ON THE BEACH GROUP PLC — AGM Information 2015

Sep 30, 2015

THIS DOCUMENT IS IMPORTANT AND REQUIRESYOUR 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 On The Beach 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.

ON THE BEACH GROUP PLC

Notice of Annual General Meeting

Notice of the Annual General Meeting of the Company to be held at 11.00 a.m. on 5 February 2016 at Park Square, Bird Hall Lane, Cheadle Heath, Cheshire SK3 0XN as set out at pages 3 to 8 of this circular.

Whether or not you propose to attend the Annual General Meeting, please complete and submit a proxy form in accordance with the instructions printed on the enclosed form. The proxy form must be received by 11.00 a.m. on 3 February 2016.

LETTER FROM THE CHAIRMAN

Dear Shareholder

Annual General Meeting

The Annual General Meeting is to take place at 11.00 a.m. on 5 February 2016 at Park Square, Bird Hall Lane, Cheadle Heath, Cheshire SK3 0XN. The formal notice of the Annual General Meeting is set out on pages 3 to 8 of this document and includes an explanation of the resolutions to be proposed at the Annual General Meeting.

Action to be taken

Enclosed with this circular is a Form of Proxy for the resolutions to be proposed at the Annual General Meeting. Please sign and return the Form of Proxy in accordance with the directions on it as soon as possible and, in any event, so that it is received not less than 48 hours before the time appointed for the Annual General Meeting (by 11.00 a.m. on 3 February 2016).

Completion and return of the Form of Proxy will not prevent you from attending the Annual General Meeting and voting in person should you wish to do so. If you are planning to attend the Annual General Meeting, please bring your attendance card with you. The card is attached to the enclosed Form of Proxy.

The results of the Annual General Meeting will be announced through a Regulatory Information Service and on the Company website, www.onthebeachgroupplc.com as soon as possible once known.

Recommendation

The directors of the Company consider that all the proposals to be considered at the Annual General Meeting are in the best interests of the Company and its members as a whole and are most likely to promote the success of the Company for the benefit of its members as a whole. The directors unanimously recommend that you vote in favour of all the proposed resolutions as they intend to do in respect of their own beneficial holdings.

I look forward to seeing you.

Yours sincerely

Richard Segal Chairman

Park Square, Bird Hall Lane, Cheadle SK3 0XN

On the Beach Group plc, a company registered in England and Wales with company registration number 09736592

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of On The Beach Group plc ("Company") will be held at 11.00 a.m. on 5 February 2016 at Park Square, Bird Hall Lane, Cheadle Heath, Cheshire, SK3 0XN.

You will be asked to consider and vote on the resolutions below. Resolutions 1 to 12 will be proposed as ordinary resolutions and resolutions 13 and 14 will be proposed as special resolutions.

RESOLUTIONS

ORDINARY RESOLUTIONS

• 1. To receive the annual accounts of the Company for the year ended 30 September 2015 together with the directors' and auditors' reports thereon.
• 1. To approve the directors' remuneration policy for the year ended 30 September 2015.
• 1. To approve the directors' remuneration report for the year ended 30 September 2015.
• 1. To reappoint Simon Cooper as a director of the Company.
• 1. To reappoint Richard Segal as a director of the Company.
• 1. To reappoint Gwendoline Parry as a director of the Company.
• 1. To reappoint Lee Ginsberg as a director of the Company.
• 1. To reappoint David Kelly as a director of the Company.
• 1. To reappoint KPMG LLP as auditors to the Company for the period from the conclusion of this meeting to the conclusion of the next general meeting of the Company at which accounts are laid.
• 1. To authorise the directors to determine the auditors' remuneration.
• 1. That, the directors be and are hereby generally and unconditionally authorised, in accordance with section 551 of the Companies Act 2006, to exercise all powers of the Company to allot shares in the Company and to grant rights to subscribe for or convert any security into shares in the Company:
• (a) up to an aggregate nominal value of £434,782.55; and
• (b) up to a further aggregate nominal amount £434,782.55 only for the purpose of a rights issue:
  • (i) to ordinary shareholders in proportion (as near as may be practicable) to their existing holdings;
  • (ii) to holders of other equity securities as required by the rights of those securities or as the directors otherwise consider necessary; and
  • (iii) is subject to such exclusions or other arrangements as they deem necessary or expedient in relation to treasury shares, fractional entitlements, record dates, legal or practical problems in or under the laws of any territory or the requirements of any regulatory body or stock exchange.

This authority shall expire at the end of the next AGM of the Company to be held in 2017 or, if earlier at the close of business on 5 February 2017 (unless previously revoked or varied by the Company in general meeting) save that under such authority the Company may, before such expiry, make an offer or agreement which would or might require the shares to be allotted or rights to subscribe for or convert any security into shares to be granted after such expiry and the directors may allot shares or grant rights to subscribe for or convert any security into shares in pursuant of such an offer or agreement as if the relevant authority conferred hereby had not expired.

1. That, subject to no prior objection being received by any shareholder or shareholders holding more than 5% or more of the issued share capital of the Company, to adopt the reduced disclosure framework permitted by paragraph 1.12 of FRS 102:The Financial Reporting Standard applicable in the UK and the Republic of Ireland (September 2015) in its individual financial statements. This exempts the Company from disclosing certain information on the grounds that equivalent information is disclosed within the consolidated financial statements of the Group. If any shareholder wishes to object to the application of these disclosure exemptions they must do so in writing or at the AGM, as set out in the explanatory notes to this resolution.

SPECIAL RESOLUTIONS

• 1. That, subject to resolution 11 being passed, the directors be and are hereby generally and unconditionally authorised to allot equity securities (as defined by the Companies Act 2006), for cash pursuant to the authority conferred on the directors by resolution 11 or by way of sale of treasury shares, as if section 561(1) of the Companies Act 2006 did not apply, provided that this power shall be limited to:
• (a) the allotment of equity securities in connection with an offer or issue of equity securities to:
  • (i) ordinary shareholders in proportion (as nearly as may be practicable) to their existing holdings;
  • (ii) holders of other equity securities as required by the rights of those securities or as the directors otherwise consider necessary;

but subject to such exclusions or other arrangements as the directors may consider necessary or expedient to deal with fractional entitlements or legal or practical problems under the laws of any territory or the regulations or requirements of any regulatory authority or any stock exchange in any territory; and

(b) the allotment, otherwise than pursuant to sub-paragraph (a) above, of equity securities up to an aggregate nominal amount of £65,217.38.

This authority shall expire at the end of the next AGM of the Company to be held in 2017 or, if earlier at the close of business on 5 February 2017 (unless previously revoked or varied by the Company in general meeting) save that under such authority the Company may, before such expiry, make an offer or agreement which would or might require the shares to be allotted or rights to subscribe for or convert any security into shares to be granted after such expiry and the directors may allot shares or grant rights to subscribe for or convert any security into shares in pursuant of such an offer or agreement as if the relevant authority conferred hereby had not expired.

• 1. That, the Company be and is hereby generally and unconditionally authorised to make market purchases (as defined in section 693(4) of the Companies Act 2006) of its own shares up to an aggregate number of 13,043,476 ordinary shares (representing approximately 10% of the Company's issued ordinary share capital) subject to:
• (a) the minimum price per ordinary share, excluding expenses, being £0.01; and
• (b) the maximum price per ordinary share, excluding expenses, being the higher of:
  • (i) 5% above the average of the middle market quotations as derived from the London Stock Exchange Daily Official List for an ordinary share over five business days before the purchase; and
  • (ii) the higher of the price of the last independent trade and the highest current independent bid on the market where the purchase is carried out.

This authority shall expire at the end of the next AGM of the Company to be held in 2017 or, if earlier at the close of business on 5 February 2017 (unless previously revoked or varied by the Company in general meeting) save that the Company shall be entitled, before the expiry of this authority, to enter into any contract for the purchase of its own shares which might be executed and completed wholly or partly after such expiry and to make purchases of its own shares in pursuant of any such contract or contracts.

By order of the Board

KirsteenVickerstaff Company Secretary

NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING

• 1. A shareholder is entitled to appoint another person as that shareholder's proxy to exercise all or any of that shareholder's rights to attend and to speak and vote at the Annual General Meeting. A shareholder may appoint more than one proxy in relation to the Annual General Meeting, provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder. A proxy does not need to be a shareholder of the Company. If you are appointing more than one proxy you will need to state clearly on each form of proxy the number of shares in relation to which the proxy is appointed, and ensure that, taken together, the numbers of shares stated on the forms of proxy do not exceed your holding. A proxy is legally required to vote in accordance with any voting instructions given by his appointing shareholder. A shareholder may not appoint more than one proxy to exercise rights attached to any one share. Where a shareholder appoints more than one proxy, on a vote on a show of hands the proxies shall only be entitled to one vote collectively.
• 1. A personalised form of proxy for use in connection with the Annual General Meeting is enclosed with the document of which this notice forms part. If you do not have a personalised form of proxy and believe that you should, please contact the Company's registrars, Capita Asset Services, PXS1 34 Beckenham Road, Beckenham, Kent BR3 4ZF. Completion and return of a form of proxy will not prevent a shareholder from attending and voting at the Annual General Meeting. Addresses (including electronic addresses) in this document are included strictly for the purposes specified and not for any other purpose.
• 1. To appoint a proxy or proxies shareholders must complete: (a) a form of proxy,sign it and return it, together with the power of attorney or any other authority under which it is signed, or a notarially certified copy of such authority, to the Company's registrars Capita Asset Services, PXS1 34 Beckenham Road, Beckenham, Kent BR3 4ZF; or (b) a CREST Proxy Instruction (see note 4 below), in each case so that it is received no later than 11.00 a.m. on 3 February 2016.
• 1. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the Annual General Meeting and any adjournment(s) of the meeting by using the procedures described in the CREST Manual (available via http://www.euroclear.com/CREST). CREST Personal Members or other CREST sponsored members and those CREST members who have appointed any 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.
• 1. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & Ireland Limited's specifications and must contain the information required for such instructions, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by Capita Asset Services (ID RA 10) by the latest time for receipt of proxy appointments set out in paragraph 3 above. 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 Company's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
• 1. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & Ireland Limited 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 any voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as is 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. 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. Only those shareholders included in the register of members of the Company at 6.00 p.m. on 3 February 2016 or, if the meeting is adjourned, in the register of members two working days before the time for holding any adjourned meeting, will be entitled to attend and to vote at the Annual General Meeting in respect of the number of shares registered in their names at that time. Changes to entries on the share register after the relevant deadline will be disregarded in determining the rights of any person to attend or vote at the Annual General Meeting.

EXPLANATORY NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING

The following notes provide an explanation as to why the resolutions set out in the notice are to be put to shareholders.

Resolutions 1 to 12 are ordinary resolutions. These resolutions will be passed if more than 50% of the votes cast for or against are in favour.

Resolution 1 – Laying of accounts

The directors are required by the Companies Act 2006 to present to the shareholders of the Company at a general meeting the reports of the directors and auditors, and the audited accounts of the Company, for the year ended 30 September 2015. The reports of the directors and the audited accounts have been approved by the directors, and the report of the auditors has been approved by the auditors, and a copy of each of these documents may be found in the annual accounts and reports.

Resolution 2 – Directors' remuneration policy

This resolution seeks shareholders' approval for the directors' remuneration policy, on pages 33 to 39 (inclusive) of the director's remuneration report for the year ended 30 September 2015.

The directors' remuneration policy sets out the Company's forward looking policy on directors' remuneration (including the approach on exit payments for directors), and is subject to a binding shareholder vote by ordinary resolution, as required by law. The Company is required to put the directors' remuneration policy to a binding vote of the shareholders: (i) at least once every three years; or (ii) on a more frequent basis if changes to it are proposed.

Resolution 2 is proposed as an ordinary resolution. If the directors' remuneration policy is approved it will become effective from the close of the Meeting, following which all payments by the Company to directors and former directors will be made in accordance with it, unless a payment has been approved by a resolution of the shareholders at a general meeting. If the Company wishes to amend the directors' remuneration policy it first will need to obtain the approval of shareholders for that revised policy. If the directors' remuneration policy is not approved by shareholders, the Company will seek shareholder approval for a revised policy as soon as practicable.

Resolution 3 – Directors' remuneration report

This resolution seeks shareholders' approval for the directors' remuneration report (excluding the director's remuneration policy) for the year ended 30 September 2015.

Resolution 3 is proposed as an ordinary resolution. The vote is advisory in nature.

Resolutions 4 to 8 – Reappointment of directors of the Company

The Company's articles of association require that at the first annual general meeting, all directors must retire from office, although they may offer themselves for reappointment. Simon Cooper, Richard Segal,Gwendoline Parry, Lee Ginsberg and David Kelly are retiring and seeking reappointment. Information in relation to the directors is shown on pages 21-22 of the annual report and accounts.

Resolution 9 – Auditors' appointment

The Companies Act 2006 requires that auditors be appointed at each general meeting at which accounts are laid, to hold office until the next such meeting. The current auditors of the Company, KPMG LLP are seeking reappointment at the Annual General Meeting. This resolution seeks shareholder approval for the reappointment of KPMG LLP as auditors of the Company.

Resolution 10 – Auditors' remuneration

This resolution gives the directors the authority to determine the remuneration of the auditors for the audit work to be carried out by them in the next financial year.

Resolution 11 – Authority of the directors to allot shares

This resolution, if passed, gives the directors authority to (i) allot shares up to a nominal value up to £434,782.55, and (ii) allot shares up to a further nominal value of £434,782.55 where the allotment is in connection with an offer by way of rights issue. Each amount is equal to approximately one-third of the Company's issued ordinary share capital as at 8 January 2016.

The directors are seeking this resolution to ensure that the Company has maximum flexibility in managing the Company's resources. The directors have no present intention to exercise this authority and would use it only if satisfied at the time that to do so would be in the interests of the Company.

The terms of this resolution comply with The Investment Association Share Capital Management Guidelines issued in July 2014.

The authority granted by this resolution will expire on 5 February 2017 or, if earlier, the date of the next annual general meeting of the Company.

Resolution 12 – Adoption of reduced disclosure framework in FRS 102

The Company proposes to adopt the reduced disclosure framework permitted by paragraph 1.12 of FRS 102: The Financial Reporting Standard applicable in the UK and the Republic of Ireland (September 2015) ("FRS 102") in its individual financial statements. This exempts the Company from disclosing certain information detailed elsewhere in FRS 102 on the grounds that equivalent information is disclosed within the consolidated financial statements of the Group.

The Company may take advantage of the disclosure exemptions in paragraph 1.12 of FRS 102, provided it satisfies the requirements of paragraph 1.11 of FRS 102, which includes the obligation to ensure its shareholders have been notified in writing about, and do not object to, the use of the disclosure exemptions. Objections to the use of the disclosure exemptions may be served on the Company by a shareholder or shareholders holding in aggregate 5% or more of the total allotted shares in the Company. If any shareholder wishes to object to the application of these disclosure exemptions they must do so:

• (a) in person or by proxy at the AGM on 5 February 2016; and/or
• (b) in writing to the Company's head office address (marked for the attention of the Company Secretary), provided this is received by the Company by 4 February 2016; and/or
• (c) by email to the Company Secretary (kirsteen.vickerstaff@onthebeach.co.uk) by 10.00 a.m. on 5 February 2016.

Further information about FRS 102 can be found on the FRC's website at https://www.frc.org.uk/ Our-Work/Codes-Standards/Corporate-reporting/Standards-in-Issue.aspx, or the Company Secretary would be happy to provide further information (please contact: kirsteen.vickerstaff@onthebeach.co.uk).

Resolutions 13 and 14 are special resolutions. These resolutions will be passed if not less than 75% of the votes cast for and against are in favour.

Resolution 13 – Disapplication of statutory pre-emption rights

This resolution, if passed, gives the directors authority to allot ordinary shares or sell treasury shares for cash without first offering them to existing shareholders in proportion to their existing shareholdings and is limited to allotments or sales in connection with rights issues or other pre-emptive offers or otherwise up to a maximum nominal value of £65,217.38 (representing 5% of the Company's existing issued share capital as at 8 January 2016).

The directors are seeking this resolution to ensure that the Company has maximum flexibility in managing the Company's resources. The directors have no present intention to exercise this authority and would use it only if satisfied at the time that to do so would be in the interests of the Company.

The directors confirm their intention to follow the provisions of the Pre-Emption Group's Statement of Principle regarding cumulative usage of authorities within a rolling three-year period, where the Principles provide that usage in excess of 7.5% should not take place without prior consultation with shareholders.

The authority granted by this resolution will expire on 5 February 2017 or, if earlier, the date of the next annual general meeting of the Company.

Resolution 14 – Purchase of own shares

This resolution, if passed, gives the Company authority to purchase its own ordinary shares. In accordance with The Investment Association Share Capital Management Guidelines issued in July 2014, it is proposed as a special resolution.

Purchases would only be made after careful consideration, where the directors believe that an increase in earnings or net assets per share would result and where purchases were, in the opinion of the directors, in the interests of the Company.The directors have no current intention to use this authority but consider it prudent to obtain authority so as to preserve flexibility.

The Company may either cancel any shares it purchases under this authority or transfer them into treasury (and subsequently sell or transfer them out of treasury or cancel them).

The authority sought covers up to a maximum of 13,043,476 shares, representing approximately 10% of the issued share capital as at 8 January 2016.

The authority granted by this resolution will expire on 5 February 2017 or, if earlier, the date of the next annual general meeting of the Company.