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Directors’ Report

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The directors submit their report, together with the audited financial statements for the year ended 31 March 2007. Directors’ responsibilities in Corporate Governance .

Principal activities, business review and results
Man Group plc (‘the Company’) is the holding company for the Man group (‘the Group’). Details of the principal operating subsidiaries are set out Financial Statements.

The Company is required to set out in this Report a fair review of the business of the Group during the financial year ended 31 March 2007 and of the position of the Group at the end of the financial year and a description of the principal risks and uncertainties facing the Group (referred to as the ‘Business Review’). The information that fulfils the requirements of the Business Review can be found in the following sections of the Annual Report, which is incorporated by reference:

The audited financial statements of the Group at the end of document. The Group profit for the year amounted to $1,284 million (2006: $1,014 million).

On 30 March 2007 the Group Board announced that it intends to separate its Brokerage business, to be effected by an initial public offering on the New York Stock Exchange of a majority interest in that business (to be renamed ‘MF Global’). This is expected to take place in the third calendar quarter of 2007, subject to market conditions remaining favourable and prior shareholder approval. As a result, Brokerage has been reclassified as a discontinued operation in the financial statements. In taking this decision the Board considers that the separation of Brokerage from the Asset Management division will allow each business to focus even more effectively on their separate growth strategies and take advantage of the significant business development opportunities in each of their industries. The Board believes that an IPO of MF Global will create significant value for Man Group shareholders and that Man Group’s focus on its leading position in the fast growing alternative investment industry will generate further long-term value for shareholders.

Dividends
The directors recommend a final dividend of 12.7 cents per ordinary share giving a total of 20.0 cents per ordinary share for the year. Subject to shareholder approval at the Annual General Meeting, the final dividend will be paid on 24 July 2007 in sterling at the rate of 6.42 pence per share to shareholders on the register at the close of business on 6 July 2007. The shares will be quoted ex-dividend from 4 July 2007. The Dividend Reinvestment Plan will be available in respect of this dividend.

Share capital
Following shareholder approval at the 2006 Annual General Meeting and the fulfilment of all conditions, each ordinary share of 18 US cents each was subdivided into six ordinary shares of three US cents each effective on 14 August 2006. All comparative and referenced figures relating to numbers of shares have been restated accordingly.

Details of movements in the share capital of the Company are given in Note 24 to the financial statements. During the year, the Company purchased in the market for cancellation 44,019,161 of its ordinary shares of three cents each at a total cost of £197 million ($375 million), giving an average repurchase cost of £4.46 per share. All repurchasing was undertaken at share prices that were earnings enhancing. These transactions represented some 2.3% of the issued ordinary share capital at 31 March 2007. As at 16 May 2007, the Company has an unexpired authority from last year’s Annual General Meeting to repurchase further shares up to a remaining maximum of 154,610,703 ordinary shares.

Resolutions relating to the Company’s share capital being proposed at the Annual General Meeting are set out in the Notice of Meeting. Further details are given in the accompanying letter from the Chairman.

(See Figure 47)

Shareholdings
As at 16 May 2007 the following voting interests in the ordinary share capital of the Company, disclosable under the Disclosure and Transparency Rules of the Financial Services Authority (which replaced Part VI of the Companies Act 1985 with effect from 20 January 2007) had been notified to the Company being that of BlackRock Inc (6.70%), Legal & General Group Plc (5.06%) and Baillie Gifford & Co (4.98%). Details of the directors’ interests in the share capital of the Company and details of directors’ share options are set out in the Remuneration Report. There have been no changes in the directors’ share interests between 31 March 2007 and the date of this report.

Annual General Meeting
The Company’s Annual General Meeting will be held at 11 am on Thursday 12 July 2007, at the Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London, SW1P 3EE.

Directors
Jonathan Nicholls resigned from the Board effective 20 July 2006, after over two years as a non-executive director, following his appointment as an executive director of Old Mutual plc. The senior management changes announced on 7 September 2006 were effected on 30 March 2007 when Deputy Chief Executive and Finance Director Peter Clarke assumed the office of Group Chief Executive in succession to Stanley Fink who became non-executive Deputy Chairman. As at 31 March 2007, the Board comprised two executive directors and six non-executive directors (including the Chairman). However effective 30 March 2007 Kevin Hayes was appointed as Chief Financial Officer and joined the Board as Finance Director on 31 May 2007 thus increasing the number of executive directors to three. The Nomination Committee oversaw the selection process which culminated in the appointment of Kevin Hayes and which was carried out by an executive search firm specialising in Board level recruitment. The process included benchmarking and the interview of a number of candidates. Biographical details of all the current directors are set out in Board of Directors. In accordance with the Articles of Association, Kevin Hayes is required to retire at the Annual General Meeting and, being eligible, offers himself for re-appointment. The Directors to retire by rotation at the Annual General Meeting are Alison Carnwath and Harvey McGrath and, being eligible, offer themselves for re-appointment. Since Glen Moreno has served as a non-executive director for more than nine years, he retires annually and, being eligible, also offers himself for re-appointment at the Annual General Meeting. The Board recommends to shareholders the re-appointment of all four directors retiring at the meeting and offering themselves for re-appointment, on the basis that they are all effective directors of the Company and demonstrate the appropriate level of commitment in their respective roles. In the case of Glen Moreno, the Board, including all of the other members deemed independent, is completely satisfied that he remains independent in character and judgement and it maintains a careful watch to ensure this view of Glen Moreno’s position may be maintained.

Directors’ interests and indemnity arrangements
At no time during the year did any director hold a material interest in any contract of significance with the Company or any of its subsidiary undertakings other than service contracts between each executive director and the Company and letters of engagement between each non-executive director and the Company.

The Company has purchased and maintained throughout the year Directors’ and Officers’ liability insurance in respect of itself and its directors. The directors also have the benefit of the indemnity provision in the Company’s Articles of Association. These provisions, which are qualifying third-party indemnity provisions as defined by s. 309A of the Companies Act 1985, were in force throughout the year and are currently in force.

Details of directors’ remuneration, service contracts and interests in the shares of the Company are set out in the Directors’ Remuneration Report.

Auditors
PricewaterhouseCoopers LLP have indicated their willingness to continue in office and resolutions will be proposed at the Annual General Meeting to re-appoint them as auditors of the Company and to authorise the directors to determine their remuneration for the current year.

Credit payment policy
It continues to be the Group’s policy to honour all of its contractual commitments and this includes paying suppliers according to agreed payment terms, which are agreed when negotiating transactions. The Company, being a holding company, had no external trade creditors at 31 March 2007 or 31 March 2006.

Employees, environment and charitable donations
The Group’s policies in relation to employees, and the environment, and details of the Group’s charitable donations in the year, are included in the Corporate Responsibility Summary Report.

By Order of the Board
Peter Clarke
Company Secretary
31 May 2007