Remuneration report

Xchanging has successfully emerged from a number of business and operational challenges in 2011. During this time Kenneth Lever and David Bauernfeind were appointed Chief Executive Officer and Chief Financial Officer respectively, and the business was successfully stabilised. The appointment of Geoff Unwin as Chairman from 1 January 2012 was also announced towards the end of 2011 and has helped complete the stabilisation process and accelerate the turnaround.

We will seek to move towards the next phase of our growth plan which includes a focus on maximising the economic value of the business and the growth of profitable and sustainable revenue streams. The Board has taken the view that managing for growth in this way will help lead to superior levels of medium and longer-term value creation for our shareholders.

Embedding this philosophy across the Company will take some time to implement. The proposed revisions to our executive incentive arrangements in 2012 outlined in this report represent some of the first steps towards achieving our growth aspirations.