Internal Audit Review

Prudential Group Internal Audit has reviewed the processes used to compile UK businesses' environmental impact figures in respect of the twelve month period ended 31 March 2001.

The diversity of Prudential's investment property portfolio (with over 1,100 properties), and the extent to which it changes, makes it difficult to compile data regarding environmental impacts on a timely basis. This is why the environmental impacts reporting period differs from the financial reporting period.

No review of prior year estimates has been undertaken; these are less reliable than the current year's figures and should not be used to extrapolate trends.

The figures presented for Energy, Water, Waste and CO2 Emissions are, in our opinion, fairly stated, and may be used as a basis for future environmental performance monitoring and commitments. The figures for Paper and Travel are significantly understated, for reasons given below, and these figures should not be used to set future targets.

Actions have been taken to improve the accuracy of the understated figures and enhance the environmental impacts reporting process in future reporting periods. Prudential intends to conduct further internal audits of the process for data capture and commission a third party independent environmental impacts review in the course of 2002.

Steven Barlow – Group Chief Internal Auditor

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