Remuneration Committee

Role of the Remuneration Committee and its Terms of Reference
The Remuneration Committee is responsible for developing Group policy on executive remuneration, and for determining the remuneration of Executive Directors and the executives below Board level who report directly to the Group Chief Executive. It also monitors the remuneration of other senior employees of the Group and has oversight of the operation of all the Group’s share and share option plans. The Committee operates within terms of reference agreed by the Board, which are available on the Group’s website or on request from the Group.

The Board has accepted all the recommendations made by the Committee during the year.

Composition of the Remuneration Committee
The Remuneration Committee is made up entirely of independent Non-executive Directors. The members of the Committee have been as follows:

• John Grant (Committee Chairman);
• Ken Harvey;
• Bonnie Hill (until 21 July 2003);
• Stephen Pettit (from 18 November 2003); and
• George Rose.

The Group Chairman, Deputy Chairman, Group Chief Executive and Group Human Resources Director (Pat Fulker) are invited to attend meetings to provide advice on remuneration policies and practices. No Director participates in any discussion on his or her own remuneration.

The Committee appointed Ernst & Young LLP in February 2003 as independent remuneration advisors to the Committee. During the year, the Group appointed Linklaters, with the agreement of the Committee, to provide advice to the Committee on Directors’ service contracts.

In the year to 31 March 2004, these advisors provided other services to the Group in the UK as follows:

• Ernst & Young LLP: technical accounting advice and corporate finance services; and
• Linklaters: general legal advice.