Report of the directors.

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Appointment and replacement of directors /

With regard to the appointment of directors the Company is governed by its Articles of Association, the Corporate Governance Code, the Companies Acts and related legislation.

The Company is required to have no fewer than two and no more than 16 directors. Directors may be appointed by the Company by ordinary resolution or by a resolution of the Board. A director appointed by the Board holds office until the following annual general meeting but is then eligible for re-appointment.

The Articles of Association provide that, at every annual general meeting, any director who held office at the time of the two preceding annual general meetings and who did not retire at either of them must retire and may offer himself for re-election. In addition, any director who has been in office, other than as a director holding an executive position, for a continuous period of nine years or more at the date of the meeting must also retire and may offer himself for re-election. At the annual general meeting at which a director retires, shareholders can pass an ordinary resolution to re-elect the director or to elect some other eligible person in his place.

The only people who can be elected as directors at an annual general meeting are: (i) directors retiring at the meeting; (ii) anyone recommended by the directors; and (iii) anyone nominated by a shareholder. The nominating shareholder must be entitled to vote at the meeting. He must deliver to the Company a letter stating that he intends to nominate another person for election and the written consent of that person to be elected. These documents must be delivered to the Company not less than seven and not more than 42 days before the day of the meeting.

The Company may by special resolution remove any director before the expiration of his term of office. A director automatically stops being a director if: (i) he resigns; (ii) he offers to resign and the Company accepts his offer; (iii) all of the other directors (being at least three in number) pass a resolution or sign a written notice requiring his resignation; (iv) he is or has been suffering from mental or physical ill health and the directors pass a resolution removing him from office; (v) he is absent without the permission of the Board for a continuous period of six months and the directors pass a resolution removing him from office; (vi) he becomes bankrupt or makes a composition with his creditors generally; (vii) he is prohibited by law from being a director; or (viii) he ceases to be a director under legislation or is removed pursuant to the Articles.

Significant agreements /

The following significant agreements contain provisions entitling the counterparties to, or the holders of notes or bonds issued pursuant to, those agreements to exercise termination or other rights in the event of a change of control of the Company:

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£450,000,000 multicurrency credit facility agreement dated 26 July 2010 between, amongst others, the Company, The Royal Bank of Scotland plc (as agent) and the financial institutions named therein as banks (the “Facility”)

On a change of control of the Company, unless the Majority Banks (as defined therein) otherwise agree, all loans, letters of credit and guarantees, together with all accrued interest and other sums payable under the agreement, must be prepaid and, upon such prepayment being made, the total commitments of the banks under the Facility will be cancelled and reduced to zero

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£60,000,000 facility agreement dated 20 June 2011 between a wholly owned subsidiary of the Company and The Royal Bank of Scotland group, guaranteed by the Company (the “RBS Facility”)

On a change of control of the Company the lender has the ability to require prepayment of any amount outstanding under the RBS Facility, whereupon the Facility will be cancelled

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Note purchase agreements dated 28 July 2005, 17 September 2007 (as amended) and 17 December 2009 (the “Note Purchase Agreements”) pursuant to which notes amounting in aggregate to US$342,000,000 (the “2005 Notes”), US$125,000,000 (the “2007 Notes”) and US$183,000,000 and £25,000,000 (the “2009 Notes”, together with the 2005 Notes and the 2007 Notes, the “Notes”) respectively were issued by the Company

Each holder of Notes has an option, on a change of control of the Company, to require the Company to prepay the entire principal amount of the Notes held by that holder together with interest accrued thereon and the Make-Whole Amount (as defined in each of the Note Purchase Agreements)

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Pursuant to a subscription agreement dated 18 March 2010 between, amongst others, Aegis Group Capital (Jersey) Limited as issuer (the “Issuer”), the Company as guarantor and the financial institutions named therein as managers and pursuant to a trust deed dated 20 April 2010 between the Issuer as issuer, the Company as guarantor and Citicorp Trustee Company Limited as trustee, the Issuer issued £190,600,000 2.50% guaranteed convertible bonds due 2015 (the “Convertible Bonds”)

On a change of control of the Company the holder of each Convertible Bond will have the right to require the Issuer to redeem the Convertible Bond at its principal amount together with accrued unpaid interest.

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