Terms of Reference

Retail board

1. Purpose The purposes of the Retail Board are to:
   
   
   1. Discuss and review prior to submission to the Board with appropriate recommendations:
      
      
      1. The strategy reviews of the businesses and the strategic choices of the Group.
      2. The annual budget for the Group.
      3. The Five year plans.
      4. The Group Top Ten Risks.
      5. Monthly Group Trading Performance.
      6. Management Development and senior executive succession plans.
      7. Capital expenditure proposals requiring Board approval before submission to the Board.
   2. Oversee and review the Group CSR programme and operating companies’ individual progress; with the Group Chief Executive reporting to the Board at least annually on issues, progress and recommendations for change.
   3. Approve for recommendation to the Board any acquisitions or disposals of businesses, parts of businesses or shares in other companies not covered by the delegated authorities in 1. d) below.
   4. Approve acquisitions and disposals of companies and businesses:
      
      
      1. In the case of a company or business where prior to the proposed acquisition or disposal the Group has 50% or less of the issued share capital and where the higher of the price paid or debt funding or net assets or liabilities is no more than £10 million in cash or loan notes (or the equivalent value in non sterling currencies). This value to be based on 100% of the company and reduced proportionately for purchase/sales of lesser percentage holdings.
      2. In the case of a company which is a subsidiary of the Group and is consolidated in the Group accounts prior to any proposed further acquisition of any outstanding minority interests, the purchase of further shares in the company provided the total value being paid for the outstanding minority shareholding is no more than £10 million (or the equivalent value in non sterling currencies).
      3. In the case of a company or business which is currently a subsidiary or part of a subsidiary of a Group company and consolidated into the Group accounts prior to the proposed disposal, where the disposal proceeds or net liabilities, net assets or debt funding being sold from the Group are no more than £10 million (or the equivalent for non sterling currencies).
   5. Make recommendations to the Board regarding proposed acquisitions and disposals of businesses where the acquisition or disposal price for the whole is in excess of £10 million in cash or loan notes (or the equivalent value in non sterling currencies) or where the consideration, whatever the value, is being satisfied by the issue of shares by or to the Company or its subsidiaries.
   6. Review periodically as necessary the communications messages to the investor and city community for effectiveness and relevance.
   7. Discuss periodically as necessary any issues regarding strategy and performance the investor and city community are communicating and to ensure these are communicated appropriately to the Board and that actions are taken to address any legitimate concerns.
   8. Exercise all powers of execution and delivery of the Board in relation to the approval and authorisation for signature of financing documents within these Terms of Reference and authority limits contained herein;
   9. Review and approve on behalf of the Board any significant or unusual treasury transactions within the limits set out in the Treasury Policy;
   10. Oversee the work of the Treasury Committee; and
   11. Allot new shares in the Company to employees following the exercise of share options in schemes approved by the Board.
2. Membership
   1. The members of the Committee shall be the executive directors of the Company.
   2. The chairman of the Committee shall be the Group Chief Executive.
   3. A quorum shall be any two executive directors of the Company.
   4. Although a Committee meeting should not normally take place without either:-
      
      
      1. the Group Chief Executive being present, or
      2. the Group Chief Executive having given his consent for the meeting to take place in his absence, or
      3. reasonable efforts having been made to inform the Group Chief Executive of the intention to convene the meeting,
      any decisions taken and actions agreed by a meeting of the Committee at which the Group Chief Executive is not present shall nonetheless be validly made.
3. Attendance

   The Company Secretary shall act as secretary to the Committee.

   Members of the executive management team shall be entitled to attend automatically, time allowing, but shall attend as required by the Group Chief Executive.

   The Group Director of Audit and Risk shall attend when Group Risks are discussed or considered.

   The Group Director of Social Responsibility shall attend whenever matters relating to CSR are discussed or reviewed.

   The Group Chief Executive shall have the right to ask other senior executives to attend as required.

4. Frequency

   The Committee will meet as and when necessary.

5. Responsibility and powers
   1. The Committee is authorised to approve
      
      
      1. Any decision within the limits contained within the Purposes described in 1. above; and
      2. Recommendation to the Board regarding any of the relevant Purposes described under 1. above.
   2. The Committee is also authorised to consider and approve:
      
      
      1. The opening of new ordinary current or deposit account banking facilities, the persons to act as the authorised signatories and the authority limits of all bank accounts in the United Kingdom and overseas;
      2. Arrangements with financial institutions for dealing in the following:
         - money market instruments
         - currency instruments
         - interest rate instruments
         - exchange traded futures and options contracts
         - sale and repurchase agreements;
      3. Any uncommitted arrangements, or committed arrangements with a maturity term of three years or less, that may be required for the purpose of any other form of financing required by the Company in connection with its business activities;
      4. The drawing of funds under the then current terms of the Company's committed facilities;
      5. Changes to established funding programmes whether committed or uncommitted irrespective of term. Any such change will be reported at the Board meeting following the change;
      6. The issue, execution and delivery of term debt with a maturity term of three years or less, including Notes under the Company's Multi-Currency Euro Commercial Paper and Medium-Term Note Programme as the same may be amended from time to time or under any programme supplementing, replacing or substituting any of the same;
      7. The amendment, replacement or substitution of the Company's Multi-Currency Euro Commercial Paper and Medium-Term Note Programme;
      8. Guarantees and indemnities up to a maximum liability in each case of £100 million or its equivalent (at the time of approval or authorisation) in any other currency required from the Company in connection with the issue of bonds, guarantees, indemnities or letters of credit or other financial accommodation by any bank, surety group or financial institution on its behalf;
      9. Guarantees and indemnities (whether in respect of any financial obligation or otherwise) including (but without prejudice to the generality of the foregoing) any such guarantee or indemnity required to be given by the Company in respect of the obligations of any of the Company's subsidiary companies of up to £100 million in each case or its equivalent (at the time of approval or authorisation) in any other currency; and
      10. The allotment of shares in the Company to those of its employees or ex-employees who have validly exercised options over shares granted under any of the Company's share option schemes. Provided that where the exercise is by a director of the Company that exercise has been discussed with, and agreed by, the Chairman.
   3. In connection with the authorities described in point 5 b) above the Committee is further authorised:
      
      
      1. To review existing facilities annually and to recommend approval of the annual Financing Plan;
      2. To review and approve the Group Treasury Operating Plan;
      3. To approve hedging of interest rate exposure where EBIT is more than five times the net interest expense and either:
         – the proposed hedge will have a maturity term of more than five years, or
         – the proposed hedge will change the proportion of fixed:floating interest rate exposure by more than 25%.
         
         If EBIT is less than five times the net interest expense, the Committee is required to review the strategy for capping the interest expense and to recommend approval of the strategy;
      4. To approve currency forward contracts, currency options or other similar instruments in connection with the acquisition or disposal of Group undertakings, or a capital injection for an existing Group undertaking, in excess of £25 million, such approvals to be reported at the next scheduled Board meeting;
      5. To approve the investment of funds for amounts greater than the limits prescribed in Treasury Policy and less than £100m for periods of less than 12 months;
      6. To issue comfort letters, whether in respect of any financial obligation or otherwise, and where such comfort letters are issued the details to be reported to the next Board meeting;
      7. To approve changes to the list of banks designated as “Club” banks;
      8. To designate institutions as Approved Professional Fund Managers;
      9. To review the monthly executive summary of treasury activities and issues as submitted by the Treasury Committee;
      10. To review the minutes of the Treasury Committee; and
      11. To report to the Board significant issues arising from any reviews, or otherwise identified in the course of performing its responsibilities.
   4. The Committee may:
      
      
      1. Authorise any director or the Company Secretary on behalf of, or in the name of, the Company to execute and deliver any agreement, document or instrument and to do any act or thing for or in connection with any of the above transactions, arrangements and other matters, including but without prejudice to the generality of the foregoing, a power of attorney or other document pursuant to which the execution and delivery of any agreement, document or instrument constituting or evidencing any of the transactions, arrangements or other matters, as are more particularly referred to above will be effected;
      2. Authorise the appointment of individuals to act on behalf of the Company in relation to matters for which it has authority or responsibility and specifically delegate to the Company Secretary the authority to approve the exercise of options and allotment of shares in accordance with 5 b) above; and
      3. Designate day to day responsibility for certain areas of CSR to individuals not being members of the Committee or the Board.
6. Reporting procedures

   The Secretary shall circulate the minutes of meetings of the Committee and authorisations to exercise share options (or a summary thereof) to all members of the Board, to all members of the Committee and such other attendees of the meetings as the Chairman of the Committee shall direct or as the Secretary shall think fit.