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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. It contains the resolutions to be voted on at the Company's annual general meeting to be held on Thursday 3 May 2007 at 2.00 pm. If you are in any doubt as to the action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (or, if you are resident outside the United Kingdom, an appropriately qualified independent financial adviser). If you have sold or transferred all of your shares in Smith & Nephew plc please forward this document, together with the accompanying documents, to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

28 March 2007

Dear Shareholder,

The annual general meeting of the Company is to be held on Thursday 3 May 2007, at The Institution of Mechanical Engineers, 1 Birdcage Walk, Westminster, London SW1H 9JJ. The meeting will commence at 2.00 pm. Notice of the annual general meeting is contained in the Notice of Meeting, and a detailed explanation of the business to be conducted at the meeting is outlined in the Annual General Meeting Notes.

As a Group, we continuously review our impact on the environment and consider ways of reducing it. Further details of our initiatives are contained in our Sustainability Report which is available on our website. As an example of that approach, we believe that by taking advantage of the recent changes in legislation and making documents available to shareholders via our website rather than sending them to shareholders in hard copy, we can reduce the large amount of paper used for printing as well as the costs of printing and postage. Accordingly, if shareholders approve resolution 16, the directors intend that future annual reports and summary financial statements will be made available primarily via the Smith & Nephew website. However, shareholders would still be able to receive copies of documents in hard copy should they so wish. We will be writing to shareholders later this year to explain the process in more detail

Following regulatory changes introduced by the New York Stock Exchange in 2006, Smith & Nephew has decided not to send a printed version of the annual report and accounts to holders of ADSs, as evidenced by ADRs, for this and subsequent mailings. Instead, these are available on the Smith & Nephew website. The notice of the AGM will continue to be sent to ADR holders in hard copy format along with the form of proxy and confirmation that the Accounts are available for viewing on the Smith & Nephew website.
If ADR holders wish to continue to receive a hard copy of the annual report and accounts you should contact Bank of New York at Investor Services, PO Box 11258, Church Street Station, New York, NY 10286-1258 telephone +1-888-BNY-ADRS (toll free) or via their website.

Following regulatory changes introduced by the New York Stock Exchange in 2006, Smith & Nephew has decided not to send a printed version of the annual report and accounts to holders of ADSs, as evidenced by ADRs, for this and subsequent mailings. Instead, these are available on the Smith & Nephew website. The notice of the AGM will continue to be sent to ADR holders in hard copy format along with the form of proxy and confirmation that the Accounts are available for viewing on the Smith & Nephew website.
If ADR holders wish to continue to receive a hard copy of the annual report and accounts you should contact Bank of New York at Investor Services, PO Box 11258, Church Street Station, New York, NY 10286-1258 telephone +1-888-BNY-ADRS (toll free) or via their website.

As part of the ordinary business of the meeting, resolutions 4 to 8 are to reappoint certain of the directors. Biographical details of the directors standing for re-election are set out in the Annual General Meeting Notes. I believe that Sir Christopher O'Donnell, Chief Executive and Adrian Hennah, Chief Financial Officer have provided extremely effective leadership for the Group, and the Board is recommending their re-election. I confirm that each of the independent non-executive directors that are standing for re-election, who are Warren Knowlton, Richard De Schutter and Rolf Stomberg, continue to demonstrate commitment to their role bringing their international commercial experience to Board and Committee meetings, and the Board is also recommending their re-election. Following the retirements of Dudley Eustace and Peter Hooley in 2006, the Board has asked Rolf Stomberg to serve up to a further 3 years as a non-executive director. Although he has been on the Board 9 years as a non-executive director, he brings considerable experience and stability to the Board and acts in an independent and questioning manner at Board and Committee meetings. The Board therefore continues to consider him as independent.

The articles currently state the amount the Group can borrow is equal to two and a half times the Company's share capital and adjusted consolidated reserves. In order to provide for flexibility in the Group's financing arrangements, it is proposed that the determination of the limit of the borrowings be simplified by having a figure of US$6.5 billion replace the formula in the articles.
The Board considers all of the resolutions to be in the best interests of shareholders and accordingly recommends that shareholders vote in favour of all the resolutions proposed.
I look forward to meeting you at my first annual general meeting as Chairman. If you are not able to come to the meeting in person, your vote is still important to us and I would urge you to complete, sign and return the form of proxy by 2.00 pm on Tuesday 1 May 2007. You may register your proxy appointment electronically via our registrar's website.
Yours sincerely,

John Buchanan
Chairman