Letter from the chairman, 21 September 1999

Dear AA Colleague,

This week, Centrica will complete its purchase of the AA. On the eve of this historic event, I should like to thank you personally for your contribution to making the AA what it is today.

The AA has gone from strength to strength over the past 94 years because of its ability to innovate and adapt to changing markets, while maintaining an unswerving commitment to service and professionalism - in short: ''Courtesy and Care''. The fact that we are in such a good position and have been able to decide our own destiny at this time is down to the hard work and commitment of today's AA people and past generations of AA employees.

Our motivation for joining Centrica is entirely consistent with the AA heritage - Centrica shares our service values and has the financial muscle both to expand our operations and to see off increasingly well-resourced competitors.

There will be changes - that is inevitable. One of the first is that the AA Committee will no longer exist and I will not be its chairman. I pay tribute to all my Committee colleagues who have worked so hard and so selflessly to secure the best deal for the AA's future, not least the non-executive members who are giving up their jobs in the process.

However, I am pleased that I will be maintaining a close AA link myself as a non-executive director of Centrica and as chairman of the proposed new AA Motoring Policy Committee.

These are challenging times to be working for the AA, and I know that retired colleagues will be tracking our fortunes with interest. I believe that we have taken the right decision and set the AA on a new course for the new millennium. Our members have voted overwhelmingly for the promise of a ''better AA''. I have no doubt that, with Centrica, AA staff will rise to this challenge as they have always done and turn that promise into reality.

Thank you all again, and my best wishes for the future.

Yours sincerely

Brian Shaw Chairman