Benefits provided for members of the Final Salary section of the Plan are based on three factors:

• The annual accrual rate
• The rate of Final Pensionable Salary close to retirement
• The length of Plan membership

In order to pay for future benefit liabilities, contributions from both the Company and the Final Salary section members are invested in a single fund. Active members of the Final Salary section pay contributions at the rate of 7% of Pensionable Salary. The Company meets the balance of the cost for providing the benefits and currently pays contributions at the rate of 11% of Pensionable Salary.

The Trustee has appointed investment managers who deal with the day to day investment of the fund. The investment managers are currently:

BlackRock Investment Management
BlackRock manages an active UK Equity portfolio. The manager’s objective is to achieve a return equal to the return on the FTSE All Share Index, plus 2% pa over rolling three year periods. At 31 March 2007, the BlackRock portfolio was valued at £76.3m

State Street Global Advisers
State Street holds assets in a passive managed fund consisting of UK Equities and Index Linked Gilts.

The manager’s objective for the UK Equities portfolio is to match the FTSE All Share Index. At 31 March 2007, the UK Equities portfolio was valued at £61.9m.

The manager’s objective for the Index Linked Gilts is to match the FTSE A ILG (over 5 years) Index. At 31 March 2007, the Index Linked Gilts portfolio was valued at £108.0m.

Henderson Global Investors Limited
Henderson manages an active Corporate Bond portfolio. The manager’s objective is to achieve a return equal to the return on the iBoxx All Stocks Sterling Non-Gilt Index, plus 1% pa over rolling three year periods. At 31 March 2007, the Henderson portfolio was valued at £70.9m.

Royal London Asset Management
Royal London manages an active Corporate Bond portfolio. The manager’s objective is to achieve a return equal to the return on a composite index, plus 2% pa over rolling three year periods. The composite index is:

57.5% iBoxx Over 15 Years Sterling Non-Gilt index and
42.5% iBoxx All Stocks Sterling Non-Gilt index

At 31 March 2007, the Royal London portfolio was valued at £38.3m.

Investment performance of the Final Salary Section
Throughout the year, the Trustee closely monitors the performance of the investment managers. The return achieved by the Plan over one and three years to 31 March 2007 is shown below:

Total fund	One year - %	Three years - % pa
Return	5.6	10.3
Benchmark return	4.6	9.6