Dividends

New Star's directors have a dividend policy that reflects the company's long-term earnings and cashflow potential whilst maintaining an appropriate level of dividend cover. It is expected that the company will pay interim dividends each October following the publication of the interim results and final dividends each May following the annual general meeting. On 18 January 2008, the Board announced that it had decided to reduce the 2007 dividend from the level of 9p per share forecast in April 2007 in view of the uncertainties faced by New Star and the desire to maintain its financial position. This decision was confirmed when New Star's preliminary results were announced on 20 March 2008. Accordingly, the Board is recommending to shareholders a final dividend for the year ended 31 December 2007 of 1p per share, making a total dividend for the year of 5p per share. The final dividend will be payable on 22 May 2008 to shareholders on the register at the close of business on the record date, 4 April 2008.