Dear Shareholder

2010 was a year of significant positive change for our businesses. At the same time it was a year of significant change in the area of corporate governance, with the Financial Reporting Council’s proposed changes to the Combined Code (“2008 Code”) being brought into effect in May 2010 by the publication of the UK Corporate Governance Code (the “Code”). The Code applies to financial years beginning on or after 29 June 2010.

We, as a Board, welcome the new Code with its greater emphasis on the principles contained within it. We also welcome the UK Stewardship Code published in July 2010 which aims to enhance the quality of engagement between institutional investors and the companies in which they invest by setting out good practice on engagement.

I am pleased to report that, with the appointment of Dean Finch as our new Group Chief Executive in February 2010, the non executive members of the Board were able to revert to their more usual sole roles of Chairman, Senior Independent Director and Chairs of Board Committees such that the Company’s compliance with the 2008 Code during 2010 significantly improved upon its compliance during 2009. With the exception of Jorge Cosmen’s membership of our Nomination Committee, the Board seeks to be in full compliance with the terms of the 2008 Code and, from this year onwards, the new Code.

With the arrival of a new Group Chief Executive in February 2010, we delayed undertaking a full scale Board evaluation during 2010. We did however initiate an interim internal review in late 2010 which was led by our Group Human Resources Director. This review will be completed shortly and will be followed, in late 2011 or early 2012, by a further full evaluation which will be externally facilitated.

Whilst we have seen a number of changes amongst the Executive members of the Board in recent years, we have benefited from a good deal of stability within the Non-Executive Directors on the Board and I would like to thank my non executive colleagues for all of their help and assistance in what have, sometimes, been difficult times. During 2011 we will be revisiting the appropriate balance of skills, expertise, experience and knowledge required by the Company in order to ensure that the composition of the Board continues to meet those needs and to ensure that appropriate succession planning is in place for executive board positions.

In the report that follows we have decided to report against the 2008 Code. We will report against the new Code in future years.

John Devaney
Chairman
24 February 2011