The board has overall responsibility for the group’s systems of risk management, regulatory compliance and internal control and for reviewing their effectiveness. The systems are designed to ensure that the key risks taken by the company and its subsidiaries in the conduct of their business are identified and evaluated so that appropriate controls are put in place to manage those risks. Such systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable, but not absolute, assurance against material misstatement or loss.

The system of internal control is supported by a well established organisational structure within the group, with clear levels of responsibility and delegation of authority and a strong control culture embedded in the day to day management of each operating company. Each operating company in the group regularly undertakes a review of, and reports to its board on, these controls and procedures, having due regard to its key risks. Where necessary, steps are taken to improve internal control and risk management further, following these reviews. The Risk Management page of this investor relations section details these key risks and explains how they are controlled.

Group Internal Audit regularly reviews the effectiveness of controls and procedures established by the company and its operating businesses to manage key risks. The head of Group Internal Audit reports through the Audit Committee to the board, to which he has unrestricted access through the chairman.

The company has complied with the Turnbull Committee’s guidance for directors. Identifying, evaluating and managing the group’s significant risks is an ongoing process which is regularly reviewed by the board, and which has been in place for the year ended 31st July, 2007 and up to the date of the approval of these financial statements.