Director Shareholding

STOCK EXCHANGE ANNOUNCEMENT

The Company announces the purchase on 7th May 2004 of 50,433 ordinary shares in
the Company by Computershare Trustees Limited (the Trustee) at a price of 230.0
pence per share for the purpose of satisfying the purchase of ordinary shares
by eligible employees (including executive directors) under the Rolls-Royce
SharePurchase Plan (the Plan) for the current month. The Plan has been approved
by the Inland Revenue as a share incentive plan under Schedule 8 to the Finance
Act 2000.

Following the transaction the Trustee will hold 4,806,737 ordinary shares, all
of which are held on behalf of eligible employees pursuant to the terms of the
Plan.

The number of ordinary shares purchased on this date on behalf of the executive
directors were as follows:

Sir John Rose    55

C H Green        55

A B Shilston     55

Company notified 10 May 2004

Dated 10 May 2004

For further information please contact John Warren, Deputy Company Secretary,
Rolls-Royce Group plc, tel. no. 01332 245878