Directors' remuneration report

Dear Shareholder,

On behalf of the Board, I am pleased to present our Directors' remuneration report for 2012, for which we will be seeking your approval at our AGM on 10 May 2013.

Since the Company's listing in July 2010, the Remuneration Committee has been focused on introducing a number of changes that help to bring the overall structure of our executives' remuneration into line with the market for listed company executives. One such change was the introduction of the first executive Annual Incentive Plan for the Company in 2011. The Remuneration Committee wishes to further this alignment in 2013, by proposing the adoption of a new long-term incentive plan. The plan is intended to take the place of the existing Joint Share Ownership Scheme as the link between executive reward and the longer-term performance and objectives of the Company. These changes are intended to help the Remuneration Committee find a position of appropriate balance between remuneration elements that attract, retain and motivate the right calibre of senior executive talent and take into account the entrepreneurial culture of the business.

During the financial year, the Remuneration Committee undertook a review of the Annual Incentive Plan structure in place for our Executive Directors and concluded that the core financial measures remained sound and should be retained in order to encourage strong growth. The plan was adjusted to meet the Company's objectives for 2013 and to move the maximum payout under the plan into line with the appropriate market comparators.

Retaining and recruiting our executive team is an important responsibility of the Board and accordingly the Remuneration Committee undertook processes and shareholder consultation to set the remuneration for the appointment of the new Chief Financial Officer and the Operations Director. During 2012, there were no increases in base salaries of Executive Directors apart from on their promotion or appointment to the Board and an increase for the Chief Executive Officer.

An important function performed by the Remuneration Committee was to compile an attractive remuneration package for a successor Chairman of the Board. Following advice from our external advisers and a shareholder consultation process, we agreed remuneration for the newly appointed Chairman Designate, Sir Stuart Rose.

We are focused on providing clear reporting on past remuneration and future policy. We welcome shareholder feedback on this report.

Douglas McCallum
Remuneration Committee Chairman