Additional Information

	Percentage of total shares	Nature of holding
Baille Gifford & Co	4.94	Indirect
FMR LLC	4.78	Indirect
Fidelity International Limited	3.93	Indirect
Lloyds TSB Group Plc	3.93	Indirect
Legal & GeneralGroup Plc	3.58	Direct

At the date of this report, 609.3m ordinary shares of 21/15^thp each have been issued and are fully paid up and are quoted on the London Stock Exchange. During the year ended 31 December 2007, options were exercised pursuant to the Company’s share option schemes, resulting in the allotment of 18.1m new ordinary shares. A further 0.3m new ordinary shares have been allotted under these schemes since the end of the financial year to the date of this report.

The Company renewed its authority to repurchase up to 10% of its own issued share capital at the Annual General Meeting in May 2007 and again at the Extraordinary General Meeting in September 2007. During the year the Company acquired 6.6m(2006: 52.9m) ordinary shares, representing 1% of the issued share capital. During the year 6.55m shares, representing 1% of the issued share capital, were cancelled and the remaining 41,163 share are held in treasury.

The Company’s share capital was consolidated on 17 September 2007, with every 31 existing ordinary shares replaced with 30 new ordinary shares. The consolidation resulted in a reduction in the number of shares in issue by 19.96m shares.

Rights and restrictions attaching to shares
Under the Company’s Articles of Association, holders of ordinary shares are entitled to participate in the payment of dividends pro rata to their holding. The Board may propose and pay interim dividend and recommend a final dividend, in respect of any accounting period out of the profits available for distribution under English law. A final dividend may be declared by the shareholders in the general meeting by ordinary resolution, but no dividend may be declared in excess of the amount recommended by the Board.

At any general meeting a resolution put to vote of the meeting shall be decided on a show of hands unless (before or on the declaration of the results of the show of the hands or on the withdrawal of any other demand for a poll) a poll is properly demanded. On a show of hands every member who is present in person or by proxy at a general meeting of the Company shall have one vote. On a poll every member who is present in person or by proxy shall have one vote for every share of which they are the holder.

No person holds securities in the Company carrying special rights with regard to control of the Company. The Company is not aware of any agreements between holders of securities that may result in restrictions on the transfer of securities or on voting rights.

Restrictions on transfer of shares
The Company’s Articles of Association allow Directors to, in their absolute discretion refuse to register the transfer of a share in certificated form which is not fully paid. They may also refuse to register a transfer of a share in certificated form unless the instrumented form of transfer is lodged, duly stamped, at the registered office of the Company or at such other place as the Directors may appoint and (except in the case of a transfer by a recognized person where a certificate has not been issued in respect of the share) is accompanied by the certificate for the share to which it relates and such other evidence as the Directors may reasonably require to show the right of the transfer or to make the transfer.

The Directors may refuse to register a transfer of a share in uncertificated Form in any case where the Company is entitled to refuse (or is excepted From the requirement) under the Uncertificated Securities Regulations to register the transfer; and they may refuse to register any such transfer in favour of more than four transferees.

Going concern
The Board of Directors has a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the accounts.

Disabled persons
It is the Group’s policy to give full consideration to suitable applications for employment of disabled persons. Disabled employees are eligible to participate in all career development opportunities available to staff. Opportunities also exist for employees of the Group who become disabled to continue in their employment or to be retrained for other positions in the Group.

Employee involvement
The Group is committed to involving all employees in the performance and development of the Group. Its approach to employee development offers continual challenges in the job, learning opportunities and personal development. The Group supports employees through a comprehensive range of key business and management skills courses and an annual management development programme.

The Group encourages all its employees to participate fully in the business through open dialogue. Employees receive news of the Group through Recap, the Group’s newsletter, frequent email notices, internal notice board statements, and Capita Online, a regular communication reviewing the performance of the Group from the perspective of the Directors.

These communication initiatives enable employees to share information within and between business units and employees are encouraged to contribute news, views and feedback. The Group maintains a strong communications network and employees are encouraged, through its open door policy, to discuss with management matters of interest to the employee and subjects affecting day-to-day operations of the Group.

The Group grants share options to senior employees, on a discretionary basis, in order to reward their long term commitment to the Group. The granting of all share options is subject to the approval of the Remuneration Committee. The share option schemes have been a key factor in attracting, retaining and motivating senior employees across the Group.

The Capita Share save Scheme, an employee Save As You Earn Scheme, and the Capita Share Ownership Plan, a share incentive plan, are both firmly established and are designed to promote employee share ownership and to give employees the opportunity to participate in the future success of the Group. 20% of the Group’s eligible employees have share options or own Capita shares.

In keeping with its belief that employees are the Group’s most valuable asset, the Group operates an annual employee awards scheme, celebrating the core values that embody the organisation and rewarding employees for service excellence, effective teamwork, service to the community and innovation.

Payment of suppliers
The Company aims to pay suppliers in accordance with the suppliers’ contract terms. The Company had an average of 42 days’ purchases (2006: 43 days’ purchases) outstanding in trade creditors.

Charitable and political donations
During the year charitable donations amounted to £0.5m (2006: £0.5m). No political contributions were made. Further details of the Group’s charitable donations and work within the community can be found on this site.

Financial instruments
The Group’s financial instruments primarily comprise bonds, unsecured loan notes, bank loans, finance leases and overdrafts. The principal purpose of these is to raise funds for the Group’s operations. In addition various other financial instruments such as trade creditors and trade debtors arise directly from its operations. From time to time, the Group also enters into derivative transactions, primarily interest rate swaps, currency swaps and forward exchange contracts, the purpose of which is to manage interest risk and currency risk.

The main financial risks, to which the Group has exposure, are interest rate risk, liquidity risk, credit risk and foreign currency risk. The Group borrows in selected currencies at fixed and floating rates of interest and makes use of interest rate swaps to generate the desired interest profile and to manage its exposure to interest rate fluctuations.

In respect of liquidity risk, the Group aims to maintain a balance between continuity of funding and flexibility through the use of bonds, bank loans, unsecured loan notes, finance leases and overdrafts.

In respect of credit risk, the Group trades only with recognised, creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash equivalents, available-for-sale financial investments and certain derivative instruments, the Group’s exposure to credit risk arises from default of the counterparty. The Group has a maximum exposure equal to the carrying amount of the above receivables and instruments.

The Group has exposure to foreign currency risk where it has investments in overseas operations which are affected by foreign exchange movements. The Group is not generally exposed to significant foreign currency risk except in respect of its overseas operations in India which generate exposure to movements in the INR/GBP exchange rates .The Group seeks to mitigate the effect of this exposure by executing forward currency contracts to fix the GBP cost of highly probable forecast transactions denominated in INR. These forward currency contracts are designated as cash flow hedges and it is the Group’s policy to negotiate the terms of the hedge derivatives to match the terms of the hedged items in order to maximise hedge effectiveness.

Qualifying third party indemnity provisions for the benefit of Directors
Under the Companies (Audit, Investigations and Community Enterprise) Act 2004 (which amends the Companies Act 1985), companies are under an obligation to disclose any indemnities which are in force in favour of their directors .The current Articles of Association of the Company contain an indemnity in favour of the Directors of the Company which indemnifies them in respect of certain liabilities and costs that they might incur in the execution of their duties as Directors .Copies of the relevant extract from the Articles of Association are available for inspection at the registered office of The Company during normal business hours on any weekday and will be available at the venue of the Annual General Meeting from 15 minutes before the meeting until it ends.

Auditors
A resolution to re-appoint Ernst & Young LLP as the external auditors will be put to the forthcoming Annual General Meeting.

The Company is committed to ensuring appropriate independence in its Relationship with external auditors and the key safeguards are:

• The Group Risk and Business Assurance Director monitors the independence of the auditor as part of the Group’s assessment of auditor effectiveness and reports to the Audit Committee
• The Audit Committee routinely benchmarks the level of the external Audit fee against other comparable companies both within and without its sector, to ensure ongoing objectivity in the audit process
• The Group Finance Director monitors the level and nature of non-audit fees accruing to the external auditor, and specific assignments are discussed in advance with the external auditor and flagged for the approval of the Audit Committee as appropriate and in accordance with the Company’s policy on the provision of non-audit services by auditors. The Audit Committee reviews, in aggregate, non-audit fees of this nature on an annual basis and considers implications for the objectivity and independence of the relationship with the external auditor.
• Ensuring conflicts of interest are avoided is a fundamental criterion in the selection of any third party auditor for assignments with which the Group is involved. Such conflicts may arise across public or private sector customers and key supplier relationships, for example, and are a key determinant in the award process for external audit assignments.

Powers of Directors
The business of the Company shall be managed by the Directors who are subject to the provisions of the Companies Act, the Memorandum and the Articles of Association of the Company and to any directions given by special resolution, including the Company’s power to repurchase its own shares.

The Company’s Articles of Association may only be amended by a special resolution of the Company’s shareholders.

Change of control
All of the Company’s share schemes contain provisions relating to a change of control .Outstanding options and awards would normally vest and become exercisable on a change of control, subject to the satisfaction of any performance conditions at that time.

The Group has a number of borrowing facilities provided by various banks and other financial institutions .The bonds issued by the Group contain a change of control provision which requires prepayment of the full facility amount in the event that a change of control occurs and the Group’s credit rating falls below investment grade. The Group currently has £461.1m of bonds in issue.

There are no other significant contracts in place that would take effect, alter or terminate on the change of control of the Company.

Statement of Directors’ responsibilities in respect of the accounts and auditors
Company law requires the Directors to prepare accounts for each financial year that give a true and fair view of the state of affairs of the Company and of the Group and of the profit or loss of the Group for that period.

In preparing those accounts, the Directors are required to:

• Select suitable accounting policies and then apply them consistently
• Make judgements and estimates that are reasonable and prudent
• State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the accounts
• Prepare the accounts on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

To the best of each Director’s knowledge and belief, there is no information relevant to the preparation of their report of which the Company’s auditors are unaware.

Each of the Directors has taken all steps that a Director might reasonably be expected to have taken to be aware of all relevant audit information and to establish that the Company’s auditors are aware of that information.

The Directors confirm that the accounts comply with the above requirements.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at anytime the financial position of the Group and to enable them to ensure that the accounts comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

To the best of each Director’s knowledge, the financial statements contained within this Annual Report and Accounts give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group and the undertakings included in the consolidation taken as a whole; and the Directors’ report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

Annual General Meeting
The 2008 Annual General Meeting of the Company will be held at Deutsche Bank, Winchester House, 1 Great Winchester Street, London, EC2N 2DB, on 6th May 2008. At the AGM a number of resolutions will be proposed. The resolutions are set out in the Notice of Meeting, which was sent to Shareholders with the Annual Report and Accounts and includes notes explaining the business to be transacted. In May 2007, shareholders granted authority for the Company to purchase up to 59.88m ordinary shares. This authority was renewed at the EGM in September 2007 and will expire at the conclusion of the 2008 Annual General Meeting. A resolution to renew this authority will be put to shareholders at that meeting.