During the year, the Remuneration Committee ("the Committee"), which has formal terms of reference approved by the Board, recommends to the Board the broad policy for the remuneration of the Chairman, the executive directors and other senior executives. A copy of the terms of reference of the Committee which were revised in 2006 is available on the Company's website at www.lowandbonar.com.

The Committee currently comprises the following non-executive directors of the Company, Chris Littmoden, Chairman of the Committee from 31/12/2006 and Steve Hannam and Folkert Blaisse. All of the Committee members are considered by the Board to be independent. The Chairman, Duncan Clegg is invited to attend meetings of the Committee other than when his own remuneration is under consideration. The Group Chief Executive may be invited to attend meetings of the Committee. The Committee keeps itself informed of all relevant developments and best practice in the field of remuneration and seeks advice where appropriate from external advisers.