The 2008/9 financial year witnessed unprecedented turmoil in the financial markets, with dramatic impact on the availability of credit, extreme volatility in equity, commodity and currency prices and severely depressed investor sentiment and risk appetite. The performance and stability of the banking and general financial sector were, as a consequence, very badly hit leading to some companies needing state subsidy to survive and others to cut or pass their dividend. Peter Clarke highlights in his Review the benefits in turbulent markets of the Company's flexible business model, global reach and robust capital position and explains how his executive team is developing an integrated hedge fund management business to respond to investor demand for governance and risk management, transparency and liquidity.

Total shareholder return

The directors are accountable to shareholders for the performance of the business and the protection of the Company's assets. Transparency is key for shareholder confidence and for this reason we have tried to enhance the quality of our reporting in the Annual Report this year.

Against a background of severe economic downturn and uncertainty, the role the Board plays in reviewing and reinforcing business strategy, monitoring the performance of the Chief Executive and management team, understanding risk and reviewing risk controls is of paramount importance. I am pleased to lead a Board whose non-executives bring a wealth of experience in international fund management and financial services to their stewardship of the business and who provide substantial challenge to their executive colleagues. Of particular note this year has been the focus of the Audit and Risk Committee on liquidity, valuation and increased risk. The Remuneration Committee has brought increased rigour to the determination of the bonus pool, the assessment of executive director and senior management performance, and the consideration of how risk should be reflected in bonus structures. The Nomination Committee has broadened its remit and implemented a rigorous and thorough process for non-executive director search.

In addition, the Board as a whole participated this year in an external evaluation of its operation and effectiveness conducted by an independent third party. The findings of this work confirmed a culture of strong engagement, commitment and open debate, all of which position us well to respond to current challenges. We have also identified some areas for future focus, including a renewed concentration on executive director and senior management succession planning which is essential to our continued success, and I look forward to working with my colleagues on these in the course of the year. A more detailed account of the operation and activities of the Board and its Committees during the year is given in the Corporate Governance Report.

The year ahead will see some changes in Board membership. Glen Moreno, who has served as a non-executive director for 15 years and as Senior Independent Director since 2002, has decided to retire at this year's AGM. We are very grateful for the extensive industry knowledge, experience and robust guidance and wisdom he has brought to the Board through the various stages of Man Group's evolution. His unique contribution will be very much missed and he leaves with our best wishes for the future. I am pleased that Alison Carnwath has agreed to take over from him as Senior Independent Director.

This year's economic and market turbulence has resulted in a total shareholder return of -58% and an average annual return of -12% on a three year basis. The Company has, nevertheless, achieved a substantial profit in a difficult year when some other industry players have reported substantial losses. It is the quality of Man's income generation and business performance, coupled with the strength of its balance sheet, that has enabled the Board to maintain its final dividend for 2008/9 at the same level as the previous year.

I pay tribute to the energy, skill and commitment of all our staff who have continued to deliver performance in very challenging markets and who acted so quickly to de-risk investors' assets and protect our business at the end of the last calendar year. Looking ahead, work is now in progress to leverage the Company's scale and distribution network and our people's hedge fund investing, product structuring and regulatory expertise in the development of a new hedge fund management business. This, together with recent reductions in our cost base and planned operational efficiencies, will provide the basis for balanced and profitable future growth.

Jon Aisbitt

Chairman