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AVESCO GROUP PLC ANNUAL REPORT 2011 www.avesco.com


NOTICE OF MEETING NOTES


Information on the resolutions to be proposed at the Annual General Meeting


Resolution 1 – To receive the report and accounts The Directors will present the report and accounts of the Company for the year ended 30 September 2011 together with the auditors’ report on the annual report and accounts.


Resolution 2 – To approve the Directors' Remuneration Report The Directors will present for approval the Directors' Remuneration Report for the year ended 30 September 2011, which appears on pages 22 to 23 of the annual report and accounts.


Resolution 3 – To declare a final dividend Payment of the final dividend of 3.0p per ordinary share, as recommended by the Directors, is subject to the approval of shareholders.


Resolutions 4, 5 and 6 – Re-election of Directors In accordance with the Articles of Association of the Company, at each AGM one third (or the number nearest to but not greater than one third) of the Directors must retire and stand for re-election. Accordingly, Mr Andrews and Mr Murray will retire at the AGM and stand for re-election. The Articles of Association also provide that any director appointed during the year shall hold office only until the next following AGM and then shall be eligible for re- election. Mr Giniger stands for re-election on this basis. Brief biographical details of the Directors seeking re-election, are set out on pages 18 to 19. The resolutions for the re-election of each Director will be voted on separately. Mr Andrews has a contract with the Company, which is capable of termination on not less than 12 months' notice. Each of Mr Murray and Mr Giniger has a contract with the Company, which is capable of termination on not less than three months’ notice.


Resolutions 7 and 8 – Reappointment and Remuneration of Auditors Resolution 7 is a resolution to reappoint Ernst & Young LLP (who were appointed during the year) as the Company’s auditors. Resolution 8 is to authorise the Directors to determine the auditors' remuneration.


Resolution 9 - Authority to allot shares The authority given to the Directors to allot further shares in the capital of the Company requires the prior authorisation of the shareholders in General Meeting under Section 551 Companies Act 2006. Upon the passing of Resolution 9, the Directors will have authority to allot up to 8,661,960 ordinary shares of 10p each, which is approximately 33 per cent of the current issued share capital. This authority will expire on 12 March 2017. The Directors have no present intention of exercising this authority other than as may be required under the Company’s employee share schemes.


Resolution 10 - Disapplication of pre-emption rights The passing of Resolution 10 will give the Directors authority under Section 561 Companies Act 2006 to allot, for cash, up to 2,598,580 shares of 10p each (being approximately 10 per cent of the current issued share capital) without


being required first to offer such securities to existing shareholders in accordance with the statutory pre-emption rights. This authority will expire 15 months from the date of the passing of the Resolution or, if earlier, at the conclusion of the next following Annual General Meeting of the Company. This authority will also extend to any subsequent sale of equity securities which have been held in treasury. The limits, which apply to this authority, will apply as a total to all and any allotments of shares and sales of treasury shares pursuant to this authority.


The Resolution will give the Company greater flexibility when considering future opportunities. A disapplication of pre-emption rights in respect of approximately 10 per cent of the issued share capital is the same percentage as was approved at the AGM of the Company held in March 2011. A limit of 10 per cent of the issued share capital is considered appropriate having regard to the disproportionate level of costs that may be incurred by the Company in the case of a pre-emptive issue of less than 10 per cent and is consistent with market practice on AIM. However, the interests of existing shareholders will be protected as, except in the case of an issue to shareholders (or sale of treasury shares) in proportion to shareholdings or the allotment of shares under (or transfer of treasury shares pursuant to) the Company's employee share schemes, the proportionate interests of shareholders cannot, without their consent, be reduced by more than 10 per cent by the issue for cash of new shares or sale of treasury shares. Other than as may be required under the Company’s employee share schemes, the Directors have no present intention to allot any part of the unissued share capital of the Company or, without the prior approval of the Company in general meeting, to make any issue which would effectively alter the control of the Company or the nature of its business.


Resolution 11 - Authority to purchase shares The Articles of Association of the Company contain provision, with the authority of the shareholders, for the Company to make market purchases of its own shares. It is proposed that the Company be authorised to purchase up to approximately 10 per cent of its issued share capital subject to the limitations set out in Resolution 11. It is the intention of the Directors only to exercise the authority if satisfied that to do so would result in an increase in earnings per share and would be in the best interests of the shareholders generally. The Directors have no present intention to make any such purchase.


Following the introduction of the Company (Acquisition of Own Shares) (Treasury Shares) Regulations 2003, certain listed companies can now, subject to certain restrictions, hold up to 10 per cent. of their own shares acquired by way of market purchase in treasury, rather than cancelling them. The Company would consider holding any of its own shares which it purchases pursuant to the authority conferred by this Resolution as treasury shares. This would allow the Company to sell shares out of treasury, providing the Company with the ability to replenish its distributable reserves. No dividends will be paid on any shares held in treasury and no voting rights will attach to such shares. It would also be possible for the Company to transfer shares out of treasury pursuant to an employee share scheme.


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