesses with executives required to include risk management on agendas for their regular management meetings and to report half yearly to the Risk Management Committee on actions taken to review the effectiveness of their controls. Businesses are also required to have processes to formally identify risks, consider their financial and non-financial implications and, so far as possible, take action to reduce those risks.

The Company has an internal audit department. The resources of this department are augmented with independent expert external resources wherever necessary to review risk and monitor compliance with the Company’s policies and procedures across its international operations. Accordingly the resources of the department, together with additional available resources, are considered adequate.

The Audit Committee regularly reviews the effectiveness of internal controls based on the processes implemented by the Risk Management Committee. At each meeting the Audit Committee receives a presentation from the Head of Internal Audit on action taken to identify and reduce risks and to increase awareness of both risk management and the importance of having effective internal controls.