Royal Mail Share Offer

Frequently Asked Questions This set of Frequently Asked Questions is intended to answer general queries that members of the public might have about the Royal Mail Share Offer. They cover queries which relate specifically to the Offer itself and also how we will be handling the interests of both our existing and new clients in our capacity as an Intermediary. If you have a question that is not covered then please do not hesitate to contact your nearest regional office or our dedicated Issue support team on 01253 831211. Most Popular Questions What is the Royal Mail Share Offer? The Government has announced that it intends to proceed with an initial public offering (IPO) of Royal Mail plc. As part of the proposed offer of shares, individuals located in the UK who are aged 18 or over may apply for Royal Mail shares in the Retail Offer. When will the Share Offer take place? The Royal Mail Share Offer is expected to take place soon. Can I register for the Offer? If you wish to register your interest in the issue, which will lead to us sending out an application form to new clients, please contact your nearest regional office or our dedicated Issue support team on 01253 831211. You can view the location of our regional offices and office details by clicking on the link below. http://www.jbrearley.co.uk/marketing/company/company-offices.aspx Existing James Brearley & Sons clients will not necessarily have to register for the Offer as they will be able to place their interest over the phone with their regional office or online in the case of Icon clients. How will I be able to apply for Royal Mail shares? If you are not a client of James Brearley & Sons then you will be able to apply for shares by completing our application form and providing us with funds to cover your interest. Existing James Brearley & Sons clients will be able to place their interest over the phone or online in the case of Icon clients. What will be the price of the shares? The price of the shares will not be determined until after the Offer closes, and so you will not know the exact price of the shares when you apply. This means that, when you apply for shares, you will be asked to state the amount of money you wish to invest rather than the number of shares you wish to buy. How many shares can I apply for? You will be told the amounts which you can apply to invest at the time of application. What is the minimum application amount? The minimum application amount will be 750. 1

What is the maximum application amount? There will be no maximum application amount. Royal Mail Share Offer Will there be any incentives for investors, such as bonus shares or discounts? There will be no incentives such as bonus shares or discounts. All investors will pay the same price for their shares in the Offer. Will applications made through Intermediaries be given higher allocations than other applications (or vice versa)? The same share allocation policy will be applied to all applications in the Retail Offer, irrespective of how the application was made. There will, however, be special allocation arrangements for eligible employees of Royal Mail. INFORMATION ABOUT THE OFFER How much of Royal Mail s share capital is being offered for sale? The expected amount of share capital being offered for sale will be announced when the Offer starts and will be set out in the prospectus. Why is the Government selling the shares? The Government believes that a share sale will not only provide commercial discipline to the company, but will also give Royal Mail future access to private capital. This will enable the company to continue modernising and to take advantage of opportunities such as the growth in online shopping, building on its success in parcels and logistics. Who receives the proceeds from the sale? The shares are being sold by the Government, which will receive the proceeds of the sale. What is the prospectus? The prospectus is the document on the basis of which shares in Royal Mail will be offered for sale by the Government. It will include information about Royal Mail and the terms on which the shares are being sold. It is expected to be over 400 pages long. Decisions to invest in Royal Mail shares should be made after reading the prospectus. The prospectus will be made available online when it becomes available for wider distribution. A paper copy may be requested from us by contacting your nearest regional office or our dedicated Issue support team on 01253 831211. You can view the location of our regional offices and office details by clicking on the link below http://www.jbrearley.co.uk/marketing/company/company-offices.aspx What is the summary prospectus? The summary prospectus contains a summary of certain information about Royal Mail and the Offer, but this is not the full prospectus. Any decision on whether to apply to invest should be made on the basis of the information in the full prospectus. The summary prospectus will be made available online when it becomes available for wider distribution. A paper copy may be requested from us by contacting your nearest regional office or our dedicated Issue support team on 01253 831211. You can view the location of our regional offices and office details by clicking on the link below. http://www.jbrearley.co.uk/marketing/company/company-offices.aspx 2

When can I see a copy of the prospectus? Both the prospectus and the smaller summary prospectus will be available on our dedicated website page at the point the Offer opens. At this time you may also obtain a hard copy of either document from one of our regional offices or our Issue support team on 01253 831211. You can view the location of our regional offices and office details by clicking on the link below. http://www.jbrearley.co.uk/marketing/company/company-offices.aspx When is the closing date for the Offer? This date will be announced in due course when the Offer starts and the prospectus is published. When will dealings commence in Royal Mail shares? Dealings will commence a few days after the close of the Offer. The date and time of the start of dealings will be set out in the prospectus. How much will dividends be, and when will they be paid? In the absence of unforeseen circumstances, Royal Mail intends to propose a final dividend for this financial year of 133 million, to be paid in July 2014. This amount is approximately two-thirds of the full-year dividend of 200 million that Royal Mail believes it would have proposed had it been listed for the full financial year. In general, the amounts and timings of any dividends declared will depend on the board and shareholders of Royal Mail at the relevant time. The amounts of any dividends that you receive will also depend on the number of shares you hold. You should note that a company is not obliged to declare and pay a dividend. Will the shares be eligible to be held in an ISA (or SIPP). Yes. APPLICATION - GENERAL Can I apply for Royal Mail shares now? No, you cannot apply for Royal Mail shares now. The Royal Mail Share Offer is expected to take place soon. If you register your interest we will be happy to send you further details of the Offer as they become available. How long will I have to apply for shares? Once the Offer has been launched you will have only a limited time in which to submit your application. The closing deadline will be included in the prospectus. How can I decide how many shares to apply for if I don t know the price? If you apply you will need to state how much money you would like to invest rather than apply for a fixed number of shares. Can I put a limit on the price per share I pay when I apply? When will I need to pay for the shares? The full price of the shares must be paid on application. 3

Will I receive all of the shares I apply for? Not necessarily. If there is heavy demand for the shares, applicants may not receive all the shares they applied for, and some may not receive any at all. If you are not allocated all or any of the shares you applied for, the appropriate amount of money will be returned to you. How many shares will I get if the Offer is oversubscribed? There will be some information on the allocation of shares in the prospectus when it is published. However, the final basis of allocation of shares will only be decided once the Offer has closed. The same share allocation policy will be applied to all applications in the Retail Offer from members of the public, irrespective of how the application was made. There is no guarantee that every applicant will receive shares. Can I make more than one application? You may apply only once for your own benefit in the Retail Offer, which includes applications made through Intermediaries. Can I apply jointly with another person? Yes, however this would prevent you from making an application in your individual name. Can a company, business, partnership, club, charity, association, trust or other organisation apply in the Offer? No, only individuals may apply in the Retail Offer, and in their own names. May children apply for Royal Mail shares (or have shares bought for them)? Children under 18 years old are not entitled to apply for shares in their own name. A parent, grandparent or guardian of a child may, however, apply in their own name for the benefit of the child, as well as make an application on their own behalf. To accept applications for minors you will firstly need to provide us with documentation to support the child s date of birth. If I apply for myself and also on behalf of a child, would that be a multiple application? An application made by you for your own benefit and one for the benefit of the child are treated as separate applications. They are not treated as multiple applications because they are made for the benefit of different people. Can people located outside the UK apply for shares? No, people located outside the UK may not apply through an Intermediary. Can people located in the Channel Islands or the Isle of Man apply for shares? No, only persons located in the UK can apply in the Retail Offer. The Channel Islands and the Isle of Man are not part of the United Kingdom. Can foreign nationals/citizens living in the UK apply for shares? Yes, a foreign national can apply for shares in the Retail Offer provided that there is no law or regulation in their country of nationality that prevents them from doing so. If you are in any doubt about your legal position you should consult an appropriate legal advisor. Can I apply for my shares to be put directly into an ISA (or SIPP)? Yes this is possible where we act as the custodian over your ISA or SIPP. 4

Will there be application forms in newspapers? Royal Mail Share Offer Will I be able to sell my Royal Mail shares after the Offer? Yes, one of the main advantages of applying for shares via James Brearley & Sons, rather than through the Government or Royal Mail, is that you will be able to place a deal with us on the first day of trading. INTERMEDIARY S APPLICATION AND PAYMENT PROCESS How do those without access to the internet apply for shares? It will be possible for new clients to collect and drop off application forms at our regional offices or request these be posted to them and returned to our dedicated Issue support team. Existing clients will simply be able to place their interest over the phone or online in the case of Icon clients. How do I pay for the shares? We are happy to process a cheque or take details of your debit card over the phone. If you are an existing client you may wish to send an electronic transfer directly to your account. Is a cheque from my bank or building society acceptable? Yes but in the case of a building society cheque this will need to state that the cheque has been drawn on your account or be supported by a letter from the building society on headed paper and/or bearing an official stamp which confirms the details of the originating account. Can I apply using a cheque drawn on someone else s account? Can I pay online using a credit card? Can I pay using someone else s debit card? Where do I send my completed application form and cheque? A completed form can be dropped off at one of our regional offices or posted to our dedicated Issue support team. When will application cheques be cashed? Cheques will be processed immediately upon their receipt. An application will not be deemed as accepted until we are holding cleared funds on account for you. If I don t receive all the shares I applied for, how will you refund (some) of my money? In the instance that you don t receive all of the shares that you apply for, if you do not hold a Cash Settlement Account with us, we will post you a cheque for the balance. Will I get interest on any money returned to me? No 5

Will I receive my own share certificate after the Offer? If you do not have a James Brearley & Sons nominee account then a share certificate will be raised and posted to you. When will I receive my share certificate? It is likely that it will take approximately 7-10 business days after formal dealings in the shares commence, before we will be in a position to provide you with a share certificate. How much will it cost me to deal in my Royal Mail shares? There is no charge for handling your application. A note of our dealing charges, when you come to sell your holding, can be viewed by clicking on the link below. http://www.jbrearley.co.uk/marketing/files/client_charge_card.pdf How much will you charge me to hold my Royal Mail shares? The annual running cost of a James Brearley & Sons nominee account is 50 which is charged on a half yearly basis at the end of April and October. APPLICATION THROUGH INTERMEDIARIES What is an Intermediary? The Intermediaries are professional firms who provide stockbroking and sharedealing services to members of the public. The Intermediaries are independent of the Government and Royal Mail, and will act on behalf of their customers who apply in the Offer, and not for the Government or Royal Mail. If you apply through an Intermediary you will deal only with that Intermediary, and not with the Government or Royal Mail. What are the benefits of applying through an Intermediary? The same share allocation policy will be applied to all applications in the Retail Offer from members of the public, irrespective of how the application was made. After the Offer, you may be able to deal in the shares more quickly if you apply through an Intermediary. If you are already a client or customer of an Intermediary you may find it more convenient to apply for shares through them. If you are not already a client or customer of an Intermediary you may wish to use the Offer as an opportunity to become one. What are the disadvantages of applying through an Intermediary? Although an Intermediary is not permitted to charge you for applying in the Offer, it may charge you fees for holding for you, and dealing in, any shares allocated to you. An Intermediary is obliged to inform you of any fees and charges before you make your application. 6

Will it cost anything to apply through an Intermediary? The Intermediary is not permitted to charge you for applying in the Offer. But the Intermediary may charge you fees for holding for you, and dealing in, any shares allocated to you, and any fees related to an ISA or a SIPP. An Intermediary is obliged to inform you of any fees and charges before you make your application. Are all of the Intermediaries offering the same terms or services? The terms on which Intermediaries may act for you may vary. You may wish to ask an Intermediary how and when you must make your application; when it will need your funds; when you will be able to deal in your shares; and what fees it will charge for other services it is offering in connection with your application (such as holding the shares on your behalf, and dealing in the shares for you). Why may I be able to deal earlier through an Intermediary? If you apply direct to the Government you may not receive confirmation of your allocation of shares until a few days after the trading of the shares has started on the London Stock Exchange. If you apply through an Intermediary you may be able to deal on the first day of trading, but you may wish to confirm this with the Intermediary that you choose. MISCELLANEOUS Can a Royal Mail Employee apply in the Employee Priority Offer through an Intermediary? If you wish to apply in the Employee Priority Offer, you can only apply direct to the Government, and not through an Intermediary. You may apply only once for your own benefit, and you will only receive a priority allocation of shares if you apply in the Employee Priority Offer. Will I have to pay any stamp duty to purchase shares in the Offer? What financial benefits will I receive from investing in shares? There are two potential financial benefits that can come from owning shares in a company: income from dividends and growth in the value of the shares. However, you should note that a company is not obliged to declare and pay a dividend, the value of shares can fall as well as rise, and you could lose the value of your original investment. If you need more information you should consult an appropriate financial adviser. How will I receive my dividends? If the shares are held in a James Brearley & Sons nominee account dividends will be credited directly to your Cash Settlement Account. If the shares are registered in your own name the company registrar will post these to your home address as held on their records. Is tax payable on dividends? Dividends are treated as paid net of basic rate income tax. If you are a basic rate taxpayer you will not have to pay any further tax. If you pay higher rate tax (currently 40%) there will be additional income tax to pay. If you are in any doubt about your tax position you should consult an appropriate financial adviser. 7

Which Government department is handling the Offer? The Shareholder Executive, which is part of the Department for Business, Innovation & Skills. Is the Post Office part of Royal Mail? The Post Office and Royal Mail are separate independent businesses, and have been since April 2012. The Post Office is not for sale. Under the Postal Services Act 2011, the Post Office must remain in wholly public ownership with the sole exception of any future move to a mutual ownership structure. 8