We recognise that in managing our business, we must be aware of the risks that go with it and make sure all our activities are conducted ethically.

In 2003, we made sure our corporate and individual behaviour was responsible through strong governance maintained by using a raft of Powergen Group policies.

These policies have now been incorporated into a suite of Powergen UK business-specific policies, which include the following:

• Delegations of authority
• Health and safety
• Environment
• Competition and regulation
• E-commerce
• Information technology
• Human resources.

We manage our significant risks by an Internal Control Framework administered by our Internal Audit function.

Risks are controlled and performance improved through planned independent reviews conducted through an audit plan administered by Internal Audit.

The audit plan is based on the current business structure and risk profile set out in our annual business plan and considers the key risks facing the business both now and in the foreseeable future.

In determining the audit plan, particular consideration is made of:

• Critical changes within the business, and the risks associated with these
• The importance of systems underpinning data in published accounts
• The degree of change in terms of systems and staff.
• The plan is subject to amendment as a result of changes in legislation or other significant changes within Powergen.

Internal Audit works closely with the E.ON AG Group Internal Audit team to share knowledge about our respective businesses and to discuss best practice guidance and audit methodologies.