MACFARLANE GROUP PLC — AGM Information 2012

Mar 30, 2012

How to get to the Thistle Hotel Glasgow

Road: From South M8, junction 17, 3 sets of lights, 1st left, 2nd straight over, 3rd right. From West M8, junction 17, right fork, 5 sets of lights, 1st right, 2nd right, 3rd right, 4th left, 5th right. 250 car parking spaces are available for a charge.

Rail: Take trains to either Glasgow Central or Queen Street Station. Both stations are only 0.5 miles from the hotel.

Air: Glasgow Airport is 9 miles away.

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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to what action you should take, you are recommended to seek your own financial advice from your stockbroker or other independent adviser authorised under the Financial Services and Markets Act 2000.

If you have sold or transferred all of your shares in Macfarlane Group PLC, please forward this document, together with the accompanying documents, as soon as possible either to the purchaser or transferee or to the person who arranged the sale or transfer so they can pass these documents to the person who now holds the shares.

NOTICE IS HEREBY GIVEN THAT the one hundred and thirteenth ANNUAL GENERAL MEETING of the members of MACFARLANE GROUP PLC (the "Company") will be held at the Thistle Hotel Glasgow, 36 Cambridge Street, Glasgow G2 3HN on Tuesday 8 May 2012 at 12 noon for the purpose of transacting the following business:

Ordinary Business

• 1. To receive, consider and adopt the Directors' Report and the Company's Annual Accounts for the financial year ended 31 December 2011;
• 1. To approve the Directors' Remuneration Report for the financial year ended 31 December 2011;
• 1. To declare a dividend of 1.05p per share payable on 8 June 2012;
• 1. To re-elect P.D.Atkinson who is retiring by rotation as a Director of the Company;
• 1. To re-elect J.Love who is retiring by rotation as a Director of the Company;
• 1. To appoint KPMG Audit PLC as auditors of the Company, to hold office from the conclusion of the Annual General Meeting until the conclusion of the next Annual General Meeting of the Company at which accounts are laid before the members and to authorise the Directors to determine their remuneration.

Special Business

• To consider and, if thought fit, pass resolution 7 which will be proposed as a special resolution:
• 1. That the Directors be and are hereby empowered pursuant to section 570 of the Companies Act 2006 (the "Act") to allot equity securities (as defined in section 560 of the Act) pursuant to the authority given in accordance with section 551 of the Act, as if section 561 of the Act did not apply to any such allotment, up to a maximum nominal amount of £1,437,738 (representing 5% of the Company's issued ordinary share capital as at 23 March 2012) and shall expire at the conclusion of the Annual General Meeting of the Company in 2013, or, if earlier, on the date falling 15 months after the date of the passing of this resolution, except that the Company may before such expiry make offers or agreements which would or might require equity securities to be allotted after such expiry and notwithstanding such expiry the Directors may allot equity securities in pursuance of such offers or agreements.
• To transact such other ordinary business as may be properly transacted at the Annual General Meeting.

By Order of the Board

Andrew Cotton

21 Newton Place Glasgow G3 7PY

Secretary 30 March 2012

Notice of Annual General Meeting

Macfarlane Group PLC (Company No: SC4221)

The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

• 1. A member entitled to attend and vote at the meeting is entitled to appoint another person as his proxy to exercise all or any of his rights to attend, speak and to vote at the meeting. A proxy need not be a member of the Company. A member may appoint more than one proxy provided that each proxy is appointed to exercise the rights attached to a different share or shares held by him.
• 1. A shareholder attending the meeting has the right to ask questions relating to the business being dealt with at the meeting in accordance with section 319A of the Companies Act 2006 (the "Act"). In certain circumstances prescribed by section 319 of the Act, the Company need not answer a question.
• 1. Information regarding the meeting, including the information required by section 311A of the Act, is available from www.macfarlanegroup.net.
• 1. A form of proxy is enclosed with this notice. (Please note that this is different to the alternative method of submitting proxies using CREST which is described in Note 5 below). To be effective the instrument appointing a proxy must be completed and deposited, together with the authority (if any) under which it is executed or a notarially certified copy of such authority, at the office of the Company's registrars, Equiniti Limited, Aspect House, Spencer Road, Lancing, BN99 6ZR (the "Company's Registrars") not later than forty eight hours (disregarding any day that is not a working day) before the time appointed for holding the meeting, being 12 noon on Friday 4 May 2012. Completion and return of the form of proxy does not preclude a member from attending and voting in person at the meeting. To change your proxy instructions simply submit a new proxy appointment using the methods set out above. A replacement proxy form may be obtained by contacting the Company. To revoke your proxy instructions, please contact the Company's Registrars by no later than 12 noon on Friday 4 May 2012. However, if you have appointed a proxy and attend and vote at the meeting in person, your proxy appointment will automatically be terminated when you exercise your vote. If you are not a member of the Company but you have been nominated by a member of the Company to enjoy information rights, you do not have a right to appoint any proxies under the procedures set out in this notice. Please read note 6 "Nominated persons" below.
• 1. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so for the meeting and any adjournment(s) of it by using the procedures described in the CREST Manual (available from https://www.euroclear.com/CREST). CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.

• If you are a person who has been nominated under section 146 of the Act to enjoy information rights, you may have a right under an agreement between you and the member of the Company who has nominated you to have information rights ("Relevant Member") to be appointed or to have someone else appointed as a proxy for the meeting. If you either do not have such a right or if you have such a right but do not wish to exercise it, you may have a right under an agreement between you and the Relevant Member to give instructions to the Relevant Member as to the exercise of voting rights. Your main point of contact in terms of your investment in the Company remains the Relevant Member (or, perhaps, your custodian or broker) and you should continue to contact them (and not the Company) regarding any changes or queries relating to your personal details and your interest in the Company (including any administrative matters). The only exception to this is where the Company expressly requests a response from you.

• In accordance with Regulation 41 of the Uncertificated Securities Regulations 2001, only those members entered on the Company's register of members no later than 6.00pm on Friday 4 May 2012, or in the case of an adjournment, as at 48 hours (disregarding any day that is not a working day) prior to the time of the adjourned meeting shall be entitled to attend and vote at the meeting.

• A corporation which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its powers as a member provided that no more than one corporate representative exercises powers over the same share.

• As at 6pm on 23 March 2012 the Company's issued share capital comprised 115,019,000 Ordinary Shares of 25p each. Each Ordinary Share carries the right to one vote at a general meeting of the Company and, therefore, the total number of voting rights in the Company as at 6pm on 23 March 2012 is 115,019,000.

In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a CREST Proxy Instruction) must be properly authenticated in accordance with Euroclear UK & Ireland Limited's (EUI) specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the issuer's agent (ID: RA19) not later than forty eight hours (disregarding any day that is not a working day) before the time appointed for holding the meeting, being no later than 12 noon on Friday 4 May 2012. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.

CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

• 1. Any member who has a general query about the meeting should contact the Company Secretary by post at the Company's Registered Office. No other method of communication will be accepted. You may not use any electronic address provided in this notice of Annual General Meeting or any related documents (including the form of proxy) to communicate with the Company for any purposes other than those expressly stated.
• 1. Under Section 527 of the Act members meeting the threshold requirements set out in that section have the right to require the Company to publish on a website a statement setting out any matter relating to: (i) the audit of the Company's accounts (including the auditors' report and the conduct of the audit) that are to be laid before the AGM; or (ii) any circumstance connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance with Section 437 of the Act. The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with Sections 527 or 528 of the Act. Where the Company is required to place a statement on a website under Section 527 of the Act, it must forward the statement to the Company's auditors not later than the time when it makes the statement available on the website. The business which may be dealt with at the AGM includes any statement that the Company has been required under Section 527 of the Act to publish on a website. Any request pursuant to section 527 must be received by the Company at least one week before the meeting to which it relates.
• 1. Copies of each director's service contract and non-executive director's terms of appointment with the Company, or with any of its subsidiary undertakings are available for inspection at the registered office of the Company during usual business hours until the time of the meeting and will be available for inspection at the Thistle Hotel Glasgow, 36 Cambridge Street, Glasgow G2 3HN for at least 15 minutes prior to and during the meeting.

Resolution 1 is a standard resolution. Company law requires that the statutory accounts are laid before the Company in general meeting. The Accounts are accompanied by the Directors' Report, the Directors' Remuneration Report and the report of the independent auditor.

Resolution 2 requests approval for the Directors' Remuneration Report which is included in the Annual Report. This is an advisory vote and votes cast against approval of the Directors' Remuneration Report will not invalidate the Annual Report and Accounts as a whole.

Resolution 3 will, if passed, confirm approval of the payment of a final dividend. The Directors have proposed a final dividend of 1.05p per share, to be paid on 8 June 2012 to shareholders on the register on 11 May 2012.

Resolutions 4 and 5 seek approval for the re-appointment of Directors in accordance with the Company's Articles of Association and the UK Corporate Governance Code as it applies to companies outside the FTSE350. The biographies of the Directors seeking re-election which appear in the Annual Accounts are repeated here for easy reference:

Peter Atkinson, Chief Executive joined Macfarlane Group as Chief Executive on 6 October 2003. He has a strong sales and marketing background through his career at Procter & Gamble and S.C. Johnson. Peter also has significant general management experience gained during his time at GKN PLC and its joint venture partners where he worked from 1988 to 2001 in a number of senior executive roles in their business-tobusiness operations. He has a successful track record of both business turnarounds and business development with extensive exposure to international business, having worked in the UK, Continental Europe and the USA. From 2000 to 2003, he was responsible for the US automotive and materials handling businesses of Brambles Industries PLC. Peter was a non-executive director of Speedy Hire plc until July 2011.

John Love, Finance Director is a member of The Institute of Chartered Accountants of Scotland. John has been with the Group for sixteen years and was appointed Finance Director on 12 July 1999. He was with Deloitte and its predecessor firms for sixteen years before joining Macfarlane Group in 1996.

The Board believes the executive Directors have led the effective implementation of the Company's strategy and has confidence in recommending the re-election of these directors by shareholders.

Resolution 6 seeks shareholder approval to appoint KPMG Audit PLC as auditors of the Company. As set out in the Annual Report a competitive audit tender process was undertaken in 2011. The result is a recommendation that KPMG Audit PLC should be appointed as auditor to the Company in place of Deloitte LLP with effect from the end of their term of office at the conclusion of this year's AGM. Consequently Deloitte LLP have confirmed their intention to resign at the conclusion of this year's AGM and, as required by section 519(3) of the Companies Act 2006, have deposited with the Company a statement of the circumstances connected with their resignation. A copy of this statement is attached to this notice and is being sent to shareholders' for information only, as required by section 520(2) of the Companies Act 2006.

Resolution 7 is proposed as a special resolution, requiring a majority of 75% of those voting to be in favour. If the directors wish to allot equity securities they are required to offer those equity securities first to current shareholders in proportion to their existing holdings. This resolution requests authority for disapplication of pre-emption rights up to a nominal amount of £1,437,738 being 5% of the Company's issued share capital at 23 March 2012. This amount is in line with institutional shareholders recommendations. The authority, if granted, would supersede a similar resolution passed at last year's AGM.

Explanation of the resolutions to be proposed at the AGM