Remuneration Report

1. Directors' emoluments

Executive Directors
	Notes	Salary/Fees £000	Bonuses £000	Benefits £000	Total emoluments 2006 £000	Pension 2006 £000	Total emoluments 2005 £000	Pension 2005 £000
Nigel Payne	1,2,3	520	2,405	5	2,930	80	770	45
Andrew McIver	1,3	307	668	4	979	47	591	26
Mark Blandford	3	126	-	1	127	12	128	12
Dave Hobday	3,7	126	344	-	471	18	-	-

Non-Executive Directors
Peter Dicks	4,5,6,9	125	-	-	125	-	75	-
Sean O'Connor	4,5,6,7,8	95			95	-	55	-
Brian Harris	5,6,7	80	-	-	80	-	50	-
Bob Holt	4	77	-	-	77	-	48	-
		1,456	3,417	10	4,884	157	1,717	83
Included within Bonuses for 2006 is £683,271 (N Payne: £390,671; A Mclver: £292,600) paid following the completion of the Group's 2003 Long Term Incentive Plan. In addition, bonuses were significantly enhanced, in accordance with the Group's bonus scheme rules, due to the Group significantly exceeding expectations for the year. There were no LTIP bonuses paid in 2005. In addition, Nigel Payne was paid a discretionary bonus of £500,000 when he announced he was standing down as Group Chief Executive in May 2006. Aggregate emoluments for Nigel Payne, as highest paid Director, amounted to £2,930,275 excluding pension contributions (2005: £769,829). The average total emoluments of the Executive Directors was £1,126,709 (2005: £496,122). The average total emoluments of non-Board employees was £94,375 (2005: £58,750). The ratio between the two averages was 11.9:1 (2005: 8.4:1). Member of the Audit Committee. The Chairman sat on this Committee because the Board considered his experience and qualifications were of such value to the Committee as to make any deemed lack of independence (by virtue of being the Chairman of the Company and a shareholder of the Company and option holder regarding shares in the capital of the Company) of negligible significance in the context of the make-up and the balance of skills of the Company's Board. Member of the Remuneration Committee. Member of the Nomination Committee. Member of the Social Responsibility Committee. Senior Independent Director. Peter Dicks resigned as Non-Executive Chairman and Director of the Company on 14 September 2006.

2. Interests of Directors in share options and shares in the Company

Options	Notes	No. of options at 31 July 2005	No. of options at 31 July 2006	Date of grant	Exercise price (p)	Earliest exercise date	Expiry of exercise period
Executive Directors
Nigel Payne	1	1,500,000	1,500,000	29/01/04	49	29/01/07	29/01/14
Nigel Payne	2	-	500,000	01/08/05	-	01/08/07	01/08/08
Andrew McIver	1	500,000	500,000	29/01/04	49	29/01/07	29/01/14
Andrew McIver	2	-	500,000	01/08/05	-	01/08/07	01/08/08
Mark Blandford		-	-	-	-	-	-
Dave Hobday	2	-	400,000	08/11/05	-	01/08/07	01/08/08

Non-Executive Directors
Peter Dicks	3,4	250,000	250,000	13/12/99	65	13/12/01	12/12/06
Sean O'Connor		-	-	-	-	-	-
Brian Harris		-	-	-	-	-	-
Bob Holt		-	-	-	-	-	-
Share options granted under the Sportingbet Plc Unapproved Executive Share Option Scheme 2004, subject to a guaranteed sale price of £2.15 up to and including 31 December 2007 pursuant to a trust deed dated 29 June 2005. Share options granted under the Sportingbet Long Term Retention Plan 2005. Peter Dicks's share options were granted by contract outside of Sportingbet Plc's Unapproved Share Option Scheme. Peter Dicks resigned as Non-Executive Chairman and Director of the Company on 14 September 2006.

No options were exercised during this financial year (2005: nil). The market price of shares at 31 July 2006 was 245.75p and the range during the financial period was 447.5p to 171.0p.

Shares	Notes	2006	2005
Executive Directors
Nigel Payne	7	276,398	176,398
Andrew McIver	8	51,700	27,500
Dave Hobday		-	-
Mark Blandford	1	12,480,173	12,480,173

Non-Executive Directors
Peter Dicks	2,3	170,440	155,000
Sean O'Connor	4	106,774	78,334
Brian Harris	5	45,519	13,079
Bob Holt	6	90,440	35,000
Mark Blandford's shares in the Company are held jointly with his wife. On 22 March 2006, 5,000,000 shares were transferred to the Blandford 2006 Family Settlement Trust, whose trustees include Mark Blandford and his wife. Peter Dicks purchased 15,440 shares on 31 July 2006. Peter Dicks resigned as Non-Executive Chairman and Director of the Company on 14 September 2006. Sean O'Connor purchased 15,440 shares on 31 July 2006. On 26 May 2006 13,000 shares were purchased in the name of Trillium Venture Developments Limited, and are held on trust. Brian Harris purchased 10,000 shares on 19 October 2005, 7,000 shares on 26 May 2006 and 15,440 shares on 31 July 2006. Bob Holt purchased 40,000 shares on 18 July 2006 and 15,440 shares on 31 July 2006. 35,000 shares of his total shareholding are held in the Mears Group Executive Pension Scheme. Nigel Payne purchased 100,000 shares on 26 May 2006. 100,000 shares of his total shareholding are held in the name of the Sportingbet Plc EBT - Nigel Payne Appointed Trust Fund. Andrew McIver purchased 24,200 shares on 26 May 2006. 24,200 shares of his total shareholding are held in the name of the Sportingbet Plc EBT - Andrew McIver Appointed Trust Fund.

(a) Remuneration policy
The Company’s policy is designed to attract, retain and motivate individuals to ensure the success of the Company. Remuneration packages are designed to reward the Executive Directors fairly for their contributions whilst remaining within the range of benefits offered by similar companies in the sector.

The Remuneration Committee seeks to structure total benefits packages, including base salaries, which align the interests of shareholders and senior executives with particular importance weighted upon the performance-related elements of such total remuneration. Directors’ remuneration will be the subject of regular review in accordance with this policy in the next financial year.

(b) Terms of reference
The terms of reference of the Remuneration Committee include:

To determine the remuneration and benefits, including incentive arrangements, of the Executive Directors, the directors of divisional companies and other employees of similar status.
To set targets for performance-related pay elements of remuneration packages.
To review recommendations from the Board on the overall remuneration and benefits policy of the Group, with the power and authority to amend it if appropriate.
To have regard to the provisions of the Combined Code and associated guidance in its decision-making.

(c) Service contracts
The Company’s The Company’s policy on the duration of Directors’ contracts is that for both Executive and Non-Executive Directors notice periods will be no more than one year served by the Company or the Director.

(d) Bonuses
The Company operates a bonus incentive scheme which applies, at differing rates, to the employment terms of the Executive Directors and members of senior management. Part of any payment under this scheme is linked to the annual performance of the business for which they are responsible; the remainder of such payment is made on a discretionary basis.

The Remuneration Committee reviews the packages and varies individual elements when appropriate from year to year. The Remuneration Committee has policies and procedures in place to monitor the size of potential rewards.

(e) Share incentive schemes
The Company operates four share incentive schemes, namely the Unapproved Share Option Scheme (the ‘Unapproved Scheme’), the Sportingbet Plc Company Share Option Plan (the ‘IR Approved Scheme’), the Sportingbet Plc Executive Share Option Scheme (the ‘Executive Scheme’) and the Long Term Retention Plan 2005 (the ‘2005 Share Plan’). Prior to the Company’s admission to AIM on 30 January 2001, share options were granted under the Unapproved Scheme only and since that date, share options have been granted under the IR Approved Scheme and the Executive Scheme. Under the Executive Scheme, certain senior management’s share options are subject to a guaranteed sale price of £2.15 or £2.75 from the date of vesting up to and including 31 December 2007 pursuant to a trust deed dated 29 June 2005 (£6.8m is held in a designated account for the 3,087,500 shares). The 2005 Share Plan was introduced on 2 August 2005. The Company’s policy to grant share options under the IR Approved Scheme, the Executive Scheme and the 2005 Share Plan is at the Remuneration Committee’s discretion as and when considered appropriate.

The 2005 Share Plan entails a loyalty element and a performance element. The loyalty element represents 35% of the Executive Directors’ total potential awards pursuant to the 2005 Share Plan. Participants who remain employed by the Company until 31 July 2007 may exercise loyalty awards which have vested up to that date. Participants who remain employed by the Company until 31 July 2007 may exercise performance awards which may have vested, subject to the satisfaction of certain performance conditions, up to that date.

Performance conditions are based on the extent to which growth in the Company’s fully diluted earnings per share (‘EPS Growth’) exceeds growth in the retail prices index (‘RPI Growth’) over a financial year of the Company.

For the performance award to be exercisable in full, EPS Growth must exceed RPI Growth by 5% per financial year compound. The proportion of the performance award exercisable increases on a straight line sliding scale between 0 and 100% if EPS Growth exceeds RPI Growth by any margin up to 5% over a financial year. The Remuneration Committee continues to believe that, in relation to the 2005 Share Plan, 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 other senior executives. The Remuneration Committee reviews the appropriateness of the performance measure and the specific target set when considering each new grant of performance awards.

(f) Cash based Long Term Incentive Plan
In 2003, the Remuneration Committee engaged external consultants to review remuneration and benefits packages. As a result, a cash-based long term incentive plan (‘LTIP’) was established and offered to a small number of key employees which was varied in July 2005. The LTIP pays a cash sum based on the relevant employee’s gross salary and matured in March 2006.

Remuneration Report

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