THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own personal financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 (the ''FSMA'') if you are resident in the United Kingdom or, if you are not, from another appropriately authorised independent financial adviser in your own jurisdiction.

This document, which comprises (i) a circular prepared in compliance with the Listing Rules and (ii) a prospectus relating to Severfield-Rowen, prepared in accordance with the Prospectus Rules of the UK Listing Authority (made under section 73A of FSMA) has been approved by the Financial Services Authority (the ''FSA'') in accordance with Part VI of FSMA. A copy of this document has been filed with the FSA in accordance with Prospectus Rule 3.2.1. This document, together with the documents incorporated into it by reference (as set out in Part X of this document) will be made available to the public in accordance with Prospectus Rule 3.2.1 by the same being made available, free of charge, at www.sfrplc.com, at the Company's registered office and at the offices of Ashurst LLP, Broadwalk House, 5 Appold Street, London EC2A 2HA.

Subject to the restrictions set out below, if you sell or have sold or otherwise transfer or transferred all of your Existing Ordinary Shares (other than ex-rights) held in certificated form before 19 March 2013 (the ''Ex-Rights Date'') please send this document, together with any Provisional Allotment Letter (duly renounced) but not the personalised Form of Proxy, if and when received, at once to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for delivery to the purchaser or transferee except that such documents should not be forwarded or sent into any jurisdiction where to do so might constitute a violation of local securities laws or regulations, including but not limited, subject to certain exceptions, to the United States or any of the Excluded Territories. If you sell or have sold or otherwise transfer or transferred only part of your holding of Existing Ordinary Shares (other than ex-rights) held in certificated form before the Ex-Rights Date, you should refer to the instructions regarding split applications in Part III of this document and in the Provisional Allotment Letter, if and when received. If you sell or have sold or otherwise transfer or transferred all or some of your Existing Ordinary Shares (other than ex-rights) held in uncertificated form before the Ex-Rights Date, a claim transaction will automatically be generated by Euroclear UK which, on settlement, will transfer the appropriate number of Nil Paid Rights to the purchaser or transferee.

YOU SHOULD READ THIS PROSPECTUS AND ALL DOCUMENTS INCORPORATED INTO IT BY REFERENCE IN THEIR ENTIRETY. YOUR ATTENTION IS SPECIFICALLY DRAWN TO THE DISCUSSION OF CERTAIN RISKS AND OTHER FACTORS THAT SHOULD BE CONSIDERED WHEN DECIDING WHETHER TO PARTICIPATE IN THE RIGHTS ISSUE, AS SET OUT IN THE SECTION OF THIS DOCUMENT ENTITLED ''RISK FACTORS''. YOUR ATTENTION IS ALSO DRAWN TO THE LETTER FROM THE EXECUTIVE CHAIRMAN OF SEVERFIELD-ROWEN THAT IS SET OUT IN PART I OF THIS PROSPECTUS.

SEVERFIELD-ROWEN PLC

(Incorporated and registered in England and Wales under the Companies Act 1985, with registered number 1721262)

Proposed 7 for 3 Underwritten Rights Issue of up to 208,252,511 New Ordinary Shares at 23 pence per New Ordinary Share

and

Notice of General Meeting

Financial Adviser, Sponsor, Bookrunner, Underwriter and Corporate Broker Jefferies International Limited

The distribution of this document and/or the accompanying documents and/or the Provisional Allotment Letters, and/or the transfer of Nil Paid Rights, Fully Paid Rights and/or New Ordinary Shares through CREST or otherwise into jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this document and/or the accompanying documents and/or the Provisional Allotment Letters come should inform themselves about and observe any of those restrictions. Any failure to comply with any of these restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, subject to certain exceptions, this document, the Form of Proxy, the Provisional Allotment Letter and any other such documents should not be distributed, forwarded to or transmitted in or into the United States or any of the Excluded Territories.

The Existing Ordinary Shares are admitted to the premium segment of the Official List of the UK Listing Authority and to trading on the London Stock Exchange's main market for listed securities. Applications will be made for the New Ordinary Shares to be admitted to the premium segment of the Official List of the UK Listing Authority and to trading on the London Stock Exchange's main market for listed securities. It is expected that Admission will become effective and that dealings on the London Stock Exchange in the New Ordinary Shares (nil paid) will commence at 8.00 a.m. (London time) on 19 March 2013.

Your attention is drawn to the letter from the Executive Chairman which is set out on pages 37 to 47 of this document, recommending you to vote in favour of the Resolution to be proposed at the General Meeting. You should read the whole of this document and any documents incorporated herein by reference. Shareholders and any other persons contemplating a purchase of the Nil Paid Rights, Fully Paid Rights or the New Ordinary Shares should review the risk factors set out on pages 13 to 26 of this document for a discussion of certain factors that should be considered when deciding what action to take in relation to the Rights Issue and deciding whether or not to purchase the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares.

The latest time and date for acceptance and payment in full for the New Ordinary Shares by holders of Nil Paid Rights is 11.00 a.m. on 4 April 2013. The procedures for delivery of the Nil Paid Rights, acceptance and payment are set out in Part III of this document and for Qualifying Non-CREST Shareholders only, also in the Provisional Allotment Letter which is due to be sent subsequently. Qualifying CREST Shareholders should refer to paragraph 4 of Part III of this document.

Subject to the passing of the Resolution at the General Meeting, it is expected that Qualifying Non-CREST Shareholders (other than, subject to certain exceptions, Restricted Shareholders) will be sent a Provisional Allotment Letter on 18 March 2013. Qualifying CREST Shareholders will not receive Provisional Allotment Letters. Instead, Qualifying CREST Shareholders (other than, subject to certain exceptions, Restricted Shareholders) will receive a credit to their appropriate stock accounts in CREST in respect of the Nil Paid Rights to which they are entitled on 19 March 2013. The Nil Paid Rights so credited are expected to be enabled for settlement by Euroclear UK as soon as practicable after Admission has become effective. Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsors regarding the action to be taken in connection with this document and the Rights Issue.

Notice of the General Meeting of Severfield-Rowen to be held at the offices of Ashurst LLP, Broadwalk House, 5 Appold Street, London EC2A 2HA at 11.00 a.m. on 18 March 2013 is set out at the end of this document. A Form of Proxy for use at the General Meeting is enclosed and, to be valid, should be completed, signed and returned so as to be received by Severfield-Rowen's Registrar, Computershare as soon as possible but, in any event, so as to arrive no later than 11.00 a.m. on 15 March 2013 at the address set out therein. Completion and return of a Form of Proxy will not prevent members from attending and voting in person should they wish to do so.

Jefferies International Limited (''Jefferies'') is authorised and regulated in the UK by the FSA and is acting exclusively for the Company in connection with the Rights Issue and not for any other person and will not be responsible to any other person for providing the protections afforded to its clients, or for providing advice in relation to the Rights Issue, the contents of this document and the accompanying documents or any arrangements referred to therein.

Jefferies may, in accordance with applicable legal and regulatory provisions, engage in transactions in relation to the Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares and/or related instruments for its own account for the purpose of hedging its underwriting exposure or otherwise. Moreover, subject to the terms of the Underwriting Agreement, Jefferies and any sub-underwriter or any affiliate thereof acting as an investor for its or their own account(s) may subscribe for, retain or purchase Nil Paid Rights, Fully Paid Rights, Provisional Allotment Letters and/or New Ordinary Shares and/or related instruments for its or their own account(s) and in that capacity may offer or sell such securities and/or other instruments otherwise than in connection with the Rights Issue. Accordingly, references in this document to New Ordinary Shares being offered or placed should be read as including any offering or placement of New Ordinary Shares to each of Jefferies, the sub-underwriters or any of their affiliates acting in such capacity. Except as required by applicable law or regulation, the aforementioned entities do not propose to make any public disclosure in relation to any such transactions.

Apart from the responsibilities and liabilities, if any, which may be imposed on Jefferies by FSMA or the regulatory regime established thereunder, Jefferies does not accept any responsibility whatsoever and makes no representation or warranty, express or implied, as to the contents of this document including its accuracy, completeness or verification or for any other statement made or purported to be made by it or on its behalf, in connection with the Company, the New Ordinary Shares or the Rights Issue and nothing in this document is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. Accordingly Jefferies disclaims to the fullest extent permitted by applicable law all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of this document.

Neither the Company nor Jefferies, or any of their respective representatives, is making any representation to any Shareholder or purchaser of New Ordinary Shares regarding the legality of an investment in New Ordinary Shares by such Shareholder or purchaser under the laws applicable to such Shareholder or purchaser. Each investor should consult with his or her advisers as to the legal, tax, business, financial and related aspects of a purchase of New Ordinary Shares.

The investors acknowledge that: (i) they have not relied on Jefferies or any person affiliated with Jefferies in connection with any investigation of the accuracy of any information contained in this document or their investment decision and (ii) they have relied only on the information contained in this document, and that no person has been authorised to give any information or to make any representation concerning the Company or the Group or the New Ordinary Shares (other than as contained in this document) and, if given or made, any such other information or representation should not be relied upon as having been authorised by the Company or Jefferies.

Subject to certain exceptions, this document is not being sent to Shareholders with registered addresses in the United States or the Excluded Territories. This document does not constitute an offer to sell or a solicitation of an offer to buy New Ordinary Shares or take up entitlements to Nil Paid Rights in any jurisdiction in which such offer or solicitation is unlawful.

Except as otherwise provided for herein, this document does not constitute an offer of Nil Paid Rights, Fully Paid Rights or New Ordinary Shares to any Shareholder with a registered address in, or who is resident in, the United States or in the Excluded Territories. None of the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares have been or will be registered under the US Securities Act of 1933, as amended (the ''US Securities Act'') or under any securities laws of any state or other jurisdiction of the United States and they may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable exemption from the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares in the United States.

The Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares will not be registered under the securities laws of any Excluded Territory and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within such jurisdictions except pursuant to an applicable exemption from and in compliance with (or in a transaction not subject to) any applicable securities laws.

The attention of Shareholders with a registered address outside the United Kingdom is drawn to the section entitled ''Important Information'' on pages 30 to 35 of this document.

28 February 2013

	PAGE
SUMMARY	1
RISK FACTORS	13
RIGHTS ISSUE STATISTICS	27
EXPECTED TIMETABLE OF PRINCIPAL EVENTS .	28
DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS	29
IMPORTANT INFORMATION	30
WHERE TO FIND HELP	36
PART I — LETTER FROM THE EXECUTIVE CHAIRMAN OF SEVERFIELD-ROWEN PLC .	37
PART II — SOME QUESTIONS AND ANSWERS ON THE RIGHTS ISSUE .	48
PART III — TERMS AND CONDITIONS OF THE RIGHTS ISSUE .	56
PART IV — INFORMATION ON THE COMPANY .	78
PART V — OPERATING AND FINANCIAL REVIEW .	84
PART VI — CAPITAL RESOURCES .	94
PART VII — HISTORICAL FINANCIAL INFORMATION ON THE GROUP	101
PART VIII — UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE GROUP .	117
PART IX — ADDITIONAL INFORMATION .	120
PART X — DOCUMENTS INCORPORATED BY REFERENCE .	151
PART XI — DEFINITIONS AND GLOSSARY	152
NOTICE OF GENERAL MEETING	158

SUMMARY

Summaries are made up of disclosure requirements known as ''Elements''. The Elements are numbered in Sections A — E (A.1 — E.7).

This summary contains all the Elements required to be included in a summary for this type of securities and Issuer (defined below). Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements.

Even though an Element may be required to be inserted in the summary because of the type of securities and Issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of ''not applicable''.

	Section A — Introduction and Warnings
A.1	Introduction:	This summary should be read as an introduction to this document. Any decision to take-up or acquire new ordinary shares of 2.5 pence each in the share capital of the Company (''New Ordinary Shares'') in nil paid form (''Nil Paid Rights''), and/or rights to acquire the New Ordinary Shares fully paid (''Fully Paid Rights'') and/or New Ordinary Shares pursuant to the 7 for 3 underwritten rights issue announced by the Company on 28 February 2013 (the ''Rights Issue'') should be based on consideration of this document as a whole. Where a claim relating to the information contained in this document is brought before a court, the plaintiff investor might under the national legislation of the relevant member state of the European Economic Area, have to bear the costs of translating this document before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with other parts of this document or if it does not provide, when read together with the other parts of this document, key information in order to aid investors when considering whether to take-up or acquire Nil Paid Rights and/or Fully Paid Rights and/or New Ordinary Shares.
A.2	Consent for intermediaries:	Not applicable; no consent is given by the issuer to the use of the prospectus for subsequent resale or final placement of securities by financial intermediaries.
	Section B — Issuer
B.1	Legal and commercial name:	Severfield-Rowen Plc (''Severfield-Rowen'' or the ''Company'').
B.2	Domicile and legal form, applicable legislation and country of incorporation:	The Company is a company limited by shares and was duly incorporated and is domiciled in England, and operates under the legislation of England and Wales.
B.3	Current operations/ principal activities and markets:	Severfield-Rowen is the largest fabricator of structural steel in the UK. With a broad range of in-house skill sets, it is able to design, fabricate and erect structural steel for a wide range of customers across a number of market sectors. There are three distinct but related elements of the commercial offering of Severfield-Rowen and each of its subsidiaries and subsidiary undertakings from time to time (the ''Group''): design, fabrication and erection. The design process offers clients alternative concepts and solutions for
		their project. By working closely with the project consulting engineers at the concept stage of the project and with the assistance of 2-D and 3-D analysis modelling software, the Group is able to offer its clients 'value engineering' for the most effective and efficient solutions. Advice on material choices, fabrication fire protection, surface treatment and erection techniques can often lead to significant project savings.

	The Group operates four fabrication facilities in the UK giving it one of the largest capacities of any UK fabricator. At these facilities, the Group manufactures steel beams, columns and other steel products used in the construction industry. The investment that the Group has made in these fabrication facilities in recent years enables the Group to deliver accelerated construction timetables requiring high output of its steel products in a short time period, but also high precision fabrication for specialist structures, such as the Orbit tower at the London Olympic Park.
	The Group has its own in-house erection business, which offers customers on-site erection services of its steel beams and other products. This in-house capability enhances both the Group's ability to optimise the design of projects for efficient construction and the Group's proven ability to meet a wide range of erection challenges including central London office towers, complex stadium structures and nuclear power stations.
	The Group's design, fabrication and erection capability enable it to address all key sectors of the UK construction market. The principal market sectors it targets are commercial offices, power and energy, stadiums and leisure, city centre and retail, distribution and industrial, transport, bridges and car parks, health and education. This breadth of capability and experience has benefited the Group as the overall construction market has contracted in the last 3-4 years, with the structural steel market itself contracting by an estimated 30-50 per cent. since 2007, whilst the Group's own revenue has fallen by over ten per cent. in the same period. The Group's flexibility has enabled it to refocus its activity from sectors which were very strong prior to the market contraction, such as city centre and retail developments, to sectors which have seen more activity in the past 2-3 years such as commercial offices and transportation. Notably, the Group was responsible for a substantial number of venues and facilities built for the London Olympics including, but not limited to, the Olympic stadium, the velodrome and the Orbit tower.
	Severfield-Rowen's operations in India are of significant importance in achieving the Group's strategic growth ambitions. JSW Severfield Structures Limited, being the Company's Indian joint venture company, owned as to 50 per cent. with the other 50 per cent. owned by JSW Steel Limited (''JSW Steel'') (''JSW Structures'' or the ''Indian Joint Venture''), currently has one fabrication plant, located adjacent to JSW Steel's plant at Vijayanagar in Bellary, Karnataka. The plant currently consists of two main fabrication lines, a plated beam line, a fittings factory and a metal deck flooring production line, via a second joint venture company, JSW Structural Metal Decking Ltd (owned as to 66 per cent. by JSW Structures and 34 per cent. by SMD Asia LLP) resulting in 35,000 tonnes of capacity. The plant has been designed to optimise product range, quality and productivity as befitting the demands of the construction industry in India. The plant incorporates state-of-the-art technology and processing equipment. Bespoke plated products are manufactured on site at Bellary. The plant currently utilises 26,000m2 of workspace and 52,000m2 of logistics and storage area, employing over 400 employees.
	JSW Structures has a head office with sales operatives and project managers in Mumbai with additional sales representation and a design office in Bangalore and sales representation in Delhi. JSW Structures received ISO14001 and ISO18001 certifications in 2012.

B.4a	Significant recent	Trading in the UK was especially difficult during 2012, due to a
	trends affecting the	combination of market and operational factors. The market factors
	Company and the	resulted in pressure up and down the supply chain and the directors of
	steelwork and	Severfield-Rowen (the ''Directors'') believe these pressures are likely to
	construction	continue for the foreseeable future. In particular, weak demand continues
	industries:	to result in increased competition, tighter margins and the transfer of commercial, technical and financial risk down the supply chain, through more demanding contract terms and longer payment cycles. Notwithstanding these difficult trading conditions and despite negligible growth and pressure on margins, the Group's market position has strengthened in relation to its competition. However, while the order book remained stable at £218 million, margins in the first half of 2012 reflected the lower demand levels, the increased intensity of the competitive environment and the need to improve some aspects of the Group's operational performance.
		The Group's financial performance for the 12 months ended 31 December 2012 reflects the results of the contract execution issues, particularly on 122 Leadenhall Street, identified in the board of Directors (the ''Board'') review of certain of the Group's contracts the results of which were announced on 19 February 2013 (the ''Review''). As a result of the Review and the wider trading backdrop, the Board took a more prudent view of the overall prospects for the Group in 2013 and into 2014 and, accordingly, it lowered its expectations somewhat.
		Revenue for the 12 month period ended 31 December 2012 of £256.6 million (2011: £267.8 million) was at a similar level to the previous year. The underlying operating loss before results of associates was £18.2 million (2011: £14.2 million profit). This reflects the difficult trading conditions during the year, the £9.9 million charge to profit in respect of the 122 Leadenhall Street contract and the other adjustments relating to additional costs and reduction in contract value expectations totalling £10.2 million identified in the Review.
		The share of results of associates of a profit of £0.2 million (2011 £2.5 million loss) represents a step change in the performance of the Indian Joint Venture in recording its first positive contribution to the Group's profits, where production was running at good operating levels for most of the year.
		The Group's underlying operating loss after share of results of associates was £18.0 million (2011: £11.7 million profit). The underlying loss before tax for the period was £19.6 million (2011: £10.1 million profit).
		Net debt of £29.7 million as at 31 December 2012, represented an improvement of £1.6 million on the position at 31 December 2011 of £31.3 million. This reflects the improvement in working capital offset by capital investment, further equity investment in India and financing costs.
		Trading conditions are difficult as previously stated. However, the order book as at 31 December 2012 remained strong at £209 million, and the re-organisation of the Group's largest businesses into Severfield-Watson Structures Ltd is continuing in line with plan. More than half of the anticipated overhead savings of £2 million, previously announced on 5 November 2012, have now been realised and the programme will be largely complete by 30 June 2013.
		The performance of the Indian Joint Venture for the 12 months ended 31 December 2012 was in line with the Board's expectations. The first phase of expansion of the Bellary site to lift output from 35,000 tonnes to 55,000 tonnes by the end of summer 2013 is continuing and the order book at 31 December 2012 stood at £29 million.

B.5	Description of the Severfield-Rowen Group and the Company's position therein:	The Company acts as the holding company of the Group. As at 27 February 2013, (the ''Latest Practicable Date''), the Company owns directly or indirectly 100 per cent. of the issued ordinary share capital of the following principal subsidiaries:
		Name		Activity	Country of Incorporation
		Atlas Ward Structures Limited		Steelwork design, fabrication and erection	England & Wales
		Engineering Construction Training Limited	disciplines	Training and assessments in engineering and construction industry	England & Wales
		Fisher Engineering Limited		Steelwork fabrication	England & Wales
		Severfield-Reeve International Limited		Steelwork fabrication	England & Wales
		Severfield-Rowen Structures Limited	fabrication	Steelwork design and	England & Wales
		Steelcraft Erection Services Limited		Steelwork erection	England & Wales
		Watson Steel Structures Limited	fabrication	Steelwork design and	England & Wales
		JSW Severfield Structures Limited		Steelwork design, fabrication and erection	India
		Severfield-Rowen Mauritius Limited	Holding company		Mauritius
B.6	Interests in the Company and voting rights:	As at the Latest Practicable Date, the following persons had notified the Company of an interest which represents 3 per cent. or more of the voting share capital of the Company:
		Shareholder		Number of ordinary shares (as at the Latest Practicable Date) held	Percentage of voting share capital
		M&G Investments JO Hambro Capital Management . Aviva Investors Threadneedle Investments Rathbones Legal & General Investment Management Standard Life Royce & Associates LLC So far as the Company is aware, no person or persons, directly or indirectly, jointly or severally, own or exercise or could exercise control		11,693,956 10,038,748 8,968,906 6,103,427 5,320,000 4,591,930 4,521,046 3,452,300	13.1% 11.2% 10.0% 6.8% 6.0% 5.1% 5.1% 3.9%
		over the Company. There are no differences between the voting rights enjoyed by the shareholders described above and those enjoyed by any other holder of ordinary shares in the capital of the Company (''Shareholders'').

The selected financial information set forth below for the financial years ended as at 31 December 2011 and 2010 has been extracted without material adjustment from the audited financial statements incorporated by reference into this document. The selected financial set forth below for the twelve month period ended 31 December 2012 has been extracted without material adjustment from the unaudited financial statements unaudited second interim period results to 31 December 2012 included at Part VII of this document.
		12 months ended
Consolidated income statement	31 December 2012	31 December 2011	31 December 2010
	(£ million)	(£ million)	(£ million)
Revenue	256.6	267.8	266.7
Gross (loss)/profit Operating (loss)/profit before	(13.3)	20.3	26.1
share of Associates	(21.9)	10.9	13.8
Share of results of Associates .	0.20	(2.5)	(1.8)
Operating (loss)/profit after
share of results of Associates	(21.7)	8.3	12.0
(Loss)/Profit before tax	23.3	6.8	11.1

		12 months ended
Condensed consolidated balance sheet	31 December 2012	31 December 2011	31 December 2010
	(£ million)	(£ million)	(£ million)
Non-current assets	155.6	156.9	165.0
Current assets	69.8	100.5	88.1
Total assets	225.3	257.4	253.1
Current liabilities	97.0	103.6	99.8
Non-current liabilities	21.7	21.6	22.3
Total liabilities	118.7	125.1	122.1
Net assets	106.6	132.3	130.9
Total Equity	106.6	132.3	130.9
		12 months ended
Consolidated statement of cash flow	31 December 2012	31 December 2011	31 December 2010
	(£ million)	(£ million)	(£ million)
Net cash from operating activities	10.2	(8.9)	(11.2)
Net cash (used in)/from investing activities .	(2.7)	(1.6)	(5.6)
Net cash (used in)/from financing activities	(8.3)	9.2	8.9
Net (decrease)/increase in cash and cash equivalents	(0.8)	(1.3)	(7.9)
Cash and cash equivalents at beginning of period	2.3	3.6	11.5
Cash and cash equivalents at end of period	1.4	2.3	3.6
Deloitte LLP, the auditors of the Company, issued unqualified audit opinions in respect of financial years ended 31 December 2011 and 2010. The 12 month unaudited second interim period results to 31 December 2012 have been subject to an interim review by Deloitte LLP and are reproduced in full in this document.

		While revenue in the year ended 31 December 2011 of £267.8 million was flat year-on-year (2010: £266.7 million), underlying operating profit fell to £13.8 million (2010: £10.9 million) as a result of tighter market pricing as surviving competitors sought to obtain a share of a smaller market. In the year ended 2012, the operating loss of £21.9 million reflected the difficult trading conditions during the year, the £9.9 million charge to the profit and loss account in respect of the 122 Leadenhall Street contract and the other adjustments relating to additional costs and reduction in contract value expectations totalling £10.2 million arising from the Review. Since 31 December 2012, the Group's net financial indebtedness has
		increased from £29.7 million to £44.0 million as at 14 February 2013 (being the latest practicable date prior to the publication of this document for these purposes).
B.8	Select key pro forma financial information:	As at 31 December 2012, the Group had gross assets of £225.3 million and net assets of £106.6 million. Assuming that the Rights Issue proceeds were received on that date and taking into account the use of proceeds to repay debt, the Rights Issue would have increased the gross assets of the Group by £13.2 million to £238.5 million and the net assets of the Group by £43.9 million to £150.5 million. This unaudited pro forma financial information addresses a hypothetical situation and should not be construed as indicative of the Company's trading performance since 31 December 2012 or its future financial position or results.
B.9	Profit forecast or estimate:	Not applicable; no profit forecast or estimate is made.
B.10	Nature of any qualifications in audit report on the historical financial information:	Not applicable; no qualifications are included in any audit report on the historical financial information included in this document.
B.11	Explanation in respect of insufficient working capital:	Not applicable; the Company is of the opinion that, taking into account the net proceeds of the Rights Issue and the Revised Facilities (as such term is defined below), the Group has sufficient working capital for its present requirements, that is, for at least the next 12 months from the date of this document.
	Section C — Securities
C.1	Type and class of the securities being offered and admitted to trading, including the security identification number:	New Ordinary Shares in the capital of the Company to be offered and admitted to trading in connection with the Rights Issue with ISIN GB00B27YGJ97. The ISIN code for the Nil Paid Rights is GB00B7V0D751 and for the Fully Paid Rights is GB00B997JV80.
C.2	Currency of the securities issue:	Pounds sterling in respect of the New Ordinary Shares and the Ordinary Shares (as such term is defined below) in issue as at the Latest Practicable Date.
C.3	Number of shares in issue and par value:	89,251,076 ordinary shares with a par value of 2.5 pence each (''Ordinary Shares'').
C.4	Rights attached to the securities:	Holders of the New Ordinary Shares and holders of Ordinary Shares in issue as at 14 March 2013 (the ''Existing Ordinary Shares'') will have the following rights: subject to any rights or restrictions as to voting for the time being
		attached to any Ordinary Shares, on a show of hands every member present in person or by duly appointed proxy at an extraordinary general meeting and entitled to vote shall have one vote and on a poll every member present in person or by proxy and entitled to vote has one vote for every share held by him;

		shares may be transferred, if in certificated form, by an instrument of transfer in writing in any usual form, or in such other form as the directors may approve, executed by or on behalf of the transferor and (in the case of a partly paid share) the transferee. An Ordinary Share in uncertificated form may be transferred by means of the relevant system concerned; the right to receive dividends on a pari passu basis; and if the Company is wound up, with the sanction of a special resolution and any other sanction required by law and subject to the Companies Act 2006, the liquidator may divide among the members the whole or any part of the assets of the Company and for that purpose may value
		any assets and determine how the division shall be carried out as between members or classes of members.
C.5	Restrictions on free transferability of the securities:	There are no restrictions on the free transferability of the Ordinary Shares.
C.6	Admission to trading on regulated market:	The Existing Ordinary Shares are currently trading on the main market for listed securities operated by the London Stock Exchange plc (the ''London Stock Exchange''). The Company has a premium listing on the official list of the UK Listing Authority (the ''Official List'').
		An application for admission to trading on the main market for listed securities operated by the London Stock Exchange will be made in respect of all the New Ordinary Shares. It is expected that trading in the Nil Paid Rights (in the computerised system for the paperless settlement of sales and purchases of securities (''CREST'')) and through the renounceable provisional allotment letters relating to the Rights Issue (the ''Provisional Allotment Letters'') will commence on 19 March 2013.
C.7	Dividend policy:	The Board remains focused on strengthening the balance sheet and conserving cash. In light of this and against the backdrop of a continuing challenging UK market, while there are no restrictions in the revised financing facilities, (the ''Revised Facilities Agreement''), the Board will not be recommending the payment of a final dividend for the 15 month period ending 31 March 2013.
		However, the Board is committed to reinstating the payment of dividends. Depending, among other things, on improved financial performance in 2013, it intends to introduce a progressive dividend policy, having regard to the Group's underlying earnings, cash flows and capital investment plans, the requirement to maintain an appropriate level of dividend cover and the then prevailing market outlook.
	Section D — Risks
D.1	Key information on the key risks related to Severfield-Rowen and the steelwork and construction industries:	If the ordinary resolution to be proposed at the general meeting of Severfield-Rowen to be held on 18 March 2013 (the ''Resolution'') is not passed or any of the other conditions of the Rights Issue are not fulfilled, the Rights Issue will not proceed and the Revised Facilities Agreement will not come into effect. In that event, Severfield-Rowen will remain subject to the Group's existing finance facilities of up to £50 million (the ''Existing Facilities'') and the financial covenants therein. The Board has held constructive discussions with the Group's existing lenders, which have resulted in the weekly deferral of the requirement to test the covenants under the Existing Facilities as at 31 December 2012.

In the event that Shareholders do not vote in favour of the Resolution, Severfield-Rowen will be in breach of one or more covenants under the Existing Facilities on 18 March 2013, being the date of the General Meeting. A breach of any one of such covenants would be an event of default under the Existing Facilities entitling the Group's lenders to demand immediate repayment of all outstanding amounts and cancel the facilities. As at 14 February 2013, the Group had net financial indebtedness of £44.0 million.
In the event that Shareholders do not vote in favour of the Resolution and the Group's lenders demanded repayment of all outstanding amounts and cancelled the Existing Facilities on 18 March 2013, the Group would have insufficient funds to repay the amounts outstanding. The Group would then immediately need to find alternative sources of funds to replace the funds that would have been made available pursuant to the Rights Issue and the revolving credit facility of up to £35 million to be made available subject to completion of the Rights Issue (the ''Revised Facilities''). The actions that the Group would then seek to take to make up the shortfall in its funding requirements (which the Directors believe would need to be pursued simultaneously and immediately), are as follows:
seek to negotiate a new facility agreement with its lenders;
seek to obtain a sufficient amount of alternative funding from other sources;
seek to dispose of some or all of its assets or businesses; and/or
seek to find a purchaser of the entire Group.
However, the Directors are not confident that any of the above actions will be achievable.
In the event that the alternative courses of action set out above fail, the Group ultimately may have to cease trading at that time. As a result, Shareholders could lose their investment in the Company.
A failure to estimate effectively risks, costs or timing when bidding on contracts and to manage such contracts efficiently could all have an adverse impact on the Group. As an illustration of this risk, in the second half of 2012, in January 2013 and in February 2013, the Company announced the deterioration of the Group's financial performance which was, in part, due to cost overruns on a number of contracts including the contract for the development at 122 Leadenhall Street. Similarly, if the risk management strategies employed by the Group do not adapt quickly enough to new risks or other changes in the market, this could have an adverse impact on the profitability of the Group.
General volatility, economic and market cycles, the recession in the United Kingdom and the global economic downturn could cause the financial performance and/or financial condition of the Group to decline, including by causing a material decrease in the Group's cash flows. As a result of the global economic downturn, existing and potential customers may choose to cancel, postpone or scale back their capital investment, which would impact the Group's existing and future order book, and may therefore have an adverse effect on the Group's future prospects, financial condition and results of operations.

		The Indian Joint Venture and any other joint venture arrangements with additional parties in the future may not be successful. The Company does not have unilateral control over the Indian Joint Venture and is thus subject to risks associated with sharing management control over such operations.
		Since the commercial offering of the Indian Joint Venture represents a new proposition in the Indian construction market and there are few known reference points which management can use in the development and growth of the business, the Group may be unable to establish itself in the Indian construction sector and the anticipated opportunities available to the Indian Joint Venture may not be realised.
		The Group operates in increasingly competitive markets in which competitors have offered, and continue to offer, pricing reductions and improved commercial terms to try and win work which contributes to increased pricing pressures and places significant downward pressure on the Group's profit margins. The Group's inability to compete effectively and/or profitably would have a material adverse effect on its business, financial condition and results of operations.
		Contract disputes in relation to steelwork and services provided by the Group, which can be significant in terms of value, can result in payment delays or refusals to make payments in full, or indeed at all, which could have a material adverse effect on the Group's business, financial condition and results of operations.
		A failure to meet contractual deadlines could adversely damage the Group's reputation within the industry and client base and/or affect the Group's exposure to financial liability. Failure to meet schedule requirements could damage the Company's reputation and client base, as well as incur significant liquidated damages. While the Group seeks to limit its liability in contracts in relation to damages arising due to a failure to meet deadlines, these limitations may not be effective in all cases.
D.3	Key information on the key risks related to the New Ordinary Shares:	The price of the Ordinary Shares may be volatile, may decrease, and Shareholders may not be able to sell the Ordinary Shares at a favourable price after the Rights Issue.
		The Company may not be able to pay any dividend in future periods or give an assurance to the amount of any such dividend, if paid.
		The implementation of the Rights Issue will result in the dilution of ownership of Existing Ordinary Shares for holders of Ordinary Shares on the register of members of the Company at 14 March 2013 (''Qualifying Shareholders'') who do not take up their rights under the Rights Issue.
		If the conditions to the Rights Issue are not satisfied or waived (as applicable) by Admission, the Rights Issue will not proceed.
	Section E — Offer
E.1	Total net proceeds and estimate of total expenses of the issue/ offer, including estimated expenses charged to investors:	The Company expects that the Rights Issue will raise net proceeds of approximately £44.8 million, after allowing for total expenses of £3.1 million. No expenses will be charged to Shareholders who take up their rights in the Rights Issue. Shareholders who do not take up their rights in the Rights Issue may have the New Ordinary Shares to which they are entitled sold on their behalf. To the extent that such New Ordinary Shares are sold at a premium to the issue price of 23 pence per New Ordinary Share, the relevant Shareholders shall be entitled to such premium, subject to brokerage and exchange costs. No amount of less than £5.00 per holding will be paid to such Shareholders but will be
		aggregated and retained by the Company.

E.2a	Reasons for the offer, use of proceeds and estimated net amount of proceeds:	The severity of the downturn in the UK market in which the Group operates has had an adverse impact on the profitability of the Group. As a result, while taking into account the level of the Group's indebtedness, the Directors believe it is now appropriate for the Group to recapitalise its business through a capital raising via the Rights Issue in conjunction with the Revised Facilities.
		The Board believes that the Rights Issue should enable Severfield-Rowen to protect and enhance shareholder value. The Board also believes that a more robust capital structure will be achieved through the reduction of outstanding debt under the Existing Facilities and the Revised Facilities becoming effective. The Rights Issue and the Revised Facilities are expected by the Board to provide greater operational and financial flexibility in the future while demonstrating financial strength to customers, relative to the Group's principal competitors, in a continuing difficult market environment. In addition, the Board believes the Rights Issue will enable the Group to commit to continued investment in the growth of the Indian Joint Venture over the next two to three years.
		If the Resolution is not approved by Shareholders and the Rights Issue does not proceed, the amended financing arrangements under the Revised Facilities will not come into effect. In that event, Severfield Rowen will remain subject to the Existing Facilities and the financial covenants therein. The Board has held constructive discussions with the Group's existing lenders, which have resulted in the weekly deferral of the requirement to test covenants under the Existing Facilities as at 31 December 2012.
		In the event that Shareholders do not vote in favour of the Resolution, Severfield-Rowen will be in breach of one or more covenants under the Existing Facilities on 18 March 2013, being the date of the General Meeting. A breach of any one of such covenants would be an event of default under the Existing Facilities entitling the Group's lenders to demand immediate repayment of all outstanding amounts and cancel the facilities. As at 14 February 2013 the Group had net financial indebtedness of £44.0 million. In the event that Shareholders' do not vote in favour of the Resolution and the Group's lenders demanded repayment of all outstanding amounts and cancelled the Existing Facilities on 18 March 2013, the Group would have insufficient funds to repay the amounts outstanding. The Group would then immediately need to find alternative sources of funds to replace the funds that would have been made available pursuant to the Rights Issue and the Revised Facilities. The actions that the Group would then seek to take to make up the shortfall in its funding requirements (which the Directors believe would need to be pursued simultaneously and immediately), include seeking to negotiate a new facility agreement with its lenders; seeking to obtain a sufficient amount of alternative funding from other sources; seeking to dispose of some or all of its assets or businesses; and/or seeking to find a purchaser of the entire Group. The Directors are not confident that any of the above actions will be achievable. In the event that the alternative courses of action set out above fail, the Group ultimately may have to cease trading at that time. As a result, Shareholders could lose their investment in the Company.

		As at 14 February 2013 (being the latest practicable date prior to the publication of this document for these purposes), the Group had net financial indebtedness of £44.0 million, of which £44.2 million was outstanding under the Existing Facilities. The Directors intend to use the net proceeds of the Rights Issue (being approximately £44.8 million) to reduce the Group's drawings under the Existing Facilities, which is a condition for the Revised Facilities Agreement to come into effect. Any balance of the net proceeds of the Rights Issue will be used for general corporate purposes. This will result in the Group operating with a structurally lower level of indebtedness. Accordingly, the Directors believe that the Rights Issue will have both immediate and longer-term benefits for the Group.
E.3	Terms and conditions of the offer:	The Company proposes to raise approximately £44.8 million (net of expenses) by way of the Rights Issue of up to 208,252,511 New Ordinary Shares. The Rights Issue is underwritten pursuant to the underwriting agreement between Jefferies International Limited (''Jefferies'') and the Company (the ''Underwriting Agreement''). The price at which Qualifying Shareholders will be invited to subscribe for New Ordinary Shares (the ''Issue Price'') will be 23 pence which represents a 38.7 per cent. discount to the theoretical ex-rights price of 37.55 pence per Ordinary Share based on the closing middle-market price of 71.5 pence per Existing Ordinary Share on the Latest Practicable Date. Under the Rights Issue, the New Ordinary Shares will be offered by way of rights to all Qualifying Shareholders of the Company (in the case of Qualifying Shareholders with registered addresses outside the European Economic Area, such offer being made by way of a notice which will be published in the London Gazette). Subject to certain exceptions, Shareholders with a registered address, resident, or otherwise believed to be in the United States or any other of Canada, Japan, Australia and the Republic of South Africa, will not be entitled to participate in the Rights Issue. The Rights Issue is conditional upon: (a) the approval of the Resolution without material amendment at the
		General Meeting; (b) admission of the New Ordinary Shares to the premium segment of the Official List and to trading nil paid on the London Stock Exchange's main market for listed securities (''Admission'') becoming effective by not later than 8.00 a.m. (London time) on 19 March 2013 (or such later time and/or date as the Company and Jefferies may agree); and (c) the Underwriting Agreement having become unconditional prior to
		Admission (save for the condition relating to Admission) and not having been terminated in accordance with its terms.
E.4	Interests material to the issue/offer, including conflicting interests:	Not applicable; there is no interest, including any conflicting interest, that is material to the issue/offer.
E.5	Name of person offering to sell the securities and lock-up agreement details:	Severfield-Rowen Plc. Not applicable; there are no lock-up agreements.
E.6	Amount and percentage of immediate dilution resulting from the offer:	A Shareholder who sells or otherwise elects not to take up their Nil Paid Rights will experience 70 per cent. dilution (i.e. their proportionate interest in the Company will drop by 30 per cent.).

E.7	Estimated expenses	Not applicable; no expenses will be charged to investors by the Company
	charged to the investor	in respect of the Rights Issue.
	by the Company:

RISK FACTORS

The Rights Issue and any investment in the Ordinary Shares and New Ordinary Shares is subject to a number of risks. Accordingly, Shareholders and prospective investors should carefully consider the factors and risks associated with any investment in Ordinary Shares or the New Ordinary Shares, the Group's business and the industry in which it operates, together with all other information contained in this Prospectus and all of the information incorporated by reference into this document, including, in particular, the risk factors described below, and their personal circumstances prior to making any investment decision. Some of the following factors relate principally to the Group's businesses. Other factors relate principally to the Rights Issue and an investment in the New Ordinary Shares. The Group's businesses, operating results, financial condition and prospects could be materially and adversely affected by any of the risks described below. In such case, the market price of the Ordinary Shares, Nil Paid Rights and/or the Fully Paid Rights may decline and investors may lose all or part of their investment.

Prospective investors should note that the risks relating to the Group, its industry and the New Ordinary Shares summarised in the section of this document headed ''Summary'' are the risks that the Directors believe to be the most essential to an assessment by a prospective investor of whether to consider an investment in the New Ordinary Shares. However, as the risks which the Group faces relate to events and depend on circumstances that may or may not occur in the future, prospective investors should consider not only the information on the key risks summarised in the section of this document headed ''Summary'' but also, among other things, the risks and uncertainties described below.

The following is not an exhaustive list or explanation of all risks which investors may face when making an investment in the New Ordinary Shares and should be used as guidance only. Additional risks and uncertainties relating to the Group that are not currently known to the Group, or that it currently deems immaterial, may individually or cumulatively also have a material adverse effect on the Group's business, prospects, results of operations and financial position and, if any such risk should occur, the price of the New Ordinary Shares may decline and investors could lose all or part of their investment. Investors should consider carefully whether an investment in Ordinary Shares and New Ordinary Shares is suitable for them in the light of the information in this Prospectus and their personal circumstances.

1. Importance of vote

If the Resolution is not passed or any of the other conditions of the Rights Issue are not fulfilled, the Rights Issue will not proceed

Severfield-Rowen is pursuing the Rights Issue to reduce the Group's financial indebtedness. This will result in the Group operating with a structurally lower level of indebtedness and will provide greater operational and financial flexibility to build on the Group's strong market position in the UK and to enable the Group to commit to continued investment in India.

The Board firmly believes that proceeding with the Rights Issue, together with the Revised Facilities, are in the best interests of Shareholders as a whole. The Board is therefore seeking Shareholder approval for the Resolution at the General Meeting which must be passed in order to allow the Rights Issue to be implemented.

If the Resolution is not approved by Shareholders and the Rights Issue does not proceed, the amended financing arrangements under the Revised Facilities will not come into effect. In that event, Severfield-Rowen will remain subject to the Existing Facilities and the financial covenants therein. The Board has held constructive discussions with the Group's existing lenders, which have resulted in the weekly deferral of the requirement to test the covenants under the Existing Facilities as at 31 December 2012.

In the event that Shareholders do not vote in favour of the Resolution, Severfield-Rowen will be in breach of one or more covenants under the Existing Facilities on 18 March 2013, being the date of the General Meeting. A breach of any one of such covenants would be an event of default under the Existing Facilities entitling the Group's lenders to demand immediate repayment of all outstanding amounts and cancel the facilities. As at 14 February 2013 (being the latest practicable date prior to publication of this document for these purposes), the Group had net financial indebtedness of £44.0 million.

In the event that the Shareholders do not vote in favour of the Resolution and the Group's lenders demanded repayment of all outstanding amounts and cancelled the Existing Facilities on 18 March 2013, the Group would have insufficient funds to repay the amounts outstanding. The Group would then immediately need to find alternative sources of funds to replace the funds that would have been made

available pursuant to the Rights Issue and the Revised Facilities. The actions that the Group would then seek to take to make up the shortfall in its funding requirements (which the Directors believe would need to be pursued simultaneously and immediately), are as follows:

seek to negotiate a new facility agreement with its lenders;
seek to obtain a sufficient amount of alternative funding from other sources;
seek to dispose of some or all of its assets or businesses; and/or
seek to find a purchaser of the entire Group.

However, the Directors are not confident that any of the above actions will be achievable.

In the event that the alternative courses of action set out above fail, the Group ultimately may have to cease trading at that time. As a result, Shareholders could lose their investment in the Company.

In order to address the risks set out above:

the Company has entered into the Revised Facilities Agreement with the Group's existing lenders; and
the Company is undertaking the Rights Issue.

The Revised Facilities Agreement was entered into on 27 February 2013 but remains conditional on the completion of the Rights Issue and the application of the net proceeds of the Rights Issue to reduce the outstanding borrowings under the Existing Facilities Agreement.

In connection with the Rights Issue, the Company has entered into the Underwriting Agreement with Jefferies dated 28 February 2013, pursuant to which Jefferies has undertaken, subject to certain conditions described more fully in paragraph 12 of Part IX, to underwrite the Rights Issue. Subject to Shareholder approval of the Resolution, the Underwriting Agreement gives the Directors a high degree of confidence that the Company will be able to raise the necessary funds from the Rights Issue to enable the Revised Facilities Agreement to come into effect.

2. General Risks

A failure to estimate effectively risks, costs or timing when bidding on contracts and to manage such contracts efficiently could all have an adverse impact on the Group

The success of the Group will depend on identifying key issues and risks with respect to potential projects and ensuring that the contractual arrangements in relation to each project adequately safeguard the Group against such risks. Such issues and risks can include, but are not limited to, the pricing and availability of steel and other raw materials, labour costs, wage inflation, and the cost of capital maintenance or replacement of assets. Unanticipated increases in costs in relation to these and other areas may reduce operating profit to the extent that such increases cannot be passed on to customers or along the supply chain. For substantially all of its contracts, the Group is required to deliver steelwork in accordance with specified milestones on agreed delivery dates. Significant financial consequences can be imposed where milestones are not met or steelwork is not delivered on time. This risk is exacerbated by the fact that some of the contracts the Group undertakes may continue for a number of years. While the identification of key risks, the estimation of costs, the management of key contracts and the establishment of appropriate deadlines in relation to such contracts is an inherent part of the Group's business, the length and complexity of the projects on which the Group supplies steelwork means that management's estimates can be particularly difficult to make and could turn out to be inaccurate, which could have an adverse impact on the financial performance of the Group.

As an illustration of the risks highlighted above, in the second half of 2012, in January 2013 and February 2013, the Company announced a deterioration in the Group's financial performance. As set out at paragraph 3 of Part I of this document, this was in part due to cost overruns on a number of contracts including the contract for the development at 122 Leadenhall Street. There can be no assurance that similar issues will not arise on other of the Group's contracts in the future.

In addition to the contract risks discussed above, the Group has contracts which contain significant liability provisions. Due to the length of projects on which the Group supplies steelwork, the Group may be liable for a relatively long period and such liability may extend beyond the completion date for a project. While the Group seeks to limit its liability in most contracts and in some cases pass liability to sub-contractors or suppliers, these limitations may not be effective in all cases.

If the risk management strategies employed by the Group fail to identify key risks or accurately estimate costs and timetables, or do not adapt quickly enough to new risks or other changes in the market, this could have an adverse impact on the profitability of the Group.

General volatility, economic and market cycles, the recession in the United Kingdom and the global economic downturn could adversely affect the Group's future prospects, financial condition and results of operations

Global market turmoil, the recent recession in the United Kingdom and beyond and, in particular, the ongoing credit crisis, have had and could continue to have a material adverse effect on the Group's businesses. Factors such as inflation, investor sentiment, the availability and cost of credit and the liquidity of the global financial markets could significantly affect the Group's businesses. A continuation or deterioration of these economic and financial conditions could cause the financial performance and/or financial condition of the Group to decline, including by causing a material decrease in the Group's cash flows.

The Group's businesses may be affected by the general risks associated with all companies operating in the same markets. The construction market in which the Group operates depends on numerous factors, many of which are beyond the Group's control and the exact effect of which cannot be accurately predicted. Such factors include general economic and political activities, including the extent of any governmental regulation and taxation.

The value of investment undertaken by the Group could be adversely affected by changes in economic, political, administrative, taxation or other regulatory factors, whether under English or Indian law or in any other jurisdictions in which the Group may operate now or in the future.

As a result of the global economic downturn, existing and potential customers may choose to cancel, postpone or scale back their capital investment, which would impact the Group's existing and future order book, and may therefore have an adverse effect on the Group's future prospects, financial condition and results of operations.

The Company's joint ventures may not be successful

The Company currently has a joint venture in India with JSW Steel, which in the 12 months ended 31 December 2012, made a positive financial contribution to the Group for the first time. The Company may also seek to enter into other joint venture arrangements with additional parties in the future.

Although the Company has sought to protect its interest in relation to the Indian Joint Venture, there can be no assurance that these steps have been, or will be, effective. The Company does not have unilateral control over the Indian Joint Venture and is thus subject to risks associated with sharing management control over such operations with JSW Steel. In addition to the risks highlighted in this section, joint ventures involve risks that one or more of the Company's existing or future joint venture partners may:

have economic or business interests or goals that are or become inconsistent with or opposed to the Company's own, which could result in delays, additional costs or disagreement, each of which could adversely affect the relevant joint venture;
become insolvent or otherwise fail to comply with the undertakings contained in the joint venture agreements;
exercise veto rights so as to block, delay or otherwise frustrate actions that the Company believes to be in its and/or the relevant joint venture's best interests;
seek to terminate such joint venture arrangements either as a matter of right or by virtue of the Company's alleged non-compliance with the applicable joint venture agreement;
take action contrary to the Company's policies or objectives with respect to its investments, for instance by taking actions that would favour such joint venture partner's interest over the Company's and/or the joint venture's interest or veto proposals in respect of the joint venture operations that the Company believes are in the best interest of such operations; or
fail to comply with their obligations to the joint venture and/or to third parties under the joint venture agreement and/or other agreements (including being unable or unwilling to meet a capital call to fund the relevant project), which could have a material adverse effect on the joint venture, any other joint venture partners and the project.

The Group may be unable to establish itself in the Indian construction sector and the anticipated opportunities available to the Indian Joint Venture may not be realised

The commercial offering of the Group's Indian Joint Venture represents a new proposition in the Indian construction market. There are few known reference points which management can use in the development and growth of the business in India due to the relative immaturity of the construction market in which the Indian Joint Venture operates. There is a risk that this may impact upon the execution of projects which the Indian Joint Venture undertakes since local project planning, contractual interpretation and accepted custom in the Indian construction sector may differ from the business model within which the Group is used to operating. The Group's ability to expand its business in India may be affected if it is unable to identify business opportunities and undertake projects successfully, which may have an adverse effect on the Group's operating results and financial condition.

The Group's ability to raise debt financing on satisfactory terms following the expiry of the Existing Facilities and/or the Revised Facilities may not be successful

The Group's ability to grow its business profitably is in part dependent upon the Group's ability to generate or obtain capital. The ability to arrange such financing on satisfactory terms following the expiry of the Existing Facilities in October 2016 and/or the Revised Facilities in November 2016 will depend in part upon prevailing capital market conditions, as well as conditions within the business and/or operating results. There can be no assurance that the Group will be able to secure borrowings following the expiry of the Existing Facilities in October 2016 and/or the Revised Facilities in November 2016 on commercially acceptable terms or at all, and failure to do so may adversely affect the Group's businesses and returns.

Increases in costs of goods sold and operating costs without corresponding increases in revenue could have an adverse impact on the profitability of the Group

The Group's operating costs could increase without a corresponding increase in revenue. Factors which could increase operating and other expenses include among others: (a) increases in costs of labour; (b) increases in the costs of raw materials; and (c) increases in sub-contractor and professional services costs. The Group's ability to pass on these increases to customers may be limited or restricted, and an inability to do so may reduce the Group's operating profit.

The Group's financial performance and success depends upon the continued viability of suppliers, contractors, sub-contractors and other service providers

The Company is required to engage third party suppliers and contractors to provide supplies and services for the development of the Group's businesses. Such third-party suppliers and contractors have been and may continue to be adversely affected by the economic downturn. The Group may order goods from a supplier or hire a contractor that subsequently becomes insolvent, causing cost overruns, contract delays and thereby increasing the risk that the Group will have to bear increased costs of supplies from alternative suppliers and/or be unable to recover costs in relation to any work or services performed by such contractor, to the extent that such costs are not covered by insurance.

The Group's business is dependent upon IT systems and information security, a failure of which could cause significant disruption to the Group's operations and adversely affect its future prospects, financial strength and results of operations

The efficient operation of the Group's business depends in part on the proper operation, performance and development of its IT and information security systems. A significant performance failure of the Group's IT systems could lead to loss of control over critical business information and/or systems (such as contract costs, invoicing, accounts payable or payroll management), resulting in an adverse impact on the ability of the business affected to operate effectively and/or fulfil its contractual obligations, which may in turn lead to a loss of custom, revenue, profitability and cash flow and the incurring of significant consequential and remedial costs as well as reputational damage.

In addition, the Group is required to maintain data security and confidentiality over personal information regarding employees and information provided by and to customers. Should there be any serious breach of IT security, or any improper disclosure or use of such confidential information, this could subject the Group to adverse publicity, investigations and legal claims, which might damage its reputation and future prospects and/or result in damages, civil penalties or fines.

The Group may lose its rights to use the Fabsec Licence

Under the terms of the Fabsec Licence the Group is licensed to use various patents, intellectual property, trademarks and software in the production, design and manufacture of bespoke steel beams and columns. The manufacture of Fabsec steel beams and columns forms an important part of the Group's business. If the Fabsec Licence were to be terminated then this would have a material adverse effect on the Group's ability to produce bespoke steel beams for certain applications. Furthermore, it could lead to the Group being in breach of other contracts relating to the supply of steel beams which it has entered into but for which it has yet to complete its obligations.

Circumstances in which the Fabsec Licence could be terminated include, inter alia, a breach of the Fabsec Licence by Severfield-Rowen which, if capable of remedy, is not remedied within a specified period of time, or the insolvency, administration or liquidation of either the licensor or the Company. Further details of the Fabsec Licence are set out at paragraph 13.7 of Part IX of this document.

In addition to the Fabsec Licence, Severfield-Rowen is a party to the Fabsec Shareholders' Agreement which governs the relationship between the shareholders' of Fabsec Limited, details of which are set out at paragraph 13.8 of Part IX of this document. If the Fabsec Shareholders' Agreement were to be terminated or Severfield-Rowen was forced to transfer all of its shares in Fabsec Limited then the Group would lose its rights to the Fabsec Licence. The Company could be forced to transfer all of its shares in Fabsec Limited if it was found to be knowingly in breach of the Fabsec Shareholders' Agreement and, if capable of remedy, failed to remedy such breach within a specific period of time. The implications for Severfield-Rowen of the loss of the Fabsec Licence are set out above. The Fabsec Licence and Fabsec Shareholders' Agreement have been in force for over ten years, and the Directors are not aware of any circumstances which might lead to either of them being terminated for any reason.

The Group may be unable to identify and execute acquisitions, joint ventures or investments, and if it does pursue such transactions, it may fail to successfully integrate them into or realise anticipated benefits to its business

The Group may make and seek acquisitions and development opportunities in the future. Any future acquisitions and development opportunities may significantly affect the Group's operating results and financial condition. Furthermore, any new acquisition may divert resources, including the attention of the Group's management team, from the day to day running of the business. The Group may be unable to find suitable acquisition targets or to identify appropriate partnerships or investments. Even if it is able to identify such opportunities, no assurance can be given that the Group will be able to manage future acquisitions profitably or integrate such acquisitions successfully without substantial costs, delays or other problems being incurred or experienced. In addition, no assurance can be given that any companies or businesses acquired will achieve levels of profitability that will justify the investment the Group makes in them. Despite conducting thorough due diligence into companies that may be or have been acquired, it is possible that unanticipated liabilities may arise in respect of such companies for which the relevant warranty or indemnity protection does not provide. The Group's ability to expand its businesses in the future may also be affected if it is unable to identify and consummate acquisitions and integrate them successfully.

The Group may incur liabilities in respect of future disposals, either contractually through the provision of certain indemnities, representations and warranties, or otherwise. If any such liabilities crystallise in the future, this could cause a cash outflow for the Group and have an adverse effect on the Group's operating results and financial condition.

The Group operates in various international markets which may have inherent risks relating to fraud, bribery and corruption

The Group operates principally in the UK and through its joint ventures in India and also from time to time enters into contracts for steelwork business in other jurisdictions. Operating in international markets brings with it inherent risks associated with fraud, bribery and corruption, which may have an adverse effect on the Group. In certain jurisdictions, instances of fraud, bribery and corruption are more common than in others. In addition, the construction industry has historically been shown to be vulnerable to corrupt or unethical practices. While the Directors believe that there are adequate procedures, systems and controls in place to support the Company's business, there can, however, be no assurance that the systems and procedures implemented will be effective in preventing theft, fraud, bribery and corruption. Although the Company's internal policies and procedures mandate strict compliance with applicable laws prohibiting corrupt payments to other businesses, officials or employees or other persons, there is no assurance that such internal policies and procedures have been or will be adhered to by its employees.

The Group may therefore be subject to civil and criminal penalties in any jurisdiction in which its employees, agents, sub-contractors or joint venture partners engage in such activity, which penalties may be material, and which can have a materially adverse impact on the Group's reputation and, in extreme cases, lead to temporary or permanent debarment from participating in public procurement processes. Instances of fraud, bribery and corruption, and violation of laws and regulations in the jurisdictions in which the Group operate could therefore impair its ability to win tenders for new projects, and have a material adverse effect on its financial condition and results of operations.

The Group is exposed to the political, legal, regulatory and social risks of the countries in which it operates which could have a material adverse effect on the Group's businesses, operating results, financial condition and prospects

The Group is exposed to the political, economic, legal, regulatory and social risks of the countries in which it operates or intends to operate, including, but not limited to, its operations in India through the Indian Joint Venture. These risks potentially include changes to taxation and royalties payable to Indian State Governments, new regulations and legislation (including, but not limited to, proposed legislation in relation to the compensation payable to local stakeholders or displaced persons), expropriation and nationalisation of property, instability in political, economic or financial systems, uncertainty arising from underdeveloped infrastructure and underdeveloped legal and regulatory systems, civil strife or labour unrest, acts of war, armed conflict, terrorism, outbreaks of infectious diseases, security of staff or prohibitions. All of these factors could have a material adverse effect on the Group's businesses, operating results, financial condition and/or prospects.

As the contribution of the Indian Joint Venture constitutes an increasingly important part of the Group's business strategy, a downturn in the rate of economic growth in India could have a material adverse effect on the Group's future operating results

The contribution of the Indian Joint Venture constitutes an increasingly important part of the Group's business and, accordingly, the performance and growth of the Group's businesses will be dependent in part on the health of the Indian economy which may be materially and adversely affected by political instability, regional conflicts or economic slowdown elsewhere in the world. The Indian economy also remains largely driven by the performance of the agriculture sector which depends on the nature of the monsoon, which is difficult to predict. Any slowdown in the Indian economy could have a material adverse effect on the Group's future businesses, operating results, financial condition and prospects.

The Group is exposed to counterparty credit risks which are exacerbated by the current economic downturn

Whilst the Group regularly reviews the financial solvency of potential commercial and financial counterparties and seeks to obtain credit insurance in respect of each customer for whom it undertakes a project, it is possible that certain customers, sub-contractors, joint venture partners, suppliers, or financial institutions such as banks and insurance providers, either in the private sector or those partly or whollyowned by the public sector, may become insolvent or elect to default under their contracts and that any credit insurance obtained may be insufficient to cover such losses. This risk is exacerbated by the current economic climate. If a counterparty were to default on a payment obligation to the Group, they may be unable to collect the amounts owed, in which case some or all of such amounts would need to be written off. Even where credit insurance is in place in respect of that counterparty, the scope of the credit insurance policy cover may be insufficient to cover all the risks which may present themselves and it is possible for claims to fall outside the scope of the cover, exceed the monetary limit of the relevant policy, for the underwriters to fail, or for coverage to be vitiated. Furthermore, if a counterparty, such as a sub-contractor, supplier, financial institution or joint venture partner becomes insolvent or is otherwise unable to meet its obligations in connection with a particular project, the Group will need to find a replacement to carry out that party's obligations or, alternatively, fulfil the obligations themselves, which may increase the costs to the Group. A default by a financial counterparty in respect of contracts, such as bank facilities and other financial derivatives used to hedge currency risk, could also impose costs on the Group associated with replacing such facilities or financial derivatives, and additional costs associated with any related loss of liquidity and currency risk could be incurred. Accordingly, any significant defaults or performance delays on the part of commercial and financial counterparties could increase costs or liabilities for the Group, which would adversely impact its profitability and financial condition.

Suppliers may not be prepared to supply products to the Group on commercially acceptable terms, or at all, if they are unable to obtain credit insurance which could adversely affect the Group's future prospects, financial condition and results of operations

The ability of the Group to distribute, supply and assemble steel products for its customers depends on its ability to procure products, including steel, from suppliers. If the Group is unable to obtain supplies of steel and other products used within the Group's business, at all or on commercially acceptable terms, it is likely that the Group's business would be adversely affected. In particular, as a consequence of the recent developments effecting the Group highlighted in paragraph 3 of Part I some suppliers may face difficulties in obtaining credit insurance on their receivables from their credit insurers; as a result, this may affect the willingness of some of the Group's suppliers and potential suppliers to continue extending favourable credit terms to the Group and, in some cases, the Group's suppliers and potential suppliers may require prepayments from the Group prior to making supplies available to the Group. To the extent the Group's available cash is limited, and to the extent that any such prepayments adversely affect its cashflows and working capital, the Group may not be able to procure products from suppliers or it may have to procure products on less favourable terms. Were this to be the case it is likely that the Group's businesses would be materially adversely affected. A failure by the Group to be able to purchase supplies of products as a result of the withdrawal of credit insurance to the Group's suppliers could ultimately cause the Group to cease trading.

Changes to tax laws, or to the interpretation of tax laws, as well as increases in tax rates may adversely impact the profitability of the Group

The Group is subject to the tax laws of the countries in which it operates and to certain double tax agreements entered into between such countries. Changes to these laws or the interpretation of them, or an inadvertent failure to comply with these laws or increases in applicable tax rates, may increase the tax liabilities of the Group or expose the Group to financial penalties, any of which may potentially reduce the Group's profitability.

The success of the Group depends upon its ability to recruit and retain senior management and other key employees and its appointment of a new chief executive officer and a new chief operating officer to replace Tom Haughey who stepped down from the Board in January 2013, and to replace Peter Emerson who has announced that he will step down from the Board in June 2013

The success of the Group depends on the efforts, abilities, experience and expertise of members of its senior management team and skilled personnel and its future success will depend in part on its ability to attract and retain highly skilled management and personnel. While the Group has employment or service contracts with its key executives and technical personnel, and has in place the Share Schemes which provide for share grants (or equivalent cash-based awards) to incentivise key executives and technical personnel, it cannot guarantee the retention of such key executives and technical personnel. The failure to retain and/or recruit additional or substitute senior managers and/or other key employees of the Group could have a material adverse effect on the business.

In light of the developments affecting the Group highlighted at paragraph 3 of Part I of this document, on 23 January 2013, Tom Haughey, formerly the chief executive officer of the Group stood down from his role and left the Board with immediate effect. John Dodds assumed the role of Executive Chairman with immediate effect on 23 January 2013 pending the appointment of a new chief executive. The Board is actively engaged in a search process for a new chief executive. Whilst John Dodds has significant experience in the steel construction sector and contracting having spent seven years as group chief executive of Kier Group to March 2010, the Group is currently being led by the Executive Chairman. There can be no assurance that the Board will be successful in attracting a new chief officer of the right calibre, or how long the recruitment of a new chief executive officer may take.

In addition, Peter Emerson, the Group's chief operating officer, has announced his intention to retire from the Board in June 2013 upon reaching his 60th birthday. The Board is undecided as to whether it will look to appoint a replacement for Peter Emerson or whether the role of chief operating officer will be rolled into the role of chief executive officer. Should the Board choose to appoint a new chief operating officer there can be no assurance that the Board will be successful in attracting a new chief operating officer of the right calibre, or how long the recruitment of a new chief operating officer may take.

There can be strong competition for personnel from other companies and organisations and there may be shortages in the availability of appropriately skilled and experienced individuals to replace Tom Haughey

and, if applicable, Peter Emerson which could have a material adverse effect on the Group's future prospects, financial condition or results of operations.

Industrial action taken by organised labour unions could have a material adverse effect on the Group's business, financial condition and results of operations

Whilst the Directors believe that all of the Group's operations have, in general, good relations with their employees and, where applicable, the trade unions that represent those employees, and that the Group complies with applicable employment laws and regulations relating to employees' representatives information and consultation obligations, there can be no assurance that the Group's operations will not be affected by developments in the future. There can also be no assurance that work stoppages or other labourrelated developments will not adversely affect the financial condition of the Group. Should significant industrial action be taken in any of the Group's divisions or should other labour-related developments (including the introduction of new labour regulations in countries where the Group will operate) arise, the Group could experience a significant disruption to its operations and increased costs as a result and/or damage to its reputation, which could have a material adverse effect on the Group's business, financial condition and results of operations.

Any failure of the Group's health, safety or environmental programmes or policies could subject the Group to potential liabilities and reputational damage

The nature of the businesses conducted by the Group requires the adoption and maintenance of rigorous health and safety and environmental risk management programmes since the Group is subject to a broad range of laws, regulations and standards, including those relating to the health and safety of employees, protection of the public, protection of the environment and the storage and handling of hazardous substances and waste materials. The Group is involved in significant and complex projects and therefore health and safety performance and environmental matters are critical to the success of all areas of the Group's businesses. Any failure in health and safety performance, safe working practices or environmental risk management which results in a major or significant health and safety environmental incident could subject the Group to investigations, prosecutions and/or civil litigation, each of which could be costly for the business in terms of potential liabilities, settlements and management time. Furthermore, such a failure could generate significant adverse publicity and have a negative impact on the Group's reputation and its ability to win new business, which in turn could adversely affect its operating and financial performance.

Major incidents at the Group's fabrication facilities could cause significant disruption to the Group's operations and adversely affect its future prospects, financial condition and results of operations

The Group has four main fabrication facilities which are at the core of its business and the loss of any single facility through fire or other major incident could have a material adverse effect on the ability of the Group to deliver steelwork in accordance with specified milestones on agreed delivery dates. If the Group's disaster recovery procedures are not sufficient to mitigate the harm that may result from such a disaster or disruption, it could have a material adverse effect on the Group's future prospects, financial condition or results of operations.

A major catastrophic incident in relation to one of the Group's projects could subject the Group to liability and significant reputational harm

It is possible that a major catastrophic event, such as the collapse of a bridge, building or other substantial structure could occur at one of the projects in relation to which the Group has provided construction services. Such a catastrophic event could result in the personal injury or death of one or more employees of the Group, employees of other contractors, sub-contractors working on the project or members of the public, significant, actionable environmental harm, and/or extensive damage to third party property. In the event that such a catastrophic event is found to be caused by the negligence of the Group, it could have a significant impact on its business.

Such catastrophic incidents could subject the Group to claims for personal injury, wrongful death, property damage or claims by customers, contractors, sub-contractors, governments, employees or members of the public, which could lead to the payment of extensive damages, and result in significant adverse publicity and reputational harm. Such adverse publicity and reputational harm could lead to a loss of business or a decline in the Company's share price if shareholders anticipate a loss of business.

The Group has a defined benefit pension scheme that is in deficit and in respect of which it may be required to further increase its contributions which could have a material adverse impact on the Group's business, operational results and financial condition

Atlas Ward Structures Limited, a wholly-owned subsidiary of the Company, has a defined benefit pension scheme which is closed to new members (the ''Atlas Ward Pension Scheme'').

Updated valuations for the Atlas Ward Pension Scheme, calculated in accordance with IAS 19, as at 31 December 2012 value the scheme's assets at £18.6 million and liabilities at £30.2 million. This leaves a gross deficit in the scheme of £11.6 million. Since the date of the latest actuarial valuation the Group has agreed to increase contributions to the Atlas Ward Pension Scheme by £165,000 per annum to £995,000 per annum to cover the increase in the amount of the Atlas Ward Pension Scheme's deficit.

The amount of this deficit, calculated in accordance with IAS 19 and which is recognised in the Group's balance sheet, is dependent on some critical assumptions including mortality rates and investment returns and is likely to vary from year to year. Annual reports are prepared by the scheme's actuary as at 5 April to monitor the amount of the deficit and formal actuarial valuations are carried out on a tri-annual basis. The next formal actuarial valuation is due as at 5 April 2014.

Due to the volatility of the assumptions used to calculate the deficit, the amount of contributions required from the Group may increase to cover any further increase in the deficit. In particular, in the event that the market value of the scheme's assets decline in relation to their assessed liabilities, the Group may be required to further increase its contributions to cover any further funding shortfalls. This could have a material adverse effect on the Group's business, operational results and overall financial condition.

There is a risk that the Pensions Regulator could seek to use its anti-avoidance powers against the Group in order to compel further contributions to be made by the Group to the scheme. However, the use of such powers is subject to the statutory requirements set out in the Pensions Act 2004 and it must be reasonable in the circumstances for the Pensions Regulator to do so. The Company is not aware of any circumstances which may result in the Pensions Regulator seeking to use such anti-avoidance powers.

The Group's insurance coverage may be insufficient to cover losses or it could be subject to uninsured liabilities which could materially affect its business, financial condition and results of operations

The Group maintains a customary level of insurance cover which the Directors believe is adequate for its business. The scope of the Group's insurance policy cover may be insufficient to cover all the risks which may from time to time present themselves, or may change from time to time and therefore certain liabilities of the Group may not be covered by the current policies. In respect of all Group policies, certain potential liabilities which are currently covered by existing polices may not be covered in the event of any future liabilities arising. Furthermore, in the future the Group may not be able to maintain or obtain adequate insurance cover at rates it considers reasonable or it may take the decision not to insure certain risks if it is not economically viable to do so. Even in the event of cover being maintained it is possible for claims to fall outside the scope of the cover, exceed the monetary limit of the relevant policy, for the underwriters to fail, or for coverage to be vitiated, in any case leaving the Group exposed to a portion or even the entirety of the relevant claim. In any of these circumstances where the Group faces liabilities not covered by insurance, such liabilities may have an adverse effect on the Group's business, financial condition and results of operations.

The Group is exposed to fluctuations in currency exchange rates which could have a material adverse effect on the Group's operating results and financial condition

The Group's reporting currency is, and the majority of its revenue is generated in, Sterling. However, the Group also generates a portion of its revenue in Euros, reflective of its operations across Europe.

The Group's currency translation exposure is to the Indian rupee, reflective of the Indian Joint Venture, as the results of operations of the Indian Joint Venture must be translated into sterling to produce the Group's consolidated financial statements.

The Group is also subject to certain transactional currency exposures as a result of revenues generated and operating costs incurred by the Group in non-sterling currencies including, but not limited, to the euro. Fluctuations in currency exchange rates, which have recently experienced volatility due to the global financial downturn, have affected and will continue to affect the value of revenues generated by the Group

and operating costs incurred in currencies other than Sterling, each of which could have a material adverse effect on the Group's business, financial condition and results of operations.

The Group's foreign currency hedging strategies may not adequately protect its results of operations or balance sheet position from the effect of exchange rate fluctuations, which may result in losses or may limit any benefit that it might otherwise receive from favourable movements in exchange rates. Any significant adverse fluctuations in currency rates could have a material adverse effect on the Group's business, financial condition and results of operations.

The Group is exposed to fluctuations in interest rates which could have a material adverse effect on the Group's operating results and financial condition

The Group is exposed to movements in interest rates which affect the amount of interest paid on borrowings and the return on capital investments. Borrowings under the Group's Existing Facilities are provided at a variable interest rate. To the extent that the Group's existing or future indebtedness is provided at variable interest rates and unhedged or not hedged effectively, changes in interest rates may increase the Group's cost of borrowing, potentially increasing interest expense and reducing the Group's profitability. Interest rates are highly sensitive to many factors beyond the Group's control, including international and domestic economic and political conditions. Movements in interest rates could have a material adverse effect on the cost of any variable rate and unhedged borrowing exposure or on the returns generated by the Group's investments, either of which could adversely effect the Group's business, operating results and financial condition.

3. Risk factors specific to the steelwork and construction industries

The Group operates in highly competitive markets and may not be able to compete effectively and/or profitably

The Group operates in highly competitive markets. The Group relies on factors such as technical expertise, project management expertise, quality of management, quality of service, overall competitive pricing, the availability of supplies and labour and the availability of surety bonding as well as health and safety management and reputation in order to continue to compete successfully. In increasingly competitive markets, competitors have offered and continue to offer pricing reductions and improved commercial terms to try to win work which contribute to increased pricing pressure and place significant downward pressure on the Group's profit margins. This pressure on the Group's profit margins may result in the Group having to be more selective with the projects it bids for. The Group's inability to compete effectively and/or profitably would have a material adverse effect on its business, financial condition and results of operations.

Contract disputes can result in payment delays or refusals to pay on completed contracts which could have a material adverse effect on the Group's business, financial condition and results of operations

Disputes in relation to steelwork and services provided by the Group may arise, for example, where customers allege that quality standards are not met, milestones have not been achieved or project delays have occurred. Such disputes can be significant in terms of value. The Group is subject to the risk that payments due under contracts for work undertaken will not be recovered in full, or indeed at all, and that recovery of such amounts may take longer than expected under the contract. Delays in receipt of payment or failure to receive payment altogether could have a material adverse effect on the Group's business, financial condition and results of operations.

A failure to meet deadlines could subject the Group to liability and significant reputational harm

The construction industry in which the Group operates is highly schedule driven; any failure to meet schedule requirements within contracts could adversely affect the Group's reputation and/or exposure to financial liability. Many of the Company's contracts are subject to specific delivery schedule requirements with liquidated damages charged in the event the delivery schedules are not achieved. Failure to meet any such schedule requirements could damage the Company's reputation within the industry and client base, as well as incur significant liquidated damages. While the Group seeks to limit its liability in contracts in relation to damages arising due to a failure to meet deadlines, these limitations may not be effective in all cases.

The Group is subject to risks associated with the price and availability of steel which could adversely affect the Group's business, financial condition and results of operations

The Group is subject to risks associated with the availability and price of steel, which are subject to political, economic and market factors that are outside of the Group's control. Increases in the price of steel increase the Group's operating costs and reduce its operating profit to the extent that such increases cannot be passed on to customers. The ability of the Group to pass on raw material price increases to its customers is limited by the price-sensitive nature of its customers, and there can be no assurance that it will be able to pass on any such increases in the future. In the event of a lack of availability of steel, the Group may be unable to deliver steelwork in accordance with specified milestones on agreed delivery dates which could adversely affect the Group's business, financial condition and results of operations.

The cessation of the Group's relationship with Tata Steel, the Group's principal supplier of steel, could lead to a short term financial disruption to the Group's business whilst it secures alternative supplies of steel

At present the Group is largely dependent upon Tata Steel for the supply of steel, and it is possible that there could be circumstances in the future where Tata Steel may be unwilling or unable to meet the Group's steel needs. Whilst the Directors expect that the Group would be able to quickly secure alternative sources of steel in the event of a cessation of the Group's relationship with Tata Steel or an interruption in the supply of steel, the Group could suffer a short term financial disruption to its business whilst it secures suitable alternative supplies of steel, which could have adverse financial consequences for the Group. Such alternative sources of steel may only be available at less favourable prices and on less favourable terms than those currently obtained from Tata Steel. Circumstances may also arise where the failure by Tata Steel, or any other supplier of steel to the Group to provide raw materials, may substantially delay the ability of the Group to deliver steelwork in accordance with specified milestones on agreed delivery dates which could adversely affect the Group's business, financial condition and results of operations.

The failure of the Group to obtain surety and other forms of bonding may hinder its ability to tender or win projects

In some of the markets in which the Group operates customers require the provision of surety bonding or parent company guarantees to provide cover for commitment to bid prices, advance payments and any default on the part of the Group to deliver the steelwork or services in accordance with the contract. These bonds are typically guaranteed by specialist financial institutions and banks. Such surety bonding is provided to the Group by way of two revolving credit facilities provided by two insurance companies. Given the tightening of credit in connection with the recent financial crisis, such bonding is becoming more expensive or difficult to obtain. If conditions were to further deteriorate, bonding may, to the extent not covered by the facilities that the Group currently has in place, in some instances, be unavailable. If the Group is not able to arrange such bonding, then it may be difficult to tender for or win projects, which may adversely impact its future prospects, financial condition or results of operations.

The Group's business depends on the continued availability and effective management of sub-contractors and other service providers, and the performance of the contractors under which the Group may sub-contract

Where the Group's work is conducted by sub-contractors and other providers, the Group generally retains the primary responsibility for delivery. The Group's business is dependent on the availability, quality and performance of its sub-contractors and other service providers. If the Group is unable to locate, select, monitor and manage these service providers successfully, the Group's ability to complete contracts on schedule and within forecast costs to the requisite levels of quality could be severely impacted and there may be a material adverse effect on future prospects or results of operations.

Additionally, when the Group serves as a sub-contractor on a project it will become dependent on the effective performance of the relevant contractor for whom it works. When contractors fail to adequately manage projects by, for example, not properly coordinating amongst other contractors, sub-contractors, service providers and customers, the Group may be unable effectively to perform its responsibilities in relation to the project. Furthermore, where a contractor fails to secure payment from its customer for amounts due in connection with a project, the Group may experience a delay in receiving payment for work it has completed in connection with such project. Accordingly, ineffective management of a project by a contractor for whom the Group is carrying out work could have a material adverse effect on the Group's financial condition or results of operations.

Legal proceedings, investigations and disputes could have a material adverse effect on the Group's future prospects, financial condition or results of operations

The Group engages in steelwork services that can result in substantial injury or damages that may expose it to legal proceedings, investigations and disputes. For example, in the ordinary course of its business, it may be involved in legal disputes regarding non-performance under a contract, project cost overruns and liquidated damages, personal injury and wrongful death claims, labour disputes, negligence claims, commercial disputes as well as other claims. In addition, in the ordinary course of its business it may make professional judgements and recommendations about environmental and engineering solutions in relation to the provisions and erection of steelwork. The Group may be deemed to be responsible for those judgements and recommendations if they are later determined to be erroneous. Additionally, the Group may be found liable for the wrongful acts or omissions of its sub-contractors or service providers. Any unfavourable legal ruling could result in substantial monetary damages or criminal violations.

The Group is subject to numerous regulations and laws governing its operations. Any failure to comply with such regulations can lead to investigations, prosecutions, fines or civil penalties, each of which can be significant and lead to reputational damage.

The Group is subject to various complex regulations and any violations of or changes in such regulations could disrupt its business

The industries and jurisdictions in which the Group operates impose a number of complex, demanding and evolving legal, administrative and regulatory requirements which relate to, among other matters, criminal and civil laws, tax laws, planning, developing, building, land use, fire, health and safety, environment, competition and employment. These requirements often provide broad discretion to the administering authorities in relation to enforcement. Violations of or changes in relevant law, regulations or policies, or the interpretation thereof, or delays in such interpretations being delivered, may delay or increase the cost of ongoing contracts or subject the Group to penalties, fines, criminal prosecutions, civil claims or other unforeseen costs or debarment.

Each aspect of the regulatory environment in which the Group operates is subject to change. Changes could have an adverse impact on its business and operating results, in particular in (but not limited to) the following areas:

construction laws and regulations;
planning requirements;
utilities regulations;
labour laws;
pension regulations;
health and safety regulations;
competition/antitrust;
data protection;
environmental and sustainability requirements;
tax regulations; and
the transfer of capital and income in and between the countries in which the Group operates.

4. Additional risks relating to the Rights Issue and the New Ordinary Shares

The price of the Ordinary Shares may be volatile, may decrease, and Shareholders may not be able to sell the Ordinary Shares at a favourable price after the Rights Issue

The price of the Ordinary Shares may decline below the Issue Price. Should that occur after Rights are exercised, Qualifying Shareholders who exercised their Rights will suffer an immediate loss as a result. Moreover, there can be no assurance that, following the exercise of Rights, Shareholders will be able to sell their New Ordinary Shares at a price equal to or greater than the Issue Price.

The price of the Ordinary Shares will fluctuate and may not always reflect the underlying asset value or the prospects of the Group. The price of the Ordinary Shares may fall in response to market appraisal of the Group's current strategy or if the Group's operating results and/or prospects from time to time are below the prior expectations of market analysts and investors. In addition, stock markets have, from time to time, experienced significant price and volume fluctuations that have affected the market price of securities and which may be unrelated to the Group's operating performance and prospects. A number of factors outside

the control of the Group may impact on its performance and the price of the Ordinary Shares. The factors which may affect the Company's share price include (but are not limited to):

the Group's expected and actual operating performance and the performance of other companies in the markets in which the Group operates;
speculation about the Group's businesses, about mergers or acquisitions involving the Group and/or major divestments by the Group in the press, media or investment community;
speculation and short-selling of the Company's shares relating to the intentions of the Company's major Shareholders or significant sales of Shares by such Shareholders;
the publication of credit ratings by rating agencies and of research reports by analysts; and
general economic and market conditions.

An active trading market in the Nil Paid Rights may not develop

An active trading market in the Nil Paid Rights may not develop on the London Stock Exchange during the trading period. In addition, because the trading price of the Nil Paid Rights depends on the trading price of Ordinary Shares, the Nil Paid Rights price may be volatile and is subject to the same risks as noted in the preceding risk factor. The volatility of the price of Ordinary Shares may also magnify the price volatility of the Nil Paid Rights.

The listing of the New Ordinary Shares on the Official List and Admission may not occur when expected

There is no assurance that the listing of the New Ordinary Shares on the Official List and Admission will take place when anticipated. See ''Expected Timetable of Principal Events'' on page 28 of this document for further information on the expected dates of these events.

The Company may not be able to pay any dividend in future periods

Under UK company law, a company may pay cash dividends only to the extent that it has distributable reserves and cash available for this purpose. The Company's ability to pay dividends is affected by the Group's profitability and the extent to which the Company has distributable reserves out of which dividends may be paid. Whilst at the current time the Company does have distributable reserves from which it is able to pay dividends, in the light of these factors, the Company can give no assurance that it will be able to pay dividends in the future or as to the amount of any such dividend, if paid.

Shareholders who do not acquire New Ordinary Shares in the Rights Issue will experience dilution of their ownership of the Company

The Rights Issue offer period is expected to begin on 19 March 2013 and expire at 11.00 a.m. (London time) on 4 April 2013. If Qualifying Shareholders do not take up their entitlements under the Rights Issue, their proportionate ownership and voting interests in the Company will be reduced and the percentage that their Shares will represent of the total share capital of the Company will be reduced accordingly. Even if a Qualifying Shareholder elects to sell their unexercised Nil Paid Rights or such Nil Paid Rights are sold on their behalf, the consideration they receive may not be sufficient to compensate them fully for the dilution of their percentage ownership of the Company's capital that may be caused as a result of the Rights Issue.

If the conditions to the Rights Issue are not satisfied by Admission, the Rights Issue will not proceed

The Rights Issue is underwritten pursuant to the Underwriting Agreement, the scope and principal terms (including conditions and termination rights) of which are set out in paragraph 12 of Part IX of this document. The underwriting of the Rights Issue will become fully effective on 19 March 2013, provided that all of the conditions are satisfied or waived (where applicable) by Admission and none of the termination rights are exercised prior to Admission. The Underwriting Agreement grants Jefferies customary rights to terminate the Underwriting Agreement in certain circumstances prior to Admission. If Jefferies is entitled to terminate, and does terminate, the Underwriting Agreement before Admission occurs, then the Rights Issue will not proceed.

In addition, if the Resolution is not passed at the General Meeting, the Rights Issue will not proceed.

Any future issues of Ordinary Shares could further dilute the holdings of current Shareholders

Other than under the Rights Issue, the Company has no current plans for an offering of Ordinary Shares. However, it is possible that the Company may decide to offer additional Ordinary Shares or another class of shares in the capital of the Company in the longer term either to raise capital or for other purposes. If Shareholders did not take up such offer of shares or were not eligible to participate in such offering, their proportionate ownership and voting interests in the Company would be reduced and the percentage that their Ordinary Shares would represent of the total share capital of the Company would be reduced accordingly. An additional offering, or significant sales of Ordinary Shares by major Shareholders, could have a material adverse effect on the market price of the Company's shares as a whole.

Overseas Shareholders may not be able to receive New Ordinary Shares in the Rights Issue

Securities laws of certain jurisdictions may restrict the Company's ability to allow participation by Overseas Shareholders in the Rights Issue. In particular, holders of Ordinary Shares with registered addresses, or resident or located, in the US may not be able to exercise Rights unless a registration statement under the US Securities Act is effective with respect to such rights or an exemption from the registration requirements is available thereunder. The Rights Issue will not be registered under the US Securities Act. Securities laws of certain other jurisdictions may restrict the Company's ability to allow participation by Qualifying Shareholders in the Rights Issue in such jurisdictions, and/or in any future issue of shares carried out by the Company. Qualifying Shareholders who have a registered address in, or who are resident or located in, any of the Excluded Territories should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to receive Nil Paid Rights, Fully Paid Rights, Provisional Allotment Letters and the New Ordinary Shares in the Rights Issue.

The ability of Overseas Shareholders to bring actions or enforce judgments against the Company or the Directors may be limited

The ability of an Overseas Shareholder to bring an action against the Company may be limited. The Company is a public limited company incorporated in England and Wales. The rights of holders of Ordinary Shares are governed by English law and by the Company's Articles of Association. These rights differ from the rights of shareholders in typical US corporations and some other non-UK corporations. An Overseas Shareholder may not be able to enforce a judgment against some or all of the Directors and senior management. The Directors and senior management are resident in the UK. Consequently, it may not be possible for an Overseas Shareholder to effect service of process upon the Directors and senior management within the Overseas Shareholder's country of residence or to enforce against the Directors and senior management judgments of courts of the Overseas Shareholder's country of residence based on civil liabilities under that country's securities laws. There can be no assurance that an Overseas Shareholder will be able to enforce any judgments in civil and commercial matters or any judgments under the securities laws of countries other than the UK against the Directors or senior management who are residents of the UK or countries other than those in which judgment is made. In addition, English or other courts may not impose civil liability on the Directors or senior management in any original action based solely on foreign securities laws brought against the Company or the Directors in a court of competent jurisdiction in England or other countries.

Shareholders may be subject to exchange rate risks

The Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares are priced in Sterling, and will be quoted and traded in Sterling. In addition, any dividends the Company may pay will be declared and paid in Sterling. Accordingly, Shareholders resident in non-UK jurisdictions are subject to risks arising from adverse movements in the value of their local currencies against the pound, which may reduce the value of the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares, as well as that of any dividends paid.

RIGHTS ISSUE STATISTICS

Issue Price per New Ordinary Share	23 pence
Basis of Rights Issue	7 New Ordinary Shares for every 3 Existing Ordinary Shares
Number of Ordinary Shares in issue at the date of this document	89,251,076
Number of New Ordinary Shares to be provisionally allotted pursuant to the Rights Issue(1)	208,252,511
Number of Ordinary Shares in issue immediately following completion of the Rights Issue(1)	297,503,587
New Ordinary Shares as a percentage of the enlarged issued share capital of the Company immediately following completion of the Rights Issue(1)	70%
Estimated proceeds of the Rights Issue to be retained by the Company (net of expenses)(2)	£44.8 million
Estimated expenses of the Rights Issue (excluding VAT)	£3.1 million
Notes:

(1) The numbers in this table are based on 89,251,076 Existing Ordinary Shares in issue as at the date of this document and assume that no further Ordinary Shares are issued from the date of this document until completion of the Rights Issue other than the New Ordinary Shares. The actual number of New Ordinary Shares to be issued under the Rights Issue will be subject to rounding to eliminate fractions.

(2) The estimated net proceeds are based on 208,252,511 New Ordinary Shares being issued pursuant to the Rights Issue and on the assumptions set out in note (1) above, and the expression ''net proceeds of the Rights Issue'', where used in this document, shall be qualified accordingly.

Each of the times and dates in the table below is indicative only and may be subject to change.

Record Date	close of business on 14 March 2013
Latest time and date for receipt of Forms of Proxy for the General Meeting	11.00 a.m. on 15 March 2013
General Meeting	11.00 a.m. on 18 March 2013
Despatch of Provisional Allotment Letters (to Qualifying Non-CREST Shareholders only(1))	18 March 2013
Notice to be published in the London Gazette	18 March 2013
Dealings in New Ordinary Shares, nil paid, commence on the London Stock Exchange	8.00 a.m. on 19 March 2013
Start of the Rights Issue offer period	19 March 2013
Existing Ordinary Shares marked ''ex-rights'' by the London Stock Exchange	8.00 a.m. on 19 March 2013
Nil Paid Rights credited to stock accounts in CREST as soon as possible after (Qualifying CREST Shareholders only(1))	8.00 a.m. on 19 March 2013
Nil Paid Rights and Fully Paid Rights enabled in CREST	8.00 a.m. on 19 March 2013
Recommended latest time for requesting withdrawal of Nil Paid Rights and Fully Paid Rights from CREST (i.e. if your Nil Paid Rights and Fully Paid Rights are in CREST and you wish to convert them to certificated form)	4.30 p.m. on 27 March 2013
Latest time for depositing renounced Provisional Allotment Letters, nil or fully paid, into CREST or for depositing Nil Paid Rights or Fully Paid Rights into a CREST stock account (i.e. if your Nil Paid Rights and Fully Paid Rights are represented by a Provisional Allotment Letter and you wish to convert them to uncertificated form)	3.00 p.m. on 28 March 2013
Latest time and date for splitting Provisional Allotment Letters, nil or fully paid	3.00 p.m. on 2 April 2013
Latest time and date for acceptance, payment in full and registration of renunciation of Provisional Allotment Letters	11.00 a.m. on 4 April 2013
Results of Rights Issue to be announced	5 April 2013
Dealings in New Ordinary Shares, fully paid, commence on the London Stock Exchange	8.00 a.m. on 5 April 2013
New Ordinary Shares credited to CREST stock accounts	5 April 2013
Despatch of definitive share certificates for the New Ordinary Shares in certificated form	by no later than 12 April 2013

Notes:

(1) The ability to participate in the Rights Issue is subject to certain restrictions relating to Qualifying Shareholders with registered addresses or who are located or resident in countries outside the UK (particularly the Restricted Shareholders) details of which are set out in Part III of this document.

(2) The times and dates set out in the expected timetable of principal events above and mentioned throughout this document may be adjusted by Severfield-Rowen (in consultation with Jefferies), in which event details of the new times and dates will be notified to the UK Listing Authority, the London Stock Exchange and, where appropriate, Qualifying Shareholders.

(3) Different deadlines and procedures for applications may apply in certain cases. For example, if you hold your Existing Ordinary Shares through a CREST member or other nominee, that person may set an earlier date for application and payment than the dates noted above.

(4) References to times in this document are to London times unless otherwise stated.

DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS

Directors	Principal functions
John Dodds	Executive Chairman
Peter Emerson	Chief Operating Officer
Alan Dunsmore	Finance Director
Derek Randall	Executive Director — Business Development and
	International
Keith Elliot	Non-executive Director
Toby Hayward	Non-executive Director
Chris Holt	Non-executive Director

Note: The business address of each of the Directors is the Company's registered office address, shown below.

Company Secretary	Jonathan Rhodes
Registered office	Dalton Airfield Industrial Estate Dalton Thirsk North Yorkshire YO7 3JN
Financial Adviser, Sponsor, Bookrunner, Underwriter and Corporate Broker	Jefferies International Limited Vintners Place 68 Upper Thames Street London EC4V 3BJ
Legal advisers to the Company	Ashurst LLP Broadwalk House 5 Appold Street London EC2A 2HA
Legal advisers to Jefferies	Latham & Watkins (London) LLP 99 Bishopsgate London EC2M 3XF
Auditors and Reporting Accountants to the Company	Deloitte LLP 1 City Square Leeds LS1 2AL
Registrar and Receiving Agent	Computershare Investor Services PLC PO Box 82 The Pavilions Bridgwater Road Bristol BS99 7ZZ

IMPORTANT INFORMATION

Presentation of financial information

The Company publishes its financial statements in pounds sterling (''£'' or ''Sterling''). The abbreviation ''£m'' represents millions of pounds sterling, and references to ''pence'' and ''p'' represent pence in the UK. References to ''Euros'', ''EUR'' or ''e'' are to the single currency of the participating member states of the European Union.

The financial information presented in a number of tables in this document has been rounded to the nearest whole number or the nearest decimal place. Therefore, the sum of the numbers in a table may not conform exactly to the total figure given for that table. In addition, certain percentages presented in the tables in this document reflect calculations based upon the underlying information prior to rounding, and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers.

International Financial Reporting Standards

The financial statements have been prepared in accordance with IFRS. The financial statements have also been prepared in accordance with IFRS adopted for use in the European Union and therefore comply with Article 4 of the EU IAS Regulation.

There are certain non-IFRS financial measures included in this document, including key performance indicators. The Directors have included these measures as they use them to measure business performance.

These measures should not be considered as an alternative to measures based on IFRS, and may not be computed in the same manner as similar titled measures presented by other companies.

No incorporation of website information

Severfield-Rowen's website is www.sfrplc.com and this document is available on that website. The information on that website, any website mentioned in this document or any website directly or indirectly linked to these websites has not been verified and does not form part of this document and investors should not rely on it.

Forward looking statements

Certain statements made in this document constitute forward looking statements. Forward looking statements can be identified by the use of words such as ''may'', ''will'', ''should'', ''predict'', ''assurance'', ''aim'', ''hope'', ''risk'', ''expect'', ''intend'', ''estimate'', ''anticipate'', ''believe'', ''plan'', ''seek'', ''continue'' or other similar expressions that are predictive or indicative of future events. All statements other than statements of historical facts included in this document, including, without limitation, those regarding the Group's expectations, intentions and beliefs concerning, amongst other things, the Group's results of operations, financial position, growth strategy, prospects, dividend policy and the industries in which the Group operates, are forward looking statements. By their nature, such forward looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Group and its Directors, which may cause the actual results, performance, achievements, dividends of the Group or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. As such, forward looking statements are no guarantee of future performance.

Such forward looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. Among the important factors that could cause the Group's actual results, performance or achievements to differ materially from those in the forward looking statements include, among others, economic conditions in the relevant markets of the world, market position of the Company or its subsidiaries, earnings, financial position, return on capital and operating margins, anticipated investments and capital expenditures, political uncertainty, the actions of competitors, activities by governmental authorities such as changes in taxation or regulation, changing business or other market conditions and general economic conditions and such other risk factors identified in the ''Risk Factors'' section of this document. Forward looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward looking statements. These forward looking statements speak only as of the date of this document and are not intended to give assurance as to future results. The Group will update this document as

required by applicable law, including the Takeover Code, Listing Rules, Prospectus Rules and/or the Disclosure and Transparency Rules of the FSA, but otherwise expressly disclaims any such obligation or undertaking to release publicly any updates or revisions to any forward looking statement contained herein to reflect any change in Severfield-Rowen's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

You are advised to read this document and, in particular, the Summary, the Risk Factors, Part IV ''Information on Severfield-Rowen'' and Part V ''Operating and Financial Review'' for a further discussion of the risks and other factors that could affect the Group's future performance and the industries and markets in which it operates. In light of these risks, uncertainties and assumptions, the events described in the forward looking statements in this document may or may not occur. Investors should note that the contents of these paragraphs relating to forward looking statements are not intended to qualify the statements made as to sufficiency of working capital in this document.

Defined terms

Certain terms used in this document, including all capitalised terms and other terms, are defined and explained in the section headed ''Definitions and Glossary'' in Part XI of this document.

Market and industry information

Market data and certain industry forecasts used in this document were obtained from internal surveys, reports and studies, where appropriate, as well as market research, publicly available information and industry publications. Industry forecasts are forward-looking statements. See ''Forward looking statements'' above.

Enforcement of civil liabilities

The ability of an Overseas Shareholder to bring an action against the Company may be limited under law.

The Company is a public limited company incorporated under the laws of England and Wales. The rights of holders of the Shares are governed by English law and by the Company's Articles. These rights differ from the rights of shareholders in typical US corporations and some other non-UK corporations. In particular, even though the Companies Act has prescribed a range of circumstances under which shareholders of companies may bring derivative actions, English law significantly limits such circumstances. Under English law generally, only a company can be the proper pursuer or claimant in proceedings in respect of wrongful acts committed against it. In addition, it may be difficult for an Overseas Shareholder to prevail in a claim against the Company under, or to enforce liabilities predicated upon, non-UK securities laws.

An Overseas Shareholder may not be able to enforce a judgment against some or all of the Company's Directors. All the Directors of the Company are residents of the UK. Consequently, it may not be possible for an Overseas Shareholder to affect service of process upon the Directors within the Overseas Shareholder's country of residence or to enforce against the Directors judgments of courts of the Overseas Shareholder's country of residence based on civil liabilities under that country's securities laws. There can be no assurance that an Overseas Shareholder will be able to enforce any judgments in civil and commercial matters or any judgments under the securities laws of countries other than the UK against the Directors who are residents of the UK or countries other than those in which judgment is made. In addition, English or other courts may not impose civil liability on the Directors in any original action based solely on foreign securities laws brought against the Company or the Directors in a court of competent jurisdiction in England or other countries.

Notice to Investors in the United States

Securities may not be offered or sold in the United States unless they are registered under the US Securities Act or are exempt from such registration. The New Ordinary Shares, the Nil Paid Rights and the Fully Paid Rights have not been and will not be registered under the US Securities Act or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the United States except pursuant to an applicable exemption from the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States.

The Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the US or any US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares or the accuracy or adequacy of this document. Any representation to the contrary is a criminal offence in the United States.

Subject to certain exceptions, neither this document nor the Provisional Allotment Letter constitutes, or will constitute, or forms part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or acquire New Ordinary Shares, Nil Paid Rights and/or Fully Paid Rights to any Shareholder with a registered address in or located in the United States. Notwithstanding the foregoing, the Company reserves the right to offer the Nil Paid Rights to, and the Fully Paid Rights and the New Ordinary Shares may be offered to and acquired by, a limited number of persons in the United States reasonably believed to be ''qualified institutional buyers'' within the meaning of Rule 144A under the US Securities Act (''QIBs''), in offerings exempt from, or in transactions not subject to, the registration requirements of the US Securities Act.

The New Ordinary Shares, the Nil Paid Rights and the Fully Paid Rights are being offered and sold outside the United States in reliance on Regulation S.

A QIB in the United States, by exercising its Nil Paid Rights or Fully Paid Rights and/or acquiring any New Ordinary Shares upon exercise thereof or by purchasing New Ordinary Shares not taken up in the Rights Issue, will be deemed to represent, warrant and agree, amongst other things that:

it is a QIB; is aware that the offer and sale of securities to it is being made in a transaction exempt from registration under the US Securities Act; and is acquiring such securities for its own account or for the account or benefit of a QIB;
it understands that such securities have not been and will not be registered under the US Securities Act and may not be reoffered, resold, pledged or otherwise transferred except:
in an offshore transaction in accordance with Regulation S under the US Securities Act;
to a QIB in a transaction in accordance with Rule 144A under the US Securities Act; or
with respect to the New Ordinary Shares only, pursuant to Rule 144 under the US Securities Act (if available); or
in another transaction exempt from, or not subject to, the registration requirements under the US Securities Act,

and, in each case, in compliance with any applicable securities laws of any state or other jurisdiction of the United States; and

for so long as the New Ordinary Shares are ''restricted securities'' within the meaning of Rule 144(a)(3) under the US Securities Act, not to deposit any New Ordinary Shares in any unrestricted depositary facility established or maintained by any depositary bank.

No representation has been or will be made by the Company or Jefferies as to the availability of Rule 144 under the US Securities Act or any other exemption under the US Securities Act or any state securities laws for the reoffer, sale, pledge or transfer of the New Ordinary Shares by any investor.

In the United States, this prospectus is being furnished on a confidential basis solely for the purpose of enabling a prospective investor to consider purchasing the particular securities described herein. The information contained in this prospectus has been provided by the Company and the other sources identified herein. Distribution of this prospectus to any person other than the offeree specified by the Company and those persons, if any, retained to advise such offeree with respect thereto, is unauthorised, and any disclosure of its contents, without prior written consent of the Company, is prohibited. Any reproduction or distribution of this prospectus in the United States, in whole or in part, and any disclosure of its contents to any other person is prohibited. This prospectus is personal to each offeree and does not constitute an offer to any other person or to the public generally to subscribe for or otherwise acquire the securities described herein. Investors agree to the foregoing by accepting delivery of this prospectus.

Furthermore, each person in the United States acquiring Nil Paid Rights, Fully Paid Rights or New Ordinary Shares will, prior to any such acquisition, be required to execute and deliver to the Company and/or one of its designees and Jefferies, an investor letter setting forth certain additional representations and warranties and certain restrictions and procedures regarding the securities.

Notice to New Hampshire Residents Only

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES (''RSA 421-B'') WITH THE STATE OF NEW HAMPSHIRE, NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT, NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT, ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

Notice to investors in a European Economic Area member state

In relation to the EEA States (except for the United Kingdom) that have implemented the Prospectus Directive (each, a ''relevant member state''), with effect from and including the date on which the Prospectus Directive was implemented in that relevant member state (the ''relevant implementation date''), no New Ordinary Shares, Nil Paid rights or Fully Paid Rights have been offered or will be offered pursuant to the Rights Issue to the public in that relevant member state prior to the publication of a prospectus in relation to the New Ordinary Shares, Nil Paid Rights and Fully Paid Rights which has been approved by the competent authority in that relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in the relevant member state, all in accordance with the Prospectus Directive, except that with effect from and including the relevant implementation date, offers of New Ordinary Shares, Nil Paid Rights or Fully Paid Rights may be made to the public in that relevant member state at any time under the following exemptions under the Prospectus Directive, if they are implemented in that relevant member state:

(i) to any legal entity which is a qualified investor, as defined in the Prospectus Directive;
(ii) to fewer than 100, or if the relevant member state has implemented the relevant provisions of the PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) in such relevant member states; or
(iii) in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of New Ordinary Shares, Nil Paid rights or Fully Paid Rights shall result in a requirement for the publication by the Company or Jefferies of a prospectus pursuant to Article 3 of the Prospectus Directive or any measure implementing the Prospectus Directive in that relevant member state.

For this purpose, the expression ''an offer of any New Ordinary Shares, Nil Paid Rights or Fully Paid Rights to the public'' in relation to any New Ordinary Shares, Nil Paid Rights and Fully Paid Rights in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the Rights Issue and any New Ordinary Shares, Nil Paid Rights and Fully Paid Rights to be offered so as to enable an investor to decide to acquire any New Ordinary Shares, Nil Paid Rights or Fully Paid Rights, as the same may be varied in that relevant member state by any measure implementing the Prospectus Directive in that relevant member state.

Notice to all Overseas Investors

All Overseas Shareholders and any person (including, without limitation, a nominee or trustee) who has a contractual or legal obligation to forward this document or any Provisional Allotment Letter, if and when received, or other document to a jurisdiction outside the UK, should read paragraph 8 of Part III of this document.

Notice to all investors

The Nil Paid Rights, the Fully Paid Rights, the Provisional Allotment Letters and the New Ordinary Shares will not be registered under the securities laws of the United States, any state or other jurisdiction of the United States or any Excluded Territory and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within such jurisdictions except pursuant to an applicable exemption from and in compliance with any applicable securities laws. There will be no public

offer of the Nil Paid Rights, the Fully Paid Rights, the Provisional Allotment Letters and the New Ordinary Shares in any of the Excluded Territories.

Subject to certain exceptions, this document does not constitute an offer of Nil Paid Rights, Fully Paid Rights or New Ordinary Shares to any person with a registered address, or who is located, in the United States or any Excluded Territory or in any other jurisdiction in which such an offer is unlawful.

To the extent that New Ordinary Shares are not taken up in the Rights Issue, Jefferies may arrange for the offer of the New Ordinary Shares (a) in accordance with Regulation S under the US Securities Act or (b) to persons reasonably believed to be QIBs in reliance on an exemption from the registration requirements of section 5 of the US Securities Act. Prospective investors are hereby notified that sellers of the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares may be relying on the exemption from the registration provisions of Section 5 of the US Securities Act provided by Rule 144A thereunder.

In addition, until 40 days after the commencement of the Rights Issue, an offer, sale or transfer of the New Ordinary Shares, the Nil Paid Rights or the Fully Paid Rights within the United States by a dealer (whether or not participating in the Rights Issue) may violate the registration requirements of the US Securities Act.

Any person exercising the Nil Paid Rights or the Fully Paid Rights will be required to make the representations set out at paragraph 9.4 of Part III of this document. Notwithstanding the foregoing, where proof has been provided to the Company's satisfaction that Nil Paid Rights or Fully Paid Rights are being exercised by a person that is, and each account for which it is acting is, or is acting on behalf of a person that is, a QIB and that such exercise will not result in the contravention of any applicable regulatory or legal requirements in any jurisdiction, the Company may allow such exercise on the terms and conditions and subject to the requirements set out in Part III of this document.

The Company reserves the right to treat as invalid any Provisional Allotment Letter (or renunciation thereof) that appears to the Company or its agents to have been executed in or despatched from the United States or that provides an address in the United States for the acceptance or renunciation of the Rights Issue, or which does not make the warranty set out in the Provisional Allotment Letter to the effect that the person accepting or renouncing the Provisional Allotment Letter does not have a registered address and is not otherwise located in the United States and is not acquiring the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Nil Paid Rights, Fully Paid Rights or New Ordinary Shares in the United States or where the Company believes acceptance of such Provisional Allotment Letter may infringe applicable legal or regulatory requirements. The Company will not be bound to allot (on a non-provisional basis) or issue any New Ordinary Shares, Nil Paid Rights or Fully Paid Rights to any person with an address in, or who is otherwise located in, the United Sates in whose favour a Provisional Allotment Letter or any Nil Paid Rights, Fully Paid Rights or New Ordinary Shares may be transferred or renounced. In addition, the Company and Jefferies reserve the right to reject any MTM instruction sent by or on behalf of a CREST member with a registered address in the United States in respect of the Nil Paid Rights. Any payment made in respect of Provisional Allotment Letters under any of these circumstances will be returned without interest.

Any persons in the United States who obtain a copy of this document should inform themselves about and observe any legal restrictions and any person in the United Sates who is not a QIB is required to disregard it.

For so long as any of the Nil Paid Rights, Fully Paid Rights or New Ordinary Shares are ''restricted securities'' within the meaning of Rule 144(a)(3) under the US Securities Act, the Company will, during any period in which it is neither subject to Section 13 or Section 15(d) of the US Securities Exchange Act of 1934, as amended, nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder, furnish, upon request, to any holder or beneficial holder of the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares, or any prospective purchaser designated by any such holder or beneficial owner, upon the request of such holder, beneficial owner or prospective purchaser, the information required to be delivered pursuant to Rule 144A(d)(4) under the US Securities Act.

Any reproduction or distribution of this document, in whole or in part, and any disclosure of its contents or use of any information contained in this document for any purpose other than considering an investment in the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares is prohibited. By accepting delivery of this document, each offeree of the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares agrees to the foregoing.

The distribution of this document and/or the Provisional Allotment Letters and/or the transfer of the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares into jurisdictions other than the UK may be restricted by law. Persons into whose possession these documents come should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, such documents should not be distributed, forwarded to or transmitted in or into the United States or any of the Excluded Territories or into any other jurisdiction where the extension or availability of the Rights Issue would breach any applicable law. For further information on the manner of distribution of the New Ordinary Shares, and transfer restrictions to which they are subject, see paragraph 8 of Part III of this document.

The Nil Paid Rights, the Fully Paid Rights, the Provisional Allotment Letters and the New Ordinary Shares are not transferable, except in accordance with, and the distribution of this document is subject to, the restrictions set out in paragraph 8 of Part III of this document. No action has been taken by Severfield-Rowen that would permit an offer of the New Ordinary Shares or possession or distribution of this document or any other offering or publicity material in any jurisdiction where action for that purpose is required, other than in the UK.

No person has been authorised to give any information or make any representations other than those contained in this document and, if given or made, such information or representations must not be relied upon as having been authorised by Severfield-Rowen. Neither the delivery of this document nor any subscription or sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of Severfield-Rowen since the date of this document or that the information in this document is correct as at any time subsequent to its date.

In making an investment decision, each investor must rely on their own examination, analysis and enquiry of the Company and the terms of the Rights Issue, including the merits and risks involved.

General notice

Nothing contained in this document is intended to constitute investment, legal, tax, accounting or other professional advice. This document is for your information only and nothing in this document is intended to endorse or recommend a particular course of action. You should consult with an appropriate professional for specific advice rendered on the basis of your situation.

WHERE TO FIND HELP

Part II of this document sets out answers to some of the questions most often asked by shareholders about rights issues. If you have further questions, please telephone the Shareholder Helpline on 0870 707 1329 from within the United Kingdom or on +44(0) 870 707 1329 if calling from outside the United Kingdom. The Shareholder Helpline is available from 8.30 a.m. to 5.00 p.m. (London time) Monday to Friday.

Calls to the Shareholder Helpline number are charged at approximately 10 pence per minute (including VAT) plus any of your service provider's network extras. Calls to the Shareholder Helpline number from outside the UK are charged at applicable international rates. Different charges may apply to calls made from mobile telephones and calls may be recorded and monitored randomly for security and training purposes.

PLEASE NOTE THAT, FOR LEGAL REASONS, THE SHAREHOLDER HELPLINE IS ONLY ABLE TO PROVIDE INFORMATION CONTAINED IN THIS DOCUMENT AND INFORMATION RELATING TO THE COMPANY'S REGISTER OF MEMBERS AND IS UNABLE TO GIVE ADVICE ON THE MERITS OF THE RIGHTS ISSUE, OR PROVIDE LEGAL, FINANCIAL, TAX OR INVESTMENT ADVICE.

PART I

LETTER FROM THE EXECUTIVE CHAIRMAN OF SEVERFIELD-ROWEN PLC

SEVERFIELD-ROWEN PLC

(Incorporated under the Companies Act 1985 and registered in England and Wales under the Companies Act 1985, with registered number 1721262)

Dalton Airfield Industrial Estate Dalton Thirsk North Yorkshire YO7 3JN

28 February 2013

Dear Shareholder

Proposed 7 for 3 Underwritten Rights Issue of up to 208,252,511 New Ordinary Shares at 23 pence per New Ordinary Share and Notice of General Meeting

1. Introduction

Severfield-Rowen has today announced its intention to raise approximately £44.8 million (net of expenses) by way of a rights issue. Pursuant to the Rights Issue, the Directors propose to offer New Ordinary Shares at 23 pence per share to Qualifying Shareholders, on the basis of 7 New Ordinary Shares for every 3 Existing Ordinary Shares that each Qualifying Shareholder holds at the close of business on the Record Date.

The Issue Price represents a 38.7 per cent. discount to the theoretical ex-rights price of 37.55 pence based on the closing middle-market price of 71.5 pence per Existing Ordinary Share on 27 February 2013 (being the latest practicable date prior to the publication of this document). The Rights Issue has been fully underwritten by Jefferies on, and subject to, the terms of the Underwriting Agreement.

The Rights Issue is conditional, inter alia, on the passing, without material amendment, of the Resolution at the General Meeting being convened for 11.00 a.m. on 18 March 2013 and on the Underwriting Agreement becoming unconditional and not being terminated.

In order to take up their entitlement to the New Ordinary Shares, Qualifying Shareholders need to make payment in full on acceptance by no later than 11.00 a.m. on 4 April 2013 (or such later date as may be notified by Severfield-Rowen).

The Board also announced today:

that the Group has agreed with its lenders revised terms for its revolving credit facility. The Revised Facilities Agreement will come into effect, among other conditions, upon the application of the net proceeds of the Rights Issue to reduce the outstanding borrowings under the Existing Facilities Agreement. The total revolving credit facility available under the Revised Facilities Agreement will be £35 million, although under the terms of the Revised Facilities Agreement only £20 million of the total commitments will be available for utilisation until 31 December 2013.
the Group's Interim Period Results for the 12 month period ended 31 December 2012. The Group has previously announced its intention to change its financial year end to 31 March, with effect from 31 March 2013. This is primarily to align the Group's reporting period with that of its Indian Joint Venture, which is expected to become an increasingly important element of the Group's financial performance in future years. Having previously published unaudited interim results for the six months to 30 June 2012, the Group has now also published interim period results for the 12 month period ended 31 December 2012, which have been subject to an interim review by Deloitte LLP and which are reproduced in full in this document in Part VII.

The purpose of this letter is to provide you with details of, and set out the background to, the proposed Rights Issue and to explain why the Directors consider the Rights Issue and the Resolution to be in the best interests of the Company and the Shareholders as a whole, and to recommend that you vote in favour of the Resolution set out in the Notice of General Meeting at the end of this document.

2. Summary Information on the Company

Since becoming a public company in 1988, Severfield-Rowen has grown to become the market leader in the design, fabrication and erection of structural steel and the largest fabricator of structural steel for the construction market in the UK. The Group provides an extensive in-house service to its customers, offering streamlined design, fabrication and erection capability across multiple industry sectors. Severfield-Rowen currently operates through three main business units, Severfield-Watson Structures Limited, Atlas Ward Structures Limited and Fisher Engineering Limited. In the 12 month financial period ended 31 December 2012, over 95 per cent. of Severfield-Rowen's turnover was derived from UK construction contracts.

Severfield-Rowen also has a joint venture in India with JSW Steel through a 50 per cent. shareholding in JSW Severfield Structures Limited. The Indian Joint Venture is a relatively new business, having been established in 2008 with operations commencing in 2010. In the 12 months ended 31 December 2012, the joint venture contributed positively to the Group for the first time. The Directors believe that the Indian construction market offers Severfield-Rowen a significant opportunity for growth over the medium term and the Group remains focused on investing in the business with JSW Steel, its joint venture partner.

The Group's strategy is to maintain and develop its strong market position in the UK, focussing on operational improvements to increase its competitive position in the short term, so that it is well positioned to benefit from a future recovery in the wider UK construction market in due course. In parallel, it will continue to develop the Indian Joint Venture, where the Directors believe there is a substantial growth opportunity through market growth and market penetration as a result of the value it is able to offer to its clients, namely:

a design and build service promoting and utilising the best advantages of steel for clients through enhanced steel design across a wide range of construction sectors;
precision manufacturing providing accuracy, consistency and reliability to clients for their construction projects; and
comprehensive design, fabrication and erection methodology to deliver design concepts to project reality thus providing maximum revenues and lower overall project costs to clients through short programme times and lower overall financing costs.

3. Background to the Rights Issue

United Kingdom

Since the Group reported record revenue and underlying profits in the year ended 31 December 2008 of £394.3 million and £52.5 million, respectively, the UK steel construction market in which the Group operates has deteriorated, reflecting the wider malaise in the UK economy and specifically the construction market. While this resulted in a relatively small decrease in revenue and underlying profits in 2009 to £349.4 million and £49.8 million, respectively, the effect of subdued trading conditions on the Group was more marked in 2010, with revenues and underlying profits decreasing to £267 million and £15.3 million, respectively. Revenue remained relatively constant in 2011 at £267.8 million, however, underlying profits decreased further to £10.1 million. The UK order book at the end of 2011 of £221 million showed consistency with the previous year's order book of £226 million. However, the Group's profit decreased as it experienced pressure on margins with pricing tightening as competitors sought to maintain their share of a smaller market. Throughout this period, the Group maintained its market leading position in the UK, as the duration of the economic downturn began to have a significant impact on the Group's industry competitors, several of whom exited the sector in 2011.

Trading in the UK was especially difficult during 2012, due to a combination of market conditions and operational factors. The market conditions resulted in pressure up and down the supply chain and the Directors believe these pressures are likely to continue for the foreseeable future. In particular, weak demand continues to result in increased competition, tighter margins and the transfer of commercial, technical and financial risk down the supply chain, through more demanding contract terms and longer payment cycles. Notwithstanding these difficult trading conditions and despite negligible growth and pressure on margins, the Group's market position has strengthened in relation to its competition. However, while the order book remained stable at £218 million, margins in the first half of 2012 reflected the lower demand levels, the increased intensity of the competitive environment and the need to improve some aspects of the Group's operational performance.

In response to these market conditions and operational factors, in August 2012 the Board decided to integrate three of its UK businesses, which operate with shared clients and generally in the same sub-sectors of the market. The proposed reorganisation of the UK businesses principally targets improvements in efficiencies and performance, but the integration also seeks to realise associated cost savings. The integration became effective on 1 January 2013, but implementation will continue throughout 2013. When completed, the Directors believe that the resulting company, Severfield-Watson Structures Limited, will be the largest structural steelwork company in the UK, providing a fully integrated design through fabrication and site erection service to clients. As announced on 5 November 2012, the Directors believe the resultant changes will deliver overhead savings of greater than £2 million per annum which, combined with improved performance in contract engagement and execution, are expected by the Directors to return operating margins to between 5 per cent. and 6 per cent. over time.

Contract review and management changes

On 23 January 2013, the Company announced that the Group's UK performance had been further and materially adversely affected by cost overruns on its contract for the development at 122 Leadenhall Street and that the Board intended to review its current contract base. On 19 February 2013, the Company announced the results of the Review.

In light of the trading difficulties announced on 23 January 2013, the Company also announced that the Board had concluded that a change to the Group's leadership was required to re-establish confidence with the Group's stakeholders and that Tom Haughey, formerly Chief Executive Officer, was standing down from the role and leaving the Board with immediate effect. John Dodds assumed the role of Executive Chairman with immediate effect on 23 January 2013 pending the appointment of a new chief executive. The Board is actively engaged in a search process for a new chief executive.

Peter Emerson, the Group's Chief Operating Officer, has also previously announced his intention to retire from the Board in June 2013 upon reaching his 60th birthday.

The Review addressed 70 of the Group's contracts representing approximately 90 per cent. of the Group's contracts by value, with a particular focus on the larger and more complex projects. The Review involved all key management responsible for the execution and performance of each contract. Detailed financial information on each contract was analysed, including revenue and cost position to date, forecasts to completion and the underlying progress of that contract. The inherent complexity and risk of each contract was also considered in determining the final financial outcome. Recently won contracts, at the initial stages of execution, were subject to additional scrutiny, involving cross Group peer reviews.

The Review established that the technical challenges of the site works on the contract for 122 Leadenhall Street are significantly greater than originally estimated and will require longer timescales and greater resources to complete. In response to this finding, a comprehensive reassessment of the works required to complete was undertaken, along with a detailed review of all other forecast costs still to be incurred. The result has been to change an expected profit on the overall life of the contract into a loss, with the Group incurring an incremental charge to the profit and loss account of £9.9 million in the 12 month period ended 31 December 2012.

In relation to a further three contracts, actual and potential cost overruns were identified totalling £2.9 million. These cost overruns have been charged to the profit and loss account in the 12 month period ended 31 December 2012.

On a further five contracts the value that the Board expects to be realisable under the contracts has been reassessed and reduced. These contracts, three of which remain ongoing, have all been subject to significant variations from the terms agreed at the commencement of the contracts. While much of the value of these variations has already been recovered by the Group (and this recovery process is continuing), the Board has taken a prudent approach in reducing the final account expectations, resulting in a reduction in the value realisable from these five contracts of £7.3 million. There is no cash impact on the Group as a result of this reduction in the balance sheet carrying value.

The remaining 61 contracts subject to the Review were found to be performing in accordance with the Board's expectations and the Board is satisfied that the likely financial outcome of these contracts has been appropriately estimated.

The financial outcome of the Review has resulted in a charge to the profit and loss account of £20.1 million in the 12 months ended 31 December 2012. A proportion of the related cashflows occurred within the 12 month period ended 31 December 2012, with a further £8 million of cash outflow anticipated in 2013, arising from the cost overruns identified as a result of the Review.

Actions arising from the Review

The Group's core strengths remain the design, fabrication and erection of steel structures. Since August 2012, the Board has been taking steps to improve its contracting estimating procedures, the efficacy of which was borne out in the Review. The Review, however, identified a requirement for stronger contracting processes and discipline notably in execution and risk assessment, particularly in relation to its more complex contracts. The implementation of these improvements will be undertaken as expeditiously as possible. The Review confirmed the rationale for the reorganisation and integration of the Group's two largest businesses, Severfield-Rowen Structures and Watson Steel Structures, along with its erection business, Steelcraft Erection Services.

The Group's leading market position in the UK provides competitive advantage through production capacity, product range, procurement scale, quality, delivery, the ability to take on complex assignments and project management. The Directors believe that the integration of the UK businesses should further enhance its competitive position. As one of the largest structural steelwork companies in the UK, the Directors believe Severfield-Watson Structures Limited will be well-placed to deliver stronger returns when market conditions improve.

India

Against a challenging backdrop in its UK market, the Group has continued to invest in and expand its Indian Joint Venture. In November 2008, the Company entered into a joint venture agreement with JSW Building (a subsidiary of JSW Steel), to jointly create a structural steelwork business, called JSW Severfield Structures Ltd, based in Bellary and Mumbai, India. JSW Steel, one of the largest steel companies in India, is part of the OP Jindal group. The core operations of JSW Structures were established adjacent to JSW Steel's Vijayanagar works in Bellary, 220 miles south of Bangalore and some 390 miles south-east of Mumbai. The business is involved in the design, fabrication and erection of structural steelwork principally to service the Indian markets, where the Group sees a potential for significant growth in a region with large and growing infrastructure and construction markets. The total investment cost of the 50/50 joint venture was approximately £30 million of which approximately £5.3 million was funded in equity by Severfield-Rowen and JSW Steel with the balance of the funding being raised in debt by the joint venture company from banks based in India.

JSW Structures commenced commercial production in August 2010 within the planned timescale and budget. The plant in Bellary, consisting of two main fabrication lines, a plated beam line, a fittings factory and a metal deck flooring production line, via a second joint venture company, JSW Structural Metal Decking Ltd (owned as to 66 per cent. by JSW Structures and 34 per cent. by SMD Asia LLP), opened with an order book of just over £10 million of fabricated steelwork and associated ancillary products. By March 2011, the order book for the Indian Joint Venture stood at £33 million underpinning the Company's confidence in the growth prospects in India. Having exited 2011 with an order book of £43 million, the Group's Indian business continued to see progress, with 2012 marking the first 12 months of positive financial contribution to the Group. As at 31 December 2012, the order book for the Indian Joint Venture stood at £29 million.

Production levels in India are now running at close to full capacity at approximately 3,000 tonnes per month and the quality of the order book is improving with projects now involving both local and international customers, covering a range of sectors including power and energy, and other commercial buildings. The market potential is reinforced with a strong pipeline of opportunities from local and international customers. The first phase of expansion of the existing plant, which will raise capacity from 35,000 tonnes per annum to 55,000 tonnes per annum, has already been approved and is expected to be operational by the middle of 2013. This will require £2-3 million of additional equity investment by Severfield-Rowen. In addition, a new, second site is under consideration with JSW Steel, which could, if implemented, require a further £5-10 million of equity investment over the next two years by Severfield-Rowen to match JSW Steel's investment.

The Group's Indian Joint Venture has established a strong foundation since its plant opened in 2010. The Directors believe the market for Severfield-Rowen's services and products in India offers significant scope for medium to long term growth and development. The Group plans to continue investing with JSW Steel, its joint venture partner, to expand the Indian Joint Venture's steel fabrication capacity, as well as the skills and capabilities of its workforce.

4. Reasons for the Rights Issue

The severity of the downturn in the UK market in which the Group operates has had an adverse impact on the profitability of the Group. As a result, while taking into account the level of the Group's indebtedness, the Directors believe it is now appropriate for the Group to recapitalise its business through a capital raising via the Rights Issue in conjunction with the Revised Facilities.

The Board believes that the Rights Issue should enable Severfield-Rowen to protect and enhance shareholder value. The Board also believes that a more robust capital structure will be achieved through the reduction of outstanding debt under the Existing Facilities and the Revised Facilities becoming effective. The Rights Issue and the Revised Facilities are expected by the Board to provide greater operational and financial flexibility in the future while demonstrating financial strength to customers, relative to the Group's principal competitors, in a continuing difficult market environment. In addition, the Board believes the Rights Issue will enable the Group to commit to continued investment in the growth of the Indian Joint Venture over the next two to three years.

In order for the Revised Facilities to come into effect, the Rights Issue, which will raise £44.8 million (net of expenses), needs to complete. If the Rights Issue proceeds are not received, the Revised Facilities will not become effective, resulting in Severfield-Rowen remaining subject to the Existing Facilities. Should this occur, Severfield-Rowen will be in breach of one or more of its financial covenants under the Existing Facilities on 11 April 2013, being the date until which the covenant tests have been deferred. The implications of the Rights Issue not proceeding are set out in more detail in paragraph 18 below.

5. Use of proceeds

As at 14 February 2013 (being the latest practicable date prior to the publication of this document for these purposes), the Group had net financial indebtedness of £44.0 million, of which £44.2 million was outstanding under the Existing Facilities. The Directors intend to use the net proceeds of the Rights Issue (being approximately £44.8 million) to reduce the Group's drawings under the Existing Facilities, which is a condition for the Revised Facilities Agreement to come into effect. Any balance of the net proceeds of the Rights Issue will be used for general corporate purposes. This will result in the Group operating with a structurally lower level of indebtedness. Accordingly, the Directors believe that the Rights Issue will have both immediate and longer-term benefits for the Group.

6. Amended bank financing arrangements

In conjunction with the Rights Issue, Severfield-Rowen has agreed amended financing arrangements under its revolving credit facility which are conditional upon completion of the Rights Issue. The Revised Facilities Agreement will come into effect, among other conditions, upon the application of the net proceeds of the Rights Issue to reduce the outstanding borrowings under the Existing Facilities Agreement. The total revolving credit facility available under the Revised Facilities Agreement will be £35 million, although under the terms of the Revised Facilities Agreement only £20 million of the total commitments will be available for utilisation until 31 December 2013.

If the Revised Facilities Agreement does not come into effect, Severfield-Rowen will remain subject to its Existing Facilities Agreement. Should this occur, Severfield-Rowen will be in breach of one or more of its financial covenants under the Existing Facilities on 11 April 2013, being the date until which the covenant tests have been deferred. The implications for the Group of the Rights Issue not proceeding and the Group being in breach of covenants under the Existing Facilities are set out in more detail in paragraph 18 of this Part I below.

Under the Revised Facilities Agreement, the lenders agree, subject to customary conditions precedent to utilisation, to make available to the Company and certain of its subsidiaries for utilisation up to and including 11 October 2016 a revolving credit facility up to an original aggregate sum of £35 million, of which £10 million is made available to the Company by way of an overdraft although under the terms of the Revised Facilities Agreement only £20 million of the total commitments will be available for utilisation until 31 December 2013. The borrowings under the Revised Facilities Agreement may be used for the general corporate purposes of the Company and its subsidiaries.

The principal terms of the Revised Facilities Agreement are set out in paragraph 13.2 of Part IX of this document.

7. 2012 financial performance, current trading and prospects

The Group's financial performance for the 12 months ended 31 December 2012 reflects the impact of the contract execution issues, particularly on 122 Leadenhall Street, along with the other factors highlighted in the Review, as well as the impact of adverse contract final account settlements announced earlier in the year.

Revenue for the 12 month period of £256.6 million (2011: £267.8 million) was at a similar level to the previous year. This reflects a fairly constant level of production output and contracting activity throughout the year in what remained a relatively subdued market. There was also continued relative stability in steel pricing.

The underlying operating loss before results of associates was £18.2 million (2011: £14.2 million profit). This reflects the difficult trading conditions during the year, the £9.9 million charge to the profit and loss account in respect of the 122 Leadenhall Street contract and the other adjustments relating to additional costs and reductions in contract value expectations totalling £10.2 million arising from the Review. In respect of the reduced expectations around certain contract values, the Board continues to pursue value on these contracts, but a prudent view has been taken reflecting progress made to date and the difficult prevailing trading environment.

The share of results of associates of a profit of £0.2 million (2011: £2.5 million loss) represents a step change in the performance of the Indian Joint Venture in recording its first positive contribution to Group profit, as production was running at good operating levels for most of the year.

The Group underlying operating loss after share of results of Associates is £18.0 million (2011: £11.7 million profit). The underlying loss before tax for the period is £19.6 million (2011: £10.1 million profit).

Trading conditions are difficult as previously stated. However, the order book as at 31 December 2012 remained strong at £209 million and the re-organisation of the Groups' largest businesses into Severfield-Watson Structures Ltd is continuing in line with plan. More than half of the anticipated overhead savings of £2 million, previously announced on 5 November 2012, have now been realised and the programme will be largely complete by 30 June 2013.

The performance of the Indian Joint Venture for the 12 months ended 31 December 2012 was in line with the Board's expectations. The first phase of expansion of the Bellary site to lift output from 35,000 tonnes to 55,000 tonnes by the end of summer 2013 is continuing and the order book at 31 December 2012 stood at £29 million.

While the Group's performance was extremely disappointing in 2012, the Directors believe that Severfield-Rowen is a good business which remains well supported by its customers. With the reorganisation changes already underway and the further improvements identified as part of the Review, the Board believes that the Group can return operating margins to between 5 per cent. and 6 per cent. over time and is confident that the longer term fundamentals of the Group remain strong.

8. Financial effects of the Rights Issue

Upon completion of the Rights Issue, the New Ordinary Shares will represent 70 per cent. of the Enlarged Share Capital. The New Ordinary Shares will be issued pursuant to an authority to be sought at the General Meeting. Following the issue of the New Ordinary Shares, Qualifying Shareholders who do not take up any of their Rights will suffer a dilution of 70 per cent. to their economic interests in the Company. A Qualifying Shareholder taking up their Rights in full will not suffer any dilution of their economic interests in the Company.

The Directors expect that the proceeds of the Rights Issue will make a positive contribution to total earnings in the financial year ending 31 March 2014 as a result of lower interest payments arising from reduced levels of net financial indebtedness. However, even after this saving on interest expense, the Directors expect the Rights Issue to have a negative effect on reported earnings per share for the year ending 31 March 2014 due to the increased number of Ordinary Shares in issue following the Rights Issue. These statements do not constitute a profit forecast and should not be interpreted to mean that the earnings per share in any financial period will necessarily be less than or greater than those for the relevant preceding period.

9. Dividend policy

In the Group's Interim Period Results announcement released today the Board stated that there will be no second interim dividend for the 12 months ended 31 December 2012.

The Board remains focused on strengthening the balance sheet and conserving cash. In light of this and against the backdrop of a continuing challenging UK market, while there are no restrictions in the Revised Facilities, the Board will not be recommending the payment of a final dividend for the 15 month period ending 31 March 2013.

However, the Board is committed to reinstating the payment of dividends. Depending, among other things, on improved financial performance in 2013, it intends to introduce a progressive dividend policy, having regard to the Group's underlying earnings, cash flows and capital investment plans, the requirement to maintain an appropriate level of dividend cover and the then prevailing market outlook.

10. Principal terms of the Rights Issue

Subject to the Resolution being passed, the Directors propose to offer New Ordinary Shares by way of Rights to Qualifying Shareholders, payable in full on acceptance, on the following basis:

7 New Ordinary Shares for every 3 Existing Ordinary Shares at 23 pence per New Ordinary Share

held and registered in their name on the Record Date. Holdings of Existing Ordinary Shares in certificated and uncertificated form will be treated as separate holdings for the purposes of calculating entitlements under the Rights Issue. Fractional entitlements to New Ordinary Shares will not be allotted and, where necessary, entitlements will be rounded down to the nearest whole number of New Ordinary Shares.

The Issue Price of 23 pence per New Ordinary Share represents:

a 67.8 per cent. discount to the Closing Price of an Existing Ordinary Share on 27 February 2013 (being the latest practicable date prior to the date of publication of this document); and
a 38.7 per cent. discount to the theoretical ex-rights price of 37.55 pence per Existing Ordinary Share,

based on such Closing Price.

However, if a Qualifying Shareholder takes up their Rights in full, they will, following the Rights Issue being completed and ignoring any fraction of an Ordinary Share, have the same proportional voting rights and entitlements to distributions as they had on the Record Date.

The New Ordinary Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to all future dividends and other distributions declared, made or paid.

In determining the Issue Price the Directors have considered the price at which the New Ordinary Shares need to be offered to investors with a view to ensuring the success of the Rights Issue, which involves raising a significant amount of equity compared with the current market capitalisation of the Company. The Directors believe that both the Issue Price and the discount are appropriate.

The Company has arranged for the Rights Issue to be fully underwritten by Jefferies in order to provide certainty as to the amount of capital to be raised. A summary of the material terms of the underwriting arrangements is set out at paragraph 12 of Part IX of this document.

The Rights Issue is conditional, amongst other things, on:

(a) the passing without material amendment of the Resolution at the General Meeting;
(b) Admission becoming effective by not later than 8.00 a.m. on 19 March 2013 (or such later time and/or date as Jefferies and the Company may agree (being not later than 30 April 2013)); and
(c) the Underwriting Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms prior to Admission.

Some questions and answers, together with details of further terms and conditions of the Rights Issue, including the procedure for acceptance and payment and the procedure in respect of Rights not taken up, are set out in Parts II and III of this document, and where relevant, will also be set out in the Provisional Allotment Letter.

11. Share Schemes

Participants in the Share Schemes will be advised separately of adjustments (if any) to their rights or as to any entitlement to participate in the Rights Issue.

12. General Meeting

The Rights Issue is subject to a number of conditions, including Shareholders' approval of the Resolution at the General Meeting. A notice convening the General Meeting to be held at the offices of Ashurst LLP, Broadwalk House, 5 Appold Street, London EC2A 2HA at 11.00 a.m. on 18 March 2013, is set out at the end of this document.

The General Meeting is being convened for the purposes of considering and, if thought fit, passing the Resolution. Shareholders are being asked to vote on the Resolution in order to provide the Directors with the necessary authority under the Companies Act to proceed with the Rights Issue. The Resolution will be proposed as an ordinary resolution, which to be passed, requires a simple majority of those voting (whether in person or by proxy) on the Resolution at the General Meeting. The Resolution will grant the Directors the necessary authority to allot up to 208,252,511 New Ordinary Shares pursuant to the Rights Issue representing 233 per cent. of the existing issued share capital of the Company. The authority sought pursuant to the Resolution will be in addition to and not in substitution for all existing authorities previously obtained.

If the Resolution is not approved at the General Meeting, the Company will be unable to complete the Rights Issue.

13. Taxation

Information on UK taxation with regard to the Rights Issue is set out in paragraph 11 of Part IX of this document. This information is intended only as a general guide to the current UK tax position. If you are in any doubt as to your own tax position, or are subject to tax in a jurisdiction other than the UK, you should consult your own independent professional adviser without delay.

14. Overseas Shareholders

Shareholders who have registered addresses outside the United Kingdom, or who are citizens or residents of, or are located in countries other than the United Kingdom should refer to question 4.7 of Part II and paragraph 8 of Part III of this document.

New Ordinary Shares will be provisionally allotted to all Qualifying Shareholders, including Overseas Shareholders. However, subject to certain exceptions, Provisional Allotment Letters will not be sent to Qualifying non-CREST Shareholders with registered addresses in the United States or the Excluded Territories, nor will the CREST stock account of Qualifying CREST Shareholders with registered addresses in the United States or the Excluded Territories be credited.

The Company has made arrangements under which Jefferies will try to find subscribers for the New Ordinary Shares provisionally allotted to such Shareholders by 4.30 p.m. on the second dealing day after the last date for acceptance of the Rights Issue. If Jefferies finds subscribers and is able to achieve a premium over the Issue Price and the related expenses of procuring those subscribers (including any applicable brokerage and commissions and amounts in respect of VAT which are not recoverable), such Shareholders will be sent a cheque for the amount of that aggregate premium above the Issue Price less related expenses (including any applicable brokerage and commissions and amounts in respect of VAT which are not recoverable), so long as the amount in question is more than £5.00. If any person in the United States or an Excluded Territory receives a Provisional Allotment Letter, that person should not seek to, and will not be able to, take up his rights thereunder, except as described in paragraph 8 of Part III of this document.

Notwithstanding any other provision of this document or the Provisional Allotment Letter, the Company reserves the right to permit any Shareholder on the register at the Record Date to take up his Rights if the Company in its sole and absolute discretion is satisfied that the transaction in question will not violate applicable laws.

15. Risk factors and further information

Shareholders should read the whole of this document and not rely solely on the information set out in this letter. Shareholders should consider fully and carefully the risk factors set out in the section headed ''Risk Factors'' in this document. Shareholders' attention is also drawn to the further information set out in Parts II to XI of this document.

16. Action to be taken

In respect of the General Meeting

You will find enclosed with this document a Form of Proxy for use by Shareholders at the General Meeting or any adjournment thereof. Whether or not you intend to be present at the General Meeting, you are requested to complete the Form of Proxy in accordance with the instructions printed on it and return it as soon as possible and in any case so as to be received by the Company's Registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY, no later than 11.00 a.m. on 15 March 2013. The return of a Form of Proxy will not prevent you from attending the meeting and voting in person if you wish.

In respect of the Rights Issue

You are not required to take any action at present in relation to the Rights Issue. If the Resolution is passed at the General Meeting, it is intended that:

(a) Qualifying Non-CREST Shareholders (other than, subject to certain exceptions, Restricted Shareholders) will be sent a Provisional Allotment Letter providing details of the number of New Ordinary Shares that they are entitled to take up and the procedure for acceptance and payment, renunciation, splitting and registration in respect of the New Ordinary Shares; and
(b) Qualifying CREST Shareholders (other than, subject to certain exceptions, Restricted Shareholders) will receive a credit to the appropriate stock accounts in CREST in respect of the Nil Paid Rights to which they are entitled, as soon as is practicable after 8.00 a.m. on 19 March 2013. Qualifying CREST Shareholders will not be sent a Provisional Allotment Letter.

If you sell or have sold or otherwise transferred all of your Existing Ordinary Shares held (other than ex-rights) in certificated form before the Ex-Rights Date, please forward this document and any Provisional Allotment Letter, if and when received, at once to the purchaser or transferee or the bank, stockbroker or other agent through whom the sale or transfer was effected for delivery to the purchaser or transferee, except that such documents should not be sent to any jurisdiction where to do so might constitute a violation of local securities laws or regulations, including, but not limited to the United States or any of the Excluded Territories.

If you sell or have sold or otherwise transferred only part of your holding of Existing Ordinary Shares (other than ex-rights) held in certificated form before the Ex-Rights Date, you should refer to the instructions regarding split applications in Part III of this document and in the Provisional Allotment Letter.

If you sell or have sold or otherwise transferred all or some of your Existing Ordinary Shares (other than ex-rights) held in uncertificated form before the Ex-Rights Date, a claim transaction will automatically be generated by Euroclear UK which, on settlement, will transfer the appropriate number of Nil Paid Rights to the purchaser or transferee.

The procedure for acceptance and payment depends on whether, at the time at which acceptance and payment is made, the Nil Paid Rights are in certificated form (that is, are represented by a Provisional Allotment Letter) or are in uncertificated form (that is, are in CREST). The latest time and date for acceptance and payment in full in respect of the Rights Issue is expected to be 11.00 a.m. on 4 April 2013, unless the Company notifies Qualifying Shareholders, through publication of a supplementary prospectus of a later date or unless otherwise announced by the Company. The procedure for acceptance and payment is set out in Part III of this document and, in respect of Qualifying Non-CREST Shareholders only, in the Provisional Allotment Letter.

For Qualifying Non-CREST Shareholders, the New Ordinary Shares will be issued in certificated form and will be represented by definitive share certificates, which are expected to be despatched to the registered address of the person(s) entitled to them by no later than 12 April 2013 (or such later date as may be notified by the Company through publication of a supplementary prospectus or otherwise announced by the Company).

For Qualifying CREST Shareholders, Computershare will instruct CREST to credit the stock accounts of Qualifying CREST Shareholders (other than, subject to certain exceptions, Restricted Shareholders) with their entitlements to New Ordinary Shares. It is expected that this will take place as soon as practicable after 8.00 a.m. on 5 April 2013 (or such later date as may be notified by the Company through publication of a supplementary prospectus or otherwise announced by the Company).

Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsor regarding the action to be taken in connection with this document and the Rights Issue.

If you are in any doubt as to the action you should take, you should immediately seek your own financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the FSMA or, if you are outside the UK, by another appropriately authorised independent financial adviser.

17. Directors' intentions regarding the Rights Issue

The Directors are fully supportive of the Rights Issue. Each of the Directors who holds Ordinary Shares intends either to acquire New Ordinary Shares in full or to sell sufficient Nil Paid Rights during the nil paid dealing period to meet the costs of taking up the balance of their entitlement to New Ordinary Shares under the Rights Issue.

18. Importance of the vote

As described above, Severfield-Rowen is pursuing the Rights Issue to reduce the Group's financial indebtedness. This will result in the Group operating with a structurally lower level of indebtedness and will provide greater operational and financial flexibility to build on the Group's strong market position in the UK and to enable the Group to commit to continued investment in India.

In the event that Shareholders do not vote in favour of the Resolution, Severfield-Rowen will be in breach of one or more covenants under the Existing Facilities on 18 March 2013, being the date of the General Meeting. A breach of any one of such covenants would be an event of default under the Existing Facilities entitling the Group's lenders to demand immediate repayment of all outstanding amounts and cancel the facilities. As at 14 February 2013 (being the latest practicable date prior to the publication of this document for these purposes), the Group had net financial indebtedness of £44.0 million.

In the event that shareholders do not vote in favour of the Resolution and the Group's lenders demanded repayment of all outstanding amounts and cancelled the Existing Facilities on 18 March 2013, the Group would have insufficient funds to repay the amounts outstanding. The Group would then immediately need to find alternative sources of funds to replace the funds that would have been made available pursuant to the Rights Issue and the Revised Facilities. The actions that the Group would then seek to take to make up the shortfall in its funding requirements (which the Directors believe would need to be pursued simultaneously and immediately), are as follows:

seek to negotiate a new facility agreement with its lenders;
seek to obtain a sufficient amount of alternative funding from other sources;
seek to dispose of some or all of its assets or businesses; and/or
seek to find a purchaser of the entire Group.

However, the Directors are not confident that any of the above actions will be achievable.

In order to address the risks set out above:

the Company has entered into the Revised Facilities Agreement with the Group's existing lenders; and
the Company is undertaking the Rights Issue.

The Directors therefore believe it is very important that Shareholders vote in favour of the Resolution at the General Meeting.

19. Directors' Recommendation

The Board, which has received financial advice from Jefferies in the context of the Rights Issue, considers the Rights Issue and the Resolution to be in the best interests of the Company and the Shareholders taken as a whole. In providing advice to the Board, Jefferies has relied upon the Board's commercial assessments of the Rights Issue and the Group's funding requirements.

Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolution to be put to the General Meeting as each Director intends to do, or procure, in respect of their own beneficial holdings, amounting to 453,884 Ordinary Shares in total, representing approximately 0.5 per cent. of the Existing Ordinary Shares.

Yours faithfully

John Dodds Executive Chairman

PART II

SOME QUESTIONS AND ANSWERS ON THE RIGHTS ISSUE

The questions and answers set out in this Part II are intended to be general guidance only and, as such, you should read Part III of this document for full details of what action you should take. If you are in any doubt as to what action you should take, you are recommended to seek immediately your own financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser, duly authorised under the FSMA if you are resident in the UK or, if not, from another appropriately authorised independent financial adviser. If you are an Overseas Shareholder, you should read paragraph 8 of Part III of this document and you should take professional advice as to whether you are eligible and/or you need to observe any formalities to enable you to take up your rights.

Ordinary Shares can be held in certificated form (that is, represented by a share certificate) or in uncertificated form (that is, through CREST). Accordingly, the questions and answers in this Part II are split into five sections:

Section 1 (''General'') answers general questions relating to the Rights Issue.
Section 2 (''Ordinary Shares in certificated form'') answers questions you may have in respect of the procedures for Qualifying Shareholders who hold their Ordinary Shares in certificated form. You should note that Section 4 may still apply to you.
Section 3 (''Ordinary Shares in CREST'') answers questions you may have in respect of the equivalent procedures for Qualifying Shareholders who hold their Ordinary Shares in CREST. If you are a CREST sponsored member, you should also consult your CREST sponsor. You should note that Section 4 may still apply to you.
Section 4 (''Further procedures for Ordinary Shares whether in certificated form or in CREST'') answers some detailed questions about your rights and the actions you may need to take and is applicable to Ordinary Shares whether held in certificated form or in CREST.

If you are a Qualifying CREST Shareholder who is a CREST sponsored member, you should also consult your CREST sponsor. If you do not know whether your Ordinary Shares are in certificated or uncertificated form, please call Computershare on 0870 707 1329 or, if telephoning from outside the UK, on +44 (0)870 707 1329. Calls to the Computershare 0870 707 1329 number are charged at up to 10 pence per minute (including VAT) plus any of your service provider's network extras. Calls to the Computershare +44 (0)870 707 1329 number from outside the UK are charged at applicable international rates. Different charges may apply to calls made from mobile telephones and calls may be recorded and monitored randomly for security and training purposes. Computershare cannot provide advice on the merits of the Rights Issue nor give any financial, legal or tax advice.

Timetable dates in this Part II have been included on the basis of the expected timetable set out on page 28 of this document.

1. General

What is a rights issue?

Rights issues are one way for companies to raise money. Companies do this by issuing shares for cash and giving their existing shareholders a right of first refusal to buy further shares in proportion to their existing shareholdings.

This Rights Issue is an offer by Severfield-Rowen of up to 208,252,511 New Ordinary Shares at a price of 23 pence per New Ordinary Share to Qualifying Shareholders. If you hold Ordinary Shares on the register of members of the Company at the close of business on 14 March 2013 (the ''Record Date''), you will be a Qualifying Shareholder. If you hold your Ordinary Shares in certificated form, your entitlement will be set out in your Provisional Allotment Letter (which is due to be sent to you after the General Meeting assuming that the Resolution is approved).

New Ordinary Shares are typically offered in a rights issue at a discount to the current share price. While the market value of the Existing Ordinary Shares exceeds the Issue Price, the right to buy the New Ordinary Shares is potentially valuable. In this Rights Issue, the New Ordinary Shares are being offered to Qualifying Shareholders at a discount to the share price as at 27 February 2013, which was the last business day before the details of the Rights Issue were announced. The Issue Price of 23 pence per New Ordinary Share represents a 67.8 per cent. discount to the Closing Price of 71.5 pence on 27 February 2013 (being the latest practicable date prior to the publication of this document).

If you do not want to buy the New Ordinary Shares to which you are entitled, you can instead sell or transfer your rights (called ''Nil Paid Rights'') to those New Ordinary Shares and receive the net proceeds, if any, of the sale or transfer in cash. This is referred to as dealing ''nil paid''.

2. Ordinary Shares in certificated form

2.1 How do I know if I am eligible to participate in the Rights Issue?

If you receive a Provisional Allotment Letter, then you should be eligible to participate in the Rights Issue (provided that you are not a holder with a registered address in, or located or resident in the United States or any of the Excluded Territories and/or as long as you have not sold all of your Ordinary Shares before 8.00 a.m. on 19 March 2013 (the time when the Ordinary Shares are expected to be marked ''ex-rights'' by the London Stock Exchange)).

Overseas Shareholders and any person having a registered address in, or who is resident in or located in, the United States or any of the Excluded Territories should refer to paragraph 8 of Part III of this document.

2.2 What do I need to do in relation to the Rights Issue?

Subject to Shareholders approving the Resolution at the General Meeting to be held on 18 March 2013, if you hold your Ordinary Shares in certificated form and, subject to certain exceptions, do not have a registered address in, and are not located in or resident in, the United States or any of the Excluded Territories, you will be sent a Provisional Allotment Letter that shows:

how many Ordinary Shares you held at the close of business on the Record Date;
how many New Ordinary Shares you are entitled to buy pursuant to the Rights Issue; and
how much you need to pay if you want to take up your right to buy all the New Ordinary Shares provisionally allotted to you in full.

Subject to certain exceptions (as described in paragraph 8 of Part III of this document), if you have a registered address in, or are located in or resident in the United States or any of the Excluded Territories, you will not receive a Provisional Allotment Letter.

2.3 I am a Qualifying Shareholder with a registered address in the UK. What are my choices and what should I do with the Provisional Allotment Letter?

(a) If you wish to take up your rights in full

If you wish to take up in full your rights to acquire the New Ordinary Shares to which you are entitled, all you need to do is return the Provisional Allotment Letter, together with your cheque or banker's draft for the full amount shown in Box 3, payable to ''Computershare Investor Services PLC re Severfield-Rowen Plc — Rights Issue'' and crossed ''A/C payee only'', either by post to Computershare, Corporate Actions Projects, Bristol, BS99 6AH or by hand to Computershare (during normal business hours only) at The Pavilions, Bridgwater Road, Bristol, BS13 8AE to arrive before 11.00 a.m. on 4 April 2013. Within the United Kingdom only, you can use the reply-paid envelope which will be enclosed with the Provisional Allotment Letter. Paragraph 3 of Part III of this document has full instructions on how to accept and pay for your New Ordinary Shares and instructions will also be set out in the Provisional Allotment Letter. You will be required to pay in full for all the rights you take up. A definitive share certificate will be sent to you for the New Ordinary Shares for which you acquire and it is expected that such certificate(s) will be despatched by no later than 12 April 2013.

You will only need your Provisional Allotment Letter to be returned to you if you want to deal in your Fully Paid Rights. Your Provisional Allotment Letter will not be returned to you unless you tick the appropriate box on the Provisional Allotment Letter.

Third party cheques will not be accepted with the exception of building society cheques or banker's drafts where the building society or bank has confirmed the name of the account holder by stamping or endorsing the back of the cheque or draft to such effect. The account name should be the same as that shown on the application. Post-dated cheques will not be accepted.

(b) If you do not want to take up your rights at all

If you do not want to take up any of your rights, you do not need to do anything. If you do not return your Provisional Allotment Letter acquiring the New Ordinary Shares to which you are entitled by 11.00 a.m. on 4 April 2013, Severfield-Rowen has made arrangements under which Jefferies will try to find investors to take up your rights and the rights of others who have not taken them up. If Jefferies finds investors and is able to achieve a premium over the Issue Price and the related fees and expenses of procuring those investors (including any value added tax), you will be sent a cheque for your share of the amount of that aggregate premium provided that this exceeds £5.00. Cheques are expected to be despatched on or around 12 April 2013 and will be sent to your address as it appears on the Company's register of members (or to the first named holder if you hold your Ordinary Shares jointly). If Jefferies cannot find investors who agree to pay a premium over the Issue Price and related expenses or your aggregate entitlement would be less than £5.00, you will not receive any payment.

If and to the extent that acquirers cannot be so procured, Jefferies shall as principal subscribe for the New Ordinary Shares not taken up. The proceeds of this subscription (less fees and expenses including any amounts in respect of value added tax) will be aggregated and paid to Severfield-Rowen.

Alternatively, if you do not want to take up your rights, you can sell or transfer your Nil Paid Rights (see paragraph (d) below).

(c) If you want to take up some but not all of your rights

If you want to take up some but not all of your rights and wish to sell some or all of those you do not want to take up, you should first apply to have your Provisional Allotment Letters split by completing Form X on page 2 of the Provisional Allotment Letter, and returning it by post or by hand to Computershare (during normal business hours only) at the relevant address detailed in paragraph (a) above to be received by 3.00 p.m. on 2 April 2013, (the latest time and date for splitting Provisional Allotment Letters, nil paid), together with a covering letter stating the number of split Provisional Allotment Letters required and the number of Nil Paid Rights to be comprised in each split Provisional Allotment Letter. You should then deliver the split Provisional Allotment Letter representing the rights to New Ordinary Shares you wish to accept, together with your cheque or banker's draft, to Computershare (see paragraph (a) above) to be received by 11.00 a.m. on 4 April 2013 (the latest date and time for acceptance and payment in full).

Alternatively, if you want only to take up some of your rights (and do not wish to sell or transfer some or all of those rights you do not want to take up), you should complete Form X on page 2 of the Provisional Allotment Letter and return it by post or by hand (during normal business hours only) to Computershare (see paragraph (a) above) with a covering letter confirming the number of New Ordinary Shares you wish to take up, together with a cheque or banker's draft to pay for the appropriate number of shares you wish to take up. In this case the Provisional Allotment Letter and the cheque or banker's draft must be received by Computershare by 3.00 p.m. on 2 April 2013 (the latest time and date for splitting Provisional Allotment Letters, nil paid).

(d) If you want to sell all of your rights

If you want to sell all of your rights, you should complete and sign Form X on the Provisional Allotment Letter (if it is not already marked ''Original Duly Renounced'') and pass the entire letter to your stockbroker, bank manager or other appropriate financial adviser or to the transferee (provided they are not in the United States or any of the Excluded Territories). The latest time and date for selling all of your rights is 11.00 a.m. on 4 April 2013. Please ensure, however, that you allow enough time so as to enable the person acquiring your rights to take all necessary steps in connection with taking up the entitlement prior to 11.00 a.m. on 4 April 2013.

2.4 How do I transfer my rights into the CREST system?

If you are a Qualifying Non-CREST Shareholder but are a CREST member and want your New Ordinary Shares to be in uncertificated form, you should complete Form X and the CREST Deposit Form (both on page 2 of the Provisional Allotment Letter), and ensure they are delivered to the CCSS to be received by no later than 3.00 p.m. on 28 March 2013. CREST sponsored members should arrange for their CREST sponsors to do this.

If you have transferred your rights into the CREST system, you should refer to paragraph 4 of Part III of this document for details on how to pay for the New Ordinary Shares.

2.5 I acquired my Ordinary Shares prior to the Record Date. What if I have not received a Provisional Allotment Letter?

If Shareholders approve the Resolution at the General Meeting to be held on 18 March 2013, and you do not receive a Provisional Allotment Letter but hold your Ordinary Shares in certificated form, this is likely to be because your registered address is in one of the Excluded Territories and you have not notified the Company of an address in the UK for the purpose of the service of notices. Overseas Shareholders and any person having a registered address in or who is resident in or located in the United States or any of the Excluded Territories should refer to paragraph 8 of Part III of this document. Some Qualifying Non-CREST Shareholders, however, will not receive a Provisional Allotment Letter but may still be eligible to take up their rights under the Rights Issue, namely:

Qualifying CREST Shareholders who held their Ordinary Shares in uncertificated form on the Record Date and who have converted them to certificated form;
Qualifying Non-CREST Shareholders who acquire Ordinary Shares before 14 March 2013 (the Record Date) but were not registered as the holders of those Ordinary Shares at the close of business on the Record Date; and
certain Overseas Shareholders who can demonstrate to the satisfaction of the Company that they can lawfully take up their Rights under the Rights Issue without contravention of any relevant legal or regulatory requirements (see question 4.7 below).

If you do not receive a Provisional Allotment Letter but think that you should have received one, please contact Computershare on 0870 707 1329 (or +44 (0)870 707 1329 if calling from outside the United Kingdom) between 8.30 a.m. and 5.00 p.m. (London time) Monday to Friday (except bank and other public holidays). Calls to the Computershare 0870 707 1329 number are charged at up to 10 pence per minute (including VAT) plus any of your service provider's network extras. Calls to the Computershare +44 (0)870 707 1329 number from outside the UK are charged at applicable international rates. Different charges may apply to calls made from mobile telephones and calls may be recorded and monitored randomly for security and training purposes. Computershare cannot provide advice on the merits of the Rights Issue nor give any financial, legal or tax advice.

2.6 If I buy or have bought Ordinary Shares after the Record Date but before 19 March 2013 (the date the Ordinary Shares start trading ex-rights) will I be eligible to participate in the Rights Issue?

If you buy or have bought Ordinary Shares before 8.00 a.m. on 19 March 2013 (the time when the Ordinary Shares are expected to start trading ex-rights on the London Stock Exchange) but were not registered as the holder of those Ordinary Shares at the Record Date (14 March 2013), you may still be eligible to participate in the Rights Issue. If you are in any doubt, please consult your stockbroker, bank or other appropriate financial adviser, or whoever arranged your share purchase, to ensure you claim your entitlement.

You will not be entitled to Nil Paid Rights in respect of any Ordinary Shares acquired on or after 19 March 2013, the Ex-Rights Date.

2.7 What should I do if I sell or have sold or transfer or have transferred all or some of the Ordinary Shares shown in Box 1 of the Provisional Allotment Letter before 19 March 2013 (the date the Ordinary Shares start trading ex-rights)?

If you sell or have sold or transfer or have transferred all of your Ordinary Shares before 19 March 2013 (the date the Ordinary Shares start trading ex-rights), you should complete Form X on page 2 of the Provisional Allotment Letter and send the entire Provisional Allotment Letter, together with this document and any accompanying documents, to the stockbroker, bank or other appropriate financial adviser through whom you made the sale or transfer. However, you should not forward or transmit this document or the Provisional Allotment Letter into the United States or any Excluded Territory.

If you sell or have sold or transfer or have transferred only some of your holding of Ordinary Shares before 19 March 2013, you will need to complete Form X on page 2 of the Provisional Allotment Letter and send the entire Provisional Allotment Letter, together with this document and any accompanying documents, to

the stockbroker, bank or other appropriate financial adviser through whom you made the sale or transfer, before taking any action, with regard to the balance of Rights due to you.

2.8 How many New Ordinary Shares am I entitled to acquire?

Box 2 on page 1 of the Provisional Allotment Letter shows the number of New Ordinary Shares you are entitled to buy if you are a Qualifying Non-CREST Shareholder. You are entitled to 7 New Ordinary Shares for every 3 Existing Ordinary Shares held by you on 14 March 2013 (being the Record Date) (rounding down any fractions).

2.9 What should I do if I think my holding of Ordinary Shares (as shown in Box 1 on page 1 of the Provisional Allotment Letter) is incorrect?

If you have bought or sold Ordinary Shares shortly before 14 March 2013 (the Record Date), your transaction may not be entered on the register of members in time to appear on the register at the Record Date. See questions 2.6 and 2.7 above for what you should do in this case.

Otherwise, if you are concerned about the figure in Box 1, please call Computershare on 0870 707 1329, or on +44 (0)870 707 1329 if you are calling from outside the United Kingdom. The Shareholder Helpline is available from 8.30 a.m. to 5.00 p.m. (London time) Monday to Friday.

2.10 If I take up my rights, when will I receive my new share certificate?

If you take up your rights under the Rights Issue, share certificates for the New Ordinary Shares are expected to be despatched by no later than 12 April 2013.

3. Ordinary Shares in CREST

3.1 How do I know if am eligible to participate in the Rights Issue? What do I need to do in relation to the Rights Issue?

If you are a Qualifying CREST Shareholder (save as mentioned below), it is expected that your CREST stock account(s) will be credited with your entitlement to Nil Paid Rights and enabled on 19 March 2013 (the date the Ordinary Shares start trading ex-rights). The stock account(s) to be credited will be the account(s) under the participant ID and member account ID that apply to your Ordinary Shares on the Record Date. If you are a CREST sponsored member, you should consult your CREST sponsor if you wish to check that your account has been credited with your entitlement to Nil Paid Rights. The CREST stock accounts of Restricted Shareholders (subject to certain exceptions) will not be credited with Nil Paid Rights. Overseas Shareholders (including Restricted Shareholders) should refer to paragraph 8 of Part III of this document.

3.2 How do I take up my rights using the CREST system?

If you are a Qualifying CREST Shareholder you should refer to paragraph 4 of Part III of this document for details on how to take up and pay for your rights.

If you are a Qualifying CREST Shareholder and wish to take up your rights, you should ensure that a Many-to-Many instruction (an ''MTM instruction'') has been input and has settled by 11.00 a.m. on 4 April 2013 in order to make a valid acceptance. If your Ordinary Shares are held by a nominee or you are a CREST sponsored member you should speak directly to the stockholder who looks after your stock or your CREST sponsor (as appropriate) who will be able to help you.

3.3 If I buy Ordinary Shares before 19 March 2013 (the date that the Ordinary Shares start trading ex-rights), will I be eligible to participate in the Rights Issue?

If you buy or have bought Ordinary Shares before 8.00 a.m. on 19 March 2013 (the time when the Ordinary Shares are expected to start trading ex-rights on the London Stock Exchange) but were not registered as the holder of those Ordinary Shares at the Record Date (14 March 2013), you may still be eligible to participate in the Rights Issue. Euroclear UK will raise claims in the normal manner in respect of your purchase and your Nil Paid Rights will be credited to your stock account(s) on settlement of those claims.

You will not be entitled to Nil Paid Rights in respect of any Ordinary Shares acquired on or after 19 March 2013, the Ex-Rights Date.

3.4 What should I do if I sell or have sold or transfer or have transferred all or some of my Ordinary Shares before close of business on 19 March 2013 (the date the Ordinary Shares start trading ex-rights)?

You do not have to take any action except, where you sell or transfer all of your Ordinary Shares before 19 March 2013 (the date the Ordinary Shares start trading ex-rights), to send this document and any accompanying documents to the purchaser or transferee or to the stockbroker, bank or other financial adviser through whom you made the sale or transfer. However, you should not forward or transmit this document or the Provisional Allotment Letter into the United States or any Excluded Territory. A claim transaction in respect of that sale or transfer will automatically be generated by Euroclear UK which, on settlement, will transfer the appropriate number of Nil Paid Rights to the purchaser or transferee.

3.5 How many New Ordinary Shares am I entitled to acquire?

Save in the case of Restricted Shareholders (subject to certain exceptions), your stock account will be credited with Nil Paid Rights in respect of the number of New Ordinary Shares to which you are entitled based on the number of Existing Ordinary Shares you hold on the Record Date. You can also view the claim transactions in respect of purchases/sales effected after this date, but before the Ex-Rights Date. If you are a Qualifying CREST Shareholder who is a CREST sponsored member, you should consult your CREST sponsor. You are entitled to 7 New Ordinary Shares for every 3 Existing Ordinary Shares held on 14 March 2013, the Record Date (rounding down any fractions).

3.6 What should I do if I think my holding of Ordinary Shares is incorrect?

If you are concerned about the number of Nil Paid Rights with which your stock account has been credited, please call Computershare on 0870 707 1329, or on +44 (0)870 707 1329 if you are calling from outside the United Kingdom. The Shareholder Helpline is available from 8.30 a.m. to 5.00 p.m. (London time) Monday to Friday.

3.7 If I take up my rights, when will New Ordinary Shares be credited to my CREST stock account(s)?

If you validly take up your rights under the Rights Issue, New Ordinary Shares will be credited to the CREST stock account(s) in which you hold your Fully Paid Rights on 5 April 2013 (the business day following the last time and date for acceptance and payment in full under the Rights Issue).

4. Further procedures for Ordinary Shares whether in certificated form or in CREST

4.1 Am I entitled to fractions of the New Ordinary Shares? What happens if the number of Ordinary Shares I hold is not exactly divisible?

Your entitlement to New Ordinary Shares will be calculated on the Record Date (other than in the case of those who bought Ordinary Shares after the Record Date but before the Ex-Rights Date who are eligible to participate in the Rights Issue). If the result is not a whole number, your entitlement will be rounded down to the nearest whole number of New Ordinary Shares, meaning that you will not receive a New Ordinary Share in respect of the fractional entitlement.

4.2 Will I be taxed if I take up or sell my rights or if my rights are sold on my behalf?

Information regarding United Kingdom taxation is set out in paragraph 11 of Part IX of this document. Shareholders who are in any doubt as to their tax position, or who are subject to tax in any jurisdiction other than the United Kingdom, should consult their professional adviser as soon as possible. Please note that the Shareholder Helpline will not be able to assist you with taxation issues.

4.3 I understand that there is a period when there is trading in the Nil Paid Rights. What does this mean?

If you do not want to buy the New Ordinary Shares being offered to you under the Rights Issue, you can instead sell or transfer your rights (Nil Paid Rights) to those New Ordinary Shares and receive the net proceeds of the sale or transfer in cash. This is referred to as dealing ''nil paid''. This means that during the Rights Issue offer period (i.e. between 19 March 2013 and 4 April 2013), you can purchase Ordinary Shares (which will not carry any entitlement to participate in the Rights Issue (sometimes referred to as trading ''ex-'')) and/or you can trade in the Nil Paid Rights. If you sell or transfer all of your Nil Paid Rights and you hold your Ordinary Shares in certificated form, you will need to complete Form X, the form of renunciation, on page 2 of the Provisional Allotment Letter and send it to the stockbroker, bank or other agent, through or by whom the sale or transfer was effected, to be forwarded to the purchaser or transferee except that Provisional Allotment Letters should not be forwarded or transmitted into the United States or any of the Excluded Territories.

If you buy Nil Paid Rights, you are buying an entitlement to take up the New Ordinary Shares, subject to your paying for them in accordance with the terms of the Rights Issue. Any seller of Nil Paid Rights who holds his Ordinary Shares in certificated form will need to forward to you his Provisional Allotment Letter (with Form X completed) for you to complete and return, with your cheque, by 11.00 a.m. on 4 April 2013, in accordance with the instructions on the Provisional Allotment Letter. If you are a CREST member or CREST sponsored member and you wish to hold your Nil Paid Rights in uncertificated form in CREST then you are advised to send the Provisional Allotment Letter with Form X and the CREST Deposit Form on page 2 of the Provisional Allotment Letter completed (in the case of a CREST member) to the CREST Courier and Sorting Service or (in the case of a CREST sponsored member) to your CREST sponsor by 3.00 p.m. on 28 March 2013 at the latest.

Qualifying CREST Shareholders and, subject to dematerialisation of their Nil Paid Rights as set out in the Provisional Allotment Letter, Qualifying Non-CREST Shareholders who are CREST members or CREST sponsored members, can transfer Nil Paid Rights, in whole or in part, by means of CREST in the same manner as any other security that is admitted to CREST. Please consult your CREST sponsor or stockbroker, bank or other appropriate financial adviser, or whoever arranged your share purchase, for details.

4.4 What if I want to sell the New Ordinary Shares I have paid for?

If you are a Qualifying Non-CREST Shareholder, provided the New Ordinary Shares have been paid for and you have requested the return of the receipted Provisional Allotment Letter (by placing a cross in Box 5 on page 2 of the Provisional Allotment Letter), you can transfer the Fully Paid Rights by completing Form X, the form of renunciation, on page 2 of the receipted Provisional Allotment Letter in accordance with the instructions set out on page 4 of the Provisional Allotment Letter until 11.00 a.m. on 28 March 2013. See paragraph 3 of Part III of this document for more details. After that date, you will be able to sell your New Ordinary Shares in the normal way.

The share certificate relating to your New Ordinary Shares is expected to be despatched to you by no later than 12 April 2013. Pending despatch of share certificates, instruments of transfer may be certified by Computershare against the register.

If you hold Fully Paid Rights in CREST, you may transfer the Fully Paid Rights in the same manner as any other security that is admitted to CREST. See paragraph 4 of Part III of this document for more details. Please consult your stockbroker, bank or other appropriate financial adviser, or whoever arranged your share purchase, for details.

4.5 Do I need to comply with the procedures in relation to the Money Laundering Regulations (as set out in paragraphs 3.4 and 4.3 of Part III of this document)?

If you are a Qualifying Non-CREST Shareholder, you do not need to follow these procedures if the value of the New Ordinary Shares you are acquiring is less than the sterling equivalent of e15,000 and if you pay

for them by a cheque drawn on an account in your own name and that account is one which is held with an EU or UK regulated bank or building society. If you are a Qualifying CREST Shareholder, you will not generally need to comply with the Money Laundering Regulations unless you apply to take up all or some of your entitlement to Nil Paid Rights as agent for one or more persons and you are not an EU or UK regulated credit or financial institution.

Qualifying Non-CREST Shareholders and Qualifying CREST Shareholders should refer to paragraph 3.4 and paragraph 4.3, respectively of Part III of this document for a fuller description of the requirements of the Money Laundering Regulations.

4.6 What if I am entitled to Ordinary Shares under a Share Scheme?

Participants in Share Schemes will be advised separately of adjustments (if any) to their rights or as to any entitlement to participate in the Rights Issue.

4.7 What should I do if I live outside the United Kingdom?

Your ability to take up rights to New Ordinary Shares may be affected by the laws of the country in which you live and you should take professional advice as to whether you require any governmental or other consents or any formalities you need to observe to enable you to take up your rights. Overseas Shareholders (including Restricted Shareholders) should refer to paragraph 8 of Part III of this document. Your attention is drawn to the further terms and conditions of the Rights Issue contained in Part III of this document and (in the case of Qualifying Non-CREST Shareholders) also set out in the Provisional Allotment Letter.

PART III

TERMS AND CONDITIONS OF THE RIGHTS ISSUE

1. Details of the Rights Issue

The Company is proposing to raise approximately £44.8 million, net of expenses, by way of a rights issue of up to 208,252,511 New Ordinary Shares. Subject to the fulfilment or waiver (as applicable) of the conditions referred to below, the Directors propose to offer New Ordinary Shares by way of rights to Qualifying Shareholders, payable in full on acceptance, on the following basis:

7 New Ordinary Shares for every 3 Existing Ordinary Shares at 23 pence per New Ordinary Share

held and registered in their name on the Record Date. Holdings of Existing Ordinary Shares in certificated or uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Rights Issue. New Ordinary Shares representing fractional entitlement will not be provisionally allotted to Qualifying Shareholders and, where necessary, entitlements to New Ordinary Shares will be rounded down to the nearest whole number.

The Issue Price of 23 pence per New Ordinary Share represents:

a 67.8 per cent. discount to the Closing Price of an Existing Ordinary Share on 27 February 2013 (being the latest practicable date prior to the date of publication of this document); and
a 38.7 per cent. discount to the theoretical ex-rights price of 37.55 pence per Existing Ordinary Share, based on such Closing Price.

The Nil Paid Rights (also described as rights to acquire New Ordinary Shares, nil paid) are entitlements to acquire the New Ordinary Shares subject to payment of the Issue Price. The Fully Paid Rights are entitlements to receive the New Ordinary Shares, for which a subscription and payment has already been made.

The Rights Issue is conditional upon:

(a) the passing of the Resolution without material amendment at the General Meeting;
(b) Admission becoming effective by not later than 8.00 a.m. on 19 March 2013 (or such later time and/or date as the Company and Jefferies may agree (being not later than 30 April 2013)); and
(c) the Underwriting Agreement becoming unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms prior to Admission.

The Rights Issue is fully underwritten by Jefferies and is conditional, inter alia, upon the Underwriting Agreement becoming unconditional in all respects and not being terminated in accordance with its terms, prior to Admission. The Underwriting Agreement is conditional inter alia upon Admission, certain warranties and undertakings being satisfied or not breached prior to Admission and upon the occurrence or non-occurrence of certain specified events prior to Admission, Jefferies may arrange sub-underwriting for some or all of the New Ordinary Shares.

If the Underwriting Agreement does not become unconditional in all respects by 8.00 a.m. on 19 March 2013 (or such later time and/or date as the Company and Jefferies may agree (being not later than 30 April 2013)) or if it is terminated in accordance with its terms, the Rights Issue will be revoked and the Company will not proceed with it. Revocation cannot occur after nil paid dealings in the New Ordinary Shares have begun. The Underwriting Agreement may not be terminated after Admission including, without limitation, if a supplementary prospectus is required to be produced after Admission.

A summary of the principal terms of the Underwriting Agreement is set out in paragraph 12 of Part IX of this document.

Applications will be made to the FSA and to the London Stock Exchange for the New Ordinary Shares (nil paid and fully paid) to be admitted to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities respectively. It is expected that Admission will become effective on 19 March 2013 and that dealings in the New Ordinary Shares, nil paid, will commence on the London Stock Exchange by 8:00 a.m. on that date. Dealings in the New Ordinary Shares, fully paid, are expected to commence on the London Stock Exchange by 8.00 a.m. on 5 April 2013. The New Ordinary Shares and the Ordinary Shares are in registered form and can be held in certificated form or uncertificated form via CREST.

The Ordinary Shares are already admitted to CREST. No further application for admission to CREST is required for the New Ordinary Shares and all of the New Ordinary Shares when issued and fully paid may be held and transferred by means of CREST.

Applications will be made for the Nil Paid Rights and the Fully Paid Rights to be admitted to CREST as separate securities. Euroclear UK requires the Company to confirm to it that certain conditions (imposed by the CREST Manual) are satisfied before Euroclear UK will admit any security to CREST. It is expected that these conditions will be satisfied, in respect of the Nil Paid Rights and the Fully Paid Rights, on Admission. As soon as practicable after satisfaction of these conditions, the Company will confirm this to Euroclear UK.

The ISIN for the Existing Ordinary Shares is GB00B27YGJ97. The ISIN for the New Ordinary Shares will be the same as for the Existing Ordinary Shares. The ISIN code for the Nil Paid Rights is GB00B7V0D751 and for the Fully Paid Rights is GB00B997JV80.

None of the New Ordinary Shares are being made available to the public other than pursuant to the Rights Issue.

Subject to the conditions referred to in paragraphs (a) to (c) above being satisfied (other than the condition relating to Admission) and save as provided in paragraph 8 below, it is intended that:

(a) Provisional Allotment Letters in respect of Nil Paid Rights will be despatched to Qualifying Non-CREST Shareholders (other than, subject to certain exceptions, Restricted Shareholders) on 18 March 2013;
(b) Computershare will instruct Euroclear UK to credit the appropriate stock accounts of Qualifying CREST Shareholders (other than, subject to certain exceptions, Restricted Shareholders) with such Shareholders' entitlements to Nil Paid Rights with effect from 8:00 a.m. on 19 March 2013;
(c) the Nil Paid Rights and the Fully Paid Rights will be enabled for settlement in CREST by Euroclear UK on 19 March 2013, as soon as practicable after the Company has confirmed to Euroclear UK that all the conditions for Admission of such rights to CREST have been satisfied;
(d) New Ordinary Shares will be credited to the appropriate stock accounts of the relevant Qualifying CREST Shareholders (or their renouncees) who validly take up their Rights as soon as practicable after 8:00 a.m. on 5 April 2013; and
(e) share certificates for the New Ordinary Shares will be despatched to Qualifying Non-CREST Shareholders (or their renouncees) who validly take up their Rights by no later than 12 April 2013.

This document constitutes the offer of New Ordinary Shares to Qualifying Shareholders (other than, subject to certain exceptions, those with registered addresses in the United States or the Excluded Territories), such offer being on the terms and conditions set out in this document (and in the case of Qualifying non-CREST Shareholders, the Provisional Allotment Letter) and being deemed to be made at the time the Nil Paid Rights are enabled for settlement as described above.

The offer of New Ordinary Shares and the Rights Issue is not being made by means of this document into the United States or the Excluded Territories (subject to certain exceptions) or any other jurisdiction outside the United Kingdom in which it would be illegal to make an offer. Pursuant to the Act, the offer of New Ordinary Shares to Qualifying Shareholders who have no registered address in an EEA State and who have not given to the Company an address in an EEA State for the serving of notices will be made to such Shareholders through a notice in the London Gazette, details of which are provided in paragraph 8.4 of this Part III.

The attention of Overseas Shareholders or any person (including, without limitation, nominees and trustees) who has a contractual or other legal obligation to forward this document into a jurisdiction other than the

United Kingdom is drawn to paragraph 8 of this Part III below. Subject to the provisions of paragraph 8 Qualifying Shareholders who have a registered address in any of the Excluded Territories or the United States are not being sent this document or Provisional Allotment Letters and will not have their CREST accounts credited with Nil Paid Rights.

All documents including Provisional Allotment Letters (which constitute temporary documents of title) and cheques and certificates posted to, by or from Qualifying Shareholders and/or their transferees or renounces (or their agents, as appropriate) will be posted at their own risk.

Shareholders taking up their rights by completing a Provisional Allotment Letter or by sending an MTM instruction to Euroclear UK will be deemed to have given the representations and warranties set out in paragraph 4.2(d) of this Part III.

2. Action to be taken — Introduction

The action to be taken in respect of New Ordinary Shares depends on whether, at the relevant time, the Nil Paid Rights or Fully Paid Rights in respect of which action is to be taken are in certificated form (that is, are represented by Provisional Allotment Letters) or are in uncertificated form (that is, are in CREST).

If you are a Qualifying Non-CREST Shareholder and (subject to certain limited exceptions, as set out in paragraph 8 of this Part III) do not have a registered address in the United States or the Excluded Territories, please refer to paragraph 3 and paragraphs 5 to 9 (inclusive) of this Part III.

If you are a Qualifying CREST Shareholder and (subject to certain limited exceptions, as set out in paragraph 8 of this Part III) do not have a registered address in the United States or the Excluded Territories, please refer to paragraph 4 and paragraphs 5 to 9 (inclusive) of this Part III and to the CREST Manual for further information on the CREST procedures referred to below.

Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsors, as only their CREST sponsors will be able to take the necessary action specified below to take up their entitlements or otherwise to deal with the Nil Paid Rights or Fully Paid Rights of CREST sponsored members.

All enquiries in relation to the Provisional Allotment Letters should be addressed to Computershare on 0870 707 1329 or, if telephoning from outside the UK, on +44(0)870 707 1329 between 8.30 a.m. and 5.00 p.m. (London time) Monday to Friday (except bank and other public holidays). Calls to the Computershare 0870 707 1329 number are charged at up to 10 pence per minute (including VAT) plus any of your service provider's network extras. Calls to the Computershare +44(0)870 707 1329 number from outside the UK are charged at applicable international rates. Different charges may apply to calls made from mobile telephones and calls may be recorded and monitored randomly for security and training purposes. Computershare cannot provide advice on the merits of the Rights Issue nor give any financial, legal or tax advice.

3. Action to be taken by Qualifying Non-CREST Shareholders in relation to Nil Paid Rights represented by Provisional Allotment Letters

3.1 General

Subject to the Resolution being passed at the General Meeting, Provisional Allotment Letters are expected to be despatched to Qualifying Non-CREST Shareholders (other than, subject to certain exceptions, Restricted Shareholders) on 18 March 2013. Each Provisional Allotment Letter, which constitutes a temporary document of title, will set out:

(a) the holding at the Record Date of Existing Ordinary Shares in certificated form on which a Qualifying Non-CREST Shareholder's entitlement to New Ordinary Shares has been based;
(b) the aggregate number of New Ordinary Shares in certificated form which have been provisionally allotted to such Qualifying Non-CREST Shareholder;
(c) the procedures to be followed if a Qualifying Non-CREST Shareholder wishes to dispose of all or part of his entitlement or to convert all or part of his entitlement into uncertificated form; and
(d) instructions regarding acceptance and payment, consolidation, splitting and registration of renunciation.

3.2 Procedure for acceptance and payment

(a) Qualifying Non-CREST Shareholders who wish to accept in full

Holders of Provisional Allotment Letters who wish to take up all of their entitlements must return the Provisional Allotment Letter, in accordance with the instructions thereon, together with a cheque or banker's draft in Sterling, made payable to ''Computershare Investor Service PLC re Severfield-Rowen Plc — Rights Issue'' and crossed ''A/C payee only'', for the full amount payable on acceptance, by post to Computershare, Corporate Actions Projects, Bristol, BS99 6AH or by hand to Computershare, The Pavilions, Bridgwater Road, Bristol, BS13 8AE (during normal business hours only) so as to arrive as soon as possible and in any event so as to be received no later than 11.00 a.m. on 4 April 2013. If you post the Provisional Allotment Letter within the United Kingdom by first class post, it is recommended that you allow at least three days for delivery. A reply-paid envelope will be enclosed with the Provisional Allotment Letter for use within the United Kingdom only for this purpose.

(b) Qualifying Non-CREST Shareholders who wish to accept in part

Holders of Provisional Allotment Letters who wish to take up some but not all of their Nil Paid Rights should refer to paragraph 3.8 below.

(c) Company's discretion as to validity of acceptances

If payment is not received in full by 11.00 a.m. on 4 April 2013, the provisional allotment will (unless the Company has exercised its right to treat as valid an acceptance as set out herein) be deemed to have been declined and will lapse.

The Company and Jefferies reserve the right, but shall not be obliged, to treat as valid (a) Provisional Allotment Letters and accompanying remittances for the full amounts due which are not received through the post prior to 11.00 a.m. on 4 April 2013 (the cover bearing a legible postmark not later than 11.00 a.m. on 4 April 2013) and (b) acceptances in respect of which a remittance is received prior to 11.00 a.m. on 4 April 2013 from an authorised person (as defined in section 31(2) of the FSMA) identifying the shares concerned and undertaking to lodge the relevant Provisional Allotment Letter duly completed by not later than 11.00 a.m. on 5 April 2013 and such Provisional Allotment Letter is lodged by that time.

The Company and Jefferies may also (in their absolute discretion) treat a Provisional Allotment Letter as valid and binding on the person(s) by whom or on whose behalf it is lodged even if not completed in accordance with the relevant instructions or not accompanied by a valid power of attorney where required.

The Company and Jefferies also reserve the right to treat as invalid any acceptance or purported acceptance of the New Ordinary Shares that appears to the Company to have been executed in, despatched from, or that provided an address for delivery of definitive share certificates for New Ordinary Shares in, the United States or any of the Excluded Territories.

A Qualifying Non-CREST Shareholder who makes a valid acceptance and payment in accordance with this paragraph 3.2 is deemed to request that the New Ordinary Shares to which they will become entitled be issued to them on the terms set out in this document and subject to the Company's Articles.

3.3 Payments

Payments must be made by cheque or banker's draft in Sterling drawn on a bank or building society or a branch of a bank or building society in the United Kingdom or Channel Islands which is either a settlement member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limited or which has arranged for its cheques or banker's drafts to be cleared through the facilities provided for members of any of these companies. Such cheques or banker's drafts must bear the appropriate sort code in the top right hand corner. Cheques, which must be drawn on the personal account of the individual investor where they have a sole or joint title to the funds, should be made payable to ''Computershare Investor Services PLC re Severfield-Rowen Plc — Rights Issue'' and crossed ''a/c payee only''. Third party cheques may not be accepted with the exception of building society cheques or banker's drafts where the building society or bank has confirmed the name of the account holder by stamping or endorsing the back of the cheque or banker's draft to such effect. The account name should be the same as that shown on the application. Post-dated cheques will not be accepted.

The Company reserves the right to have cheques and banker's drafts presented for payment on receipt and to instruct Computershare to seek special clearance of cheques to allow the Company to obtain value for remittances at the earliest opportunity. Interest will not be paid on payments made before they are due but will accrue for the benefit of the Company. Return of the Provisional Allotment Letter with a remittance in the form of a cheque will constitute a warranty that the cheque will be honoured on first presentation. The Company and Jefferies may elect to treat as invalid any acceptances in respect of which cheques or other remittances are notified to them or their agent as not having been so honoured. All documents, cheques and banker's drafts sent through the post will be sent at the risk of the sender. Payments via CHAPS, BACS or electronic transfer will not be accepted.

If New Ordinary Shares have already been allotted to a Qualifying Non-CREST Shareholder prior to any payment not being so honoured upon first presentation or such acceptances being treated as invalid, the Company and Jefferies may (in their absolute discretion as to manner, timing and terms) make arrangements for the sale of such New Ordinary Shares on behalf of such Qualifying Non-CREST Shareholders and hold the proceeds of sale (net of the Company's reasonable estimate of any loss that it has suffered as a result of the same and of the expenses of the sale including, without limitation, any stamp duty or SDRT payable on the transfer of such New Ordinary Shares, and of all amounts payable by such Qualifying Non-CREST Shareholders pursuant to these provisions in respect of the acquisition of such New Ordinary Shares) on behalf of such Qualifying Non-CREST Shareholders. Neither the Company nor Jefferies nor any other person shall be responsible for, or have any liability for, any loss, expense or damage suffered by such Qualifying Non-CREST Shareholders as a result.

3.4 Money Laundering Regulations

It is a term of the Rights Issue that, to ensure compliance with the Money Laundering Regulations, the Proceeds of Crime Act 2002 and the Terrorism Act 2000, the Registrar may require, in its absolute discretion, verification of the identity of the person by whom or on whose behalf a Provisional Allotment Letter is lodged with payment (which requirements are referred to below as the ''verification of identity requirements''). The person(s) (the ''acceptor'') who, by lodging a Provisional Allotment Letter with payment, as described above, accept(s) the allotment of the New Ordinary Shares (the ''relevant shares'') comprised in such Provisional Allotment Letter (being the provisional allottee or, in the case of renunciation, the person named in Form Y on such Provisional Allotment Letter) shall thereby be deemed to agree to provide the Company's Registrar and/or the Company with such information and other evidence as they or either of them may require to satisfy the verification of identity requirements.

If Computershare determines that the verification of identity requirements apply to an acceptance of an allotment and the verification of identity requirements have not been satisfied (which Computershare shall in its absolute discretion determine) by 11.00 a.m. on 4 April 2013, the Company may, in its absolute discretion, and without prejudice to any other rights of the Company, treat the acceptance as invalid or may confirm the allotment of the relevant shares to the acceptor but (notwithstanding any other term of the Rights Issue) such shares will not be issued to him or registered in his name until the verification of identity requirements have been satisfied (which Computershare shall in its absolute discretion determine). If the acceptance is treated as invalid and the verification of identity requirements are not satisfied within such period, being not less than seven days after a request for evidence of identity is despatched to the acceptor, the Company will be entitled to make arrangements (in its absolute discretion as to manner, timing and terms) to sell the relevant shares (and for that purpose the Company will be expressly authorised to act as agent of the acceptor). Any proceeds of sale (net of expenses) of the relevant shares which shall be issued to and registered in the name of the purchaser(s) or an amount equivalent to the original payment, whichever is the lower, will be held by the Company on trust for the acceptor, subject to the requirements of the Money Laundering Regulations, the Proceeds of Crime Act 2002 and the Terrorism Act 2000. Computershare is entitled in its absolute discretion to determine whether the verification of identity requirements apply to any acceptor and whether such requirements have been satisfied. Neither the Company nor Computershare will be liable to any person for any loss suffered or incurred as a result of the exercise of any such discretion or as a result of any sale of relevant shares.

Return of a Provisional Allotment Letter with the appropriate remittance will constitute a warranty from the acceptor that the Money Laundering Regulations, the Proceeds of Crime Act 2002 and the Terrorism Act 2000, will not be breached by acceptance of such remittance. If the verification of identity requirements apply, failure to provide the necessary evidence of identity may result in your acceptance being treated as

invalid or in delays in the despatch of a receipted fully-paid Provisional Allotment Letter or a share certificate.

The verification of identity requirements will not usually apply:

(a) if the acceptor is an organisation required to comply with the Money Laundering Directive 2005/60/EC of the European Parliament and of the EC Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing; or
(b) if the acceptor is a regulated United Kingdom broker or intermediary acting as agent and is itself subject to the Money Laundering Regulations; or
(c) if the acceptor (not being an acceptor who delivers his acceptance in person) makes payment by way of a cheque drawn on an account in the name of such acceptor through a financial or credit institution that is itself subject to the Money Laundering Regulations; or
(d) if the aggregate acquisition price for the relevant shares is less than e15,000 (approximately £13,000); or
(e) if the acceptor is a company whose securities are listed on a regulated market subject to specified disclosure obligations.

Where the verification of identity requirements apply, please note the following as this will assist in satisfying the requirements. Satisfaction of the verification of identity requirements may be facilitated in the following ways:

(a) if payment is made by cheque or banker's draft in Sterling drawn on a branch in the United Kingdom of a bank or building society and bears a UK bank sort code number in the top right hand corner, the following applies. Cheques should be made payable to ''Computershare re Severfield-Rowen Plc — Rights Issue''. Third party cheques will not be accepted with the exception of building society cheques or banker's drafts where the building society or bank has confirmed the name of the account holder by stamping or endorsing the building society cheque/banker's draft to such effect. The account name should be the same as that shown on the application;
(b) if the Provisional Allotment Letter is lodged with payment by an agent which is an organisation of the kind referred to in (a) above or which is subject to anti money laundering regulation in a country which is a member of the Financial Action Task Force (the non-European Union members of which are Argentina, Australia, Brazil, Canada, Hong Kong, Iceland, Japan, Mexico, New Zealand, Norway, the Russian Federation, Singapore, South Africa, Switzerland, Turkey, the United States of America and, by virtue of their membership of the Gulf Cooperation Council, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), the agent should provide written confirmation with the Provisional Allotment Letter that it has that status and a written assurance that it has obtained and recorded evidence of the identity of the persons for whom it acts and that it will on demand make such evidence available to Computershare or the relevant authority; or
(c) if a Provisional Allotment Letter is lodged by hand by the acceptor in person, he should ensure that he has with him evidence of identity bearing his photograph (for example, his passport) and evidence of his address.

In order to confirm the acceptability of any written assurance referred to in (c) above or any other case, the acceptor should contact Computershare.

3.5 Dealings in Nil Paid Rights

Subject to the fulfilment of the conditions set out in paragraph 1 above, dealings on the London Stock Exchange in the Nil Paid Rights are expected to commence at 8.00 a.m. on 19 March 2013. A transfer of Nil Paid Rights can be made by renunciation of the Provisional Allotment Letter in accordance with the instructions printed on it or, in the case of any person in whose favour the rights have been renounced, by delivery of such letter to the transferee. The latest time and date for registration of renunciation of Provisional Allotment Letters, nil paid, is expected to be 11.00 a.m. on 4 April 2013.

3.6 Dealings in Fully Paid Rights

After acceptance of the provisional allotment and receipt of payment in accordance with the provisions set out in this document and in the Provisional Allotment Letter, the Fully Paid Rights may be transferred by renunciation of the relevant Provisional Allotment Letter and delivery of the same by post to Computershare, Corporate Actions Projects, Bristol, BS99 6AH or by hand (during normal business hours only) to Computershare, The Pavilions, Bridgwater Road, Bristol, BS13 8AE, by 11.00 a.m. on 4 April 2013. To do this, Qualifying Non-CREST Shareholders will need to have their fully paid Provisional Allotment Letters returned to them after acceptance has been effected by Computershare. However, fully paid Provisional Allotment Letters will not be returned to such Shareholders unless their return is requested by placing a cross in Box 5 on page 2 of the Provisional Allotment Letter. After 4 April 2013, the New Ordinary Shares will be in registered form and will be transferable by written instrument of transfer in any usual or common form complying with the Articles or in any other written form which the Directors may approve.

3.7 Registration in names of Qualifying Non-CREST Shareholders

A Qualifying Non-CREST Shareholder who wishes to have all his entitlement to New Ordinary Shares registered in his name must accept and make payment for such allotment of the New Ordinary Shares in accordance with the provisions summarised in this document and set out in the Provisional Allotment Letter but need take no further action. A share certificate is expected to be despatched to such Qualifying Shareholders by no later than 12 April 2013.

3.8 Renunciation and splitting of Provisional Allotment Letters and acceptance in part

The Provisional Allotment Letters are fully renounceable (save as required by the laws of certain overseas jurisdictions as further described in paragraph 8 below) and may be split up to 3.00 p.m. on 2 April 2013, nil paid and fully paid.

A Qualifying Non-CREST Shareholder wishing to transfer all of their Nil Paid Rights or, after acceptance of the provisional allotment and payment in full, Fully Paid Rights comprised in a Provisional Allotment Letter may (save as required by the laws of certain overseas jurisdictions) renounce such allotment by completing and signing Form X on the Provisional Allotment Letter (if it is not already marked ''Original Duly Renounced'') and delivering (but not in or into the United States or any Excluded Territory or any other jurisdiction in which it would be illegal to do so) the Provisional Allotment Letter to the transferee or the broker or bank who acted for such Qualifying Non-CREST Shareholder in the transaction. Once so renounced, a Provisional Allotment Letter will become a negotiable instrument in bearer form and the Nil Paid Rights or Fully Paid Rights (as appropriate) comprised in the Provisional Allotment Letter may be transferred by delivery of the Provisional Allotment Letter to the transferee. The latest time and date for registration of renunciation of Provisional Allotment Letters, fully paid, is 11.00 a.m. on 4 April 2013.

If a holder of a Provisional Allotment Letter wishes either to have only some of the New Ordinary Shares registered in his name and to transfer the remainder, or wishes to transfer all the Nil Paid Rights or (if appropriate) Fully Paid Rights but to different persons, he may have the Provisional Allotment Letter split, for which purpose he or his agent must complete and sign Form X on the Provisional Allotment Letter. The Provisional Allotment letter must then be lodged, by post or by hand, with Computershare (during normal business hours only) by not later than 3.00 p.m. on 2 April 2013, to be cancelled and exchanged for the split Provisional Allotment Letters required. The number of split Provisional Allotment Letters required and the number of Nil Paid Rights or (as appropriate) Fully Paid Rights to be comprised in each such letter should be stated in a covering letter. Form X on the split Provisional Allotment Letters will be marked ''Original Duly Renounced'' before issue.

A Qualifying Non-CREST Shareholder who wishes to take up only some of his rights, without selling or transferring the remainder, should complete Form X on the Provisional Allotment Letter and return it by post or by hand to Computershare (during normal business hours only), together with a covering letter confirming the number of New Ordinary Shares to be taken up and a cheque to pay for this number of shares. In this case, the Provisional Allotment Letter and cheque must be received by Computershare by 3.00 p.m. on 2 April 2013, being the latest time and date for splitting Nil Paid Rights.

The Company and Jefferies reserve the right to refuse to register any renunciation by or in favour of any person in respect of whom the Company and Jefferies believe such renunciation may violate applicable legal or regulatory requirements, including (without limitation) any renunciation in the name of any person with an address outside the UK.

3.9 Registration in names of persons other than Qualifying Shareholders originally entitled

In order to register Fully Paid Rights in certificated form in the name of someone other than the non-CREST Qualifying Shareholder(s) originally entitled, the renouncee or his agent(s) must complete Form Y on the Provisional Allotment Letter (unless the renouncee is a CREST member who wishes to hold such shares in uncertificated form, in which case, Form X and the CREST Deposit Form must be completed — see paragraph 3.10 below) and lodge the entire Provisional Allotment Letter by post or by hand with Computershare (during normal business hours only) not later than 11.00 a.m. on 4 April 2013, the latest time for registration of renunciations. Registration cannot be effected unless and until the New Ordinary Shares comprised in a Provisional Allotment Letter are fully paid.

The New Ordinary Shares comprised in several renounced Provisional Allotment Letters may be registered in the name of one holder (or joint holders) if Form Y on the Provisional Allotment Letter is completed on one Provisional Allotment Letter (the ''Principal Letter'') and all the Provisional Allotment Letters are delivered in one batch. Details of each Provisional Allotment Letter (including the Principal Letter) should be listed in a letter attached to the Principal Letter and the allotment number of the Principal Letter should be entered in the space provided on each of the other Provisional Allotment Letters.

3.10 Deposit of Nil Paid Rights or Fully Paid Rights into CREST

Nil Paid Rights or Fully Paid Rights represented by the Provisional Allotment Letter may be converted into uncertificated form, that is, deposited into CREST (whether any such conversion arises as a result of a renunciation of those rights or otherwise). Similarly, Nil Paid Rights or Fully Paid Rights held in CREST may be converted into certificated form, that is, withdrawn from CREST. Subject to the next paragraph (or the Provisional Allotment Letter), normal CREST procedures (including timings) apply in relation to any such conversion. You are recommended to refer to the CREST Manual for details of such procedures.

The procedure for depositing the Nil Paid Rights or Fully Paid Rights represented by the Provisional Allotment Letter into CREST, depends on whether such rights are to be converted into uncertificated form in the name(s) of the person(s) whose name(s) and address appear(s) on page 1 of the Provisional Allotment Letter or in the name of a person or persons to whom the Provisional Allotment Letter has been renounced. To deposit rights that are not to be renounced, only the CREST Deposit Form will need to be completed. To deposit rights that have been renounced, Form X and the CREST Deposit Form (both on page 2 of the Provisional Allotment Letter) will need to be completed. In each case, the Provisional Allotment Letter must be deposited with the CCSS; in addition, the normal CREST Stock Deposit procedures will need to be carried out, except that (a) it will not be necessary to complete and lodge a separate CREST Transfer Form (prescribed under the Stock Transfer Act 1963) with the CCSS and (b) only the whole of the Nil Paid Rights or Fully Paid Rights represented by the Provisional Allotment Letter may be deposited into CREST. If you wish to deposit only some of the Nil Paid Rights or Fully Paid Rights represented by the Provisional Allotment Letter into CREST, you must first apply for split Provisional Allotment Letters in the manner described in paragraph 3.8 above. If the rights represented by more than one Provisional Allotment Letter are to be deposited, the CREST Deposit Form on each Provisional Allotment Letter must be completed and deposited. The Consolidation Listing Form (as defined in the Regulations) must not be used.

A holder of Nil Paid Rights or Fully Paid Rights represented by a Provisional Allotment Letter who is proposing to convert those rights into uncertificated form (whether following a renunciation of such rights or otherwise) is recommended to ensure that the conversion procedures are implemented in sufficient time to enable the person holding or acquiring the Nil Paid Rights or Fully Paid Rights in CREST following the conversion to take all necessary steps in connection with taking up the entitlement prior to 11.00 a.m. on 4 April 2013. In particular, having regard to normal processing times in CREST and on the part of Computershare, the latest recommended time for depositing a renounced Provisional Allotment Letter, with Form X and the CREST Deposit Form on page 2 of the Provisional Allotment Letter duly completed, with the CCSS (in order to enable the person acquiring the Nil Paid Rights or Fully Paid Rights in CREST as a result of the conversion to take all necessary steps in connection with taking up the entitlement prior to 11.00 a.m. on 4 April 2013) is 3.00 p.m. on 28 March 2013.

When Form X and/or the CREST Deposit Form (both on page 2 of the Provisional Allotment Letter) have been completed, the title to the Nil Paid Rights or Fully Paid Rights represented by the Provisional Allotment Letter will cease forthwith to be renounceable or transferable by delivery and, for the avoidance of doubt, any entries in Form Y will not subsequently be recognised or acted upon by Computershare. All

renunciations or transfers of the Nil Paid Rights or Fully Paid Rights must be effected through the means of CREST once such Nil Paid Rights or Fully Paid Rights have been deposited into CREST.

3.11 Issue of New Ordinary Shares in definitive form

Definitive share certificates in respect of the New Ordinary Shares to be held in certificated form are expected to be despatched by post by no later than 12 April 2013 to Qualifying Non-CREST Shareholders (or their transferees who hold Fully Paid Rights in certificated form), or in the case of joint holdings, to the first named Shareholders, at their registered address (unless lodging agent details have been completed on the Provisional Allotment Letter). All documents and cheques posted to or by Shareholders or renouncees or their agents will be posted at their risk. After the despatch of share certificates, Provisional Allotment Letters will cease to be valid for any purpose whatsoever. Pending the despatch of share certificates, instruments of transfer of the New Ordinary Shares will be certified by Computershare against the register.

4. Action to be taken by Qualifying CREST Shareholders in relation to Nil Paid Rights and Fully Paid Rights in CREST

4.1 General

Subject to the Resolution being passed at the General Meeting, it is expected that each Qualifying CREST Shareholder (other than, subject to certain to certain exceptions, Restricted Shareholders) will receive a credit to his CREST stock account of his entitlement to Nil Paid Rights on 19 March 2013. It is expected that such rights will be enabled as soon as practicable after 8.00 a.m. on 19 March 2013. The CREST stock account to be credited will be an account under the participant ID and member account ID that apply to the Existing Ordinary Shares in uncertificated form held on the Record Date by the Qualifying CREST Shareholder in respect of which the Nil Paid Rights are provisionally allotted.

The Nil Paid Rights will constitute a separate security for the purposes of CREST and can accordingly be transferred, in whole or in part, by means of CREST in the same manner as any other security that is admitted to CREST.

If the Rights Issue is delayed or if, for any other reason, it is impracticable to credit the stock accounts of Qualifying CREST Shareholders, or to enable the Nil Paid Rights, by 8.00 a.m. on 19 March 2013, the expected timetable as set out in this document may be adjusted. References to dates and times in this document should be read as subject to any such adjustment. The Company will make an appropriate announcement to a Regulatory Information Service giving details of the revised dates, but Qualifying CREST Shareholders may not receive any further written communication. Further, in such circumstances a Provisional Allotment Letter shall, unless the Company determines otherwise, be sent to each Qualifying CREST Shareholder in substitution for the Nil Paid Rights which would have been enabled or credited to its stock account in CREST and the expected timetable as set out in this document will be adjusted as appropriate.

CREST members who wish to take up all or part of their entitlements in respect of, or otherwise to transfer, Nil Paid Rights or Fully Paid Rights held by them in CREST should refer to the CREST Manual for further information on the CREST procedures referred to below. If you are a CREST sponsored member and wish to take up your entitlement, you should consult your CREST sponsor, as only your CREST sponsor will be able to take the necessary action to take up your entitlements or otherwise to deal with your Nil Paid Rights or Fully Paid Rights.

4.2 Procedure for acceptance and payment

(a) MTM instructions

CREST members who wish to take up all or part of their entitlement in respect of Nil Paid Rights in CREST must send (or, if they are CREST sponsored members, procure that their CREST sponsor sends) an MTM instruction to Euroclear UK which, on its settlement, will have the following effect:

(i) the crediting of a stock account of Computershare, under the participant ID and member account ID specified below, with the number of Nil Paid Rights to be taken up;
(ii) the creation of a settlement bank payment obligation (as defined in the CREST Manual), in accordance with the RTGS payment mechanism (as defined in the CREST Manual), in favour of the

RTGS settlement bank of Computershare in Sterling, in respect of the full amount payable on acceptance in respect of the Nil Paid Rights referred to in sub-paragraph (i) above; and

(iii) the crediting of a stock account of the accepting CREST member (being an account under the same participant ID and member account ID as the account from which the Nil Paid Rights are to be debited on settlement of the MTM instruction) of the corresponding number of Fully Paid Rights to which the CREST member is entitled on taking up his Nil Paid Rights referred to in sub-paragraph (i) above.

(b) Contents of MTM instructions

The MTM instruction must be properly authenticated in accordance with Euroclear UK's specifications and must contain, in addition to the other information that is required for settlement in CREST, the following details:

(i) the number of Nil Paid Rights to which the acceptance relates;
(ii) the participant ID of the accepting CREST member;
(iii) the member account ID of the accepting CREST member from which the Nil Paid Rights are to be debited;
(iv) the participant ID of Computershare, in its capacity as a CREST Receiving Agent. This is 3RA51;
(v) the member account ID of Computershare, in its capacity as a CREST Receiving Agent. This is SEVERFIELD-ROWEN;
(vi) the number of Fully Paid Rights that the CREST member is expecting to receive on settlement of the MTM instruction. This must be the same as the number of Nil Paid Rights to which the acceptance relates;
(vii) the amount payable by means of the settlement bank payment obligation (as defined in the CREST Manual) on settlement of the MTM instruction. This must be the full amount payable on acceptance in respect of the number of Nil Paid Rights to which the acceptance relates referred to in paragraph 4.2(b)(i) above;
(viii)the intended settlement date. This must be at or before 11.00 a.m. on 4 April 2013;
(ix) the Nil Paid Rights ISIN code. This is GB00B7V0D751;
(x) the Fully Paid Rights ISIN code. This is GB00B997JV80;
(xi) the Corporate Action Number for the Rights Issue. This will be available by viewing the relevant corporate action details in CREST; and
(xii) contact name and telephone number in the shared contact field.
(c) Valid acceptance

An MTM instruction complying with each of the requirements as to authentication and contents set out in sub-paragraph (b) of this paragraph 4.2 above will constitute a valid acceptance where either:

(i) the MTM instruction settles by not later than 11.00 a.m. on 4 April 2013; or
(ii) at the discretion of the Company and Jefferies if:
(A) the MTM instruction is received by Euroclear UK by not later than 11.00 a.m. on 4 April 2013;
(B) a number of Nil Paid Rights at least equal to the number of Nil Paid Rights inserted in the MTM instruction is credited to the CREST stock account of the accepting CREST member specified in the MTM instruction at 11.00 a.m. on 4 April 2013; and
(C) the relevant MTM instruction settles by 2.00 p.m. on 4 April 2013 (or such later time as the Company may determine).

An MTM instruction will be treated as having been received by Euroclear UK for these purposes at the time at which the instruction is processed by the Network Providers' Communications Host (as this term is defined in the CREST Manual) at Euroclear UK of the network provider used by the CREST member (or by the CREST sponsored member's CREST sponsor). This will be conclusively determined by the input time stamp applied to the MTM instruction by the Network Providers' Communications Host.

(d) Representations, warranties and undertakings of CREST members

A CREST member or CREST sponsored member who makes a valid acceptance in accordance with this paragraph 4.2 represents, warrants and undertakes to the Company and Jefferies that he has taken (or procured to be taken), and will take (or will procure to be taken), whatever action is required to be taken by him or by his CREST sponsor (as appropriate) to ensure that the MTM instruction concerned is capable of settlement at 11.00 a.m. on 4 April 2013 and remains capable of settlement at all times after that until 2.00 p.m. on 4 April 2013 (or until such later time and date as the Company may determine). In particular, the CREST member or CREST sponsored member represents, warrants and undertakes that, at 11.00 a.m. on 4 April 2013 and at all times thereafter until 2.00 p.m. on 4 April 2013 (or until such later time and date as the Company may determine), there will be sufficient Headroom within the Cap (as those terms are defined in the CREST Manual) in respect of the cash memorandum account to be debited with the amount payable on acceptance to permit the MTM instruction to settle. CREST sponsored members should contact their CREST sponsor if they are in any doubt.

If there is insufficient Headroom within the Cap (as those terms are defined in the CREST Manual) in respect of the cash memorandum account of a CREST member or CREST sponsored member for such amount to be debited or the CREST member's or CREST sponsored member's acceptance is otherwise treated as invalid and New Ordinary Shares have already been allotted to such CREST member or CREST sponsored member, the Company and Jefferies may (in their absolute discretion as to the manner, timing and terms) make arrangements for the sale of such shares on behalf of that CREST member or CREST sponsored member and hold the proceeds of sale (net of the Company's reasonable estimate of any loss that it has suffered as a result of the acceptance being treated as invalid and of the expenses of sale including, without limitation, any stamp duty or SDRT payable on the transfer of such shares, and of all amounts payable by the CREST member or CREST sponsored member pursuant to the provisions of this Part III in respect of the acquisition of such shares) on behalf of such CREST member or CREST sponsored member. Neither the Company nor Jefferies nor any other person shall be responsible for, or have any liability for, any loss, expense or damage suffered by such CREST member or CREST sponsored member as a result.

(e) CREST procedures and timings

CREST members and CREST sponsors (on behalf of CREST sponsored members) should note that Euroclear UK does not make available special procedures in CREST for any particular corporate action. Normal systems timings and limitations will therefore apply in relation to the input of an MTM instruction and its settlement in connection with the Rights Issue. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST sponsored member, to procure that his CREST sponsor takes) the action necessary to ensure that a valid acceptance is received as stated above by 11.00 a.m. on 4 April 2013. In this connection CREST members and (where applicable) CREST sponsors are referred in particular to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

(f) CREST member's undertaking to pay

A CREST member or CREST sponsored member who makes a valid acceptance in accordance with the procedures set out in this paragraph 4.2, (a) undertakes to pay to Computershare, or procure the payment to Computershare of, the amount payable in Sterling on acceptance in accordance with the above procedures or in such other manner as Computershare may require (it being acknowledged that, where payment is made by means of the CREST RTGS payment mechanism, the creation of a RTGS payment obligation in Sterling in favour of Computershare's RTGS settlement bank (as defined in the CREST Manual) in accordance with the RTGS payment mechanism shall, to the extent of the obligation so created, discharge in full the obligation of the CREST member (or CREST sponsored member) to pay the amount payable on acceptance) and (b) requests that the Fully Paid Rights and/or New Ordinary

Shares to which he will become entitled be issued to him on the terms set out in this document and subject to the Articles of Association of the Company.

If the payment obligations of the relevant CREST member in relation to such New Ordinary Shares are not discharged in full and such New Ordinary Shares have already been allotted to the CREST member or CREST sponsored member, the Company and Jefferies may (in their absolute discretion as to the manner, timing and terms) make arrangements for the sale of such shares on behalf of that CREST member or CREST sponsored member and hold the proceeds of sale (net of the Company's reasonable estimate of any loss that it has suffered as a result of the same and of the expenses of sale including, without limitation, any stamp duty or SDRT payable on the transfer of such shares, and of all amounts payable by the CREST member or CREST sponsored member pursuant to the provisions of this Part III in respect of the acquisition of such shares) or any amount equal to the original payment of the CREST member or CREST sponsored member (whichever is lower) on trust for such CREST member or CREST sponsored member. Neither the Company nor Jefferies nor any other person shall be responsible for, or have any liability for, any loss, expense or damage suffered by such CREST member or CREST sponsored member as a result.

(g) Discretion as to rejection and validity of acceptances

The Company and Jefferies may in their absolute discretion:

(i) reject any acceptance constituted by an MTM instruction, which is otherwise valid, in the event of breach of any of the representations, warranties and undertakings set out or referred to in this paragraph 4.2 of this Part III. Where an acceptance is made as described in this paragraph 4.2 of this Part III which is otherwise valid, and the MTM instruction concerned fails to settle by 2.00 p.m. on 4 April 2013 (or by such later time and date as the Company and Jefferies have determined), the Company and Jefferies shall be entitled to assume, for the purposes of their right to reject an acceptance contained in this paragraph 4.2 of this Part III, that there has been a breach of the representations, warranties and undertakings set out or referred to in this paragraph 4.2, unless the Company is aware of any reason outside the control of the CREST member or CREST sponsor (as appropriate) concerned for the failure of the MTM instruction to settle;
(ii) treat as valid (and binding on the CREST member or CREST sponsored member concerned) an acceptance which does not comply in all respects with the requirements as to validity set out or referred to in this paragraph 4.2 of this Part III;
(iii) accept an alternative properly authenticated dematerialised instruction from a CREST member or (where applicable) a CREST sponsor as constituting a valid acceptance in substitution for, or in addition to, an MTM instruction and subject to such further terms and conditions as the Company and Jefferies may determine;
(iv) treat a properly authenticated dematerialised instruction (in this sub-paragraph (iv) the ''first instruction'') as not constituting a valid acceptance if, at the time at which Computershare receives a properly authenticated dematerialised instruction giving details of the first instruction, either the Company or Computershare has received actual notice from Euroclear UK of any of the matters specified in regulation 35(5)(a) of the CREST Regulations in relation to the first instruction. These matters include notice that any information contained in the first instruction was incorrect or notice of lack of authority to send the first instruction; and
(v) accept an alternative instruction or notification from a CREST member or CREST sponsored member or (where applicable) a CREST sponsor, or extend the time for acceptance and/or settlement of an MTM instruction or any alternative instruction or notification if, for reasons or due to circumstances outside the control of any CREST member or CREST sponsored member or (where applicable) CREST sponsor, the CREST member or CREST sponsored member is unable validly to take up all or part of his Nil Paid Rights by means of the above procedures. In normal circumstances, this discretion is only likely to be exercised in the event of an interruption, failure or breakdown of CREST (or of any part of CREST) or on the part of facilities and/or systems operated by Computershare in connection with CREST.

4.3 Money Laundering Regulations

If you hold your Nil Paid Rights in CREST and apply to take up all or part of your entitlement as agent for one or more persons and you are not a UK or EU regulated person or institution (e.g. a UK credit or financial institution), then, irrespective of the value of the application, Computershare is entitled to take reasonable measures to establish the identity of the person or persons (or the ultimate controller of such person or persons) on whose behalf you are making the application. You must therefore contact Computershare before sending any MTM instruction or other instruction so that appropriate measures may be taken.

Submission of an MTM instruction which constitutes, or which may on its settlement constitute, a valid acceptance as described above constitutes a warranty and undertaking by the applicant to provide promptly to Computershare any information Computershare may specify as being required for the purposes of the Money Laundering Regulations, the Proceeds of Crime Act 2002, the Terrorism Act 2000 or the FSMA.

If Computershare determines that the verification of identity requirements apply to a MTM instruction, the relevant Nil Paid Rights (notwithstanding any other term of the Rights Issue) will not be issued to the relevant applicant unless and until the verification of identity requirements have been satisfied in respect of that MTM instruction. Pending provision of such information and other evidence as Computershare may require to satisfy the verification of identity requirements, Computershare may at its absolute discretion take, or omit to take, such action as it may determine to prevent or delay settlement of the MTM instruction. Computershare is entitled, in its absolute discretion, to determine whether the verification of identity requirements applies to a MTM instruction and whether such requirements have been satisfied. None of Computershare, the Company or Jefferies will be liable to any person for any loss or damage suffered or incurred as a result of the exercise of any such discretion.

If satisfactory evidence of identity has not been provided within a reasonable time, then Computershare will not permit the MTM instruction concerned to proceed to settlement, but without prejudice to the right of the Company to take proceedings to recover any loss suffered by it as a result of failure by the applicant to provide satisfactory evidence. Any monies will be returned (at the applicant's risk) without interest to the account of the bank or building society on which the relevant cheque or banker's draft was drawn, or as applicable, the relevant account of the bank or building society from which the relevant funds were debited.

4.4 Dealings in Nil Paid Rights in CREST

Assuming the Rights Issue becomes unconditional, dealings in the Nil Paid Rights on the London Stock Exchange are expected to commence at 8.00 a.m. on 19 March 2013. A transfer (in whole or in part) of Nil Paid Rights can be made by means of CREST in the same manner as any other security that is admitted to CREST. The Nil Paid Rights are expected to be disabled in CREST by 11.00 a.m. on 4 April 2013.

4.5 Dealings in Fully Paid Rights in CREST

After acceptance of the provisional allotment and payment in full in accordance with the provisions set out in this document, the Fully Paid Rights may be transferred (in whole or in part) by means of CREST in the same manner as any other security that is admitted to CREST. The latest time and date for settlement of any transfer of Fully Paid Rights in CREST is expected to be 9.30 a.m. on 4 April 2013. The Fully Paid Rights are expected to be disabled in CREST by 11.00 a.m. on 4 April 2013. After 4 April 2013, the New Ordinary Shares will be registered in the name(s) of the person(s) entitled to them in the Company's register of members and will be transferable in the usual way (see paragraph 4.7 of this Part III).

4.6 Withdrawal of Nil Paid Rights or Fully Paid Rights from CREST

Nil Paid Rights or Fully Paid Rights held in CREST may be converted into certificated form, that is, withdrawn from CREST. Normal CREST procedures (including timings) apply in relation to any such conversion.

The recommended latest time for receipt by Euroclear UK of a properly authenticated dematerialised instruction requesting withdrawal of Nil Paid Rights, or if appropriate, Fully Paid Rights from CREST is 4.30 p.m. on 27 March 2013, so as to enable the person acquiring or (as appropriate) holding the Nil Paid Rights, or if appropriate, Fully Paid Rights following the conversion to take all necessary steps in connection with taking up the entitlement prior to 11.00 a.m. on 4 April 2013. You are recommended to refer to the CREST Manual for details of such procedures.

4.7 Issue of New Ordinary Shares in definitive form

Fully Paid Rights in CREST are expected to be disabled in CREST after the close of CREST business on 4 April 2013 (the latest date for settlement of transfers of Fully Paid Rights in CREST). New Ordinary Shares (in definitive form) will be issued in uncertificated form to those persons registered as holding such Fully Paid Rights in CREST at the close of business on the date on which the Fully Paid Rights are disabled. Computershare will instruct Euroclear UK to credit the appropriate stock accounts of those investors (under the same participant ID and member account ID that applied to the Fully Paid Rights held by those investors) with their entitlements to New Ordinary Shares with effect from the next business day (therefore, expected to be credited on 5 April 2013).

4.8 Rights to allot/issue in certificated form

Despite any other provision of this document, the Company reserves the right to allot and/or issue any Nil Paid Rights, Fully Paid Rights or New Ordinary Shares in certificated form. In normal circumstances, this right is only likely to be exercised in the event of an interruption, failure or breakdown of CREST (or any part of CREST) or on the part of the facilities and/or systems operated by Computershare in connection with CREST.

5. Procedure in respect of rights not taken up and withdrawal rights

5.1 Procedure in respect of New Ordinary Shares not taken up

If an entitlement to New Ordinary Shares is not validly taken up by 11.00 a.m. on 4 April 2013, in accordance with the procedure set out for acceptance and payment, then that provisional allotment will be deemed to have been declined and will lapse. Jefferies will, as agent for the Company, endeavour to procure acquirers for such New Ordinary Shares by not later than 5.00 p.m. on 11 April 2013 at a price which is at least equal to the aggregate of the Issue Price and the related expenses of procuring such acquirers (including any value added tax thereon). Notwithstanding the above, if at any time after 11.00 a.m. on 4 April 2013 Jefferies is of the opinion that it is unlikely that acquirers can be procured on the terms described above Jefferies may cease to endeavour to procure acquirers on such basis. If and to the extent acquirers cannot be so procured on the basis outlined above, the relevant New ordinary Shares will be acquired by Jefferies as principal on and subject to the terms of the Underwriting Agreement or by sub-underwriters procured by Jefferies at the Issue Price on the terms and subject to the conditions of the Underwriting Agreement.

It will be a term of such acquisition that any premium over the aggregate of the Issue Price and the related expenses of procuring such acquirers (including any value added tax thereon) shall be paid (subject as provided in this paragraph 5.1):

(a) where Nil Paid Rights were, at the time they lapsed, represented by a Provisional Allotment Letter, to the person whose name and address appears on the Provisional Allotment Letter (or to the first named holder on the Provisional Allotment Letter if Ordinary Shares are held jointly);
(b) where the Nil Paid Rights were, at the time they lapsed, in uncertificated form, to the person registered as the holder of such Nil Paid Rights at the time of their disablement in CREST; and
(c) where an entitlement to the New Ordinary Shares was not taken up by an Overseas Shareholder and neither (a) nor (b) above applies, to that Overseas Shareholder.

New Ordinary Shares for which acquirers are procured on this basis will be reallotted at the Issue Price to such acquirers and the aggregate of any premiums (being the amount paid by the acquirers after deduction of the Issue Price and the fees and expenses related to the procuring of such acquirers, including any value added tax thereon), if any, will be paid (without interest) to those persons entitled (as referred to above) pro rata to their relevant lapsed provisional allotments, save that amounts of less than £5.00 per holding will not be paid to such persons but will be aggregated and retained by the Company. Cheques for the amounts due (if any) will be sent by post at the risk of such person(s) entitled, to their registered addresses (the registered address of the first named holder in the case of joint holders), provided that, where any entitlement concerned was held in CREST, the amount due will, unless the Company (in its absolute discretion) otherwise determines, be satisfied by the creation of an assured settlement bank payment obligation in favour of the relevant CREST member's (or CREST sponsored member's) RTGS settlement bank in respect of the cash amount concerned in accordance with the RTGS payment mechanism.

Any transactions undertaken pursuant to this paragraph 5.1 shall be deemed to have been undertaken at the request of the investor entitled to the lapsed provisional allotments, and neither the Company nor Jefferies nor any person procuring or seeking to procure such acquirers shall be responsible or have any liability for any loss or damage (whether actual or alleged) arising from the terms, amount or timing of any such acquisition or any failure to procure such acquirers or the decision not to endeavour to procure such acquirers on the basis so outlined. Jefferies will be entitled to retain any brokerage fees, commissions or other benefits received in connection with these arrangements.

5.2 Withdrawal rights

Qualifying Shareholders or their renouncees who have the right to withdraw their acceptances under section 87Q(4) of the FSMA after a supplementary prospectus (if any) has been published and who wish to exercise such right of withdrawal must deposit a written notice of withdrawal (which shall not include a notice sent by facsimile or any other form of electronic communication), which must include the full name and address of the person wishing to exercise such right of withdrawal and, if such person is a CREST member, the participant ID and the member account ID of such CREST member, by post to Computershare, Corporate Actions Projects, Bristol, BS99 6AH or by hand (during normal business hours only) to Computershare, The Pavilions, Bridgwater Road, Bristol BS13 8AE, so as to be received no later than two business days after the date on which the supplementary prospectus was published. Notice of withdrawal given by any other means or which is deposited with or received by Computershare after expiry of such period will not constitute a valid withdrawal.

Furthermore, the exercise of withdrawal rights will not be permitted after payment by the relevant Shareholder of his acquisition price in full and the allotment of the New Ordinary Shares to such Shareholder becoming unconditional. In such circumstances, Shareholders are advised to consult their professional advisers. Provisional allotments of entitlements to New Ordinary Shares which are the subject of a valid withdrawal notice will be deemed to be declined. Such entitlements to New Ordinary Shares will be subject to the provisions of paragraph 5.1 above as if the entitlement had not been validly taken up.

6. Share Schemes

In accordance with the rules of the Share Schemes, the Directors may make such adjustments as they deem appropriate to the number of Shares subject to awards granted under the Share Schemes to take account of the Rights Issue. Participants will be notified in due course of any adjustments so made, or of any entitlement to participate in the Rights Issue.

7. Taxation

The information regarding United Kingdom taxation in respect of the New Ordinary Shares and the Rights Issue set out in paragraph II of Part IX of this document is intended only as a general guide to the current tax position in the UK. If you are in any doubt about your tax position or are subject to a tax in a jurisdiction other than the United Kingdom, you should consult your own tax advisers without delay.

8. Overseas Shareholders and selling and transfer restrictions

8.1 General

Whilst Overseas Shareholders are entitled to participate in the Rights Issue, the offer of Nil Paid Rights, Fully Paid Rights, Provisional Allotment Letters and/or New Ordinary Shares pursuant to the Rights Issue and the distribution of this document or any other document relating to the Rights Issue (including the Provisional Allotment Letter) to those persons, may be affected by the laws of the relevant jurisdiction. Those persons should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their rights under the Rights Issue. It is the responsibility of all persons outside the United Kingdom receiving this document and/or a Provisional Allotment Letter and/or a credit of Nil Paid Rights to a stock account in CREST and wishing to accept the offer of New Ordinary Shares to satisfy themselves as to full observance of the laws of the relevant territory, including obtaining all necessary governmental or other consents which may be required, observing all other requisite formalities needing to be observed and paying any issue, transfer or other taxes due in such territory.

This paragraph 8 sets out the restrictions applicable to Qualifying Shareholders who have registered addresses outside the United Kingdom, who are citizens or residents of countries other than the United Kingdom, or who are persons (including, without limitation, custodians, nominees and trustees) who have a contractual or legal obligation to forward this document to a jurisdiction outside the United Kingdom or who hold Existing Ordinary Shares for the account or benefit of any such person. The restrictions set out in this paragraph 8 will also apply to any investors who acquire New Ordinary Shares in connection with the placement of New Ordinary Shares not subscribed for in the Rights Issue.

New Ordinary Shares will be provisionally allotted (nil paid) to all Qualifying Shareholders, including all Qualifying Shareholders with registered addresses in the United States or the Excluded Territories. However, Provisional Allotment Letters have not been, and will not be, sent to, and Nil Paid Rights will not be credited to CREST accounts of, Qualifying Shareholders with registered addresses in the United States or the Excluded Territories, or to their agents or intermediaries, except where the Company and Jefferies are satisfied that such action would not result in the contravention of any registration or other legal requirement in such jurisdiction.

Receipt of this document and/or a Provisional Allotment Letter or the crediting of Nil Paid Rights to a stock account in CREST will not constitute an offer in or into the United States or an Excluded Territory and, in those circumstances, this document and/or a Provisional Allotment Letter must be treated as sent for information only and should not be copied or redistributed. No person receiving a copy of this document and/or a Provisional Allotment Letter and/or receiving a credit of Nil Paid Rights to a stock account in CREST in any territory other than the United Kingdom may treat the same as constituting an invitation or offer to him, nor should he in any event use the Provisional Allotment Letter or deal with Nil Paid Rights or Fully Paid Rights in CREST unless, in the relevant territory, such an invitation or offer could lawfully be made to him and the Provisional Allotment Letter or Nil Paid Rights or Fully Paid Rights in CREST could lawfully be used or dealt with without contravention of any unfulfilled registration or other legal or regulatory requirements.

Accordingly, persons receiving a copy of this document and/or a Provisional Allotment Letter or whose stock account in CREST is credited with Nil Paid Rights or Fully Paid Rights should not, in connection with the Rights Issue, distribute or send the same in or into, or transfer Nil Paid Rights or Fully Paid Rights to any person in or into the United States or an Excluded Territory. If a Provisional Allotment Letter or credit of Nil Paid Rights or Fully Paid Rights in CREST is received by any person in the United States or any Excluded Territory, or by their agent or nominee in any such territory, he must not seek to take up the rights referred to in the Provisional Allotment Letter or in this document or renounce the Provisional Allotment Letter or transfer the Nil Paid Rights or Fully Paid Rights in CREST unless the Company determines that such actions would not violate applicable legal or regulatory requirements. Any person who does forward this document or a Provisional Allotment Letter into any such territories (whether under contractual or legal obligation or otherwise) should draw the recipient's attention to the contents of this paragraph 8.

Subject to this paragraph 8, any person (including, without limitation, nominees, agents and trustees) outside the United Kingdom wishing to take up his rights under the Rights Issue (or to do so on behalf of someone else) must satisfy himself as to full observance of the applicable laws of any relevant territory including obtaining any requisite governmental or other consents, observing any other requisite formalities and paying any issue, transfer or other taxes due in such territories. The comments set out in this paragraph 8 are intended as a general guide only and any Qualifying Shareholder who is in doubt as to his position should consult his own independent professional adviser without delay.

The Company may treat as invalid any acceptance or purported acceptance of the offer of Nil Paid Rights, Fully Paid Rights, Provisional Allotment Letters or New Ordinary Shares which appears to the Company, Computershare or Jefferies or their respective agents to have been executed, effected or despatched in a manner which may involve a breach of the laws or regulations of any jurisdiction or if it believes or they believe that the same may violate applicable legal or regulatory requirements or if, in the case of a Provisional Allotment Letter, it provides for an address for delivery of the definitive share certificates for New Ordinary Shares, or, in the case of a credit of New Ordinary Shares in CREST, the Qualifying CREST Shareholder's registered address is in the United States or an Excluded Territory, or if the Company believes or its agents believe that the same may violate applicable legal or regulatory requirements.

Despite any other provisions of this document or the Provisional Allotment Letter, the Company reserves the right to permit any Qualifying Shareholder to take up his rights if the Company in its sole and absolute discretion is satisfied that the transaction in question is exempt from or not subject to the legislation or regulations giving rise to the restriction in question. If the Company is so satisfied, the Company will arrange for the relevant Qualifying Shareholder to be sent a Provisional Allotment Letter if he is a Qualifying Non-CREST Shareholder or, if he is a Qualifying CREST Shareholder, arrange for Nil Paid Rights to be credited to the relevant CREST stock account.

Those Qualifying Shareholders who wish, and are permitted, to take up their entitlement should note that payments must be made as described in paragraphs 3.2 and 3.3 in relation to Qualifying Non-CREST Shareholders and paragraph 4.2 in relation to Qualifying CREST Shareholders of this Part III.

The provisions of paragraph 5 of this Part III will apply generally to Qualifying Shareholders with registered addresses in, or located or resident in, the United States or the Excluded Territories who do not or are unable to take up New Ordinary Shares provisionally allotted to them.

8.2 Offering and transfer restrictions relating to the United States

As described more fully below, there are certain selling and transfer restrictions in the Rights Issue regarding the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares. These restrictions include, among others, restrictions on the ownership and transfer of New Ordinary Shares by persons in the United States following the Rights Issue.

None of the New Ordinary Shares, the Nil Paid Rights or the Fully Paid Rights have been or will be registered under the US Securities Act or under any securities laws of any state or other jurisdiction of the United States and they may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable exemption from the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States.

Prospective investors are hereby notified that sellers of the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares may be relying on the exemption from the registration provisions of Section 5 of the US Securities Act provided by Rule 144A thereunder.

Accordingly, the Company is not extending the offer under the Rights Issue into the United States unless an exemption from the registration requirements of the US Securities Act is available and, subject to certain exceptions, neither this document nor the Provisional Allotment Letter constitutes or will constitute, or forms, or will form, part of any offer or invitation to sell or issue, or any solicitation of any offer to acquire or subscribe for, any Nil Paid Rights, Fully Paid Rights or New Ordinary Shares.

Subject to certain exceptions, neither this document nor a Provisional Allotment Letter will be sent to, and no Nil Paid Rights will be credited to a stock account in CREST with a bank or financial institution of, any Qualifying Shareholder with a registered address in the United States and Nil Paid Rights must not be transferred to any such Shareholder or any person located in or resident in the United States unless such a person satisfies the Company that a relevant exemption from the registration requirements of the US Securities Act is available. Subject to certain exceptions, Provisional Allotment Letters or renunciations thereof sent from or post-marked in the United States will be deemed to be invalid and all persons acquiring New Ordinary Shares and wishing to hold such New Ordinary Shares in registered form must provide an address outside the United Sates for registration of the New Ordinary Shares. Any person in the United States who obtains a copy of this document or a Provisional Allotment Letter and who is not a QIB is required to disregard them.

The Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares being offered outside the United States are being offered in reliance on Regulation S. Subject to certain exceptions, any person who acquires New Ordinary Shares, Nil Paid Rights or Fully Paid Rights, by accepting delivery of this document or the Provisional Allotment Letter, taking up their entitlement or accepting delivery of the New Ordinary Shares, the Nil Paid Rights or the Fully Paid Rights, will be deemed to have made the representations and warranties contained in paragraph 9.4(a) or (b) of this Part III, as applicable.

Notwithstanding the foregoing, the Company reserves the right to offer and deliver the Nil Paid Rights to, and the Fully Paid Rights and the New Ordinary Shares may be offered to and acquired by, a limited number of persons in the United States reasonably believed to be QIBs, in offerings exempt from, or in transactions not subject to, the registration requirements of the US Securities Act.

The Rights Issue is being extended in the United States only to QIBs in a manner not requiring registration under the US Securities Act.

Each person in the United States who is: (1) a Qualifying Shareholder or purchaser to whom the Nil Paid Rights, the Fully Paid Rights or the Provisional Allotment Letters are distributed, offered or sold: or (2) a purchaser who purchases New Ordinary Shares not taken up in the Rights Issue (whether pursuant to Rule 144A or otherwise) will be deemed by its subscription for, or purchase of, the Rights, Provisional Allotment Letters or New Ordinary Shares, as the case may be, to represent, and warrant and agree, amongst other things, that:

(i) it is a QIB; is aware that the offer and sale of securities to it is being made in a transaction exempt from registration under the US Securities Act; and is acquiring such securities for its own account or for the account of a QIB, as the case may be;
(ii) it understands that such securities have not been and will not be registered under the US Securities Act and may not be reoffered, resold, pledged or otherwise transferred except:
(A) in an offshore transaction in accordance with Rule 904 of Regulation S under the US Securities Act;
(B) to a QIB in a transaction in accordance with Rule 144A under the US Securities Act;
(C) with respect to the New Ordinary Shares only, pursuant to Rule 144 under the Securities Act (if available); or
(D) in another transaction exempt from, or not subject to, the registration requirements of the US Securities Act,

and, in each case, in compliance with any applicable securities laws of any state or other jurisdiction of the United States; and

(E) for so long as the New Ordinary Shares are ''restricted securities'' within the meaning of Rule 144(a)(3) under the US Securities Act, agreeing not to deposit any New Ordinary Shares in any unrestricted depositary facility established or maintained by any depositary bank.

Furthermore, each such subscriber or purchaser in the United States will, prior to any such transaction, be required to execute and deliver to the Company and/or one or more of its designees and Jefferies, an investor letter in such form as is satisfactory to the Company and Jefferies, setting forth certain restrictions and procedures regarding the securities and by accepting delivery of this document or subscribing for New Ordinary Shares will be deemed to have made each of the representations, agreements and acknowledgements above. The investor letter contains additional written representations, agreements and acknowledgements, including representations, agreements and acknowledgements, relating to the transfer restrictions applicable to the New Ordinary Shares.

QIBs that satisfy the Company as to their status may exercise the Nil Paid Rights and the Fully Paid Rights either by delivering a properly completed Provisional Allotment Letter to Computershare in accordance with the procedures set out in paragraph 3 of this Part III or by taking up their Nil Paid Rights through CREST in accordance with the procedures set out in paragraph 4 of this Part III. The Company and Computershare have the discretion to refuse to accept any Provisional Allotment Letter that is incomplete, unexecuted or not accompanied by an executed investor letter or any other required additional documentation.

QIBs who hold securities through a bank, a broker or other financial intermediary should procure that the relevant bank, broker or financial intermediary submits an investor letter on their behalf.

If any subscriber for New Ordinary Shares that was required to execute an investor letter in connection with the acquisition of such New Ordinary Shares receives them in certificated form, the certificate for the New Ordinary Shares will bear an appropriate legend reflecting the transfer restrictions described in the investor letter.

Any such transactions shall be at the sole discretion of the Company.

Subject to the limited exceptions described in this paragraph 8.2 of Part III:

(i) the Company reserves the right to treat as invalid any Provisional Allotment Letter (or renunciation thereof) that appears to the Company or its agents to have been executed in or despatched from the United States, or that provides an address in the United States, for the acceptance or renunciation of the Rights Issue, or which does not make the warranty set out in the Provisional Allotment Letter to the effect that the person accepting and/or renouncing the Provisional Allotment does not have a registered address and is not otherwise located in the United States, and is not acquiring the Nil Paid Rights, Fully Paid Rights or New Ordinary Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Nil Paid Rights, Fully Paid Rights or New Ordinary Shares in the United States or where the Company believes acceptance of such Provisional Allotment Letter may infringe applicable legal or regulatory requirements;
(ii) the Company will not be bound to allot (on a provisional or non-provisional basis) or issue any New Ordinary Shares, Nil Paid Rights or Fully Paid Rights to any person with an address in, or who is otherwise located in, the United States in whose favour a Provisional Allotment Letter or any Nil Paid Rights, Fully Paid Rights or New Ordinary Shares may be transferred or renounced; and
(iii) the Company and Jefferies reserve the right to reject any MTM instruction sent by or on behalf of any CREST Member with a registered address in the United States in respect of Nil Paid Rights.

In addition, until 40 days after the commencement of the Rights Issue, an offer, sale or transfer of the New Ordinary Shares, the Nil Paid Rights, the Fully Paid Rights or the Provisional Allotment Letters within the United States by a dealer that is participating in the Rights Issue may violate the registration requirements of the US Securities Act.

The provisions of paragraph 5.1 above will apply to any rights not taken up. Accordingly, subject to certain exceptions, Qualifying Shareholders with a registered address, or located, in the United States will be treated as unexercising holders and Jefferies will endeavour to procure on behalf of such unexercising holders subscribers for the New Ordinary Shares.

8.3 Other overseas territories

Provisional Allotment Letters will be posted to Qualifying Non-CREST Shareholders (other than, subject to certain limited exceptions, Qualifying Shareholders with registered addresses in the United States and the Excluded Territories) and Nil Paid Rights will be credited to the CREST stock accounts of Qualifying CREST Shareholders with registered addresses in any country other than the United States and the Excluded Territories. No offer of or invitation to subscribe for New Ordinary Shares is being made by virtue of this document or the Provisional Allotment Letters into the United States or the Excluded Territories. Qualifying Shareholders in jurisdictions other than the United States and the Excluded Territories may, subject to the laws of their relevant jurisdiction, accept their Rights under the Rights Issue in accordance with the instructions set out in this document and, in the case of Qualifying Non-CREST Shareholders only, the Provisional Allotment Letters.

EEA States (other than the United Kingdom)

In relation to the EEA States (except for the United Kingdom) that have implemented the Prospectus Directive (each, a ''relevant member state'', with effect from and including the date on which the Prospectus Directive was implemented in that relevant member state (the ''relevant implementation date''), no New Ordinary Shares, Nil Paid Rights or Fully Paid Rights have been offered or will be offered pursuant to the Rights Issue to the public in that relevant member state prior to the publication of a prospectus in relation to the New Ordinary Shares, Nil Paid Rights and Fully Paid Rights which has been approved by the competent authority in that relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in the relevant member state, all in accordance with the Prospectus Directive, except that with effect from and including the relevant implementation date, offers of New Ordinary Shares, Nil Paid Rights or Fully Paid Rights may be made to the public in that relevant member state at any time under the following exemptions under the Prospectus Directive, if they are implemented in that relevant member state:

(i) to any legal entity which is a qualified investor, as defined in the Prospectus Directive;

(ii) to fewer than 100, or if the relevant member state has implemented the relevant provisions of the PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) in such relevant member states; or
(iii) in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of New Ordinary Shares, Nil Paid Rights or Fully Paid Rights shall result in a requirement for the publication by the Company or Jefferies of a prospectus pursuant to Article 3 of the Prospectus Directive or any measure implementing the Prospectus Directive in that relevant member state.

8.4 Gazette notice

In accordance with section 562(3) of the Companies Act, the offer by way of Rights to Qualifying Shareholders who have no registered address in an EEA State and who have not given to the Company an address in an EEA State for the serving of notices, will (subject to the other conditions of the Rights Issue) be made by the Company causing a notice to be published in the London Gazette on 18 March 2013 stating where copies of this document and the Provisional Allotment Letters may be obtained or inspected on personal application by or on behalf of such Qualifying Shareholders.

However, in order to facilitate acceptance of the offer made to such Qualifying Shareholders by virtue of such publication, Provisional Allotment Letters will also be posted to Qualifying Shareholders who are Overseas Shareholders (other than, subject to certain exceptions, to those with registered addresses in, or who are located or resident in the United States or the Excluded Territories). Such Shareholders, if it is lawful to do so, may accept the offer by way of Rights either by returning the Provisional Allotment Letter posted to them in accordance with the instructions set out therein or, subject to surrendering the original Provisional Allotment Letter posted to them, by obtaining a copy thereof from the place stated in the notice and returning it in accordance with the instructions set out therein. Similarly, Nil Paid Rights are expected to be credited to stock accounts in CREST of Qualifying CREST Shareholders who are Overseas Shareholders (other than, subject to certain exceptions, those with registered addresses, or who are located or resident in the United States or the Excluded Territories).

8.5 Waiver

The provisions of paragraph 8 of this Part III and of any other terms of the Rights Issue relating to all Qualifying Shareholders with registered addresses in, or located or resident in the United States or any of the Excluded Territories may be waived, varied or modified as regards specific Qualifying Shareholder(s) or on a general basis by the Company in its absolute discretion. Subject to this, the provisions of this paragraph which refer to Qualifying Shareholders shall include references to the person or persons executing a Provisional Allotment Letter and, in the event of more than one person executing a Provisional Allotment Letter, the provisions of this paragraph shall apply jointly to each of them.

8.6 Payment

All payments must be made in the manner set out in paragraphs 3.2, 3.3 and 4.2 of this Part III (as applicable).

The comments set out in this paragraph 8 are intended as a guide only and, if you are in any doubt as to your eligibility to take up rights under the Rights Issue, you should consult your professional adviser without delay.

9. General

9.1 Times and dates

The Company shall, in its discretion and after consultation with its financial and legal advisers, be entitled to amend the dates that Provisional Allotment Letters are despatched or dealings in Nil Paid Rights commence or amend or extend the latest date for acceptance under the Rights Issue and all related dates set out in this document and in such circumstances shall notify the UK Listing Authority, and make an announcement via a Regulatory Information Service and, if appropriate, to Shareholders but Qualifying Shareholders may not receive any further written communication.

If a supplementary prospectus is issued by the Company two or fewer business days prior to the latest time and date for acceptance and payment in full under the Rights Issue specified in this document as the latest date for acceptance under the Rights Issue (or such later date as may be agreed between the Company and Jefferies), the latest date for acceptance under the Rights Issue shall be extended to the date that is three business days after the date of publication of the supplementary prospectus (and the dates and times of principal events due to take place following such date shall be extended accordingly).

9.2 Governing law

The terms and conditions of the Rights Issue as set out in this document and the Provisional Allotment Letter, and all other contractual and non-contractual rights, obligations and matters arising out of or in relation thereto, shall be governed by, and construed in accordance with, English law.

9.3 Jurisdiction

The courts of England and Wales are to have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Rights Issue, this document or the Provisional Allotment Letter. By accepting Rights under the Rights Issue in accordance with the instructions set out in this document and, in the case of Qualifying Non-CREST Shareholders only, the Provisional Allotment Letter, Qualifying Shareholders irrevocably submit to the jurisdiction of the courts of England and Wales and waive any objection to proceedings in any such court on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum.

9.4 Representations and Warranties

Each subscriber or purchaser acknowledges that the Company and Jefferies will rely upon the truth and accuracy of the following representations and agreements, and agrees that if any of the representations and agreements deemed to have been made by such subscriber or purchaser by his subscription for, or purchase of, the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares, as the case may be, are no longer accurate, he shall promptly notify the Company and Jefferies. If such subscriber or purchaser is subscribing for or purchasing the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares as a fiduciary or agent for one or more investor accounts, each subscriber or purchaser represent that he has sole investment discretion with respect to each such account and full power to make the below representations and agreements on behalf of such account.

(a) Qualifying Non-CREST Shareholders

Any investor accepting and/or renouncing a Provisional Allotment Letter or requesting registration of the New Ordinary Shares comprised therein represents and warrants to the Company and Jefferies that, except where proof has been provided to the Company's and Jefferies' satisfaction that such person's use of the Provisional Allotment Letter, will not result in the contravention of any applicable legal requirement in any jurisdiction:

(i) such investor is not accepting and/or renouncing the Provisional Allotment Letter, or requesting registration of the New Ordinary Shares, from within the United States or any Excluded Territory;
(ii) such investor is not in any territory in which it is unlawful to make or accept an offer to acquire or subscribe for Nil Paid Rights, Fully Paid Rights or New Ordinary Shares or to use the Provisional Allotment Letter in any manner in which such person has used or will use it;
(iii) such investor is not acting on a non-discretionary basis for a person located within the United States or any Excluded Territory or any territory referred to in (ii) above at the time the instruction

to accept or renounce was given, and such person is not accepting for the account of any person who is located within the United States, unless (I) the instruction to accept was received from someone outside the United States and (II) the person giving such instruction has confirmed that (A) it has the authority to give such instruction and (B) either (1) has investment discretion over such investment or (2) is an investment manager or investment company that is acquiring the Nil Paid Rights, Fully Paid Rights or New Ordinary Shares in an ''offshore transaction'' within the meaning of Regulation S;

(iv) such investor is not acquiring New Ordinary Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Nil Paid Rights, Fully Paid Rights or New Ordinary Shares into the United States or any Excluded Territory or any territory referred to in (ii) above; and
(v) such investor may lawfully be offered, take up, subscribe for and receive the Nil Paid Rights, Fully Paid Rights and the New Ordinary Shares in the jurisdiction in which it currently resides or is currently located.

The Company may treat as invalid any acceptance or purported acceptance of the allotment of New Ordinary Shares comprised in, or renunciation or purported renunciation of, a Provisional Allotment Letter if it (a) appears to the Company to have been executed in or despatched from the United States or any Excluded Territory or otherwise in a manner which may involve a breach of the laws of any jurisdiction or it believes the same may violate any applicable legal or regulatory requirement; (b) provides an address for delivery of definitive share certificates for New Ordinary Shares in the United States or any Excluded Territory (or any jurisdiction outside the United Kingdom in which it would be unlawful to deliver such certificates); or (c) purports to exclude the warranty required by this paragraph.

(b) Qualifying CREST Shareholders

A Qualifying CREST Shareholder who makes a valid acceptance in accordance with the procedure set out in paragraph 4 of this Part III represents and warrants to the Company and Jefferies that, except where proof has been provided to the Company's and Jefferies' satisfaction that such person's acceptance will not result in the contravention of any applicable legal requirement in any jurisdiction:

(i) such investor is not within any of the United States or any Excluded Territory;
(ii) such investor is not in any territory in which it is unlawful to make or accept an offer to acquire or subscribe for Nil Paid Rights, Fully Paid Rights or New Ordinary Shares;
(iii) such investor is not acting on a non-discretionary basis for a person located within the United States or any Excluded Territory or any territory referred to in (ii) above at the time the instruction to accept was given, and such person is not accepting for the account of any person who is located within the United States, unless (I) the instruction to accept was received from someone outside the United States and (II) the investor giving such instruction has confirmed that (A) it has the authority to give such instruction and (B) either (1) has investment discretion over such investment or (2) is an investment manager or investment company that is acquiring the Nil Paid Rights, Fully Paid Rights or New Ordinary Shares in an ''offshore transaction'' within the meaning of Regulation S; and
(iv) such investor is not acquiring Nil Paid Rights, Fully Paid Rights or New Ordinary Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Nil Paid Rights, Fully Paid Rights or New Ordinary Shares into the United States or any Excluded Territory or any territory referred to in (ii) above.

The Company may treat as invalid any MTM instruction which: (a) appears to the Company to have been despatched from the United States or an Excluded Territory or otherwise in a manner which may involve a breach of the laws of any jurisdiction or they or their agents believe may violate any applicable legal or regulatory requirement; or (b) purports to exclude the warranty required by this paragraph.

PART IV

INFORMATION ON THE COMPANY

1. Introduction

Severfield-Rowen is the largest fabricator of structural steel in the UK. With a broad range of in-house skill sets, it is able to design, fabricate and erect structural steel for a wide range of customers across a number of market sectors. It operates four fabrication plants in the UK, two in North Yorkshire, one in Lancashire and one in Northern Ireland.

As part of the restructuring actions being taken in response to the difficult trading conditions described at paragraph 3 of Part I of this document, the Group is in the process of integrating Severfield-Rowen Structures Limited, Watson Steel Structures Limited and Steelcraft Erection Services Limited into a single trading entity to be known as Severfield-Watson Structures Limited. Following the reorganisation, the Group will continue to manufacture at its two existing plants at Dalton in North Yorkshire and Bolton in Lancashire. The site at Dalton is the location of the Group's headquarters. On its 55 acre site, it has ten production lines where the steel manufacturing process is undertaken in a controlled environment. The Group's main in-house steel erection business is also based at Dalton. The Directors believe that Severfield-Watson Structures Limited will be the largest structural steelwork company in the UK, providing a fully integrated design through fabrication and site erection service to clients.

The other two main UK operating subsidiaries are Atlas Ward Structures Limited and Fisher Engineering Limited. Atlas Ward Structures Limited is located in Sherburn, near Scarborough. It is a leading design and build steelwork contractor for distribution warehouses in the UK. Atlas Ward Structures Limited designs, fabricates and erects structural steelwork principally for the warehouse, industrial and distribution sectors and has a business, skill base and client profile that is complementary to the rest of the Group. The Group's Light Steel Division, specialising in stairs and other ancillary products, is also based at Sherburn.

Fisher Engineering Limited is located in Northern Ireland and is a constructional steel fabricator. Fisher Engineering Limited also has its own in-house erection business. All of the Group's plant and crane activity is also managed out of Fisher Engineering's facility.

Severfield-Rowen also has a joint venture in India, JSW Structures. Its joint venture partner is JSW Steel, one of India's largest independent steel producers. Severfield-Rowen has a 50 per cent. share in the Indian Joint Venture. JSW Structures has been set up to replicate Severfield-Rowen's design, fabrication and erection capability in the Indian market, which historically has primarily used concrete for construction projects. JSW Structures currently has one fabrication plant, located adjacent to JSW Steel's plant at Vijayanagar in Bellary, Karnataka. The plant currently consists of two main fabrication lines, a plated beam line, a fittings factory and a metal deck flooring production line via a second joint venture company, JSW Structural Metal Decking Ltd (owned as to 66 per cent. by JSW Structures and 34 per cent. by SMD Asia LLP).

The Company is one of two manufacturing companies in the UK licensed by Fabsec Limited to produce Fabsec products. The Fabsec technology comprises various specific patents, intellectual property and software used for the design and manufacture of bespoke steel beams and columns (''Fabsec''). The primary applications of Fabsec beams are to facilitate long span composite and non-composite construction, which allow buildings to be designed with fewer columns and to provide enhanced architectural freedom. Fabsec beams are designed using the optimum combination of steel section and intumescent coating to give the most cost-effective solutions for fire resistance. These solutions are used in many sectors of the construction industry including offices, hotels, retail parks, hospitals, car parks and warehouses.

2. History

Severfield-Rowen was admitted to trading on the Unlisted Securities Market of the London Stock Exchange in 1988 before moving up to a full listing in 1995. Since then, the Group has expanded organically and through the acquisition of Rowen Structures Ltd in 1996, Watson Steel Structures in 2001, Atlas Ward Structures in 2005, and Fisher Engineering Limited in 2007. These acquisitions broadened the product range and the market access of the Group both sectorally and geographically.

In November 2008, the Company entered into a joint venture agreement with JSW Building Systems Ltd (a subsidiary of JSW Steel), to create jointly a structural steelwork business, called JSW Structures, based in Bellary and Mumbai, India. JSW Steel, one of the largest steel companies in India, is part of the

OP Jindal group. The total investment cost of the 50/50 joint venture was approximately £30 million of which approximately £5.3 million was funded in equity by Severfield-Rowen and JSW Steel with the balance of the funding being raised in debt by the joint venture company from banks based in India.

3. Financial Information

Revenue for the 12 month period ended 31 December 2012 of £256.6 million (2011: £267.8 million) was at a similar level to the previous year. The underlying operating loss before results of Associates was £18.2 million (2011: £14.2 million profit). This reflects the difficult trading conditions during the year, the £9.9 million charge to profit in respect of the 122 Leadenhall Street contract and the other adjustments relating to additional costs and reduction in contract value expectations totalling £10.2 million arising from the Review.

The share of results of Associates of a profit of £0.2 million (2011: £2.5 million loss) represents a step change in the performance of the Indian Joint Venture, in recording its first positive contribution to the Group's profits as production was running at good operating levels for most of the year.

The Group's underlying operating loss after share of results of Associates was £18.0 million (2011: £11.7 million profit). The underlying loss before tax for the period was £19.6 million (2011: £10.1 million profit).

Net debt of £29.7 million as at 31 December 2012, represented an improvement of £1.6 million on the position as at 31 December 2011 of £31.3 million. This reflects the improvement in working capital offset by capital investment, further equity investment in the Indian Joint Venture and financing costs.

The financial information in this paragraph 3 has been extracted without material adjustment from the Company's unaudited Interim Period Results for the 12 month period ended 31 December 2012 set out in Part VII of this document.

4. Group Strategy

The Group's strategy is to deliver long term shareholder value through profitable sales growth, cashflow generation and strong returns on investments. This is to be achieved through the maintenance and strengthening of its market leading position in the UK structural steel market and through the growth of its Indian Joint Venture, JSW Structures.

In the UK, the Group seeks to achieve its strategy through continuous improvement in internal processes to drive operating efficiencies, improved execution capability across all types of projects and improved client service and delivery. The Group's market leading position in the UK provides competitive advantage through production capacity, product range, procurement scale, quality, delivery, the ability to take on complex assignments and project management. The Group aims to leverage this advantage through continuing investment in human and capital resources, the application of emerging technologies and the constant refinement of the Group's design, production and erection processes. This has enabled the Group to continue enhancing its competitive position despite the challenging market conditions and to be well placed to deliver stronger returns when market conditions improve or there is further rationalisation of UK industry capacity.

The Group's Indian Joint Venture has established a strong foundation since its plant opened in 2010. The Directors believe the market for Severfield-Rowen's services and products offers significant scope for medium to long term growth and development. The Group plans to continue investing with JSW Steel, its joint venture partner, to expand its steel fabrication capacity, as well as the skills and capabilities of its workforce.

The Group will continue to seek other opportunities to realise value from its strong UK operational base, both in other international markets and in other markets in the UK where its structural steel design and fabrication expertise may have applications.

5. Business

Organisational structure

There are three distinct but related elements of the Group's commercial offering: design, fabrication and erection.

(a) Design

The design process offers clients alternative concepts and solutions for their projects. By working closely with the project consulting engineers at the concept stage of the project and with the assistance of 2-D and 3-D analysis modelling software, the Group is able to offer its clients 'value engineering' for the most effective and efficient solutions. Advice on material choices, fabrication fire protection, surface treatment and erection techniques can often lead to significant project savings.

(b) Fabrication

The Group operates four fabrication facilities in the UK giving it one of the largest capacities of any UK fabricator. At these facilities, the Group manufactures steel beams, columns and other steel products used in the construction industry. The investment that the Group has made in these fabrication facilities in recent years enables the Group to deliver accelerated construction timetables requiring high output of its steel products in a short time period, but also high precision fabrication for specialist structures, such as the Orbit tower at the London Olympic Park.

(c) Erection

The Group has its own in-house erection business, which offers customers on-site erection services of its steel beams and other products. This in-house capability enhances both the Group's ability to optimise the design of projects for efficient construction, but also the Group's proven ability to meet a wide range of erection challenges including central London office towers, complex stadium structures and nuclear power stations.

6. Markets

(a) UK

The Group's design, fabrication and erection capabilities enable it to address all key sectors of the UK construction market. The principal market sectors it targets are commercial offices, power and energy, stadiums and leisure, city centre and retail, distribution and industrial, transport, bridges and car parks, health and education. This breadth of capability and experience has benefited the Group as the overall construction market has contracted in the last 3-4 years, with the structural steel market itself contracting by an estimated 30-50 per cent. since 2007 whilst the Group's own revenue has fallen by over ten per cent. in the same period. The Group's flexibility has enabled it to refocus its activity from sectors which were very strong prior to the market contraction, such as city centre and retail developments, to sectors which have seen more activity in the past 2-3 years such as commercial offices and transportation. Notably, the Group was responsible for a substantial number of the venues and facilities which were built for the London Olympics including, but not limited to, the Olympic stadium, the velodrome and the Orbit tower.

In addition, by way of example, projects the Company's construction capabilities have been used for include the following:

Commercial offices

The Shard, London
Cannon Place, London
Co-operative headquarters, Manchester
122 Leadenhall Street, London

Power and energy

West Burton power station, Retford
Lakeside waste to energy plant, Slough
Cleveland waste to energy plant, Billingham

Stadiums and leisure

Wimbledon centre court roof
ExCel exhibition centre
Olympic stadium, Stratford
Emirates stadium, Arsenal

City centre and retail

Westfield shopping centre, Stratford

Trinity shopping centre, Leeds

Distribution and industrial

Co-operative distribution facility, Andover
Morrisons distribution centre, Bridgwater
BMW mini plant, Cowley

Transport, bridges and car parks

Terminal 2A, Heathrow
Gatwick Pier 6 passenger bridge
Gateshead Millennium Bridge
Stratford City footbridge

Health and education

Queen Elizabeth Hospital, Birmingham

The Directors believe that the Group's breadth of capability will continue to stand the Group in good stead in the coming years. While the Directors do not foresee any significant near term recovery in the overall UK construction market, the Directors believe there will continue to be pockets of strength in individual markets in which the Group participates. Specifically, prospects in the commercial office, power and energy, and distribution and industrial market sectors continue to be encouraging and the Group is well-placed to capitalise on these.

Severfield-Rowen's customers principally comprise construction companies operating under long term contracts from developers, landowners and other corporate entities to design and construct a wide range of structures. Severfield-Rowen's contractual obligations vary depending on the size of the project, the market sector and the customer. While Severfield-Rowen works on contracts across a significant range of sizes, revenues from a relatively small proportion of Severfield-Rowen's principal customers can comprise a significant proportion of revenues in any given year. For example, included in revenues in 2011 was approximately £79.2 million in relation to revenues from two customers who individually contributed over ten per cent. to Group revenue. However, given the nature of the contracts and the range of customers Severfield-Rowen performs work for, the principal customers comprising a significant proportion of revenues vary from year to year.

(b) India

Severfield-Rowen's operations in India are of significant importance in achieving the Group's strategic growth ambitions. JSW Structures currently has one fabrication plant, located adjacent to JSW Steel's plant at Vijayanagar in Bellary, Karnataka. The plant currently consists of two main fabrication lines, a plated beam line, a fittings factory and a metal deck flooring production line via a second joint venture company, JSW Structural Metal Decking Ltd (owned as to 66 per cent. by JSW Structures and 34 per cent. by SMD Asia LLP) resulting in 35,000 tonnes of capacity. The plant has been designed to optimise product range, quality and productivity, as befitting the demands of the construction industry in India. The plant incorporates state-of-the-art technology and processing equipment. Bespoke plated products are manufactured on site at Bellary. The first phase of expansion of the Bellary site to lift output from 35,000 tonnes to 55,000 tonnes by the end of summer 2013 is continuing. The plant currently utilises 26,000m2 of workspace and 52,000m2 of logistics and storage area, employing over 400 employees.

JSW Structures has a head office with sales operatives and project managers in Mumbai with additional sales representation and a design office in Bangalore and sales representation in Delhi. JSW Structures received ISO14001 and ISO18001 certifications in 2011.

Severfield-Rowen believes that its market offering in India provides clients with many advantages, namely:

a design and build service promoting and utilising the best advantages of steel for clients through enhanced steel design across a wide range of construction sectors;
precision manufacturing providing accuracy, consistency and reliability to clients for their construction projects;
comprehensive design, fabrication and erection methodology to deliver design concepts to project reality thus providing maximum revenues and lower overall project costs to clients through short programme times and lower overall financing costs.

JSW Structures has completed projects for both domestic and international customers in India across a number of sectors, including the following:

Commercial

Prestige Shantiniketan offices, Bangalore
IndiaBulls Jupiter Mills offices, Mumbai

Industrial

CRM2, Vijayanagar
Power and energy
382MW gas power station, Gujarat

Transport

Mumbai Airport air traffic control tower, Mumbai

Severfield-Rowen believes that the Indian market opportunity for structural steel is growing and continues to enjoy considerable infrastructure and construction spend. Steel is already used significantly in the power and infrastructure sectors. The use of steel in construction is anticipated to become more widespread in the coming years as its overall value benefits are realised. The Directors remain optimistic that the Indian Joint Venture will continue to grow both through market growth and through market penetration as a result of the value it is offering to clients.

(c) Other markets

From time to time, the Group engages in contracts with counterparties based outside the UK and India where deemed commercially beneficial to the business of the Group.

In 2011, the Company also entered into a collaboration agreement with Zamil to pursue joint opportunities in the steel fabrication market in the Middle East. To date, no contracts have been awarded to any member of the Group under the collaboration agreement, primarily due to poor market conditions in the Middle East construction sector.

7. Corporate social responsibility

The Company's corporate social responsibility policies and procedures are key to the way the Group does business.

Health and Safety

The Group is committed to high standards of health and safety for all employees and promotes safety excellence through all its operations. The Group operates a network of Safety Leadership Teams, chaired by each business unit's managing director. Each business has a fully functioning health and safety committee with representation from unions and shopfloor employees. The Group works closely with its clients to set a strategy for improving safety standards.

The Group's health and safety teams support operational directors across the Group in developing and maintaining a positive health and safety culture for all aspects of the Group's operations. In each operating company the employee health and safety committee has direct access into the Board via monthly health and safety meetings.

The Group operates in challenging working environments and is proud of its good safety record. The Group invests significant time and resource in behavioural safety training and all of the Group's employees and sub-contractor construction teams have been through the Group's innovative programme. The Company's successful roll-out and communication of its health and safety ''Golden Rules'' across all the Group's factory and construction sites has reinforced the Group's commitment to proactively addressing safety wherever the Group has a presence.

Employees

The Group's policy is to provide equal opportunities to all existing and prospective employees. The Group's reputation is dependent on the quality, effectiveness and skill base of its employees. It is committed to the fair and equitable treatment of all its employees and specifically to prohibit discrimination on the grounds of race, religion, sex, sexual orientation, age, nationality or ethnic origin.

The Group also has a policy of employing disabled persons where practicable and endeavours to ensure that they benefit from training and career opportunities in common with all employees. In the event that employees become disabled, every effort is made to ensure that their employment within the Company continues, with appropriate training and support.

Employee and Workforce Engagement

The Group has worked hard to promote an inclusive culture with effective two way communications with employees and union representatives to support the overall performance of the business. Employees are regularly informed of matters concerning the performance and future developments of the Group with regular scheduled meetings.

Employees' interests are taken into account when making decisions and the Group has implemented a proactive engagement process to capture suggestions from employees aimed at improving performance. Updates are provided through staff presentations on progress and strategy around the business.

Community Engagement

The Group has a long standing commitment to community involvement and proactively engages with organisations both locally and nationally. The Group companies recognise their duties as successful local employers and are involved directly with their local communities and residents, many of whom are directly employed by the business.

Training

The Group makes significant commitments to ensure the Group's employees and those engaged on Group projects have the necessary skills and training to deliver the high standards and performance expected. The Group's in-house training company, Engineering Construction Training Ltd, creates and delivers bespoke people development programmes to up-skill all areas of the Group's operations.

Through the Group's skills academy, the Group has the ability to target key areas of development and opportunities where it can work with the Group's clients and other external organisations within the industry. The Group has also implemented a theatre based behavioural safety training course to engage with the Group's employees and the Group's sub-contract site based supply chain on the health and safety agenda.

The Group is also keen to develop the skills of young people within the construction industry and provides a dedicated resource to provide the training and coaching necessary for success in this area.

Environment & Sustainability

The Group is committed to minimising the impact of its business and its processes on the natural environment and the community at large by going beyond just complying with laws, directives and regulations pertaining to its field of operations.

The Group has continued its successful accreditation to the standard of BES 6001 for the responsible sourcing of materials and was the first steel fabrication contractor to have achieved this industry leading standard. The Group also continues to pursue a carbon agenda that seeks to differentiate the Group in the marketplace. In 2012, the Group became accredited to the Carbon Trust Standard for its commitment and management of carbon emissions.

PART V

OPERATING AND FINANCIAL REVIEW

1. Overview

Severfield-Rowen is the largest fabricator of structural steel in the UK. With a broad range of in-house skill sets, it is able to design, fabricate and erect structural steel for a wide range of customers across a range of market sectors. It operates four fabrication plants in the UK, two in North Yorkshire, one in Lancashire and one in Northern Ireland.

2. Significant factors affecting the Group's operating results

The following are the principal factors which have had and are likely to continue to have a material effect on the Group's operating results and financial condition. For further discussion of the principal factors affecting the Group's operating results and financial condition, investors should read the section of this prospectus headed ''Risk Factors'' for consideration of the risks and uncertainties which the Group faces, Part I for detail on the trading conditions recently experienced by the Group, and Part IV for additional information relating to the markets in which the Group operates and industry trends.

(a) Economic and market conditions

The Group supplies into the UK construction market which has been weak since the global financial crisis started in 2008. There is some evidence to suggest that the structural steel sector of the market has actually declined between 30-50 per cent. since the market peak in 2007. Current prospects for a recovery in UK construction are variable with most commentators not expecting any meaningful recovery until 2014 at the earliest. During 2012, market weakness was more pronounced in public sector construction markets as a result of reductions in government spending. Whilst the Group is less directly exposed to those market sectors, some of its main contractor customers are more exposed which has caused them to apply pressure down their whole supply chain. This pressure manifests itself in various ways including slower payment certification on contracts, more onerous contract terms and conditions and lower final account settlements.

In response to these weak and challenging market conditions, the Group has taken several actions. At the beginning of 2010, fabrication output was reduced by approximately 20 per cent. In conjunction with this, overheads and other costs including salaries, were reduced by up to 20 per cent. In August 2012, a further reorganisation of the business was announced, which will combine the two largest operating companies in the Group, Severfield Rowen Structures Limited and Watson Steel Structures Limited, into a single operating entity with a single management structure. This is aimed at improving contract execution, contract profitability and reducing overhead costs further.

(b) Planned operating capacity

The core of the Group's activity is steel fabrication. Variations in the planned output over a year will determine the volume of contracts it is able to bid for and execute. Planned output is set with reference to the Group's total operating capacity, its prevailing order book, pipeline prospects and general market conditions, which includes factors such as levels of competition and market pricing.

(c) Contract content

The nature and content of the Group's contractual obligations can vary depending on the project, the market sector and the customer. For example, the Group can be contracted to perform some elements of work such as cladding and roofing which it will sub-contract to specialist firms. Some contracts also have a prolonged period of site works which require a greater proportion of erection resource relative to fabrication output. These variations in contract content can result in turnover varying without a proportionate variation in profit, despite underlying fabrication output remaining relatively constant.

(d) Other items

In its consolidated income statements, the Group differentiates between underlying activity and 'Other Items'. Such 'Other Items' impact the statutory results of the Group but are reported separately using a columnar presentational format on the face of the consolidated income statement. 'Other Items' include on a recurring basis the amortisation of acquired intangible assets and movements in the valuation of derivative financial instruments (in relation to foreign currency hedging contracts). 'Other Items' has also included in the last three years pre-operating losses from the Group's Indian Joint Venture, movements in contract legal provisions and an impairment in the value of investment property. The associated tax impact of all 'Other Items' is reflected in the same column of the consolidated income statement.

(e) Results from the Indian Joint Venture

As an Associate company, the Group is required to account for its share of post-tax profits from the Indian Joint Venture in its statutory operating profit (which is a pre-tax number). As well as the inherent variability of the results from this relatively young business operating in an immature and rapidly developing market, the results of the Indian Joint Venture may distort the relationship between the Group's reported taxation charge and its statutory operating profit.

3. Description of key performance indicators (''KPIs'') and performance against KPIs for the 12 months ended 31 December 2012 and financial years ended 31 December 2011, 2010 and 2009

The Group monitors its performance on individual contracts on an ongoing basis and its overall performance through monthly management accounts. To supplement these measures of performance, it also monitors certain KPIs, shown below.

(a) Underlying operating profit margin

The margin is the principal measure used by the Group to assess the success of its commercial strategy on all of its business excluding the Indian Joint Venture. It is the profit excluding the Share of Results of Associates and before non-underlying items such as the amortisation of intangible fixed assets, expressed as a percentage of revenue.

2012

The Group experienced a reduction in 2012 to 7.1 per cent. (2011: 5.3 per cent.). Whilst pricing remained tight but relatively stable, the Group experienced a number of issues on the execution and management of a number of its major contracts. This in turn led to a re-organisation of the Group's largest businesses into Severfield-Watson Structures Ltd, resulted in the resignation of the Chief Executive and subsequent contract review process from which arose a £20.1 million charge to the profit and loss and the identification of the need for further improvements to strengthen contracting processes and discipline notably in execution and risk assessment, particularly in relation to its more complex contracts.

2011

The Group experienced a reduction in 2011 to 5.3 per cent. (2010: 6.2 per cent.). The reduction was the result of lower contract pricing as a result of ongoing overcapacity in the market. Continuing weakness in the UK market led to continued margin weakness. Whilst the latter part of the year saw improved pricing, this was still at very tight margins.

2010

The Group experienced a reduction in 2010 to 6.1 per cent. (2009: 14.8 per cent.). The reduction was the result of reduced Group production capacity and lower contract pricing as a result of overcapacity in the market. Capacity reductions across the industry led to a more stable pricing environment in the latter part of the year, albeit still at very tight margins.

2009

The Group experienced an increase in 2009 to 14.3 per cent. (2008: 13.3 per cent.). The improvement reflected the very strong mix of work in the order book throughout the year. In addition a lower proportion of turnover relating to low margin sub-contracted services for which the Group was responsible improved the overall margin.

(b) Net debt

Cash is critical for providing the financial resources to develop the Group's business and to provide adequate working capital to operate smoothly. The Group has a robust and detailed cash forecasting procedure that considers the Group's position on a contract by contract basis.

2012

Net debt of £29.7 million represents an improvement of £1.6 million on the position at 31 December 2011 of £31.3 million. This reflects the improvement in working capital offset by capital investment, further equity investment in the Indian Joint Venture and financing costs.

2011

Net debt as at 31 December 2011 was £31.3 million (2010: £15.0 million). The movement primarily reflected an outflow of cash from operating activities. This was driven by higher working capital levels and an overall extension in customer payment cycles as weak market conditions persisted.

2010

Net debt as at 31 December 2010 was £15.0 million (2009: £11.5 million net cash). The movement primarily reflected an outflow of cash from operating activities, driven by the unwind of favourable contract payment positions at 31 December 2009, the impact of higher steel prices and an overall extension in customer payment cycles as weak market conditions persisted.

2009

Net cash at 31 December 2009 was £11.5 million. This was better than expected and reflected favourable payment positions on a small number of key contracts at the year end.

(c) Order book

The order book provides visibility on future activity and allows the Group to plan production and adapt accordingly. It only includes future revenue from legally committed contracts comprising both ongoing and newly won work. Whilst only the revenue within the order book is reported externally, a key forward indicator of future profitability that is tracked internally is the margin inherent within the forward order book.

2012

The order book (at 31 December 2012) for the Group (excluding the Indian Joint Venture) remained strong at £209 million, despite trading conditions remaining difficult. The order book contains a broad mix of London commercial offices, industrial, warehousing, waste to energy projects, transport including airports, health, education and leisure projects.

The Indian Joint Venture order book stood at £29 million as at 31 December 2012, which included the Company's first commercial office building in Mumbai for approximately 5,500 tonnes with a value of just over £6 million.

2011

The order book (in March 2012) for the Group (excluding the Indian Joint Venture) was £221 million (compared to £226 million in March 2011). This represented a strong position at a time of weak market conditions and also provided a good loading for the majority of the Group's production facilities for the remainder of 2012. The order book contained a broad mix of London commercial offices, industrial, warehousing, waste to energy projects, transport including airports, education and leisure.

The Indian Joint Venture order book at £43 million (in March 2012) covered almost all of the Indian Joint Venture's production plans for 2012 and was strong in terms of quality and importantly product mix. The reduction in the size of the Indian Joint Venture order book since November 2011 (£61 million) was largely the result of a single contract cancellation which failed to conclude its project financing.

2010

The order book (in March 2011) for the Group (excluding the Indian Joint Venture) was £226 million as the Group continued to secure business from all of the sectors making up UK demand. Although this was lower than the levels attained in 2008 and 2009, it nonetheless represented a strong position at a time of weak market conditions. It also provided a good loading for the majority of the Group's production facilities for the remainder of 2011.

The order mix in 2010 in India was reflective of the Group's entry into a new market with a new offering and a steep learning curve with some complex work, which contributed to lower productivity and higher

start-up losses than planned. Four months after the official opening of the manufacturing facilities at Bellary, the order book for the Indian Joint Venture (in March 2011) stood at £33 million.

2009

The order book (in March 2010) was relatively strong at £219 million. For the previous six months it had reflected the change in the market, consisting of a higher proportion of smaller scale, lower margin projects. Nevertheless, it represented over nine months of activity which, in the prevailing structural steelwork industry, the Group considered very encouraging and provided a good workload base for 2010 and beyond.

(d) Accident frequency ratio (''AFR'')

The AFR is a key measure of the safe operation of the Group's business and is one of a number of health and safety measures the Group uses to monitor its activities. The AFR is the number of RIDDOR accidents to man-hours worked, multiplied by 100,000.

2012

The AFR for 2012 was 0.49 which represents a good improvement over the previous year and is ahead of industry targets.

2011

The AFR for 2011 was 0.60. Whilst this represented a slight deterioration from the prior year, it remained industry leading and the Group introduced a programme of cultural and behavioural change to further improve the metric.

2010

The AFR for 2010 reduced significantly to 0.43 (2009: 0.85) reflecting another substantial improvement in the Group's safety record.

2009

The AFR for 2009 reduced significantly to 0.85 (2008: 1.06), reflecting another substantial improvement in the Group's safety record.

4. Current Trading and Prospects

The Group's financial performance for the 12 months ended 31 December 2012 reflected the impact of the contract execution issues, particularly on 122 Leadenhall Street, along with the other factors highlighted in the Review, as well as the impact of adverse contract final account settlements announced earlier in the year.

Trading conditions are difficult as previously stated. However, the order book at 31 December 2012 remained strong at £209 million, and the re-organisation of the Group's largest businesses into Severfield-Watson Structures Ltd is continuing in line with plan. More than half of the anticipated overhead savings of £2 million, previously announced on 5 November 2012, have now been realised and the programme will be largely complete by 30 June 2013.

5. Operating Results

5.1 Description of key income statement items

(a) Revenue

Revenue is recognised in line with the Group's policy on accounting for construction contracts, which is set out below.

(b) Construction contracts

Profit is recognised on contracts, if the final outcome can be assessed reliably, by including in the income statement revenue and related cost as contract activity progresses. Revenue is calculated as the proportion of total expected contract value which corresponds to the proportion of costs incurred to date to total expected costs for that contract. Variations in contract work, claims and incentive payments are included in revenue to the extent that there is appropriate certainty that they will ultimately be accepted by the customer and can be measured reliably. Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent contract costs have been incurred and it is probable they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When it is probable that total expected contract costs will exceed total expected contract revenue, the expected loss is recognised as an expense immediately.

(c) Operating profit before share of results of Associates

Operating profit before share of results of Associates represents the operating performance of the Group before any impact from the Indian Joint Venture or any of the other Associate company investments which the Group has.

(d) Share of results of Associates

Share of results of Associates includes the Group's post tax share of profits from its Associate company investments. This primarily relates to its Indian Joint Venture. The Group has two other Associate company investments. It has a 25.1 per cent. holding in Kennedy Watts Partnership Ltd, which is a UK based drawing office it uses for some of its contract work. It also has a 25.0 per cent. share in Fabsec Limited. Neither of these investments have a material impact on the results of the Group.

(e) Other items

The column titled 'Other Items' includes those elements of the statutory results which in the view of management are unusual in size and nature and do not arise from the normal operating activity of the Group. They are reported separately in order that a clearer picture of the underlying performance of the Group is presented on the face of the consolidated income statement.

5.2 Comparison of the financial results of the Group for the 12 months ended 31 December 2012 and 31 December 2011

(a) Revenue

Revenue for the 12 month period of £256.6 million (2011: £267.8 million) was at a similar level to the previous year. This reflected a fairly constant level of production output and contracting activity throughout the year in what remained a relatively subdued market. There was also continued relative stability in steel pricing.

By way of example, projects the Group's construction capabilities were used for in the 12 month financial period ended 31 December 2012 included the following:

Jaguar Land Rover industrial buildings, Midlands
Blackfriars Bridge, London
5 Broadgate commercial office, London
Shirley town centre redevelopment
Proctor & Gamble Plant, Hyderabad, India
Prestige Trade Tower, Bangalore, India

(b) Operating Loss

The underlying operating loss before results of Associates was £18.2 million (2011: £14.2 million profit) representing margins of 7.1 per cent. and 5.3 per cent., respectively. This reflected the difficult trading conditions during the year, the £9.9 million charge to the profit and loss account in respect of the 122 Leadenhall Street contract and the other adjustments relating to additional costs and reductions in contract value expectations totalling £10.2 million arising from the Review. In respect of the reduced expectations around certain contract values, the Board continues to pursue value on these contracts, but a prudent view has been taken reflecting progress made to date and the difficult prevailing trading environment.

(c) Share of Profits of Associate Companies

The share of results of Associates of a profit of £0.2 million (2011: £2.5 million loss) represented a step change in the performance of the Indian Joint Venture in recording its first positive contribution to Group profit, as production was running at good operating levels for most of the year.

(d) Finance Costs

Net finance costs for the group were £1.6 million (2011: £1.6 million), reflecting similar levels of indebtedness through the 12 month period compared to the prior year.

(e) Other Items

Non-underlying items reduced the profit before tax for the year by £3.7 million (2011: £3.3 million) and included the following items:

Amortisation of acquired intangibles of £2.7 million (2011: £2.7 million).
Incremental contract legal costs of £1.1 million (2011: £0.6 million).
Favourable movements in the valuation of derivatives of £0.1 million (2011: nil).

(f) Taxation

The underlying tax charge in 2012 was a credit of £2.9 million, representing an effective tax rate of 14.7 per cent. on the underlying loss before tax for the period, compared to an underlying tax charge in 2011 of £2.9 million, which represented an effective tax rate of 23.2 per cent.

(g) Dividends

The Group paid an interim dividend on 26 October 2012 of 1.50 pence, however no second interim dividend in the 12 month period ended 31 December 2012 was declared, meaning a total dividend for the 12 month period of 1.50 pence (2011: 5.00 pence).

5.3 Comparison of the financial results of the Group for the financial years ended 31 December 2011 and 31 December 2010

(a) Revenue

Revenue of £267.8 million was flat year-on-year (2010: £266.7 million). This reflected stable production volumes in the year along with relative stability in underlying steel prices. In 2011 the UK structural steel sector endured a further year of slow demand and tough trading conditions, which was exacerbated by diminishing confidence levels for business prospects in 2012 as a result of the economic environment.

By way of example, projects the Group's construction capabilities were used for in the financial year ended 31 December 2011 included the following:

Heathrow Airport Terminal 2
BMW facility, Oxford
Titanic Quarter, Belfast
The Shard, London
Amazon Distribution Centre, Dunfermline
Leeds Arena

(b) Operating Profit

The underlying operating profit before results of Associates of £14.2 million was 14 per cent. down on the prior year (2010: £16.6 million), reflecting an expected operating margin compression from 6.2 per cent. to 5.3 per cent., resulting from tighter market pricing, as surviving competitors sought to obtain a share of a smaller market.

(c) Share of Losses of Associate Companies

The Group's share of losses from its Indian Joint Venture was £2.5 million for the year (2010: £0.4 million underlying). This was generated from the first full year of operation at the business. The results reflected a gradual increase of production during the year but at levels which, for most of the year, were below the

required break-even position. Although the order book developed very well during the year, a number of customer driven contractual delays were experienced which, as well as impacting the production ramp-up, also impacted the extent to which profit could be accounted for on some larger contracts.

(d) Finance Costs

Net finance costs for the Group were £1.6 million (2010: £0.9 million). This reflected higher prevailing debt levels throughout the year, along with some costs relating to the refinancing of the Group's bank facilities in November 2011.

(e) Other Items

Non-underlying items reduced the profit before tax for the year by £3.3 million (2010: £4.2 million) and included the following items:

Amortisation of acquired intangibles of £2.7 million (2010: £2.7 million).
Legal costs and provision movements of £0.6 million (2010: £2.0 million gain). During the year, some litigation involving the Group expanded in scope resulting in additional costs of £0.6 million.

(f) Taxation

The underlying tax charge of £2.9 million represented an effective rate of 23.2 per cent. (on applicable profit which excludes results of Associates) compared with 26.6 per cent. in the previous year. This reflected a benefit from the satisfactory conclusion of some outstanding matters relating to previous years. The total tax charge for the year was £1.0 million which represented an effective tax rate of 10.3 per cent. (on applicable profit which excludes results of Associates). This included the additional deferred tax benefit from the reduction in UK corporation tax to 25 per cent. This is categorised as non-underlying and is included in other items.

(g) Dividends

On underlying basic earnings per share of 8.05 pence (2010: 12.50 pence), the Group paid a total dividend for the year of 5.00 pence (2010: 7.50 pence), split 1.50 pence as an interim dividend (2010: 5.00 pence) and 3.50 pence as a final dividend (2010: 2.50 pence).

5.4 Comparison of the financial results of the Group for the financial years ended 31 December 2010 and 31 December 2009

(a) Revenue

Revenue fell by 24 per cent. to £266.7 million (2009: £349.4 million). This reflected a reduction in production capacity and lower contract pricing compared with the previous year. Pricing reached its most competitive in the first half of the year but a combination of increasing steel prices and continuing capacity reductions by competitors led to more stable pricing towards the year end, although still at very tight margins.

By way of example, projects the Group's construction capabilities were used for in the financial year ended 31 December 2010 included the following:

ArcelorMittal Orbit, Olympic Park
Thameslink Viaduct, Borough Market, London
Saica Paper Mill, Partington
National Indoor Sports Arena and Velodrome, Glasgow
Brighton FC Stadium
Cannon Place commercial office, London

(b) Operating Profit

The operating profit before non-underlying items of £16.2 million was 69 per cent. down on the previous year (2009: £51.8 million). Operating profit margins reduced from 14.8 per cent. to 6.2 per cent. in the year, reflecting the reduced capacity and lower margins highlighted above, although the worst pricing impacts were, to some extent, compensated by the successful conclusion of more profitable contracts which commenced in the previous years.

The Company specifically targeted cost reductions across all businesses at the end of 2009. These improvements provided for the Group's resultant competitiveness throughout 2010. Further cost reduction initiatives remained under review and development, including a procurement related initiative.

(c) Share of Losses of Associate Companies

Operating profit includes the Group's 50 per cent. share of the results of the Indian Joint Venture. There was both an underlying and a non-underlying element to these results. The underlying loss of £0.4 million (2009: nil) represented the initial losses after the commencement of commercial production towards the end of 2010. The non-underlying loss of £1.4 million (2009: £1.0 million) represented the Group's share of the Indian Joint Venture's pre-operating costs throughout the year. The Group's share of losses from the Indian Joint Venture for 2009, which also related to pre-operating costs, were re-classified as non-underlying for consistency.

(d) Finance Costs

Net finance costs for the Group amounted to £0.9 million (2009: £1.0 million). The reduction reflected a lower level of average net debt levels throughout the year, compared with the previous year.

(e) Non-underlying Items

Non-underlying items reduced the profit before tax for the year by £4.2 million (2009: £6.7 million) and included the following:

Amortisation of acquired intangibles of £2.7 million (2009: £4.4 million).
Share of pre-operating losses of Indian Joint Venture of £1.4 million (2009: £1.0 million).
Impairment in valuation of investment property of £2.1 million (2009: nil). The Group has an investment property, purchased in 2007, which was previously held at its fair value of £6.1 million. The Directors reviewed both the resale and rental prospects for this property in light of the continued market weakness for commercial property and concluded that its fair value was £4.0 million. Consequently, an impairment charge of £2.1 million was taken in the year.
Movements in the valuation of derivative financial instruments nil (2009: gain £3.4 million).
Release of provisions no longer required £2.0 million gain (2009: nil). During the year, good progress was made in reducing the Group's exposure to potential liabilities under legal claims. Consequently, the Directors' best estimate of known legal claims in process reduced from £2.6 million to £0.6 million.

(f) Taxation

The underlying tax charge of £4.2 million represented an effective rate of 26.6 per cent. (on applicable profit which excluded results of Associates) compared with 28.3 per cent. in the previous year. This was aided by the satisfactory conclusion of some outstanding matters relating to previous years. The total tax charge for the year was £3.5 million which represented an effective tax rate of 27.0 per cent. The impairment of the investment property did not attract tax relief and the negative impact of this was partially offset by the deferred tax benefit from the reduction of the UK corporation tax rate to 27.0 per cent. As the impact of both of these points was non-underlying, it was reflected in Other Items.

(g) Dividends

On underlying basic earnings per share of 12.50 pence (2009: 41.11 pence), the Group paid a total dividend for the year of 7.50 pence (2009: 15.00 pence), split 5.00 pence as an interim dividend (2009: 10.00 pence) and 2.50 pence as a final dividend (2009: 5.00 pence paid as a second interim dividend as opposed to a final dividend).

5.5 Comparison of the financial results of the Group for the financial years ended 31 December 2009 and 31 December 2008

(a) Revenue

Group revenue fell by 11.4 per cent. to £349.4 million (2008: £394.3 million). Despite this reduction in revenue, capacity at all the Group's production facilities was fully utilised throughout the year. The reduction was attributable to a number of factors. These included outsourcing of third party products and services, such as decking or cladding, which the Group is sometimes asked to provide to its clients. These generate incremental revenue in addition to the revenue generated by steel. During 2009 these third party products and services were not as prevalent in the mix of contracts undertaken by the Group. In addition the Group experienced a general lowering of sales prices during the year, particularly towards the end of the year as well as seeing the effects on revenue of the differing stages of completion of contracts, in that revenue recognition on those contracts can be significantly different from one year to another.

By way of example, projects the Group's construction capabilities were used for in the financial year ended 31 December 2009 included the following:

Olympic Stadium
Westfield Stratford City Shopping Centre, London
Staythorpe Power Station, Newark
West Burton Power Station, Nottinghamshire
Victoria Hospital, Kirkcaldy
Heron Tower commercial office, London

(b) Operating Profit

The Group's underlying operating profit reduced by 7.7 per cent. to £50.8 million. Underlying operating margins, expressed as a percentage of revenue, increased to 14.6 per cent. compared to 14.0 per cent. achieved in 2008. The improvement reflected the very strong mix of work in the order book throughout 2009. In addition, incremental products supplied by the Group were lower than in the previous year. As margins on these products are not as high as those achieved on steel, a reduction in the volume equates to better margins overall. The Group's relative purchasing power also helped in protecting its margins from the reduction in the overall selling price during the year.

Actions were taken towards the end of the year in an effort to reduce the impact of the worsening economic climate and to maintain the Group's competitive advantages in 2010 and beyond. Capacity across the Group was reduced by approximately 20 per cent. including a reduction of 15 per cent. in the number of employees. In addition, wages and salaries were reduced substantially and in some cases other terms and conditions amended for the remaining employees. In addition overhead expenditure is continually being reviewed in order to generate savings and to match with the current level of capacity. The actions taken were expected to save the Group £10 million per annum on salaries, wages and other overhead costs.

(c) Share of Losses of Associate Companies

For the first time the Group results also incorporated those of the Indian Joint Venture. The joint venture generated a loss of almost £2.0 million to December 2009, in line with budget. This related primarily to salary costs and other preoperative expenses together with set up costs. Consequently, the Group's 50 per cent. share of this loss, taken to the consolidated income statement, amounted to £991,000.

(d) Finance Costs

Net finance costs for the Group amounted to £1.0 million (2008: £2.6 million). The reduction reflected both lower borrowings and lower interest rates during the year.

(e) Non-underlying Items

Non-underlying items reduced the underlying profit before tax by £5.7 million (2008: £9.9 million). These related to:

Amortisation of acquired intangibles of £4.4 million (2008: £9.2 million).
Movements in the valuation of derivative financial instruments amounting to a gain of £3.4 million (2008: loss £0.7 million).
Restructuring costs in the year of £2.3 million (2008: nil). These are primarily redundancy costs as a result of the capacity reductions throughout the Group. Capacity across the Group was reduced by approximately 20 per cent. including a reduction of 15 per cent. in the number of employees. In addition, wages and salaries have been reduced substantially and in some cases other terms and conditions amended for the remaining employees. The cost to the Group of carrying out these redundancies amounted to £2.3 million.
Development costs written off of £2.4 million (2008: nil). These costs were expended by the Group over the last several years on the development of a pedestal mounted power work platform for use on

sites in the erection of steel, particularly on high rise buildings. Changing market conditions led the Directors to conclude that the future economic value of these machines could not be guaranteed and consequently the carrying value of this intangible asset was written off in the year.

(f) Taxation

The underlying tax charge of £14.4 million represented an effective tax rate of 28.9 per cent. compared with 28.7 per cent. in the previous year. This rate was slightly higher than the prevailing rate of 28 per cent. due to the adjustments made in respect of disallowable expenditure incurred during the year. The total tax charge for the year was £12.8 million, representing an effective tax rate of 29.0 per cent. (2008: 43.7 per cent.). The high rate in 2008 reflected a one-off charge of £6.3 million due to changes to the industrial buildings allowance regime during that year.

(g) Dividends

On underlying basic earnings per share of 40.00 pence (2008: 42.20 pence), the Group paid a total dividend for the year of 15.00 pence (2008: 20.00 pence), split 10.00 pence as an interim dividend (2008: 10.00 pence) and 5.00 pence as a final dividend (2008: 10.00 pence).

PART VI

CAPITAL RESOURCES

1. Overview

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to stakeholders. The capital structure of the Group consists of debt, which includes borrowings, cash and cash equivalents, and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings. The Board reviews the capital structure of the Group on a semi-annual basis. As part of this review, it considers the cost of capital and the risks associated with each class of capital.

Group treasury activities are managed and controlled centrally. Risks to assets and potential liabilities to customers, employees and the public continue to be insured. The Group maintains its low risk financial management policy by insuring all significant trade debtors.

The treasury function seeks to reduce the Group's exposure to any interest rate, foreign exchange and other financial risks, to ensure that adequate, secure and cost-effective funding arrangements are maintained to finance current and planned future activities and to invest cash assets safely and profitably.

The Group continues to have some exposure to exchange rate fluctuations, currently between Sterling, the Euro and the US dollar. In order to maintain the projected level of profit budgeted on contracts, foreign exchange contracts are taken out to convert into Sterling at the expected date of receipt.

In conjunction with the Rights Issue, Severfield-Rowen has agreed amended financing arrangements under its revolving credit facilities which are conditional upon completion of the Rights Issue. The Revised Facilities will come into effect upon the application of the net proceeds of the Rights Issue, to reduce the outstanding borrowings under the Existing Facilities Agreement. The total revolving credit facilities available to the Group under the Revised Facilities will be £35 million, although under the terms of the Revised Facilities Agreement only £20 million of the total commitments will be available for utilisation until 31 December 2013.

The Group's current liquidity requirements arise primarily from the need to fund its working capital requirements, any capital expenditure and to make interest and principal payments on its indebtedness. The Group's principal source of liquidity has been its cash flow from operating activities. The Group has also funded its liquidity requirements through borrowings represented by its existing revolving credit facility.

Following completion of the Rights Issue, the Revised Facilities together with the proceeds of the Rights Issue and the Group's internally generated cash flows will be the principal sources of liquidity for the Group.

2. Liquidity

The Group's current liquidity requirements arise primarily from the need to fund its working capital requirements, any capital expenditure and to make interest payments on its indebtedness. The Group's principal sources of liquidity have been its cash flow from operating activities and its Existing Facilities of £50 million of which £44.2 million was drawn as at 14 February 2013. The Group also had cash and cash equivalents of £0.2 million as at that date.

Following completion of the Rights Issue, the Revised Facilities and the Group's cash flow from operating activities will be the principal sources of liquidity for the Group. Under the Revised Facilities Agreement, the lenders agree subject to customary conditions precedent to utilisation, to make available to the Company, and certain of its subsidiaries, for utilisation up to and including 11 October 2016 a revolving credit facility of up to £35 million, although under the terms of the Revised Facilities Agreement only £20 million of the total commitments will be available for utilisation until 31 December 2013.

The Revised Facilities Agreement will come into effect, among other conditions, upon the application of the net proceeds of the Rights Issue to reduce the outstanding borrowings under the Existing Facilities Agreement. The total committed facilities available under the Revised Facilities Agreement will be £35 million although under the terms of the Revised Facilities Agreement only £20 million of the total commitments will be available for utilisation until 31 December 2013.

3. Capitalisation and indebtedness

The following tables show the unaudited capitalisation and financial indebtedness of the Group as at 31 December 2012:

Capitalisation and indebtedness

	£000
Financial liabilities—borrowings	(30,697)
Financial liabilities—finance leases	(168)
Total current financial indebtedness	(30,865)
Financial liabilities—finance leases	(280)
Total non-current financial indebtedness	(280)
Total financial indebtedness	(31,145)
Shareholders' equity
Called up share capital	48,383
Retained earnings	57,756
Other reserves	486
Total shareholders' equity	106,625

Net financial indebtedness

The following table sets out the net financial indebtedness of the Group as at 31 December 2012:

	£000
Cash and cash equivalents	1,434
Total liquidity	1,434
Current financial indebtedness	(30,865)
Net current financial indebtedness	(29,431)
Non-current financial indebtedness	(280)
Total net financial indebtedness	(29,711)

4. Borrowings

As at 31 December 2012, the Group's borrowings represented the Group's existing revolving credit facility from The Royal Bank of Scotland PLC and Clyesdale Bank PLC trading as Yorkshire Bank, jointly which provides credit support of up to £50 million at an interest rate of between 1.90 per cent. and 2.65 per cent. above LIBOR subject to the ratio of Group net debt to EBITDA.

As at 14 February 2013 (being the latest practicable date prior to the publication of this document for this purpose), the Group had net financial indebtedness of £44.0 million.

As part of the process of agreeing the Revised Facilities Agreement, the Group's lending banks agreed to defer the testing of certain covenants under the Existing Facilities on a temporary basis. In the event that the Rights Issue proceeds and the conditions to the effectiveness of the Revised Facilities are satisfied, the Group will become subject to the revised covenants under the Revised Facilities Agreement as set out below. If the Revised Facilities Agreement does not come into effect, Severfield-Rowen will need to seek to renegotiate its Existing Facilities Agreement in order to secure the availability of revolving credit facilities of an appropriate duration to provide greater flexibility to the Group than is currently afforded under the Existing Facilities Agreement. Pending the conclusion of such renegotiation, Severfield-Rowen would need to continue to seek deferrals for testing of the financial covenants under the covenant regime in its Existing Facilities Agreement against a backdrop of a UK market unlikely to recover in the near term. The Directors

believe that it is unlikely that Severfield-Rowen will have sufficient financial and/or operational flexibility to implement sufficient mitigating actions if the weekly deferral of the testing under the current covenant regime does not continue.

The following table sets out the financial covenants under the Existing Facilities and the Revised Facilities (which are also described in paragraph 13.2 of Part IX of this document):

FINANCIAL COVENANT	EXISTING FACILITIES AGREEMENT	REVISED FACILITIES AGREEMENT
Net debt to EBITDA	2.75x for each financial	First test date 31 March 2014
	quarter	2.50x at 31 March 2014 and at each test date of each financial quarter thereafter
		On a ''last twelve months'' basis
Net interest cover	5.00x for each financial	First test date 31 March 2014
	quarter	3.00x at 31 March 2014
		5.00x at each test date on the last day of each financial quarter thereafter
		On a ''last twelve months'' basis
Capital expenditure		Subject to certain carry forward rights, capital expenditure of the Group in any financial year not to exceed £7.5 million
Operating cash outflow		Subject to certain provisos,
		(i) Net operating cash outflow shall not exceed £12.5 million on a quarterly look back test at the end of each quarter; and
		(ii) Net operating cash outflow shall not exceed £15 million in any month

5. Cash flows

2012

There was a net cash inflow from operating activities of £10.2 million (2011: outflow of £9.0 million). This was driven by a improvements in all areas of working capital but particularly receivables where significant underlying improvements were made over the 12 month period. Net debt of £29.7 million represented an improvement of £1.6 million on the position at 31 December 2011 of £31.3 million. This reflected the improvement in working capital offset by capital investment, further equity investment in the Indian Joint Venture and financing costs.

2011

There was an increase in net debt during the year of £16.3 million to leave the year-end position at £31.3 million (2010: £15.0 million). This movement included a cash outflow from operating activities of £9.0 million, and also included dividends of £3.6 million, investment in capital expenditure of £2.1 million, and £3.7 million of corporation tax payments. An increase in the overall level of net debt was expected, but the outflow from operating activities was higher than expected, driven by the contract mix and phasing at the year-end, coupled with greater tightness in customer settlements.

The Group secured new and increased credit facilities from The Royal Bank of Scotland PLC and Clydesdale Bank PLC trading as Yorkshire Bank, in November 2011 to remain in place until November 2016, giving the Group borrowing facilities of £50 million, a £10 million increase over its previous facility.

2010

There was an expected outflow of cash during the year to leave year-end net debt at £15.0 million (2009: net cash £11.5 million). This movement reflected an outflow from operating activities of £11.2 million, and also included dividends of £8.9 million and investment in capital expenditure and the Indian Joint Venture of £3.0 million and £2.9 million, respectively. The outflow from operating activities reflected the reversal of the particularly favourable contract working capital position at 31 December 2009, but also reflected the

impact of higher steel prices on working capital and an overall extension of customer payment cycles as weak market conditions persisted. The outflow also included corporation tax payments of £5.4 million. 2009

At the end of 2008 net borrowings were £15.8 million. During 2009, particularly towards the end of the year, careful cash management resulted in borrowings being eliminated and the Group ended the year with a net cash balance of £11.5 million. This position was significantly better than expected, helped by a £10 million unwinding of the amount of cash held in working capital at the end of the year. The Group agreed in the year a new revolving credit facility with The Royal Bank of Scotland PLC and Clydesdale Bank PLC trading as Yorkshire Bank, as joint lenders until March 2013. This facility was for £40 million, leaving the Group very comfortably within the limits of its facility.

During the year £65.4 million of cash was generated from operations. Outflows of cash during the year included dividends of £17.7 million, corporation tax paid of £13.2 million, the purchase of property, plant and equipment, net of sale proceeds, of £3.6 million and £2.4 million injected as equity into the Indian Joint Venture.

6. Capital expenditures

2012

During the 12 month period, capital expenditure amounted to £1.5 million (2011: £2.1 million). This included ongoing replacement of essential equipment as well as a production optimisation programme at one of the Group's fabrication plants.

2011

Capital expenditure in the year was £2.1 million (2010: £3.0 million). This included investment in new financial systems and in value-add equipment for the Light Steel Division and plate profiling capability.

During the year, the Group invested £0.1 million (2010: £2.9 million) as equity into the Indian Joint Venture.

2010

Capital expenditure in the year was £3.0 million (2009: £4.8 million). This included some replacement of older equipment across the Group and also some safety equipment for protection of site workers on high-rise buildings.

During the year the Group invested £2.9 million (2009: £2.4 million) as equity into the Indian Joint Venture.

2009

Capital expenditure in the year was reduced from that expended in previous years at £4.8 million. This included £3.7 million on general improvements to buildings and development of external storage areas at the Group's production sites, with the balance primarily being the maintenance to and improvement of existing plant and machinery.

During the year the Group also invested £2.4 million as equity into the Indian Joint Venture.

7. Contingent liabilities and off-balance sheet arrangements

As at 31 December 2012, the Company and its subsidiaries have provided unlimited multilateral guarantees to secure any bank overdrafts and loans of all other Group companies. At 31 December 2012, these amounted to £40 million (2011: £40 million). The Group has also given performance bonds in the normal course of trade.

8. Market risk and risk management

The Board has ensured that a formal risk assessment and management framework for assessing, monitoring and managing the strategic operational and financial risks of the Group is in place to ensure appropriate risk management of its operations. Internal control and risk management systems are embedded in the operations of the divisions. The Group has exposure to a variety of financial risks through the conduct of its operations. Financial risk management is governed by the Group's operational policies, which are subject to periodic review by the Board.

(a) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they fall due. The ultimate responsibility for liquidity risk rests with the Board.

The Group generates cash through its operations and aims to manage liquidity by ensuring that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stress conditions, without incurring unacceptable losses or risking damage to the Group's reputation. Forecast and actual cash flow is continuously monitored.

(b) Interest rate risk

The Group is exposed to interest rate risk as a result of its borrowings. The Group does not currently hedge any of its interest rate exposure. Borrowings represent the Group's existing revolving credit facility from The Royal Bank of Scotland PLC and Clyesdale Bank PLC trading as Yorkshire Bank, jointly which provides credit support of up to £50 million at an interest rate of between 1.90 per cent. and 2.65 per cent. above LIBOR subject to the ratio of Group net debt to EBITDA.

The Group performs interest rate sensitivity analysis on an annual basis based on the exposure to interest rates at the balance sheet date. For floating rate liabilities, the analysis is prepared assuming the gross amount of liability outstanding at balance sheet date was outstanding for the whole year. A 0.5 per cent. increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates.

(c) Credit risk

The Group's primary exposure to credit risk arises from the potential for non-payment or default from construction contract debtors. The degree to which the Group is exposed to this credit risk depends on the individual characteristics of the contract counterparty and the nature of the project. The Group's credit risk is also influenced by the general macroeconomic conditions.

Due to the nature of the Group's operations, it is normal practice for customers to hold retentions in respect of contracts completed and amounts due from construction contract customers are typically spread across a wide range of customers. Retentions held by customers at 31 December 2012 were £5,182,000 compared to £6,991,000 in 2011, £12,966,000 in 2010 and £14,789,000 in 2009.

The Group manages its exposure to credit risk through the application of its credit risk management policies which specify the minimum requirements in respect of the creditworthiness of potential customers, assessed through reports from credit agencies, and the timing and extent of progress payments in respect of contracts. In addition, before accepting any new customer, the Group uses an external credit rating to assess the potential customer's credit quality and defines credit limits by customer. It is Group policy that adequate credit insurance is taken out on all customers to manage the exposure that may arise as the contractual work proceeds. Accordingly, no bad debt provisions are held or expenses incurred. The Group's credit insurance committee reviews situations where adequate credit insurance on the Group's customers cannot be purchased in the present economic climate as required. Where credit insurance is difficult to acquire, the credit insurance committee (comprising J. Dodds (following the departure of T. Haughey from the Board), P. Emerson and A. Dunsmore) convenes to determine the appropriate exposure for the Group to take with a customer.

The Group manages the collection of retentions through its post-completion project monitoring procedures and ongoing contact with customers so as to ensure that potential issues that could lead to the non-payment of retentions are addressed as soon as they are identified.

Amounts outstanding from construction contract customers are due with reference to the payment terms for each particular contract but the majority would be receivable within four months from the end of the reporting period.

(d) Market risk

The Group's activities expose it primarily to the financial risks of changes in credit risks described above, in foreign currency exchange rates and interest rates. The Group has entered into a variety of derivative financial instruments to manage its exposure to foreign currency risk. Market risk exposures are monitored and are supplemented by sensitivity analysis.

(e) Foreign currency risk

The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.

The Group seeks to minimise the effects of currency risks by using derivative financial instruments when appropriate to hedge these risk exposures against contracted sales. The use of financial derivatives is governed by the Group's policies approved by the Board. The Group does not enter into or trade financial instruments including derivative financial instruments, for speculative purposes.

The Group is only significantly exposed to the Euro and US dollar. At present the Group's translation exposure to the Indian rupee via its Indian Joint Venture is not significant. Going forward, as the business grows, this exposure is expected to become more significant.

It is the policy of the Group to enter into forward foreign exchange contracts to cover future euro and US dollar currency receipts on relevant contracts.

9. Critical accounting policies and key sources of estimation uncertainty

The Group's consolidated financial statements are prepared in accordance with IFRS. The financial statements are also prepared in accordance with IFRS adopted for use in the European Union and therefore comply with Article 4 of the EU IAS Regulation. The financial statements are prepared on the historical cost basis, except for the revaluation of financial instruments.

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ.

The Group's accounting policies are summarised in the notes to the financial statements covering the 12 months to 31 December 2012 contained in this document in Part VII as well as note 1 in the notes to the audited financial statements incorporated by reference to this document. The Directors consider the following policies to be the most significant policies that require management to make subjective and at times complex judgements or to consider matters that are inherently uncertain:

(a) Revenue and margin recognition

The Group's revenue recognition and margin recognition are central to the way the Group values the work it has carried out in each financial year. These policies require forecasts to be made of the outcomes of long-term construction contracts, which require assessments and judgements to be made on recovery of pre-contract costs, changes in work scopes, contract programmes and maintenance liabilities.

The Group applies rigorous internal control procedures over the determination of each of the above variables to ensure that profit take as at the balance sheet date and the extent of future costs to contract completion are reasonably and consistently determined.

(b) Retirement benefit obligations

The Group's defined benefit pension scheme is valued in accordance with IAS 19 ''Employee Benefits''. The defined benefit obligation is calculated using a number of assumptions including increases in pension benefits, mortality rates and inflation and the future investment returns from the scheme's assets. The present value of the benefit obligations is calculated by discounting the benefit obligation using market rates on relevant AA corporate bonds at the balance sheet date.

The scheme's assets are valued at market rates at the balance sheet date. Effects of changes in the actuarial assumptions underlying the benefit obligation, discount rates and the difference between expected and actual returns on the scheme's assets are classified as actuarial gains and losses.

(c) Impairment of goodwill and intangible assets arising from acquisitions

Determining whether goodwill or associated intangible assets are impaired requires an estimation of the value in use of the cash-generating units to which these assets have been allocated. The value in use

calculation requires the entity to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value.

(d) Impairment of investment property

In the absence of a formal valuation, determining the carrying value of the Group's investment property requires an assessment of fair value. The key factors considered by the Directors in determining fair value are the possible open market valuation and rental yields on the property.

10. Recent accounting pronouncements and other developments

In 2011, a number of new standards and interpretations became effective as noted in the 2011 Annual Report and Accounts (which are incorporated by reference into this document). The adoption of these standards and interpretations has not had a material impact on the condensed interim financial statements of the Group. Since the 2011 Annual Report and Accounts were published, no significant new Standards and Interpretations have been issued and become effective that have had a material impact on the condensed interim financial statements of the Group.

As at 31 December 2012, the following standards and interpretations were in issue but not yet effective:

IFRS 1 (amended)	Government Loans
IFRS 7 (amended)	Disclosures — Offsetting Financial Assets and Financial Liabilities
Annual Improvements to IFRSs	(2009-2011) Cycle
IFRS 9	Financial Instruments
IFRS 10	Consolidated Financial Statements
IFRS 10, IFRS 12 and IAS 27 (amended)	Investment Entities
IFRS 11	Joint Arrangements
IFRS 12	Disclosure of Interests in Other Entities
IFRS 13	Fair Value Measurement
IAS 27 (revised)	Separate Financial Statements
IAS 28 (revised)	Investments in Associates and Joint Ventures
IAS 32 (amended)	Offsetting Financial Assets and Financial Liabilities
IFRIC 20	Stripping Costs in the Production Phase of a Surface Mine

The Directors do not expect that the adoption of the standards and interpretations listed above will have a material impact on the financial statements of the Group in future periods, except as follows:

IFRS 7 (amended) will increase the disclosure requirements where netting arrangements are in place for financial assets and financial liabilities; and
lFRS 12 will impact the disclosure of interests the Group has in other entities.

Beyond the information above it is not practicable to provide a reasonable estimate of the effect of these standards until a detailed review has been completed.

PART VII

HISTORICAL FINANCIAL INFORMATION ON THE GROUP

The audited consolidated financial statements of the Group for each of the financial years ended 31 December 2009, 2010 and 2011 included in the annual reports and accounts of the Company for each of the financial years ended 31 December 2009, 2010 and 2011, together with the audit reports thereon, respectively, and the unaudited half year results for the six months ended 30 June 2012, are incorporated by reference into this document.

The Group's unaudited Interim Period Results for the 12 month period ended 31 December 2012 published as at the date of this document, which have been subject to an interim review by Deloitte LLP, are reproduced in full below.

1. Introduction

The 12 months ended 31 December 2012 have proved to be a very difficult period for the Group. Contract execution issues in the first 6 months led to the announcement of a reorganisation of our two largest businesses in August, but further execution issues emerged in the second 6 month period, during the early stages of the reorganisation process, culminating in the very significant impact of the cost overruns on the 122 Leadenhall Street contract on the results for the year. This in turn led to the decision of the Chief Executive, Tom Haughey, to step down from his position. I have taken on the role of Executive Chairman on an interim basis until a new Chief Executive is found.

Contract Review

On assuming this executive role, I initiated a review by the Board (the ''Review'') which addressed 70 of the Group's contracts representing c. 90 per cent. of the Group's contracts by value, with a particular focus on the larger and more complex projects. The Review involved all key management responsible for the execution and performance of each contract. Detailed financial information on each contract was analysed, including revenue and cost position to date, forecasts to completion and the underlying progress of that contract. The inherent complexity and risk of each contract was also considered in determining the final financial outcome. Recently won contracts, at the initial stages of execution, have been subject to additional scrutiny, involving cross Group peer reviews.

The financial outcome of the Review resulted in a charge to the profit and loss account of £20.1 million in the 12 months ended 31 December 2012. A proportion of the related cash flows occurred within the 12 month period ended 31 December 2012, with a further £8 million of cash outflow anticipated in 2013.

122 Leadenhall Street Contract

The Review established that the technical challenges of the site works on this contract were significantly greater than originally estimated and will require longer timescales and greater resources to complete. In response to this finding, a comprehensive reassessment of the works required to complete has been undertaken, along with a detailed review of all other forecast costs still to be incurred. The result was to change an expected profit on the overall life of the contract into a loss, with the Group incurring an incremental charge to the profit and loss account of £9.9 million in the 12 month period ended 31 December 2012.

Other Contract Cost Positions

In relation to a further three contracts, actual and potential cost overruns were identified totalling £2.9 million. These cost overruns were charged to the profit and loss account in the 12 month period ended 31 December 2012.

Forecast Contract Value Positions

On a further five contracts the value that the Board expects to be realisable under the contracts was reassessed and reduced. These contracts, three of which remain ongoing, have all been subject to significant variations from the terms agreed at the commencement of the contract. While much of the value of these variations has already been recovered by the Group (and this recovery process is continuing), the Board took a prudent approach in reducing the final account expectations, resulting in a reduction in the

value realisable from these five contracts of £7.3 million. There was no cash impact on the Group as a result of this reduction in the balance sheet carrying value.

Remaining Contracts

The remaining 61 contracts were found to be performing in accordance with the Board's expectations with the Board satisfied that the financial out turn on these contracts had been appropriately estimated.

Actions Arising from the Review

The Review affirmed that the Group's core strengths remain the design, fabrication and erection of steel structures. Since August 2012, the Board had been taking steps to improve its contracting estimating procedures, the efficacy of which was borne out in the review of contracts recently entered into. The Review, however, identified a requirement for stronger contracting processes and discipline notably in execution and risk assessment, particularly in relation to its more complex contracts. The implementation of these improvements will be undertaken as expeditiously as possible.

The Review confirmed the rationale for the previously announced reorganisation and integration of its two largest businesses, Severfield-Rowen Structures and Watson Steel Structures, along with its erection business, Steelcraft. The integration of the merged businesses creates a less complex and more efficient management structure, under Severfield-Watson Structures Ltd, and became effective according to plan on 1 January 2013. Its implementation will continue throughout 2013.

On a positive note, while trading conditions remain difficult, the Group's order book has remained strong at £209 million and I have been encouraged by the continued support of our major customers. The order book contains a broad mix of London commercial offices, industrial, warehousing, waste to energy projects, transport including airports, health, education and leisure projects.

In India, our joint venture continues to build a solid foundation for future growth. A small profit was recorded in the second 6 month period, resulting in an overall positive contribution to the Group for the full 12 month period. The previously approved expansion of the Bellary site continues and is scheduled for completion by the summer of this year.

2. Financials

The Group's financial performance for the 12 months to 31 December 2012 reflects the impact of the contract execution issues, particularly on 122 Leadenhall Street, along with the other factors highlighted in the Review, as well as the impact of adverse contract final account settlements announced earlier in the year.

The underlying operating loss before results of Associates was £18.2 million (2011: £14.2 million profit) representing margins of 7.1 per cent. and 5.3 per cent., respectively. This reflects the difficult trading conditions during the year, the £9.9 million charge to the profit and loss account in respect of the 122 Leadenhall Street contract and the other adjustments relating to additional costs and reductions in contract value expectations totalling £10.2 million arising from the Review. In respect of the reduced expectations around certain contract values, the Board continues to pursue value on these contracts, but a prudent view has been taken reflecting progress made to date and the difficult prevailing trading environment.

The share of results of Associates of a profit of £0.2 million (2011: £2.5 million loss) represents a step change in the performance of the Indian joint venture in recording its first positive contribution to Group profit, as production was running at good operating levels for most of the year.

Underlying profit is before the amortisation of acquired intangible assets of £2.7 million (2011: £2.7 million), incremental contract legal costs of £1.1 million (2011: £0.6 million) and favourable movements in the valuation of derivatives of £0.1 million (2011: nil). The Group Operating Loss after share of results of Associates, including both underlying and non-underlying items is £21.7 million (2011: £8.3 million profit).

The underlying tax charge is a credit of £2.9 million, representing an effective tax rate of 14.7 per cent. on the underlying loss before tax for the period. The statutory tax charge is a credit of £3.9 million (2011: £1.0 million charge).

The statutory loss before tax which includes both underlying and non-underlying items is £23.3 million (2011: £6.8 million profit). The statutory loss after tax is £19.4 million (2011: £5.8 million profit) and has been withdrawn from reserves.

Underlying basic earnings per share is 18.67 pence (2011: 8.05 pence). This calculation is based on the underlying loss after tax of £16.7 million and 89,251,076 shares, being the weighted average number of shares in issue during the period. Basic earnings per share, based on the profit or loss after tax after non-underlying items, is 21.76 pence (2011: 6.52 pence).

There are no contingent shares outstanding under share-based payment schemes and accordingly there is no difference between basic and diluted earnings per share.

During the 12 months, capital expenditure amounted to £1.5 million (2011: £2.1 million). This included ongoing replacement of essential equipment as well as a production optimisation programme at one of the Group's fabrication plants.

There was a net cash inflow from operating activities of £10.2 million (2011: outflow of £9.0 million). This is driven by improvements in all areas of working capital but particularly receivables where significant underlying improvements were made over the 12 month period.

The Group has also separately announced today its intention to raise approximately £44.8 million (net of expenses) by way of a rights issue (the ''Rights Issue''), conditional on shareholder approval at a General Meeting of the Company being convened for 11.00 a.m. on 18 March 2013 and on an Underwriting Agreement becoming unconditional and not being terminated.

The Directors intend to use the net proceeds of the Rights Issue (being approximately £44.8 million) to reduce the Group's drawing under its existing £50 million credit facility (the ''Existing Facilities''). Any balance of the net proceeds of the Rights Issue will be used for general corporate purposes. This will result in the Group operating at a structurally lower level of indebtedness. Accordingly, the Directors believe that the Rights Issue will have both immediate and longer-term benefits for the Group.

The Group has also entered into an amendment and restatement of the Existing Facilities Agreement dated 27 February 2013 (the ''Revised Facilities'') with its lenders, as part of the overall refinancing of the business. The Revised Facilities Agreement will come into effect, among other conditions, upon the application of the net proceeds of the Rights Issue to reduce the outstanding borrowings under the Existing Facilities Agreement. The total revolving credit facility available under the Revised Facilities Agreement will be £35 million although only £20 million of the total commitments will be available for utilisation until 31 December 2013.

3. Dividend

As announced in our Interim Management Statement of 5 November 2012, no second interim dividend is being declared. The Board remains focussed on strengthening the balance sheet and conserving cash. In light of this and against the backdrop of a continuing challenging UK market, while there are no restrictions in the Revised Facilities Agreement, the Board will not be recommending the payment of a final dividend for the 15 month period ending 31 March 2013. However, the Board is committed to reinstating the payment of dividends. Depending, among other things, on improved financial performance in 2013, it intends to introduce a progressive dividend policy, having regard to the Group's underlying earnings, cash flows and capital investment plans, the requirement to maintain an appropriate level of dividend cover and the then prevailing market outlook.

4. UK

The UK market remains challenging but the Group continues to maintain a strong order book, which at 31 December 2012 was £209 million. As became very clear during the year, execution of some parts of the order book, particularly more complex projects, has been below expectations. While this has not impacted project delivery from a client perspective, it has significantly impacted the costs to the Group of executing such contracts. Additionally, the settlement of final accounts has become more challenging on a relatively small number of contracts. In response to these challenges, the Group announced in August the proposal to integrate its two largest businesses and its site erection company, into a single operating unit, Severfield-Watson Structures. This reorganisation is proceeding to plan and the new operating unit commenced trading as such on 1 January 2013. The underlying changes to the management structure, along with communications and process improvements, will contribute to improved execution of projects in future. Additionally, from the Review, further requirements for stronger contracting processes and discipline were also identified, notably in execution and risk assessment. These improvements will be undertaken as expeditiously as possible.

The Group's core strengths remain the design, fabrication and erection of steel structures, and the improvements being made to the business are being undertaken with the objective of ensuring that it makes an appropriate return from provision of these strengths and capabilities to our clients.

5. India

The 12 months to 31 December 2012 has seen an improvement across a number of areas for JSW Severfield Structures Ltd.

As expected, the company moved into overall profit resulting in a positive contribution to the Group's results for the first time.

Operational improvements and the increase of production levels were successful throughout the year. The approved expansion of the Bellary plant is on plan and is expected to start commissioning at the end of summer 2013. This, as well as continual improvement in operational efficiency and building the order book, are the key challenges for the business as its development continues.

Health and safety continues to be a key focus, both for management and all employees within the company, thus developing an environment which has achieved a best in class Accident Frequency Rate (''AFR''), comparable to UK levels.

The order book stands at £29 million, the most pleasing development of which is the company's first commercial office building in Mumbai for circa 5500 tonnes with a value of just over £6 million.

The company continues to build its quality reputation within the market, noted, for example, by the recent recognition by Proctor and Gamble at its site in Hyderabad for its fastest ever 'Dry Laundry Building' erected.

6. Operations

Group review

The main business of the Group is the design, fabrication and erection of structural steelwork for construction projects of varying types, including warehouses, commercial offices, industrial buildings and power stations.

UK

All of the Group's UK plants were fully loaded throughout 2012 and we continue to see prospective opportunities in 2013.

Although the Group had significant issues on a small number of contracts during the year, which impacted particularly its two largest businesses, Atlas Ward and Fisher Engineering both continued to perform well and contributed positively to the Group results. During the year, the Group was engaged in the supply of services to a large number of projects, including:

BMW Manufacturing Facility, Oxford
Asda Stores, Grangemouth and Rochdale
Jaguar Land Rover Industrial Buildings, Midlands
Heathrow Terminals
60 Holborn Commercial Office, London
Leeds Arena
Blackfriars Bridge, London
5 Broadgate Commercial Office, London
Shirley Town Centre redevelopment

India

JSSL has undertaken work in airports, power, commercial, industrial and retail sectors throughout India, including:

Siemens (DGen) CC Power Plant, Surat
JSW Cold Rolling Mill, Bellary
Air Traffic Control Tower, Mumbai International Airport
Proctor & Gamble Plant, Hyderabad
Prestige Trade Tower, Bangalore

7. Outlook

Trading conditions are difficult as previously stated. However, the order book remains as at 31 December 2012 remained £209 million, as announced on 23 January 2013, and the re-organisation of the Group's largest businesses into Severfield-Watson Structures Ltd is continuing in line with plan. More than half of the anticipated overhead savings of £2 million, previously announced on 5 November 2012, have now been realised and the programme will be largely complete by 30 June 2013.

The performance of the Indian joint venture for the 12 months ended 31 December 2012 was in line with the Board's expectations. The first phase of expansion of the Bellary site to lift output from 35,000 tonnes to 55,000 tonnes by the end of summer 2013 is continuing and the order book at 31 December 2012 stood at £29 million.

The Board believes that the proposed Rights Issue announced today in conjunction with the Revised Facilities Agreement should enable the Group to protect and enhance shareholder value and are expected to provide greater operational and financial flexibility in the future while demonstrating financial strength to customers, relative to the Group's principal competitors, in a continuing difficult market environment. In addition, the Board believes the Rights Issue will enable the Group to commit to continued investment in the growth of the Indian Joint Venture over the next two to three years.

While the Group's performance was extremely disappointing in 2012, the Directors believe that this is a good business which remains well supported by its customers. With the reorganisation changes already underway and the further improvements identified as part of the recent Review, the Board believes that the Group can return operating margins to between 5 per cent. and 6 per cent. over time and is confident that the longer term fundamentals of the Group remain strong.

John Dodds Executive Chairman 28 February 2013

Condensed Consolidated Income Statement

	Tw elv 31 De	ont hs e m ber cem (un dit ed au	ded en 20 12 )	Six ont hs ded m en 31 De ber 20 12 31 cem (un dit ed ) au			Yea nd ed r e De ber 20 11 cem (au dit ed )		Six ont hs m en 31 De ber cem (un dit ed ) au		ded 20 11
	Be for e Oth er Ite ms	Ot her (1) Ite ms	Tot al	Be for e Ot her Ite ms	Ot her (1) Ite ms	Tot al	Be for e Ot her Ite ms	Ot her (1) Ite ms	Tot al	Be for e Ot her Ite ms	Ot her (1) Ite ms	Tot al
	£0 00	£0 00	£0 00	£0 00	£0 00	£0 00	£0 00	£0 00	£0 00	£0 00	£0 00	£0 00
Re ve nu e	2 5 6, 5 9 4	—	2 5 6, 5 9 4	1 2 0, 6 5 3	—	1 2 0, 6 5 3	2 6 7, 7 7 8	—	2 6 7, 7 7 8	1 4 5, 7 3 7	—	1 4 5, 7 3 7
Co t o f s les s a	( 2 6 8, 8 0 7	) ( 1, 0 8 9 )	( 2 6 9, 8 9 6 )	( 1 3 7, 8 3 1	) ( 1, 0 8 9	) ( 1 3 8, 9 2 0 )	( 2 4 6, 8 8 9 )	( 5 9 0	) ( 2 4 7, 4 7 9	) ( 1 3 2, 7 9 5 )	( 5 9 0	) ( 1 3 3, 3 8 5 )
Gro ( los ) /p f it ss s ro	( 1 2, 2 1 3	) ( 1, 0 8 9 )	( 1 3, 3 0 2 )	( 1 7, 1 7 8	) ( 1, 0 8 9 )	( 1 8, 2 6 7 )	2 0, 8 8 9	( 5 9 0 )	2 0, 2 9 9	1 2, 9 4 2	( 5 9 0 )	1 2, 3 5 2
O he ing inc t t r o p era om e . . . . . . . . . . . . . . . . . . . . . .	7 6 2	—	7 6 2	4 3 4	—	4 3 4	5 0 8	—	5 0 8	3 4 4	—	3 4 4
is i ion D tr bu t ts co s	( 2, 8 3 ) 5	—	( 2, 8 3 ) 5	( 1, 6 1 ) 5	—	( 1, 6 1 ) 5	( 2, 6 ) 7 5	—	( 2, 6 ) 7 5	( 1, 8 ) 7 7	—	( 1, 8 ) 7 7
A dm in is ive tra t ex p en ses	( 4, 1 7 5	) ( 2, 7 4 8 )	( 6, 9 2 3 )	( 2, 2 8 6	) ( 1, 3 7 4 )	( 3, 6 6 0 )	( 4, 4 4 8 )	( 2, 7 4 9 )	( 7, 1 9 7 )	( 2, 9 6 9 )	( 1, 3 7 5 )	( 4, 3 4 4 )
Mo in he lua ion f de iva ive f ina ia l nts t t t ve me va o r nc ins tru nts me . . . . . . . . . . . . . . . . . . . . . . . . . . . .	—	1 0 4	1 0 4	—	—	—	—	4	4	—	( 1 4 )	( 1 4 )
Op t ing ( los ) /p f it be for ha f r lts f a ia tes era s ro e s re o esu o sso c S ha f r lts f As ia tes re o esu o soc . . . . . . . . . . . . . . . . . .	( 1 8, 2 0 9 2 3 2	) ( 3, 7 3 3 ) —	( 2 1, 9 4 2 ) 2 3 2	( 2 0, 6 4 5 3 5 4	) ( 2, 4 6 3 ) —	( 2 3, 1 0 8 ) 3 5 4	1 4, 1 9 3 ( 2, 5 2 2 )	( 3, 3 3 5 ) —	1 0, 8 5 8 ( 2, 5 2 2 )	8, 5 3 9 ( 8 9 0 )	( 1, 9 7 9 ) —	6, 5 6 0 ( 8 9 0 )
Op ing ( los ) /p f it a fte ha f r lts f As ia t tes era s ro r s re o esu o soc . .	( 1 7, 9 7 7	) ( 3, 7 3 3 )	( 2 1, 7 1 0 )	( 2 0, 2 9 1	) ( 2, 4 6 3 )	( 2 2, 7 5 4 )	1 1, 6 7 1	( 3, 3 3 5 )	8, 3 3 6	7, 6 4 9	( 1, 9 7 9 )	5, 6 7 0
inc / (c ) . Inv tm t ha es en om e rg e . . . . . . . . . . . . . . . . . . F ina ha nc e c rg es	1 0 ( 1, 5 9 6 )	— —	1 0 ( 1, 5 9 6 )	5 ( 7 9 9 )	— —	5 ( 7 9 9 )	2 7 ( 1, 5 8 1 )	— —	2 7 ( 1, 5 8 1 )	( 1 ) 5 ( 9 2 5 )	— —	( 1 ) 5 ( 9 2 5 )
( Lo ) /p f it be for tax ss ro e	( 1 9, 5 6 3	) ( 3, 7 3 3 )	( 2 3, 2 9 6 )	( 2 1, 0 8 5	) ( 2, 4 6 3 )	( 2 3, 5 4 8 )	1 0, 1 1 7	( 3, 3 3 5 )	6, 7 8 2	6, 7 0 9	( 1, 9 7 9 )	4, 7 3 0
Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2, 9 0 1	9 7 0	3, 8 7 1	3, 3 2 6	6 4 0	3, 9 6 6	( 2, 9 2 9 )	1, 9 6 9	( 9 6 0 )	( 1, 5 6 8 )	1, 6 0 3	3 5
( Lo ) /p f it for he io d t ss ro p er	( 1 6, 6 6 2	) ( 2, 7 6 3 )	( 1 9, 4 2 5 )	( 1 7, 7 5 9	) ( 1, 8 2 3 )	( 1 9, 5 8 2 )	7, 1 8 8	( 1, 3 6 6 )	5, 8 2 2	5, 1 4 1	( 3 7 6 )	4, 7 6 5
Ea ing ha rn s p er s re:
Ba ic s . . D i lu d te	( 1 8. 6 7p ( 1 8. 6 7p	) ( 3. 1 0p ) ) ( 3. 1 0p )	( 2 1. 7 6p ) ( 2 1. 7 6p )	( 1 9. 9 0p ( 1 9. 9 0p	) ( 2. 0 4p ) ) ( 2. 0 4p )	( 2 1. 9 4p ) ( 2 1. 9 4p )	8. 0 5p 8. 0 5p	( 1. 5 3p ) ( 1. 5 3p )	6. 5 2p 6. 5 2p	5. 7 6p 5. 7 6p	( 0. 4 2p ) ( 0. 4 2p )	5. 3 4p 5. 3 4p

(1) Other items relate to the amortisation of acquired intangibles, charges in respect of contract legal costs and movements in the valuation of derivative financial instruments and the associated tax effect of these items

Condensed Consolidated Statement of Comprehensive Income

	Twelve months ended 31 December 2012	Six months ended 31 December 2012	Year ended 31 December 2011	Six months ended 31 December 2011
	(unaudited) £000	(unaudited) £000	(audited) £000	(unaudited) £000
Actuarial loss on defined benefit pension scheme Tax relating to components of other comprehensive	(2,441)	(2,441)	(1,369)	(1,369)
income	635	635	172	172
Other comprehensive income for the period (Loss)/profit for the period from continuing	(1,806)	(1,806)	(1,197)	(1,197)
operations	(19,425)	(19,582)	5,822	4,765
Total comprehensive income for the period attributable to equity shareholders	(21,231)	(21,388)	4,625	3,568

Condensed Consolidated Statement of Changes in Equity

	Share Capital	Share Premium	Other Reserves	Retained Earnings	Total Equity
	£000	£000	£000	£000	£000
At 1 January 2012	2,231	46,152	469	83,446	132,298
Loss for the period (attributable to equity holders of
the parent)	—	—	—	(19,425)	(19,425)
Dividends paid	—	—	—	(4,459)	(4,459)
Equity settled share based payments	—	—	17	—	17
Actuarial loss on defined benefit pension scheme Deferred income taxes on defined benefit pension	—	—	—	(2,441)	(2,441)
scheme	—	—	—	635	635
At 31 December 2012 (unaudited)	2,231	46,152	486	57,756	106,625

	Share Capital	Share Premium	Other Reserves	Retained Earnings	Total Equity
	£000	£000	£000	£000	£000
At 1 January 2011	2,231	46,152	169	82,391	130,943
Profit for the period (attributable to equity holders of
the parent)	—	—	—	5,822	5,822
Dividends paid	—	—	—	(3,570)	(3,570)
Share based payments .	—	—	300	—	300
Actuarial loss on defined benefit pension scheme Deferred income taxes on defined pension benefit	—	—	—	(1,369)	(1,369)
scheme	—	—	—	172	172

Condensed Consolidated Balance Sheet

	At 31 December 2012	At 31 December 2011
	(unaudited)	(audited)
ASSETS	£000	£000
Non-current assets
Goodwill	54,712	54,712
Other intangible assets	15,726	18,227
Property, plant and equipment	76,237	79,594
Investment property	3,920	3,960
Interests in Associates	3,146	447
Deferred tax asset	1,840	—
	155,581	156,940
Current assets
Inventories	7,110	9,085
Trade and other receivables	61,217	89,161
Cash and cash equivalents	1,434	2,264
	69,761	100,510
Total assets	225,342	257,450
LIABILITIES
Current liabilities
Trade and other payables	(66,309)	(66,322)
Financial liabilities — borrowings	(30,697)	(33,159)
Financial liabilities — finance leases	(168)	(101)
Financial liabilities — derivative financial instruments	—	(104)
Tax liabilities .	160	(3,883)
	(97,014)	(103,569)
Non-current liabilities
Retirement benefit obligations	(11,568)	(9,552)
Financial liabilities — finance leases	(280)	(254)
Deferred tax liabilities Provisions	(9,855) —	(11,177) (600)

	(21,703)	(21,583)
Total liabilities	(118,717)	(125,152)
NET ASSETS	106,625	132,298
EQUITY
Share capital	2,231	2,231
Share premium	46,152	46,152
Other reserves	486	469
Retained earnings	57,756	83,446
TOTAL EQUITY	106,625	132,298

Condensed Consolidated Cash Flow Statement

	Twelve months ended 31 December 2012	Year ended 31 December 2011
	(unaudited) £000	(audited) £000
Net cash from operating activities	10,169	(8,968)
Investing activities
Interest received .	5	28
Proceeds on disposal of property, plant and equipment	1,308	624
Purchases of property, plant and equipment	(1,444)	(1,658)
Purchases of intangible fixed assets	(62)	(481)
Purchases of shares of Associates	(2,466)	(113)
Net cash (used in) investing activities	(2,659)	(1,600)
Financing activities
Interest paid	(1,350)	(2,072)
Dividends paid	(4,459)	(3,570)
Repayment of obligations under finance leases	(183)	(102)
Borrowings taken out	—	14,530
Borrowings repaid	(2,623)	—
Finance leases taken out	275	457
Net cash (used in)/from financing activities	(8,340)	9,243
Net (decrease) in cash and cash equivalents	(830)	(1,325)
Cash and cash equivalents at beginning of period	2,264	3,589
Cash and cash equivalents at end of period	1,434	2,264

Notes to the Condensed Consolidated Financial Statements

1. General information

The information for the year ended 31 December 2011 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006, but is derived from the statutory accounts for that financial year. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by the way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The interim results for the six month period to 30 June 2011 were neither audited nor reviewed. The interim results to 30 June 2012 and to 31 December 2012 have been subject to an Interim Review by the Company's Auditor.

2. Basis of preparation

The condensed interim financial information has been prepared in accordance with IAS 34 ''Interim Financial Reporting'' as adopted for use in the European Union and in accordance with the accounting policies included in the Company's Annual Report for the year ended 31 December 2011 which have been applied consistently throughout the current and preceding period.

Adoption of new and revised accounting standards

In 2011, a number of new standards and interpretations became effective as noted in the 2011 Annual Report and Accounts (page 68). The adoption of these standards and interpretations has not had a material impact on the condensed interim financial statements of the Group. Since the Annual Report and Accounts was published no significant new standards and interpretations have been issued, or become effective.

3. Going concern

In determining whether the Group's 2012 Interim Financial statements can be prepared on a going concern basis, the Directors considered all factors likely to affect its future development, performance and its financial position, including cash flows, liquidity position and borrowings facilities and the risks and uncertainties relating to its business activities in the current economic climate. The key risks and uncertainties are set forth in further detail in notice 4 below.

The Directors have reviewed the trading and cash flow forecasts as part of their going concern assessment, including downside sensitivities, which take into account the uncertainties in the current operating environment.

In forming their conclusion over the adoption of the going concern basis, the Directors have considered the possibility of the relevant resolutions at the forthcoming General Meeting, relating to the proposed equity fundraising, not being approved and on the basis of the available evidence have considered this possibility to be remote.

Having considered all the factors above impacting the Group's business, including downside sensitivities, the Directors are satisfied that the Group will be able to operate within the terms and conditions of the Group's financing facilities for the foreseeable future.

The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, a period of time not less than 12 months from the date of this report. For this reason the going concern basis has been adopted in preparing this Interim Report.

4. Risks and uncertainties

The principal risks and uncertainties which could have a material impact upon the Group's performance over the remaining three months of the 15 month period to 31 March 2013 have not changed significantly from those noted or referenced on pages 36-37 of the Directors' Report and pages 24-26 of the Financial Review included in the Annual Report 2011. These risks and uncertainties include, but are not limited to:

The commercial and market environment within which the Group operates
Possible steel price movements
Reliance on key skills and personnel within our workforce

4. Risks and uncertainties (Continued)

Health and safety
Credit, liquidity interest rate and foreign exchange risks

The Directors draw attention to the risk relating to the commercial and market environment within which the Group operates. As set out in the Annual Report 2011, weak demand is resulting in increased competition, tighter margins and the transfer of commercial, technical and financial risk down the supply chain, through more demanding contract terms and longer payment cycles. During the second half of 2012, the Board announced a reorganisation of parts of the business to improve its performance in the difficult prevailing trading conditions, particularly around engagement and execution. Additionally, following the significant cost overruns identified on the 122 Leadenhall Street contract and the subsequent Board Contract Review process, a further requirement was identified for stronger contracting processes and discipline notably in execution and risk assessment, particularly in relation to its more complex contracts. The implementation of these improvements will be undertaken as expeditiously as possible.

5. Segmental analysis

Revenue, profit before tax, and net assets all relate to the design, fabrication, and erection of structural steelwork and related activities. All of the Group's subsidiary businesses have similar products and services, production processes, types of customer, methods of distribution, regulatory environments, and economic characteristics.

Revenue, which relates wholly to construction contracts and related assets in both years originated from the United Kingdom.

There has been no change in the basis of segmentation or in the basis of measurement of segment profit or loss in the period.

6. Seasonality

There are no particular seasonal variations which impact the split of turnover over the course of the calendar year including the first three months which will form part of the 15 month period to 31 March 2013. Underlying movements in contract timing and phasing, which are an on-going feature of the business, will continue to drive moderate fluctuations in half yearly revenues.

7. Taxation

The income tax expense reflects the estimated effective rate on profit before taxation for the Group for the 15 month period ended 31 March 2013.

8. Dividends payable to equity shareholders

Twelve months ended 31 December 2012	Six months ended 31 December 2012	Year ended 31 December 2011	Six months ended 31 December 2011
£000	£000	£000	£000
4,459	1,335	3,570	1,339

9. Earnings per share

Earnings per share is calculated as follows:

	Twelve months ended 31 December 2012	Six months ended 31 December 2012	Year ended 31 December 2011	Six months ended 31 December 2011
	£000	£000	£000	£000
Earnings for the purposes of basic earnings per share being net profit attributable to equity holders of the parent company	(19,425)	(19,582)	5,822	4,765
Earnings for the purposes of underlying basic earnings per share being underlying net profit attributable to equity holders of the parent
company	(16,662)	(17,759)	7,188	5,141
Number of shares	Number	Number	Number	Number
Weighted average number of ordinary shares for the purposes of basic earnings per share . Effect of dilutive potential ordinary shares and under share plans	89,251,076 —	89,251,076 —	89,251,076 —	89,251,076 —
Weighted average number of ordinary shares for the purposes of diluted earnings per share	89,251,076	89,251,076	89,251,076	89,251,076

Basic earnings per share Underlying basic earnings per share	(21.76p) (18.67p)	(21.94p) (19.90p)	6.52p 8.05p	5.34p 5.76p
Diluted earnings per share	(21.76p)	(21.94p)	6.52p	5.34p
Underlying diluted earnings per share	(18.67p)	(19.90p)	8.05p	5.76p

10. Property, plant and equipment

During the period fixed asset additions totalled £1,505,000. The Group also disposed of certain fixed assets with carrying amounts of £796,000 for proceeds of £1,308,000.

11. Net debt

The Group's net debt is as follows:

	Twelve months ended 31 December 2012	Year ended 31 December 2011
	£000	£000
Cash and cash equivalents	1,434	2,264
Financial liabilities — borrowings	(30,697)	(33,159)
Financial liabilities — finance leases	(448)	(355)
Net debt	(29,711)	(31,250)

12. Reconciliation of Group profit from operations to cash generated from operations

	Twelve months ended 31 December 2012 unaudited	Year ended 31 December 2011
	£000	£000
Operating (loss)/profit for the period Adjustments for:	(21,710)	8,336
Provision releases and charges	(600)
Share of results of Associates	(232)	2,522
Depreciation of property, plant and equipment	4,057	4,504
Amortisation of intangible assets	2,783	2,749
Gain on disposal of property, plant and equipment	(512)	(20)
Share based payment expense	17	300
Movements in pension scheme	(425)	(349)
Unrealised gains on derivative financial instruments	(104)	(4)
Operating cash flows before movement in working capital Movements in working capital	(16,726)	18,038
(Increase)/decrease in inventories	1,975	3,548
(Increase)/decrease in receivables	27,715	(17,301)
Increase/(decrease) in payables .	(97)	(9,592)
Cash generated from operations	12,867	(5,307)
Tax paid	(2,698)	(3,661)
Net cash from operating activities	10,169	(8,968)

Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term highly liquid investments with a maturity of three months or less.

13. Related party transactions

Certain Related Party Transactions, as described in Note 31 on page 97 of the 2011 Annual Report, continued in the current period. In addition, during the period the Group provided services in the ordinary course of business to JSW Severfield Structures Limited. None of these transactions materially affected the financial position or performance of the Group during the period.

14. Cautionary statement

The Interim Management Report (''IMR'') has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose.

The IMR contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this report but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

15. Responsibility statement

We confirm that to the best of our knowledge:

(a) the condensed set of financial statements has been prepared in accordance with IAS 34 ''Interim Financial Reporting'';

Notes to the Condensed Consolidated Financial Statements (Continued)

15. Responsibility statement (Continued)

(b) the Interim Management Report includes a fair review of the information required by DTR4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
(c) the Interim Management Report includes a fair review of the information required by DTR 4.2.8R (disclosure of the related party transactions and changes therein).

By order of the Board

John Dodds	Alan Dunsmore
Director	Director
28 February 2013	28 February 2013

Independent review report to Severfield-Rowen Plc

We have been engaged by the Company to review the condensed set of financial statements in the 2012 second interim financial report for the period ended 31 December 2012 which comprises the Condensed Consolidated Income Statement, the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Balance Sheet, the Condensed Consolidated Statement of Changes in Equity, the Condensed Consolidated Cash Flow Statement and related notes 1 to 15. We have read the other information contained in the 2012 second interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity'' issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The 2012 second interim financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the 2012 second interim financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this 2012 second interim financial report has been prepared in accordance with International Accounting Standard 34, ''Interim Financial Reporting,'' as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the 2012 second interim financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity'' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the 2012 second interim financial report for the period ended 31 December 2012 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Deloitte LLP

Chartered Accountants and Statutory Auditor Leeds, UK 28 February 2013

PART VIII

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE GROUP

Set out below is an unaudited consolidated pro forma statement of net assets of the Group which has been prepared to demonstrate the effect of the Rights Issue as if it had occurred on 31 December 2012. The statement has been prepared for illustrative purposes only and because of its nature, it addresses a hypothetical situation, and therefore does not represent the Group's actual financial position or results. The pro forma statement of net assets has been prepared on the basis set out in the notes below and in accordance with the requirements of item 20.2 of Annex I and items 1 to 6 of Annex II to the Prospective Directive.

	Severfield-Rowen as at		Adjustments		Pro forma
	31 December 2012(1)	(2)	(3)	(4)	for the Group
		(Unaudited) £000	(Unaudited) £000	(Unaudited) £000	(Unaudited) £000
Non-current assets
Goodwill Other intangible assets Property, plant and equipment Investment property Interests in Associates Deferred tax asset	54,712 15,726 76,237 3,920 3,146 1,840				54,712 15,726 76,237 3,920 3,146 1,840
	155,581	—	—	—	155,581
Current assets
Inventories	7,110				7,110
Trade and other receivables Cash and cash equivalents	61,217 1,434	44,798	(30,697)	(950)	61,217 14,585
	69,761	44,798	(30,697)	(950)	82,912
Total assets	225,342	44,798	(30,697)	(950)	238,493
Current liabilities
Trade and other payables	(66,309)				(66,309)
Financial liabilities — borrowings Financial liabilities — finance leases	(30,697) (168)		30,697		— (168)
Financial liabilities — derivatives	—		—		—
Tax liabilities	160				160
	(97,014)	—	30,697	—	(66,317)
Non-current liabilities Pension obligations Deferred tax liabilities Financial liabilities — finance leases	(11,568) (9,855) (280)				(11,568) (9,855) (280)
Provisions	—				—
Total liabilities	(21,703) (118,717)	— —	— 30,697	— —	(21,703) (88,020)
NET ASSETS	106,625	44,798	—	(950)	150,473

Notes:

(1) The financial information for Severfield-Rowen has been extracted without material adjustment from the unaudited consolidated balance sheet of Severfield-Rowen as at 31 December 2012 as included in the Unaudited Interim Results for the 12 months ended 31 December 2012 which have been prepared in a manner consistent with the accounting policies adopted by the Company in the audited results for the year ended 31 December 2011.

(2) The Rights Issue is expected to raise net proceeds of approximately £44.8 million, after deducting estimated total costs and expenses in relation to the Rights Issue of £3.1 million.

(3) The net proceeds of the Rights Issue are to be used to reduce the Group's financial indebtedness, with any balance of the net proceeds to be used for general corporate purposes. The unaudited consolidated pro forma statement of net assets of the Group has been prepared to demonstrate the effects of the Rights Issue as if it had occurred on 31 December 2012. As at 14 February 2013 (being the latest practicable date prior to the publication of this document for this purpose), the Group had net financial indebtedness of £44.0 million, of which £44.2 million was outstanding borrowings under its Existing Facilities.

(4) The total fees payable by the Group to its lenders and various advisors in connection with the Revised Facilities is estimated at £950,000.

(5) Save for the adjustments described in notes (2) to (4) above, no adjustment has been made to reflect any trading or other transactions undertaken by the Group since 31 December 2012.

(6) The unaudited pro forma statement of net assets has been prepared in a manner consistent with the accounting policies adopted by the Company in the Unaudited Interim Results for the 12 months ended 31 December 2012 and the audited results for the year ended 31 December 2011.

Deloitte LLP 1 City Square Leeds LS1 2AL

The Board of Directors on behalf of Severfield-Rowen Plc Dalton Airfield Industrial Estate Dalton Thirsk North Yorkshire YO7 3JN United Kingdom

Jefferies International Limited Vintners Place 68 Upper Thames Street London EC4V 3BJ

28 February 2013

Dear Sirs,

Severfield-Rowen Plc (the ''Company'')

We report on the pro forma financial information (the ''Pro forma financial information'') set out in Part VIII of the combined prospectus and circular dated 28 February 2013 (the ''Prospectus''), which has been prepared on the basis described in notes 1 to 6, for illustrative purposes only, to provide information about how the proposed Rights Issue (the ''Transaction'') might have affected the financial information presented on the basis of the accounting policies adopted by the Company in preparing the financial statements for the period ended 31 December 2012. This report is required by Annex I item 20.2 of Commission Regulation (EC) No 809/2004 (the ''Prospectus Directive Regulation'') and is given for the purpose of complying with that requirement and for no other purpose.

Responsibilities

It is the responsibility of the directors of the Company (the ''Directors'') to prepare the Pro forma financial information in accordance with Annex I item 20.2 and Annex II items 1 to 6 of the Prospectus Directive Regulation.

It is our responsibility to form an opinion, in accordance with Annex I item 20.2 of the Prospectus Directive Regulation, as to the proper compilation of the Pro forma financial information and to report that opinion to you in accordance with Annex II item 7 of the Prospectus Directive Regulation.

Save for any responsibility arising under Prospectus Rule 5.5.3R (2)(f) to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with Annex I item 23.1 of the Prospectus Directive Regulation, consenting to its inclusion in the Prospectus.

In providing this opinion we are not updating or refreshing any reports or opinions previously made by us on any financial information used in the compilation of the Pro forma financial information, nor do we accept responsibility for such reports or opinions beyond that owed to those to whom those reports or opinions were addressed by us at the dates of their issue.

Basis of Opinion

We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. The work that we performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Pro forma financial information with the Directors. We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Pro forma financial information has been properly compiled on the basis stated and that such basis is consistent with the accounting policies of the Company.

Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in jurisdictions outside the United Kingdom, including the United States of America, and accordingly should not be relied upon as if it had been carried out in accordance with those standards or practices.

Opinion

In our opinion:

(a) the Pro forma financial information has been properly compiled on the basis stated; and
(b) such basis is consistent with the accounting policies of the Company.

Declaration

For the purposes of Prospectus Rule 5.5.3R(2)(f) we are responsible for this report as part of the Prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Prospectus in compliance with Annex I item 1.2 of the Prospectus Directive Regulation.

Yours faithfully

Deloitte LLP Chartered Accountants

Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street Square, London EC4A 3BZ, United Kingdom. Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (''DTTL''), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

Member of Deloitte Touche Tohmatsu Limited

PART IX

ADDITIONAL INFORMATION

1. Responsibility

The Company and its Directors (whose names appear in paragraph 7 of this Part IX) accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Company and the Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.

2. Incorporation and registered office

2.1 The Company was incorporated and registered in England and Wales on 6 May 1983 with registered number 01721262 under the Companies Act 1948 as a private company limited by shares with the name Severfield-Rowen Reeve Structural Engineers Limited. The Company re-registered as a public company limited by shares with the name Severfield-Reeve Plc on 16 June 1988 and changed its name to Severfield-Rowen Plc on 1 June 1999. The principal legislation under which the Company operates, and under which its securities have been created, is the Companies Act (and regulations made thereunder). The Company is domiciled in the UK.
2.2 The registered office and principal place of business of the Company is Dalton Airfield Industrial Estate, Dalton, Thirsk, North Yorkshire YO7 3JN (telephone number +44 (0) 1845 577 896).

3. Share capital

3.1 The issued share capital of the Company comprises 89,251,076 Existing Ordinary Shares in an aggregate nominal amount of £2.2 million.
3.2 The Company does not hold any Shares as treasury shares.
3.3 The issued and fully paid share capital of the Company (i) as at 27 February 2013, being the latest practicable date prior to the date of publication of this document; and (ii) as it is expected to be following completion of the proposed Rights Issue (ignoring any Ordinary Shares which may be issued on the exercise of entitlements under the Share Schemes and the effect of not allotting fractional entitlements to New Ordinary Shares under the Rights Issue) is as follows:

Existing Ordinary Share capital as at 27 February 2013

		Nominal
	Number	Amount (£)
Ordinary Shares	89,251,076	2,231,276.90

Expected Ordinary Share capital immediately following completion of the Rights Issue

		Nominal
	Number	Amount (£)
Ordinary Shares	297,503,587	7,437,589.675

3.4 The Company currently has one class of share capital, being Ordinary Shares with a nominal value of 2.5 pence each. Subject to passing of the Resolution at the General Meeting and Admission, up to 208,252,511 New Ordinary Shares could be issued at a price of 23 pence per New Ordinary Share pursuant to the Rights Issue. This would result in the issued Ordinary Share capital of the Company increasing by approximately 233 per cent. If a Qualifying Shareholder does not take up in full the offer of New Ordinary Shares under the Rights Issue, such Qualifying Shareholder will suffer an immediate dilution, as a result of the Rights Issue, of up to 70 per cent. in the proportion of the issued share capital of the Company which they hold. Qualifying Shareholders who take up their rights in full will suffer no dilution in their interests in the Company.
3.5 (i) Pursuant to an ordinary resolution of the Company passed at the annual general meeting of the Company on 13 June 2012 the Directors are generally and unconditionally authorised for the purposes of section 551 of the Companies Act 2006, to exercise all of the powers of the Company

to allot shares and grant rights to subscribe for, or convert any security into, shares in the Company: (i) up to an aggregate nominal amount (within the meaning of sections 551(3) and (6) of the Companies Act) of £743,015 (such amount to be reduced by the nominal amount allotted or granted under (ii) in excess of such sum); and (ii) comprising equity securities (as defined in section 560 of the Companies Act) up to an aggregate nominal amount (within the meaning of section 551(3) and (6) of the Companies Act) of £1,486,030 (such amount to be reduced by the allotments or grants made under (i)) in connection with or pursuant to an offer or invitation by way of a rights issue.

(ii) Such authorities expire at the conclusion of the annual general meeting of the Company in 2013 or on 30 September 2013 whichever is the earlier, save that the Company may before such expiry make any offer or agreement which would or might require shares to be allotted or rights to be granted, after such expiry and the Directors may allot shares, or grant rights to subscribe for or to convert any security into shares, in pursuance of any such offer or agreement as if the authorities conferred by this Resolution had not expired.
3.6 Pursuant to a special resolution of the Company passed at the annual general meeting of the Company on 13 June 2012 the Directors are empowered pursuant to sections 570(1) and 573 of the Companies 2006 to: (i) allot equity securities of the Company (as defined in section 560 of the Companies Act) for cash pursuant to the authority conferred by the resolution detailed in paragraph 3.5 above; and (ii) sell ordinary shares (as defined in section 560(1) of the Companies Act) held by the Company as treasury shares for cash, as if section 561 of the Companies Act did not apply to such allotment or sale.

Such power is limited to the allotment of equity securities and sale of treasury shares for cash:

(a) in connection with or pursuant to an offer of or invitation to acquire equity securities (but in the case of the authority granted under the resolution described at paragraph 3.5(ii) above, by way of a rights issue only) in favour of holders of ordinary shares in proportion (as nearly as practicable) to the respective number of ordinary shares held by them on the record date for such allotment (and holders of any other class of equity securities entitled to participate therein or if the Directors consider it necessary, as permitted by the rights of those securities) but subject to such exclusions or other arrangements as the Directors may consider necessary or expedient to deal with fractional entitlements, record dates or legal or practical difficulties which may arise under the laws of any territory or the regulations or requirements of any regulatory authority or any stock exchange in any territory or any other matter whatsoever; and
(b) in the case of the authorisation granted under the resolution described at 3.5(i) above (or in the case of any sale of treasury shares) and otherwise than pursuant to sub-paragraph 3.6(a) above, up to an aggregate nominal amount of £111,564,

such powers expire on the conclusion of the annual general meeting of the Company in 2013, or on 30 September 2013, whichever is the earlier, save that the Company may before such expiry make any offer or agreement that would or might require equity securities to be allotted, or treasury shares to be sold, after such expiry, and the Directors may allot equity securities or sell treasury shares in pursuance of any such offer or agreement as if the power conferred by this Resolution had not expired.

4. Summary of Articles of Association

The Articles of Association adopted pursuant to a special resolution passed at a general meeting of the Company held on 3 June 2010 contain provisions to the following effect:

(a) Subject to any rights or restrictions as to voting for the time being attached to any shares in the Company, on a show of hands every member present in person or by duly appointed proxy at an extraordinary general meeting and entitled to vote shall have one vote and on a poll every member present in person or by proxy and entitled to vote has one vote for every share held by him. In the case of joint holders, the person whose name stands first in the register of members who votes in person or by proxy is entitled to vote to the exclusion of all other joint holders.
(b) No holder of a share shall, unless the Board otherwise determines, be entitled to be present or vote at an extraordinary general meeting either personally or by proxy if any call or other sum presently payable by him to the Company in respect of that share remains unpaid; or if he or any other person who appears to be interested in the share has been duly served pursuant to the Companies Act with a

disclosure notice (see paragraphs entitled ''Disclosure of interests in shares and restrictions for failure to provide information'' below).

(c) A member in respect of whom an order has been made by any competent court or official in matters concerning mental disorder may vote, whether on a show of hands or on a poll, by any person authorised to do so on his behalf by that court or official as long as evidence satisfactory to the Board of that person's authority is provided in accordance with the Articles.

Dividends

Subject to the statutes, the Company in extraordinary general meeting may declare dividends and interim dividends can be paid by the Board. No dividend declared in an extraordinary general meeting shall be payable in excess of the amount recommended by the Board. Unless otherwise resolved, all dividends are apportioned and paid proportionally to the amounts paid up on the shares during any portion or portions of the period in respect of which the dividend is paid. A dividend may, upon the recommendation of the Board and on being approved at an extraordinary general meeting be wholly or partly satisfied by the distribution of assets and, in particular, of paid up shares or debentures of any other company. No dividend shall bear interest against the Company unless otherwise provided by the rights attached to the share. Any dividend or other sums payable or unclaimed for one year after having been declared may be invested or otherwise made use of by the Board for the benefit of the Company until claimed. Any dividend or other sums unclaimed for a period of 12 years from the date of such dividend becoming payable, shall be forfeited and shall revert to the Company.

The Board may, if authorised by ordinary resolution, offer Shareholders, in respect of any dividend, the right to elect to receive shares by way of scrip dividend instead of cash.

Return of capital

On a winding-up of the Company, the liquidator may, if authorised by special resolution and any other sanction required by law, divide among the members the whole or any part of the assets of the Company. For such purpose, the liquidator may set the value and may determine on the basis of that valuation and in accordance with the then existing rights of members how the division is to be carried out between members or classes of members. The liquidator may not, however, distribute to a member without his consent an asset to which there is attached a liability or potential liability for the owner.

Redeemable shares

Subject to the statutes and to the rights attached to existing shares, shares may be issued that are to be redeemed or that are liable to be redeemed at the option of the Company or of the holder. Any such redemption may be on such terms and in such manner as the Board may determine, provided that this is done before the shares are allotted.

Transfer of shares

Shares may be transferred, if in certificated form, by an instrument of transfer in writing in any usual form, or in such other form as the Board may approve or, if held in uncertificated form in accordance with and subject to the CREST Regulations or otherwise in such manner as the Board in its absolute discretion shall determine. An instrument of transfer of any certificated share must be signed by or on behalf of the transferor and (in the case of a partly paid share) the transferee. Subject to the Statutes, the Board may refuse to register any transfer of a share:

(a) that is not fully paid up without giving any reason for so doing (except that such discretion may not be exercised so as to prevent dealings in shares of that class from taking place on an open and proper basis);
(b) if it is in certificated form, unless it is left at the registered office of the Company, or such other place as determined by the Board, and is accompanied by the certificate(s) for the shares to which it relates and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer;
(c) if it is in certificated form, if the transfer is not in respect of one class of share only; or
(d) if the transfer is not in favour of four or fewer transferees.

Alteration of share capital

(a) The Company may by ordinary resolution, subject to the Companies Act:
(i) consolidate and divide all or any of its share capital into shares of a larger nominal amount than its existing shares; and
(ii) sub-divide its shares, or any of them, into shares of a smaller nominal amount and the resolution may determine that, as between the shares resulting from the sub-division, provided that in the sub-division, consolidation or division, the proportion between the amount paid and the amount, if any, unpaid on each resulting share shall be the same as it was in the case of the share from which that share is derived and any of them may have any preference or other advantage or be subject to any restrictions as compared to others.
(b) Subject to the Companies Act, the Company may by special resolution reduce its share capital, any capital redemption reserve, share premium account or other undistributable reserve.

Variation of rights

If at any time the share capital is divided into different classes of shares, the rights attached to any class of shares may be abrogated or varied with the written consent of the holders of not less than three fourths in nominal value of the issued shares of that class (excluding any shares of that class held as treasury shares), or with the sanction of a special resolution passed at a separate general meeting of the holders of that class.

Forfeiture and lien

The Company has a lien on every partly-paid up share for all monies called or payable in respect of that share. The Company may serve notice on the members in respect of any amounts unpaid on their shares. The member shall be given not less than 14 days' notice to pay the unpaid amount. In the event of non-compliance, a share in respect of which the notice is given may be forfeited by resolution of the Board.

Disclosure of interests in shares and restrictions for failure to provide information

(a) If a person appearing to have an interest in the issued share capital of the Company of a class carrying rights to vote in all circumstances at general meetings has failed to give the Company within 14 days information required by a notice requiring that information (a disclosure notice), the Board may, at its discretion, impose restrictions upon the relevant shares.
(b) The restrictions available are the suspension of voting or other rights in relation to meetings of the Company in respect of the relevant shares and, additionally, in the case of shareholders representing at least 0.25 per cent. in nominal value of that class of shares (excluding any shares of that class held as treasury shares), the withholding of payment on dividends on, and in certain cases the restriction of transfers of, the relevant shares. The restrictions shall cease to apply seven days after the Board is satisfied that the default in respect of which the restriction notice was issued no longer continues and where any shares are transferred by means of a permitted transfer. For these purposes, a permitted transfer means a transfer by way of or pursuant to acceptance of a takeover bid, or a sale of the whole beneficial interest in the shares on a recognised investment exchange or a stock exchange outside the United Kingdom on which the shares are normally traded, or a sale of the whole beneficial interest in the shares otherwise than on a stock exchange to a person whom the Board is satisfied is not connected with the transferor or with any person appearing to be interested in the shares.
(c) The Disclosure and Transparency Rules require shareholders (subject to certain exceptions) to notify the Company if the voting rights directly or indirectly held (within the meaning of those rules) by such Shareholders reaches, exceeds or falls below 3 per cent. and each 1 per cent. threshold above that.

General meetings

(a) The Companies Act requires annual general meetings to be held on a regular basis in addition to any other general meetings. The Board may call other general meetings whenever it thinks fit. The Board must also convene a meeting upon the valid request of members holding not less than 10 per cent. of the Company's paid up capital carrying voting rights at general meetings. If the Board fails to give notice of such meeting to members when required to do so, the members that requested the general meeting, or any of them representing more than one-half of the total voting rights of all members that requested the meeting, may themselves convene a meeting.
(b) An annual general meeting shall be convened by not less than 21 clear days' notice and all other general meetings shall be convened by at least 14 clear days' notice. Every notice calling a general meeting shall

specify the place, the date and the time of the meeting and the general nature of the business to be transacted.

(c) Two members present in person or by proxy and entitled to vote shall be a quorum for all purposes. If a quorum is not present within five minutes of the commencement time of the meeting (or such longer time as the chairman of the meeting may decide to wait), the meeting, if convened by or requisitioned by members, shall be dissolved or, in any other case, adjourned to such day, time and place as the chairman of the meeting shall decide and at such adjourned meeting one member present in person or by proxy (whatever the number of shares held by him) and entitled to vote shall be a quorum.
(d) Members may attend and vote in person or by duly appointed proxy. A member may appoint more than one proxy in relation to a general meeting, provided that such proxy is appointed to exercise the rights attached to a different share or shares held by the member. The Articles contain provisions for the appointment of proxies, including time limits for making such appointments ahead of the meeting and provisions for appointment by means of electronic communication.
(e) The Board, the chairman of the meeting or any person authorised by the Board may direct that members or proxies wishing to attend any general meeting should submit to searches or other security arrangements or restrictions, and shall be entitled to refuse entry to, or to eject from, a general meeting any member or proxy who fails to submit to such searches or to otherwise comply with such security arrangements or restrictions. If a member or proxy who has gained entry to a general meeting disrupts the proper and orderly conduct of the general meeting, the chairman of the meeting may at any time, without the consent of the general meeting, take such action as is thought fit to secure the safety of the people attending the meeting and to promote the orderly conduct of business at the meeting.

The Board

Subject to the statutes and the Articles, the business of the Company is managed by the Board, which may exercise all the powers of the Company. No alteration of the Articles of Association, and no directions given by the Company in general meeting by special resolution, shall invalidate any prior act of the Board that would have been valid if that alteration had not been made or that resolution had not been passed.

The Board may make such arrangements as they think fit for the management and transaction of the Company's affairs and may establish any local boards or agencies for or managing any of the affairs of the Company in any specified locality. The Board may appoint any persons as members of such local board, or any managers or agents, and may fix their remuneration. The Board may delegate to any such establishment and to any such appointee any of the powers, authorities and discretions vested in the Board (other than the powers of borrowing and of making calls) with power to sub-delegate and authorise any such appointees to fill any vacancies in any such establishment and to act notwithstanding vacancies.

Directors

(a) Appointment and retirement of directors

The directors (excluding alternate directors) shall not, unless otherwise determined by ordinary resolution, be fewer than two nor more than twelve in number. A director need not be a member of the Company.

Directors may be appointed by the Company by ordinary resolution or by the Board. At every annual general meeting one-third of the directors shall retire from office, having been determined by the composition of the Board at the start of business on the date of the notice convening the annual general meeting.

Each director shall retire at the annual general meeting unless he was appointed or re-appointed a director at either of the last two general meetings before that meeting.

(b) Remuneration of directors

The directors shall be entitled to receive fees for their services at a rate which shall not exceed an aggregate sum paid to each director of £150,000 per annum or such higher amount as the Company, by ordinary resolution, may determine from time to time.

Any director who holds any executive office, or who serves on any committee or devotes special attention to the business of the Company, or who otherwise performs services which in the opinion of the Board are outside the scope of the ordinary duties of a director may be paid extra remuneration by way of salary, participation in profits or otherwise as the Board may determine.

The Company may pay the directors' expenses incurred by them in connection with the business of the Company, including their reasonable expenses of travelling to and from meetings of the directors, committee meetings or general meetings.

Subject to the Statutes, a director notwithstanding his office:

(i) may hold any other office or place of profit with the Company (except that of auditor) in conjunction with the office of director and may act by himself or through his firm in a professional capacity for the Company;
(ii) may be a party to, or otherwise interested in, any contract, transaction or arrangement with the Company or in which the Company is otherwise interested; and
(iii) shall not, by reason of his office, be accountable to the Company for any remuneration or benefit that he derives from any such contract, transaction or arrangement and no such contract, transaction or arrangement shall be liable to be avoided on the ground of any such interest.

(c) Restrictions on directors voting

A director is not permitted to vote or be counted in the quorum on any resolution of the Board or of a committee of the Board in respect of any contract, arrangement or transaction in which the director has an interest which is to his knowledge a material interest. This prohibition does not apply to any of the following matters:

(i) the giving to him of any guarantee, security or indemnity in respect of money lent or obligations incurred by the director or by any other person at the request of, or for the benefit of, the Company or any of its subsidiary undertakings;
(ii) the giving by the Company of any guarantee, security or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiary undertakings for which the director himself has assumed responsibility in whole or in part under a guarantee or indemnity or by the giving of security;
(iii) any proposal concerning an offer of securities of or by the Company or any of its subsidiary undertakings in which offer the director is or may be entitled to participate as a holder of securities or in the underwriting or sub-underwriting of which the director is to participate;
(iv) any contract, arrangement or transaction concerning any body corporate (not being a body corporate in which the director owns 1 per cent. or more) in which he is interested, directly or indirectly, and whether as an officer, shareholder or otherwise;
(v) any contract, arrangement or transaction for the benefit of employees of the Company or any of its subsidiary undertakings under which the director benefits in a similar manner as the employees;
(vi) any contract, arrangement or transaction concerning any insurance that the Company is empowered to purchase or maintain for, or for the benefit of, any directors or for persons who include directors; and
(vii) the giving of an indemnity in accordance with the Articles; and
(viii) the provision of funds to the director to meet, or the doing of anything to enable a director to avoid incurring, expenditure in defending any criminal or civil proceedings or regulatory action or investigation in connection with any alleged negligence, default, breach of duty or breach of trust by the director in relation to the Company or an associated company.

(d) Conflicts of interest requiring Board authorisation

Provided the quorum and voting requirements are satisfied the Board may authorise any matter that would otherwise involve a director breaching his duty under the Companies Act to avoid conflicts of interest. Any director may propose that the director concerned be authorised in relation to any matter that is the subject of such a conflict and such proposal shall be resolved upon by the Board in the same manner as any other matter, except that the director who is the subject of the conflict (or any other director with a similar interest) shall not count towards the quorum or vote on the resolution authorising the conflict. Authorisation of a matter shall only be effective if that matter was agreed to without the interested director(s) voting or would have been agreed to if the votes of the interested director(s) had not been counted.

Borrowing powers

The Board may exercise all the powers of the Company to borrow money, to mortgage or charge all or part of its undertaking, property and uncalled capital and, subject to the Statutes, to issue debentures, debenture stock and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.

The Board shall restrict the borrowings of the Company and exercise all its voting and other rights and powers of control exercisable by the Company in relation to the Group to ensure that the aggregate borrowings of the Group (excluding borrowings owed by one Group member to another) does not, without the previous sanction of an ordinary resolution, exceed a sum equal to three times the aggregate of the adjusted capital and reserves.

Indemnity of directors

Subject to the Statutes, any person who is or was at any time a director of the Company or of any of its subsidiary undertakings may be indemnified out of the assets of the Company against losses incurred in the actual or purported execution and/or discharge of his duties.

Untraceable shareholders

The Company shall be entitled to sell, at the best price reasonably obtainable at the time of sale, the shares of a member or the shares to which a person is entitled by transmission if:

(a) during a period of 12 years prior to the date of advertising its intention to sell such shares, no cheque, warrant or order sent by the Company in respect of the share in question has been cashed and no communication has been received by the Company from the member or the person entitled to transmission provided that, in such period of 12 years, at least three cash dividends in respect of such shares have become payable but no dividend has been claimed;
(b) after the expiry of that period, the Company has published a notice stating it intends to sell the shares in a national daily newspaper in the United Kingdom and a newspaper circulating in the area of the last known address of the member or the person entitled by transmission and by notice in writing to a Regulatory Information Service (if the shares are listed on the Official List); and
(c) during that period or three months following the publication of the advertisements and prior to the exercise of the power of sale, the Company has not heard from the member or the person entitled to the shares by transmission.

The net proceeds of such sale shall belong to the Company, which shall be obliged to account to the former member or other person who would have been entitled to the shares for an amount equal to the proceeds as a creditor of the Company.

5. Employees

The table below sets out the average number of people employed by the Group during each of the last three financial years:

Financial year ended 31 December	2012	2011	2010
Activity
Production	1,028	963	927
Site	187	191	204
Sales and Administration	54	53	48
Total	1,269	1,207	1,179

6. Share Schemes

6.1 Severfield-Rowen Plc PSP

(a) General

The PSP was approved by the Company in October 2007. Its operation is supervised by the Remuneration Committee.

(b) Eligibility

Any employee (including an executive director) of the Company and its subsidiaries is eligible to participate in the PSP at the discretion of the Remuneration Committee. Currently, the Executive Directors and members of the Executive Committee participate in the PSP.

(c) Grant of awards

The Remuneration Committee may grant awards to acquire Shares within six weeks following the Company's announcement of its results for any period or at any other time when the Remuneration Committee considers there are exceptional circumstances which justify the granting of awards.

The Remuneration Committee may grant awards as conditional awards or as nil (or nominal) cost options with a short exercise period. All subsisting awards are in the forms of conditional awards. The Remuneration Committee may also decide to grant cash-based awards of an equivalent value to share-based awards or to satisfy share-based awards in cash.

An award may not be granted after 5 October 2017 (i.e. after the expiry of ten years following Shareholder approval of the PSP).

No payment is required for the grant of an award. Awards are not transferable (except on death) and will lapse if an employee is declared bankrupt. Awards are not pensionable.

(d) Individual limit

An employee may not ordinarily receive awards in any financial year over Shares having a market value in excess of 150 per cent. of his annual base salary in that financial year, other than in exceptional circumstances such as recruitment where this limit may be exceeded at the discretion of the Remuneration Committee.

(e) Performance conditions

The vesting of awards is subject to performance conditions set by the Remuneration Committee at the date of grant. All subsisting awards are subject to performance conditions which measure the Company's earnings per Share performance over three years.

The Company's earnings per Share will be calculated on such normalised basis as the Remuneration Committee determines. To the extent the performance conditions are not satisfied over the performance period, awards will lapse to such extent with no opportunity to re-test the performance conditions.

The Remuneration Committee may vary the performance conditions applying to existing awards if an event has occurred which causes the Remuneration Committee to consider that it would be appropriate to amend the performance conditions, provided the Remuneration Committee considers the varied conditions are fair and reasonable and not materially less challenging than the original conditions would have been but for the event in question.

(f) Vesting of awards

Awards normally vest three years after grant to the extent that the applicable performance conditions have been satisfied and provided the participant is still employed in the Group.

(g) Leaving employment

As a general rule, an award will lapse upon a participant ceasing to hold employment or office within the Group. However, if a participant ceases to be an employee or a director because of his death, disability, retirement, his employing company or the business for which he works being sold out of the Group or in other circumstances at the discretion of the Remuneration Committee, then his award will vest when he leaves. The extent to which an award will vest in these situations will depend upon two factors: (i) the extent to which any performance conditions have been satisfied by reference to the date of cessation; and (ii) the pro rating of the award to reflect the reduced performance period, although the Remuneration Committee can decide not to pro rate an award if it regards it as inappropriate to do so in the particular circumstances.

If a participant ceases to be an employee or director in the Group for one of the ''good leaver'' reasons specified above, the Remuneration Committee can also decide that his award shall not vest early but instead will vest on the date when it would have vested if he had not ceased such employment or office, subject to: (i) any performance conditions measured at that time; and (ii) pro-rating by reference to the time of cessation as described above.

(h) Corporate events

In the event of a takeover or winding up of the Company (not being an internal corporate reorganisation), all awards will vest early subject to: (i) the extent that any performance conditions have been satisfied at that time; and (ii) the pro rating of the awards to reflect the reduced performance period, although the Remuneration Committee can decide not to pro rate an award if it regards it as inappropriate to do so in the particular circumstances.

In the event of an internal corporate reorganisation, the Remuneration Committee may decide, with the consent of the new holding company, that awards will be replaced by equivalent new awards over Shares in a new holding company.

(i) Dividends

The Remuneration Committee may decide on or before the date of grant that participants will receive a payment (in cash and/or Shares) of an amount equivalent to the dividends that would have been paid on those Shares between the time when the awards were granted and the time when they vest. Alternatively, participants may have their awards increased as if dividends were paid on the Shares subject to their award and then reinvested in further Shares.

(j) Rights attached to Shares

Any Shares allotted when an award vests or is exercised will rank equally with Shares then in issue (except for rights arising by reference to a record date prior to their allotment).

(k) Variation of capital

In the event of any variation of the Company's Share capital or in the event of a demerger, payment of a special dividend or similar event which materially affects the market price of the Shares, the Remuneration Committee may make such adjustment as it considers appropriate to the number of Shares subject to an award and/or the exercise price payable (if any).

(l) Overall PSP limits

Awards may be satisfied using newly issued Shares, treasury Shares or Shares purchased in the market.

In any ten calendar year period, the Company may not issue (or grant rights to issue) more than:

(i) 10 per cent. of the issued ordinary share capital of the Company under the PSP and any other employee share plan adopted by the Company; and
(ii) 5 per cent. of the issued ordinary share capital of the Company under the PSP and any other executive share plan adopted by the Company.

Treasury Shares will count as newly issued Shares for the purposes of these limits unless institutional investors decide that they need not count.

(m) Alterations to the PSP

The Remuneration Committee may, at any time, amend the PSP in any respect, provided that the prior approval of Shareholders is obtained for any amendments that are to the advantage of participants in respect of the rules governing eligibility, limits on participation, the overall limits on the issue of Shares or the transfer of treasury Shares, the basis for determining a participant's entitlement to, and the terms of, the Shares or cash to be acquired and the adjustment of awards.

The requirement to obtain the prior approval of Shareholders will not, however, apply to any minor alteration made to benefit the administration of the PSP, to take account of a change in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for participants or for any company in the

Group. Shareholder approval will also not be required for any amendments made within the authority of the PSP to any performance condition applying to an award.

Any alteration to the material disadvantage of participants (other than to the performance conditions) requires a majority of participants who respond to the Board's invitation to indicate their approval of the alteration to approve such alteration.

6.2 Severfield-Rowen Plc SIP

(a) General

The SIP has been approved by HMRC under the Income Tax (Earnings & Pensions) Act 2003, and is intended to enable Shares to be awarded to UK taxpayers in a tax efficient manner.

In accordance with the relevant legislation, the Company may make a number of different types of awards of Shares to all qualifying employees (''Qualifying Employee''):

Qualifying Employees may be awarded Shares on a free of charge basis (''Free Shares''), up to a maximum market value of £3,000 at the date of award per annum. The Free Shares are held in a trust established by the Company for this purpose (the ''SIP Trust'') on behalf of the individual until such time as the qualifying period has expired;
individuals can purchase Shares (''Partnership Shares'') using up to 10 per cent. of their salary for any tax year (or a maximum of £1,500 if lower);
the Company can award Shares (''Matching Shares'') under the SIP over Shares with a market value of up to two times the monies used to acquire Partnership Shares; and
the Company may determine that any cash dividends accumulating in the SIP Trust be reinvested in Shares (''Dividend Shares'') on behalf of the Qualifying Employees. The amount applied by the trustees of the SIP Trust in acquiring Dividend Shares shall not exceed £1,500 in each tax year.

The Company is not obliged to offer all forms of awards in a year, and can decide each year what forms of award to offer to Qualifying Employees.

The SIP will only operate in those years that the Company determines, and in those years, all Qualifying Employees are invited to participate.

(b) Eligibility

All Qualifying Employees of the Group are eligible to participate in the SIP. An employee is a Qualifying Employee if they meet the conditions set out in Schedule 2 of the Income Tax (Earnings & Pensions) Act 2003 (''Schedule 2'').

All Qualifying Employees who participate in the SIP do so on the same terms. Awards of Free Shares may be made by reference to a Qualifying Employee's remuneration, length of service or hours worked. Any other performance criteria used to determine participation must apply to all Qualifying Employees.

(c) Limits on the issue of Shares

The Company may not issue more than ten per cent. of the issued ordinary Share capital of the Company under the SIP and any other employee share plan adopted by the Company.

New Shares, treasury Shares or market purchase Shares may be used under the SIP. To the extent that newly issued Shares are used, they will count towards the dilution limits. For so long as it is market practice, treasury Shares shall count as newly issued Shares for the purpose of the dilution limits.

(d) Vesting of Awards

Shares are held in the SIP Trust, on behalf of the relevant participant, until the expiry of the applicable holding period.

For awards of Free Shares and Matching Shares, the Company shall specify at the date of each award a holding period of not less than three years and not more than five years throughout which a participant shall be bound by the terms of the award agreement. The holding period shall be the same for all Qualifying Employees.

For awards of Dividend Shares, the holding period shall be a period of three years from the date of acquisition.

At the end of the holding period, provided the performance criteria have been satisfied, the participant is entitled to request the SIP Trust to transfer ownership of the Shares to the Qualifying Employee.

(e) Leavers

Shares under the SIP (other than Partnership Shares) are forfeitable on the cessation of employment during a period determined by the Board at the date of award (the ''Forfeiture Period'').

The Forfeiture Period shall be the same for all Qualifying Employees in relation to the same award, but may be different for different awards. It shall not exceed three years.

Shares under the SIP shall be forfeited if a Qualifying Employee leaves employment during the Forfeiture Period unless the participant leaves employment by reason of death, injury, disability, redundancy, retirement or the sale of the business for which he works to a third party.

(f) Rights Issues

The trustee of the SIP Trust has the power under the SIP trust deed to, if instructed by participants, dispose of some of the rights arising from Shares held in the SIP Trust to obtain sufficient funds to exercise the remaining rights under the rights issue. Shares so issued and allotted to participants shall be treated as Shares awarded or acquired on behalf of participants under the SIP in the same way and at the same time as the Shares in respect of which they were conferred.

(g) Alterations

The Company may alter the SIP at any time in any respect, subject to the Company obtaining the written consent of the trustee of the SIP Trust. Any alterations to the advantage of participants to the rules governing eligibility, limits on participation and the number of new Shares available under the SIP must be approved in advance by shareholders in general meeting unless the alteration or addition is minor in nature and made to benefit the administration of the SIP, to comply with the provisions of any existing or proposed legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for participants or the Group.

The Company may not make any alteration that would adversely prejudice to a material extent the rights attaching to any Shares held by participants. Any amendment to a ''key feature'' (as defined under paragraph 84(6) of Schedule 2) of the SIP requires HMRC approval.

7. Directors

7.1 Directors' details

(a) Executive Chairman

John Dodds

John Dodds was appointed to the Board as a non-executive director in October 2010, becoming Chairman in September 2011. Mr Dodds retired in March 2010 from Kier Group PLC, the construction and property services group, after serving for seven years as group chief executive. Mr Dodds worked for Kier, both in the UK and overseas, for nearly 40 years and held a main board position through the employee buy-out process in 1992 and the subsequent flotation of the group on the London Stock Exchange in 1996. Mr Dodds is a non-executive director of Newbury Racecourse PLC and Lagan Construction Holdings Limited. On 23 January 2013, Mr Dodds was appointed Executive Chairman.

(b) Executive Directors

Peter Emerson, Chief Operating Officer

Peter Emerson has worked in the specialist contracting industry since 1974, initially in the concrete contracting sector. Mr Emerson joined Rowen Structures in 1984 as a quantity surveyor, rising to Deputy Managing Director in 1996. Mr Emerson was appointed Group Commercial Director in April 1998, and in December 2001 was appointed to the role of Managing Director of Watson Steel Structures Limited and

also to Chief Operating Officer in July 2007. Mr Emerson has announced his intention to retire from the Board on 5 June 2013.

Alan Dunsmore, Finance Director

Alan Dunsmore joined the Company in March 2010 from Smiths Group PLC. Mr Dunsmore joined Smiths Group Medical Division in 1995, holding various positions throughout the business and from 2004 was director of finance for Smiths Detection. Prior to joining Smiths, Mr Dunsmore was with Coopers & Lybrand in Glasgow, where he qualified as a Chartered Accountant in 1992.

Derek Randall, Executive Director, Business Development and International

Derek Randall was appointed Executive Director, Business Development and International in May 2008. Mr Randall is a Master of Business Administration (Warwick Business School), Doctor of Business Administration (Nottingham Business School) and the Visiting Professor of International Management and Development at Birmingham City University's Business School. Before joining the Group, most of Mr Randall's career was with Corus Group PLC, latterly as commercial director of Long Products Division. Mr Randall has served on the Executive Council of The Steel Construction Institute.

(c) Non-executive Directors

Keith Elliott, Senior Non-Executive Director

Keith Elliott joined the Company as a non-executive director in October 1998. Mr Elliott retired in July 1998 from Bechtel Corporation, the international engineering and construction group, where he was a partner and senior vice-president responsible for its petroleum and chemical business. Mr Elliott is a graduate chemical engineer and serves as non-executive Chairman of Keltbray Group (Holdings) Limited.

Toby Hayward, Non-Executive Director

Toby Hayward was appointed non-executive Chairman in June 2008, stepping down in September 2011 to become Chairman of the Audit Committee. Mr Hayward qualified as a Chartered Accountant with Deloitte LLP in 1984. Mr Hayward was a director of corporate finance at Singer & Friedlander Limited and Henry Ansbacher & Co Limited before working in the Equity Capital Markets team at Canaccord Capital Limited. Mr Hayward joined Jefferies International Limited as managing director in 2005 with responsibility for UK corporate broking and left Jefferies in June 2008 to concentrate on consultancy and non-executive work.

Chris Holt, Non-Executive Director

Chris Holt joined the Company as a non-executive director in November 2011. Mr Holt retired in September 2010 from MJ Gleeson Group PLC after serving two years as chief executive, and prior to that three years as group finance director. Mr Holt's experience also includes 17 years with Foster Wheeler Limited as finance director and deputy chairman of the UK subsidiary company and 12 years with Bechtel Corporation. Mr Holt is a graduate of Leeds University, a qualified accountant and has an MBA from Golden Gate University, San Francisco.

7.2 External directorships and interests in transactions

(a) Save as set out below, none of the Directors has been a member of the administrative, management or supervisory bodies or partner, of any corporate or partnership (other than the Company and other members of the Group), at any time in the previous five years, preceding the date of this document:

Director	Current directorships and partnerships	Previous directorships and partnerships in the previous five years
Mr. Dodds	Newbury Racecourse PLC Lagan Construction Holdings Limited	Kier Group PLC
Mr. Emerson	—	—
Mr. Dunsmore	—	Smith Detection Group Limited
Mr. Randall	Severfield-Rowen Mauritius Limited	—
Mr. Elliott	Elliott Properties Limited DIGURU Limited Keltbray Group Ltd Ealing Park Mansions Company Limited Nickelby House Management Company Limited	—
Mr. Hayward	Sirius Petroleum plc THC Consulting Ltd Afren Plc	—
Mr. Holt	Optilian Ltd	M.J. Gleeson Group PLC

(b) None of the Directors has been a member of the administrative, management or supervisory bodies or partner, of any company or partnership at the time of its bankruptcy, receivership or liquidation, in the previous five years, preceding the date of this document.
(c) None of the Directors has, within the previous five years received any official public incrimination and/or sanction by any statutory or regulatory authorities (including designated professional bodies) and has not been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of a company.
(d) Save as disclosed below, none of the Directors has any potential conflicts of interests between his duties to the Company and his private interests or other duties. Where a perceived or potential conflict of interest exists in respect of a director, the Companies Act and the Articles of Association permit those directors who are not conflicted to authorise that director to have the perceived or potential conflict.
(i) Mr Emerson is a shareholder of Dalton 009 Limited, which is the owner of the land leased to Severfield-Rowen at its Dalton plant. A conflict of interest may arise in any circumstances in which Severfield-Rowen or any Group company is a party to any further arrangements with, or for the benefit of, Dalton 009 Limited; and
(ii) Mr Dodds is a non-executive director of Lagan Construction Holdings Limited with which Severfield-Rowen have entered into a contract to provide structural steel to Suffolk and Cardiff power stations. A conflict of interest may arise in any circumstances in which Severfield-Rowen or any Group company is a party to any further arrangements with, or for the benefit of, Lagan Construction Holdings Limited.
(e) None of the Directors has convictions relating to fraudulent offences within the last five years.

7.3 Directors' service contracts, interests and remuneration

(a) Executive Directors' service contracts
(i) Each of the Directors has a service contract. Peter Emerson has entered into a service contract with the Company dated 19 February 2001, under which his appointment is deemed to have commenced on 1 November 1984. Alan Dunsmore has entered into a service contract with the Company dated 1 March 2010; and Derek Randall has entered into a service contract with the

Company dated 28 February 2011. The Directors' service contracts are not for a fixed term and provide for a notice period of not less than 12 months, terminable by either party.

Details of the remuneration paid to each of the Executive Directors during the year ended 31 December 2012 are set out in the table at paragraph 7.3(a)(ii) below.

All the agreements contain garden leave protections, and the agreements for Alan Dunsmore and Derek Randall contain provisions entitling the Company to pay the Director in lieu of his notice period on termination up to the value of his basic salary at the time of termination.

(ii) Details of the Directors' remuneration for the year ended 31 December 2012 are as follows:

Name	Date of appointment	Basic Salary (£)	Bonus (£)	Benefits in Kind	Total remuneration for year ending 31/12/2012	Pension scheme contributions (£)

Mr. Dunsmore	1 March 2010	226,000	105,000	26,000	357,000	50,000
Mr. Emerson	1 November 1984	273,000	170,000	23,000	466,000	50,000
Mr. Randall .	28 February 2011	226,000	80,000	24,000	330,000	50,000

(b) Non-executive Directors

The Non-executive Directors do not have contracts of service but their appointments are subject to the Articles of Association and their re-election at annual general meetings in accordance with the Articles. All Non-executive Directors are entitled to be reimbursed for reasonable expenses incurred in carrying out their duties.

Name	Date of appointment	Last re-elected	Term	Benefits in Kind	Fees for year ending 31 December 2012 (£)
Mr. Dodds	1 September 2011	8 June 2011	12 months	—	85,000
Mr. Elliott .	20 October 1998	8 June 2011	12 months	—	60,000
Mr. Hayward	7 October 2011	13 June 2012	12 months	—	54,000
Mr. Holt .	1 November 2011	13 June 2012	12 months	—	40,000

Notes:

(1) On 23 January 2013, Mr Dodds became Executive Chairman. Whilst he remains Executive Chairman he will be paid a salary of £350,000 per annum.

8. Directors and other significant interests

8.1 As at 27 February 2013 (being the latest practicable date prior to the publication of this document), the interests (all of which are beneficial unless otherwise stated) of the Directors (as well as their immediate families) in the share capital of Severfield-Rowen or (so far as is known or could with reasonable due diligence be ascertained by the relevant Director, as the case may be) interests of a person connected (within the meaning of section 252 of the Companies Act) with a Director (as the case may be) and the existence of which was known to or could, with reasonable due diligence, be ascertained by the Directors as at 27 February 2013 together with such interests as are expected to be held immediately following completion of the Rights Issue, assuming that each Director takes up his Rights in full, are as follows:

	Number of Ordinary Shares held at present	Percentage of Ordinary Shares held at present	Number of Ordinary Shares held immediately following the Rights Issue	Percentage of Ordinary Shares held immediately following the Rights Issue
Mr. Dodds	10,000	0.01	33,333	0.01
Mr. Emerson	173,312	0.19	577,707	0.19
Mr. Dunsmore	15,000	0.02	50,000	0.02
Mr. Randall	15,000	0.02	50,000	0.02
Mr. Elliott	200,000	0.22	666,667	0.22
Mr. Hayward	30,000	0.03	100,000	0.03
Mr. Holt	10,572	0.01	35,240	0.01
TOTAL	453,884	0.51	1,512,947	0.51

Save as disclosed in this paragraph 8, none of the Directors has any interest (beneficial or non beneficial) in the share capital of the Company or any of its subsidiaries.

8.2 As at 27 February 2013 (being the latest practicable date prior to the publication of this document) the following Directors held the following awards under the PSP:

Director	Number of Shares subject to award	Vesting date
Mr. Dunsmore	125,613	4 March 2013
	111,007	13 April 2014
	141,698	6 March 2015
Mr. Emerson	151,471	4 March 2013
	155,276	13 April 2014
	170,809	6 March 2015
Mr. Randall	70,686	4 March 2013
	111,007	13 April 2014
	141,698	6 March 2015

Awards granted under the PSP vest three years from the date of grant, subject to the satisfaction of the performance condition, which measures the Company's earnings per share performance over the three year performance period.

8.3 As at 27 February 2013 (being the latest practicable date prior to the publication of this document) the following Directors beneficially held the following numbers of Shares under the SIP:

Director	Number of Shares held beneficially under the SIP
Mr. Dunsmore	2,244
Mr. Randall	1,836
Mr. Emerson	208

8.4 As at 27 February 2013 (being the latest practicable date prior to the publication of this document), and as it is expected to be immediately following the Rights Issue (assuming full take up by each person described below of their rights to New Ordinary Shares under the Rights Issue) and so far as is known to the Company by virtue of the notifications made pursuant to the Companies Act and/or Chapter 5 of the Disclosure and Transparency Rules, the name of each person (other than a Director)

who directly or indirectly, is interested in 3 per cent. or more of the voting rights in the Company, and the amount of such person's interest is as follows:

	Number of Ordinary Shares as at 27 February 2013	Percentage of voting rights as at 27 February 2013	Number of Ordinary Shares immediately following completion of the Rights Issue	Percentage of voting rights immediately following completion of the Rights Issue
Shareholder
M&G Investments	11,693,956	13.1%	38,979,853	13.1%
JO Hambro Capital Management	10,038,748	11.2%	33,462,493	11.2%
Aviva Investors	8,968,906	10.0%	29,896,353	10.0%
Threadneedle Investments	6,103,427	6.8%	20,344,757	6.8%
Rathbones	5,320,000	6.0%	17,733,333	6.0%
Legal & General Investment
Management	4,591,930	5.1%	15,306,433	5.1%
Standard Life	4,521,046	5.1%	15,070,153	5.1%
Royce & Associates LLC	3,452,300	3.9%	11,507,667	3.9%
TOTAL	54,690,313	61.3%	182,301,043	61.3%

Note:

The number of Ordinary Shares issued assumes that each Shareholder takes up its full entitlement to New Ordinary Shares under the Rights Issue.

Save as set out in this paragraph 8.4, the Company is not aware of any person who has or will immediately following Admission have a notifiable interest of 3 per cent. or more of the issued share capital of the Company.

The Company is not aware of any person who either as at the date of this document or immediately following Admission exercises, or could exercise, directly or indirectly, jointly or severally, control over the Company nor is it aware of any arrangements, the operation of which may at a subsequent date result in a change of control of the Company.

None of the major Shareholders of the Company as set out above has different voting rights from any other holder of Ordinary Shares in respect of any Ordinary Shares held by them.

9. Corporate Governance

The Disclosure and Transparency Rules require UK listed companies to report on the manner in which they apply the principles of good governance and the extent to which they comply with the provisions set out in the UK Corporate Governance Code.

The Board is committed to the highest standards of corporate governance and to applying the principles of good governance set out in the revised UK Corporate Governance Code.

The Directors confirm compliance with the UK Corporate Governance Code throughout the year ended 31 December 2012 through to the date of this document.

However on 23 January 2013, the Company announced that Tom Haughey was standing down as chief executive officer and was replaced with immediate effect by the chairman, John Dodds. The UK Corporate Governance Code provides that the roles of chairman and chief executive officer should not be exercised by the same person. The Board is currently actively seeking a new chief executive officer, at which point it is anticipated that the role of John Dodds will revert to that of chairman.

The Board has established Nomination, Remuneration and Audit committees, with formally delegated duties and responsibilities, and written terms of reference. From time to time, separate committees may be set up by the Board to consider specific issues should the need arise.

9.1 The Board

The Company is led by a board of directors which currently consists of an executive chairman, three executive directors and three non-executive directors. Further detail on the composition of the Board, including brief biographies of all of the Directors, is described in paragraph 7 of this Part IX.

The Board sets the strategy of the Company and its individual trading businesses and ensures the Company has in place the financial and human resources it needs to meet its objectives.

There is a formal schedule of matters reserved for Board decision. This covers the overall Group strategy, and the Company's policy on acquisitions and divestments, approval of major capital expenditure and consideration of significant financing matters, risk management, the strategic direction of individual trading subsidiaries, codes of conduct, annual budgets and progress towards those budgets. The Board also considers employee issues and key appointments.

The Board delegates certain of its duties to its Audit, Nomination and Remuneration committees, each of which operates within prescribed terms of reference which are available in full from the company secretary by request.

A detailed description of the role and responsibilities of a non-executive director is set out in the letter of appointment, and all new non-executive directors confirm before they take up their appointment that they can allocate sufficient time to meet the expectations of the role.

The non-executive directors complement the skills and experience of the executive directors, providing the requisite degree of independent judgment and scrutiny to the decision-making process at Board and committee level. Mr Elliott is the senior independent non-executive director and has now served as a Director for 14 years. The Board recognises that he is technically non-independent due to tenure but believes that he continues to act independently and recognises his high level of commitment and effective contribution to the Board's decision making process.

The Board operates to a standing agenda which ensures that all matters reserved for its decision are dealt with in an appropriate manner, and all matters requiring regular or annual review receive adequate scrutiny and debate. Detailed information papers are circulated to directors between meetings. All meetings of the Board are structured to allow open discussion by all Directors and to ensure that no single individual or group dominates the decision-making process. The executive chairman holds meetings with the non-executive directors without the other executive directors present when he deems it appropriate. In addition to formal meetings of the Board, informal meetings to familiarise with particular operations, address strategic matters or discuss new developments are held as appropriate. The company secretary attends all Board meetings and is responsible for advising the Board and its committees on corporate governance and matters of procedure, as well as facilitating the flow of information within the Board. All directors have access to the services of the company secretary and may take independent advice at the Company's expense, as well as requesting information from the Company to enable informed judgments to be made and duties adequately discharged.

The Board annually reviews its composition and that of its committees, together with the respective contribution of each director. The process for evaluating the performance of the executive chairman and non-executive directors, the Board committees and the Board as a whole is well-established. It considers the adequacy and appropriateness of the skill-set of the Board, taking into account new developments in the Company's business and strategy and the range of experience and expertise represented.

The latest Board evaluation process concluded that the Board and its committees were operating effectively, with clear demarcation of the respective responsibilities of individual directors and Board committees. The Board is satisfied that the executive chairman and non-executive directors are each able to devote the amount of time required to attend to the Company's affairs and his duties as a Board member.

The Board has established a strong control framework within which the Group operates. This contains the following elements:

Executive Committee

Day-to-day management of the Group is delegated to the Executive Committee which comprises the Executive Directors and five directors of the Company's subsidiaries and is chaired by the executive chairman. The Executive Committee meets formally on a monthly basis and assists the main Board by focusing on strategic and operational matters relating to the business.

Group health and safety

A Group Health and Safety Committee, comprising all members of the Executive Committee, meets formally on a monthly basis. Safety leadership teams for each operating company report into the Health and Safety Committee.

9.2 Internal control

The Board is responsible for risk management and internal control within the context of achieving the Group's objectives. The Board has used a risk-based approach in establishing a robust internal control system. The system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss. Operational management is charged with responsibility for identifying and evaluating risks facing the Group's businesses on a day-to-day basis, considering all financial, transactional, technological, political, regulatory, reputational, socio-economic and physical risks.

9.3 Committees

Specific responsibilities of the Board are delegated to the Audit Committee, Remuneration Committee and Nominations Committee; all of which have defined terms of reference, procedures, responsibilities and powers. The committees, their members and a report on their activities are given below:

The Nominations Committee:

The Nominations Committee's members are the Non-executive Directors. The Nominations Committee is responsible for leading the process for appointments to the Board. Its chairman is Mr Holt. The Nominations Committee meets at least once a year and at such other times as the chairman of the committee may require.

The Nominations Committee's terms of reference include the following:

regularly reviewing the structure, size and composition of the Board and making recommendations to the Board with regard to any adjustments that are deemed appropriate;
the identification and nomination for the approval of the Board of candidates to fill Board vacancies as and when they arise;
ensuring that a candidate, on appointment and thereafter, will have sufficient time to undertake the role and to periodically review their commitments; and
ensuring that the company secretary, on behalf of the Board, has written to any appointee, detailing their role and the time commitments and proposing an induction plan, approved by the chairman.

Remuneration Committee:

The Remuneration Committee is composed of the Non-executive Directors and is chaired by Mr Elliott.

The Remuneration Committee meets at least four times a year and is responsible for considering the remuneration policy and packages of the Executive Directors. The Remuneration Committee is also responsible for reviewing succession issues, Group talent management processes and other human resource matters.

The Remuneration Committee's terms of reference include the following:

responsibility for recommending the amount and composition of remuneration of the Directors;
considering and advising on the remuneration policy for the Executive Directors and members of the Executive Committee;
responsibility for reviewing the Group performance framework;
reviewing and assessing candidates for appointment as directors; and
responsibility for ensuring that due regard is given to applicable law, regulation and listing requirements in matters of executive remuneration and that the Company complies with all applicable regulations relating to executive remuneration.

Audit Committee:

The Audit Committee is composed of the Non-executive Directors and is chaired by Mr Hayward, who is regarded by the Board as having recent and relevant financial experience. The Audit Committee meets at least twice a year. Representatives of the Company's external auditors attend its meetings, at the Audit Committee chairman's discretion.

The Audit Committee's terms of reference include the following:

to monitor the integrity of the financial statements of the Company and any formal announcements relating to the Company's financial performance and to review significant financial reporting judgements contained in them;
to monitor and review the Company's internal financial controls;
to make recommendations to the Board in relation to the appointment, re-appointment or removal of the Company's external auditor and to consider and advise the Board regarding the remuneration and terms of engagement of the external auditor;
to review the external auditor's independence and the effectiveness of the audit process, taking into consideration relevant regulatory requirements;
to monitor and review the appropriateness of the Company's internal audit strategies; and
to consider the effectiveness of the Company's risk based internal control systems and to make such recommendations to the Board as the committee considers desirable.

10. Mandatory bids, squeeze-out and sell-out rules in relation to Ordinary Shares

Other than as provided by the Takeover Code and Chapter 28 of the Companies Act, there are no rules or provisions relating to mandatory bids and/or squeeze-out and sell-out rules relating to the Company.

10.1 Mandatory bid

The Takeover Code applies to the Company. Under the Takeover Code, if an acquisition of interests in Ordinary Shares were to increase the aggregate holding of the acquirer and its concert parties to interests in Ordinary Shares carrying 30 per cent. or more of the voting rights in the Company, the acquirer and, depending on circumstances, its concert parties would be required (except with the consent of the Panel on Takeovers and Mergers) to make a cash offer for the outstanding shares in the Company at a price not less than the highest price paid for interests in Ordinary Shares by the acquirer or its concert parties during the previous 12 months. This requirement would also be triggered by any acquisition of interests in Ordinary Shares by a person holding (together with its concert parties) shares carrying between 30 per cent. and 50 per cent. of the voting rights in the Company if the effect of such acquisition were to increase that person's percentage of the total voting rights in the Company.

10.2 Squeeze-out

Under the Companies Act, if an offeror were to make an offer to acquire all of the Ordinary Shares in the Company not already owned by it and was to acquire 90 per cent. of the Ordinary Shares to which such offer related it could then compulsorily acquire the remaining 10 per cent. The offeror would do so by sending a notice to outstanding Shareholders telling them that it will compulsorily acquire their Ordinary Shares and then, six weeks later, it would deliver a transfer of the outstanding Ordinary Shares in its favour to the Company which would execute the transfers on behalf of the relevant Shareholders, and pay the consideration to the Company which would hold the consideration on trust for outstanding Shareholders. The consideration offered to the Shareholders whose Ordinary Shares are compulsorily acquired under this procedure must in general, be the same as the consideration that was available under the original offer unless a Shareholder can show that the offer value is unfair.

10.3 Sell-out

The Companies Act would also give minority Shareholders in the Company a right to be bought out in certain circumstances by an offeror who has made a takeover offer. If a takeover offer related to all the Ordinary Shares in the Company and, at any time before the end of the period within which the offer could be accepted, the offeror held or had agreed to acquire not less than 90 per cent. of the Ordinary Shares, any holder of Ordinary Shares to which the offer related who had not accepted the offer could, by a written communication to the offeror, require it to acquire those Ordinary Shares.

The offeror would be required to give any Shareholder notice of his right to be bought out within one month of that right arising. The offeror may impose a time limit on the rights of minority Shareholders to be bought out, but that period cannot end less than three months after the end of the acceptance period or, if later, three months from the date on which notice is served on Shareholders notifying them of their sell-out rights. If a Shareholder exercises his rights, the offeror is entitled and bound to acquire those Ordinary Shares on the terms of the offer or on such other terms as may be agreed.

10.4 Public takeover bids occurring in the last and current financial year

There have been no public takeover bids by third parties in respect of the share capital of the Company in the last or current financial year.

11. United Kingdom taxation

The following statements are intended as a general guide only to certain UK tax considerations and do not purport to be a complete analysis of all potential UK tax consequences of acquiring, holding or disposing of New Ordinary Shares, Nil Paid Rights or Fully Paid Rights. The following statements are based on current United Kingdom tax legislation and on what is understood to be the current practice of HMRC (which may not be binding), both of which are subject to any subsequent changes (potentially with retrospective effect) and may not apply to certain classes of Shareholder. They relate only to Qualifying Shareholders who are resident and, in the case of individuals, ordinarily resident in the United Kingdom for tax purposes (except where otherwise stated) and who hold their Ordinary Shares beneficially as investments. They are not addressed to certain categories of Shareholders who are subject to special rules, such as dealers in securities or those who have acquired (or are deemed for tax purposes to have acquired) their Ordinary Shares and/or New Ordinary Shares by reason of employment.

Any person who is in any doubt as to his tax position or who is subject to tax in a jurisdiction other than the United Kingdom is strongly recommended to consult their professional advisers immediately.

11.1 Taxation of chargeable gains

(a) Acquisition of New Ordinary Shares

For the purposes of United Kingdom taxation of chargeable gains, the issue of New Ordinary Shares to existing Shareholders who take up their rights under the Rights Issue should be regarded as a reorganisation of the Company's share capital. Accordingly, to the extent that a Qualifying Shareholder takes up all or part of his entitlement under the Rights Issue in respect of his existing holding of Ordinary Shares (the ''Existing Holding''), he should not be treated as having disposed of any part of that Existing Holding. Instead, his Existing Holding and the New Ordinary Shares issued to him in respect of his Existing Holding should be treated as a single asset (the ''New Holding'') acquired at the time he acquired his Existing Holding. For the purpose of computing any gain or loss on a subsequent disposal by a Qualifying Shareholder of any shares that comprise his New Holding, the amount paid for the New Ordinary Shares will be added to the base cost of his Existing Holding.

(b) Disposals

If a Qualifying Shareholder disposes of all or some of his rights to acquire New Ordinary Shares under the Rights Issue, or if he allows all or part of those rights to lapse and receives a cash payment in respect of this, he may, depending on his circumstances, incur a liability to United Kingdom taxation of chargeable gains. However, if the proceeds resulting from the disposal or lapse are ''small'' (currently interpreted by HMRC as not exceeding the greater of £3,000 or 5 per cent. of the value (as at the date of the disposal or lapse) of the Existing Holding) and are not greater than or equal to the Shareholder's allowable expenditure (being the amount of expenditure which would have been allowable as a deduction in computing a gain or loss on the disposal of the Existing Holding if it had been disposed of immediately before the receipt of the proceeds), the Shareholder will not, under present HMRC practice, be treated as making a disposal for the purposes of United Kingdom taxation of chargeable gains. Rather, the proceeds will be deducted from the acquisition cost of his Existing Holding. If the proceeds resulting from the disposal or lapse are greater than the Shareholder's allowable expenditure, the Shareholder will be treated as making a disposal but for the purpose of computing any chargeable gain he may elect for the proceeds to be reduced by the amount of the allowable expenditure (and, accordingly, that allowable expenditure will cease to be available as a deduction when computing any gain accruing on any subsequent disposal).

(c) Non-United Kingdom tax resident Shareholders

An individual Shareholder who has ceased to be resident or ordinarily resident in the UK for tax purposes for a period of less than five years of assessment and who disposes of all or part of his New Holding during that period of temporary non-residence may be liable to on his return to the UK to UK taxation of chargeable gains arising during the period of absence, subject to any available exemption or relief.

A Shareholder who is not resident or ordinarily resident for tax purposes in the UK will not otherwise generally be subject to UK taxation of chargeable gains on the disposal or deemed disposal of New Ordinary Shares unless the Shareholder is carrying on a trade, profession or vocation in the UK through a branch or agency (or, in the case of a corporate Shareholder, a permanent establishment) in connection with which the New Ordinary Shares are held.

(d) Indexation allowance and annual exemptionThe following paragraphs deal separately with Shareholders within the charge to corporation tax and Shareholders within the charge to capital gains tax.
(i) Shareholders within the charge to corporation tax

Shareholders within the charge to United Kingdom corporation tax will, for the purposes of computing gains but not losses, be allowed to claim an indexation allowance in respect of the amounts they have paid for their New Ordinary Shares. The indexation allowance will generally only apply from the date the money for the New Ordinary Shares is paid, not from the time the Existing Holding was acquired.

(ii) Shareholders within the charge to capital gains tax

For Shareholders within the charge to United Kingdom capital gains tax, indexation allowance and taper relief have been abolished and such Qualifying Shareholders will not be able to claim an indexation allowance in respect of amounts paid for New Ordinary Shares or taper relief in respect of disposals of New Ordinary Shares.

Shareholders within the charge to capital gains tax are generally liable to capital gains tax at the rate of 18 per cent. where they are basic rate tax payers and 28 per cent. where they are higher or additional rate tax payers on any chargeable gain in excess of the annual exempt amount (£10,600 for individuals in the 2012/2013 tax year).

11.2 Taxation of dividends

(a) Company

The Company will not be required to withhold tax at source on any dividends it pays to its Shareholders.

(b) United Kingdom resident Shareholders

Individual Shareholders resident in the United Kingdom for taxation purposes are generally liable to income tax in respect of dividends or other income distributions of the Company. An individual Shareholder resident in the UK for taxation purposes and in receipt of a dividend from the Company will generally be entitled to receive a tax credit equal to one-ninth of the cash dividend received or 10 per cent. of the aggregate of the cash dividend received and the related tax credit (the ''gross dividend''). The related tax credit can be set against the individual Shareholder's total liability to income tax on the gross dividend.

For example, on a dividend received of £90, the tax credit would be £10, and an individual would be liable to income tax on £100 but would also have the benefit of the tax credit to reduce this liability. Taking the tax credit into account, therefore, no further income tax is payable in respect of the dividend by UK resident individuals who are liable to income tax at no more than the basic rate. Eligible UK resident individuals who are subject to income tax at no more than the higher rate are subject to tax on dividends at the dividend upper rate (currently 32.5 per cent.) but are entitled to offset the 10 per cent. tax credit against such liability. For example, on a dividend received of £90 such a taxpayer would have to pay additional tax of £22.50 (representing 32.5 per cent. of the gross dividend less the 10 per cent. credit) which is equal to an effective rate of income tax of 25 per cent. of the net dividend. For this purpose, dividends are treated as the top slice of an individual's income.

From 6 April 2010 new rates of income tax apply to taxable income above £150,000 (the ''additional rates''). Eligible UK resident individuals who are liable to income tax at the additional rates and who receive dividends will be subject to tax on the gross dividend at the new dividend additional rate of 42.5 per cent., to the extent that the gross dividend falls above the threshold for the additional rates of income tax when it is treated (as mentioned above) as the top slice of the individual's income. After setting off the tax credit in respect of the gross dividend, eligible individuals will, accordingly, have to account for income tax equal to 32.5 per cent. of the gross dividend. For example, a dividend received of £90 will carry a tax credit of £10. The individual would be liable to income tax on £100 at the dividend additional rate of 42.5 per cent.,

being £42.50. After taking into account the tax credit of £10, the net tax charge is £32.50 (which is equal to an effective rate of income tax of approximately 36.1 per cent. of the dividend received). From 6 April 2013 the dividend additional rate is to be reduced so that such individuals will pay tax at a rate of 37.5 per cent. (which equates to 30.6 per cent. of the dividend received for eligible individuals as a result of applying the tax credit).

United Kingdom resident Shareholders who are not liable to United Kingdom tax on dividends, including pension funds and charities, are not entitled to claim repayment of the tax credit attaching to dividends paid by the Company.

Subject to certain anti-avoidance rules, corporate Shareholders resident in the United Kingdom for tax purposes should not be subject to corporation tax on dividends received on the Ordinary Shares from the Company.

(c) Non-United Kingdom resident Shareholders

Non-United Kingdom resident Shareholders are not liable to make actual payments of UK income tax in respect of dividends received from the Company. Non-United Kingdom resident Shareholders are not generally entitled to claim any part of the tax credit, and any ability to do so will depend on the terms of any applicable double tax treaty between the UK and the country in which the Shareholder is resident. Non-United Kingdom resident Shareholders may also be subject to tax on dividend income under any law to which they are subject outside the UK. Such Shareholders should consult their own tax advisers concerning their tax liabilities.

11.3 Stamp duty and SDRT

The statements below summarise the current position and are intended as a general guide only to stamp duty and SDRT. Special rules apply to agreements made by broker dealers and market makers in the ordinary course of their business and to certain categories of person (such as depositaries and clearance services) who may be liable to stamp duty or SDRT at a higher rate or may, although not primarily liable for tax, be required to notify and account for it under the Stamp Duty Reserve Tax Regulations 1986.

(a) The Rights Issue

No stamp duty or SDRT will generally be payable on the issue of Provisional Allotment Letters or split Provisional Allotment Letters or on the issue of definitive share certificates or crediting of CREST member accounts with Nil Paid Rights. Similarly, no stamp duty or SDRT will be payable on the registration of Provisional Allotment Letters, whether by the original holders or their renouncees.

A purchase of Nil Paid Rights or Fully Paid Rights, whether represented by a Provisional Allotment Letter or in CREST on or before the last time for registration of renunciation will not be liable to stamp duty but will be liable to SDRT, generally at the rate of 0.5 per cent. of the amount or value of the consideration payable.

Stamp duty and SDRT are normally a liability of the purchaser or transferee (although where such purchase is effected through a stockbroker or other financial intermediary, that person should normally account for the liability to SDRT and should indicate this has been done in any contract note issued to a buyer). In the case of transfers within CREST, any SDRT due will be collected through CREST in accordance with the CREST rules.

(b) Subsequent transfers

A transfer for value of Ordinary Shares will generally be subject to stamp duty or SDRT. Stamp duty will arise on the execution of an instrument to transfer Ordinary Shares and SDRT will arise on the entry into of an agreement to sell such Ordinary Shares.

The amount of stamp duty or SDRT payable on the transfer is generally calculated at the rate of 0.5 per cent. of the consideration paid. Stamp duty is rounded up to the nearest £5. An exemption from stamp duty is available on an instrument transferring Ordinary Shares where the amount or value of the consideration is £1,000 or less, and it is certificated on the instrument that the transaction effected by the instrument does not form part of a larger transaction or series of transactions in respect of which the aggregate amount or value of the consideration exceeds £1,000. A liability to SDRT will be cancelled and any SDRT already paid will be repaid, generally with interest, where an instrument of transfer is executed, stamp duty is paid on that instrument and a claim for payment is made within six years of the date on which the liability to SDRT arises.

(c) Shares held through CREST

Paperless transfers of Ordinary Shares within the CREST system are generally liable to SDRT, rather than stamp duty, at the rate of 0.5 per cent. of the amount or value of the consideration payable. SDRT on relevant transactions is generally settled within the CREST system. Deposits of shares into CREST will generally not be subject to SDRT, unless the transfer into CREST is itself for consideration.

12. Underwriting Agreement

The Company and Jefferies have entered into the Underwriting Agreement dated 28 February 2013 pursuant to which Jefferies has agreed, subject to certain conditions, to use its reasonable endeavours to procure subscribers for the New Ordinary Shares which are not validly taken up in the Rights Issue (the ''Rump Shares''), failing which Jefferies has agreed to subscribe for such Rump Shares at the Issue Price.

Under the Underwriting Agreement, the Company has also appointed Jefferies as sponsor in connection with the applications for Admission.

The Company has agreed to pay a commission to Jefferies equal to 3 per cent. of the gross proceeds of the Rights Issue, out of which sub-underwriting commissions will be paid.

In addition to the payment of fees and commissions, the Company will pay all other costs, charges, fees and expenses of, or incidental to, the Rights Issue, the allotment and issue of the New Ordinary Shares, Admission and the Underwriting Agreement. These include (but are not limited to) the fees of the FSA and the London Stock Exchange, printing and advertising costs, postage, registrars' and receiving agents' charges, its own and Jefferies' legal and other out-of-pocket expenses, all stamp duty and stamp duty reserve tax and other duties and value added tax on the fees, commissions, costs and expenses payable in connection with the Rights Issue.

Jefferies' obligations under the Underwriting Agreement are conditional on:

(a) subject to prior satisfaction or waiver of the other conditions prescribed in the Underwriting Agreement, Admission occurring not later than 8.00 a.m. on 19 March 2013, or such later time and/or date as Jefferies may agree with the Company in writing;
(b) none of the warranties and undertakings on the part of the Company contained in the Underwriting Agreement being or becoming untrue, inaccurate or misleading in any respect on and as of the date of the Underwriting Agreement, the date of publication of this document, the date of any supplementary prospectus (insofar as it is published before Admission) and immediately before Admission; and
(c) the Resolution being passed without material amendment at the General Meeting.

The Underwriting Agreement confers on Jefferies the right to terminate the Underwriting Agreement prior to Admission upon the occurrence of certain events, including:

(a) any matter or circumstance arising prior to Admission as a result of which it is reasonable to expect that any of the conditions in the Underwriting Agreement will not be satisfied by the required time(s) (if any) and continue to be satisfied at Admission; and/or
(b) other events occurring prior to Admission, including certain material adverse changes relating to the Group and certain events relating to material disruption in settlement, payment or clearance services or economic or political events.

The Underwriting Agreement also contains certain customary warranties by the Company as to the accuracy of the information contained in this document and certain other documents prepared in connection with the Rights Issue, and in relation to other matters relating to the Group and its business, and an indemnity from the Company in favour of Jefferies and its related persons.

13. Material contracts

The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by the Company or a member of the Group (a) in the two years immediately preceding the date of this documents and are, or may be, material or (b) contain provisions under which any member of the Group has any obligation or entitlement which is material to the Group as at the date of this document:

13.1 Underwriting Agreement

Details of the Underwriting Agreement are set out in paragraph 12 of this Part IX.

13.2 Revised Facilities Agreement

On 27 February 2013, the Company entered into the Revised Facilities Agreement between, among others, the Company as original borrower and original guarantor, certain subsidiaries of the Company as original borrowers and original guarantors, The Royal Bank of Scotland PLC as original lender and agent and Clydesdale Bank PLC trading as Yorkshire Bank as original lender. The Revised Facilities Agreement is an amendment and restatement of the Existing Facilities Agreement which becomes effective on the satisfaction of certain customary conditions precedent including the prepayment of the borrowings under the Existing Facilities Agreement from the net proceeds of the Rights Issue (the date when it becomes effective being the ''Effective Date'').

Upon the Effective Date, under the Revised Facilities Agreement, the lenders agree, subject to customary conditions precedent to utilisation, to make available to the Company and certain of its subsidiaries for utilisation up to and including 11 October 2016 a revolving credit facility up to an original aggregate sum of £35 million (of which £10 million is made available to the Company by way of an overdraft) although under the terms of the Revised Facilities Agreement, only £20 million of the total commitments will be available for utilisation until 31 December 2013. The borrowings under the Revised Facilities Agreement may be used for the general corporate purposes of the Company and its subsidiaries.

Under the Revised Facilities Agreement, the Company undertakes to ensure compliance with certain revised financial covenants outlined below:

Net debt to EBITDA	First test date 31 March 2014
	2.50x at 31 March 2014 and at each test date on the last day of each financial quarter thereafter
	On a ''last twelve months'' basis
Net interest cover	First test date 31 March 2014
	3.00x at 31 March 2014
	5.00x at each test date on the last day of each financial quarter thereafter
	On a ''last twelve months'' basis
Capital expenditure	Subject to certain carry forward rights, capital expenditure of the Group in any financial year not to exceed £7.5 million
Operating Cash Outflow	Subject to certain provisos,
	(i) Net operating cash outflow shall not exceed £12.5 million on a quarterly look back test at the end of each quarter; and

(ii) Net operating cash outflow shall not exceed £15 million in any month.

The Revised Facilities Agreement contains customary representations and warranties, affirmative and negative covenants (including but not limited to covenants on disposals, acquisitions, security and financial indebtedness), indemnities and events of default, with certain qualifications, carve-outs and materiality thresholds.

The interest rate under the Revised Facilities Agreement is a rate of 4 per cent. per annum initially over LIBOR with a downward ratchet applicable upon delivery of the audited accounts for the financial year

ending March 2014 and for each financial quarter thereafter depending on the ratio of gross debt to EBITDA as follows:

Ratio of debt: EBITDA	Margin % per annum
Greater than 2.25:1	4.00
Greater than 2.0:1 but less than or equal to 2.25:1	3.75
Greater than 1.5:1 but less than or equal to 2.0:1	3.00
Less than or equal to 1.5:1 .	2.5

A consent fee of 1 per cent. of the total commitments under the Revised Facilities Agreement on the Effective Date is payable under the Revised Facilities Agreement.

A commitment fee of 50 per cent. of the applicable margin per annum is payable on each lender's available commitment for the availability period.

Under the Revised Facilities Agreement mandatory prepayment of debt and cancellation of commitments is required where certain disposals by the Company occur, subject to a £5 million per annum basket.

The Revised Facilities Agreement is unsecured, though security may be required to be granted in the future in certain limited circumstances.

13.3 Existing Facilities Agreement

On 11 November 2011, the Company entered into the Existing Facilities Agreement between, among others, the Company as original borrower and original guarantor, certain subsidiaries of the Company as original borrowers and original guarantors, The Royal Bank of Scotland PLC as original lender and agent and Clydesdale Bank PLC trading as Yorkshire Bank as original lender under which the lenders agreed to make available a revolving credit facility up to an original aggregate sum of £50 million of which £10 million is made available to the Company by way of an overdraft.

Under the Existing Facilities Agreement, the revolving credit facility to be drawn in Sterling (or such other currency as is permitted under the Existing Facilities Agreement) has been made available by the lenders for utilisation by the Company and certain of its subsidiaries up to and including 10 October 2016.

The borrowings made under the Existing Facilities Agreement may be used towards the general corporate purposes of the Company and its subsidiaries. Subject to the terms of the Existing Facilities Agreement, a lender may provide an ancillary facility on a bilateral basis to a borrower in place of up to 50 per cent. of that lender's revolving credit commitment. Except as provided under the Existing Facilities Agreement, the terms of the ancillary facility will be those agreed between the ancillary lender and the Company.

Under the Existing Facilities Agreement, the Company undertakes to ensure compliance with certain financial covenants in relation to (i) interest cover (ratio of consolidated EBITDA (as defined in the Existing Facilities Agreement) to consolidated net interest payable); (ii) debt cover (ratio of consolidated total net borrowings payable to consolidated EBITDA (as defined in the Existing Facilities Agreement)); and (iii) the permitted total amount of capital expenditure of the Group in any financial year.

The Existing Facilities Agreement contains customary representations and warranties, affirmative and negative covenants (including but not limited to covenants on disposals, acquisitions, security and financial indebtedness), indemnities and events of default, with certain qualifications, carve-outs and materiality thresholds.

The Existing Facilities are unsecured.

13.4 Zamil Collaboration Agreement

On 24 January 2011, the Company entered into an agreement with Zamil dated 24 January 2011 in order to formalise the terms of their collaboration for the purpose of identifying and tendering for specific fabrication and steelwork projects in the Middle East and North Africa region (the ''Collaboration Agreement''). On a project by project basis, the Company and Zamil will formalise their participating interests and contractual arrangements through, inter alia, a contractual joint venture, a joint venture utilising a special purpose vehicle, or a principal contractor and sub-contractor relationship.

The Collaboration Agreement is for a duration of eight years from the date of the agreement unless it is terminated earlier by either party on 20 business days written notice or immediately as a result of the other party's fraud or insolvency.

13.5 SMD Joint Venture Agreement

On 15 June 2009, JSW Structures entered into a joint venture agreement with SMD to create a joint venture company (''JSW Metal Decking Limited'' or ''JMDL'') for the purpose of engaging in the manufacture, design and erection of metal decking and ancillaries for construction projects in India and the surrounding region (the ''JMDL JVA'').

The target market sectors of the JMDL JVA include multi-storied high rise buildings, shopping malls, airports, IT parks, car parks, light bridges, stadia and other constructions in India and the surrounding region.

JSW Structures holds 66 per cent. and SMD holds 34 per cent. of the issued share capital of JMDL. JSW Structures is entitled to appoint four directors and SMD is entitled to appoint two directors such that the total composition of the board is six directors, four nominated by JSW Structures and two nominated by SMD. JSW Structures has the right to appoint the chairman and SMD has the right to appoint the managing director/CEO of JMDL.

JSW Structures and SMD are obligated to inject such quantum of funds in the form of debt or equity or preference contributions in JMDL as may be mutually agreed from time to time to facilitate the strategic growth of the business up to an amount not exceeding £3 million. If for any reason either party was unable to meet its funding obligations when called by JMDL this would constitute an event of default under the JMDL JVA and the non-defaulting party would have the option to purchase all of the shares of the other party in JMDL for fair value.

JSW Structures and SMD do not guarantee any borrowings of JMDL and do not provide any other security required in respect thereof. The dividend policy of JMDL is determined by the board.

Each shareholder is under an obligation to provide various services to JMDL including, inter alia, the training of personnel and the procurement of key personnel. In addition, JSW Structures has agreed to enter in suitable supply agreements for the supply of coils by JSW Structures on a back to back basis.

Neither JSW Structures nor SMD may transfer their shares to any person (other than to a related person) in the period up to and including 16 November 2018. At the end of this period, if either shareholder wishes to transfer their shares in JMDL then the other shareholder shall have a right of first refusal over such transfer. The JMDL JVA contains various additional events of default, including but not limited to, (i) a shareholder entering administration, (ii) a change of control to the ultimate holding company of a shareholder and (iii) insolvency of either shareholder. Should any event of default occur, the non-defaulting shareholder will have an option to acquire all of the shares of the defaulting shareholder.

13.6 Indian Joint Venture Agreement

On 17 November 2008, Severfield-Rowen Structures Limited (''SRS'') entered into a joint venture agreement with JSW Building, a subsidiary of JSW Steel, to create a joint venture company, JSW Structures, for the purpose of, inter alia, engaging in the design, fabrication and erection of structural steelwork for construction projects in India and the surrounding region. With effect from 12 February 2009, SRS entered into a deed of adherence (pursuant to the joint venture agreement) with, inter alia, Severfield-Rowen Mauritius Limited by which all of the rights, benefits and obligations of SRS were assigned to Severfield-Rowen Mauritius Limited. Furthermore on 14 August 2009 JSW Building entered in a deed of adherence (pursuant to the joint venture agreement) with, inter alia, JSW Steel whereby all of the rights, benefits and obligations of JSW Building were assigned to JSW Steel.

The target market sectors of the Indian Joint Venture include multi-storied high rise buildings, shopping malls, airports, IT parks, car parks, light bridges, stadia and other constructions in India and the surrounding region.

Severfield-Rowen (through Severfield-Rowen Mauritius Limited) and JSW Steel each hold 50 per cent. of the issued share capital of JSW Structures and each is entitled to appoint four directors such that the total composition of the board is eight directors, four nominated by Severfield-Rowen and four nominated by JSW Steel. JSW Steel has the right to appoint the chairman and Severfield-Rowen has the right to appoint the managing director/CEO of JSW Structures. The chairman is not entitled to a second or casting vote.

Severfield-Rowen and JSW Steel are obligated to inject such quantum of funds in the form of debt or equity or preference contributions in JSW Structures as may be mutually agreed from time to time in equal amounts to facilitate the strategic growth of the business up to an amount not exceeding £30 million. If for any reason either party was unable to meet its funding obligations when called this would constitute an event of default under the joint venture agreement and the non-defaulting party would have the option to purchase all of the shares of the other party in JSW Structures for fair value. As at the date of this document, the initial funding obligation of £30 million has been satisfied, of which approximately £5.3 million was funded in equity by Severfield-Rowen and JSW Steel with the balance of the funding being raised in debt by the joint venture company from banks based in India.

Severfield-Rowen and JSW Steel do not guarantee any borrowings of JSW Structures and do not provide any other security required in respect thereof. The dividend policy of JSW Structures is determined by the board.

Severfield-Rowen is under a further obligation to provide training to the personnel of JSW Structures in respect of commercial, operational, technical and erection management.

Neither Severfield-Rowen Mauritius Limited nor JSW Steel may transfer their shares to any person (other than to a related person) for a period of ten calendar years from the date of the agreement. At the end of this period, if either shareholder wishes to transfer their shares in JSW Structures then the other shareholder shall have a right of first refusal over such transfer. The Indian Joint Venture Agreement contains various additional events of default, including but not limited to, (i) a shareholder entering administration, (ii) a change of control to the ultimate holding company of a shareholder and (iii) insolvency of either shareholder. Should any event of default occur, the non-defaulting shareholder will have an option to acquire all of the shares of the defaulting shareholder.

13.7 Fabsec Licence

On 18 May 2001, the Company entered into a licence agreement with Fabsec (the ''Fabsec Licence''). Under the terms of the Fabsec Licence, the Company has been granted a royalty free, perpetual licence in relation to various patents, intellectual property and software to design and manufacture a range of steelwork products (the ''Products'') for the sole purpose of supplying the Products to meet the requirements of its own construction contracts, those of the Group and those of the William Hare Group from time to time.

Fabsec, as licensor, has undertaken for the duration of the Fabsec Licence not to manufacture the Products itself and not to grant any other person the right to design or manufacture the Products in the United Kingdom. The Company may assign its rights and obligations under the Fabsec Licence to any member of its Group.

Whilst the Fabsec Licence is perpetual it is subject to certain termination provisions including upon the administration, liquidation or insolvency of either party, or upon a breach of the Fabsec Licence that, if capable of remedy, is not remedied within the required time period set out in the agreement.

The Fabsec Licence is also subject to the provisions of the Fabsec Shareholders' Agreement.

13.8 Fabsec Shareholders' Agreement

On 18 May 2001, the Company entered into a shareholders agreement with each of Fabsec, Corus UK Limited, W J Leigh & Co and Atlas Ward Holdings Limited in relation to the Fabsec Licence in order to govern the relationship between the shareholders and to provide for the assignment and grant of certain licences, patents and intellectual property rights for the purpose of developing and manufacturing various steelwork products (the ''Fabsec Shareholders' Agreement'').

Under the Fabsec Shareholders' Agreement, the Company holds 250 A ordinary shares comprising 25 per cent. of the issued share capital of Fabsec (formerly Journalkeep Limited). Each of the other shareholders also holds a 25 per cent. interest in Fabsec through B ordinary shares, C ordinary shares and D ordinary shares, respectively. Each class of ordinary shares has equal rights including in relation to the appointment of directors of Fabsec with each shareholder able to appoint one director to the board.

The Fabsec Shareholders' Agreement provides that, subject to Fabsec making reasonable provision in terms of its working capital requirements, 50 per cent. of the profit available for distribution in respect of each financial year is to be distributed by Fabsec to shareholders by way of dividend.

The Fabsec Shareholders' Agreement is terminable if any shareholder knowingly commits any material breach of the agreement (''Defaulting Party'') and fails to remedy the breach within 28 days of receipt of written notice to such effect from all of the other shareholders (''Non-Defaulting Parties''). The Non-Defaulting Parties then have the right to purchase from the Defaulting Party all of the shares of Fabsec beneficially owned or controlled by the Defaulting Party. The Fabsec Shareholders' Agreement is assignable by any of the shareholders subject to the transferee executing a deed of adherence.

14. Litigation

14.1 Save as described in paragraph 14.2 below, there are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) which may have, or have had in the recent past (covering the 12 months preceding the date of this document), a significant effect on the Company's and/or the Group's financial position or profitability.

14.2 Shard project (the ''Project'')

SRS, a subsidiary of Severfield-Rowen, in its position as sub-contractor to Mace Limited (the main contractor to the Project), entered into a further sub-contract with Cleveland Bridge UK Limited (''CBUK'') for the supply, fabrication and erection of steelwork up to and including level 9 of The Shard main structure (the ''CBUK Sub-contract''). On 21 December 2012, the Technology and Construction Court of the Queen's Bench Division of the High Court (the ''Court'') handed down its judgment in respect of a dispute between SRS and CBUK.

As a result of a dispute over the quality and time of delivery of certain steelwork supplied by CBUK pursuant to the CBUK Sub-contract, SRS withheld certain contractual payments due under the CBUK Sub-contract. CBUK brought a claim against SRS for these unpaid sums in respect of the supplied steelwork.

SRS counterclaimed alleging that, in breach of contract, (i) CBUK had failed to deliver certain steelwork on time pursuant to the CBUK Sub-contract resulting in a significant delay, and (ii) a large proportion of the steelwork supplied by CBUK had been defective. Furthermore, as a consequence of the delays of the CBUK steelwork, SRS had undertaken acceleration and remedial measures to recover costs incurred as a result of the delay.

In its judgment the Court found that SRS was entitled to damages from CBUK totalling £824,478.49 for CBUK's breach of contract.

In addition, the Court found in favour of SRS in relation to several of its claims for several technical non-conformity reports (the ''NCRs''). However, SRS was not successful in respect of all of its claims in respect of the NCRs, and a decision is still pending in respect of claims for further NCRs which are valued at up to £600,000.

The Court also ruled that CBUK was entitled to the total amount of £928,472.55 plus VAT, subject to any set-off against SRS's claim, for sums outstanding under the CBUK Sub-contract.

Currently no payments have been made further to the awards handed down by the Court as SRS and CBUK are awaiting the quantum findings in respect of the NCRs.

So far no legal costs have been awarded in respect of the Shard litigation. A costs hearing is expected to take place once the quantum for the NCRs has been established. As at the date of this document, SRS had incurred legal costs of approximately £2.3 million.

15. Subsidiaries

The Company acts as the holding company of the Group, which is the largest specialist structural steelwork group in the UK. The Group operates in the UK, India and the Middle East. Severfield-Rowen designs, fabricates and erects steelwork across a broad range of sectors and has a substantial presence in the UK steelwork market.

As at 27 February 2013 (being the last practicable date prior to the date of publication of this document), the Company owns directly or indirectly 100 per cent. of the issued ordinary share capital of the following principal subsidiaries.

Incorporated in England & Wales:

Name	Activity
Atlas Ward Structures Limited	Steelwork design, fabrication and erection
Engineering Construction Training Limited	Training and assessments in engineering and construction industry disciplines
Fisher Engineering Limited	Steelwork fabrication
Severfield-Reeve International Limited	Steelwork fabrication
Severfield-Rowen Structures Limited(1)	Steelwork design and fabrication
Steelcraft Erection Services Limited(1)	Steelwork erection
Watson Steel Structures Limited(1)	Steelwork design and fabrication

Note:

(1) As part of the restructuring actions being taken in response to the recent deterioration of the markets in which the Group operates described at paragraph 2 of Part I of this document, the Group is in the process of merging Severfield-Rowen Structures Limited, Watson Steel Structures Limited and Steelcraft Erection Services Limited into a single trading entity to be known as Severfield-Watson Structures Limited.

Incorporated in India:

Name	Activity
JSW Severfield Structures Limited1	Steelwork design, fabrication and erection

Note:

(1) Severfield-Rowen owns 50 per cent. of the issued ordinary share capital as part of the joint venture with JSW Steel Limited of India.

Incorporated in Mauritius:

Name Activity

Severfield-Rowen Mauritius Limited Holding company

As at 27 February 2013 (being the last practicable date prior to the date of publication of this document), the Company owns directly or indirectly 25.1 per cent. of the issued ordinary share capital of Kennedy Watts Partnership Limited and 25 per cent. of the issued ordinary share capital of Fabsec Limited.

16. Property, plant and equipment

16.1 Save as set out below, there are no existing or planned material tangible fixed assets, including leased properties, owned by the Group.

	£,000 as at 31 December 2012
Land and buildings	62,703
Plant and equipment	11,877
Fixtures, fittings and office equipment .	608
Motor vehicles	1,049
Total	76,237

16.2 There are currently no charges or security granted in respect of the assets referred to in paragraph 16.1. There are currently no known environmental issues which will materially affect the Group's use of its fixed assets.

17. Working capital

The Company is of the opinion that, taking into account the net proceeds of the Rights Issue and the Revised Facilities, the Group has sufficient working capital for its present requirements, that is, for at least the next 12 months from the date of this document.

18. No significant change

Save for the increase of net financial indebtedness from £29.7 million as at 31 December 2012 to £44.0 million as at 14 February 2013 disclosed at paragraph 4 of Part VI of this document, there has been no significant change in the financial or trading position of the Group since 31 December 2012, being the date to which the last published financial statements of the Group were prepared.

19. Related Party Transactions

In respect of the periods for which historical financial information appears or is incorporated by reference in this document and in respect of the periods from the end of such financial periods to 27 February 2013, being the latest practicable date prior to the publication of this document, save as disclosed below and in note 32 on page 93 of the audited consolidated financial statements of the Group for the financial year ended 31 December 2009, note 31 on page 97 of the audited consolidated financial statements of the Group for the financial year ended 31 December 2010 and note 31 on page 97 of the audited consolidated financial statements of the Group for the financial year ended 31 December 2011 (which are incorporated by reference into this document), neither the Company nor any member of the Group has entered into any transactions with related parties save as set out below:

The Company is currently negotiating a compromise agreement with its former CEO, Thomas Haughey who left the Company on 22 January 2013. Under the terms of his service agreement he is entitled to a 12 month notice period. The compensation due to Mr Haughey is expected to be in the region of £422,098 representing his salary and contractual benefits for what would have been his notice period. No bonus will be paid.

20. Miscellaneous

20.1 The total costs and expenses of, and incidental to, the Rights Issue payable by the Company are estimated to be £3.1 million (excluding VAT).
20.2 Jefferies has given and has not withdrawn its written consent to the issue of this document with the inclusion herein of references to its name in the form and context in which they appear.
20.3 Deloitte LLP (a member of the Institute of Chartered Accountants of England and Wales) has given and has not withdrawn its written consent to the inclusion in this document of its report set out in Part VIII of this document in the form and context in which its appears and has authorised the content of that report for the purposes of item 5.5.3R(2)(f) of the Prospectus Rules.
20.4 The financial information concerning the Group contained in this document does not constitute statutory accounts within the meaning of section 434 of the Companies Act. Deloitte LLP, whose registered address is 1 City Square, Leeds, West Yorkshire, LS1 2AL, audited the statutory accounts of the companies comprising the Group for the financial years ended 31 December 2009, 31 December 2010 and 31 December 2011 and gave reports under section 495 of the Companies Act on such accounts which were not qualified and did not contain any such statement under section 498 (2) or (3) of the Companies Act.
20.5 Certain information has been obtained from external publications and/or third parties and is sourced in this document where the information is included. The Company confirms that this information has been accurately reproduced and, so far as the Company is aware and is able to ascertain from information published by third parties, no facts have been omitted that would render the reproduced information inaccurate or misleading. Unless otherwise stated, such information has not been audited.
20.6 The New Ordinary Shares will, when issued, be in registered form and will, on Admission, be capable of being held in certificated and uncertificated form. Title to the certificated New Ordinary Shares will be evidenced by entry in the register of members of the Company and title to uncertificated New Ordinary Shares will be evidenced by entry in the operator register maintained by Euroclear UK

(which forms part of the register of members of the Company). The Fully Paid Rights will be admitted with the ISIN GB00B997JV80. The Nil Paid Rights will be issued with ISIN GB00B7V0D751. Once issued, the New Ordinary Shares will trade with the ISIN GB00B27YGJ97, the Existing Ordinary Shares currently trade with the ISIN GB00B27YGJ97.

20.7 The Ordinary Shares are in registered form and are capable of being held in certificated form and uncertificated form (that is, in CREST). The register of members is maintained by Computershare.
20.8 Save in respect of the Rights Issue, none of the New Ordinary Shares have been marketed or are available in whole or in part to the public in conjunction with the application for the New Ordinary Shares to be admitted to the premium segment of the Official List.
20.9 The Company will make appropriate announcements to a Regulatory Information Service giving details of the results of the Rights Issue and details of the sale of the New Ordinary Shares not taken up by Qualifying Shareholders on or about 5 April 2013.
20.10 The Company remains subject to the continuing obligations of the Listing Rules with regard to the issue of securities for cash and the provisions of section 561 of the Companies Act (which confers on Shareholders rights of pre-emption in respect of the allotment of equity securities which are, or are to be, paid up in cash).
20.11 The Company is in discussions with HMRC to defer a VAT payment of approximately £2.5 million otherwise due in January 2013 to a number of payments in February, March and April 2013.

21. Documents available for inspection

Copies of the following documents will be available for inspection during normal business hours on any weekday (Saturday, Sunday and public holidays excepted) at the registered office of the Company at Dalton Airfield Industrial Estate, Dalton, Thirsk, North Yorkshire, YO7 3JN and at the offices of Ashurst LLP, Broadwalk House, 5 Appold Street, London, EC2A 2HA until Admission:

(a) the Articles of Association;
(b) the audited consolidated financial statements of the Company for the financial years ended 31 December 2009, 31 December 2010, and 31 December 2011 and the unaudited financial statements of the Company for the six months ended 30 June 2012 and 31 December 2012;
(c) the report on the unaudited pro forma financial information by Deloitte LLP set out in Part VIII of this document;
(d) the letters of consent referred to in paragraphs 20.2 and 20.3 above; and
(e) this document.

Dated: 28 February 2013

PART X

DOCUMENTS INCORPORATED BY REFERENCE

The following information, available free of charge in electronic format through Severfield-Rowen's website at www.sfrplc.com or in printed format from Severfield-Rowen's registered office at Dalton Airfield Industrial Estate, Dalton, Thirsk, North Yorkshire, YO7 3JN, is incorporated by reference in this document.

The table below sets out the various sections of such documents which are incorporated by reference into this document, so as to provide the information required pursuant to the Prospectus Rules and to ensure that Qualifying Shareholders and others are aware of all information which, according to the particular nature of the Company and of the New Ordinary Shares, is necessary to enable Qualifying Shareholders and others to make an informed assessment of the assets and liabilities, financial position, profit and losses and prospects of the Company, and of the rights attaching to the New Ordinary Shares. Information on the other parts of the document is either covered elsewhere in this document or is not relevant to an investor's assessment of the Group.

Reference Document	Information incorporated by reference	Reference Document Page Reference	Page Reference in this Document
Unaudited half year	Condensed Consolidated Income Statement	6	101
results for the	Condensed Consolidated Statement of Comprehensive Income	8
six months ended	Condensed Consolidated Statement of Changes in Equity	9
30 June 2012	Condensed Consolidated Balance Sheet	10
	Condensed Consolidated Cash Flow Statement	11
	Notes	12-17
	Independent Review Report	18-19
2011 Annual Report	Independent Auditors' Report	62	101
and Accounts	Consolidated Income Statement	63
	Consolidated Statement of Comprehensive Income	64
	Consolidated Balance Sheet	65
	Consolidated Statement of Changes in Equity	66
	Consolidated Cash Flow Statement	67
	Notes to the Consolidated Financial Statements	68-98
2010 Annual Report	Independent Auditors' Report	62	101
and Accounts	Consolidated Income Statement	63
	Consolidated Statement of Comprehensive Income	64
	Consolidated Balance Sheet	65
	Consolidated Statement of Changes in Equity	66
	Consolidated Cash Flow Statement	67
	Notes to the Consolidated Financial Statements	68-98
2009 Annual Report	Independent Auditors' Report	60	101
and Accounts	Consolidated Income Statement	61
	Consolidated Statement of Comprehensive Income	62
	Consolidated Balance Sheet	63
	Consolidated Statement of Changes in Equity	64
	Consolidated Cash Flow Statement	65
	Notes to the Consolidated Financial Statements	66-93

PART XI

DEFINITIONS AND GLOSSARY

The following expressions have the following meaning throughout this document, unless the context otherwise requires:

''Act'' or ''Companies Act''	the Companies Act 2006 as amended from time to time;
''Admission''	the admission of the New Ordinary Shares (nil paid) to the premium segment of the Official List becoming effective in accordance with the Listing Rules and the admission of such shares (nil paid) to trading on the London Stock Exchange's main market for listed securities becoming effective in accordance with the Admission and Disclosure Standards;
''Admission and Disclosure Standards''	the Admission and Disclosure Standards of the London Stock Exchange containing, among other things, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange's main market for listed securities;
''Articles of Association'' or ''Articles''	the articles of association of the Company, details of which are set out in paragraph 4 of Part IX of this document;
''Associate''	an entity over which the Group is in a position to exercise significant influence, but not control, through participation in the financial and operating policy decisions in the investee;
''Atlas Ward Pension Scheme''	has the meaning given to such term on page 21 of the section entitled ''Risk Factors'';
''Audit Committee''	the audit committee established by the Board;
''Board''	the board of directors of the Company;
''business day''	any day (excluding Saturdays and Sundays or public holidays in England and Wales) on which banks are generally open in London for the transaction of normal banking business;
''CCSS'' or ''CREST Courier and Sorting Service''	the CREST Courier and Sorting Service established by Euroclear UK to facilitate, amongst other things, the deposit and withdrawal of securities;
''certificated'' or ''in certificated form''	where a share or other security is not in uncertificated form;
''Closing Price''	the closing, middle market quotation of an Existing Ordinary Share, as published in the Daily Official List;
''Communications Host''	a network provider's communication host (as defined in the CREST Glossary of Terms promulgated by Euroclear UK on 15 July 1996 and as amended since);
''Company'' or ''Severfield-Rowen''	Severfield-Rowen Plc;
''Computershare'' or ''Registrars'' or ''Receiving Agent''	Computershare Investor Services PLC;
''CREST''	the computerised system for the paperless settlement of sales and purchases of securities operated by Euroclear UK & Ireland in accordance with the CREST Regulations;

''CREST Manual''	the rules governing the operation of CREST consisting of the CREST Reference Manual, the CREST International Manual, the CREST Central Counterparty Service Manual, the CREST rules, the Registrars Service Standards, the Settlement Discipline Rules, the CCSS Operations Manual, the Daily Timetable, the CREST Application Procedure and the CREST Glossary of Terms (all as defined in the CREST Glossary of Terms promulgated by Euroclear UK on 15 July 1996 and as amended since);
''CREST member''	a person who has been admitted to Euroclear UK as a system member (as defined in the CREST Regulations);
''CREST participant''	a person who is, in relation to CREST, a system participant (as defined in the CREST Regulations);
''CREST Regulations'' or ''Regulations''	the Uncertified Securities Regulations 2001 (SI 2001 No.3755), as amended;
''CREST rules''	the rules, regulations, procedures, facilities and requirements of Euroclear UK & Ireland as operator (within the meaning of the CREST Regulations) of the CREST system;
''CREST sponsor''	a CREST participant admitted to CREST as a CREST sponsor;
''CREST sponsored member''	a CREST member admitted to CREST as a sponsored member;
''Daily Official List''	the daily record setting out the prices of all trades in shares and other securities conducted on the London Stock Exchange;
''dealing day''	any day on which the London Stock Exchange is open for business in the trading of securities admitted to the premium segment of the Official List;
''Directors''	the current Executive Directors and Non-executive Directors of the Company whose names are set out on page 29 of this document;
''Disclosure and Transparency Rules'' or ''DTR''	the rules made by the FSA under Part VI of FSMA relating to the disclosure of information (as amended from time to time);
''EEA States''	the member states of the European Economic Area;
''Effective Date''	as defined in paragraph 13.2 of Part IX of this document;
''Enlarged Share Capital''	the issued share capital of the Company following completion of the Rights Issue;
''EU'' or ''European Union''	the European Union first established by the treaty made at Maastricht on 7 February 1992;
''EUR'' or ''Euro'' or ''g''	the lawful currency of the European Union;
''Euroclear UK & Ireland'' or ''Euroclear UK''	Euroclear UK & Ireland Limited, the operator of CREST;
''European Economic Area''	the European Union, Iceland, Norway and Liechtenstein;
''Excluded Territories'' and each an ''Excluded Territory''	Canada, Japan, Australia and the Republic of South Africa and any other jurisdiction where the extension or availability of the Rights Issue (and any other transaction contemplated thereby) would breach any applicable law or regulation;
''Executive Directors''	the executive directors of Severfield-Rowen;
''Existing Facilities''	the facilities of up to £50 million made available under and in accordance with the Existing Facilities Agreement;

''Existing Facilities Agreement''	the facilities agreement dated 11 November 2011 between Severfield-Rowen, certain subsidiaries of Severfield-Rowen, Royal Bank of Scotland PLC and Clydesdale Bank PLC trading as Yorkshire Bank comprising a revolving credit facility of up to £50 million, and further described in paragraph 13.3 of Part IX of this document;
''Existing Ordinary Shares''	the fully paid Ordinary Shares of 2.5 pence each in the capital of the Company in issue at the Record Date;
''Ex-Rights Date''	the date on which the New Ordinary Shares are expected to commence trading ex-rights, being 19 March 2013;
''Fabsec''	as defined in paragraph 1 of Part IV of this document;
''Fabsec Licence''	as defined in paragraph 13.7 of Part IX of this document;
''Fabsec Shareholders Agreement''	as defined in paragraph 13.8 of Part IX of this document;
''Financial Services Authority'' or ''FSA''	the Financial Services Authority of the UK in its capacity as the competent authority for the purposes of Part VI of FSMA and in the exercise of its functions in respect of admission to the premium segment of the Official List otherwise than in accordance with Part VI of FSMA;
''Form of Proxy''	form of proxy accompanying this document for use by Shareholders in relation to the General Meeting;
''FSMA''	the Financial Services and Markets Act 2000, as amended;
''Fully Paid Rights''	rights to acquire the New Ordinary Shares, fully paid;
''General Meeting''	the general meeting of Severfield-Rowen to be held at the offices of Ashurst LLP, Broadwalk House, 5 Appold Street, London EC2A 2HA on 18 March 2013 at 11.00 a.m., notice of which is set out at the end of this document;
''Group'' or ''Severfield-Rowen Group''	the Company and each of its subsidiaries and subsidiary undertakings from time to time;
''HMRC''	Her Majesty's Revenue and Customs and, where relevant, any predecessor body which carried out part of its functions and references to any approval by Her Majesty's Revenue and Customs shall, where appropriate, include approval by an officer thereof;
''IAS''	International Accounting Standards;
''IASB''	the International Accounting Standards Board;
''IFRS''	International Financial Reporting Standards as issued by the International Accounting Standards Board;
''Indian Joint Venture''	the Group's joint venture in India with JSW Steel;
''Interim Period Results''	the Group's results for the 12 month financial period ended on 31 December 2012;
''ISIN''	the international securities identifying number;
''Issue Price''	23 pence per New Ordinary Share;
''Jefferies''	Jefferies International Limited;
''JSW Building''	JSW Building Systems Limited;
''JSW Steel''	JSW Steel Limited, part of the OP Jindal group of companies;

''JSW Structures''	JSW Severfield Structures Ltd, the Company's Indian joint venture company, owned as to 50 per cent. jointly with JSW Steel;
''Listing Rules''	the listing rules made by the FSA under Part VI of FSMA (as amended from time to time);
''London Gazette''	the official newspaper of the Crown;
''London Stock Exchange''	London Stock Exchange PLC;
''member account ID''	the identification code or number attached to any member account in CREST;
''Money Laundering Regulations''	the Money Laundering Regulations 2007, as amended from time to time;
''MTM instruction''	as defined in paragraph 3.2 of Part II of this document;
''New Ordinary Shares''	the new Ordinary Shares of 2.5 pence each proposed to be issued by the Company pursuant to the Rights Issue;
''Nil Paid Rights''	rights to acquire New Ordinary Shares, nil paid, provisionally allotted to Qualifying Shareholders pursuant to the Rights Issue;
''Nominations Committee''	the nominations committee established by the Board;
''Non-CREST Shareholder''	a Shareholder who does not hold his Ordinary Shares in CREST;
''Non-executive Directors''	the non-executive directors of the Company;
''Notice of the General Meeting''	the notice of the General Meeting which is set out at the end of this document;
''Official List''	the Official List of the UK Listing Authority;
''Ordinary Shares''	ordinary shares of 2.5 pence each in the capital of the Company;
''Overseas Shareholders''	Shareholders who have registered addresses outside the UK or who are located or resident in, countries outside the UK;
''participant ID''	the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant;
''Prospectus'' or ''this document''	this document, comprising a circular and a prospectus relating to the Company for the purpose of the Rights Issue (together with any supplements or amendments thereto);
''Prospectus Rules''	the rules made by the FSA under Part VI of FSMA in relation to offers of transferable securities to the public and admission of transferable securities to trading on a regulated market;
''Provisional Allotment Letter'' or ''PAL''	the renounceable provisional allotment letter expected to be sent to Qualifying Non-CREST Shareholders by the Company in respect of the New Ordinary Shares (nil paid) provisionally allotted to them pursuant to the Rights Issue;
''PSP''	the Severfield-Rowen Plc performance share plan;
''QIB'' or ''Qualified Institutional Buyer''	a qualified institutional buyer within the meaning of Rule 144A under the US Securities Act;
''Qualifying CREST Shareholders''	Qualifying Shareholders holding Ordinary Shares on the Record Date in uncertificated form;
''Qualifying Non-CREST Shareholders''	Qualifying Shareholders holding Ordinary Shares on the Record Date in certificated form;
''Qualifying Shareholders''	holders of Ordinary Shares on the register of members of the Company at the Record Date;

''Record Date''	close of business on 14 March 2013;
''Regulation S''	Regulation S under the US Securities Act;
''Regulatory Information Service''	one of the regulatory information services authorised by the UK Listing Authority to receive, process and disseminate regulatory information in respect of listed companies;
''Remuneration Committee''	the remuneration committee established by the Board;
''Resolution''	the ordinary resolution to be proposed at the General Meeting as set out in the Notice of the General Meeting;
''Restricted Shareholders''	Qualifying Shareholders having registered addresses in, or resident or located in, the United States or any of the Excluded Territories;
''Review''	the Board's review of certain of the Group's contracts, the results of which were announced on 19 February 2013;
''Revised Facilities''	the facility of up to £35 million to be made available under and in accordance with the Revised Facilities Agreement, subject to the completion of the Rights Issue;
''Revised Facilities Agreement''	the facility agreement dated 11 November 2011 as amended and restated pursuant to an amendment and restatement agreement dated 27 February 2013 between Severfield-Rowen Plc, certain subsidiaries of Severfield-Rowen Plc, The Royal Bank of Scotland PLC and Clydesdale Bank PLC trading as Yorkshire Bank comprising a revolving credit facility of up to £35 million, which remains conditional upon completion of the Rights Issue;
''Rights''	the Nil Paid Rights and/or the Fully Paid Rights;
''Rights Issue''	the proposed issue of the New Ordinary Shares to Qualifying Shareholders by way of Rights on the terms and subject to the conditions set out in this document, and in the case of Qualifying Non-CREST Shareholders only, the Provisional Allotment Letters;
''Rule 144A''	Rule 144A under the US Securities Act;
''SDRT''	UK stamp duty reserve tax;
''Shareholders''	holders of Ordinary Shares;
''Share Schemes''	the Severfield-Rowen Plc Performance Share Plan and the Severfield-Rowen Plc Share Incentive Plan as described in paragraph 6 of Part IX of this document;
''Shares''	Ordinary Shares, or the New Ordinary Shares to be issued pursuant to the Rights Issue, as the context may require;
''SIP''	the Severfield-Rowen Plc share incentive plan;
''SMD''	SMD Asia LLP;
''SRS''	Severfield-Rowen Structures Limited;
''Statutes''	every statute (including any statutory instrument, order, regulation or subordinate legislation made under it) concerning companies that are incorporated in England and Wales to the extent that it is for the time being in force or (where the context requires) was in force at a particular time including the Companies Act and the CREST Regulations;
''Sterling'' or ''£'' or ''pence''	the lawful currency of the UK;

''stock account''	an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited;
''subsidiary''	a subsidiary, as that term is defined in section 1159 of the Companies Act;
''subsidiary undertaking''	a subsidiary undertaking, as that term is defined in section 1162 of the Companies Act;
''Takeover Code''	the City Code on Takeovers and Mergers;
''UK Corporate Governance Code''	the UK Corporate Governance published by the Financial Reporting Council;
''UK Listing Authority''	the FSA in its capacity as the competent authority for the purposes of Part VI of FSMA and in the exercise of its functions in respect of the admission to the premium segment of the Official List otherwise than in accordance with Part VI of FSMA;
''uncertificated'' or ''in uncertificated form''	recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST;
''Underwriting Agreement''	the agreement between the Company and Jefferies dated 28 February 2013, the principal terms of which are summarised in paragraph 12 of Part IX of this document;
''United Kingdom'' or ''UK''
	the United Kingdom of Great Britain and Northern Ireland;
''United States'' or ''US''	the United States of America, its territories and possessions, any state of the United States and the District of Columbia;
''US dollar''	the lawful currency of the United States of America;
''US Securities Act''	the US Securities Act of 1933, as amended;
''VAT''	value added tax; and

NOTICE OF GENERAL MEETING

SEVERFIELD-ROWEN PLC

Incorporated in England and Wales under the Companies Act 1985 with registered number 1721262

Notice is hereby given that a general meeting of Severfield-Rowen Plc (the ''Company'') will be held at 11.00 a.m. on 18 March 2013 at the offices of Ashurst LLP, Broadwalk House, 5 Appold Street, London EC2A 2HA to consider and, if thought fit, pass the following resolution which will be proposed as an ordinary resolution:

ORDINARY RESOLUTION

THAT the directors of the Company (the ''Directors'') be and they are hereby generally and unconditionally authorised pursuant to section 551 of the Companies Act 2006 (the ''Act'') (in addition to, and not in substitution for any existing authority to allot) to exercise all the powers of the Company to allot shares in the Company or grant rights to subscribe for or to convert any security into shares in the Company (together ''relevant securities'') in connection with the Rights Issue (as defined in the combined circular and prospectus of the Company dated 28 February 2013 of which this notice forms part) (the ''Prospectus'') up to an aggregate nominal amount of £5,206,313, such authority to expire (unless renewed, varied or revoked by the Company in general meeting) on the earlier of fifteen months from the date this resolution is passed and the conclusion of the annual general meeting of the Company in 2013 (save that the Company may before such expiry make any offer or agreement which would or might require relevant securities to be allotted after such expiry and the Directors may allot relevant securities pursuant to any such offer or agreement as if such authority had not expired).

By order of the Board:

Jonathan Rhodes Company Secretary

28 February 2013

Registered office: Dalton Airfield Industrial Estate Dalton Thirsk North Yorkshire YO7 3JN

Notes:

1. A member who is an individual is entitled to attend, speak and vote at the meeting or to appoint one or more other persons as his proxy to exercise all or any of his rights on his behalf. Further details of how to appoint a proxy, and the rights of proxies, are given in the paragraphs below. A member that is a company can appoint one or more corporate representatives (such as a director or employee of the company) whose attendance at the meeting is treated as if the company were attending in person, or it can appoint one or more persons as its proxy to exercise all or any of its rights on its behalf. In each case, a person attending the meeting will need to provide the Company or its registrars, Computershare Investor Services PLC, with evidence of their identity and, if applicable, their appointment as a proxy or corporate representative with authority to vote on behalf of a member.
1. A proxy need not be a shareholder of the Company. 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 other authority (if any) under which it is signed, or a notarially certified copy of such authority, to the Company's registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, United Kingdom; or (b) a CREST Proxy Instruction (as set out in paragraph 11 below); or (c) an online proxy appointment at www.computershare.com, in each case so that it is received no later than 11.00 a.m. on 15 March 2013. To appoint more than one proxy, you will need to complete a separate form of proxy form in relation to each appointment. A form of proxy for use in connection with the General Meeting is enclosed with this document. If you do not have a form of proxy and believe that you should, please contact the Company's registrars, Computershare Investor Services PLC on +44 (0)870 707 1329 or at The Pavilions, Bridgwater Road, Bristol BS99 6ZY, United Kingdom.
1. You will need to state clearly on each form of proxy the number of shares in relation to which the proxy is appointed. A failure to specify the number of shares each proxy appointment relates to or specifying a number of shares in excess of those held by the member will result in the proxy appointment being invalid.
1. The return of a completed form of proxy or any CREST Proxy Instruction (as described in paragraph 11 below) will not prevent a shareholder attending the General Meeting and voting in person if he/she wishes to do so.
1. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's register of members in respect of the joint holding (the first-named being the most senior).
1. Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights (a ''Nominated Person'') may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
1. The statement of the rights of shareholders in relation to the appointment of proxies in paragraphs 1, 2 and 3 above does not apply to Nominated Persons. The rights described in these paragraphs can only be exercised by shareholders of the Company.
1. Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, the Company gives notice that only those shareholders included in the register of members of the Company at close of business on 15 March 2013 or, if the meeting is adjourned, in the register of members at 6.00 p.m. on the day which is two days before the day of any adjourned meeting, will be entitled to attend and to vote at the General Meeting in respect of the number of shares registered in their names at that time. Changes to entries on the share register after close of business on 15 March 2013, or, if the meeting is adjourned, in the register of members at 6.00 p.m. on the day which is two days before the day of any adjourned meeting, will be disregarded in determining the rights of any person to attend or vote at the General Meeting.
1. As at 9.00 a.m. on 27 February 2013, the Company's issued share capital comprised 89,251,076 ordinary shares of 2.5 pence 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 9.00 a.m. on 27 February 2013 was 89,251,076.
1. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the General Meeting and any adjournment(s) of the meeting by using the procedures described in the CREST Manual (available via www.euroclear.com/CREST). CREST personal members or other CREST sponsored members, and those CREST members who have appointed a 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 instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is 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 the Company's agent (ID 3RA50), by the latest time for receipt of proxy appointments set out in paragraph 2 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 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. You may not use any electronic address provided in this notice, or any related documents including the proxy form to communicate with the Company for any purposes other than those expressly stated.
1. A copy of this notice, and other information required by section 311A of the Companies Act 2006, can be found at www.sfrplc.com.

AI assistant

SEVERFIELD PLC — Capital/Financing Update 2013

4741_prs_2013-02-28_6ddc9da8-c06e-49bf-82ec-7114c65426ff.pdf

SEVERFIELD-ROWEN PLC

CONTENTS

SUMMARY

RISK FACTORS

1. Importance of vote

If the Resolution is not passed or any of the other conditions of the Rights Issue are not fulfilled, the Rights Issue will not proceed

2. General Risks

A failure to estimate effectively risks, costs or timing when bidding on contracts and to manage such contracts efficiently could all have an adverse impact on the Group

General volatility, economic and market cycles, the recession in the United Kingdom and the global economic downturn could adversely affect the Group's future prospects, financial condition and results of operations

The Company's joint ventures may not be successful

The Group may be unable to establish itself in the Indian construction sector and the anticipated opportunities available to the Indian Joint Venture may not be realised

The Group's ability to raise debt financing on satisfactory terms following the expiry of the Existing Facilities and/or the Revised Facilities may not be successful

Increases in costs of goods sold and operating costs without corresponding increases in revenue could have an adverse impact on the profitability of the Group

The Group's financial performance and success depends upon the continued viability of suppliers, contractors, sub-contractors and other service providers

The Group's business is dependent upon IT systems and information security, a failure of which could cause significant disruption to the Group's operations and adversely affect its future prospects, financial strength and results of operations

The Group may lose its rights to use the Fabsec Licence

The Group may be unable to identify and execute acquisitions, joint ventures or investments, and if it does pursue such transactions, it may fail to successfully integrate them into or realise anticipated benefits to its business

The Group operates in various international markets which may have inherent risks relating to fraud, bribery and corruption

The Group is exposed to the political, legal, regulatory and social risks of the countries in which it operates which could have a material adverse effect on the Group's businesses, operating results, financial condition and prospects

As the contribution of the Indian Joint Venture constitutes an increasingly important part of the Group's business strategy, a downturn in the rate of economic growth in India could have a material adverse effect on the Group's future operating results

The Group is exposed to counterparty credit risks which are exacerbated by the current economic downturn

Suppliers may not be prepared to supply products to the Group on commercially acceptable terms, or at all, if they are unable to obtain credit insurance which could adversely affect the Group's future prospects, financial condition and results of operations

Changes to tax laws, or to the interpretation of tax laws, as well as increases in tax rates may adversely impact the profitability of the Group

Industrial action taken by organised labour unions could have a material adverse effect on the Group's business, financial condition and results of operations

Any failure of the Group's health, safety or environmental programmes or policies could subject the Group to potential liabilities and reputational damage

Major incidents at the Group's fabrication facilities could cause significant disruption to the Group's operations and adversely affect its future prospects, financial condition and results of operations

A major catastrophic incident in relation to one of the Group's projects could subject the Group to liability and significant reputational harm

The Group has a defined benefit pension scheme that is in deficit and in respect of which it may be required to further increase its contributions which could have a material adverse impact on the Group's business, operational results and financial condition

The Group's insurance coverage may be insufficient to cover losses or it could be subject to uninsured liabilities which could materially affect its business, financial condition and results of operations

The Group is exposed to fluctuations in currency exchange rates which could have a material adverse effect on the Group's operating results and financial condition

The Group is exposed to fluctuations in interest rates which could have a material adverse effect on the Group's operating results and financial condition

3. Risk factors specific to the steelwork and construction industries

The Group operates in highly competitive markets and may not be able to compete effectively and/or profitably

Contract disputes can result in payment delays or refusals to pay on completed contracts which could have a material adverse effect on the Group's business, financial condition and results of operations

A failure to meet deadlines could subject the Group to liability and significant reputational harm

The Group is subject to risks associated with the price and availability of steel which could adversely affect the Group's business, financial condition and results of operations

The cessation of the Group's relationship with Tata Steel, the Group's principal supplier of steel, could lead to a short term financial disruption to the Group's business whilst it secures alternative supplies of steel

The failure of the Group to obtain surety and other forms of bonding may hinder its ability to tender or win projects

The Group's business depends on the continued availability and effective management of sub-contractors and other service providers, and the performance of the contractors under which the Group may sub-contract

Legal proceedings, investigations and disputes could have a material adverse effect on the Group's future prospects, financial condition or results of operations

The Group is subject to various complex regulations and any violations of or changes in such regulations could disrupt its business

4. Additional risks relating to the Rights Issue and the New Ordinary Shares

The price of the Ordinary Shares may be volatile, may decrease, and Shareholders may not be able to sell the Ordinary Shares at a favourable price after the Rights Issue

An active trading market in the Nil Paid Rights may not develop

The listing of the New Ordinary Shares on the Official List and Admission may not occur when expected

The Company may not be able to pay any dividend in future periods

Shareholders who do not acquire New Ordinary Shares in the Rights Issue will experience dilution of their ownership of the Company

If the conditions to the Rights Issue are not satisfied by Admission, the Rights Issue will not proceed

Any future issues of Ordinary Shares could further dilute the holdings of current Shareholders

Overseas Shareholders may not be able to receive New Ordinary Shares in the Rights Issue

The ability of Overseas Shareholders to bring actions or enforce judgments against the Company or the Directors may be limited

Shareholders may be subject to exchange rate risks

RIGHTS ISSUE STATISTICS

DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS

IMPORTANT INFORMATION

Presentation of financial information

International Financial Reporting Standards

No incorporation of website information

Forward looking statements

Defined terms

Market and industry information

Enforcement of civil liabilities

Notice to Investors in the United States

Notice to New Hampshire Residents Only

Notice to investors in a European Economic Area member state

Notice to all Overseas Investors

Notice to all investors

General notice

WHERE TO FIND HELP

PART I

LETTER FROM THE EXECUTIVE CHAIRMAN OF SEVERFIELD-ROWEN PLC

SEVERFIELD-ROWEN PLC

Proposed 7 for 3 Underwritten Rights Issue of up to 208,252,511 New Ordinary Shares at 23 pence per New Ordinary Share and Notice of General Meeting

1. Introduction

2. Summary Information on the Company

3. Background to the Rights Issue

United Kingdom

SEVERFIELD PLC Capital/Financing Update 2013