Dear Shareholder

Notice of Annual General Meeting and explanation of business
Introduction
I am pleased to invite you to the twenty-fifth annual general meeting of the Company, to be held at Chester House, Kennington Park, 1-3 Brixton Road, London SW9 6DE, at 11.00 a.m. on Thursday, 28 July 2011.

A formal notice convening the AGM is set out on pages 7 to 11 of this document and an explanation of each of the resolutions that the Directors will be proposing at the AGM is set out below.

Annual Report and Accounts (resolution 1)

The business of the AGM will begin with a resolution to receive and adopt the Annual Report and Accounts. Shareholders will have the opportunity to put any questions on the Annual Report and Accounts to the Board before the resolution is proposed at the AGM.

Declaration of final dividend (resolution 2)

Shareholders will be asked to approve the payment of a final dividend of 0.55 pence per Existing Ordinary Share in respect of the financial year ended 31 March 2011. If approved at the AGM, this dividend will be paid to Shareholders entered on the register of members at the close of business on 15 July 2011. Consequently, the dividend (if approved) will be paid based on the share capital of the Company prior to the Share Consolidation which will take place if resolution 12 is approved by Shareholders.

Election and re-election of Directors (resolutions 3 to 8)

As announced on 6 June 2011, I will be stepping down from the Board this year, after 8 years. Accordingly, I will be retiring with effect from the conclusion of the AGM. Our Chairman-elect, Daniel Kitchen, who was appointed to the Board on 6 June 2011, will be offering himself for election, as required by the Articles, and will, if elected, take up his appointment as Chairman. The Articles also require one-third of the current Directors to retire by rotation at every annual general meeting. However, the Company is adopting the requirements of the UK Corporate Governance Code (June 2010) (formerly the UK Combined Code) in relation to Directors’ appointments and in particular the annual re-election of all Directors. Therefore, in accordance with provision B.7.1 of the UK Corporate Governance Code, all of the other Directors will retire at the AGM and being eligible offer themselves up for re-election. In relation to all of the Non-Executive Directors seeking re-election, I can confirm that, following formal performance evaluation, their performance continues to be effective and they continue to demonstrate commitment to their roles as non-executive directors, including commitment of the necessary time for Board and committee meetings and other duties.

Biographical details of each of the Directors are set out on pages 32 to 33 of the Annual Report and Accounts.

Directors’ Remuneration Report (resolution 9)

Shareholders are asked to approve the Directors’ Remuneration Report. This contains the remuneration policy for the Board, and is set out on page 46 of the Annual Report and Accounts.

Re-appointment and remuneration of auditors (resolutions 10 and 11)

Shareholders will be asked to re-appoint PricewaterhouseCoopers LLP as the Company’s auditors until the conclusion of the next annual general meeting and to grant authority to the Directors to determine their remuneration.

Share consolidation (resolution 12)

The Company currently has a very large number of Existing Ordinary Shares. The Directors are therefore proposing to consolidate the Company’s existing share capital on the basis described below (the Share Consolidation) into New Ordinary Shares with the intention that, following such consolidation, the number of shares in issue and the likely share price will be more appropriate for a company of the Company’s size in the UK market.

The effect of the Share Consolidation will be that shareholders on the Company’s register of members at the Share Consolidation Record Date will, on the implementation of the Share Consolidation, hold:

ONE NEW ORDINARY SHARE OF £1.00 EACH FOR EVERY TEN EXISTING ORDINARY SHARES OF £0.10 EACH

and in that proportion for any other number of Existing Ordinary Shares then held.

If a shareholding is not exactly divisible by 10, the Share Consolidation will generate an entitlement to a fraction of a New Ordinary Share. Any fractional entitlements arising on the Share Consolidation will be consolidated and sold in the market for the best price reasonably obtainable on behalf of the Shareholders entitled to the fractions. In the event that the net proceeds of sale are three pounds (£3.00) or more per any entitled Shareholder, then such proceeds of sale will be paid to the relevant Shareholder. If such net proceeds amount to less than three pounds (£3.00) for any entitled Shareholder, they will be retained by the Company in accordance with the Articles and will be donated to charity. The value of any Shareholder’s fractional entitlement will not exceed the value of one New Ordinary Share.

Each Shareholder’s proportionate interest in the Company’s issued ordinary share capital will remain unchanged as a result of the Share Consolidation, except as affected by fractional entitlements. However, if you hold fewer than 10 Existing Ordinary Shares at the Share Consolidation Record Date, you will not receive any New Ordinary Shares.

Aside from the change in nominal value, each New Ordinary Share will have the same rights (including voting and dividend rights and rights on a return of capital) and will be subject to the same restrictions as each Existing Ordinary Share prior to the Share Consolidation, and as are set out in the Articles. The Share Consolidation will not affect the Company’s net assets, nor the net assets of the Company’s group.

Requests will be made to the UKLA and to the London Stock Exchange to reflect, on the Official List and the London Stock Exchange’s main market for listed securities respectively, the Share Consolidation.

New share certificates in respect of the New Ordinary Shares will be posted to those shareholders who, on the Share Consolidation Record Date, hold their Existing Ordinary Shares in certificated form. These will replace existing certificates which should then be destroyed. Pending the receipt of new certificates, transfers of New Ordinary Shares held in certificated form will be certified against the register of members of the Company.

Resolution 12 must be passed in order for the Share Consolidation to proceed.

Renewal of authority to allot securities and power to waive pre-emption rights (resolutions 13 and 14)

Resolutions dealing with the authority of the Directors to allot shares will be proposed at the AGM.

By law, directors are not permitted to allot new shares (or to grant rights over shares) unless authorised to do so by shareholders. In addition, directors require specific authority from shareholders before allotting new shares (or rights in respect of shares) for cash without first offering them to existing shareholders in proportion to their holdings.

Resolution 13 gives the Directors the necessary authority until the date of the next annual general meeting or, if earlier, 15 months after the date of passing the resolution, to allot shares, up to an aggregate nominal amount of £38,424,377 (being approximately one-third of the issued share capital of the Company as at 21 June 2011 (being the last practicable date prior to publication of this document)). In line with guidance issued by the ABI, paragraph (a)(ii) of resolution 13 would also give the Directors authority to allot equity securities (as defined in section 560(1) of the Act) in connection with a rights issue in favour of Shareholders up to an aggregate nominal amount equal to £76,848,755, as reduced by the nominal amount of any shares issued under paragraph (a)(i) of resolution 13. This amount (before any reduction) represents approximately two-thirds of the issued ordinary share capital of the Company as at 21 June 2011 (being the last practicable date prior to publication of this document). In order to ensure that the maximum amount of shares issuable under resolution 13 is in total never more than an amount equal to two-thirds of the current issued ordinary share capital, deductions will be made from (a)(i) or (a)(ii) to ensure that this remains the case, whether or not the Company issues shares under (a)(i) first or (a)(ii) first.

Resolution 14 empowers the Directors until the date of the next annual general meeting or, if earlier, 15 months after the date of passing the resolution, to allot equity securities for cash (or transfer shares which are from time to time held by the Company in treasury) otherwise than to existing Shareholders on a pro rata basis, up to an aggregate nominal amount of £5,763,656, which is equivalent to approximately 5% of the issued share capital of the Company as at 21 June 2011 (being the last practicable date prior to publication of this document). It also enables the Directors, in the case of an issue by way of rights pursuant to the authorisation granted under resolution 13, to deal with fractional entitlements and to make such exclusions or other arrangements as may be appropriate to resolve legal, regulatory or practical problems which might arise, particularly with regard to overseas Shareholders. It is intended to renew such authority and power at successive annual general meetings.

This limited authority will enable the Directors to issue shares when they believe it is in the interests of the Company to do so. It replaces the equivalent authority taken at the last AGM over one third of the Company’s share capital, which will remain in force up until the conclusion of this year’s meeting. While the Company would always consider from time to time the best manner of financing the Group, there is no present intention of issuing ordinary shares pursuant to resolution 13. If they do exercise the authorities, the Directors intend to follow ABI recommendations concerning their use (including as regards the Directors standing for re-election in certain cases). As at 21 June 2011 (being the last practicable date prior to publication of this document), the Company held no shares in treasury.

Authority for purchase of own shares (resolution 15)

Resolution 15 authorises the Company to make market purchases (within the meaning of section 693 of the Act) on the London Stock Exchange of up to an aggregate of (i) 115,273,133 ordinary shares of £0.10 each (equivalent to approximately 10% of the issued share capital of the Company as at 21 June 2011 (being the last practicable date prior to publication of this document)), or (ii) (if resolution 12 is passed) 11,527,313 ordinary shares of £1.00 each (equivalent to approximately 10% of the Company’s issued share capital following the Share Consolidation based on the issued share capital of the Company as at 21 June 2011 (being the last practicable date prior to publication of this document)), at a minimum price per ordinary share of its nominal value and a maximum price of the higher of (i) 105% of the average of the middle market quotations of the ordinary shares as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which that ordinary share is contracted to be purchased and (ii) the higher of the last independent trade and the highest current independent bid on the London Stock Exchange Official List at the time the purchase is carried out. Resolution 15 should not be taken as an indication that the Company will purchase ordinary shares at any particular price or indeed at all. The Directors will only consider making purchases if they believe that such purchases would result in an increase in earnings per share and are in the best interests of the Shareholders. Any ordinary shares purchased under the authority would either be cancelled, and the number of ordinary shares in issue would be reduced accordingly, or would be held in treasury.

The authority will expire at the conclusion of the annual general meeting of the Company in 2012 or, if earlier, the date which falls 15 months after the passing of the resolution. It is intended to renew such authority and power at successive annual general meetings. The number of shares covered by the resolution will be adjusted accordingly if the Share Consolidation is approved and implemented.

The Directors would consider holding as treasury shares any shares which the Company repurchases pursuant to the authority provided by this resolution 15. To the extent that any shares repurchased by the Company are held in treasury, earnings per share will only be increased on a temporary basis until such time as the shares are sold or transferred out of treasury. Overall, the Directors believe that the ability of the Company to hold shares in treasury will provide the Company with greater flexibility in the management of its share capital.

The Company has options outstanding over 24,984,761 shares, representing approximately 2.17 per cent. of the Company’s ordinary issued share capital as at 21 June 2011 (being the last practicable date prior to publication of this document). If the existing authority given at the 2010 AGM and the authority now being sought by resolution 15 were to be fully used, these would represent approximately 2.71% of the Company’s ordinary issued share capital at that date.

Authority to retain a notice period of fourteen clear days for general meetings (resolution 16)

Resolution 16 is a resolution to allow the Company to hold general meetings (other than annual general meetings) on 14 clear days’ notice. Before the coming into force of the Shareholders’ Rights Regulations on 3 August 2009, the Company was able to call general meetings (other than an annual general meeting) on 14 clear days’ notice without obtaining shareholder approval. Changes made to the Act by the Shareholders’ Rights Regulations increased the notice period required for general meetings of the Company to 21 days unless shareholders approve a shorter notice period (which cannot be less than 14 clear days).

Accordingly, in order to preserve the Company’s ability to call general meetings (other than an annual general meeting) on 14 clear days’ notice, resolution 16 seeks such approval from Shareholders. The flexibility offered by this resolution will be used where, taking into account the circumstances, the Directors consider this appropriate in relation to the business to be considered at the general meeting. If granted, the approval will be effective until the Company’s next annual general meeting, when it is intended that a similar resolution will be proposed.

Electronic communications

At the 2008 AGM, a resolution was proposed and passed enabling the Company to make documents available to Shareholders by electronic means, including making them available on a website, rather than sending hard copies. This reflected changes introduced by the Act. The Board intends in the future to supply all Shareholders with shareholder documents by making them available on the Company’s website except where a Shareholder has specifically requested that we continue to provide him or her with hard copies. Shareholders will be informed by email whenever a shareholder document is made available on the website.

Action to be taken

You will find enclosed a form of proxy for use at the AGM, to be held at Chester House, Kennington Park, 1-3 Brixton Road, London SW9 6DE at 11.00 a.m. on Thursday, 28 July 2011.

Whether or not you intend to be present at the AGM you are requested to complete the form of proxy and return it to the Company’s registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY. Members may also register the appointment of a proxy electronically by accessing the website www.eproxyappointment.com, which is operated by Computershare Investor Services PLC. In either case, the proxy appointment must be received by Computershare Investor Services PLC by no later than 48 hours before the time of the AGM.

Alternatively, CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual. CREST messages must be received by the issuer’s agent not later than 48 hours before the time appointed for holding the meeting. Completion and return of a form of proxy will not preclude Shareholders from attending and voting at the AGM should they choose to do so.

You will also find enclosed a form which explains the different ways in which you can choose to receive shareholder communications in future and sets out what you need to do in relation to each option. Please note that if you wish to continue to receive communications in hard copy you must return the form to the Company’s registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, by no later than 26 July 2011. If you do not return the form by this date, you will be treated as having agreed to the Company supplying you with shareholder documents by means of the Company’s website.

Recommendation

Your Board considers that the resolutions to be proposed at the AGM are in the best interests of the Company and the Shareholders as a whole, and the Board unanimously recommends that you vote in favour of the proposed resolutions, as the Directors intend to do in respect of their own beneficial shareholdings.

Yours sincerely

AJ Hales CBE
Chairman