Statements

SIG is committed to business integrity, high ethical values and professionalism in all its activities. As an essential part of this commitment the Group supports the highest standards in corporate governance. The Board is accountable to the Company’s Shareholders for good governance and this statement and the Directors’ Remuneration Report on pages 51 to 59 describe how the principles of good governance set out in the Combined Code on corporate governance published by the Financial Reporting Council in June 2006 (“the Code”) are applied within SIG.

STATEMENT OF COMPLIANCE WITH THE CODE

The Company has applied the principles set out in Section 1 of the Code for the period under review and has, throughout the year, complied with the provisions set out therein with the exception of Code provision A3.2 in relation to the required number of Non-Executive Directors where the Company was not in compliance from 1 January 2008 to 30 June 2008. On 30 June 2008 Mr. D. Williams, an Executive Director and the previous Chief Executive, retired and from that date the Board became compliant with Code provision A3.2.

The Company’s Auditors, Deloitte LLP, are required to review whether the above statement reflects the Company’s compliance with the nine provisions of the Combined Code specified for its review by the Listing Rules and to report if it does not reflect such compliance. No such report has been made.

THE BOARD

As at 31 December 2008 and at the date of this Report, the Board was made up of seven members comprising the Chairman, three Executive Directors and three Non Executive Directors. The Non-Executive Directors are considered by the Board to be independent of management and free of any relationship, which could materially interfere with the exercise of their independent judgement. The Board considers that each of the Non-Executive Directors brings his own senior level of experience and expertise. Biographical details of each of the Directors, which illustrate their range of experience, are set out on page 40. The Company’s policy relating to the terms of appointment and remuneration of both the Executive and Non-Executive Directors is detailed in the Directors’ Remuneration Report on pages 51 to 59.

The division of responsibilities between the Chairman and Chief Executive is clearly established and is understood by the Board. The Chairman, at the time of his appointment, met and continues to meet the independence criteria set out in the Code.

The Senior Independent Director is Mr. P. H. Blackburn.

All Directors are subject to election at the Annual General Meeting immediately following their appointment and to re-election every three years.

BOARD PROCEDURES

The Board meets regularly during the year, as well as on an ad hoc basis as required by time critical business needs. The Board met formally on 13 occasions during the year and individual attendance at those and the Board Committee meetings is set out in the table on page 48. All Board members are supplied with information in a form and of a quality appropriate to enable them to discharge their duties. Board and Committee papers are sent out seven days before meetings take place. There is an agreed schedule of matters reserved to the Board for collective decision and these include:

• determining the strategy and control of the Group;
• amendments to the structure and capital of the Company and Group;
• approval of financial reporting and controls;
• approval of capital and revenue expenditure of a significant size;
• acquisitions and disposals above a prescribed level; and
• corporate governance matters and approval of Group policies and risk management strategies.

The Board has formally delegated specific responsibilities to Board Committees, including the Nominations, Audit and Remuneration Committees. The Board will also appoint Committees to approve specific processes as deemed necessary. For example, during the year, Board Committees were established to approve bank documentation, dividend payments and the preliminary and interim announcements.

To enable the Board to perform its duties effectively all Directors have full access to all relevant information and to the services of the Company Secretary whose responsibility it is for ensuring that Board procedures are followed. The appointment and removal of the Company Secretary is a matter reserved for the Board. There is an agreed procedure whereby Directors wishing to take independent legal advice in the furtherance of their duties may do so at the Company’s expense. Directors have the right to ensure that any concerns they raise about the running of the Company or a proposed action will be recorded in the Board minutes. Further, on resignation, if a Non-Executive Director had any such concerns, the Chairman would invite him to provide a written statement for circulation to the Board.

All Board Committees are provided with sufficient resources to undertake their duties. Appropriate training is available to all Directors on appointment and on an ongoing basis as required.

The Terms of Reference for each of the Board Committees are available on request from the Company Secretary or on the SIG website (www.sigplc.co.uk).

RICHARD MONRO

COMPANY SECRETARY
18 MARCH 2009