THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you should consult your stockbroker, independent financial adviser or other person duly authorised under the Financial Services and Markets Act 2000 who specialises in advising on the acquisition of shares and other securities if you are resident in the United Kingdom or, if not, you should consult another appropriately authorised independent financial adviser. The whole text of the document should be read, but your attention is, in particular, drawn to the section entitled ''Risk Factors'' in Part 2 of this document.

If you have sold or otherwise transferred all your Shares, please forward this document, together with the accompanying Form of Proxy as soon as possible to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for delivery to the purchaser or transferee. If you have sold or otherwise transferred only part of your holding of Shares you should retain these documents and consult the bank, stockbroker or other agent through whom the sale was effected.

Waterman Group plc

(Incorporated in England and Wales with registered number 2188844)

Disposal of Pickfords Wharf

Circular to Shareholders and

Notice of General Meeting

Evolution Securities, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as sponsor and financial adviser exclusively for Waterman in connection with the Disposal. Evolution Securities is not acting for, and will not be responsible to, any person other than Waterman for providing protections afforded to customers of Evolution Securities or for advising any other person on the contents of this document or any transaction or arrangement referred to herein. For the avoidance of doubt, nothing in this paragraph seeks to limit or exclude Evolution Securities' responsibilities and liabilities which may arise under FSMA or the regulatory regime established thereunder.

This document should be read as a whole. Your attention is drawn to the letter from the Chairman of Waterman set out in Part 1 of this document which explains why the Directors are unanimously recommending that you vote in favour of the Resolution to be proposed at the General Meeting referred to below. Before deciding on what voting action to take, you should carefully consider all the information in this document; in particular the section entitled ''Risk Factors'' in Part 2 of this document.

Notice of a General Meeting of Waterman, convened for 9.00 a.m. on 10 November 2011 at the offices of Evolution Securities at 100 Wood Street, London EC2V 7AN is set out at the end of this document. A Form of Proxy for use at the General Meeting is enclosed with this document. To be valid, the Form of Proxy should be completed in accordance with the instructions printed thereon and returned to the Company's registrars, Capita Registrars at the Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible, but in any event, so as to be received no later than 9.00 a.m. on 8 November 2011. Completion and return of a Form of Proxy will not preclude Shareholders from attending and voting in person at the General Meeting.

		Page
	Expected Timetable of Key Events	3
	Forward-Looking Statements	4
Part 1	Letter from the Chairman of Waterman Group plc	5
Part 2	Risk Factors	9
Part 3	Valuation Report on the Property	11
Part 4	Summary of the Principal Terms and Conditions of the Sale and Leaseback Agreement	17
Part 5	Pro forma Financial Information on the Continuing Group	18
Part 6	Additional Information	22
Part 7	Definitions	27
	Notice of General Meeting	29

EXPECTED TIMETABLE OF KEY EVENTS

Latest time and date for receipt of Forms of Proxy for the General Meeting

9.00 a.m. on 8 November 2011

Expected date of Completion of the Disposal Within 5 Business days

General Meeting 9.00 a.m. on 10 November 2011

following obtaining Shareholder approval at the General Meeting

Notes:

⁽¹⁾ If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by announcement through a regulatory information service of the London Stock Exchange

⁽²⁾ All references to times in this document are to London times unless stated otherwise

FORWARD-LOOKING STATEMENTS

This document includes statements that are, or may be deemed to be, ''forward-looking statements''. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms ''believes'', ''estimates'', ''plans'', ''anticipates'', ''targets'', ''aims'', ''continues'', ''projects'', ''assumes'', ''expects'', ''intends'', ''may'', ''will'', ''would'' or ''should'', or in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts.

Such statements appear in a number of places throughout this document and include statements regarding the Directors', the Company's and the Group's intentions, beliefs or current expectations concerning, among other things, the Group's results or operations, financial condition, prospects, growth strategies and the industries in which the Group operates. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. A number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements, including without limitation: conditions in the markets, the market position of the Group, earnings, financial position, cash flows, return on capital, anticipated investments and capital expenditures, changing business or other market conditions and general economic conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described in this document.

Forward-looking statements contained in this document based on past trends or activities should not be taken as a representation that such trends or activities will continue in the future. However, these forward-looking statements and other statements contained in this document regarding matters that are not historical facts involve predictions. No assurance can be given that such future results will be achieved.

Except to the extent required by applicable law, the Listing Rules or the Disclosure and Transparency Rules, the Company disclaims any obligation or undertaking to update any forward-looking statement contained in this document to reflect any change in the Director's, Company's or the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

DEFINITIONS AND GLOSSARY

Capitalised and certain technical terms contained in this document have the meanings set out in the definitions section in Part 7 of this document.

DATE

This document is dated 18 October 2011.

LETTER FROM THE CHAIRMAN OF WATERMAN GROUP PLC

WATERMAN GROUP PLC

(Incorporated in England and Wales with registered number 2188844)

Roger Fidgen (Chairman & Non-executive Director) Nick Taylor (Chief Executive) Alex Steele (Finance Director) Craig Beresford (Director) Simon Harden (Director) John Waiting (Director) John Archibald (Non-executive Director) Geoff Wright (Non-executive Director)

Directors: Registered Office: Pickfords Wharf Clink Street London SE1 9DG

18 October 2011

Dear Shareholder

Proposed Disposal of Pickfords Wharf

1. Introduction

The Company today announced that it had entered into a conditional agreement to dispose of its freehold property, Pickfords Wharf, to GMS Estates Limited, for a consideration of approximately £11.91 million payable in cash on Completion.

In view of its size, the Disposal constitutes a class 1 transaction for the purposes of the Listing Rules and completion of the Disposal is therefore conditional on approval by Shareholders at the General Meeting. The General Meeting is being convened at the offices of Evolution Securities at 100 Wood Street, London EC2V 7AN at 9.00 a.m. on 10 November 2011 at which the Resolution will be proposed to approve the Disposal. The notice convening the General Meeting is set out at the end of this document.

The purpose of this document is, inter alia, to: (i) provide you with background to and reasons for the Disposal; and (ii) to explain why the Board considers the Disposal to be in the best interests of the Company and Shareholders as a whole. This document also contains a recommendation by the Directors that you vote in favour of the Resolution to be proposed at the General Meeting, as they intend to do in respect of their own holdings of 289,189 Ordinary Shares representing approximately 0.94 per cent. of the current issued share capital of the Company.

A valuation report in respect of the Property, prepared by Sanderson Weatherall LLP, is set out in Part 3 of this document.

2. Background to and reasons for the Disposal

Waterman is an international engineering and environmental consultancy. It has no business in real estate investment. The Company originally acquired the Property in 2001 for a consideration of £7.51 million and relocated the Company's head office to the Property in June 2002 following refurbishment. The Property was subsequently revalued at £7.75 million in July 2004 following the introduction of IFRS accounting. Since its acquisition by the Company, the value of the Property has increased slightly and has a current market value of £7.81 million, as set out in the valuation report in Part 3 of this document. These two valuations are based upon the Red Book (as defined in the valuation report set out in Part 3 of this document) standard in accordance with the recommendations of the Royal Institution of Chartered Surveyors on the basis that the Property is vacant at the time of any sale.

Earlier this year, the Board decided to market the Property for sale. There have been a number of expressions of interest from potential purchasers but the Buyer's proposal represents the best offer received by the Company to date and in the Board's view an attractive one. The consideration of approximately £11.91 million payable by the Buyer under the terms of the Sale and Leaseback Agreement represents a premium to the current book value of the Property, and therefore a profit of approximately £4.46 million (before transaction costs of approximately £0.32 million) will arise on Completion. The Company intends to utilise the net proceeds of the Disposal to settle any capital gains tax due to HMRC from the Disposal and to reduce the Continuing Group's indebtedness, which is expected to increase the Continuing Group's flexibility to invest in the development of its business. The Company's head office will remain situated at the Property pursuant to the terms of the Sale and Leaseback Agreement described in Part 4 of this document.

Should the Disposal not complete, the Company will not be able to realise this profit, nor reduce Group indebtedness and increase flexibility to invest in business development at this time.

3. The Sale and Leaseback Agreement

The Disposal is conditional on the passing by Shareholders of the Resolution to be proposed at the General Meeting. It is expected that Completion would take place within 5 Business Days after Shareholder approval of the Disposal is obtained at the General Meeting. The consideration for the Disposal is approximately £11.91 million payable in cash on Completion.

Further details of the Sale and Leaseback Agreement are set out in Part 4 of this document.

4. Current trading of the Group and prospects for the Continuing Group

The Group released its unaudited preliminary results for the financial year ended 30 June 2011 on Tuesday 4 October 2011.

Current trading of the Group

The last financial year has seen improving trading conditions for the Group with profitability returning. During the second half of the year the Group experienced an improvement in the level of private sector workload. This helped compensate for the impact of reduced investment in the public sector following the UK government's Comprehensive Spending Review announced in October 2010.

Much has been achieved over the last twelve months. The Group has created a stable platform to enable future investment in resources and new markets to occur to stimulate increased profitability and the creation of shareholder value.

The Group has made good progress with the collection of overdue debt from the major UK clients. The Group's net debt at the year end was £8.6 million which was marginally lower than the half year net debt of £8.9 million.

Prospects for the Continuing Group

The Group has returned to profitability over the financial year during a period when its markets have remained constrained by lack of significant investment by its clients.

Historically, three quarters of the Group's revenue was generated from the property sector. This reliance on the property sector has created difficult trading conditions over the last three years as the sector suffered a severe and abrupt downturn. However, over the financial year the Group has seen a significant improvement in enquiries and secured projects in the commercial and residential markets and more recently the Group has witnessed renewed interest from clients involved in retail developments throughout the UK.

The Group is continuing to diversify and has recruited a new Director of Technology Services in Australia following new commissions in the telecommunications sector. In addition, in June this year the Group appointed a new Managing Director of its Building Services business from within its existing team. He will be particularly focused on promoting the Group's carbon and energy management credentials to clients.

While there remains financial uncertainty both in the global economy and in the rate of recovery in many markets, I believe we are well positioned and have a highly regarded brand and employees which will enable the Continuing Group to succeed and take advantage of appropriate opportunities.

5. Use of proceeds and effects of the Disposal on the Continuing Group

The net proceeds from the Disposal after transaction costs of approximately £0.32 million, are expected to amount to approximately £11.59 million and the Board currently intends to use these to:

* pay capital gains tax due to HMRC from the Disposal, which the Company has estimated will be approximately £0.51 million;
* repay in full the mortgage on the Property and associated early repayment charge which together amount to approximately £4.09 million; and
* repay approximately £3.52 million of term loans with HSBC including repayment in full of the 2006 Loan and the 2003 Loan and a repayment of approximately £1.73 million of the 2007 Loan. Following which the Company will have a single term loan with HSBC, being the 2007 Loan, with a principal balance of approximately £2.27 million.

It is anticipated that following the above payments, the Company will receive approximately £3.47 million net cash from the Disposal. The net cash will reduce the Continuing Group's net debt and increase covenant headroom within the Continuing Group's banking facilities, which it is anticipated will provide the Continuing Group with greater flexibility to reinvest in its core consultancy business.

The Property has a net book value of approximately £7.45 million (the freehold book value of the Property is approximately £7.36 million and the book value of the certain assets relating to the Pickfords Wharf lift is approximately £0.09 million) and therefore a profit before tax of approximately £4.46 million (before transaction costs of approximately £0.32 million) will arise on Completion. The proposed use of proceeds will result in a reduction in capital repayments and interest costs associated with the Group's debt (as set out above), which in the last financial year, would have resulted in reductions of approximately £0.8 million and £0.4 million respectively. The rent payable for the leaseback of the Property by the Company will be approximately £0.68 million per annum. Had the Disposal occurred on 1 July 2010, the commencement of the Group's last full financial year, the earnings of the Group would have been reduced.

The Disposal would have increased the Group's net assets by approximately £4.14 million had it occurred on 30 June 2011, as shown in the pro forma financial information relating to the Continuing Group set out in Part 5 of this document.

6. Risk factors

Shareholders should consider fully and carefully the risk factors associated with the Disposal and the Continuing Group. Your attention is drawn to the Risk Factors set out in Part 2 of this document.

7. General Meeting

Completion of the Disposal is conditional upon approval by Shareholders at a general meeting. Accordingly, there is set out at the end of this document a notice convening the General Meeting. At the General Meeting, the Resolution will be proposed. The Resolution provides for the approval of the Disposal on the terms and conditions set out in the Sale and Leaseback Agreement and authority for the Directors to act for the purposes of giving effect to the Resolution.

The Resolution is proposed as an ordinary resolution and must be passed by more than 50 per cent. of the votes cast by Shareholders at the General Meeting.

8. Action to be taken

You will find enclosed with this document a Form of Proxy for use at the General Meeting. Whether or not you propose to attend the General Meeting in person, it is important that you complete and sign the enclosed Form of Proxy in accordance with the instructions printed thereon and return it to the Company's registrars, Capita Registrars at the Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible and, in any event, so as to be received not later than 9.00 a.m. on 8 November 2011. The completion and return of a Form of Proxy will not preclude you from attending the General Meeting and voting in person, if you so wish.

You may, if you wish, register your proxy appointment electronically for the General Meeting and any adjournment(s) thereof via the website www.capitashareportal.com and following the instructions.

If you hold Shares in CREST, you may appoint a proxy by completing and transmitting a CREST Proxy Instruction to Capita Registrars so that it is received by no later than 9.00 a.m. on 8 November 2011.

9. Further information

Your attention is drawn to the further information set out in Parts 2 to 7 (inclusive) of this document. You should read the whole of this document and not just rely on the information contained in this letter.

10. Recommendation

The Board believes that the Disposal is in the best interests of the Company and its Shareholders as a whole. Accordingly, your Board unanimously recommends that Shareholders vote in favour of the Resolution to be proposed at the General Meeting as the Directors intend to do in respect of those Ordinary Shares of which they are the registered holders and which are not subject to trusts which on 17 October 2011 (the latest practicable date prior to the publication of this document) amounted in aggregate to 289,189 Ordinary Shares, representing approximately 0.94 per cent. of the current issued share capital of the Company.

Yours faithfully,

Roger Fidgen Chairman

RISK FACTORS

All of the information set out in this document, including, but not limited to, the risks described below, should be carefully considered. If any of the following risks actually materialise, the business, financial condition and prospects of the Continuing Group and the market price of the Ordinary Shares could be materially and adversely affected to the detriment of the Company, the Continuing Group and Shareholders, and you may lose all or part of your investment in the Ordinary Shares. The risks described below are those material risks of which the Directors are aware; however, further risks that are not presently known to the Directors, or that the Directors currently deem immaterial, may also have a material and adverse effect on the Company's and the Continuing Group's business, financial condition and prospects and the market price of the Ordinary Shares.

1. Risks relating to the Disposal

The Disposal fails to complete

The Sale and Leaseback Agreement is conditional on the passing of the Resolution at the General Meeting. There is no certainty that the Resolution will be passed at the General Meeting and it is therefore possible that the Disposal will not complete. Should the Disposal not complete, the Company will not receive net proceeds after transaction costs of approximately £11.59 million and will not realise any profit from the Disposal. Consequently, the Company will not be able to reduce the Group's indebtedness and will not have increased flexibility to reinvest in its core consultancy business as set out in the intended use of proceeds from the Disposal in paragraph 5 of Part 1 of the document.

2. Risks relating to the business of the Continuing Group

Reduction in demand from customers

A large portion of the Company's customer base consists of clients in property, construction and infrastructure sectors including property developers, contractors, architects and public sector bodies. The Company believes any deterioration in these sectors may depress the revenue of the Continuing Group.

The key factors which may cause a deterioration in the property, construction and infrastructure sectors are as follows:

* a slow-down in the economy of the UK or other countries that the Continuing Group operates in;
* the cyclical nature of its customers' businesses; and
* lack of demand from the businesses that drive the demand for property, construction and infrastructure activity.

The Directors believe that any deterioration in the property, construction and infrastructure sectors caused by one or a number of these factors could have a material adverse effect on the Continuing Group's business, financial condition and future prospects.

Unexpected decline in revenue or profitability

The Company's revenue and profit have varied historically from period to period. Factors which may cause the Continuing Group's revenue and profit to decline include the following:

* any pricing pressure that may result from an increase in competition in the Continuing Group's business areas;
* pressure to move to fixed price contracts from contracts where work is billed on a chargeable hour basis; and
* possible exceptional write-offs or exceptional charges such as unrecoverable work in progress or bad debts.

One or a number of these factors could also cause a material adverse effect on the Continuing Group's business, financial condition and future prospects.

Directors and senior management

The Continuing Group relies on the Directors and senior management and in particular their experience and skills, which have been developed over many years, in the Continuing Group's business and the sector in which it operates. Additionally, these persons have developed strong relationships with existing clients of the Continuing Group and have a strong reputation and contacts within the sector within which the Continuing Group operates. In the past, such contacts and reputations have enabled the Continuing Group to win new business. Consequently, whilst not currently anticipated, the unexpected departure or loss of any of these individuals from the Continuing Group may have a material adverse effect on the Continuing Group's business, financial condition and future prospects and there can be no assurance that the Continuing Group will be able to attract or retain suitable replacements.

Operations overseas

In China, India, Kazakhstan, Russia and the UAE, the Continuing Group is exposed to certain uncertainties and risks, namely increases in taxation and increases in insurance premiums and political instability. The occurrence of any of these risks could increase operating costs in these jurisdictions and/or reduce the Continuing Group's ability to operate and develop its business in these jurisdictions, which in turn may have a material adverse effect on the Continuing Group's business, financial condition or prospects.

3. Risk relating to the market and economic factors

Currencies and interest rates

The Continuing Group will continue to sell and procure products and services in countries other than the United Kingdom and will consequently conduct part of its business in currencies other than Pounds Sterling (the currency in which the Continuing Group will continue to report its financial results). It is possible that material fluctuations in the exchange rate of Pounds Sterling against the other currencies in which the Continuing Group transacts its business could have an adverse impact on the Continuing Group's operations and its reported results. Similarly the Continuing Group will be exposed to interest rate movements on its borrowings. The Continuing Group's interest costs in respect of its borrowings will increase in the event of rising interest rates to the extent that it has not hedged its exposure. At present the Group manages its exposure to currency risks by, wherever possible, matching the currency of earnings of a local subsidiary with its cost base and mitigates further currency exposure where feasible through holding liabilities and assets in a currency to form natural hedging arrangements. Currently, the Group does not hedge its net investment in foreign subsidiaries and does not have any other hedging arrangements in place in respect of currency risks. The Group does not currently hedge its exposure to interest rate risks. The Continuing Group will continue to regularly review its exposure to these risks and will put in place appropriate hedges in relation to these risks if it is deemed appropriate to do so.

VALUATION REPORT ON THE PROPERTY

PRIVATE AND CONFIDENTIAL

The Directors Waterman Group plc Pickfords Wharf Clink Street London SE1 9DG

and

Evolution Securities Limited 100 Wood Street London EC2V 7AN

Leeds London Newcastle Manchester Teesside Elsley Court 20-22 Great Titchfield Street London W1W 8BE Tel 0207 851 2100 Fax 0207 851 2101 sandersonweatherall.com

18 October 2011

Dear Sirs

PICKFORDS WHARF, CLINK STREET, LONDON SE1 – PROPERTY VALUATION

In accordance with your instructions, we have undertaken a valuation of Pickfords Wharf, Clink Street, London SE1, the headquarters office building of Waterman Group plc, ('the Company'), in order to advise you of our opinion of the Market Value of the freehold interest held by the Company. We report as follows:

Purpose of Valuation

You have informed us that the valuation is a Regulated Purpose Valuation for inclusion in a shareholder circular to be issued by the Company under the Listing Rules.

Scope of Instruction

In accepting your instruction we confirm the following:

* The date of valuation is as at 18 October 2011.
* Our valuation has been prepared in accordance with the RICS Valuation Standards Global and UK, 7th edition, published by The Royal Institution of Chartered Surveyors (RICS) (''The Red Book'') and in accordance with the requirements of the Financial Services Authority and the Listing Rules.
* Our inspection of the property and this Valuation Report are subject to our Terms and Conditions of Engagement and Guidance for Clients.
* We have valued the property on the basis of Market Value (MV) as defined in The Red Book.
* This report has been prepared by Robert Dagwell BSc FRICS, Partner and checked by Peter Atkinson BSc MRICS, associate, who accept responsibility for this report, have sufficient skills, knowledge and understanding to undertake this instruction competently, are members of the RICS Valuer Registration Scheme and are qualified to provide this advice as independent External Valuers in accordance with VS1.5, VS1.6 and VS1.7 of The Red Book.

Chartered Surveyors and Property Consultants Sanderson Weatherall LLP Registered in England – LLP No. OC 344770 Registered Office 25 Wellington Street Leeds LS1 4WG Regulated by RICS

* We have no conflict of interest in providing this advice and we confirm that neither Sanderson Weatherall nor the valuers have any material interest in the Company or its subsidiaries. Furthermore, in relation to Sanderson Weatherall's preceding financial year, we confirm that the proportion of total fees payable to Sanderson Weatherall by the Company is less than 5% of the total income of the firm and this is not anticipated to increase in the current year.
* That we carry Professional Indemnity Insurance on a per claim basis which is adequate in respect of this instruction. We also confirm that Sanderson Weatherall operates a quality control system regulated under ISO 9001:2000, which amongst other matters, provides for peer group review of all valuations produced.
* This valuation has been carried out following an external and internal inspection of all of the property on 10 August 2011. Our valuation assumes that there have been no material changes to the property between the date of our inspection and the date of this valuation.
* We have relied on measurements of the property provided by Plowman Craven, property measurement specialists, dated June 2010. We presume that the property has not been altered significantly since the date of their survey. We have also relied upon the details of tenancies, occupation and rental income, all as supplied to us by the Company and summarised in the Appendix. We reserve the right to amend our valuation in the event of any of these details proving to be incorrect.
* The RICS Valuation Standards Global & UK, 7th edition, require that we report Market Value. We confirm that there is no material difference between Market Value and the definition of Open Market Value referred to in the FSA Listing Rules and that the two definitions produce the same figure.
* The property the subject of this report comprises the entire freehold estate of the Company. The property is held for owner occupation and investment purposes and is subject to the tenancies as detailed herein.

Valuation Procedure

We attach as an Appendix a brief description of the property and notes as to location, extent of the site, construction and accommodation of the building and its apparent condition. We have seen copies of leases in respect of the tenancies, which are drafted on acceptable terms, but have otherwise relied on the details of the property as supplied to us by the Company and as summarised in the Appendix.

Our valuation of the property includes the value of plant, machinery, fixtures and fittings normally attributed to a landlord, including lifts, escalators, lighting, heating systems and sanitary facilities as appropriate.

We have not carried out a building survey, nor have we inspected those parts of the property which are unexposed or inaccessible and such parts are assumed to be in good repair and condition. We have valued the property in the condition apparent to us during our inspection. In respect of the let parts of the property, we assume that the tenants will be held to comply with the repairing liability contained in their respective leases.

We have not carried out any investigation to determine whether deleterious or hazardous material has been used in the construction of the property, or has since been incorporated. Our valuation therefore assumes the absence of such materials.

We assume that the property complies in all respects with all legislation, statutory provisions and regulations relating to construction, use and occupation; that no significant expenditure is necessary in respect of the Equality Act 2010; The Regulatory Reform (Fire Safety) Order; and Control of Asbestos at Work Regulations; and, that no notices are currently outstanding against the property.

We have made no formal investigations into whether the property, or any neighbouring land, is or has been contaminated, or is being put to any potentially contaminative use. Our inspections did not reveal any obvious areas of concern, however, if it is established subsequently that contamination exists or that the property has been put to a contaminative use, this may reduce the value now reported.

The services have not been tested as this is outside the scope of our instructions. We have assumed that the services are connected to the main supplies and that they conform to necessary regulations and there are no outstanding notices against any of the supplies.

We have made informal enquiries of the local planning and highways authorities and unless otherwise stated assume that neither the existence nor use of the property is or will be in contravention of planning or other statutory regulations and that the property is not adversely affected by any local or regional planning or highways proposals.

Valuation Opinion

The property has been valued on the basis of Market Value, as defined within the RICS Valuation Standards – Global & UK, 7th edition. The definition of Market Value is:

''The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm's-length transaction, after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion''.

Other than for consistency in valuation comparison, no allowance has been made in our valuation for any taxation, or expenses and costs that may arise on disposal or acquisition.

In respect of VAT, we understand that the property is not elected for VAT and we have therefore assumed that VAT would not be payable on realisation of the capital value.

Subject to the foregoing we are of the opinion that the Market Value of the freehold interest in Pickfords Wharf, Clink Street, London SE1, subject to the tenancies detailed to us by the Company, as at 18 October 2011, for the purposes of inclusion in a shareholder circular to be issued by the Company under the Listing Rules, is:

MARKET VALUE £7,810,000

(seven million, eight hundred and ten thousand pounds)

Our valuation has been prepared on an investment basis utilising available comparable market transactions, on arm's length terms.

Confidentiality

This Valuation Report is confidential to and for the sole use of Waterman Group plc, its Directors and shareholders and to Evolution Securities, for the purpose to which it refers and no liability to any third party is accepted in respect of the whole or any part of its content. This Report may be disclosed to external professional advisors assisting the addressee in respect of the stated purpose.

We consent to this Valuation being published in the Listing circular for which it has been prepared, but neither the whole nor any part of this Report, nor any reference thereto, may be included in any other document, circular or statement without our written approval of the form and context in which it is to appear.

Yours faithfully

Robert Dagwell BSc FRICS Partner – Valuation Services RICS Registered Valuer

Peter Atkinson BSc MRICS Associate RICS Registered Valuer

Authorised to sign for and on behalf of SANDERSON WEATHERALL LLP

1. LOCATION

The property is situated on the south bank of the River Thames, in the London Borough of Southwark approximately mid way between London Bridge and the Cannon Street rail bridge. The property enjoys uninterrupted views over the river and across to the City of London. The immediate vicinity is characterised by a variety of recently constructed and period buildings in a mix of office, commercial and residential uses and is a location which has enjoyed considerable regeneration and infrastructure improvement in recent years. It is adjacent to the Golden Hinde replica sailing ship tourist attraction and is close to the popular destination of Borough Market. Nearby public transport facilities include London Bridge British Rail and Underground Stations.

2. THE SITE

The site has an approximate area of 0.095 ha (0.234 acres). The main building plot is broadly rectangular and level.

3. CONSTRUCTION & DESCRIPTION

The property comprises a period seven storey former wharf side warehouse which was extensively refurbished in 1983 to provide self contained offices, eight residential flats, a retail unit and separate public house. The building is of concrete frame construction with brick walls under a north lit style roof, with metal frame double glazed sash windows.

The offices are accessed by a ground floor entrance reception area which leads to a single passenger lift which serves all floors other than the top, fifth floor which is accessed only by stairs. The office accommodation is open plan in layout, with individual rooms created by demountable partitions. The space has carpeted raised timber floors with floor boxes for power and communications cabling, exposed solid ceilings with pendant cat II fluorescent lighting and central heating via perimeter radiators. Some areas have the benefit of air cooling cassette units. Each floor has separate male and female wcs.

We were unable to inspect the residential flats but these are accessed via an independent ground floor entrance and lift and stairwell. The retail unit is a double unit fronting onto Clink Street, on ground and basement floors. It trades as the tourist and ticketing office serving the Golden Hinde replica. The public House fronts onto and has a terrace overlooking the River Thames. It is also on ground and basement floors and trades as The Old Thameside Inn.

4. ACCOMMODATION

We have relied upon the following floor areas, as measured by Plowman Craven:

Description	Approximate Net Internal Floor Area
Offices – Occupied by Waterman Group	sq m	sq ft
Basement – Meeting & Store Rooms	143.5	1,544
Ground Floor – Reception & Meeting Rooms	116.0	1,249
First Floor – Offices	550.3	5,923
Second Floor – Offices	550.0	5,920
Third Floor – Offices	251.5	2,707
Fourth Floor – Offices	236.7	2,548
Fifth Floor – Offices	216.5	2,330
TOTAL WATERMAN GROUP PREMISES	2,064.5	22,221
Retail Unit – Sea Dogs/Golden Hinde Ltd
Basement – Store Rooms & Staff	104.7	1,127
Ground Floor – Retail & Offices	58.3	628
TOTAL GOLDEN HINDE PREMISES	163.0	1,755
Public House – The Old Thameside Inn
Basement – Trading & Staff	297.6	3,203
Ground Floor – Trading	264.3	2,845
TOTAL PUBLIC HOUSE	561.9	6,048
BUILDING TOTAL (Excl Residential)	2,789.4	30,024

5. CONDITION

We have not been instructed to carry out a structural survey and the following comments should not be regarded as such. Generally, we found the property to be in a good state of repair and decoration in keeping with its age and nature of use.

We have valued the office areas occupied by Waterman Group in the condition found at our inspection and have made an allowance in our valuation for the costs of making good and recarpeting, as would be required by an ingoing occupier. Our valuation otherwise assumes that the various tenants have, or will comply with the internal repairing obligations contained in their respective leases.

6. SERVICES AND AMENITIES

All mains services appear to be connected to the property. None of the services were tested during the course of our inspection of the property.

7. STATUTORY ENQUIRIES

Planning

The property is situated within the Borough High Street conservation area but is not listed. From enquiries made of the local Planning Authority, we understand that the property has consent for its existing uses and that there have been various minor planning approvals in respect of the use and alteration of the building in recent years. Furthermore we are not aware of any formal proposals which would have an adverse effect upon our valuation.

Rating Assessment

The property is assessed in the 2010 rating list as follows.

Address	Description	Rateable Value
1st to 5th floors, Pickfords Wharf	Offices and premises	£487,500
Old Thameside Inn	Public House and premises	£240,000
1&2 Clink Street, Pickfords Wharf	Shop and premises	£15,500
3 Clink Street, Pickfords Wharf	Shop and premises	£9,300
4 Clink Street, Pickfords Wharf	Shop and premises	£17,750

8. ENVIRONMENTAL ISSUES

No indications of past or present contaminative land uses or other environmental features were noted during our inspection. Our inspection was only of a limited visual nature and we cannot give any assurances that previous uses on the site or in the surrounding areas have not contaminated subsoils or groundwaters.

Flooding

The Environment Agency classifies the subject property as being within an area classified as having a low chance of flooding in any year as the site is protected by River Thames flood defences.

9. TENURE FREEHOLD

We have not examined the title documents and nor have we been provided with a report on title in respect of the subject property. We therefore assume that the freehold interest is not subject to any onerous restrictions, charges, easements or rights of way and is in all respects good and marketable. We recommend that your solicitors verify our assumptions to be correct.

10. TENANCIES

We have been provided with copy leases in respect of all of the commercial tenants and one of the residential flats.

Retail unit No. 1&2, is let to Sea Dogs Limited, guaranteed by Golden Hinde Ltd, for a term of 25 years expiring 23 June 2023 at a current rent of £24,000 pax. The lease is drawn on an effectively full repairing basis and is generally on acceptable commercial terms.

The Public House is let to Mitchells & Butler for a term of 99 years expiring 24 December 2084, at a peppercorn ground rent. The lease is drawn on an effectively full repairing basis and is generally on acceptable commercial terms.

The eight residential flats are all let for original terms of 99 years, expiring 24 March 2085. Six of the flats have been the subject of 90 year statutory lease extensions. The two remaining flats are subject to ground rents of £50 each pa. We have assumed that the leases for these flats will also be extended in due course and that the freeholder will benefit from premium payments in each case.

11. MARKET COMMENTARY AND GENERAL COMMENTS

The central London office letting market remains active in comparison with the rest of the UK, but letting demand can be patchy and highly dependent on specific location and quality of the accommodation. Owner occupier and investor demand however remains robust and capital values, even for vacant office buildings in central London, are underpinned by a relative lack of supply of such stock.

The south bank area of SE1 has seen considerable inward investment and improvement in the building stock over the last 20 years, partly as a result of the extension of the Jubilee Underground Line and the improved public transport links to the east and west. Development of the river frontage, particularly in the area around Borough Market and London Bridge has generated considerable residential and commercial property regeneration, with a corresponding significant influx of tourism.

The subject property occupies a prominent riverside site, with views across to the City of London to the north and would in our view be extremely attractive to owner occupiers of the office element and prospective investors.

Our valuation of the freehold interest assumes vacant possession of the accommodation occupied by Waterman Group, but otherwise assumes the benefit of the rental income from the retail unit. Furthermore, we have assumed that the two residential flats which have thus far not instigated a statutory lease extension will do so in due course, with the premium value attaching to the freehold interest.

12. VALUATION OPINION

Having regard to the above we are of the opinion that the value of the freehold interest on the basis requested is:

Valuation Basis	Pickfords Wharf, Clink Street, London SE1
Market Value	£7,810,000 (seven million, eight hundred and ten thousand pounds)

The difference between the current reported Market Value of £7.81m and the current net book value of £7.363m arises because the Company does not perform a regular revaluation of its freehold property to Market Value. The value of £7.363m recorded in the unaudited balance sheet as at 30 June 2011 represents the freehold valuation of £7.75m at 1 July 2004 (upon the introduction of IFRS accounting) adjusted for an amortisation charge of 2% pa of the deemed value of the building.

The Company has not recorded any revaluation of its freehold property in its financial statements since 1 July 2004 and does not undertake regular revaluations.

13. TERMS OF ENGAGEMENT AND GUIDANCE FOR CLIENTS

We refer you to our ''Terms of Engagement and Guidance for Clients''. This document describes in detail the work which we have and have not undertaken in compiling this report and valuation on your behalf.

SUMMARY OF THE PRINCIPAL TERMS OF THE SALE AND LEASEBACK AGREEMENT

The following is a summary of the principal terms of the Sale and Leaseback Agreement

1. Agreement

The Sale and Leaseback Agreement was entered into on 17 October 2011 between the Company and Buyer, for the sale of the freehold of the Property to the Buyer. The Sale and Leaseback Agreement incorporates the Standard Commercial Property Conditions (Second Edition).

2. Consideration

The consideration payable by the Buyer on Completion will be £11,914,250. A deposit of £1,191,425 on account of that sum was paid by the Buyer to the Company on exchange of contracts on 17 October 2011 to be held as stakeholder.

3. Completion

Completion of the Sale and Leaseback Agreement is conditional on the passing of the Resolution. If the Resolution is not passed on 10 November 2011 then the Sale and Leaseback Agreement shall terminate and the Company must return to Buyer the £1,191,425 deposit unless Completion failed to take place because of an act or omission of the Buyer.

The Property is being sold to the Buyer subject to the existing occupational leases of the Property.

4. Leaseback

On Completion the Company will be granted an overriding lease by the Buyer of the office and commercial premises in the Property for a term of 15 years with the Company benefiting from an option to terminate after 10 years (the ''Lease''). The rent payable under the Lease is £682,066 per annum and is subject to review on an upwards only basis at the expiry of each fifth year of the term to the then prevailing open market rent.

The Company will continue to occupy the office premises and receive rental income from commercial premises. The Lease requires the Buyer to maintain the structure of and insure the Property with the Company paying a fair and reasonable proportion of the costs to the Buyer in so doing.

PRO FORMA FINANCIAL INFORMATION ON THE CONTINUING GROUP

1. Unaudited pro forma statement of net assets of the Continuing Group

The unaudited consolidated pro forma statement of net assets set out below has been prepared to illustrate the effect of the Disposal on the net assets of the Group at 30 June 2011 as if the Disposal had taken place on 30 June 2011. The information, which has been produced for illustrative purposes only, by its nature addresses a hypothetical situation and, therefore, does not represent the actual financial position of the Group. The unaudited pro forma statement of net assets is compiled on the basis set out in the notes below and does not take into account any trading of the Company subsequent to 30 June 2011.

		Adjustments	Unaudited Pro
	Group	Disposal of	Forma Continuing
	as at	Pickfords	Group as at
	30 June 2011	Wharf	30 June 2011
	£m	£m	£m
ASSETS	(Note 1)	(Note 2)	(Note 3)
Non-current assets
Goodwill	17,193	—	17,193
Other intangible assets	968	—	968
Plant, plant and equipment	10,239	-7,453	2,786
Loan and receivables	10	—	10
Deferred taxation asset	846	—	846
	29,256	-7,453	21,803
Current assets
Trade and other receivables	35,866	—	35,866
Cash and cash equivalents	1,411	11,592	13,003
	37,277	11,592	48,869
Total assets	66,533	4,139	70,672
LIABILITIES
Current liabilities
Trade and other payables	19,538	—	19,538
Financial liabilities – borrowings	1,265	—	1,265
Current tax liability	—	—	—
	20,803	—	20,803
Non-current liabilities
Financial liabilities – borrowings	8,764	—	8,764
Provisions	2,647	—	2,647
	11,411	—	11,411
Total liabilities	32,214	—	32,214
Net assets	34,319	4,139	38,458

Notes

The unaudited pro forma statement of net assets at 30 June 2011 has been compiled on the following basis:

The net assets of the Group have been extracted, without material adjustment, from the unaudited consolidated balance sheet of the Group as at 30 June 2011 which was prepared in accordance with IFRS as included in the unaudited preliminary results for the year ended 30 June 2011.
1. The Disposal of Pickfords Wharf comprises the net book value of the freehold property and associated assets of £7.45 million as at 30 June 2011 which was prepared in accordance with IFRS as included in the unaudited preliminary results for the year ended 30 June 2011. The net proceeds of approximately £11.59 million represent the expected Disposal proceeds of £11.91 million, less associated transaction fees of approximately £0.32 million.
1. No adjustment has been made to reflect the trading results of the Group since 30 June 2011.
1. No adjustment has been made to reflect any capital gains tax which may be payable by the Company as a result of the Disposal.
Accountant's report on unaudited pro forma statement of net assets of the Continuing Group

The Directors Waterman Group plc Pickfords Wharf Clink Street London SE1 9DG

and

Evolution Securities Limited 100 Wood Street London EC2V 7AN

18 October 2011

Dear Sirs

Waterman Group plc (the ''Company'')

We report on the pro forma financial information (the ''Pro forma financial information'') set out in Part 5 of the Company's circular dated 18 October 2011 (the ''Circular'') which has been prepared on the basis described in the notes to the Pro forma financial information, for illustrative purposes only, to provide information about how the proposed disposal of Pickfords Wharf 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 30 June 2011. This report is required by item 13.3.3R of the Listing Rules of the UK Listing Authority (the ''Listing Rules'') and is given for the purpose of complying with that Listing Rule and for no other purpose.

Responsibilities

It is the responsibility of the directors of the Company to prepare the Pro forma financial information in accordance with item 13.3.3R of the Listing Rules.

It is our responsibility to form an opinion, as required by item 13.3.3R of the Listing Rules as to the proper compilation of the Pro forma financial information and to report our opinion to you.

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.

Save for any responsibility which we may have to those persons to whom this report is expressly addressed and which we may have to shareholders of the Company as a result of the inclusion of this report in the Circular, 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 item 13.4.1R of the Listing Rules, consenting to its inclusion in the Circular.

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

PricewaterhouseCoopers LLP, 1 Embankment Place, London WC2N 6RH T: +44 (0) 20 7583 5000, F: +44 (0) 20 7822 4652, www.pwc.co.uk

PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number OC303525. The registered office of PricewaterhouseCoopers LLP is 1 Embankment Place, London WC2N 6RH. PricewaterhouseCoopers LLP is authorised and regulated by the Financial Services Authority for designated Investment business.

documents, considering the evidence supporting the adjustments and discussing the Pro forma financial information with the directors of the Company.

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.

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.

Yours faithfully

PricewaterhouseCoopers LLP Chartered Accountants

ADDITIONAL INFORMATION

1. Responsibility

The Directors, whose names appear in paragraph 2, accept responsibility for the information contained in this document. To the best of the knowledge and belief of 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. Directors of the Continuing Group

The Directors of the Company and their principal functions are as follows:

3. Incorporation and Registered Office

The Company was incorporated and registered in England and Wales on 4 November 1987 with registered number 2188844. The Company's registered office and principal place of business is Pickfords Wharf, Clink Street, London SE1 9DG, telephone number 020 7928 7888.

4. Directors' Interests in Shares

4.1 As at 17 October 2011 (being the latest practicable date prior to the publication of this document), insofar as known to the Company, the interest of the Directors, their immediate families and those of any connected person (within the meaning of Schedule 11B of FSMA and the provisions of the Disclosure and Transparency Rules), the existence of which is known to, or could with reasonable diligence be ascertained by, that Director whether or not held through another party, in the share capital of the Company were as follows:

		Contingent	Conditional
		Long Term	Share Bonus	Percentage of
	Beneficial	Incentive Plan	Award	issued Ordinary
Name	Shareholding	Shareholding	Shareholding	Shares
R S Fidgen
(Non-executive Chairman)	35,000	Nil	Nil	0.11
N J Taylor	84,428	10,000	38,000	0.27
C W Beresford	72,123	10,000	25,000	0.23
J F G Waiting	41,815	10,000	25,000	0.14
S D Harden	29,771	10,000	25,000	0.10
A A Steele	Nil	5,000	Nil	Nil
J G Archibald
(Non-executive)	6,052	Nil	Nil	0.02
G H Wright
(Non-executive)	20,000	Nil	Nil	0.07

Taken together, the combined percentage interest of the Directors in the issued share capital of the Company as at 17 October 2011 was approximately 0.94 per cent.

4.2 As at 17 October 2011 (being the latest practicable date prior to the publication of this document), the following unexercised options over Ordinary Shares have been granted to Directors:

		Exercise Period	Exercise	No. of
Name	Date of Grant	From-To	Price	Options
J F G Waiting	15 November 2002	15 November 2005 – 14 November 2012	44.5p	50,000

5. Major Interests in Shares

So far as the Company is aware, as at 17 October 2011 (being the latest practicable date prior to the publication of this document), only the following persons were, directly or indirectly, interested in 3 per cent. or more of the issued share capital of the Company, excluding shares held in treasury:

	Number of
Shareholder	shares held	%
P Gyllenhammar	7,470,896	24.3
Liontrust Asset Management	2,199,163	7.1
Universities Superannuation Scheme	1,985,000	6.4
F Clampitt	1,691,995	5.5
Henderson Global Investors Limited	1,464,662	4.8
Executors of A G Thomson deceased	1,050,000	3.4

6. Service Agreements

Currently, executive Directors' service contracts are not for a fixed term, but may be terminated by either party in accordance with the notice period. There are no specific contractual provisions in relation to the payment of termination payments over and above the stated notice period.

The details of the service contracts of the currently serving Directors are as follows:

				Base
			Benefits	Salary	Pension
		Notice	2011	and Fees	2011
Name	Contract Date	Period	£'000	£'000	£'000
R S Fidgen (Non-executive Chairman)	01 July 2004	None	Nil	27	Nil
N J Taylor	06 January 2003	12 months	29	202	23
C W Beresford	06 January 2003	6 months	14	153	17
J F G Waiting	01 July 2005	6 months	9	152	17
S D Harden	01 July 2007	6 months	11	144	16
A A Steele	19 February 2010	12 months	15	112	12
J G Archibald (Non-executive)	06 January 2003	3 months	Nil	23	Nil
G H Wright (Non-executive)	01 June 2007	None	Nil	23	Nil

7. Material Contracts

Material contracts relating to the Continuing Group

The following contracts are all: (i) material contracts (not being contracts entered into in the ordinary course of business) which have been entered into within the two years prior to the date of this document by members of the Continuing Group; or (ii) contracts (not being contracts entered into in the ordinary course of business) entered into at any time by members of the Continuing Group which contain provisions under which any member of the Continuing Group has an obligation or entitlement which is, or may be, material to the Continuing Group as at the date of this document.

(i) an agreement dated 28 October 2009 between the Company and Rosemount Kirkaldy LLP relating to the sale by the Company of the property known as 99 Southwark Street;
(ii) a share sale agreement dated 31 August 2007 between the Company, Waterman Building Services Limited, John William Eames, Michael Furness, Stephen Robert Green and Jonathan Lee Powell in relation to the acquisition of Furness Green Limited by Waterman Building Services Limited;
(iii) a share sale agreement dated 3 April 2007 between the Company and the Shareholders of Boreham Consulting Engineers Limited (''Boreham'') in relation to the acquisition of Boreham by the Company. The sale agreement includes warranties in favour of the Company given by the sellers of Boreham covering matters which are customary to an agreement of this nature. The time period for claims under such warranties has expired, other than in relation to warranties relating to taxation which will expire on 3 May 2013;
(iv) a share sale agreement dated 9 October 2006 between Compeng Pty Limited, Thomas Robert Gorog, Waterman International (Asia) Pty Limited, Philip John Barnes and the Other Shareholders (as defined therein) in relation to Waterman International (Asia) Pty Limited's acquisition of a 51 per cent. interest in AHW Consulting Engineers (Victoria) Pty Limited. The sale agreement includes warranties in favour of Waterman International (Asia) Pty Ltd given by Compeng Pty Limited and Thomas Robert Gorog covering matters which are customary to an agreement of this nature. The time period for claims under such warranties has expired, other than in relation to warranties relating to taxation which will expire in October 2013. The sale agreement also includes indemnities in favour of Waterman International (Asia) Pty Limited in relation to taxation and certain identified claims and disputes;
(v) a share sale agreement dated 6 December 2005 between the Company, Waterman Environmental Limited, Stephen John Power, Guy Philip Jeremiah and Daniel Wellington in relation to the Waterman Environmental Limited's acquisition of the entire issued share capital of JP Envirosystems Limited. The sale agreement includes warranties in favour of Waterman Environmental Limited given by the sellers of JP Envirosystems Limited which are customary to an agreement of this nature. The time period for claims under such warranties has expired other than in relation to warranties relating to taxation which will expire in December 2012;
(vi) a group overdraft facility of up to £4 million made available by HSBC. The borrowers under the group overdraft facility are the Company, Waterman Structures Limited, Waterman Building Services Limited, Waterman International Limited, Waterman Group UK Limited, Waterman HDC Limited, Waterman Environmental Limited, Waterman International (London) Limited, Waterman CPM Limited, Waterman Aspen Limited, Waterman Boreham Limited, Waterman Transport & Development Limited, Waterman Energy, Environment and Design Limited and Waterman International Holdings Limited. The overdraft facility is repayable on demand, and is subject to annual review by HSBC. There are a number of terms and conditions applicable to the overdraft facility which are customary to a facility of this nature;
(vii) a term loan to the Company by HSBC pursuant to a facility letter dated 26 March 2007 accepted by the Company on 5 April 2007 and amended by letter dated 10 August 2010 in connection with the acquisition of the entire issued share capital of Boreham Consulting Engineers Limited (the ''2007 Loan''). The 2007 Loan was entered into for a term of ten years from the date of first draw down. The borrowing limit of the 2007 Loan was £7 million, to be repaid by quarterly repayments which commenced three months after the first draw down. There are a number of terms and conditions applicable to the 2007 Loan which are customary to a facility of this nature;
(viii) a term loan to the Company by HSBC pursuant to a facility letter dated 28 September 2006 accepted by the Company on 18 October 2006 and amended by letters dated 26 March 2007 and 10 August 2010 (the ''2006 Loan''). The 2006 Loan was entered into for a term of ten years from the date of first draw down. The borrowing limit of the 2006 Loan was £2.1 million, to be repaid by quarterly repayments which commenced three months after the first draw down. There are a number of terms and conditions applicable to the 2006 Loan which are customary to a facility of this nature;
(ix) a term loan to the Company by HSBC pursuant to a facility letter dated 23 May 2003 accepted by the Company on 25 June 2003 and amended by letters dated 5 February 2004, 5 July 2006, and 26 March 2007 (the ''2003 Loan''). The 2003 Loan was entered into for a term of ten years from the date of first draw down. The borrowing limit of the 2006 Loan was the Euro equivalent of £1.5 million, to be repaid by quarterly repayments to cover interest only for the first two years and thereafter amortising evenly over the remaining eight years, commencing three months after the first draw down. There are a number of terms and conditions applicable to the 2003 Loan which are customary to a facility of this nature;
(x) a term loan to the Company by Nationwide Building Society pursuant to a facility letter dated 10 January 2001 accepted by the Company on 12 January 2001 and amended by letter dated 13 April 2007 in connection with the acquisition by the Company of the Property (the ''Mortgage Loan''). The Mortgage Loan was entered into for a term of twenty years. The borrowing limit

of the Mortgage Loan was £5 million, to be repaid by quarterly repayments. There are a number of terms and conditions applicable to the Mortgage Loan which are customary to a facility of this nature. The Mortgage Loan will be repaid from the proceeds of the Disposal; and

(xi) an invoice discounting agreement dated 16 December 1996 as amended by letters dated 9 April and 21 September 1998, 13 December 1999, 27 July 2000, 28 February 2002 and 30 October 2006 between Waterman Transport and Development Limited and GMAC Commercial Finance Development Limited (''GMAC'') and novated by GMAC to Close Invoice Finance Limited on 5 July 2010 in relation to an invoice discounting facility provided by Close Invoice Finance Limited up to an aggregate amount of £3 million.

Material contracts relating to the Property

Other than the Sale and Leaseback Agreement (described in Part 4 of this document), there are no contracts (other than contracts entered into in the ordinary course of business) affecting the Property which have been entered into by any members of the Group (i) within the two years immediately preceding the date of this document which are, or may be, material to the Group or (ii) which contain any provision under which any member of the Group has any obligation or entitlement which is material to the Group as of the date of this document.

8. Related Party Transactions

Save as set out below, neither the Company nor any of its subsidiaries has entered into any related party transactions both during the three years to 30 June 2011 being the date to which the Group's most recent unaudited preliminary results were prepared and also in the period 30 June 2011 to the date on which this document is published.

The directors have identified 19 (2010: 18, 2009: 19) key management personnel whose compensation was as follows:

	Group
	30 June	30 June	30 June
	2011	2010	2009
	£'000	£'000	£'000
Short term benefits	2,293	2,109	2,822
Credit in respect of share based payments	Nil	Nil	(88)
Post employment benefits	192	201	213
	2,485	2,310	2,947

9. Litigation

The Continuing Group

There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) during the 12 months preceding the date of this document which may have, or have had in the recent past, significant effects on the financial position or profitability of the Company or the Continuing Group.

The Property

10. Significant change

The Continuing Group

There has been no significant change in the financial or trading position of the Continuing Group since 30 June 2011, being the date to which the Group's latest unaudited preliminary results were prepared.

The Property

There has been no significant change in the valuation of the Property since 18 October 2011, being the date of the valuation contained in the valuation report set out in Part 3 of this document.

11. Working capital

The Company is of the opinion that, taking into account existing bank and other facilities, the Continuing Group has sufficient working capital for its present requirements, that is for at least the next 12 months from the date of this document.

12. Consents

Evolution Securities has given and has not withdrawn its written consent to the inclusion in this document of the references to its name in the form and the context in which it is included.

PricewaterhouseCoopers LLP has given and has not withdrawn its written consent to the inclusion in this document of its report on the pro forma financial information as set out in Section 2 of Part 5 in the form and context in which it is included.

Sanderson Weatherall LLP has given and has not withdrawn its written consent to the inclusion in this document of its report set out in Part 3 in the form and context in which it is included.

13. Documents available for inspection

Copies of the following documents may be inspected at the Company's registered office and at the offices of Rosenblatt Solicitors at 9-13 St Andrew Street, London EC4A 3AF, during usual business hours on any weekday (Saturdays, Sundays and UK public holidays excluded) up to and including the date of the General Meeting and will also be available for inspection at the General Meeting at least 15 minutes prior to and during the General Meeting:

(a) the articles of association of the Company;
(b) the unaudited consolidated accounts of the Group for the financial year ended 30 June 2011 and the audited consolidated accounts of the Group for the financial year ended 30 June 2010;
(c) the consent letters referred to in paragraph 12 above;
(d) the Sale and Leaseback Agreement described in Part 4 of this document;
(e) the report on the unaudited pro-forma statement of net assets of the Continuing Group from PricewaterhouseCoopers LLP as set out in Part 5 of this document;
(f) the valuation report set out in Part 3 of this document; and
(g) this document.

Dated: 18 October 2011

DEFINITIONS

	The following definitions apply throughout this document, unless the context otherwise requires:
''Act''	the Companies Act 2006, as amended
''Board'' or ''Directors''	the directors of Waterman at the date of this document, whose names are set out on page 5 of this document
''Business Day''	a day other than a Saturday or Sunday or public holiday in England and Wales on which banks are open in London for general commercial business
''Buyer''	GMS Estates Limited
''Capita Registrars''	a trading name of Capita Registrars Limited
''Company'' or ''Waterman''	Waterman Group plc, a public limited company incorporated in England and Wales with registered number 2188844
''Completion''	the completion of the Disposal pursuant to the Sale and Leaseback Agreement
''Continuing Group''	the Group following Completion
''CREST''	the relevant system (as defined in the CREST Regulations) in respect of which Euroclear UK & Ireland is the Operator (as defined in the CREST Regulations)
''Disposal''	the disposal by the Company of the Property in accordance with the terms of the Sale and Leaseback Agreement
''Evolution or Evolution Securities''	Evolution Securities Limited, the Company's sponsor and financial adviser
''Form of Proxy''	the form of proxy accompanying this document for use by Shareholders at the General Meeting
''FSMA''	the Financial Services and Markets Act 2000
''General Meeting''	the general meeting of the Company convened for 9 a.m. on 10 November 2011 at the offices of Evolution Securities Limited at 100 Wood Street, London EC2V 7AN, notice of which is attached to this document, and any adjournment thereof
''Group''	Waterman and each of its subsidiaries (within the meaning of the Act) at the date of this document
''IFRS''	International Financial Reporting Standards as adopted by the European Union
''Listing Rules	the listing rules made by the UKLA under section 74(4) of FSMA
''London Stock Exchange''	London Stock Exchange plc
''Ordinary Shares''	ordinary shares of 10 pence each in the capital of Waterman
''Prospectus Rules''	the prospectus rules made by the UKLA under section 74(4) of FSMA
''Property'' or ''Pickfords Wharf''	Pickfords Wharf, Clink Street, London SE1 9DG, comprising the current head office of the Company, three retail units, eight residential apartments and a public house, certain assets relating to the Pickfords Wharf lift, and the property subject to the Disposal
''Register''	the Company's register of members
''Regulations''	the Uncertificated Securities Regulations 2001 (SI 2001 3755)
''Resolution''	the ordinary resolution set out in the notice of the General Meeting at the end of this document to approve the Disposal

''Sale and Leaseback Agreement''	the conditional agreement dated 17 October 2011 between the Company and the Buyer for the purchase and leaseback of the Property, further details of which is set out in Part 4 of this document
''Shareholders''	holders of Ordinary Shares
''Shares''	Ordinary Shares
''UK''	the United Kingdom of Great Britain and Northern Ireland
''uncertificated'' or ''in uncertifcated form''	Shares which are recorded on the register of members of the Company as being held in uncertificated form in CREST and title to which, by virtue of the Regulations, may be transferred by means of CREST
''UK Listing Authority'' or the ''UKLA''	the Financial Services Authority acting in its capacity as the competent authority for the purposes of FSMA
''2003 Loan''	a term loan to the Company by HSBC pursuant to a facility letter dated 23 May 2003 accepted by the Company on 25 June 2003 and amended by letters dated 5 February 2004, 5 July 2006 and 26 March 2007
''2006 Loan''	a term loan to the Company by HSBC pursuant to a facility letter dated 28 September 2006 accepted by the Company on 18 October 2006 and amended by letters dated 26 March 2007 and 10 August 2010
''2007 Loan''	a term loan to the Company by HSBC pursuant to a facility letter dated 26 March 2007 accepted by the Company on 5 April 2007 and amended by letter dated 10 August 2010 in connection with the acquisition of the entire issued share capital of Boreham Consulting Engineers Limited

WATERMAN GROUP PLC

(Registered in England and Wales No. 2188844)

NOTICE OF GENERAL MEETING

NOTICE IS HEREBY GIVEN that a general meeting (''Meeting'') of Waterman Group plc (the ''Company'') will be held at the offices of Evolution Securities Limited at 100 Wood Street, London EC2V 7AN on 10 November 2011 at 9 a.m. for the purpose of considering and, if thought fit, passing the following resolution as an ordinary resolution:

Ordinary Resolution

THAT the proposed disposal of Pickfords Wharf, Clink Street, London SE1 9DG by the Company (the ''Disposal'') pursuant to and on the terms and conditions of a sale and leaseback agreement dated 17 October 2011 between (i) the Company and (ii) GMS Estates Limited (the ''Agreement'') as more particularly described in the circular to the Company's shareholders dated 18 October 2011 of which this notice forms part (the ''Circular''), be and is hereby approved, and that the directors of the Company (the ''Directors'') (or any duly constituted committee thereof) be and are hereby authorised to make such non-material amendments, waivers or variations to the terms and conditions of the Disposal or to the Agreement and any agreements incidental to or forming part of the Agreement which the Directors (or any duly constituted committee thereof) consider necessary, expedient or desirable to complete or give effect to or otherwise in connection with the Disposal and/ or any agreement executed to give effect thereto and to do all such other things as they may consider necessary, desirable or expedient in connection with the Disposal.

By order of the Board

Graham Hiscocks Company Secretary

Registered office:

Pickfords Wharf Clink Street London SE1 9DG

Dated 18 October 2011

Notes:

1. Proxies

A member is entitled to appoint another person as his proxy to exercise all or any of his rights to attend, to speak and to vote at the meeting. A member may appoint more than one proxy in relation to the meeting, provided that each proxy is appointed to exercise the rights attached to a different share or shares held by him. A proxy need not be a member of the Company. To be valid, forms of proxy together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy or a copy certified in accordance with the Powers of Attorney Act 1971 must be received by or deposited with the Registrar of Waterman Group plc, Capita Registrars, at PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU not later than 48 hours before the time of the Meeting. Shareholders may vote electronically, not later than 48 hours before the time of the meeting, by visiting www.capitashareportal.com. You will be asked to enter the Investor Code shown on your proxy card and agree to certain terms and conditions. If you are a CREST member, see note 2 below. Completion of a form of proxy will not preclude a member attending and voting in person at the Meeting.

2. CREST members

Alternatively, if you are a member of CREST, you may register the appointment of a proxy by using the CREST electronic proxy appointment service. Further details are contained below.

CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the Meeting and any adjournment(s) thereof by using the procedures, and to the address, described in the CREST Manual subject to the provisions of the Company's Articles of Association. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.

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 and Ireland Limited's (formerly CRESTCo's) (Euroclear) specifications and must contain the information required for such instructions, as described in the CREST Manual (available via www.euroclear.com/CREST). The message, regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy, must, in order to be valid, be transmitted so as to be received by the issuers agent (ID RA10) no later than 48 hours before the time of the Meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Applications Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.

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

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

3. Documents on display

Copies of executive directors service agreements, copies of the terms and conditions of appointment of non-executive directors and a copy of the Articles of Association of the Company are available for inspection at the Company's registered office during normal business hours from the date of this notice until the close of the Meeting (Saturdays, Sundays and public holidays excepted) and will be available for inspection at the place of the Meeting for at least 15 minutes prior to and during the Meeting.

A copy of this notice, and other information required by section 311A of the Companies Act 2006, can be found at the Company's website at www.watermangroup.com.

4. Right to attend and vote

Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that in order to have the right to attend and vote at the meeting (and also for the purpose of determining how many votes a person entitled to attend and vote may cast), a person must be entered on the register of members of the Company at 6 p.m. on 8 November 2011, or, in the event of any adjournment, at close of business on the date which is two days before the day of the adjourned meeting. Changes to entries on the register of members after this time shall be disregarded in determining the rights of any person to attend or vote at the meeting.

5. Right to ask questions

Any member attending the Meeting has the right to ask questions. The Company must cause to be answered any such question relating to the business being dealt with at the meeting but no such answer need be given if (a) to do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information, (b) the answer has already been given on a website in the form of an answer to a question, or (c) it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.

6. Corporate members

Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in relation to the same shares.

7. Nominated persons

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 have a right, under an agreement between him/her and the member by whom he/she was nominated, to be appointed (or to have someone else appointed) as a proxy for the meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may have a right, under such an agreement, to give instructions to the member as to the exercise of voting rights.

The statement of the above rights of the members in relation to the appointment of proxies does not apply to Nominated Persons. Those rights can only be exercised by shareholders of the Company.

8. Website publication of audit concerns

Shareholders should note that under section 527 of the Companies Act 2006, members meeting the threshold requirements set out in that section have the right to require the Company to publish on a website a statement setting out any matter relating to: (i) the audit of the Company's accounts (including the auditors report and the conduct of the audit) that are to be laid before the Meeting; or (ii) any circumstance connected with an auditor of the Company appointed for the financial year beginning on or after 30 June 2011 ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance with section 437 of the Companies Act 2006, (in each case) that the members propose to raise at the Meeting. The Company may not require the members requesting any such website publication to pay its expenses in complying with sections 527 or 528 of the Companies Act 2006. Where the Company is required to place a statement on a website under section 527 of the Companies Act 2006, it must forward the statement to the Company's auditor not later than the time when it makes the statement available on the website. The business which may be dealt with at the meeting includes any statement that the Company has been required under section 527 of the Companies Act 2006 to publish on a website.

9. Total number of shares and voting rights

As at 17 October 2011 (being the latest practicable date before the posting of this document), the Company's issued share capital consists of 30,758,824 ordinary shares, carrying one vote each. Therefore, the total voting rights in the Company as at that date are 30,758,824.

10. Electronic communications

Any electronic address (within the meaning of section 333(4) of the Companies Act 2006) provided in this Notice of the Meeting (or in any related documents including the Chairman's letter and proxy form) may not be used to communicate with the Company for any purposes other than those expressly stated.

AI assistant

Weir Group Inc. — AGM Information 2011

5246_rns_2011-10-18_580d34fb-00ac-4144-843b-e37d2fdde382.pdf

Waterman Group plc

Disposal of Pickfords Wharf

Circular to Shareholders and

Notice of General Meeting

TABLE OF CONTENTS

EXPECTED TIMETABLE OF KEY EVENTS

FORWARD-LOOKING STATEMENTS

DEFINITIONS AND GLOSSARY

DATE

LETTER FROM THE CHAIRMAN OF WATERMAN GROUP PLC

WATERMAN GROUP PLC

Proposed Disposal of Pickfords Wharf

1. Introduction

2. Background to and reasons for the Disposal

3. The Sale and Leaseback Agreement

4. Current trading of the Group and prospects for the Continuing Group

Current trading of the Group

Prospects for the Continuing Group

5. Use of proceeds and effects of the Disposal on the Continuing Group

6. Risk factors

7. General Meeting

8. Action to be taken

9. Further information

10. Recommendation

RISK FACTORS

1. Risks relating to the Disposal

The Disposal fails to complete

2. Risks relating to the business of the Continuing Group

Reduction in demand from customers

Unexpected decline in revenue or profitability

Directors and senior management

Operations overseas

3. Risk relating to the market and economic factors

Currencies and interest rates

VALUATION REPORT ON THE PROPERTY

PRIVATE AND CONFIDENTIAL

PICKFORDS WHARF, CLINK STREET, LONDON SE1 – PROPERTY VALUATION

Purpose of Valuation

Scope of Instruction

Valuation Procedure

Valuation Opinion

MARKET VALUE £7,810,000

(seven million, eight hundred and ten thousand pounds)

Confidentiality

1. LOCATION

2. THE SITE

3. CONSTRUCTION & DESCRIPTION

4. ACCOMMODATION

5. CONDITION

6. SERVICES AND AMENITIES

7. STATUTORY ENQUIRIES

Planning

Rating Assessment

8. ENVIRONMENTAL ISSUES

Flooding

9. TENURE FREEHOLD

10. TENANCIES

11. MARKET COMMENTARY AND GENERAL COMMENTS

12. VALUATION OPINION

13. TERMS OF ENGAGEMENT AND GUIDANCE FOR CLIENTS

SUMMARY OF THE PRINCIPAL TERMS OF THE SALE AND LEASEBACK AGREEMENT

1. Agreement

2. Consideration

3. Completion

4. Leaseback

PRO FORMA FINANCIAL INFORMATION ON THE CONTINUING GROUP

1. Unaudited pro forma statement of net assets of the Continuing Group

Waterman Group plc (the ''Company'')

Responsibilities

Basis of opinion

Opinion

ADDITIONAL INFORMATION

1. Responsibility

2. Directors of the Continuing Group

3. Incorporation and Registered Office

4. Directors' Interests in Shares

5. Major Interests in Shares

Weir Group Inc. AGM Information 2011