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Corporate governance statement

At the 2008 annual general meeting, shareholders were asked to approve a new set of articles including provisions allowing the directors to authorise conflicts. Pursuant to this, a register of authorised interests is maintained by the Company Secretary and updated by the Board as needed from time to time.

Throughout the year, the Company has complied with all relevant provisions set out in Section 1 of the Combined Code (June 2006).

Directors’ and officers’ liability insurance

The Company has purchased insurance against directors’ and officers’ liability as permitted by the Companies Act 1985 for the benefit of the directors and officers of the Company and its subsidiaries.

The Company has granted rolling indemnities to the directors and the Company Secretary, uncapped in amount but subject to applicable law, in relation to certain losses and liabilities which they may incur in the course of acting as officers of companies within the Group. These indemnities also set out the terms on which the Company may, in its discretion, advance defence costs. A specimen indemnity is available for view on the Company’s investor relations website, bashares.com by clicking on the heading Corporate Governance.

Political donations

At the annual general meeting in 2008, shareholders passed a resolution to authorise the making of political donations and the incurring of political expenditure for the purposes of section 367 of the Companies Act 2006. This authorisation was taken on a four-year basis as a precaution only and we have no present intention of using it. In the event that any political donation is made or political expenditure incurred, we would seek further shareholder approval.

We do not make political donations or incur political expenditure within the ordinary meaning of those words and have no intention of doing so. The amount of political donations made and political expenditure incurred in the year to March 31, 2009, was £nil (2008: £nil).

Post-balance sheet events

There were no material post-balance sheet events occurring after March 31, 2009.

Internal control and risk management

Internal control

The directors are responsible for, and for reviewing the effectiveness of, the Company’s system of internal control, including internal financial control, which is designed to provide reasonable, but not absolute, assurance regarding (a) the safeguarding of assets against unauthorised use or disposition and (b) the maintenance of proper accounting records and the reliability of financial information used within the business or for publication. These controls are designed to manage rather than eliminate the risk of failure to achieve business objectives due to circumstances which may reasonably be foreseen and can only provide reasonable and not absolute assurance against material misstatement or loss.

Standing instructions

The Company has a Statement of Business Principles applicable to all employees. The Company also has a Code of Business Conduct and Ethics which applies to all employees. These are two of a number of Standing Instructions to employees of the Group designed to enhance internal control. Along with the Finance Standing Instructions, these are regularly updated and made available to staff through the Company’s intranet.

Organisation structure

A clear organisational structure exists, detailing lines of authority and control responsibilities. The professionalism and competence of staff is maintained both through rigorous recruitment policies and a performance appraisal system which establishes targets, reinforces accountability and awareness of controls, and identifies appropriate training requirements. Action plans are prepared and implemented to ensure that staff develop and maintain the required skills to fulfil their responsibilities, and that the Company can meet its future management requirements.

Information systems

Information systems are developed to support the Company’s long-term objectives and are managed by a professionally staffed Information Management team within the Chief Financial Officer’s organisation. Appropriate policies and procedures are in place covering all significant areas of the business.

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