Remuneration report

Composition and role of the remuneration committee

The board has established a remuneration committee, which is chaired by Patricia Mann. The other members of the committee in 2002 were Roger Carr, Sir Sydney Lipworth (until his retirement on 13 May 2002), Sir Michael Perry and Sir Brian Shaw. Helen Alexander and Robert Tobin became members of the committee when they joined the board on 1 January 2003. All of the members of the committee are independent non-executive directors.

The committee makes recommendations to the board, within formal terms of reference, on the policy and framework of executive remuneration and its cost to the company. The committee is also responsible for the implementation of remuneration policy and determining specific remuneration packages for each of the executive directors. The committee has access to advice provided by the group head of reward (Mike New), the group human resources director (Anne Minto), the company secretary (Grant Dawson), the chief executive (Sir Roy Gardner) and external consultants. During 2002, the committee consulted, but did not formally appoint, Towers Perrin, who provided survey and other information on executive compensation to assist in the formulation of the committee’s recommendations. Towers Perrin also provided advice to the group on retirement benefits and change management processes during the year.

This report explains how the company has applied the principles in the Combined Code on Corporate Governance that relate to directors’ remuneration. It will be submitted to the forthcoming AGM for approval. No director votes on any matter relating to his or her own remuneration.

Framework and policy on executive directors’ remuneration

The group’s remuneration policy is designed to provide competitive rewards for its executive directors and other senior executives, taking into account the company’s performance, the markets in which the group operates and pay and conditions elsewhere in the group.

In constructing the remuneration packages, the committee aims to achieve a balance between fixed and variable compensation for each director. Accordingly, a significant proportion of the remuneration package depends on the attainment of demanding performance objectives, both short and long term. In agreeing the level of base salaries and the annual performance bonus scheme, the committee takes into consideration the total remuneration that executives could receive. The committee reviews the packages and varies individual elements when appropriate from year to year.

The current practice is to make conditional awards each year under both the executive share option scheme (ESOS) and the long term incentive scheme (LTIS). These schemes are designed to align the interests of executive directors and other senior executives with the longer term interests of shareholders by rewarding them for delivering increased shareholder value.

As a matter of policy, all executive directors and certain senior executives are expected to retain a minimum shareholding in the company at least equal in value to the executive’s base salary.

The committee believes that these arrangements, which are further explained below, are important in providing a potential remuneration package that will attract, retain and continue to motivate executive directors and senior executives in a marketplace that is increasingly challenging and competitive in both commercial and human resource terms. It is intended that the current remuneration policy, which has previously been approved by shareholders, will continue for 2003 and succeeding years.

In 2002, the total compensation of the executive directors, consisted of components in the following proportions:

Relative proportions of components of executive directors' remuneration 2002

Note: Salary and benefits are amounts received during 2002; pension is the increase in transfer value less director’s contributions during 2002; performance bonus is that paid in respect of 2002; and ESOS and LTIS is the estimated value of the awards made in 2002 based on a Black Scholes model, provided that all performance conditions are met, at the end of the relevant performance periods.

Components of remuneration

Base salary

The committee seeks to establish a base salary for each executive director determined by individual performance and external market data from independent sources, in particular salary levels for similar positions in comparable companies. Base salaries are reviewed annually. Base salary is the only element of remuneration that is pensionable.

Annual performance bonus

To recognise performance against agreed objectives, the committee has put in place an annual bonus scheme for executive directors similar to that applying to other senior executives in the group. Annual bonuses for executive directors are determined by the achievement of demanding individual, business and corporate objectives. The scheme provided the potential for a maximum bonus payment of 60% of base salary should every element of every objective be achieved in full. Annual bonus objectives and targets are approved by the committee and, in 2002, related to financial performance, customer and employee satisfaction and personal performance, each at 20% of base salary. For executive directors with business unit responsibilities, the scheme is structured to reflect the performance of their business unit as well as that of the group. No bonus at all is payable to an individual if their agreed minimum personal performance target is not met.

Executive share option scheme (ESOS)

Options granted under the ESOS only become exercisable if and to the extent that performance conditions are satisfied three years after the date of grant. If exercisable, they remain so until the tenth anniversary of grant. Performance conditions are based on the extent to which growth in the company’s earnings per share (EPS growth) exceeds growth in the Retail Prices Index (RPI growth) over a three year performance period. EPS is calculated as fully-diluted earnings per share adjusted for exceptional charges and goodwill amortisation. The committee believes that this method of calculating EPS provides an independent and verifiable measure of the company’s performance.

In respect of each grant of options, the committee has determined that, for the option to be exercisable in full, EPS growth must exceed RPI growth by 18 percentage points or more over the three year performance period. No part of the option grant will be exercisable if EPS growth fails to exceed RPI growth by at least 9 percentage points over the performance period. The proportion of the option grant exercisable by the executive will increase on a sliding scale between 40% and 100% if EPS growth exceeds RPI growth by between 9 and 18 percentage points over the performance period.

The company’s EPS growth may be re-measured annually for a further two years, but always from the date of grant of the options, with the performance conditions increasing proportionately. The committee believes that, in relation to the ESOS, EPS growth in excess of RPI growth is the most appropriate measure for determining the increase in value delivered to shareholders by the company’s executive directors and senior executives. The committee reviews the appropriateness of the performance measure and the specific targets set when considering each new grant of options.

In April 2002, options were granted to each executive director equal to twice his base salary and, at the same or lower rates, to certain other senior executives. Details of options granted to executive directors are shown here. It is the company’s intention that new shares be issued, subject to institutional guidelines, to satisfy the exercise of options granted under the ESOS.

Three of the executive directors hold options under the restructured executive share option scheme (RESOS). The RESOS was put in place to replace options which executives had previously held over British Gas plc shares and which were cancelled at demerger. There are no performance conditions attaching to options under the RESOS. Further details are given here.

Long term incentive scheme (LTIS)

Allocations of shares are made annually to executive directors and other senior executives under the LTIS. These awards are subject to challenging performance conditions based on the company’s total shareholder return (TSR) relative to the returns of a comparator group, since this ensures that the executives are not rewarded unless the company has outperformed its peers in creating shareholder value. The committee has determined that, in the absence of a meaningful ‘natural’ comparator group for the company, the companies comprising the FTSE 100 at the start of the relevant performance period (the LTIS comparator group) constitute the most appropriate comparator group for the purpose of the LTIS. The committee reviews the appropriateness of the performance measure and the specific target set when considering each new allocation of shares under the LTIS. In assessing the extent of satisfaction of the performance condition, the committee uses data provided by Hoare Govett.

Allocations made prior to May 2001 are subject to a performance period of either three or four years (at the participant’s choice), followed by a retention period of two years. Changes to these arrangements were approved at the 2001 AGM. Allocations made from May 2001 will be released to the participant under normal circumstances after the three year performance period, provided the performance conditions have been met.

The actual number of shares eventually released to the participant depends on the company’s TSR over the entire performance period relative to the LTIS comparator group. The maximum annual allocation of shares only vests and is released to the executive if the company’s TSR over the performance period is ranked in 25th position or above relative to the 99 other companies in the LTIS comparator group. No shares vest if the TSR over the performance period is ranked below 50th position in the LTIS comparator group. Between 25th and 50th position, shares vest on a sliding scale from 100% to 40%.

In April 2002, LTIS allocations equal to three quarters of base salary were awarded to executive directors and, at the same or lower rates, to certain other senior executives. The maximum number of shares that could eventually be transferred to each executive director upon satisfaction of the performance criteria appears here.

Prior to 2002, the trustee bought shares in the market to match the likely future requirements for shares under LTIS releases. Any shortfall will be satisfied by the issue of new shares.

TSR: Centrica and FTSE 100: 1997 to 2002

The following table shows graphs of the company’s TSR performance and that of the FTSE 100 index. As required by the Directors’ Remuneration Report Regulations 2002, this uses a rolling definition of the FTSE 100, whereas the definition used for the purposes of the LTIS is the FTSE 100 as constituted at the beginning of the period. In order to demonstrate the delivery of shareholder value during the respective performance periods, TSR graphs for LTIS awards that vested in March and October 2002 are shown in the tables here.

TSR indices – Centrica and FTSE 100: 1997-2002

Other employment benefits

In common with other senior management, executive directors are entitled to a range of benefits, including a contributory, final salary pension, a company car, life assurance, private medical insurance and a financial counselling scheme. They are also eligible, on the same basis as other employees, to participate in the company’s Inland Revenue approved sharesave and share incentive plans. These are open to all eligible employees and provide a long term savings and investment opportunity.

Service contracts

It is the company’s policy for the notice period in executive directors’ service contracts not to exceed one year. The committee retains a level of flexibility in order to offer contracts to new executive directors that contain an initial notice period in excess of one year, provided that after the first such period the notice period reduces to one year.

The executive directors’ service contracts have no fixed term but provide that either the director or the company may terminate the employment by giving one year’s written notice and that the company may pay compensation in lieu of notice. Phillip Bentley’s contract provides for an initial notice period of two years, which reverted in November 2002 to one year on the same basis as the other executive directors. The dates of the executive directors’ service contracts are disclosed in the table here.

Upon Mike Alexander’s retirement from the board on 28 February 2003, he will forfeit all of the options granted to him under the ESOS (see the table here) and the conditional allocations of shares made to him under the LTIS on 2 October 2000, 1 October 2001 and 2 April 2002 (see the table here). The performance targets in respect of the allocations of shares made to him under the LTIS on 1 October 1998 and 7 October 1999 have previously been achieved and those shares will be released to him at the end of the retention periods on 30 September 2003 and 30 September 2004, respectively. Mike Alexander will not receive any payments other than his pension, the details of which are disclosed here.

External appointments of executive directors

The board believes that experience of other companies’ practices and challenges is valuable both for the personal development of its executive directors and for the company. It is therefore the company’s policy to allow each executive director to accept one non-executive directorship of another company, although the board retains the discretion to vary this policy. Fees are retained by the individual director. Details of individual directors’ external appointments are given in their biographies.

Non-executive directors

Non-executive directors do not hold service contracts. The dates of their appointment are shown in the table below. Their appointment is subject to the articles of association. Their fees are determined having regard to the need to attract individuals of the right calibre and experience, the time and responsibilities entailed and the fees paid by other companies. Their fees are approved by the board, upon the recommendation of the executive committee, whose members are the executive directors listed in the table below, together with Grant Dawson, general counsel and company secretary. The executive committee received survey and other information from the remuneration consultants, Towers Perrin. The non-executive directors, including the chairman, do not participate in any of the company’s share schemes, incentive plans or pension schemes.

In addition to their fees as non-executive directors of the company, Sir Brian Shaw received fees for consultancy services to the AA Motoring Policy Unit and Sir Sydney Lipworth received fees for services as a non-executive director of Goldfish Bank Limited.

The remuneration report up to this statement has not been audited. From this point until the end of the report, the disclosures, with the exception of the two line graphs, have been audited.

Directors’ emoluments

		Base salary/fees	Annual performance bonus	Benefits(i)	Total emoluments(ii) 2002	Total emoluments(ii) 2001(iii)
		£000	£000	£000	£000	£000
Executive directors	Date of service contract
Mike Alexander	10 January 2002	389	199	29	617	506
Phillip Bentley (iv)	13 September 2000	400	231	16	647	536
Mark Clare	21 March 2001	418	181	27	626	553
Sir Roy Gardner	21 March 2001	678	376	44	1,098	847
Roger Wood	21 March 2001	389	194	25	608	559
		2,274	1,181	141	3,596	3,001
Non-executive directors	Date of appointment
Roger Carr	1 January 2000	34	–	–	34	30
Sir Sydney Lipworth (v)	12 March 1999	22	–	–	22	45
Patricia Mann	4 December 1996	34	–	–	34	30
Sir Michael Perry	4 December 1996	195	–	–	195	180
Sir Brian Shaw (vi)	23 September 1999	54	–	–	54	50
		339	–	–	339	335
Total emoluments		2,613	1,181	141	3,935	3,336
(i) Benefits include all taxable benefits arising from employment by the company, mainly the provision of a company car. (ii) The following are excluded from the table above: • pensions – see below ; • share options – see below. The aggregate of the amount of gains made by executive directors on the exercise of share options was £305,950; and • long term incentives – see below. The aggregate value of shares vested to executive directors under the LTIS was £4,630,479. (iii) The total emoluments figure for 2001 excludes £30,000 paid to Francis Mackay for his services as a director during that year. (iv) In addition to the emoluments shown above, Phillip Bentley received a payment of £200,000 (2001: £250,000) as the second and final tranche of compensation for loss of entitlement under his previous employer’s performance bonus and share option schemes. (v) The figure for Sir Sydney Lipworth for 2002 includes fees of £8,333 in respect of services as a non-executive director of Goldfish Bank Limited while a director of Centrica plc. (vi) The figures for Sir Brian Shaw include fees of £20,000 per annum in respect of consultancy services to the AA Motoring Policy Unit.

Directors’ pensions

The pension arrangements for the executive directors, who are all members of the Centrica staff pension scheme, are shown below. The staff pension scheme is a funded, Inland Revenue-approved, final salary, occupational pension scheme. Its rules provide for the following main features:

normal retirement at age 65;
right to an immediate, unreduced pension on retirement at age 60;
right to an immediate, unreduced pension on leaving service after age 55, subject to 10 years’ service and company consent;
right to an immediate, unreduced pension on leaving service on reorganisation or for redundancy after age 50;
life assurance cover of four times pensionable salary;
spouse’s pension on death in service payable at the rate of two thirds of the member’s prospective pension and, on death after retirement, two thirds of accrued pension. Children’s pensions are also payable;
members’ contributions payable at the rate of 4% of pensionable earnings;
pension payable in the event of retirement due to ill health;
pensions in payment and in deferment guaranteed to increase in line with the increase in the RPI; and
no discretionary practices are taken into account in calculating transfer values.

All benefits are subject to Inland Revenue limits. Where such limitation is due to the earnings ‘cap’, benefits are increased to the level that would otherwise have been paid and are provided via the Centrica unapproved pension scheme. This scheme is unfunded but the benefits are secured by a charge over Centrica’s assets to give security equivalent to the pensions provided to other employees. An appropriate provision in respect of their accrued value has been made in the company’s balance sheet.

Pension benefits earned by directors (£)

	Accrued pension as at 31 December 2002(i)	Accrued pension as at 31 December 2001	Increase in accrued pension(ii)	Transfer value as at 31 December 2002	Transfer value as at 31 December 2001	Contri- butions paid in 2002(iii)	Difference in transfer values less contri- butions	Transfer value of the increase in accrued pension excluding inflation(iv)
Mike Alexander (v),(vi)	176,700	160,400	16,300	2,598,800	2,328,300	14,513	255,987	181,777
Phillip Bentley (vii)	19,600	9,500	10,100	196,400	93,100	14,513	88,787	83,410
Mark Clare (vi)	74,300	61,900	12,400	793,000	643,200	14,513	135,287	104,576
Sir Roy Gardner (viii)	183,400	140,000	43,400	2,883,800	2,227,100	14,513	642,187	619,708
Roger Wood (viii)	89,300	73,200	16,100	1,645,400	1,325,200	14,513	305,687	254,634
(i) Accrued pension is that which would be paid annually on retirement at age 65, based on eligible service to 31 December 2002. (ii) The increase in accrued pension during the year excludes any pension arising from additional voluntary contributions. The increase in accrued pension adjusted to exclude inflation may be derived by discounting the figure in the first column by the rate of inflation (1.7% – see note (iv)) and subtracting the figure in the second column. (iii) Contributions were paid in the year by the directors under the terms of the scheme up to the maximum rate of 15% of the earnings ‘cap’. (iv) The rate of inflation used was 1.7%, the annual rate to 30 September 2002, the date used for pension increases under the scheme. (v) The accrued pension shown for Mike Alexander includes a credit in relation to a transfer from a previous employer’s pension scheme. (vi) With effect from 1 January 1998, the pensions for Mike Alexander and Mark Clare have accrued at the rate of 2.26% (approximately 1/44) and 2.28% (approximately 1/44) of pensionable salary respectively for each year of pensionable service. Pensions in relation to service prior to 1 January 1998 will continue to accrue at the rate of 1.67% (1/60) of pensionable salary. (vii) The pension for Phillip Bentley accrues at the rate of 2.31% (approximately 1/43) of pensionable salary for each year of pensionable service. (viii) The pensions for Sir Roy Gardner and Roger Wood accrue at the rate of 3.33% (1/30) of pensionable salary per year of service.

Directors’ interests in shares

The directors’ beneficial interests (which include those of their families) in the ordinary shares in the company and the executive directors’ interests in the long term incentive scheme (LTIS) are shown in the following two tables:

Directors as at 31 December 2002	Shareholdings as at 31 December 2002	Shareholdings as at 1 January 2002	LTIS: total allocations as at 31 December 2002	LTIS: total allocations as at 1 January 2002
Executive directors
Mike Alexander	328,194	27,849	773,614	1,129,858
Phillip Bentley	80,095	50,000	453,857	317,069
Mark Clare	354,625	24,539	840,895	1,187,130
Sir Roy Gardner	771,661	166,569	1,382,870	2,012,367
Roger Wood	366,011	55,197	800,876	1,208,491
Non-executive directors
Roger Carr	4,700	4,700	–	–
Patricia Mann	2,142	2,142	–	–
Sir Michael Perry	15,900	15,900	–	–
Sir Brian Shaw	1,000	1,000	–	–
(i) As at 17 February 2003, the beneficial shareholdings of the executive directors had increased from the totals shown at 31 December 2002 by the following numbers of shares: Mike Alexander 93; Phillip Bentley 20,093; Mark Clare 10,093; Sir Roy Gardner 30,093; Roger Wood 20,000; and Sir Michael Perry 10,000. (ii) As at 31 December 2002, 27,238,473 shares (1 January 2002: 39,361,377) were held by the trustee of the employee share trust under the LTIS rules. As with other employees, the directors are deemed to have a potential interest in those shares, being beneficiaries under the trust. These interests remained unchanged as at 17 February 2003. (iii) From 1 January 2002 to 17 February 2003, none of the directors had any beneficial interests in the company’s securities other than ordinary shares, nor any non-beneficial interests in any of the company’s securities, or those of its subsidiary or associated undertakings.

The following table gives details of the LTIS allocations held by each director:

	Vested during 2002		In retention period		In performance period
	4 March 1997(i)	1 October 1997(i)	1 October 1998(ii)	7 October 1999(ii)	2 October 2000(iii)	1 October 2001(iv)	2 April 2002(iv)
Mike Alexander	282,843	205,184	178,024	142,415	185,994	135,398	131,783
Phillip Bentley	–	–	–	–	181,671	135,398	136,788
Mark Clare	282,843	205,184	181,431	151,703	221,422	144,547	141,792
Sir Roy Gardner	500,186	362,851	340,716	272,446	312,943	223,225	233,540
Roger Wood	312,616	226,782	189,949	154,799	188,947	135,398	131,783

Market price at allocation date	64.00p	94.25p	118.00p	161.50p	220.50p	214.50p	227.00p
End of qualifying period(v)	2/3/2002	30/9/2002	30/9/2003	30/9/2004	1/10/2005	30/9/2004	1/4/2005
Market price at vesting date(vi)	215.88p	165.46p
(i) At the end of the respective performance periods (2 March 2000 and 30 September 2000), the company ranked in sixth and fourth positions respectively in the relevant LTIS comparator groups. Accordingly, 100% of the allocations were released on the vesting dates (4 March 2002 and 1 October 2002 respectively) following the expiry of the two year retention period. These shares were subject to income tax at the individual’s marginal rate, based on the market value of the shares at the date of vesting. The income tax liability was satisfied by the sale of sufficient shares and, accordingly, the directors only received the net number of shares following disposal, which is reflected in the shareholdings as at 31 December 2002 here. (ii) At the end of the respective performance periods (30 September 2001 and 30 September 2002), the company ranked fourth in the relevant LTIS comparator groups. Accordingly, 100% of the allocations are being held in trust for a further two years at the end of which time they will be released to the directors at the trustee’s discretion. (iii) The performance period relating to this allocation will end on 1 October 2003. If and to the extent that the performance condition is met, the relevant number of shares will then be held in trust for two years, at the end of which time they will be released to the directors at the trustee’s discretion. (iv) The respective performance periods relating to these allocations will end on 30 September 2004 and 1 April 2005. If and to the extent that the performance conditions are met, the allocations will vest and the relevant number of shares will be released to the directors, at the trustee’s discretion. (v) The end of the qualifying period is the date on which it is judged whether or not the qualifying conditions (see LTIS section here) have been fulfilled. (vi) The vesting date was the next business day after the end of the qualifying period.

The following tables, which have not been audited, show the TSR performance of Centrica and the respective TSR comparator groups over the qualifying periods relating to the two LTIS awards that vested during 2002:

TSR indices – Centrica and FTSE 100: March 1997 LTIS Award


TSR indices – Centrica and FTSE 100: October 1997 LTIS Award

Directors’ interests in share options

Full details of the options over ordinary shares in the company held by executive directors who served during the year and any movements in those options in the year are shown below:

	Options held as at 1 January 2002	Options granted during year	Options exercised during year(iv)	Options held as at 31 December 2002	Exercise price (pence)	Date from which exercisable	Expiry date
Mike Alexander
RESOS(i)	86,145	–	86,145(a)	–	90.266	Oct 1996	Oct 2003
ESOS(ii)	308,269	–	–	308,269	240.050	Jun 2004	May 2011
ESOS(ii)	–	351,423	–	351,423	224.800	Apr 2005	Apr 2012
Sharesave(iii)	7,435	–	7,435(b)	–	46.400	Jun 2002	Nov 2002
Sharesave(iii)	14,967	–	–	14,967	92.200	Jun 2003	Nov 2003
Sharesave(iii)	–	1,863	–	1,863	177.600	Jun 2007	Nov 2007
	416,816	353,286	93,580	676,522
Phillip Bentley
ESOS(ii)	308,269	–	–	308,269	240.050	Jun 2004	May 2011
ESOS(ii)	–	364,768	–	364,768	224.800	Apr 2005	Apr 2012
Sharesave(iii)	5,071	–	–	5,071	191.000	Jun 2004	Nov 2004
	313,340	364,768	–	678,108
Mark Clare
RESOS(i)	177,645	–	–	177,645	81.060	Oct 1997	Oct 2004
ESOS(ii)	329,098	–	–	329,098	240.050	Jun 2004	May 2011
ESOS(ii)	–	378,113	–	378,113	224.800	Apr 2005	Apr 2012
Sharesave(iii)	37,176	–	37,176(c)	–	46.400	Jun 2002	Nov 2002
Sharesave(iii)	–	9,318	–	9,318	177.600	Jun 2007	Nov 2007
	543,919	387,431	37,176	894,174
Sir Roy Gardner
RESOS(i)	1,336,446	–	–	1,336,446	81.889	Nov 1997	Nov 2004
ESOS(ii)	508,227	–	–	508,227	240.050	Jun 2004	May 2011
ESOS(ii)	–	622,775	–	622,775	224.800	Apr 2005	Apr 2012
Sharesave(iii)	37,176	–	37,176(b)	–	46.400	Jun 2002	Nov 2002
Sharesave(iii)	–	9,318	–	9,318	177.600	Jun 2007	Nov 2007
	1,881,849	632,093	37,176	2,476,766
Roger Wood
ESOS(ii)	308,269	–	–	308,269	240.050	Jun 2004	May 2011
ESOS(ii)	–	351,423	–	351,423	224.800	Apr 2005	Apr 2012
Sharesave(iii)	37,176	–	37,176(b)	–	46.400	Jun 2002	Nov 2002
Sharesave(iii)	–	9,318	–	9,318	177.600	Jun 2007	Nov 2007
	345,445	360,741	37,176	669,010
(i) Restructured executive share option scheme (RESOS) Options granted to company employees under the British Gas plc executive share option scheme prior to February 1997 were cancelled and replaced at demerger by non-Inland Revenue-approved options to acquire Centrica shares. The replacement options were granted on the same terms as British Gas executive share options, with the same exercise date and aggregate exercise price per share, and the number of shares placed under option was adjusted to take account of the demerger. No further options have been or will be granted under this scheme. (ii) Executive share option scheme (ESOS) Options were granted to executives under the terms of the Centrica executive share option scheme on 31 May 2001 and 2 April 2002. Details of the operation of this scheme are shown here. (iii) Sharesave scheme The company operates an Inland Revenue-approved all-employee savings-related share option scheme. The scheme is designed to provide a long term savings and investment opportunity for employees and is described here. (iv) Exercise of share options Options were exercised at the following dates and prices: (a) 5 April 2002 at 225 pence; (b) 5 June 2002 at 207.5 pence; and (c) 1 July 2002 at 202.75 pence.

No director’s options lapsed during the year.

The closing price of a Centrica ordinary share on the last trading day of 2002 (31 December) was 171 pence. The range during the year was 239 pence (high) and 150 pence (low).

This report on remuneration has been approved by the board and signed on its behalf by