Independence of Non-Executive Directors

The Chairman, Dr Michael Frenzel, did not meet the independence criteria laid out in the provisions of the Combined Code at the time of his appointment. This is because Dr Frenzel is the Chief Executive of TUI AG – a 52% shareholder of the Company as at 30 September 2009.

Details of the Chairman’s other significant commitments are given in his biography. The Chairman does have a number of other external roles but the Board is satisfied that these do not interfere with the performance of his duties as Chairman of the Company.

Of the other 11 Non-Executive Directors, two are not considered to be independent – Rainer Feuerhake and Horst Baier who are also Executive Directors of TUI AG.

The Non-Executive Directors considered to be independent are Sir Michael Hodgkinson, Tony Campbell, Clare Chapman, Bill Dalton, Jeremy Hicks, Dr Erhard Schipporeit, Dr Albert Schunk, Harold Sher and Giles Thorley.

The Board recognises that the Combined Code requires that at least half the Board, excluding the Chairman, should be independent Non-Executive Directors. The Board had 17 members up to 27 May 2009 (when Christoph Mueller resigned), of whom nine were deemed to be independent. From 28 May 2009 to 30 September 2009, the Board had 16 members of whom nine were also deemed to be independent. Therefore the Company was compliant with provision A3.2 of the Combined Code throughout the year ended 30 September 2009. Following the appointment of Horst Baier, the Board reverted to 17 members of which nine were deemed independent.

The Board is committed to seek to ensure that its membership is regularly refreshed.