Notice of AGM

28 August 2013

PENNA CONSULTING PLC

("Penna" or "the Company")

Notice of Annual General Meeting, Proposed authority to make purchases of its own shares

and

Rule 9 Waiver

Penna Consulting, the international human resources consulting group, has today posted a Circular to Shareholders giving Notice of its AGM to be held at 12.15 p.m. on 26 September 2013.

As part of the Resolutions being put to Shareholders, the Company is again proposing to seek Shareholder approval to have authority to make market purchases of up to 10 per cent. of the Company's issued share capital.

As at the latest practicable date, Mr Stephen Rowlinson, the Chairman of the Company held 7,698,540 Ordinary Shares representing approximately 29.9 per cent. of the issued share capital of the Company. However, were the Company to undertake a share repurchase in accordance with the authority being sought at the AGM, Mr Stephen Rowlinson's interest in Ordinary Shares could increase beyond 30 per cent. of the issued share capital of the Company, in which case he could be required to make a mandatory offer for the remainder of the share capital of the Company. Therefore, the Independent Shareholders are being asked to waive the obligations that would otherwise apply to Mr Stephen Rowlinson in these circumstances pursuant to Rule 9 of the Takeover Code.

The full Circular to Shareholders (and the Company's Report and Accounts for the year ended 31 March 2013 which has also today been posted to Shareholders) is available on Penna's website, www.penna.com. Defined terms used in this announcement are the same as those defined in the Circular unless the context requires otherwise.

Enquiries:

Disclaimer

Charles Stanley, which is regulated by the Financial Conduct Authority, is acting as financial adviser to the Company, and to no one else in relation to the proposals in the Circular and will not be responsible to any person other than the Company for providing the protection afforded to its customers or for advising any other person on the contents of this document or any transaction or arrangement referred to in the Circular.

Shareholder Circular

1. Introduction

In common with many listed companies, the Directors have included a resolution in the notice of annual general meeting of the Company to give limited authority to make market purchases of Ordinary Shares. The Directors have always considered it to be in the best interests of all Shareholders for the Company to have the right, in appropriate circumstances, to purchase its own shares in the market. The Company either cancels any shares it purchases under the authority granted to it by Shareholders or transfers them into treasury.

As at the latest practicable date, Mr Stephen Rowlinson, the Chairman of the Company, held 7,698,540 Ordinary Shares representing approximately 29.9 per cent. of the issued share capital of the Company. However, were the Company to undertake a share repurchase in accordance with the authority being sought, Mr Stephen Rowlinson's interest in the Ordinary Shares could increase beyond 30 per cent. of the issued share capital of the Company, in which case he could be required to make a mandatory offer for the remainder of the share capital of the Company. The Independent Directors are therefore seeking your approval, via the Waiver Resolution, for a waiver to be granted from the obligations that would otherwise apply to Mr Stephen Rowlinson in these circumstances.

As well as providing details of the resolutions being put to shareholders at the Annual General Meeting, the Circular also explains why the Independent Directors consider the Rule 9 Waiver to be in the best interests of the Company and its Shareholders as a whole.

2. Background

The Independent Directors believe that it is in the best interests of the Company and its Shareholders as a whole to retain the flexibility in the management of its capital structure. This flexibility also applies to the approach the Company takes to satisfy the potential issue of shares pursuant to the exercise of employee share options. In accordance with section 724 of the Act, the Company is entitled, on buying back its own shares, to hold such shares in treasury for subsequent sale, transfer for the purposes of or pursuant to employee share option schemes, or cancellation as an alternative to cancelling them immediately. As at 27 August 2013 (the latest practicable date prior to the publication of the Circular), the Company held 330,000 Ordinary Shares in treasury. However, the Independent Directors would not be prepared to exercise the authority being sought in Resolution 10 (authority to purchase own shares) and cancel or return to treasury the Ordinary Shares so acquired in circumstances which would lead to Mr Stephen Rowlinson becoming obliged to make a general offer to acquire all of the Ordinary Shares not already held by him in accordance with Rule 9 of the Takeover Code.

Mr Stephen Rowlinson, the Chairman of the Company, currently holds 7,698,540 Ordinary Shares representing 29.9 per cent. of the Company's issued share capital. If the appropriate Resolution is approved at the AGM, Mr Stephen Rowlinson would be in a position where, were he not to participate pro rata to his interests in any further re-purchase by the Company of its own shares, his percentage interest would increase beyond its current level, thereby potentially triggering a mandatory offer under Rule 9 of the Takeover Code.

It is for this reason that the Independent Directors have decided to seek a waiver from the Panel from the obligation on Mr Stephen Rowlinson to make a general offer under Rule 9 of the Takeover Code that could arise as a result of the exercise of the share buy-back authority being sought. Accordingly, subject to the Waiver Resolution being approved by the Independent Shareholders voting on a poll at the Annual General Meeting, the Panel has agreed to grant the Rule 9 Waiver where the obligations on Mr Stephen Rowlinson arise solely as a result of the exercise by the Company of the authority granted under Resolution 10 and the cancellation or return to treasury of the Ordinary Shares so acquired.

The Rule 9 Waiver, if approved, will not be valid if any purchases of Ordinary Shares are made by Mr Stephen Rowlinson or any other person acting in concert with him in the period between the date of this document and the Annual General Meeting.

3. City Code on Takeovers and Mergers

The Takeover Code is issued and administered by the Panel. The Panel has been designated as the supervisory authority to carry out certain regulatory functions in relation to takeovers and its statutory functions are set out in and under Chapter 1 of Part 28 of the UK Companies Act 2006.

Under Rule 9 of the Takeover Code, any person who acquires an "interest" (as defined in the Takeover Code) in shares which, when taken together with shares in which he is already interested and in which persons acting in concert with him are interested, carry 30 per cent. or more of the voting rights of a company which is subject to the Takeover Code, is normally required to make a general offer to all of the remaining shareholders to acquire their shares.

In addition, when any person, together with any persons acting in concert with him, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of such a company but does not hold shares carrying more than 50 per cent. of such voting rights, a general offer will normally be required if any further interests in shares are acquired by any such person.

Under Rule 37 of the Takeover Code, when a company purchases its own voting shares, any resulting increase in the percentage of shares carrying voting rights in which a person or a group of persons acting in concert is interested will be treated as an acquisition for the purposes of Rule 9 (although a shareholder who is neither a director, nor acting in concert with a director, will not normally incur an obligation to make a Rule 9 offer).

An offer under Rule 9 of the Takeover Code must be made in cash (or accompanied by a cash alternative) and at the highest price paid by the person required to make the offer, or any person acting in concert with him, for any interest in shares in the company during the 12 months prior to the announcement of the offer.

The Panel has agreed, however, to waive the obligation to make a general offer that would otherwise arise as a result of the transaction, subject to the approval of the Independent Shareholders. Accordingly, the Waiver Resolution is being proposed at the Annual General Meeting and will be taken on a poll. Mr Stephen Rowlinson will not be entitled to vote on the Waiver Resolution.

The Independent Directors believe that each of the resolutions relating to the share buyback authority and the Waiver Resolution is in the best interests of Shareholders as a whole and unanimously recommend that Shareholders approve each of these resolutions by voting in favour of them at the forthcoming Annual General Meeting as each of the Independent Directors intends to do in respect of his or her own beneficial holdings.

4. Maximum potential holding

The following table sets out the shareholding of Mr Stephen Rowlinson as at the date of this announcement and following the maximum purchase of Ordinary Shares (and subsequent cancellation thereof) in accordance with the share buyback authority being sought at the AGM.

If the Company utilises the share buyback authority to its full extent and buys back and cancels or returns to treasury the Ordinary Shares so acquired, should Mr Stephen Rowlinson not participate in any such buy back, he will be interested in 7,698,540 Ordinary Shares representing 33.27 per cent. of the voting rights of the Company.

Following utilisation of the share buyback authority, Mr Stephen Rowlinson may be interested in Ordinary Shares carrying 30 per cent. or more of the Company's voting share capital, but will not hold Ordinary Shares carrying more than 50 per cent. of such voting rights and therefore any further increase in Mr Stephen Rowlinson's interest in Ordinary Shares (including, for example, market purchases of Ordinary Shares) by or on behalf of Mr Stephen Rowlinson, will be subject to the provisions of Rule 9 of the Takeover Code.

5. Mr Stephen Rowlinson's intentions

Mr Stephen Rowlinson has confirmed to the Company that he is not proposing, as a result of any increase in his percentage interest of Ordinary Shares following any re-purchase by the Company of its own shares, to seek any change in the composition of the Board or to the general nature of any other aspect of the Company's business.

As required by the Takeover Code, Mr Stephen Rowlinson has also confirmed that his intentions regarding the future of the Company's business, the maintenance of existing trading facilities for the securities of the Company, the location of the Company's places of business and the continued employment of its employees and management and those of its subsidiaries, including any material change in the conditions of employment, will not be altered as a result of these proposals, nor will there be any redeployment of the fixed assets of the Company as a result of such proposals.

Mr Stephen Rowlinson has not taken part in any decision of the Independent Directors in relation to the Waiver, since it is his interest in Ordinary Shares which is the subject of the Waiver. Mr Stephen Rowlinson has confirmed he will not vote on the Waiver Resolution.

6. Company's business and its current financial and trading and prospects

Penna is an international provider of human capital management consultancy. The Company is organised into two service groups, namely HR Consulting and Recruitment Solutions.

HR Consulting includes the Company's market leading outplacement consultancy as well as services which are focused on selecting and developing individual leaders and their teams, identifying and developing talent and helping clients manage the people aspects of change. These services include coaching, assessment, leadership consulting, leadership development and career development.

Recruitment Solutions combines the Company's service capabilities in recruitment advertising and communications, managed recruitment and assessment, executive search and executive interim. This broad range of recruitment activities enables the Company to offer clients in both the public sector and commercial sectors with innovative solutions to their recruitment needs.

The Company announced its preliminary results for the year ended 31 March 2013 on 11 June 2013. Within these results the Company stated that the current financial year had started well with the recruitment teams seeing some tentative signs of recovery in the markets served by the Company. Although the UK economy continues to be one that is characterized by caution and restraint, the Company has continued to perform satisfactorily and the Directors continue to believe that Penna's approach will ensure that it continues to be profitable and cash generative.

7. Action to be taken

A form of proxy for use in connection with the AGM is also enclosed with the Circular.

Shareholders who hold their shares in certificated form are requested to complete and return the enclosed Form of Proxy to the Company's registrars at Capita Registrars PXS, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU as soon as possible but in any event, to be valid, so as to arrive no later than 12:15 p.m. on 24 September 2013.

Shareholders who hold their shares in uncertificated form may use the CREST electronic proxy appointment service. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with CRESTCo's specifications and must contain the information required for such instructions, as described in the CREST Manual issued by Euroclear UK & Ireland Limited. The message must be transmitted so as to be received by the issuer's agent, Capita Registrars (CREST ID: RA10) by 12:15 p.m. on 24 September 2013.

The return of a Form of Proxy or the appointment of a proxy through CREST will not preclude a member from attending and voting at the Annual General Meeting in person, should they subsequently decide to do so.

8. Recommendation

Mr Stephen Rowlinson has not taken part in any decision of the Board relating to any proposal to seek a waiver of Rule 9 from the Panel since it is his shareholding which is the subject of the waiver.

The Independent Directors, who have been so advised by Charles Stanley in respect of the Rule 9 Waiver, consider obtaining the Rule 9 Waiver to be fair and reasonable and in the best interests of the Independent Shareholders and the Company as a whole. In providing advice to the Independent Directors, Charles Stanley has taken into account the Independent Directors' commercial assessments.

Accordingly, the Independent Directors unanimously recommend that the Independent Shareholders vote in favour of Resolutions 10 and 11 at the AGM as they intend to do in respect of their own beneficial holdings of 202,755 Ordinary Shares in aggregate, representing 0.9 per cent. of the current issued share capital of the Company.