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n (j BOWERGROUP RETIREMENT BENEFITS SCHEME
rn o REPORT AND ACCOUNTS
[-1 ~-YEAR ENDED 28 FEBRUARY 2010 n
Scheme Registration Number 10068399X
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ANNUAL REPORT
Scheme Advisers
Trustees Report
Investment Report
Further Information
Auditors Report
Summary of Contributions Paid
Financial Statements
Notes to Financial Statements
Compliance Statement
Actuarial Statements
BOWER GROUP RETIREMENT BENEFITS SCHEME
Page No
1-2
3-6
7-13
13
14-15
16
17-18
19-22
23
Appendices
n BOWER GROUP RETIREMENT BENEFITS SCHEME n
n SCHEME ADVISERS
Consultants amp Administrators n n
Actuary
n [J
Auditors
(IC) Investment Managers
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LJ AVC Managers
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Sterling PensionManagement Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN
Paul Weaver FIA Sterling Actuarial Services Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN
Baker Tilly UK Audit LLP 2 Wnitena1ro-uay Leeds LS 1 4HG
BNY Mellon Asset Management (Newton Fund Managers) lngrave Road Brentwood CM15 8TG
CloseAsset Management Limited 10 Exchange Square Primrose Street London EC2A 2BY
Legal amp General Investment Management One Coleman Street London EC2R5M
Royal London Asset Management Limited 55 Gracechurch Street London EC3VORL
Bristol ampWest PLC (Bank of Ireland Group) PO Box27 1 Temple Quay Bristol BS99 7 AX
Clerical Medical Investment Group Ltd 33 Old Broad Street
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11 BOWmiddotERGROUP RETIREMENT BENEFITS SCHEME n
n SCHEME ADVISERS
n Legal Advisers Sacker amp Partners LLP 29 Ludgate Hill London n EC4M 7NX
Banker HSBC Clerkenwellr-1 London EC1V 7DA
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BOWER GROUP RETIREMENT BENEFITS SCHEME
TRUSTEESREPORT
INTRODUCTION
The Trustees of the Bower Group Retirement Benefits Scheme (the Scheme) present their annual report together with the investment report financial statements and actuarial statements for the year ended 28 February 2010
TRUSTEES
The Trustees of the Scheme during the year were
Carillion Trustees Limited
The power to appoint and remove Trustees is vested in the Principal Employer and must be exercised by Deed
The Trustees are responsible for the administration and investment policy of the Scheme There were two formal Trustees meetings held during the Scheme year There were no fees paid during the Scheme year to the Trustees
SPgNSORINGmiddotEMPLOYERS
The Scheme provides for all eligible employees of the Principal Employer - Dudley Bower Group pie (formerly Bower Group Pie) and also for participating employers Dudley Bower Services Ltd Dudley Bower Management Services Ltd and Dudley Bower Facilities Management Ltd The registered address of all the sponsoring employers is
24 Birch Street Wolverhampton West Midlands WV1 4HY
3
1 ] I I I
BOWER GROUP RETIREMENT BENEFITS SCHEME n n STATEMENT OF TRUSTEES RESPONSIBILITIES
The audited accounts are_ the responsibility of the trustees Pension scheme regulations require n the trustees to make available to scheme members beneficiaries and certain other parties audited accounts for each scheme year which
bull show a true and fair view of the financial transactions of the scheme during the scheme year n and of the amount and disposition at the end of the scheme year of the assets and liabilities other than liabilities to pay pensions and benefits after the end of the scheme year and n bull contain the information specified in the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statementfrom the Auditor) Regulations 1996
r- -i including a statement whether the accounts have been prepared in accordance with the Statement of Recommended Practice Financial Reports of Pension Schemes
The trustees nave supervised tlie preparation of the accounts and have agreed suitabletl (-) accounting pohc1es to be appliea consistently-rrrakin-g-estimates~and~judgements-on-a-reasonable~~~~ and prudent basis They are also responsible for making available each year commonly in the form of a trustees annual report information about the scheme prescribed by pensions legislation 11 which they should ensure is consistentwith the audited accounts it accompanies
Following the first minimum funding valuation under the Pensions Act 1995 the trustees are j responsible under pensions legislation for ensuring that there is prepared maintained and from
time to time revised a schedule of contributions showing the rates of contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme and the dates on or before which such contributions are to be paid The trustees are also responsible for
f 1
J keeping records of contributions received in respect of any active member of the scheme and for procuring that contributions are made to the scheme in accordance with the schedule of contributions
The trustees also have a general responsibility for ensuring that adequate accounting records are kept and for taking such steps asmiddot are reasonably open to them to safeguard the assets of the
LJ scheme and to prevent and detect fraud and other irregularities ---
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BOWER GROUP RETIREMENT BENEFITS SCHEME
SCHEME MEMBERSHIP
2010 2009Active Members
At 29 February 2009 0 0
_Q QAt 28 February 2010
Pensioners
At 29 February 2009 56 50
Add Deferred retiring _ 4 6 Dependants pensions becoming payable 3
Less Deaths
28 February 2010
Deferred Members
At 29 February 2009 236 243
Add Leavers with deferred pensions Less Pensions becoming payable (4) (6)
Deaths (3) Transfers out ill
At 28 February 2010 236
The breakdown_ of the deferred membership at 28February2010 is as follows
Current MowlemEmployee Deferred who retain a Final-Salary link 0
Deferred who retain a Final-Salary link butwho left 70 Mowlem employment after 01 August2002
Non Mowlem Employee Deferreds 159
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11 BOWER GROUP RETIREMENT BENEFITS SCHEME n
n REVIEW OF FINANCIAL DEVELOPMENT OF THE SCHEME
A full actuarial valuation was performed by the Scheme Actuary Paul Weaver of Sterling Actuarial n Services Limited as at 28 February 2007 The actuarial valuation indicated t_hat the Scheme was 114 funded on the old Minimum Funding Requirements (MFR) Valuation basis and 70 on the Scheme Actuarys recommended ongoing basis In monetary terms the deficit on the n recommended basiswas pound3270000
Benefits have been augmented for all members who were active on the 31 May 2001 with more
1] than 2 years pensionable service andwho continue to work for Mowlem until after 1 August 2002 The augmentation is such that their deferred pension receives increases in line with their salary increases from 31 May 2001 until their ultimate date of leaving Mowlem
n The Trustees have received regular employer contributions of pound288000 per year since 2003 The employer agreed to continue payment of annual contributions of pound288000 for a further three years commencing February 2005 t] C) Since then the Trustees received an advance employer contribution of pound288000 for February 2009 by way of deduction in account post year end The actuarial statement based on the)-J actuarial valuation forms part ofthe Appendix to this report
Contributions have notyet been received for this year due to administrative delays An appropriate ) j statement of funding principles has been agreed between the Trustees and employer as part of
the actuarialvaluation as at 28 February 2007 A new Schedule of Contributions has been agreed requiring the employer to pay at least pound698490 per annum plus operating and administration expenses for the seven years commencing 1 July 2010 I J The Trustees investment policy is detailed in their Statementof Investment Principles The day-toshyday management of the investments of the Scheme have been delegated by the Trustees to Close 1J Teams Ltd Legal amp General Assurance (Pensions) Management Ud BNY Mellon Asset Management (Newton Fund Managers Ltd) and Royal London Asset Management Ltd (RLAM) The Trustees meet regularly to discuss investment reports received from their adviser and the u investment managers to assess the overall investment policy and asset allocation
C-) Following an investment strategy review the Trustee agreed to invest 50 in fixed interest LJ securities and 50 in growth assets This was achieved by allocating 25 each ofthe Schemes
assets to BNY Mellon ancl CLOSE Teams with the remaining 50 invested in Corporate Bonds Long Dated Gilts and Cash The Trustees agreed to appoint RLAM to manage the Corporate u Bonds and Legal amp General to manage the Long Dated Gilts and Cash The reallocation was completed during May 2009
u The value of the Scheme increased by pound974417 (2009 decrease of pound1660784) to pound7085711 an increase of 16 The additional purchases of investments into the scheme for the year was poundnil (2009 poundnil)
11LJ During the Scheme year contributions receivable were poundNil compared with pound288000 for the
f--- shy ----~-PI~ous Scheme iear
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- The financial stafemenfs~fiave-beenpreparecrancraT1clitea ii1ccfmpliiince~Witll-FErgUlatiomrmaaermiddot- ---shyunder sections 41 ( 1) and (6) of the Pensions Act 1995
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BOWER GROUP RETIREMENT BENEFITS SCHEME
INVESTMENT REPORT FOR THE YEAR ENDING 28 FEBRUARY 2010
NEWTON REAL RETURN FUND
Investment aim The Fund aims to outperform cash (1 month LIBOR) by4 pa over rolling 3 year periods
Fund information The overall investmentpolicy of the Newton Managed Intrepid Funo is determined by BNY Mellon Fund Managers Limited The Royal Bank of Scotland pie is the Depositary of the Fund and BNY Mellon Asset Servicing BV is the Custodian of the assets held in the Fund
The Pension Scheme holds shares in the Fund and receives a monthly statement that shows the number of the shares the Scheme owns The register is held by the Registrar BNY Mellon Fund Man~Q_E~rs Limited as proof of ownership
BNY Mellon Fund Managers Limited confirms the securities held by the Fund to be transferable securities
The deployment of the assets over the period is shown in the table below
UK Equities
Overseas Equities
UK Fixed Interest
Overseas Fixed Interest
UK Index Linked
Cash
Other Total
183 226
337 376
47 39
118 120
40 13
223 133
52 93 1000 100i0
During the year to 28 February 2010 the Funds weighting in UK Equities and Overseas Equities increased The Funds weighting in UK Fixed Interest UK Index Linked Gilts and Cash decreased over the period
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r1 BOWER GROUP RETIREMENT BENEFITS SCHEME n Market Review n All Index returns are sourced from FTSE World Indices as quoted by Nomura FTSE and Datastream and quoted in sterling gross of fees (CAPS middotreturns are quoted net of fees)
n Ten Largest Equity Holdings as at 31 March 2010
Vodafone Group pie UK 43
GlaxoSmithKline pie UK 40 n Norway (Kingdom of) 65 15052013 UK 28
Smith amp Nephew PLC UK 24
11 ETFS Agriculture DJ -AIGSM UK 23
Deutsche Telecom AG UK 22
Millicom Intl Cellular UK 22~ (J Newcrest Mining Ltd UK 21
rl Roche Hldgs AG UK 20
Bayer AG UK 20
l-J Fund Performance
[j In order to measure the performance of the Fund the Manager participates in the RussellMellon CAPS Pooled Pension Fund Survey This service measures the performance of several similar pooled pension funds under discretionary management A summary of the results are detailed in the table below
LJ
)_J 12 months () 168 398
J l_) 3 years( pa)
5 years( pa)
105
118
33
85
u Source Newton as at 28 February 2010 unless otherwise stated
Returns are calculated using close of business offer prices net of fees
u The total value of the Newton Managed Intrepid Fund was pound1632278 as at 31 March 2010
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r-1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n Close Teams LtdESCHER ( Formerly Escher UK Asset Management LTD) n Close TEAMS Limited operates a Manager of Managers service whereby the govermmce of the Schemes investments is delegated to a professional third party It operates sector specific funds run by individual fund n management houses selected for their exp-ertise by the TEAMS Investment Committee The TEAMS
n Investment Committee continually reviews the performance and suitability of these managers The Committee monitors the performance processes and personnel associated with each manager to ensure that appropriate managers are retained for each investment sector Quarterly performance reports and periodic stewardship reports are prepared and issued to the Trustees by the Committeemiddot
The TEAMS Investment Committee calculates and monitors performance on a quarterly basis Quarterly
Ii performance is assessed and reported as at 31 March 30 June 30 September and 31 December each year
n Close TEAMS is responsible for selecting monitoring and if necessary replacing the specialist investment managers used for each TEAMS fund In discharging this duty Close TEAMS ensures that every decision taken is in the best interests of clients
Close TEAMS ensures transparency in selection and monitoring processes by having an independent member - representing client interests - sitting on the decision making body the TEAMS Investment
llrtmiddot ) Committee The independent member is dapital Cranfield Trustees a renowned independent trustee
company The TEAMS Investment Committeeshy
[1 1 Professionally interprets investment performance data and statistical analysis 2 Monitors managers on a continuous and consistent basis 3 Keeps risk tightlycontrolled
r-j 4 Evaluates why managers achieve (or fail to achieve) performance targets over meaningful and statistically significant time periods
5 Assesses the future performance potential of existing managers and potential replacement managers 6 Makes timely decisions on changing managers n TEAMS funds are held in insurance polices issued by Winterthur Life UK Limited a Credit Suisse Group Company
l_j Transaction Details
Valuation as 28 February 2010 No ofUnits Unit Price (pence) ValuetJ
TEAMS 6040 Global Eq 2 Outperform 1 286246 143Sp pound1845763u() TOT AL AT 26 FEBRUARY 2010 ~18457631
u --- shy
Performance (specified gross of fees)
TEAMS 6040 Global Equitie$ 2 Outperformance Fund LJ 1 yr to 31 Mar 501 (benchmark495) u 3yrs (annualized) 18 pa (benchmark 15) 5yrs (annualized) 76 pa (benchmark 82)
- - -- ~~--~------- ---~--shy~u--~- -nvestment~Management~Fees -- ~- - - - - -- - - - shy
Deducted from the unit pricing (rather than being charged directly to the client)
9 J 1J
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BOWER GROUP RETIREMENT BENEFITS SCHEMEmiddot
Legal amp General Assurance (Pensions Management) Limited
n The assets of the Scheme are invested in an insurance policy with Legal amp General Assurance (Pensions Management) Limited part ofthe Legal amp General Group which ls one of the largest financial institutions in the United Kingdom shyn The policy is designed for corporate and public sector Pension Schemes and takes full advantage of the tax exemptions available to an insurance policy ofthis type It is a unitised policy and the value of the units fluctuates directly in relation to the value or the value of the underlying assets All units are redeemable at bidmiddot prices that are calculated from independent external pricing resources The assets underlying the units are held by independent corporate custodians which are regularly reviewed by external auditors
Legal amp Generals investment brief is to apply cash flows to or from and make switches between the funds 11 shown below (which are sections within the policy) in accordance with instructions received from the Trustees or their authorised Administrators
n Transaction Details
Valuation as 28 February 2010 No of Units Unit Price (pence) Valuet] () 2037 Index-Linked Gilt 25009978 1152890p pound28833754
lj 2047 Index-Linked Gilt 25509237 1141650p pound29122620
2055 Index-Linked Gilt 20993495 1404210p - pound29479276
11 Cash 8954772 6303530p pound56446674
TOTAL AT 26 FEBRUARY 2010 ~14388232~
Notes Prices are based cm the value of the underlying securities at close of business on 26 February 2010 Activity for this pricing date is included in this valuation
lJ Investment Value and Distribution Value and Distribution Fund at 20 May 2009 at 1 March 2010
u GBP GBP
lJ 0 2037 Index-Linked Gilt 281422 200 289003 201
2047 Index-Linked Gilt 281028 200 292162 203
lJ 2055 Index-Linked Gilt
Cash
281027
564305
200
400
295740
564467
205
391
IJ Total Assets 1407782 1000 1441372 1000
Notes The unit prices for these valuations were based on market closing prices on the previous working day The values shown include any activity that took place on the valuation day
IJ f---~- ---P-erformance- --middotmiddot-~-middotmiddot-middot--middotmiddot---middot---middotmiddot-- -shy
1J~-- -_--- rh~ tirr1~ -w~ight~d i~v~t~~~t ~t~ms o-~-th~-s~h~-~~~ts--~~~e ~~-t~i~~~-- --~
lJ For the Cash Fund which is not index tracking the index returns shown in the table below are for comparison purposes only
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BOWER GROUP RETIREMENT BENEFITS SCHEME
n Investment Sector Fund Fund Index
n 2037 Index-Linked Gilt +27 +27
2047 Index-Linked Gilt +40 +39n 2055 Index-Linked Gilt +52 +52
n Cash +04 +03
Total Assets +25 na
n ROYAL LONDON ASSET MANAGEMENT LTD - RLPPC UK CORPORATE BOND
1-1 1(~ I) FUND
Investment aim To outperform the benchmark (iBoxx Sterling Non-Gilt All Maturities Index) by 08 per annum n gross of fees
Custody Arrangements The Custodian for the Fund is HSBC Securities Services at 8 Canada Square London E14 5HQ I Fund performance _ During the period between the funds inception date on 20th May 2009 to 28th February 2010 the I RLPPC UK Corporate Bond Fund outperformed the benchmark The fund returned 179 during the period compared to middota benchmark return of 15
LJ The positive performance recorded was primarily due to the following key factors
bull The sector allocation decision to remain overweight in credit bonds relative toLJ supranational bonds
bull The overweight positions in the best performing sectors eg subordinated financials LJ L) structured real estate and social housing
The table below shows the performance of the fund net of fees) and the benchmark index for the three months ending 31 March 2010
LJ Fund) Benchmark) Relative )
Quarter 1 495 394 101
LJ 12 months 2983 2095 888 3 years pa 314 410 -096 5 years pa 385 420 o35 Since inception (pa) 638 588 050LJ
----~--~---shy-rnenunclreturns irnne a5ove-ta6le middotare net of fees -amiddotncnnclude the -impact ofcash holdings over
~ C -the peritrd~--- --- - - ~------ ~--- ~~~~------~~--~ ---~--~~--- -_-_ -- ---- ~- --~-----~ ~~~---~~ ~~~- ~~ ~shy
Portfolio Value Fund GBP) LJ 20th May 2009 141076286
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BOWER GROUP RETIREMENT BENEFITS SCHEME
281h February 2010 166374512
n n n n n u() 7 I
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u LJ
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Change over the period 25298226 Inflows (outflows) overthe period 00
Ten Largest Bond Holdings as at 31 March 2010
Royal Bank of Scotland 7 5 2024 Finance for Residence Soc Housing 1113 2058 General Electric Capital 55 Vrn 2066
Annington Finance No1 8 2021 Qm_~gon Healthcare 5333 Vrn 2035 Lloyds TSB Bank 75 15042024
KFW 55 2015 Phoenix Natural Gas Fin 55 2017
NRW Bank 2625 2012
HSBC Holdings 675 12028
Sector breakdown
12
12
09
09
09
08
08
08
08
08
Banks amp financial services
Consumer goods
Consumer Services Foreign fixed interest sovereigns
General industrials
UK government bonds
Insurance
Investment trusts
Real estate
Social Housing
Structured
f--- shy ~upranationalsamp-agencies--middot- ----shyLJ-~ ~~~T~lecommUnicaUons~~~--~~- ~---- ----------shy
Utility
J TOTAL
u
251277 47
34 44
32 11
00 40
27 00
03 5151 01
55 1635 0962 99210
-~et2-~------middot----middot-------middot--------- -- ---- -~sa------------ ----- -- --- ------shy---~3~--~-----------middot ~- __ ---------~~--~--~-middot-~-~
93116 1000010000
12
I iJ
BOWER GROUP RETIREMENT BENEFITS SCHEME
AVCINVESTMENT
The Trustees hold assets invested separately from the main fund in the form of either individual accounts with Bristol amp West (Bank of Ireland Group) or individual funds managed by Clerical Medical
During the Scheme year no additional voluntary contributions (AVCs) were made Each member receives an annual statement at the year end confirming the amount held in their account and the movements in the year
FURTHER INFORMATION
Further disclosures required by legislation are included in the compliance statement Requests for additional information about the Scheme generally or queries relating to members own benefits should be made to Sterling Pension Management Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN telephone no 020 7537 6930
Signed on behalf of the Trustees
fdpound- ~cJt-e Trustee Date~~ Date
13
BOWER GROUP RETIREMENT BENEFITS SCHEME
INDEPENDENT AUDITORS REPORT to the Trustees of the Bower Group Retirement Benefits Pension Scheme
We have audited the financial statements on pages 16 to 22
This report is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors report and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this report or for the opinions we have formed
Respective responsibilities of the trustees and the auditors The trustees responsibilities for obtaining an annual report including audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustees Responsibilities
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board
We report to you our opinion as to whether the financial statements show a true and fair view and contain the information required by the relevant legislation We also report to you if in our opinion we have not received all the information and explanations we require for our audit or if the information specified by law is not disclosed
We read other information contained in the annual report and consider the implications for our report if we Imiddot become aware of any apparent misstatements or material inconsistencies with the financial statements The other information comprises [the Trustees Report the Investment Report the Actuarial Statement the Actuarial Certificate the Compliance Statement and the Members Information]
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements It also includes an assessment of the significant estimates and judgements made by the trustees in the preparation of the financial statements and of whether the accounting policies are appropriate to the Schemes circumstances consistently applied and adequately disclosed
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
Opinion In our opinion the financial statements show a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the financial transactions of the Scheme during the scheme year ended 28 February 2010 and of the amount and disposition at that date of its assets and liabilities other than liabilities to pay pensions and benefits after the end of the year and contain the information specified in Regulation 3 of and the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 made under the Pensions Act 1995
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
_Q)(b Date
14
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
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u 17
i_j
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
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n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
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20
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2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
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BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
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9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
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BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
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ANNUAL REPORT
Scheme Advisers
Trustees Report
Investment Report
Further Information
Auditors Report
Summary of Contributions Paid
Financial Statements
Notes to Financial Statements
Compliance Statement
Actuarial Statements
BOWER GROUP RETIREMENT BENEFITS SCHEME
Page No
1-2
3-6
7-13
13
14-15
16
17-18
19-22
23
Appendices
n BOWER GROUP RETIREMENT BENEFITS SCHEME n
n SCHEME ADVISERS
Consultants amp Administrators n n
Actuary
n [J
Auditors
(IC) Investment Managers
11
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Ll ()
LJ AVC Managers
LJ
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Sterling PensionManagement Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN
Paul Weaver FIA Sterling Actuarial Services Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN
Baker Tilly UK Audit LLP 2 Wnitena1ro-uay Leeds LS 1 4HG
BNY Mellon Asset Management (Newton Fund Managers) lngrave Road Brentwood CM15 8TG
CloseAsset Management Limited 10 Exchange Square Primrose Street London EC2A 2BY
Legal amp General Investment Management One Coleman Street London EC2R5M
Royal London Asset Management Limited 55 Gracechurch Street London EC3VORL
Bristol ampWest PLC (Bank of Ireland Group) PO Box27 1 Temple Quay Bristol BS99 7 AX
Clerical Medical Investment Group Ltd 33 Old Broad Street
f-----~-----~----~--~~-London-EC2N--1HZ~-----------~---shy
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11 BOWmiddotERGROUP RETIREMENT BENEFITS SCHEME n
n SCHEME ADVISERS
n Legal Advisers Sacker amp Partners LLP 29 Ludgate Hill London n EC4M 7NX
Banker HSBC Clerkenwellr-1 London EC1V 7DA
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BOWER GROUP RETIREMENT BENEFITS SCHEME
TRUSTEESREPORT
INTRODUCTION
The Trustees of the Bower Group Retirement Benefits Scheme (the Scheme) present their annual report together with the investment report financial statements and actuarial statements for the year ended 28 February 2010
TRUSTEES
The Trustees of the Scheme during the year were
Carillion Trustees Limited
The power to appoint and remove Trustees is vested in the Principal Employer and must be exercised by Deed
The Trustees are responsible for the administration and investment policy of the Scheme There were two formal Trustees meetings held during the Scheme year There were no fees paid during the Scheme year to the Trustees
SPgNSORINGmiddotEMPLOYERS
The Scheme provides for all eligible employees of the Principal Employer - Dudley Bower Group pie (formerly Bower Group Pie) and also for participating employers Dudley Bower Services Ltd Dudley Bower Management Services Ltd and Dudley Bower Facilities Management Ltd The registered address of all the sponsoring employers is
24 Birch Street Wolverhampton West Midlands WV1 4HY
3
1 ] I I I
BOWER GROUP RETIREMENT BENEFITS SCHEME n n STATEMENT OF TRUSTEES RESPONSIBILITIES
The audited accounts are_ the responsibility of the trustees Pension scheme regulations require n the trustees to make available to scheme members beneficiaries and certain other parties audited accounts for each scheme year which
bull show a true and fair view of the financial transactions of the scheme during the scheme year n and of the amount and disposition at the end of the scheme year of the assets and liabilities other than liabilities to pay pensions and benefits after the end of the scheme year and n bull contain the information specified in the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statementfrom the Auditor) Regulations 1996
r- -i including a statement whether the accounts have been prepared in accordance with the Statement of Recommended Practice Financial Reports of Pension Schemes
The trustees nave supervised tlie preparation of the accounts and have agreed suitabletl (-) accounting pohc1es to be appliea consistently-rrrakin-g-estimates~and~judgements-on-a-reasonable~~~~ and prudent basis They are also responsible for making available each year commonly in the form of a trustees annual report information about the scheme prescribed by pensions legislation 11 which they should ensure is consistentwith the audited accounts it accompanies
Following the first minimum funding valuation under the Pensions Act 1995 the trustees are j responsible under pensions legislation for ensuring that there is prepared maintained and from
time to time revised a schedule of contributions showing the rates of contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme and the dates on or before which such contributions are to be paid The trustees are also responsible for
f 1
J keeping records of contributions received in respect of any active member of the scheme and for procuring that contributions are made to the scheme in accordance with the schedule of contributions
The trustees also have a general responsibility for ensuring that adequate accounting records are kept and for taking such steps asmiddot are reasonably open to them to safeguard the assets of the
LJ scheme and to prevent and detect fraud and other irregularities ---
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BOWER GROUP RETIREMENT BENEFITS SCHEME
SCHEME MEMBERSHIP
2010 2009Active Members
At 29 February 2009 0 0
_Q QAt 28 February 2010
Pensioners
At 29 February 2009 56 50
Add Deferred retiring _ 4 6 Dependants pensions becoming payable 3
Less Deaths
28 February 2010
Deferred Members
At 29 February 2009 236 243
Add Leavers with deferred pensions Less Pensions becoming payable (4) (6)
Deaths (3) Transfers out ill
At 28 February 2010 236
The breakdown_ of the deferred membership at 28February2010 is as follows
Current MowlemEmployee Deferred who retain a Final-Salary link 0
Deferred who retain a Final-Salary link butwho left 70 Mowlem employment after 01 August2002
Non Mowlem Employee Deferreds 159
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11 BOWER GROUP RETIREMENT BENEFITS SCHEME n
n REVIEW OF FINANCIAL DEVELOPMENT OF THE SCHEME
A full actuarial valuation was performed by the Scheme Actuary Paul Weaver of Sterling Actuarial n Services Limited as at 28 February 2007 The actuarial valuation indicated t_hat the Scheme was 114 funded on the old Minimum Funding Requirements (MFR) Valuation basis and 70 on the Scheme Actuarys recommended ongoing basis In monetary terms the deficit on the n recommended basiswas pound3270000
Benefits have been augmented for all members who were active on the 31 May 2001 with more
1] than 2 years pensionable service andwho continue to work for Mowlem until after 1 August 2002 The augmentation is such that their deferred pension receives increases in line with their salary increases from 31 May 2001 until their ultimate date of leaving Mowlem
n The Trustees have received regular employer contributions of pound288000 per year since 2003 The employer agreed to continue payment of annual contributions of pound288000 for a further three years commencing February 2005 t] C) Since then the Trustees received an advance employer contribution of pound288000 for February 2009 by way of deduction in account post year end The actuarial statement based on the)-J actuarial valuation forms part ofthe Appendix to this report
Contributions have notyet been received for this year due to administrative delays An appropriate ) j statement of funding principles has been agreed between the Trustees and employer as part of
the actuarialvaluation as at 28 February 2007 A new Schedule of Contributions has been agreed requiring the employer to pay at least pound698490 per annum plus operating and administration expenses for the seven years commencing 1 July 2010 I J The Trustees investment policy is detailed in their Statementof Investment Principles The day-toshyday management of the investments of the Scheme have been delegated by the Trustees to Close 1J Teams Ltd Legal amp General Assurance (Pensions) Management Ud BNY Mellon Asset Management (Newton Fund Managers Ltd) and Royal London Asset Management Ltd (RLAM) The Trustees meet regularly to discuss investment reports received from their adviser and the u investment managers to assess the overall investment policy and asset allocation
C-) Following an investment strategy review the Trustee agreed to invest 50 in fixed interest LJ securities and 50 in growth assets This was achieved by allocating 25 each ofthe Schemes
assets to BNY Mellon ancl CLOSE Teams with the remaining 50 invested in Corporate Bonds Long Dated Gilts and Cash The Trustees agreed to appoint RLAM to manage the Corporate u Bonds and Legal amp General to manage the Long Dated Gilts and Cash The reallocation was completed during May 2009
u The value of the Scheme increased by pound974417 (2009 decrease of pound1660784) to pound7085711 an increase of 16 The additional purchases of investments into the scheme for the year was poundnil (2009 poundnil)
11LJ During the Scheme year contributions receivable were poundNil compared with pound288000 for the
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- The financial stafemenfs~fiave-beenpreparecrancraT1clitea ii1ccfmpliiince~Witll-FErgUlatiomrmaaermiddot- ---shyunder sections 41 ( 1) and (6) of the Pensions Act 1995
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BOWER GROUP RETIREMENT BENEFITS SCHEME
INVESTMENT REPORT FOR THE YEAR ENDING 28 FEBRUARY 2010
NEWTON REAL RETURN FUND
Investment aim The Fund aims to outperform cash (1 month LIBOR) by4 pa over rolling 3 year periods
Fund information The overall investmentpolicy of the Newton Managed Intrepid Funo is determined by BNY Mellon Fund Managers Limited The Royal Bank of Scotland pie is the Depositary of the Fund and BNY Mellon Asset Servicing BV is the Custodian of the assets held in the Fund
The Pension Scheme holds shares in the Fund and receives a monthly statement that shows the number of the shares the Scheme owns The register is held by the Registrar BNY Mellon Fund Man~Q_E~rs Limited as proof of ownership
BNY Mellon Fund Managers Limited confirms the securities held by the Fund to be transferable securities
The deployment of the assets over the period is shown in the table below
UK Equities
Overseas Equities
UK Fixed Interest
Overseas Fixed Interest
UK Index Linked
Cash
Other Total
183 226
337 376
47 39
118 120
40 13
223 133
52 93 1000 100i0
During the year to 28 February 2010 the Funds weighting in UK Equities and Overseas Equities increased The Funds weighting in UK Fixed Interest UK Index Linked Gilts and Cash decreased over the period
j
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r1 BOWER GROUP RETIREMENT BENEFITS SCHEME n Market Review n All Index returns are sourced from FTSE World Indices as quoted by Nomura FTSE and Datastream and quoted in sterling gross of fees (CAPS middotreturns are quoted net of fees)
n Ten Largest Equity Holdings as at 31 March 2010
Vodafone Group pie UK 43
GlaxoSmithKline pie UK 40 n Norway (Kingdom of) 65 15052013 UK 28
Smith amp Nephew PLC UK 24
11 ETFS Agriculture DJ -AIGSM UK 23
Deutsche Telecom AG UK 22
Millicom Intl Cellular UK 22~ (J Newcrest Mining Ltd UK 21
rl Roche Hldgs AG UK 20
Bayer AG UK 20
l-J Fund Performance
[j In order to measure the performance of the Fund the Manager participates in the RussellMellon CAPS Pooled Pension Fund Survey This service measures the performance of several similar pooled pension funds under discretionary management A summary of the results are detailed in the table below
LJ
)_J 12 months () 168 398
J l_) 3 years( pa)
5 years( pa)
105
118
33
85
u Source Newton as at 28 February 2010 unless otherwise stated
Returns are calculated using close of business offer prices net of fees
u The total value of the Newton Managed Intrepid Fund was pound1632278 as at 31 March 2010
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r-1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n Close Teams LtdESCHER ( Formerly Escher UK Asset Management LTD) n Close TEAMS Limited operates a Manager of Managers service whereby the govermmce of the Schemes investments is delegated to a professional third party It operates sector specific funds run by individual fund n management houses selected for their exp-ertise by the TEAMS Investment Committee The TEAMS
n Investment Committee continually reviews the performance and suitability of these managers The Committee monitors the performance processes and personnel associated with each manager to ensure that appropriate managers are retained for each investment sector Quarterly performance reports and periodic stewardship reports are prepared and issued to the Trustees by the Committeemiddot
The TEAMS Investment Committee calculates and monitors performance on a quarterly basis Quarterly
Ii performance is assessed and reported as at 31 March 30 June 30 September and 31 December each year
n Close TEAMS is responsible for selecting monitoring and if necessary replacing the specialist investment managers used for each TEAMS fund In discharging this duty Close TEAMS ensures that every decision taken is in the best interests of clients
Close TEAMS ensures transparency in selection and monitoring processes by having an independent member - representing client interests - sitting on the decision making body the TEAMS Investment
llrtmiddot ) Committee The independent member is dapital Cranfield Trustees a renowned independent trustee
company The TEAMS Investment Committeeshy
[1 1 Professionally interprets investment performance data and statistical analysis 2 Monitors managers on a continuous and consistent basis 3 Keeps risk tightlycontrolled
r-j 4 Evaluates why managers achieve (or fail to achieve) performance targets over meaningful and statistically significant time periods
5 Assesses the future performance potential of existing managers and potential replacement managers 6 Makes timely decisions on changing managers n TEAMS funds are held in insurance polices issued by Winterthur Life UK Limited a Credit Suisse Group Company
l_j Transaction Details
Valuation as 28 February 2010 No ofUnits Unit Price (pence) ValuetJ
TEAMS 6040 Global Eq 2 Outperform 1 286246 143Sp pound1845763u() TOT AL AT 26 FEBRUARY 2010 ~18457631
u --- shy
Performance (specified gross of fees)
TEAMS 6040 Global Equitie$ 2 Outperformance Fund LJ 1 yr to 31 Mar 501 (benchmark495) u 3yrs (annualized) 18 pa (benchmark 15) 5yrs (annualized) 76 pa (benchmark 82)
- - -- ~~--~------- ---~--shy~u--~- -nvestment~Management~Fees -- ~- - - - - -- - - - shy
Deducted from the unit pricing (rather than being charged directly to the client)
9 J 1J
n n
BOWER GROUP RETIREMENT BENEFITS SCHEMEmiddot
Legal amp General Assurance (Pensions Management) Limited
n The assets of the Scheme are invested in an insurance policy with Legal amp General Assurance (Pensions Management) Limited part ofthe Legal amp General Group which ls one of the largest financial institutions in the United Kingdom shyn The policy is designed for corporate and public sector Pension Schemes and takes full advantage of the tax exemptions available to an insurance policy ofthis type It is a unitised policy and the value of the units fluctuates directly in relation to the value or the value of the underlying assets All units are redeemable at bidmiddot prices that are calculated from independent external pricing resources The assets underlying the units are held by independent corporate custodians which are regularly reviewed by external auditors
Legal amp Generals investment brief is to apply cash flows to or from and make switches between the funds 11 shown below (which are sections within the policy) in accordance with instructions received from the Trustees or their authorised Administrators
n Transaction Details
Valuation as 28 February 2010 No of Units Unit Price (pence) Valuet] () 2037 Index-Linked Gilt 25009978 1152890p pound28833754
lj 2047 Index-Linked Gilt 25509237 1141650p pound29122620
2055 Index-Linked Gilt 20993495 1404210p - pound29479276
11 Cash 8954772 6303530p pound56446674
TOTAL AT 26 FEBRUARY 2010 ~14388232~
Notes Prices are based cm the value of the underlying securities at close of business on 26 February 2010 Activity for this pricing date is included in this valuation
lJ Investment Value and Distribution Value and Distribution Fund at 20 May 2009 at 1 March 2010
u GBP GBP
lJ 0 2037 Index-Linked Gilt 281422 200 289003 201
2047 Index-Linked Gilt 281028 200 292162 203
lJ 2055 Index-Linked Gilt
Cash
281027
564305
200
400
295740
564467
205
391
IJ Total Assets 1407782 1000 1441372 1000
Notes The unit prices for these valuations were based on market closing prices on the previous working day The values shown include any activity that took place on the valuation day
IJ f---~- ---P-erformance- --middotmiddot-~-middotmiddot-middot--middotmiddot---middot---middotmiddot-- -shy
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lJ For the Cash Fund which is not index tracking the index returns shown in the table below are for comparison purposes only
lJ 10
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BOWER GROUP RETIREMENT BENEFITS SCHEME
n Investment Sector Fund Fund Index
n 2037 Index-Linked Gilt +27 +27
2047 Index-Linked Gilt +40 +39n 2055 Index-Linked Gilt +52 +52
n Cash +04 +03
Total Assets +25 na
n ROYAL LONDON ASSET MANAGEMENT LTD - RLPPC UK CORPORATE BOND
1-1 1(~ I) FUND
Investment aim To outperform the benchmark (iBoxx Sterling Non-Gilt All Maturities Index) by 08 per annum n gross of fees
Custody Arrangements The Custodian for the Fund is HSBC Securities Services at 8 Canada Square London E14 5HQ I Fund performance _ During the period between the funds inception date on 20th May 2009 to 28th February 2010 the I RLPPC UK Corporate Bond Fund outperformed the benchmark The fund returned 179 during the period compared to middota benchmark return of 15
LJ The positive performance recorded was primarily due to the following key factors
bull The sector allocation decision to remain overweight in credit bonds relative toLJ supranational bonds
bull The overweight positions in the best performing sectors eg subordinated financials LJ L) structured real estate and social housing
The table below shows the performance of the fund net of fees) and the benchmark index for the three months ending 31 March 2010
LJ Fund) Benchmark) Relative )
Quarter 1 495 394 101
LJ 12 months 2983 2095 888 3 years pa 314 410 -096 5 years pa 385 420 o35 Since inception (pa) 638 588 050LJ
----~--~---shy-rnenunclreturns irnne a5ove-ta6le middotare net of fees -amiddotncnnclude the -impact ofcash holdings over
~ C -the peritrd~--- --- - - ~------ ~--- ~~~~------~~--~ ---~--~~--- -_-_ -- ---- ~- --~-----~ ~~~---~~ ~~~- ~~ ~shy
Portfolio Value Fund GBP) LJ 20th May 2009 141076286
LJ
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11
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BOWER GROUP RETIREMENT BENEFITS SCHEME
281h February 2010 166374512
n n n n n u() 7 I
[_]
u LJ
LJ Cgt
LJ
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Change over the period 25298226 Inflows (outflows) overthe period 00
Ten Largest Bond Holdings as at 31 March 2010
Royal Bank of Scotland 7 5 2024 Finance for Residence Soc Housing 1113 2058 General Electric Capital 55 Vrn 2066
Annington Finance No1 8 2021 Qm_~gon Healthcare 5333 Vrn 2035 Lloyds TSB Bank 75 15042024
KFW 55 2015 Phoenix Natural Gas Fin 55 2017
NRW Bank 2625 2012
HSBC Holdings 675 12028
Sector breakdown
12
12
09
09
09
08
08
08
08
08
Banks amp financial services
Consumer goods
Consumer Services Foreign fixed interest sovereigns
General industrials
UK government bonds
Insurance
Investment trusts
Real estate
Social Housing
Structured
f--- shy ~upranationalsamp-agencies--middot- ----shyLJ-~ ~~~T~lecommUnicaUons~~~--~~- ~---- ----------shy
Utility
J TOTAL
u
251277 47
34 44
32 11
00 40
27 00
03 5151 01
55 1635 0962 99210
-~et2-~------middot----middot-------middot--------- -- ---- -~sa------------ ----- -- --- ------shy---~3~--~-----------middot ~- __ ---------~~--~--~-middot-~-~
93116 1000010000
12
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BOWER GROUP RETIREMENT BENEFITS SCHEME
AVCINVESTMENT
The Trustees hold assets invested separately from the main fund in the form of either individual accounts with Bristol amp West (Bank of Ireland Group) or individual funds managed by Clerical Medical
During the Scheme year no additional voluntary contributions (AVCs) were made Each member receives an annual statement at the year end confirming the amount held in their account and the movements in the year
FURTHER INFORMATION
Further disclosures required by legislation are included in the compliance statement Requests for additional information about the Scheme generally or queries relating to members own benefits should be made to Sterling Pension Management Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN telephone no 020 7537 6930
Signed on behalf of the Trustees
fdpound- ~cJt-e Trustee Date~~ Date
13
BOWER GROUP RETIREMENT BENEFITS SCHEME
INDEPENDENT AUDITORS REPORT to the Trustees of the Bower Group Retirement Benefits Pension Scheme
We have audited the financial statements on pages 16 to 22
This report is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors report and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this report or for the opinions we have formed
Respective responsibilities of the trustees and the auditors The trustees responsibilities for obtaining an annual report including audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustees Responsibilities
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board
We report to you our opinion as to whether the financial statements show a true and fair view and contain the information required by the relevant legislation We also report to you if in our opinion we have not received all the information and explanations we require for our audit or if the information specified by law is not disclosed
We read other information contained in the annual report and consider the implications for our report if we Imiddot become aware of any apparent misstatements or material inconsistencies with the financial statements The other information comprises [the Trustees Report the Investment Report the Actuarial Statement the Actuarial Certificate the Compliance Statement and the Members Information]
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements It also includes an assessment of the significant estimates and judgements made by the trustees in the preparation of the financial statements and of whether the accounting policies are appropriate to the Schemes circumstances consistently applied and adequately disclosed
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
Opinion In our opinion the financial statements show a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the financial transactions of the Scheme during the scheme year ended 28 February 2010 and of the amount and disposition at that date of its assets and liabilities other than liabilities to pay pensions and benefits after the end of the year and contain the information specified in Regulation 3 of and the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 made under the Pensions Act 1995
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
_Q)(b Date
14
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
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BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
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n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
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20
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2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
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7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
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9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
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BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
n BOWER GROUP RETIREMENT BENEFITS SCHEME n
n SCHEME ADVISERS
Consultants amp Administrators n n
Actuary
n [J
Auditors
(IC) Investment Managers
11
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Sterling PensionManagement Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN
Paul Weaver FIA Sterling Actuarial Services Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN
Baker Tilly UK Audit LLP 2 Wnitena1ro-uay Leeds LS 1 4HG
BNY Mellon Asset Management (Newton Fund Managers) lngrave Road Brentwood CM15 8TG
CloseAsset Management Limited 10 Exchange Square Primrose Street London EC2A 2BY
Legal amp General Investment Management One Coleman Street London EC2R5M
Royal London Asset Management Limited 55 Gracechurch Street London EC3VORL
Bristol ampWest PLC (Bank of Ireland Group) PO Box27 1 Temple Quay Bristol BS99 7 AX
Clerical Medical Investment Group Ltd 33 Old Broad Street
f-----~-----~----~--~~-London-EC2N--1HZ~-----------~---shy
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11 BOWmiddotERGROUP RETIREMENT BENEFITS SCHEME n
n SCHEME ADVISERS
n Legal Advisers Sacker amp Partners LLP 29 Ludgate Hill London n EC4M 7NX
Banker HSBC Clerkenwellr-1 London EC1V 7DA
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BOWER GROUP RETIREMENT BENEFITS SCHEME
TRUSTEESREPORT
INTRODUCTION
The Trustees of the Bower Group Retirement Benefits Scheme (the Scheme) present their annual report together with the investment report financial statements and actuarial statements for the year ended 28 February 2010
TRUSTEES
The Trustees of the Scheme during the year were
Carillion Trustees Limited
The power to appoint and remove Trustees is vested in the Principal Employer and must be exercised by Deed
The Trustees are responsible for the administration and investment policy of the Scheme There were two formal Trustees meetings held during the Scheme year There were no fees paid during the Scheme year to the Trustees
SPgNSORINGmiddotEMPLOYERS
The Scheme provides for all eligible employees of the Principal Employer - Dudley Bower Group pie (formerly Bower Group Pie) and also for participating employers Dudley Bower Services Ltd Dudley Bower Management Services Ltd and Dudley Bower Facilities Management Ltd The registered address of all the sponsoring employers is
24 Birch Street Wolverhampton West Midlands WV1 4HY
3
1 ] I I I
BOWER GROUP RETIREMENT BENEFITS SCHEME n n STATEMENT OF TRUSTEES RESPONSIBILITIES
The audited accounts are_ the responsibility of the trustees Pension scheme regulations require n the trustees to make available to scheme members beneficiaries and certain other parties audited accounts for each scheme year which
bull show a true and fair view of the financial transactions of the scheme during the scheme year n and of the amount and disposition at the end of the scheme year of the assets and liabilities other than liabilities to pay pensions and benefits after the end of the scheme year and n bull contain the information specified in the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statementfrom the Auditor) Regulations 1996
r- -i including a statement whether the accounts have been prepared in accordance with the Statement of Recommended Practice Financial Reports of Pension Schemes
The trustees nave supervised tlie preparation of the accounts and have agreed suitabletl (-) accounting pohc1es to be appliea consistently-rrrakin-g-estimates~and~judgements-on-a-reasonable~~~~ and prudent basis They are also responsible for making available each year commonly in the form of a trustees annual report information about the scheme prescribed by pensions legislation 11 which they should ensure is consistentwith the audited accounts it accompanies
Following the first minimum funding valuation under the Pensions Act 1995 the trustees are j responsible under pensions legislation for ensuring that there is prepared maintained and from
time to time revised a schedule of contributions showing the rates of contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme and the dates on or before which such contributions are to be paid The trustees are also responsible for
f 1
J keeping records of contributions received in respect of any active member of the scheme and for procuring that contributions are made to the scheme in accordance with the schedule of contributions
The trustees also have a general responsibility for ensuring that adequate accounting records are kept and for taking such steps asmiddot are reasonably open to them to safeguard the assets of the
LJ scheme and to prevent and detect fraud and other irregularities ---
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SCHEME MEMBERSHIP
2010 2009Active Members
At 29 February 2009 0 0
_Q QAt 28 February 2010
Pensioners
At 29 February 2009 56 50
Add Deferred retiring _ 4 6 Dependants pensions becoming payable 3
Less Deaths
28 February 2010
Deferred Members
At 29 February 2009 236 243
Add Leavers with deferred pensions Less Pensions becoming payable (4) (6)
Deaths (3) Transfers out ill
At 28 February 2010 236
The breakdown_ of the deferred membership at 28February2010 is as follows
Current MowlemEmployee Deferred who retain a Final-Salary link 0
Deferred who retain a Final-Salary link butwho left 70 Mowlem employment after 01 August2002
Non Mowlem Employee Deferreds 159
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11 BOWER GROUP RETIREMENT BENEFITS SCHEME n
n REVIEW OF FINANCIAL DEVELOPMENT OF THE SCHEME
A full actuarial valuation was performed by the Scheme Actuary Paul Weaver of Sterling Actuarial n Services Limited as at 28 February 2007 The actuarial valuation indicated t_hat the Scheme was 114 funded on the old Minimum Funding Requirements (MFR) Valuation basis and 70 on the Scheme Actuarys recommended ongoing basis In monetary terms the deficit on the n recommended basiswas pound3270000
Benefits have been augmented for all members who were active on the 31 May 2001 with more
1] than 2 years pensionable service andwho continue to work for Mowlem until after 1 August 2002 The augmentation is such that their deferred pension receives increases in line with their salary increases from 31 May 2001 until their ultimate date of leaving Mowlem
n The Trustees have received regular employer contributions of pound288000 per year since 2003 The employer agreed to continue payment of annual contributions of pound288000 for a further three years commencing February 2005 t] C) Since then the Trustees received an advance employer contribution of pound288000 for February 2009 by way of deduction in account post year end The actuarial statement based on the)-J actuarial valuation forms part ofthe Appendix to this report
Contributions have notyet been received for this year due to administrative delays An appropriate ) j statement of funding principles has been agreed between the Trustees and employer as part of
the actuarialvaluation as at 28 February 2007 A new Schedule of Contributions has been agreed requiring the employer to pay at least pound698490 per annum plus operating and administration expenses for the seven years commencing 1 July 2010 I J The Trustees investment policy is detailed in their Statementof Investment Principles The day-toshyday management of the investments of the Scheme have been delegated by the Trustees to Close 1J Teams Ltd Legal amp General Assurance (Pensions) Management Ud BNY Mellon Asset Management (Newton Fund Managers Ltd) and Royal London Asset Management Ltd (RLAM) The Trustees meet regularly to discuss investment reports received from their adviser and the u investment managers to assess the overall investment policy and asset allocation
C-) Following an investment strategy review the Trustee agreed to invest 50 in fixed interest LJ securities and 50 in growth assets This was achieved by allocating 25 each ofthe Schemes
assets to BNY Mellon ancl CLOSE Teams with the remaining 50 invested in Corporate Bonds Long Dated Gilts and Cash The Trustees agreed to appoint RLAM to manage the Corporate u Bonds and Legal amp General to manage the Long Dated Gilts and Cash The reallocation was completed during May 2009
u The value of the Scheme increased by pound974417 (2009 decrease of pound1660784) to pound7085711 an increase of 16 The additional purchases of investments into the scheme for the year was poundnil (2009 poundnil)
11LJ During the Scheme year contributions receivable were poundNil compared with pound288000 for the
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- The financial stafemenfs~fiave-beenpreparecrancraT1clitea ii1ccfmpliiince~Witll-FErgUlatiomrmaaermiddot- ---shyunder sections 41 ( 1) and (6) of the Pensions Act 1995
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BOWER GROUP RETIREMENT BENEFITS SCHEME
INVESTMENT REPORT FOR THE YEAR ENDING 28 FEBRUARY 2010
NEWTON REAL RETURN FUND
Investment aim The Fund aims to outperform cash (1 month LIBOR) by4 pa over rolling 3 year periods
Fund information The overall investmentpolicy of the Newton Managed Intrepid Funo is determined by BNY Mellon Fund Managers Limited The Royal Bank of Scotland pie is the Depositary of the Fund and BNY Mellon Asset Servicing BV is the Custodian of the assets held in the Fund
The Pension Scheme holds shares in the Fund and receives a monthly statement that shows the number of the shares the Scheme owns The register is held by the Registrar BNY Mellon Fund Man~Q_E~rs Limited as proof of ownership
BNY Mellon Fund Managers Limited confirms the securities held by the Fund to be transferable securities
The deployment of the assets over the period is shown in the table below
UK Equities
Overseas Equities
UK Fixed Interest
Overseas Fixed Interest
UK Index Linked
Cash
Other Total
183 226
337 376
47 39
118 120
40 13
223 133
52 93 1000 100i0
During the year to 28 February 2010 the Funds weighting in UK Equities and Overseas Equities increased The Funds weighting in UK Fixed Interest UK Index Linked Gilts and Cash decreased over the period
j
u 7
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r1 BOWER GROUP RETIREMENT BENEFITS SCHEME n Market Review n All Index returns are sourced from FTSE World Indices as quoted by Nomura FTSE and Datastream and quoted in sterling gross of fees (CAPS middotreturns are quoted net of fees)
n Ten Largest Equity Holdings as at 31 March 2010
Vodafone Group pie UK 43
GlaxoSmithKline pie UK 40 n Norway (Kingdom of) 65 15052013 UK 28
Smith amp Nephew PLC UK 24
11 ETFS Agriculture DJ -AIGSM UK 23
Deutsche Telecom AG UK 22
Millicom Intl Cellular UK 22~ (J Newcrest Mining Ltd UK 21
rl Roche Hldgs AG UK 20
Bayer AG UK 20
l-J Fund Performance
[j In order to measure the performance of the Fund the Manager participates in the RussellMellon CAPS Pooled Pension Fund Survey This service measures the performance of several similar pooled pension funds under discretionary management A summary of the results are detailed in the table below
LJ
)_J 12 months () 168 398
J l_) 3 years( pa)
5 years( pa)
105
118
33
85
u Source Newton as at 28 February 2010 unless otherwise stated
Returns are calculated using close of business offer prices net of fees
u The total value of the Newton Managed Intrepid Fund was pound1632278 as at 31 March 2010
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r-1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n Close Teams LtdESCHER ( Formerly Escher UK Asset Management LTD) n Close TEAMS Limited operates a Manager of Managers service whereby the govermmce of the Schemes investments is delegated to a professional third party It operates sector specific funds run by individual fund n management houses selected for their exp-ertise by the TEAMS Investment Committee The TEAMS
n Investment Committee continually reviews the performance and suitability of these managers The Committee monitors the performance processes and personnel associated with each manager to ensure that appropriate managers are retained for each investment sector Quarterly performance reports and periodic stewardship reports are prepared and issued to the Trustees by the Committeemiddot
The TEAMS Investment Committee calculates and monitors performance on a quarterly basis Quarterly
Ii performance is assessed and reported as at 31 March 30 June 30 September and 31 December each year
n Close TEAMS is responsible for selecting monitoring and if necessary replacing the specialist investment managers used for each TEAMS fund In discharging this duty Close TEAMS ensures that every decision taken is in the best interests of clients
Close TEAMS ensures transparency in selection and monitoring processes by having an independent member - representing client interests - sitting on the decision making body the TEAMS Investment
llrtmiddot ) Committee The independent member is dapital Cranfield Trustees a renowned independent trustee
company The TEAMS Investment Committeeshy
[1 1 Professionally interprets investment performance data and statistical analysis 2 Monitors managers on a continuous and consistent basis 3 Keeps risk tightlycontrolled
r-j 4 Evaluates why managers achieve (or fail to achieve) performance targets over meaningful and statistically significant time periods
5 Assesses the future performance potential of existing managers and potential replacement managers 6 Makes timely decisions on changing managers n TEAMS funds are held in insurance polices issued by Winterthur Life UK Limited a Credit Suisse Group Company
l_j Transaction Details
Valuation as 28 February 2010 No ofUnits Unit Price (pence) ValuetJ
TEAMS 6040 Global Eq 2 Outperform 1 286246 143Sp pound1845763u() TOT AL AT 26 FEBRUARY 2010 ~18457631
u --- shy
Performance (specified gross of fees)
TEAMS 6040 Global Equitie$ 2 Outperformance Fund LJ 1 yr to 31 Mar 501 (benchmark495) u 3yrs (annualized) 18 pa (benchmark 15) 5yrs (annualized) 76 pa (benchmark 82)
- - -- ~~--~------- ---~--shy~u--~- -nvestment~Management~Fees -- ~- - - - - -- - - - shy
Deducted from the unit pricing (rather than being charged directly to the client)
9 J 1J
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BOWER GROUP RETIREMENT BENEFITS SCHEMEmiddot
Legal amp General Assurance (Pensions Management) Limited
n The assets of the Scheme are invested in an insurance policy with Legal amp General Assurance (Pensions Management) Limited part ofthe Legal amp General Group which ls one of the largest financial institutions in the United Kingdom shyn The policy is designed for corporate and public sector Pension Schemes and takes full advantage of the tax exemptions available to an insurance policy ofthis type It is a unitised policy and the value of the units fluctuates directly in relation to the value or the value of the underlying assets All units are redeemable at bidmiddot prices that are calculated from independent external pricing resources The assets underlying the units are held by independent corporate custodians which are regularly reviewed by external auditors
Legal amp Generals investment brief is to apply cash flows to or from and make switches between the funds 11 shown below (which are sections within the policy) in accordance with instructions received from the Trustees or their authorised Administrators
n Transaction Details
Valuation as 28 February 2010 No of Units Unit Price (pence) Valuet] () 2037 Index-Linked Gilt 25009978 1152890p pound28833754
lj 2047 Index-Linked Gilt 25509237 1141650p pound29122620
2055 Index-Linked Gilt 20993495 1404210p - pound29479276
11 Cash 8954772 6303530p pound56446674
TOTAL AT 26 FEBRUARY 2010 ~14388232~
Notes Prices are based cm the value of the underlying securities at close of business on 26 February 2010 Activity for this pricing date is included in this valuation
lJ Investment Value and Distribution Value and Distribution Fund at 20 May 2009 at 1 March 2010
u GBP GBP
lJ 0 2037 Index-Linked Gilt 281422 200 289003 201
2047 Index-Linked Gilt 281028 200 292162 203
lJ 2055 Index-Linked Gilt
Cash
281027
564305
200
400
295740
564467
205
391
IJ Total Assets 1407782 1000 1441372 1000
Notes The unit prices for these valuations were based on market closing prices on the previous working day The values shown include any activity that took place on the valuation day
IJ f---~- ---P-erformance- --middotmiddot-~-middotmiddot-middot--middotmiddot---middot---middotmiddot-- -shy
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lJ For the Cash Fund which is not index tracking the index returns shown in the table below are for comparison purposes only
lJ 10
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BOWER GROUP RETIREMENT BENEFITS SCHEME
n Investment Sector Fund Fund Index
n 2037 Index-Linked Gilt +27 +27
2047 Index-Linked Gilt +40 +39n 2055 Index-Linked Gilt +52 +52
n Cash +04 +03
Total Assets +25 na
n ROYAL LONDON ASSET MANAGEMENT LTD - RLPPC UK CORPORATE BOND
1-1 1(~ I) FUND
Investment aim To outperform the benchmark (iBoxx Sterling Non-Gilt All Maturities Index) by 08 per annum n gross of fees
Custody Arrangements The Custodian for the Fund is HSBC Securities Services at 8 Canada Square London E14 5HQ I Fund performance _ During the period between the funds inception date on 20th May 2009 to 28th February 2010 the I RLPPC UK Corporate Bond Fund outperformed the benchmark The fund returned 179 during the period compared to middota benchmark return of 15
LJ The positive performance recorded was primarily due to the following key factors
bull The sector allocation decision to remain overweight in credit bonds relative toLJ supranational bonds
bull The overweight positions in the best performing sectors eg subordinated financials LJ L) structured real estate and social housing
The table below shows the performance of the fund net of fees) and the benchmark index for the three months ending 31 March 2010
LJ Fund) Benchmark) Relative )
Quarter 1 495 394 101
LJ 12 months 2983 2095 888 3 years pa 314 410 -096 5 years pa 385 420 o35 Since inception (pa) 638 588 050LJ
----~--~---shy-rnenunclreturns irnne a5ove-ta6le middotare net of fees -amiddotncnnclude the -impact ofcash holdings over
~ C -the peritrd~--- --- - - ~------ ~--- ~~~~------~~--~ ---~--~~--- -_-_ -- ---- ~- --~-----~ ~~~---~~ ~~~- ~~ ~shy
Portfolio Value Fund GBP) LJ 20th May 2009 141076286
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BOWER GROUP RETIREMENT BENEFITS SCHEME
281h February 2010 166374512
n n n n n u() 7 I
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Change over the period 25298226 Inflows (outflows) overthe period 00
Ten Largest Bond Holdings as at 31 March 2010
Royal Bank of Scotland 7 5 2024 Finance for Residence Soc Housing 1113 2058 General Electric Capital 55 Vrn 2066
Annington Finance No1 8 2021 Qm_~gon Healthcare 5333 Vrn 2035 Lloyds TSB Bank 75 15042024
KFW 55 2015 Phoenix Natural Gas Fin 55 2017
NRW Bank 2625 2012
HSBC Holdings 675 12028
Sector breakdown
12
12
09
09
09
08
08
08
08
08
Banks amp financial services
Consumer goods
Consumer Services Foreign fixed interest sovereigns
General industrials
UK government bonds
Insurance
Investment trusts
Real estate
Social Housing
Structured
f--- shy ~upranationalsamp-agencies--middot- ----shyLJ-~ ~~~T~lecommUnicaUons~~~--~~- ~---- ----------shy
Utility
J TOTAL
u
251277 47
34 44
32 11
00 40
27 00
03 5151 01
55 1635 0962 99210
-~et2-~------middot----middot-------middot--------- -- ---- -~sa------------ ----- -- --- ------shy---~3~--~-----------middot ~- __ ---------~~--~--~-middot-~-~
93116 1000010000
12
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BOWER GROUP RETIREMENT BENEFITS SCHEME
AVCINVESTMENT
The Trustees hold assets invested separately from the main fund in the form of either individual accounts with Bristol amp West (Bank of Ireland Group) or individual funds managed by Clerical Medical
During the Scheme year no additional voluntary contributions (AVCs) were made Each member receives an annual statement at the year end confirming the amount held in their account and the movements in the year
FURTHER INFORMATION
Further disclosures required by legislation are included in the compliance statement Requests for additional information about the Scheme generally or queries relating to members own benefits should be made to Sterling Pension Management Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN telephone no 020 7537 6930
Signed on behalf of the Trustees
fdpound- ~cJt-e Trustee Date~~ Date
13
BOWER GROUP RETIREMENT BENEFITS SCHEME
INDEPENDENT AUDITORS REPORT to the Trustees of the Bower Group Retirement Benefits Pension Scheme
We have audited the financial statements on pages 16 to 22
This report is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors report and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this report or for the opinions we have formed
Respective responsibilities of the trustees and the auditors The trustees responsibilities for obtaining an annual report including audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustees Responsibilities
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board
We report to you our opinion as to whether the financial statements show a true and fair view and contain the information required by the relevant legislation We also report to you if in our opinion we have not received all the information and explanations we require for our audit or if the information specified by law is not disclosed
We read other information contained in the annual report and consider the implications for our report if we Imiddot become aware of any apparent misstatements or material inconsistencies with the financial statements The other information comprises [the Trustees Report the Investment Report the Actuarial Statement the Actuarial Certificate the Compliance Statement and the Members Information]
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements It also includes an assessment of the significant estimates and judgements made by the trustees in the preparation of the financial statements and of whether the accounting policies are appropriate to the Schemes circumstances consistently applied and adequately disclosed
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
Opinion In our opinion the financial statements show a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the financial transactions of the Scheme during the scheme year ended 28 February 2010 and of the amount and disposition at that date of its assets and liabilities other than liabilities to pay pensions and benefits after the end of the year and contain the information specified in Regulation 3 of and the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 made under the Pensions Act 1995
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
_Q)(b Date
14
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
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BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
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n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
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-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
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BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
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9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
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BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
-- ---
11 BOWmiddotERGROUP RETIREMENT BENEFITS SCHEME n
n SCHEME ADVISERS
n Legal Advisers Sacker amp Partners LLP 29 Ludgate Hill London n EC4M 7NX
Banker HSBC Clerkenwellr-1 London EC1V 7DA
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BOWER GROUP RETIREMENT BENEFITS SCHEME
TRUSTEESREPORT
INTRODUCTION
The Trustees of the Bower Group Retirement Benefits Scheme (the Scheme) present their annual report together with the investment report financial statements and actuarial statements for the year ended 28 February 2010
TRUSTEES
The Trustees of the Scheme during the year were
Carillion Trustees Limited
The power to appoint and remove Trustees is vested in the Principal Employer and must be exercised by Deed
The Trustees are responsible for the administration and investment policy of the Scheme There were two formal Trustees meetings held during the Scheme year There were no fees paid during the Scheme year to the Trustees
SPgNSORINGmiddotEMPLOYERS
The Scheme provides for all eligible employees of the Principal Employer - Dudley Bower Group pie (formerly Bower Group Pie) and also for participating employers Dudley Bower Services Ltd Dudley Bower Management Services Ltd and Dudley Bower Facilities Management Ltd The registered address of all the sponsoring employers is
24 Birch Street Wolverhampton West Midlands WV1 4HY
3
1 ] I I I
BOWER GROUP RETIREMENT BENEFITS SCHEME n n STATEMENT OF TRUSTEES RESPONSIBILITIES
The audited accounts are_ the responsibility of the trustees Pension scheme regulations require n the trustees to make available to scheme members beneficiaries and certain other parties audited accounts for each scheme year which
bull show a true and fair view of the financial transactions of the scheme during the scheme year n and of the amount and disposition at the end of the scheme year of the assets and liabilities other than liabilities to pay pensions and benefits after the end of the scheme year and n bull contain the information specified in the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statementfrom the Auditor) Regulations 1996
r- -i including a statement whether the accounts have been prepared in accordance with the Statement of Recommended Practice Financial Reports of Pension Schemes
The trustees nave supervised tlie preparation of the accounts and have agreed suitabletl (-) accounting pohc1es to be appliea consistently-rrrakin-g-estimates~and~judgements-on-a-reasonable~~~~ and prudent basis They are also responsible for making available each year commonly in the form of a trustees annual report information about the scheme prescribed by pensions legislation 11 which they should ensure is consistentwith the audited accounts it accompanies
Following the first minimum funding valuation under the Pensions Act 1995 the trustees are j responsible under pensions legislation for ensuring that there is prepared maintained and from
time to time revised a schedule of contributions showing the rates of contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme and the dates on or before which such contributions are to be paid The trustees are also responsible for
f 1
J keeping records of contributions received in respect of any active member of the scheme and for procuring that contributions are made to the scheme in accordance with the schedule of contributions
The trustees also have a general responsibility for ensuring that adequate accounting records are kept and for taking such steps asmiddot are reasonably open to them to safeguard the assets of the
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SCHEME MEMBERSHIP
2010 2009Active Members
At 29 February 2009 0 0
_Q QAt 28 February 2010
Pensioners
At 29 February 2009 56 50
Add Deferred retiring _ 4 6 Dependants pensions becoming payable 3
Less Deaths
28 February 2010
Deferred Members
At 29 February 2009 236 243
Add Leavers with deferred pensions Less Pensions becoming payable (4) (6)
Deaths (3) Transfers out ill
At 28 February 2010 236
The breakdown_ of the deferred membership at 28February2010 is as follows
Current MowlemEmployee Deferred who retain a Final-Salary link 0
Deferred who retain a Final-Salary link butwho left 70 Mowlem employment after 01 August2002
Non Mowlem Employee Deferreds 159
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11 BOWER GROUP RETIREMENT BENEFITS SCHEME n
n REVIEW OF FINANCIAL DEVELOPMENT OF THE SCHEME
A full actuarial valuation was performed by the Scheme Actuary Paul Weaver of Sterling Actuarial n Services Limited as at 28 February 2007 The actuarial valuation indicated t_hat the Scheme was 114 funded on the old Minimum Funding Requirements (MFR) Valuation basis and 70 on the Scheme Actuarys recommended ongoing basis In monetary terms the deficit on the n recommended basiswas pound3270000
Benefits have been augmented for all members who were active on the 31 May 2001 with more
1] than 2 years pensionable service andwho continue to work for Mowlem until after 1 August 2002 The augmentation is such that their deferred pension receives increases in line with their salary increases from 31 May 2001 until their ultimate date of leaving Mowlem
n The Trustees have received regular employer contributions of pound288000 per year since 2003 The employer agreed to continue payment of annual contributions of pound288000 for a further three years commencing February 2005 t] C) Since then the Trustees received an advance employer contribution of pound288000 for February 2009 by way of deduction in account post year end The actuarial statement based on the)-J actuarial valuation forms part ofthe Appendix to this report
Contributions have notyet been received for this year due to administrative delays An appropriate ) j statement of funding principles has been agreed between the Trustees and employer as part of
the actuarialvaluation as at 28 February 2007 A new Schedule of Contributions has been agreed requiring the employer to pay at least pound698490 per annum plus operating and administration expenses for the seven years commencing 1 July 2010 I J The Trustees investment policy is detailed in their Statementof Investment Principles The day-toshyday management of the investments of the Scheme have been delegated by the Trustees to Close 1J Teams Ltd Legal amp General Assurance (Pensions) Management Ud BNY Mellon Asset Management (Newton Fund Managers Ltd) and Royal London Asset Management Ltd (RLAM) The Trustees meet regularly to discuss investment reports received from their adviser and the u investment managers to assess the overall investment policy and asset allocation
C-) Following an investment strategy review the Trustee agreed to invest 50 in fixed interest LJ securities and 50 in growth assets This was achieved by allocating 25 each ofthe Schemes
assets to BNY Mellon ancl CLOSE Teams with the remaining 50 invested in Corporate Bonds Long Dated Gilts and Cash The Trustees agreed to appoint RLAM to manage the Corporate u Bonds and Legal amp General to manage the Long Dated Gilts and Cash The reallocation was completed during May 2009
u The value of the Scheme increased by pound974417 (2009 decrease of pound1660784) to pound7085711 an increase of 16 The additional purchases of investments into the scheme for the year was poundnil (2009 poundnil)
11LJ During the Scheme year contributions receivable were poundNil compared with pound288000 for the
f--- shy ----~-PI~ous Scheme iear
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- The financial stafemenfs~fiave-beenpreparecrancraT1clitea ii1ccfmpliiince~Witll-FErgUlatiomrmaaermiddot- ---shyunder sections 41 ( 1) and (6) of the Pensions Act 1995
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BOWER GROUP RETIREMENT BENEFITS SCHEME
INVESTMENT REPORT FOR THE YEAR ENDING 28 FEBRUARY 2010
NEWTON REAL RETURN FUND
Investment aim The Fund aims to outperform cash (1 month LIBOR) by4 pa over rolling 3 year periods
Fund information The overall investmentpolicy of the Newton Managed Intrepid Funo is determined by BNY Mellon Fund Managers Limited The Royal Bank of Scotland pie is the Depositary of the Fund and BNY Mellon Asset Servicing BV is the Custodian of the assets held in the Fund
The Pension Scheme holds shares in the Fund and receives a monthly statement that shows the number of the shares the Scheme owns The register is held by the Registrar BNY Mellon Fund Man~Q_E~rs Limited as proof of ownership
BNY Mellon Fund Managers Limited confirms the securities held by the Fund to be transferable securities
The deployment of the assets over the period is shown in the table below
UK Equities
Overseas Equities
UK Fixed Interest
Overseas Fixed Interest
UK Index Linked
Cash
Other Total
183 226
337 376
47 39
118 120
40 13
223 133
52 93 1000 100i0
During the year to 28 February 2010 the Funds weighting in UK Equities and Overseas Equities increased The Funds weighting in UK Fixed Interest UK Index Linked Gilts and Cash decreased over the period
j
u 7
n
r1 BOWER GROUP RETIREMENT BENEFITS SCHEME n Market Review n All Index returns are sourced from FTSE World Indices as quoted by Nomura FTSE and Datastream and quoted in sterling gross of fees (CAPS middotreturns are quoted net of fees)
n Ten Largest Equity Holdings as at 31 March 2010
Vodafone Group pie UK 43
GlaxoSmithKline pie UK 40 n Norway (Kingdom of) 65 15052013 UK 28
Smith amp Nephew PLC UK 24
11 ETFS Agriculture DJ -AIGSM UK 23
Deutsche Telecom AG UK 22
Millicom Intl Cellular UK 22~ (J Newcrest Mining Ltd UK 21
rl Roche Hldgs AG UK 20
Bayer AG UK 20
l-J Fund Performance
[j In order to measure the performance of the Fund the Manager participates in the RussellMellon CAPS Pooled Pension Fund Survey This service measures the performance of several similar pooled pension funds under discretionary management A summary of the results are detailed in the table below
LJ
)_J 12 months () 168 398
J l_) 3 years( pa)
5 years( pa)
105
118
33
85
u Source Newton as at 28 February 2010 unless otherwise stated
Returns are calculated using close of business offer prices net of fees
u The total value of the Newton Managed Intrepid Fund was pound1632278 as at 31 March 2010
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r-1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n Close Teams LtdESCHER ( Formerly Escher UK Asset Management LTD) n Close TEAMS Limited operates a Manager of Managers service whereby the govermmce of the Schemes investments is delegated to a professional third party It operates sector specific funds run by individual fund n management houses selected for their exp-ertise by the TEAMS Investment Committee The TEAMS
n Investment Committee continually reviews the performance and suitability of these managers The Committee monitors the performance processes and personnel associated with each manager to ensure that appropriate managers are retained for each investment sector Quarterly performance reports and periodic stewardship reports are prepared and issued to the Trustees by the Committeemiddot
The TEAMS Investment Committee calculates and monitors performance on a quarterly basis Quarterly
Ii performance is assessed and reported as at 31 March 30 June 30 September and 31 December each year
n Close TEAMS is responsible for selecting monitoring and if necessary replacing the specialist investment managers used for each TEAMS fund In discharging this duty Close TEAMS ensures that every decision taken is in the best interests of clients
Close TEAMS ensures transparency in selection and monitoring processes by having an independent member - representing client interests - sitting on the decision making body the TEAMS Investment
llrtmiddot ) Committee The independent member is dapital Cranfield Trustees a renowned independent trustee
company The TEAMS Investment Committeeshy
[1 1 Professionally interprets investment performance data and statistical analysis 2 Monitors managers on a continuous and consistent basis 3 Keeps risk tightlycontrolled
r-j 4 Evaluates why managers achieve (or fail to achieve) performance targets over meaningful and statistically significant time periods
5 Assesses the future performance potential of existing managers and potential replacement managers 6 Makes timely decisions on changing managers n TEAMS funds are held in insurance polices issued by Winterthur Life UK Limited a Credit Suisse Group Company
l_j Transaction Details
Valuation as 28 February 2010 No ofUnits Unit Price (pence) ValuetJ
TEAMS 6040 Global Eq 2 Outperform 1 286246 143Sp pound1845763u() TOT AL AT 26 FEBRUARY 2010 ~18457631
u --- shy
Performance (specified gross of fees)
TEAMS 6040 Global Equitie$ 2 Outperformance Fund LJ 1 yr to 31 Mar 501 (benchmark495) u 3yrs (annualized) 18 pa (benchmark 15) 5yrs (annualized) 76 pa (benchmark 82)
- - -- ~~--~------- ---~--shy~u--~- -nvestment~Management~Fees -- ~- - - - - -- - - - shy
Deducted from the unit pricing (rather than being charged directly to the client)
9 J 1J
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BOWER GROUP RETIREMENT BENEFITS SCHEMEmiddot
Legal amp General Assurance (Pensions Management) Limited
n The assets of the Scheme are invested in an insurance policy with Legal amp General Assurance (Pensions Management) Limited part ofthe Legal amp General Group which ls one of the largest financial institutions in the United Kingdom shyn The policy is designed for corporate and public sector Pension Schemes and takes full advantage of the tax exemptions available to an insurance policy ofthis type It is a unitised policy and the value of the units fluctuates directly in relation to the value or the value of the underlying assets All units are redeemable at bidmiddot prices that are calculated from independent external pricing resources The assets underlying the units are held by independent corporate custodians which are regularly reviewed by external auditors
Legal amp Generals investment brief is to apply cash flows to or from and make switches between the funds 11 shown below (which are sections within the policy) in accordance with instructions received from the Trustees or their authorised Administrators
n Transaction Details
Valuation as 28 February 2010 No of Units Unit Price (pence) Valuet] () 2037 Index-Linked Gilt 25009978 1152890p pound28833754
lj 2047 Index-Linked Gilt 25509237 1141650p pound29122620
2055 Index-Linked Gilt 20993495 1404210p - pound29479276
11 Cash 8954772 6303530p pound56446674
TOTAL AT 26 FEBRUARY 2010 ~14388232~
Notes Prices are based cm the value of the underlying securities at close of business on 26 February 2010 Activity for this pricing date is included in this valuation
lJ Investment Value and Distribution Value and Distribution Fund at 20 May 2009 at 1 March 2010
u GBP GBP
lJ 0 2037 Index-Linked Gilt 281422 200 289003 201
2047 Index-Linked Gilt 281028 200 292162 203
lJ 2055 Index-Linked Gilt
Cash
281027
564305
200
400
295740
564467
205
391
IJ Total Assets 1407782 1000 1441372 1000
Notes The unit prices for these valuations were based on market closing prices on the previous working day The values shown include any activity that took place on the valuation day
IJ f---~- ---P-erformance- --middotmiddot-~-middotmiddot-middot--middotmiddot---middot---middotmiddot-- -shy
1J~-- -_--- rh~ tirr1~ -w~ight~d i~v~t~~~t ~t~ms o-~-th~-s~h~-~~~ts--~~~e ~~-t~i~~~-- --~
lJ For the Cash Fund which is not index tracking the index returns shown in the table below are for comparison purposes only
lJ 10
u
~I n
BOWER GROUP RETIREMENT BENEFITS SCHEME
n Investment Sector Fund Fund Index
n 2037 Index-Linked Gilt +27 +27
2047 Index-Linked Gilt +40 +39n 2055 Index-Linked Gilt +52 +52
n Cash +04 +03
Total Assets +25 na
n ROYAL LONDON ASSET MANAGEMENT LTD - RLPPC UK CORPORATE BOND
1-1 1(~ I) FUND
Investment aim To outperform the benchmark (iBoxx Sterling Non-Gilt All Maturities Index) by 08 per annum n gross of fees
Custody Arrangements The Custodian for the Fund is HSBC Securities Services at 8 Canada Square London E14 5HQ I Fund performance _ During the period between the funds inception date on 20th May 2009 to 28th February 2010 the I RLPPC UK Corporate Bond Fund outperformed the benchmark The fund returned 179 during the period compared to middota benchmark return of 15
LJ The positive performance recorded was primarily due to the following key factors
bull The sector allocation decision to remain overweight in credit bonds relative toLJ supranational bonds
bull The overweight positions in the best performing sectors eg subordinated financials LJ L) structured real estate and social housing
The table below shows the performance of the fund net of fees) and the benchmark index for the three months ending 31 March 2010
LJ Fund) Benchmark) Relative )
Quarter 1 495 394 101
LJ 12 months 2983 2095 888 3 years pa 314 410 -096 5 years pa 385 420 o35 Since inception (pa) 638 588 050LJ
----~--~---shy-rnenunclreturns irnne a5ove-ta6le middotare net of fees -amiddotncnnclude the -impact ofcash holdings over
~ C -the peritrd~--- --- - - ~------ ~--- ~~~~------~~--~ ---~--~~--- -_-_ -- ---- ~- --~-----~ ~~~---~~ ~~~- ~~ ~shy
Portfolio Value Fund GBP) LJ 20th May 2009 141076286
LJ
I I J
11
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
281h February 2010 166374512
n n n n n u() 7 I
[_]
u LJ
LJ Cgt
LJ
LJ
LJ
Change over the period 25298226 Inflows (outflows) overthe period 00
Ten Largest Bond Holdings as at 31 March 2010
Royal Bank of Scotland 7 5 2024 Finance for Residence Soc Housing 1113 2058 General Electric Capital 55 Vrn 2066
Annington Finance No1 8 2021 Qm_~gon Healthcare 5333 Vrn 2035 Lloyds TSB Bank 75 15042024
KFW 55 2015 Phoenix Natural Gas Fin 55 2017
NRW Bank 2625 2012
HSBC Holdings 675 12028
Sector breakdown
12
12
09
09
09
08
08
08
08
08
Banks amp financial services
Consumer goods
Consumer Services Foreign fixed interest sovereigns
General industrials
UK government bonds
Insurance
Investment trusts
Real estate
Social Housing
Structured
f--- shy ~upranationalsamp-agencies--middot- ----shyLJ-~ ~~~T~lecommUnicaUons~~~--~~- ~---- ----------shy
Utility
J TOTAL
u
251277 47
34 44
32 11
00 40
27 00
03 5151 01
55 1635 0962 99210
-~et2-~------middot----middot-------middot--------- -- ---- -~sa------------ ----- -- --- ------shy---~3~--~-----------middot ~- __ ---------~~--~--~-middot-~-~
93116 1000010000
12
I iJ
BOWER GROUP RETIREMENT BENEFITS SCHEME
AVCINVESTMENT
The Trustees hold assets invested separately from the main fund in the form of either individual accounts with Bristol amp West (Bank of Ireland Group) or individual funds managed by Clerical Medical
During the Scheme year no additional voluntary contributions (AVCs) were made Each member receives an annual statement at the year end confirming the amount held in their account and the movements in the year
FURTHER INFORMATION
Further disclosures required by legislation are included in the compliance statement Requests for additional information about the Scheme generally or queries relating to members own benefits should be made to Sterling Pension Management Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN telephone no 020 7537 6930
Signed on behalf of the Trustees
fdpound- ~cJt-e Trustee Date~~ Date
13
BOWER GROUP RETIREMENT BENEFITS SCHEME
INDEPENDENT AUDITORS REPORT to the Trustees of the Bower Group Retirement Benefits Pension Scheme
We have audited the financial statements on pages 16 to 22
This report is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors report and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this report or for the opinions we have formed
Respective responsibilities of the trustees and the auditors The trustees responsibilities for obtaining an annual report including audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustees Responsibilities
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board
We report to you our opinion as to whether the financial statements show a true and fair view and contain the information required by the relevant legislation We also report to you if in our opinion we have not received all the information and explanations we require for our audit or if the information specified by law is not disclosed
We read other information contained in the annual report and consider the implications for our report if we Imiddot become aware of any apparent misstatements or material inconsistencies with the financial statements The other information comprises [the Trustees Report the Investment Report the Actuarial Statement the Actuarial Certificate the Compliance Statement and the Members Information]
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements It also includes an assessment of the significant estimates and judgements made by the trustees in the preparation of the financial statements and of whether the accounting policies are appropriate to the Schemes circumstances consistently applied and adequately disclosed
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
Opinion In our opinion the financial statements show a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the financial transactions of the Scheme during the scheme year ended 28 February 2010 and of the amount and disposition at that date of its assets and liabilities other than liabilities to pay pensions and benefits after the end of the year and contain the information specified in Regulation 3 of and the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 made under the Pensions Act 1995
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
_Q)(b Date
14
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
LJ
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l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
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19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
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BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
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l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
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BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
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BOWER GROUP RETIREMENT BENEFITS SCHEME
TRUSTEESREPORT
INTRODUCTION
The Trustees of the Bower Group Retirement Benefits Scheme (the Scheme) present their annual report together with the investment report financial statements and actuarial statements for the year ended 28 February 2010
TRUSTEES
The Trustees of the Scheme during the year were
Carillion Trustees Limited
The power to appoint and remove Trustees is vested in the Principal Employer and must be exercised by Deed
The Trustees are responsible for the administration and investment policy of the Scheme There were two formal Trustees meetings held during the Scheme year There were no fees paid during the Scheme year to the Trustees
SPgNSORINGmiddotEMPLOYERS
The Scheme provides for all eligible employees of the Principal Employer - Dudley Bower Group pie (formerly Bower Group Pie) and also for participating employers Dudley Bower Services Ltd Dudley Bower Management Services Ltd and Dudley Bower Facilities Management Ltd The registered address of all the sponsoring employers is
24 Birch Street Wolverhampton West Midlands WV1 4HY
3
1 ] I I I
BOWER GROUP RETIREMENT BENEFITS SCHEME n n STATEMENT OF TRUSTEES RESPONSIBILITIES
The audited accounts are_ the responsibility of the trustees Pension scheme regulations require n the trustees to make available to scheme members beneficiaries and certain other parties audited accounts for each scheme year which
bull show a true and fair view of the financial transactions of the scheme during the scheme year n and of the amount and disposition at the end of the scheme year of the assets and liabilities other than liabilities to pay pensions and benefits after the end of the scheme year and n bull contain the information specified in the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statementfrom the Auditor) Regulations 1996
r- -i including a statement whether the accounts have been prepared in accordance with the Statement of Recommended Practice Financial Reports of Pension Schemes
The trustees nave supervised tlie preparation of the accounts and have agreed suitabletl (-) accounting pohc1es to be appliea consistently-rrrakin-g-estimates~and~judgements-on-a-reasonable~~~~ and prudent basis They are also responsible for making available each year commonly in the form of a trustees annual report information about the scheme prescribed by pensions legislation 11 which they should ensure is consistentwith the audited accounts it accompanies
Following the first minimum funding valuation under the Pensions Act 1995 the trustees are j responsible under pensions legislation for ensuring that there is prepared maintained and from
time to time revised a schedule of contributions showing the rates of contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme and the dates on or before which such contributions are to be paid The trustees are also responsible for
f 1
J keeping records of contributions received in respect of any active member of the scheme and for procuring that contributions are made to the scheme in accordance with the schedule of contributions
The trustees also have a general responsibility for ensuring that adequate accounting records are kept and for taking such steps asmiddot are reasonably open to them to safeguard the assets of the
LJ scheme and to prevent and detect fraud and other irregularities ---
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BOWER GROUP RETIREMENT BENEFITS SCHEME
SCHEME MEMBERSHIP
2010 2009Active Members
At 29 February 2009 0 0
_Q QAt 28 February 2010
Pensioners
At 29 February 2009 56 50
Add Deferred retiring _ 4 6 Dependants pensions becoming payable 3
Less Deaths
28 February 2010
Deferred Members
At 29 February 2009 236 243
Add Leavers with deferred pensions Less Pensions becoming payable (4) (6)
Deaths (3) Transfers out ill
At 28 February 2010 236
The breakdown_ of the deferred membership at 28February2010 is as follows
Current MowlemEmployee Deferred who retain a Final-Salary link 0
Deferred who retain a Final-Salary link butwho left 70 Mowlem employment after 01 August2002
Non Mowlem Employee Deferreds 159
=u----shy
]
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[middotj
-------~-------middot--~~- -~~-
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11 BOWER GROUP RETIREMENT BENEFITS SCHEME n
n REVIEW OF FINANCIAL DEVELOPMENT OF THE SCHEME
A full actuarial valuation was performed by the Scheme Actuary Paul Weaver of Sterling Actuarial n Services Limited as at 28 February 2007 The actuarial valuation indicated t_hat the Scheme was 114 funded on the old Minimum Funding Requirements (MFR) Valuation basis and 70 on the Scheme Actuarys recommended ongoing basis In monetary terms the deficit on the n recommended basiswas pound3270000
Benefits have been augmented for all members who were active on the 31 May 2001 with more
1] than 2 years pensionable service andwho continue to work for Mowlem until after 1 August 2002 The augmentation is such that their deferred pension receives increases in line with their salary increases from 31 May 2001 until their ultimate date of leaving Mowlem
n The Trustees have received regular employer contributions of pound288000 per year since 2003 The employer agreed to continue payment of annual contributions of pound288000 for a further three years commencing February 2005 t] C) Since then the Trustees received an advance employer contribution of pound288000 for February 2009 by way of deduction in account post year end The actuarial statement based on the)-J actuarial valuation forms part ofthe Appendix to this report
Contributions have notyet been received for this year due to administrative delays An appropriate ) j statement of funding principles has been agreed between the Trustees and employer as part of
the actuarialvaluation as at 28 February 2007 A new Schedule of Contributions has been agreed requiring the employer to pay at least pound698490 per annum plus operating and administration expenses for the seven years commencing 1 July 2010 I J The Trustees investment policy is detailed in their Statementof Investment Principles The day-toshyday management of the investments of the Scheme have been delegated by the Trustees to Close 1J Teams Ltd Legal amp General Assurance (Pensions) Management Ud BNY Mellon Asset Management (Newton Fund Managers Ltd) and Royal London Asset Management Ltd (RLAM) The Trustees meet regularly to discuss investment reports received from their adviser and the u investment managers to assess the overall investment policy and asset allocation
C-) Following an investment strategy review the Trustee agreed to invest 50 in fixed interest LJ securities and 50 in growth assets This was achieved by allocating 25 each ofthe Schemes
assets to BNY Mellon ancl CLOSE Teams with the remaining 50 invested in Corporate Bonds Long Dated Gilts and Cash The Trustees agreed to appoint RLAM to manage the Corporate u Bonds and Legal amp General to manage the Long Dated Gilts and Cash The reallocation was completed during May 2009
u The value of the Scheme increased by pound974417 (2009 decrease of pound1660784) to pound7085711 an increase of 16 The additional purchases of investments into the scheme for the year was poundnil (2009 poundnil)
11LJ During the Scheme year contributions receivable were poundNil compared with pound288000 for the
f--- shy ----~-PI~ous Scheme iear
j~---- -~-shy
- The financial stafemenfs~fiave-beenpreparecrancraT1clitea ii1ccfmpliiince~Witll-FErgUlatiomrmaaermiddot- ---shyunder sections 41 ( 1) and (6) of the Pensions Act 1995
J
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11
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BOWER GROUP RETIREMENT BENEFITS SCHEME
INVESTMENT REPORT FOR THE YEAR ENDING 28 FEBRUARY 2010
NEWTON REAL RETURN FUND
Investment aim The Fund aims to outperform cash (1 month LIBOR) by4 pa over rolling 3 year periods
Fund information The overall investmentpolicy of the Newton Managed Intrepid Funo is determined by BNY Mellon Fund Managers Limited The Royal Bank of Scotland pie is the Depositary of the Fund and BNY Mellon Asset Servicing BV is the Custodian of the assets held in the Fund
The Pension Scheme holds shares in the Fund and receives a monthly statement that shows the number of the shares the Scheme owns The register is held by the Registrar BNY Mellon Fund Man~Q_E~rs Limited as proof of ownership
BNY Mellon Fund Managers Limited confirms the securities held by the Fund to be transferable securities
The deployment of the assets over the period is shown in the table below
UK Equities
Overseas Equities
UK Fixed Interest
Overseas Fixed Interest
UK Index Linked
Cash
Other Total
183 226
337 376
47 39
118 120
40 13
223 133
52 93 1000 100i0
During the year to 28 February 2010 the Funds weighting in UK Equities and Overseas Equities increased The Funds weighting in UK Fixed Interest UK Index Linked Gilts and Cash decreased over the period
j
u 7
n
r1 BOWER GROUP RETIREMENT BENEFITS SCHEME n Market Review n All Index returns are sourced from FTSE World Indices as quoted by Nomura FTSE and Datastream and quoted in sterling gross of fees (CAPS middotreturns are quoted net of fees)
n Ten Largest Equity Holdings as at 31 March 2010
Vodafone Group pie UK 43
GlaxoSmithKline pie UK 40 n Norway (Kingdom of) 65 15052013 UK 28
Smith amp Nephew PLC UK 24
11 ETFS Agriculture DJ -AIGSM UK 23
Deutsche Telecom AG UK 22
Millicom Intl Cellular UK 22~ (J Newcrest Mining Ltd UK 21
rl Roche Hldgs AG UK 20
Bayer AG UK 20
l-J Fund Performance
[j In order to measure the performance of the Fund the Manager participates in the RussellMellon CAPS Pooled Pension Fund Survey This service measures the performance of several similar pooled pension funds under discretionary management A summary of the results are detailed in the table below
LJ
)_J 12 months () 168 398
J l_) 3 years( pa)
5 years( pa)
105
118
33
85
u Source Newton as at 28 February 2010 unless otherwise stated
Returns are calculated using close of business offer prices net of fees
u The total value of the Newton Managed Intrepid Fund was pound1632278 as at 31 March 2010
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8
r-1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n Close Teams LtdESCHER ( Formerly Escher UK Asset Management LTD) n Close TEAMS Limited operates a Manager of Managers service whereby the govermmce of the Schemes investments is delegated to a professional third party It operates sector specific funds run by individual fund n management houses selected for their exp-ertise by the TEAMS Investment Committee The TEAMS
n Investment Committee continually reviews the performance and suitability of these managers The Committee monitors the performance processes and personnel associated with each manager to ensure that appropriate managers are retained for each investment sector Quarterly performance reports and periodic stewardship reports are prepared and issued to the Trustees by the Committeemiddot
The TEAMS Investment Committee calculates and monitors performance on a quarterly basis Quarterly
Ii performance is assessed and reported as at 31 March 30 June 30 September and 31 December each year
n Close TEAMS is responsible for selecting monitoring and if necessary replacing the specialist investment managers used for each TEAMS fund In discharging this duty Close TEAMS ensures that every decision taken is in the best interests of clients
Close TEAMS ensures transparency in selection and monitoring processes by having an independent member - representing client interests - sitting on the decision making body the TEAMS Investment
llrtmiddot ) Committee The independent member is dapital Cranfield Trustees a renowned independent trustee
company The TEAMS Investment Committeeshy
[1 1 Professionally interprets investment performance data and statistical analysis 2 Monitors managers on a continuous and consistent basis 3 Keeps risk tightlycontrolled
r-j 4 Evaluates why managers achieve (or fail to achieve) performance targets over meaningful and statistically significant time periods
5 Assesses the future performance potential of existing managers and potential replacement managers 6 Makes timely decisions on changing managers n TEAMS funds are held in insurance polices issued by Winterthur Life UK Limited a Credit Suisse Group Company
l_j Transaction Details
Valuation as 28 February 2010 No ofUnits Unit Price (pence) ValuetJ
TEAMS 6040 Global Eq 2 Outperform 1 286246 143Sp pound1845763u() TOT AL AT 26 FEBRUARY 2010 ~18457631
u --- shy
Performance (specified gross of fees)
TEAMS 6040 Global Equitie$ 2 Outperformance Fund LJ 1 yr to 31 Mar 501 (benchmark495) u 3yrs (annualized) 18 pa (benchmark 15) 5yrs (annualized) 76 pa (benchmark 82)
- - -- ~~--~------- ---~--shy~u--~- -nvestment~Management~Fees -- ~- - - - - -- - - - shy
Deducted from the unit pricing (rather than being charged directly to the client)
9 J 1J
n n
BOWER GROUP RETIREMENT BENEFITS SCHEMEmiddot
Legal amp General Assurance (Pensions Management) Limited
n The assets of the Scheme are invested in an insurance policy with Legal amp General Assurance (Pensions Management) Limited part ofthe Legal amp General Group which ls one of the largest financial institutions in the United Kingdom shyn The policy is designed for corporate and public sector Pension Schemes and takes full advantage of the tax exemptions available to an insurance policy ofthis type It is a unitised policy and the value of the units fluctuates directly in relation to the value or the value of the underlying assets All units are redeemable at bidmiddot prices that are calculated from independent external pricing resources The assets underlying the units are held by independent corporate custodians which are regularly reviewed by external auditors
Legal amp Generals investment brief is to apply cash flows to or from and make switches between the funds 11 shown below (which are sections within the policy) in accordance with instructions received from the Trustees or their authorised Administrators
n Transaction Details
Valuation as 28 February 2010 No of Units Unit Price (pence) Valuet] () 2037 Index-Linked Gilt 25009978 1152890p pound28833754
lj 2047 Index-Linked Gilt 25509237 1141650p pound29122620
2055 Index-Linked Gilt 20993495 1404210p - pound29479276
11 Cash 8954772 6303530p pound56446674
TOTAL AT 26 FEBRUARY 2010 ~14388232~
Notes Prices are based cm the value of the underlying securities at close of business on 26 February 2010 Activity for this pricing date is included in this valuation
lJ Investment Value and Distribution Value and Distribution Fund at 20 May 2009 at 1 March 2010
u GBP GBP
lJ 0 2037 Index-Linked Gilt 281422 200 289003 201
2047 Index-Linked Gilt 281028 200 292162 203
lJ 2055 Index-Linked Gilt
Cash
281027
564305
200
400
295740
564467
205
391
IJ Total Assets 1407782 1000 1441372 1000
Notes The unit prices for these valuations were based on market closing prices on the previous working day The values shown include any activity that took place on the valuation day
IJ f---~- ---P-erformance- --middotmiddot-~-middotmiddot-middot--middotmiddot---middot---middotmiddot-- -shy
1J~-- -_--- rh~ tirr1~ -w~ight~d i~v~t~~~t ~t~ms o-~-th~-s~h~-~~~ts--~~~e ~~-t~i~~~-- --~
lJ For the Cash Fund which is not index tracking the index returns shown in the table below are for comparison purposes only
lJ 10
u
~I n
BOWER GROUP RETIREMENT BENEFITS SCHEME
n Investment Sector Fund Fund Index
n 2037 Index-Linked Gilt +27 +27
2047 Index-Linked Gilt +40 +39n 2055 Index-Linked Gilt +52 +52
n Cash +04 +03
Total Assets +25 na
n ROYAL LONDON ASSET MANAGEMENT LTD - RLPPC UK CORPORATE BOND
1-1 1(~ I) FUND
Investment aim To outperform the benchmark (iBoxx Sterling Non-Gilt All Maturities Index) by 08 per annum n gross of fees
Custody Arrangements The Custodian for the Fund is HSBC Securities Services at 8 Canada Square London E14 5HQ I Fund performance _ During the period between the funds inception date on 20th May 2009 to 28th February 2010 the I RLPPC UK Corporate Bond Fund outperformed the benchmark The fund returned 179 during the period compared to middota benchmark return of 15
LJ The positive performance recorded was primarily due to the following key factors
bull The sector allocation decision to remain overweight in credit bonds relative toLJ supranational bonds
bull The overweight positions in the best performing sectors eg subordinated financials LJ L) structured real estate and social housing
The table below shows the performance of the fund net of fees) and the benchmark index for the three months ending 31 March 2010
LJ Fund) Benchmark) Relative )
Quarter 1 495 394 101
LJ 12 months 2983 2095 888 3 years pa 314 410 -096 5 years pa 385 420 o35 Since inception (pa) 638 588 050LJ
----~--~---shy-rnenunclreturns irnne a5ove-ta6le middotare net of fees -amiddotncnnclude the -impact ofcash holdings over
~ C -the peritrd~--- --- - - ~------ ~--- ~~~~------~~--~ ---~--~~--- -_-_ -- ---- ~- --~-----~ ~~~---~~ ~~~- ~~ ~shy
Portfolio Value Fund GBP) LJ 20th May 2009 141076286
LJ
I I J
11
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
281h February 2010 166374512
n n n n n u() 7 I
[_]
u LJ
LJ Cgt
LJ
LJ
LJ
Change over the period 25298226 Inflows (outflows) overthe period 00
Ten Largest Bond Holdings as at 31 March 2010
Royal Bank of Scotland 7 5 2024 Finance for Residence Soc Housing 1113 2058 General Electric Capital 55 Vrn 2066
Annington Finance No1 8 2021 Qm_~gon Healthcare 5333 Vrn 2035 Lloyds TSB Bank 75 15042024
KFW 55 2015 Phoenix Natural Gas Fin 55 2017
NRW Bank 2625 2012
HSBC Holdings 675 12028
Sector breakdown
12
12
09
09
09
08
08
08
08
08
Banks amp financial services
Consumer goods
Consumer Services Foreign fixed interest sovereigns
General industrials
UK government bonds
Insurance
Investment trusts
Real estate
Social Housing
Structured
f--- shy ~upranationalsamp-agencies--middot- ----shyLJ-~ ~~~T~lecommUnicaUons~~~--~~- ~---- ----------shy
Utility
J TOTAL
u
251277 47
34 44
32 11
00 40
27 00
03 5151 01
55 1635 0962 99210
-~et2-~------middot----middot-------middot--------- -- ---- -~sa------------ ----- -- --- ------shy---~3~--~-----------middot ~- __ ---------~~--~--~-middot-~-~
93116 1000010000
12
I iJ
BOWER GROUP RETIREMENT BENEFITS SCHEME
AVCINVESTMENT
The Trustees hold assets invested separately from the main fund in the form of either individual accounts with Bristol amp West (Bank of Ireland Group) or individual funds managed by Clerical Medical
During the Scheme year no additional voluntary contributions (AVCs) were made Each member receives an annual statement at the year end confirming the amount held in their account and the movements in the year
FURTHER INFORMATION
Further disclosures required by legislation are included in the compliance statement Requests for additional information about the Scheme generally or queries relating to members own benefits should be made to Sterling Pension Management Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN telephone no 020 7537 6930
Signed on behalf of the Trustees
fdpound- ~cJt-e Trustee Date~~ Date
13
BOWER GROUP RETIREMENT BENEFITS SCHEME
INDEPENDENT AUDITORS REPORT to the Trustees of the Bower Group Retirement Benefits Pension Scheme
We have audited the financial statements on pages 16 to 22
This report is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors report and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this report or for the opinions we have formed
Respective responsibilities of the trustees and the auditors The trustees responsibilities for obtaining an annual report including audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustees Responsibilities
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board
We report to you our opinion as to whether the financial statements show a true and fair view and contain the information required by the relevant legislation We also report to you if in our opinion we have not received all the information and explanations we require for our audit or if the information specified by law is not disclosed
We read other information contained in the annual report and consider the implications for our report if we Imiddot become aware of any apparent misstatements or material inconsistencies with the financial statements The other information comprises [the Trustees Report the Investment Report the Actuarial Statement the Actuarial Certificate the Compliance Statement and the Members Information]
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements It also includes an assessment of the significant estimates and judgements made by the trustees in the preparation of the financial statements and of whether the accounting policies are appropriate to the Schemes circumstances consistently applied and adequately disclosed
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
Opinion In our opinion the financial statements show a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the financial transactions of the Scheme during the scheme year ended 28 February 2010 and of the amount and disposition at that date of its assets and liabilities other than liabilities to pay pensions and benefits after the end of the year and contain the information specified in Regulation 3 of and the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 made under the Pensions Act 1995
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
_Q)(b Date
14
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
LJ
I
j
u 17
i_j
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
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u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
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n n n n ll0
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BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
1 ] I I I
BOWER GROUP RETIREMENT BENEFITS SCHEME n n STATEMENT OF TRUSTEES RESPONSIBILITIES
The audited accounts are_ the responsibility of the trustees Pension scheme regulations require n the trustees to make available to scheme members beneficiaries and certain other parties audited accounts for each scheme year which
bull show a true and fair view of the financial transactions of the scheme during the scheme year n and of the amount and disposition at the end of the scheme year of the assets and liabilities other than liabilities to pay pensions and benefits after the end of the scheme year and n bull contain the information specified in the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statementfrom the Auditor) Regulations 1996
r- -i including a statement whether the accounts have been prepared in accordance with the Statement of Recommended Practice Financial Reports of Pension Schemes
The trustees nave supervised tlie preparation of the accounts and have agreed suitabletl (-) accounting pohc1es to be appliea consistently-rrrakin-g-estimates~and~judgements-on-a-reasonable~~~~ and prudent basis They are also responsible for making available each year commonly in the form of a trustees annual report information about the scheme prescribed by pensions legislation 11 which they should ensure is consistentwith the audited accounts it accompanies
Following the first minimum funding valuation under the Pensions Act 1995 the trustees are j responsible under pensions legislation for ensuring that there is prepared maintained and from
time to time revised a schedule of contributions showing the rates of contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme and the dates on or before which such contributions are to be paid The trustees are also responsible for
f 1
J keeping records of contributions received in respect of any active member of the scheme and for procuring that contributions are made to the scheme in accordance with the schedule of contributions
The trustees also have a general responsibility for ensuring that adequate accounting records are kept and for taking such steps asmiddot are reasonably open to them to safeguard the assets of the
LJ scheme and to prevent and detect fraud and other irregularities ---
u()
u LJ
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BOWER GROUP RETIREMENT BENEFITS SCHEME
SCHEME MEMBERSHIP
2010 2009Active Members
At 29 February 2009 0 0
_Q QAt 28 February 2010
Pensioners
At 29 February 2009 56 50
Add Deferred retiring _ 4 6 Dependants pensions becoming payable 3
Less Deaths
28 February 2010
Deferred Members
At 29 February 2009 236 243
Add Leavers with deferred pensions Less Pensions becoming payable (4) (6)
Deaths (3) Transfers out ill
At 28 February 2010 236
The breakdown_ of the deferred membership at 28February2010 is as follows
Current MowlemEmployee Deferred who retain a Final-Salary link 0
Deferred who retain a Final-Salary link butwho left 70 Mowlem employment after 01 August2002
Non Mowlem Employee Deferreds 159
=u----shy
]
LJ 5
[middotj
-------~-------middot--~~- -~~-
----------- --
11 BOWER GROUP RETIREMENT BENEFITS SCHEME n
n REVIEW OF FINANCIAL DEVELOPMENT OF THE SCHEME
A full actuarial valuation was performed by the Scheme Actuary Paul Weaver of Sterling Actuarial n Services Limited as at 28 February 2007 The actuarial valuation indicated t_hat the Scheme was 114 funded on the old Minimum Funding Requirements (MFR) Valuation basis and 70 on the Scheme Actuarys recommended ongoing basis In monetary terms the deficit on the n recommended basiswas pound3270000
Benefits have been augmented for all members who were active on the 31 May 2001 with more
1] than 2 years pensionable service andwho continue to work for Mowlem until after 1 August 2002 The augmentation is such that their deferred pension receives increases in line with their salary increases from 31 May 2001 until their ultimate date of leaving Mowlem
n The Trustees have received regular employer contributions of pound288000 per year since 2003 The employer agreed to continue payment of annual contributions of pound288000 for a further three years commencing February 2005 t] C) Since then the Trustees received an advance employer contribution of pound288000 for February 2009 by way of deduction in account post year end The actuarial statement based on the)-J actuarial valuation forms part ofthe Appendix to this report
Contributions have notyet been received for this year due to administrative delays An appropriate ) j statement of funding principles has been agreed between the Trustees and employer as part of
the actuarialvaluation as at 28 February 2007 A new Schedule of Contributions has been agreed requiring the employer to pay at least pound698490 per annum plus operating and administration expenses for the seven years commencing 1 July 2010 I J The Trustees investment policy is detailed in their Statementof Investment Principles The day-toshyday management of the investments of the Scheme have been delegated by the Trustees to Close 1J Teams Ltd Legal amp General Assurance (Pensions) Management Ud BNY Mellon Asset Management (Newton Fund Managers Ltd) and Royal London Asset Management Ltd (RLAM) The Trustees meet regularly to discuss investment reports received from their adviser and the u investment managers to assess the overall investment policy and asset allocation
C-) Following an investment strategy review the Trustee agreed to invest 50 in fixed interest LJ securities and 50 in growth assets This was achieved by allocating 25 each ofthe Schemes
assets to BNY Mellon ancl CLOSE Teams with the remaining 50 invested in Corporate Bonds Long Dated Gilts and Cash The Trustees agreed to appoint RLAM to manage the Corporate u Bonds and Legal amp General to manage the Long Dated Gilts and Cash The reallocation was completed during May 2009
u The value of the Scheme increased by pound974417 (2009 decrease of pound1660784) to pound7085711 an increase of 16 The additional purchases of investments into the scheme for the year was poundnil (2009 poundnil)
11LJ During the Scheme year contributions receivable were poundNil compared with pound288000 for the
f--- shy ----~-PI~ous Scheme iear
j~---- -~-shy
- The financial stafemenfs~fiave-beenpreparecrancraT1clitea ii1ccfmpliiince~Witll-FErgUlatiomrmaaermiddot- ---shyunder sections 41 ( 1) and (6) of the Pensions Act 1995
J
6
---- middot- ---- --
11
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BOWER GROUP RETIREMENT BENEFITS SCHEME
INVESTMENT REPORT FOR THE YEAR ENDING 28 FEBRUARY 2010
NEWTON REAL RETURN FUND
Investment aim The Fund aims to outperform cash (1 month LIBOR) by4 pa over rolling 3 year periods
Fund information The overall investmentpolicy of the Newton Managed Intrepid Funo is determined by BNY Mellon Fund Managers Limited The Royal Bank of Scotland pie is the Depositary of the Fund and BNY Mellon Asset Servicing BV is the Custodian of the assets held in the Fund
The Pension Scheme holds shares in the Fund and receives a monthly statement that shows the number of the shares the Scheme owns The register is held by the Registrar BNY Mellon Fund Man~Q_E~rs Limited as proof of ownership
BNY Mellon Fund Managers Limited confirms the securities held by the Fund to be transferable securities
The deployment of the assets over the period is shown in the table below
UK Equities
Overseas Equities
UK Fixed Interest
Overseas Fixed Interest
UK Index Linked
Cash
Other Total
183 226
337 376
47 39
118 120
40 13
223 133
52 93 1000 100i0
During the year to 28 February 2010 the Funds weighting in UK Equities and Overseas Equities increased The Funds weighting in UK Fixed Interest UK Index Linked Gilts and Cash decreased over the period
j
u 7
n
r1 BOWER GROUP RETIREMENT BENEFITS SCHEME n Market Review n All Index returns are sourced from FTSE World Indices as quoted by Nomura FTSE and Datastream and quoted in sterling gross of fees (CAPS middotreturns are quoted net of fees)
n Ten Largest Equity Holdings as at 31 March 2010
Vodafone Group pie UK 43
GlaxoSmithKline pie UK 40 n Norway (Kingdom of) 65 15052013 UK 28
Smith amp Nephew PLC UK 24
11 ETFS Agriculture DJ -AIGSM UK 23
Deutsche Telecom AG UK 22
Millicom Intl Cellular UK 22~ (J Newcrest Mining Ltd UK 21
rl Roche Hldgs AG UK 20
Bayer AG UK 20
l-J Fund Performance
[j In order to measure the performance of the Fund the Manager participates in the RussellMellon CAPS Pooled Pension Fund Survey This service measures the performance of several similar pooled pension funds under discretionary management A summary of the results are detailed in the table below
LJ
)_J 12 months () 168 398
J l_) 3 years( pa)
5 years( pa)
105
118
33
85
u Source Newton as at 28 February 2010 unless otherwise stated
Returns are calculated using close of business offer prices net of fees
u The total value of the Newton Managed Intrepid Fund was pound1632278 as at 31 March 2010
LJ
~u~
J
8
r-1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n Close Teams LtdESCHER ( Formerly Escher UK Asset Management LTD) n Close TEAMS Limited operates a Manager of Managers service whereby the govermmce of the Schemes investments is delegated to a professional third party It operates sector specific funds run by individual fund n management houses selected for their exp-ertise by the TEAMS Investment Committee The TEAMS
n Investment Committee continually reviews the performance and suitability of these managers The Committee monitors the performance processes and personnel associated with each manager to ensure that appropriate managers are retained for each investment sector Quarterly performance reports and periodic stewardship reports are prepared and issued to the Trustees by the Committeemiddot
The TEAMS Investment Committee calculates and monitors performance on a quarterly basis Quarterly
Ii performance is assessed and reported as at 31 March 30 June 30 September and 31 December each year
n Close TEAMS is responsible for selecting monitoring and if necessary replacing the specialist investment managers used for each TEAMS fund In discharging this duty Close TEAMS ensures that every decision taken is in the best interests of clients
Close TEAMS ensures transparency in selection and monitoring processes by having an independent member - representing client interests - sitting on the decision making body the TEAMS Investment
llrtmiddot ) Committee The independent member is dapital Cranfield Trustees a renowned independent trustee
company The TEAMS Investment Committeeshy
[1 1 Professionally interprets investment performance data and statistical analysis 2 Monitors managers on a continuous and consistent basis 3 Keeps risk tightlycontrolled
r-j 4 Evaluates why managers achieve (or fail to achieve) performance targets over meaningful and statistically significant time periods
5 Assesses the future performance potential of existing managers and potential replacement managers 6 Makes timely decisions on changing managers n TEAMS funds are held in insurance polices issued by Winterthur Life UK Limited a Credit Suisse Group Company
l_j Transaction Details
Valuation as 28 February 2010 No ofUnits Unit Price (pence) ValuetJ
TEAMS 6040 Global Eq 2 Outperform 1 286246 143Sp pound1845763u() TOT AL AT 26 FEBRUARY 2010 ~18457631
u --- shy
Performance (specified gross of fees)
TEAMS 6040 Global Equitie$ 2 Outperformance Fund LJ 1 yr to 31 Mar 501 (benchmark495) u 3yrs (annualized) 18 pa (benchmark 15) 5yrs (annualized) 76 pa (benchmark 82)
- - -- ~~--~------- ---~--shy~u--~- -nvestment~Management~Fees -- ~- - - - - -- - - - shy
Deducted from the unit pricing (rather than being charged directly to the client)
9 J 1J
n n
BOWER GROUP RETIREMENT BENEFITS SCHEMEmiddot
Legal amp General Assurance (Pensions Management) Limited
n The assets of the Scheme are invested in an insurance policy with Legal amp General Assurance (Pensions Management) Limited part ofthe Legal amp General Group which ls one of the largest financial institutions in the United Kingdom shyn The policy is designed for corporate and public sector Pension Schemes and takes full advantage of the tax exemptions available to an insurance policy ofthis type It is a unitised policy and the value of the units fluctuates directly in relation to the value or the value of the underlying assets All units are redeemable at bidmiddot prices that are calculated from independent external pricing resources The assets underlying the units are held by independent corporate custodians which are regularly reviewed by external auditors
Legal amp Generals investment brief is to apply cash flows to or from and make switches between the funds 11 shown below (which are sections within the policy) in accordance with instructions received from the Trustees or their authorised Administrators
n Transaction Details
Valuation as 28 February 2010 No of Units Unit Price (pence) Valuet] () 2037 Index-Linked Gilt 25009978 1152890p pound28833754
lj 2047 Index-Linked Gilt 25509237 1141650p pound29122620
2055 Index-Linked Gilt 20993495 1404210p - pound29479276
11 Cash 8954772 6303530p pound56446674
TOTAL AT 26 FEBRUARY 2010 ~14388232~
Notes Prices are based cm the value of the underlying securities at close of business on 26 February 2010 Activity for this pricing date is included in this valuation
lJ Investment Value and Distribution Value and Distribution Fund at 20 May 2009 at 1 March 2010
u GBP GBP
lJ 0 2037 Index-Linked Gilt 281422 200 289003 201
2047 Index-Linked Gilt 281028 200 292162 203
lJ 2055 Index-Linked Gilt
Cash
281027
564305
200
400
295740
564467
205
391
IJ Total Assets 1407782 1000 1441372 1000
Notes The unit prices for these valuations were based on market closing prices on the previous working day The values shown include any activity that took place on the valuation day
IJ f---~- ---P-erformance- --middotmiddot-~-middotmiddot-middot--middotmiddot---middot---middotmiddot-- -shy
1J~-- -_--- rh~ tirr1~ -w~ight~d i~v~t~~~t ~t~ms o-~-th~-s~h~-~~~ts--~~~e ~~-t~i~~~-- --~
lJ For the Cash Fund which is not index tracking the index returns shown in the table below are for comparison purposes only
lJ 10
u
~I n
BOWER GROUP RETIREMENT BENEFITS SCHEME
n Investment Sector Fund Fund Index
n 2037 Index-Linked Gilt +27 +27
2047 Index-Linked Gilt +40 +39n 2055 Index-Linked Gilt +52 +52
n Cash +04 +03
Total Assets +25 na
n ROYAL LONDON ASSET MANAGEMENT LTD - RLPPC UK CORPORATE BOND
1-1 1(~ I) FUND
Investment aim To outperform the benchmark (iBoxx Sterling Non-Gilt All Maturities Index) by 08 per annum n gross of fees
Custody Arrangements The Custodian for the Fund is HSBC Securities Services at 8 Canada Square London E14 5HQ I Fund performance _ During the period between the funds inception date on 20th May 2009 to 28th February 2010 the I RLPPC UK Corporate Bond Fund outperformed the benchmark The fund returned 179 during the period compared to middota benchmark return of 15
LJ The positive performance recorded was primarily due to the following key factors
bull The sector allocation decision to remain overweight in credit bonds relative toLJ supranational bonds
bull The overweight positions in the best performing sectors eg subordinated financials LJ L) structured real estate and social housing
The table below shows the performance of the fund net of fees) and the benchmark index for the three months ending 31 March 2010
LJ Fund) Benchmark) Relative )
Quarter 1 495 394 101
LJ 12 months 2983 2095 888 3 years pa 314 410 -096 5 years pa 385 420 o35 Since inception (pa) 638 588 050LJ
----~--~---shy-rnenunclreturns irnne a5ove-ta6le middotare net of fees -amiddotncnnclude the -impact ofcash holdings over
~ C -the peritrd~--- --- - - ~------ ~--- ~~~~------~~--~ ---~--~~--- -_-_ -- ---- ~- --~-----~ ~~~---~~ ~~~- ~~ ~shy
Portfolio Value Fund GBP) LJ 20th May 2009 141076286
LJ
I I J
11
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
281h February 2010 166374512
n n n n n u() 7 I
[_]
u LJ
LJ Cgt
LJ
LJ
LJ
Change over the period 25298226 Inflows (outflows) overthe period 00
Ten Largest Bond Holdings as at 31 March 2010
Royal Bank of Scotland 7 5 2024 Finance for Residence Soc Housing 1113 2058 General Electric Capital 55 Vrn 2066
Annington Finance No1 8 2021 Qm_~gon Healthcare 5333 Vrn 2035 Lloyds TSB Bank 75 15042024
KFW 55 2015 Phoenix Natural Gas Fin 55 2017
NRW Bank 2625 2012
HSBC Holdings 675 12028
Sector breakdown
12
12
09
09
09
08
08
08
08
08
Banks amp financial services
Consumer goods
Consumer Services Foreign fixed interest sovereigns
General industrials
UK government bonds
Insurance
Investment trusts
Real estate
Social Housing
Structured
f--- shy ~upranationalsamp-agencies--middot- ----shyLJ-~ ~~~T~lecommUnicaUons~~~--~~- ~---- ----------shy
Utility
J TOTAL
u
251277 47
34 44
32 11
00 40
27 00
03 5151 01
55 1635 0962 99210
-~et2-~------middot----middot-------middot--------- -- ---- -~sa------------ ----- -- --- ------shy---~3~--~-----------middot ~- __ ---------~~--~--~-middot-~-~
93116 1000010000
12
I iJ
BOWER GROUP RETIREMENT BENEFITS SCHEME
AVCINVESTMENT
The Trustees hold assets invested separately from the main fund in the form of either individual accounts with Bristol amp West (Bank of Ireland Group) or individual funds managed by Clerical Medical
During the Scheme year no additional voluntary contributions (AVCs) were made Each member receives an annual statement at the year end confirming the amount held in their account and the movements in the year
FURTHER INFORMATION
Further disclosures required by legislation are included in the compliance statement Requests for additional information about the Scheme generally or queries relating to members own benefits should be made to Sterling Pension Management Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN telephone no 020 7537 6930
Signed on behalf of the Trustees
fdpound- ~cJt-e Trustee Date~~ Date
13
BOWER GROUP RETIREMENT BENEFITS SCHEME
INDEPENDENT AUDITORS REPORT to the Trustees of the Bower Group Retirement Benefits Pension Scheme
We have audited the financial statements on pages 16 to 22
This report is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors report and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this report or for the opinions we have formed
Respective responsibilities of the trustees and the auditors The trustees responsibilities for obtaining an annual report including audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustees Responsibilities
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board
We report to you our opinion as to whether the financial statements show a true and fair view and contain the information required by the relevant legislation We also report to you if in our opinion we have not received all the information and explanations we require for our audit or if the information specified by law is not disclosed
We read other information contained in the annual report and consider the implications for our report if we Imiddot become aware of any apparent misstatements or material inconsistencies with the financial statements The other information comprises [the Trustees Report the Investment Report the Actuarial Statement the Actuarial Certificate the Compliance Statement and the Members Information]
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements It also includes an assessment of the significant estimates and judgements made by the trustees in the preparation of the financial statements and of whether the accounting policies are appropriate to the Schemes circumstances consistently applied and adequately disclosed
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
Opinion In our opinion the financial statements show a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the financial transactions of the Scheme during the scheme year ended 28 February 2010 and of the amount and disposition at that date of its assets and liabilities other than liabilities to pay pensions and benefits after the end of the year and contain the information specified in Regulation 3 of and the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 made under the Pensions Act 1995
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
_Q)(b Date
14
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
LJ
I
j
u 17
i_j
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
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BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
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BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
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BOWER GROUP RETIREMENT BENEFITS SCHEME
SCHEME MEMBERSHIP
2010 2009Active Members
At 29 February 2009 0 0
_Q QAt 28 February 2010
Pensioners
At 29 February 2009 56 50
Add Deferred retiring _ 4 6 Dependants pensions becoming payable 3
Less Deaths
28 February 2010
Deferred Members
At 29 February 2009 236 243
Add Leavers with deferred pensions Less Pensions becoming payable (4) (6)
Deaths (3) Transfers out ill
At 28 February 2010 236
The breakdown_ of the deferred membership at 28February2010 is as follows
Current MowlemEmployee Deferred who retain a Final-Salary link 0
Deferred who retain a Final-Salary link butwho left 70 Mowlem employment after 01 August2002
Non Mowlem Employee Deferreds 159
=u----shy
]
LJ 5
[middotj
-------~-------middot--~~- -~~-
----------- --
11 BOWER GROUP RETIREMENT BENEFITS SCHEME n
n REVIEW OF FINANCIAL DEVELOPMENT OF THE SCHEME
A full actuarial valuation was performed by the Scheme Actuary Paul Weaver of Sterling Actuarial n Services Limited as at 28 February 2007 The actuarial valuation indicated t_hat the Scheme was 114 funded on the old Minimum Funding Requirements (MFR) Valuation basis and 70 on the Scheme Actuarys recommended ongoing basis In monetary terms the deficit on the n recommended basiswas pound3270000
Benefits have been augmented for all members who were active on the 31 May 2001 with more
1] than 2 years pensionable service andwho continue to work for Mowlem until after 1 August 2002 The augmentation is such that their deferred pension receives increases in line with their salary increases from 31 May 2001 until their ultimate date of leaving Mowlem
n The Trustees have received regular employer contributions of pound288000 per year since 2003 The employer agreed to continue payment of annual contributions of pound288000 for a further three years commencing February 2005 t] C) Since then the Trustees received an advance employer contribution of pound288000 for February 2009 by way of deduction in account post year end The actuarial statement based on the)-J actuarial valuation forms part ofthe Appendix to this report
Contributions have notyet been received for this year due to administrative delays An appropriate ) j statement of funding principles has been agreed between the Trustees and employer as part of
the actuarialvaluation as at 28 February 2007 A new Schedule of Contributions has been agreed requiring the employer to pay at least pound698490 per annum plus operating and administration expenses for the seven years commencing 1 July 2010 I J The Trustees investment policy is detailed in their Statementof Investment Principles The day-toshyday management of the investments of the Scheme have been delegated by the Trustees to Close 1J Teams Ltd Legal amp General Assurance (Pensions) Management Ud BNY Mellon Asset Management (Newton Fund Managers Ltd) and Royal London Asset Management Ltd (RLAM) The Trustees meet regularly to discuss investment reports received from their adviser and the u investment managers to assess the overall investment policy and asset allocation
C-) Following an investment strategy review the Trustee agreed to invest 50 in fixed interest LJ securities and 50 in growth assets This was achieved by allocating 25 each ofthe Schemes
assets to BNY Mellon ancl CLOSE Teams with the remaining 50 invested in Corporate Bonds Long Dated Gilts and Cash The Trustees agreed to appoint RLAM to manage the Corporate u Bonds and Legal amp General to manage the Long Dated Gilts and Cash The reallocation was completed during May 2009
u The value of the Scheme increased by pound974417 (2009 decrease of pound1660784) to pound7085711 an increase of 16 The additional purchases of investments into the scheme for the year was poundnil (2009 poundnil)
11LJ During the Scheme year contributions receivable were poundNil compared with pound288000 for the
f--- shy ----~-PI~ous Scheme iear
j~---- -~-shy
- The financial stafemenfs~fiave-beenpreparecrancraT1clitea ii1ccfmpliiince~Witll-FErgUlatiomrmaaermiddot- ---shyunder sections 41 ( 1) and (6) of the Pensions Act 1995
J
6
---- middot- ---- --
11
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BOWER GROUP RETIREMENT BENEFITS SCHEME
INVESTMENT REPORT FOR THE YEAR ENDING 28 FEBRUARY 2010
NEWTON REAL RETURN FUND
Investment aim The Fund aims to outperform cash (1 month LIBOR) by4 pa over rolling 3 year periods
Fund information The overall investmentpolicy of the Newton Managed Intrepid Funo is determined by BNY Mellon Fund Managers Limited The Royal Bank of Scotland pie is the Depositary of the Fund and BNY Mellon Asset Servicing BV is the Custodian of the assets held in the Fund
The Pension Scheme holds shares in the Fund and receives a monthly statement that shows the number of the shares the Scheme owns The register is held by the Registrar BNY Mellon Fund Man~Q_E~rs Limited as proof of ownership
BNY Mellon Fund Managers Limited confirms the securities held by the Fund to be transferable securities
The deployment of the assets over the period is shown in the table below
UK Equities
Overseas Equities
UK Fixed Interest
Overseas Fixed Interest
UK Index Linked
Cash
Other Total
183 226
337 376
47 39
118 120
40 13
223 133
52 93 1000 100i0
During the year to 28 February 2010 the Funds weighting in UK Equities and Overseas Equities increased The Funds weighting in UK Fixed Interest UK Index Linked Gilts and Cash decreased over the period
j
u 7
n
r1 BOWER GROUP RETIREMENT BENEFITS SCHEME n Market Review n All Index returns are sourced from FTSE World Indices as quoted by Nomura FTSE and Datastream and quoted in sterling gross of fees (CAPS middotreturns are quoted net of fees)
n Ten Largest Equity Holdings as at 31 March 2010
Vodafone Group pie UK 43
GlaxoSmithKline pie UK 40 n Norway (Kingdom of) 65 15052013 UK 28
Smith amp Nephew PLC UK 24
11 ETFS Agriculture DJ -AIGSM UK 23
Deutsche Telecom AG UK 22
Millicom Intl Cellular UK 22~ (J Newcrest Mining Ltd UK 21
rl Roche Hldgs AG UK 20
Bayer AG UK 20
l-J Fund Performance
[j In order to measure the performance of the Fund the Manager participates in the RussellMellon CAPS Pooled Pension Fund Survey This service measures the performance of several similar pooled pension funds under discretionary management A summary of the results are detailed in the table below
LJ
)_J 12 months () 168 398
J l_) 3 years( pa)
5 years( pa)
105
118
33
85
u Source Newton as at 28 February 2010 unless otherwise stated
Returns are calculated using close of business offer prices net of fees
u The total value of the Newton Managed Intrepid Fund was pound1632278 as at 31 March 2010
LJ
~u~
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8
r-1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n Close Teams LtdESCHER ( Formerly Escher UK Asset Management LTD) n Close TEAMS Limited operates a Manager of Managers service whereby the govermmce of the Schemes investments is delegated to a professional third party It operates sector specific funds run by individual fund n management houses selected for their exp-ertise by the TEAMS Investment Committee The TEAMS
n Investment Committee continually reviews the performance and suitability of these managers The Committee monitors the performance processes and personnel associated with each manager to ensure that appropriate managers are retained for each investment sector Quarterly performance reports and periodic stewardship reports are prepared and issued to the Trustees by the Committeemiddot
The TEAMS Investment Committee calculates and monitors performance on a quarterly basis Quarterly
Ii performance is assessed and reported as at 31 March 30 June 30 September and 31 December each year
n Close TEAMS is responsible for selecting monitoring and if necessary replacing the specialist investment managers used for each TEAMS fund In discharging this duty Close TEAMS ensures that every decision taken is in the best interests of clients
Close TEAMS ensures transparency in selection and monitoring processes by having an independent member - representing client interests - sitting on the decision making body the TEAMS Investment
llrtmiddot ) Committee The independent member is dapital Cranfield Trustees a renowned independent trustee
company The TEAMS Investment Committeeshy
[1 1 Professionally interprets investment performance data and statistical analysis 2 Monitors managers on a continuous and consistent basis 3 Keeps risk tightlycontrolled
r-j 4 Evaluates why managers achieve (or fail to achieve) performance targets over meaningful and statistically significant time periods
5 Assesses the future performance potential of existing managers and potential replacement managers 6 Makes timely decisions on changing managers n TEAMS funds are held in insurance polices issued by Winterthur Life UK Limited a Credit Suisse Group Company
l_j Transaction Details
Valuation as 28 February 2010 No ofUnits Unit Price (pence) ValuetJ
TEAMS 6040 Global Eq 2 Outperform 1 286246 143Sp pound1845763u() TOT AL AT 26 FEBRUARY 2010 ~18457631
u --- shy
Performance (specified gross of fees)
TEAMS 6040 Global Equitie$ 2 Outperformance Fund LJ 1 yr to 31 Mar 501 (benchmark495) u 3yrs (annualized) 18 pa (benchmark 15) 5yrs (annualized) 76 pa (benchmark 82)
- - -- ~~--~------- ---~--shy~u--~- -nvestment~Management~Fees -- ~- - - - - -- - - - shy
Deducted from the unit pricing (rather than being charged directly to the client)
9 J 1J
n n
BOWER GROUP RETIREMENT BENEFITS SCHEMEmiddot
Legal amp General Assurance (Pensions Management) Limited
n The assets of the Scheme are invested in an insurance policy with Legal amp General Assurance (Pensions Management) Limited part ofthe Legal amp General Group which ls one of the largest financial institutions in the United Kingdom shyn The policy is designed for corporate and public sector Pension Schemes and takes full advantage of the tax exemptions available to an insurance policy ofthis type It is a unitised policy and the value of the units fluctuates directly in relation to the value or the value of the underlying assets All units are redeemable at bidmiddot prices that are calculated from independent external pricing resources The assets underlying the units are held by independent corporate custodians which are regularly reviewed by external auditors
Legal amp Generals investment brief is to apply cash flows to or from and make switches between the funds 11 shown below (which are sections within the policy) in accordance with instructions received from the Trustees or their authorised Administrators
n Transaction Details
Valuation as 28 February 2010 No of Units Unit Price (pence) Valuet] () 2037 Index-Linked Gilt 25009978 1152890p pound28833754
lj 2047 Index-Linked Gilt 25509237 1141650p pound29122620
2055 Index-Linked Gilt 20993495 1404210p - pound29479276
11 Cash 8954772 6303530p pound56446674
TOTAL AT 26 FEBRUARY 2010 ~14388232~
Notes Prices are based cm the value of the underlying securities at close of business on 26 February 2010 Activity for this pricing date is included in this valuation
lJ Investment Value and Distribution Value and Distribution Fund at 20 May 2009 at 1 March 2010
u GBP GBP
lJ 0 2037 Index-Linked Gilt 281422 200 289003 201
2047 Index-Linked Gilt 281028 200 292162 203
lJ 2055 Index-Linked Gilt
Cash
281027
564305
200
400
295740
564467
205
391
IJ Total Assets 1407782 1000 1441372 1000
Notes The unit prices for these valuations were based on market closing prices on the previous working day The values shown include any activity that took place on the valuation day
IJ f---~- ---P-erformance- --middotmiddot-~-middotmiddot-middot--middotmiddot---middot---middotmiddot-- -shy
1J~-- -_--- rh~ tirr1~ -w~ight~d i~v~t~~~t ~t~ms o-~-th~-s~h~-~~~ts--~~~e ~~-t~i~~~-- --~
lJ For the Cash Fund which is not index tracking the index returns shown in the table below are for comparison purposes only
lJ 10
u
~I n
BOWER GROUP RETIREMENT BENEFITS SCHEME
n Investment Sector Fund Fund Index
n 2037 Index-Linked Gilt +27 +27
2047 Index-Linked Gilt +40 +39n 2055 Index-Linked Gilt +52 +52
n Cash +04 +03
Total Assets +25 na
n ROYAL LONDON ASSET MANAGEMENT LTD - RLPPC UK CORPORATE BOND
1-1 1(~ I) FUND
Investment aim To outperform the benchmark (iBoxx Sterling Non-Gilt All Maturities Index) by 08 per annum n gross of fees
Custody Arrangements The Custodian for the Fund is HSBC Securities Services at 8 Canada Square London E14 5HQ I Fund performance _ During the period between the funds inception date on 20th May 2009 to 28th February 2010 the I RLPPC UK Corporate Bond Fund outperformed the benchmark The fund returned 179 during the period compared to middota benchmark return of 15
LJ The positive performance recorded was primarily due to the following key factors
bull The sector allocation decision to remain overweight in credit bonds relative toLJ supranational bonds
bull The overweight positions in the best performing sectors eg subordinated financials LJ L) structured real estate and social housing
The table below shows the performance of the fund net of fees) and the benchmark index for the three months ending 31 March 2010
LJ Fund) Benchmark) Relative )
Quarter 1 495 394 101
LJ 12 months 2983 2095 888 3 years pa 314 410 -096 5 years pa 385 420 o35 Since inception (pa) 638 588 050LJ
----~--~---shy-rnenunclreturns irnne a5ove-ta6le middotare net of fees -amiddotncnnclude the -impact ofcash holdings over
~ C -the peritrd~--- --- - - ~------ ~--- ~~~~------~~--~ ---~--~~--- -_-_ -- ---- ~- --~-----~ ~~~---~~ ~~~- ~~ ~shy
Portfolio Value Fund GBP) LJ 20th May 2009 141076286
LJ
I I J
11
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
281h February 2010 166374512
n n n n n u() 7 I
[_]
u LJ
LJ Cgt
LJ
LJ
LJ
Change over the period 25298226 Inflows (outflows) overthe period 00
Ten Largest Bond Holdings as at 31 March 2010
Royal Bank of Scotland 7 5 2024 Finance for Residence Soc Housing 1113 2058 General Electric Capital 55 Vrn 2066
Annington Finance No1 8 2021 Qm_~gon Healthcare 5333 Vrn 2035 Lloyds TSB Bank 75 15042024
KFW 55 2015 Phoenix Natural Gas Fin 55 2017
NRW Bank 2625 2012
HSBC Holdings 675 12028
Sector breakdown
12
12
09
09
09
08
08
08
08
08
Banks amp financial services
Consumer goods
Consumer Services Foreign fixed interest sovereigns
General industrials
UK government bonds
Insurance
Investment trusts
Real estate
Social Housing
Structured
f--- shy ~upranationalsamp-agencies--middot- ----shyLJ-~ ~~~T~lecommUnicaUons~~~--~~- ~---- ----------shy
Utility
J TOTAL
u
251277 47
34 44
32 11
00 40
27 00
03 5151 01
55 1635 0962 99210
-~et2-~------middot----middot-------middot--------- -- ---- -~sa------------ ----- -- --- ------shy---~3~--~-----------middot ~- __ ---------~~--~--~-middot-~-~
93116 1000010000
12
I iJ
BOWER GROUP RETIREMENT BENEFITS SCHEME
AVCINVESTMENT
The Trustees hold assets invested separately from the main fund in the form of either individual accounts with Bristol amp West (Bank of Ireland Group) or individual funds managed by Clerical Medical
During the Scheme year no additional voluntary contributions (AVCs) were made Each member receives an annual statement at the year end confirming the amount held in their account and the movements in the year
FURTHER INFORMATION
Further disclosures required by legislation are included in the compliance statement Requests for additional information about the Scheme generally or queries relating to members own benefits should be made to Sterling Pension Management Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN telephone no 020 7537 6930
Signed on behalf of the Trustees
fdpound- ~cJt-e Trustee Date~~ Date
13
BOWER GROUP RETIREMENT BENEFITS SCHEME
INDEPENDENT AUDITORS REPORT to the Trustees of the Bower Group Retirement Benefits Pension Scheme
We have audited the financial statements on pages 16 to 22
This report is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors report and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this report or for the opinions we have formed
Respective responsibilities of the trustees and the auditors The trustees responsibilities for obtaining an annual report including audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustees Responsibilities
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board
We report to you our opinion as to whether the financial statements show a true and fair view and contain the information required by the relevant legislation We also report to you if in our opinion we have not received all the information and explanations we require for our audit or if the information specified by law is not disclosed
We read other information contained in the annual report and consider the implications for our report if we Imiddot become aware of any apparent misstatements or material inconsistencies with the financial statements The other information comprises [the Trustees Report the Investment Report the Actuarial Statement the Actuarial Certificate the Compliance Statement and the Members Information]
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements It also includes an assessment of the significant estimates and judgements made by the trustees in the preparation of the financial statements and of whether the accounting policies are appropriate to the Schemes circumstances consistently applied and adequately disclosed
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
Opinion In our opinion the financial statements show a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the financial transactions of the Scheme during the scheme year ended 28 February 2010 and of the amount and disposition at that date of its assets and liabilities other than liabilities to pay pensions and benefits after the end of the year and contain the information specified in Regulation 3 of and the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 made under the Pensions Act 1995
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
_Q)(b Date
14
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
LJ
I
j
u 17
i_j
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
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u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
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n n n n ll0
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IJ l_j
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BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
-------~-------middot--~~- -~~-
----------- --
11 BOWER GROUP RETIREMENT BENEFITS SCHEME n
n REVIEW OF FINANCIAL DEVELOPMENT OF THE SCHEME
A full actuarial valuation was performed by the Scheme Actuary Paul Weaver of Sterling Actuarial n Services Limited as at 28 February 2007 The actuarial valuation indicated t_hat the Scheme was 114 funded on the old Minimum Funding Requirements (MFR) Valuation basis and 70 on the Scheme Actuarys recommended ongoing basis In monetary terms the deficit on the n recommended basiswas pound3270000
Benefits have been augmented for all members who were active on the 31 May 2001 with more
1] than 2 years pensionable service andwho continue to work for Mowlem until after 1 August 2002 The augmentation is such that their deferred pension receives increases in line with their salary increases from 31 May 2001 until their ultimate date of leaving Mowlem
n The Trustees have received regular employer contributions of pound288000 per year since 2003 The employer agreed to continue payment of annual contributions of pound288000 for a further three years commencing February 2005 t] C) Since then the Trustees received an advance employer contribution of pound288000 for February 2009 by way of deduction in account post year end The actuarial statement based on the)-J actuarial valuation forms part ofthe Appendix to this report
Contributions have notyet been received for this year due to administrative delays An appropriate ) j statement of funding principles has been agreed between the Trustees and employer as part of
the actuarialvaluation as at 28 February 2007 A new Schedule of Contributions has been agreed requiring the employer to pay at least pound698490 per annum plus operating and administration expenses for the seven years commencing 1 July 2010 I J The Trustees investment policy is detailed in their Statementof Investment Principles The day-toshyday management of the investments of the Scheme have been delegated by the Trustees to Close 1J Teams Ltd Legal amp General Assurance (Pensions) Management Ud BNY Mellon Asset Management (Newton Fund Managers Ltd) and Royal London Asset Management Ltd (RLAM) The Trustees meet regularly to discuss investment reports received from their adviser and the u investment managers to assess the overall investment policy and asset allocation
C-) Following an investment strategy review the Trustee agreed to invest 50 in fixed interest LJ securities and 50 in growth assets This was achieved by allocating 25 each ofthe Schemes
assets to BNY Mellon ancl CLOSE Teams with the remaining 50 invested in Corporate Bonds Long Dated Gilts and Cash The Trustees agreed to appoint RLAM to manage the Corporate u Bonds and Legal amp General to manage the Long Dated Gilts and Cash The reallocation was completed during May 2009
u The value of the Scheme increased by pound974417 (2009 decrease of pound1660784) to pound7085711 an increase of 16 The additional purchases of investments into the scheme for the year was poundnil (2009 poundnil)
11LJ During the Scheme year contributions receivable were poundNil compared with pound288000 for the
f--- shy ----~-PI~ous Scheme iear
j~---- -~-shy
- The financial stafemenfs~fiave-beenpreparecrancraT1clitea ii1ccfmpliiince~Witll-FErgUlatiomrmaaermiddot- ---shyunder sections 41 ( 1) and (6) of the Pensions Act 1995
J
6
---- middot- ---- --
11
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BOWER GROUP RETIREMENT BENEFITS SCHEME
INVESTMENT REPORT FOR THE YEAR ENDING 28 FEBRUARY 2010
NEWTON REAL RETURN FUND
Investment aim The Fund aims to outperform cash (1 month LIBOR) by4 pa over rolling 3 year periods
Fund information The overall investmentpolicy of the Newton Managed Intrepid Funo is determined by BNY Mellon Fund Managers Limited The Royal Bank of Scotland pie is the Depositary of the Fund and BNY Mellon Asset Servicing BV is the Custodian of the assets held in the Fund
The Pension Scheme holds shares in the Fund and receives a monthly statement that shows the number of the shares the Scheme owns The register is held by the Registrar BNY Mellon Fund Man~Q_E~rs Limited as proof of ownership
BNY Mellon Fund Managers Limited confirms the securities held by the Fund to be transferable securities
The deployment of the assets over the period is shown in the table below
UK Equities
Overseas Equities
UK Fixed Interest
Overseas Fixed Interest
UK Index Linked
Cash
Other Total
183 226
337 376
47 39
118 120
40 13
223 133
52 93 1000 100i0
During the year to 28 February 2010 the Funds weighting in UK Equities and Overseas Equities increased The Funds weighting in UK Fixed Interest UK Index Linked Gilts and Cash decreased over the period
j
u 7
n
r1 BOWER GROUP RETIREMENT BENEFITS SCHEME n Market Review n All Index returns are sourced from FTSE World Indices as quoted by Nomura FTSE and Datastream and quoted in sterling gross of fees (CAPS middotreturns are quoted net of fees)
n Ten Largest Equity Holdings as at 31 March 2010
Vodafone Group pie UK 43
GlaxoSmithKline pie UK 40 n Norway (Kingdom of) 65 15052013 UK 28
Smith amp Nephew PLC UK 24
11 ETFS Agriculture DJ -AIGSM UK 23
Deutsche Telecom AG UK 22
Millicom Intl Cellular UK 22~ (J Newcrest Mining Ltd UK 21
rl Roche Hldgs AG UK 20
Bayer AG UK 20
l-J Fund Performance
[j In order to measure the performance of the Fund the Manager participates in the RussellMellon CAPS Pooled Pension Fund Survey This service measures the performance of several similar pooled pension funds under discretionary management A summary of the results are detailed in the table below
LJ
)_J 12 months () 168 398
J l_) 3 years( pa)
5 years( pa)
105
118
33
85
u Source Newton as at 28 February 2010 unless otherwise stated
Returns are calculated using close of business offer prices net of fees
u The total value of the Newton Managed Intrepid Fund was pound1632278 as at 31 March 2010
LJ
~u~
J
8
r-1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n Close Teams LtdESCHER ( Formerly Escher UK Asset Management LTD) n Close TEAMS Limited operates a Manager of Managers service whereby the govermmce of the Schemes investments is delegated to a professional third party It operates sector specific funds run by individual fund n management houses selected for their exp-ertise by the TEAMS Investment Committee The TEAMS
n Investment Committee continually reviews the performance and suitability of these managers The Committee monitors the performance processes and personnel associated with each manager to ensure that appropriate managers are retained for each investment sector Quarterly performance reports and periodic stewardship reports are prepared and issued to the Trustees by the Committeemiddot
The TEAMS Investment Committee calculates and monitors performance on a quarterly basis Quarterly
Ii performance is assessed and reported as at 31 March 30 June 30 September and 31 December each year
n Close TEAMS is responsible for selecting monitoring and if necessary replacing the specialist investment managers used for each TEAMS fund In discharging this duty Close TEAMS ensures that every decision taken is in the best interests of clients
Close TEAMS ensures transparency in selection and monitoring processes by having an independent member - representing client interests - sitting on the decision making body the TEAMS Investment
llrtmiddot ) Committee The independent member is dapital Cranfield Trustees a renowned independent trustee
company The TEAMS Investment Committeeshy
[1 1 Professionally interprets investment performance data and statistical analysis 2 Monitors managers on a continuous and consistent basis 3 Keeps risk tightlycontrolled
r-j 4 Evaluates why managers achieve (or fail to achieve) performance targets over meaningful and statistically significant time periods
5 Assesses the future performance potential of existing managers and potential replacement managers 6 Makes timely decisions on changing managers n TEAMS funds are held in insurance polices issued by Winterthur Life UK Limited a Credit Suisse Group Company
l_j Transaction Details
Valuation as 28 February 2010 No ofUnits Unit Price (pence) ValuetJ
TEAMS 6040 Global Eq 2 Outperform 1 286246 143Sp pound1845763u() TOT AL AT 26 FEBRUARY 2010 ~18457631
u --- shy
Performance (specified gross of fees)
TEAMS 6040 Global Equitie$ 2 Outperformance Fund LJ 1 yr to 31 Mar 501 (benchmark495) u 3yrs (annualized) 18 pa (benchmark 15) 5yrs (annualized) 76 pa (benchmark 82)
- - -- ~~--~------- ---~--shy~u--~- -nvestment~Management~Fees -- ~- - - - - -- - - - shy
Deducted from the unit pricing (rather than being charged directly to the client)
9 J 1J
n n
BOWER GROUP RETIREMENT BENEFITS SCHEMEmiddot
Legal amp General Assurance (Pensions Management) Limited
n The assets of the Scheme are invested in an insurance policy with Legal amp General Assurance (Pensions Management) Limited part ofthe Legal amp General Group which ls one of the largest financial institutions in the United Kingdom shyn The policy is designed for corporate and public sector Pension Schemes and takes full advantage of the tax exemptions available to an insurance policy ofthis type It is a unitised policy and the value of the units fluctuates directly in relation to the value or the value of the underlying assets All units are redeemable at bidmiddot prices that are calculated from independent external pricing resources The assets underlying the units are held by independent corporate custodians which are regularly reviewed by external auditors
Legal amp Generals investment brief is to apply cash flows to or from and make switches between the funds 11 shown below (which are sections within the policy) in accordance with instructions received from the Trustees or their authorised Administrators
n Transaction Details
Valuation as 28 February 2010 No of Units Unit Price (pence) Valuet] () 2037 Index-Linked Gilt 25009978 1152890p pound28833754
lj 2047 Index-Linked Gilt 25509237 1141650p pound29122620
2055 Index-Linked Gilt 20993495 1404210p - pound29479276
11 Cash 8954772 6303530p pound56446674
TOTAL AT 26 FEBRUARY 2010 ~14388232~
Notes Prices are based cm the value of the underlying securities at close of business on 26 February 2010 Activity for this pricing date is included in this valuation
lJ Investment Value and Distribution Value and Distribution Fund at 20 May 2009 at 1 March 2010
u GBP GBP
lJ 0 2037 Index-Linked Gilt 281422 200 289003 201
2047 Index-Linked Gilt 281028 200 292162 203
lJ 2055 Index-Linked Gilt
Cash
281027
564305
200
400
295740
564467
205
391
IJ Total Assets 1407782 1000 1441372 1000
Notes The unit prices for these valuations were based on market closing prices on the previous working day The values shown include any activity that took place on the valuation day
IJ f---~- ---P-erformance- --middotmiddot-~-middotmiddot-middot--middotmiddot---middot---middotmiddot-- -shy
1J~-- -_--- rh~ tirr1~ -w~ight~d i~v~t~~~t ~t~ms o-~-th~-s~h~-~~~ts--~~~e ~~-t~i~~~-- --~
lJ For the Cash Fund which is not index tracking the index returns shown in the table below are for comparison purposes only
lJ 10
u
~I n
BOWER GROUP RETIREMENT BENEFITS SCHEME
n Investment Sector Fund Fund Index
n 2037 Index-Linked Gilt +27 +27
2047 Index-Linked Gilt +40 +39n 2055 Index-Linked Gilt +52 +52
n Cash +04 +03
Total Assets +25 na
n ROYAL LONDON ASSET MANAGEMENT LTD - RLPPC UK CORPORATE BOND
1-1 1(~ I) FUND
Investment aim To outperform the benchmark (iBoxx Sterling Non-Gilt All Maturities Index) by 08 per annum n gross of fees
Custody Arrangements The Custodian for the Fund is HSBC Securities Services at 8 Canada Square London E14 5HQ I Fund performance _ During the period between the funds inception date on 20th May 2009 to 28th February 2010 the I RLPPC UK Corporate Bond Fund outperformed the benchmark The fund returned 179 during the period compared to middota benchmark return of 15
LJ The positive performance recorded was primarily due to the following key factors
bull The sector allocation decision to remain overweight in credit bonds relative toLJ supranational bonds
bull The overweight positions in the best performing sectors eg subordinated financials LJ L) structured real estate and social housing
The table below shows the performance of the fund net of fees) and the benchmark index for the three months ending 31 March 2010
LJ Fund) Benchmark) Relative )
Quarter 1 495 394 101
LJ 12 months 2983 2095 888 3 years pa 314 410 -096 5 years pa 385 420 o35 Since inception (pa) 638 588 050LJ
----~--~---shy-rnenunclreturns irnne a5ove-ta6le middotare net of fees -amiddotncnnclude the -impact ofcash holdings over
~ C -the peritrd~--- --- - - ~------ ~--- ~~~~------~~--~ ---~--~~--- -_-_ -- ---- ~- --~-----~ ~~~---~~ ~~~- ~~ ~shy
Portfolio Value Fund GBP) LJ 20th May 2009 141076286
LJ
I I J
11
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
281h February 2010 166374512
n n n n n u() 7 I
[_]
u LJ
LJ Cgt
LJ
LJ
LJ
Change over the period 25298226 Inflows (outflows) overthe period 00
Ten Largest Bond Holdings as at 31 March 2010
Royal Bank of Scotland 7 5 2024 Finance for Residence Soc Housing 1113 2058 General Electric Capital 55 Vrn 2066
Annington Finance No1 8 2021 Qm_~gon Healthcare 5333 Vrn 2035 Lloyds TSB Bank 75 15042024
KFW 55 2015 Phoenix Natural Gas Fin 55 2017
NRW Bank 2625 2012
HSBC Holdings 675 12028
Sector breakdown
12
12
09
09
09
08
08
08
08
08
Banks amp financial services
Consumer goods
Consumer Services Foreign fixed interest sovereigns
General industrials
UK government bonds
Insurance
Investment trusts
Real estate
Social Housing
Structured
f--- shy ~upranationalsamp-agencies--middot- ----shyLJ-~ ~~~T~lecommUnicaUons~~~--~~- ~---- ----------shy
Utility
J TOTAL
u
251277 47
34 44
32 11
00 40
27 00
03 5151 01
55 1635 0962 99210
-~et2-~------middot----middot-------middot--------- -- ---- -~sa------------ ----- -- --- ------shy---~3~--~-----------middot ~- __ ---------~~--~--~-middot-~-~
93116 1000010000
12
I iJ
BOWER GROUP RETIREMENT BENEFITS SCHEME
AVCINVESTMENT
The Trustees hold assets invested separately from the main fund in the form of either individual accounts with Bristol amp West (Bank of Ireland Group) or individual funds managed by Clerical Medical
During the Scheme year no additional voluntary contributions (AVCs) were made Each member receives an annual statement at the year end confirming the amount held in their account and the movements in the year
FURTHER INFORMATION
Further disclosures required by legislation are included in the compliance statement Requests for additional information about the Scheme generally or queries relating to members own benefits should be made to Sterling Pension Management Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN telephone no 020 7537 6930
Signed on behalf of the Trustees
fdpound- ~cJt-e Trustee Date~~ Date
13
BOWER GROUP RETIREMENT BENEFITS SCHEME
INDEPENDENT AUDITORS REPORT to the Trustees of the Bower Group Retirement Benefits Pension Scheme
We have audited the financial statements on pages 16 to 22
This report is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors report and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this report or for the opinions we have formed
Respective responsibilities of the trustees and the auditors The trustees responsibilities for obtaining an annual report including audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustees Responsibilities
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board
We report to you our opinion as to whether the financial statements show a true and fair view and contain the information required by the relevant legislation We also report to you if in our opinion we have not received all the information and explanations we require for our audit or if the information specified by law is not disclosed
We read other information contained in the annual report and consider the implications for our report if we Imiddot become aware of any apparent misstatements or material inconsistencies with the financial statements The other information comprises [the Trustees Report the Investment Report the Actuarial Statement the Actuarial Certificate the Compliance Statement and the Members Information]
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements It also includes an assessment of the significant estimates and judgements made by the trustees in the preparation of the financial statements and of whether the accounting policies are appropriate to the Schemes circumstances consistently applied and adequately disclosed
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
Opinion In our opinion the financial statements show a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the financial transactions of the Scheme during the scheme year ended 28 February 2010 and of the amount and disposition at that date of its assets and liabilities other than liabilities to pay pensions and benefits after the end of the year and contain the information specified in Regulation 3 of and the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 made under the Pensions Act 1995
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
_Q)(b Date
14
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
LJ
I
j
u 17
i_j
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
-LJ
LJ
u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
n I l
n n n n ll0
n -1 I
lJ
IJ l_j
J(J
i I l___j
u LJ
~ I LJ
IJ J
BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
---- middot- ---- --
11
n n n l-l
n n no
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~~--shy
~J
BOWER GROUP RETIREMENT BENEFITS SCHEME
INVESTMENT REPORT FOR THE YEAR ENDING 28 FEBRUARY 2010
NEWTON REAL RETURN FUND
Investment aim The Fund aims to outperform cash (1 month LIBOR) by4 pa over rolling 3 year periods
Fund information The overall investmentpolicy of the Newton Managed Intrepid Funo is determined by BNY Mellon Fund Managers Limited The Royal Bank of Scotland pie is the Depositary of the Fund and BNY Mellon Asset Servicing BV is the Custodian of the assets held in the Fund
The Pension Scheme holds shares in the Fund and receives a monthly statement that shows the number of the shares the Scheme owns The register is held by the Registrar BNY Mellon Fund Man~Q_E~rs Limited as proof of ownership
BNY Mellon Fund Managers Limited confirms the securities held by the Fund to be transferable securities
The deployment of the assets over the period is shown in the table below
UK Equities
Overseas Equities
UK Fixed Interest
Overseas Fixed Interest
UK Index Linked
Cash
Other Total
183 226
337 376
47 39
118 120
40 13
223 133
52 93 1000 100i0
During the year to 28 February 2010 the Funds weighting in UK Equities and Overseas Equities increased The Funds weighting in UK Fixed Interest UK Index Linked Gilts and Cash decreased over the period
j
u 7
n
r1 BOWER GROUP RETIREMENT BENEFITS SCHEME n Market Review n All Index returns are sourced from FTSE World Indices as quoted by Nomura FTSE and Datastream and quoted in sterling gross of fees (CAPS middotreturns are quoted net of fees)
n Ten Largest Equity Holdings as at 31 March 2010
Vodafone Group pie UK 43
GlaxoSmithKline pie UK 40 n Norway (Kingdom of) 65 15052013 UK 28
Smith amp Nephew PLC UK 24
11 ETFS Agriculture DJ -AIGSM UK 23
Deutsche Telecom AG UK 22
Millicom Intl Cellular UK 22~ (J Newcrest Mining Ltd UK 21
rl Roche Hldgs AG UK 20
Bayer AG UK 20
l-J Fund Performance
[j In order to measure the performance of the Fund the Manager participates in the RussellMellon CAPS Pooled Pension Fund Survey This service measures the performance of several similar pooled pension funds under discretionary management A summary of the results are detailed in the table below
LJ
)_J 12 months () 168 398
J l_) 3 years( pa)
5 years( pa)
105
118
33
85
u Source Newton as at 28 February 2010 unless otherwise stated
Returns are calculated using close of business offer prices net of fees
u The total value of the Newton Managed Intrepid Fund was pound1632278 as at 31 March 2010
LJ
~u~
J
8
r-1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n Close Teams LtdESCHER ( Formerly Escher UK Asset Management LTD) n Close TEAMS Limited operates a Manager of Managers service whereby the govermmce of the Schemes investments is delegated to a professional third party It operates sector specific funds run by individual fund n management houses selected for their exp-ertise by the TEAMS Investment Committee The TEAMS
n Investment Committee continually reviews the performance and suitability of these managers The Committee monitors the performance processes and personnel associated with each manager to ensure that appropriate managers are retained for each investment sector Quarterly performance reports and periodic stewardship reports are prepared and issued to the Trustees by the Committeemiddot
The TEAMS Investment Committee calculates and monitors performance on a quarterly basis Quarterly
Ii performance is assessed and reported as at 31 March 30 June 30 September and 31 December each year
n Close TEAMS is responsible for selecting monitoring and if necessary replacing the specialist investment managers used for each TEAMS fund In discharging this duty Close TEAMS ensures that every decision taken is in the best interests of clients
Close TEAMS ensures transparency in selection and monitoring processes by having an independent member - representing client interests - sitting on the decision making body the TEAMS Investment
llrtmiddot ) Committee The independent member is dapital Cranfield Trustees a renowned independent trustee
company The TEAMS Investment Committeeshy
[1 1 Professionally interprets investment performance data and statistical analysis 2 Monitors managers on a continuous and consistent basis 3 Keeps risk tightlycontrolled
r-j 4 Evaluates why managers achieve (or fail to achieve) performance targets over meaningful and statistically significant time periods
5 Assesses the future performance potential of existing managers and potential replacement managers 6 Makes timely decisions on changing managers n TEAMS funds are held in insurance polices issued by Winterthur Life UK Limited a Credit Suisse Group Company
l_j Transaction Details
Valuation as 28 February 2010 No ofUnits Unit Price (pence) ValuetJ
TEAMS 6040 Global Eq 2 Outperform 1 286246 143Sp pound1845763u() TOT AL AT 26 FEBRUARY 2010 ~18457631
u --- shy
Performance (specified gross of fees)
TEAMS 6040 Global Equitie$ 2 Outperformance Fund LJ 1 yr to 31 Mar 501 (benchmark495) u 3yrs (annualized) 18 pa (benchmark 15) 5yrs (annualized) 76 pa (benchmark 82)
- - -- ~~--~------- ---~--shy~u--~- -nvestment~Management~Fees -- ~- - - - - -- - - - shy
Deducted from the unit pricing (rather than being charged directly to the client)
9 J 1J
n n
BOWER GROUP RETIREMENT BENEFITS SCHEMEmiddot
Legal amp General Assurance (Pensions Management) Limited
n The assets of the Scheme are invested in an insurance policy with Legal amp General Assurance (Pensions Management) Limited part ofthe Legal amp General Group which ls one of the largest financial institutions in the United Kingdom shyn The policy is designed for corporate and public sector Pension Schemes and takes full advantage of the tax exemptions available to an insurance policy ofthis type It is a unitised policy and the value of the units fluctuates directly in relation to the value or the value of the underlying assets All units are redeemable at bidmiddot prices that are calculated from independent external pricing resources The assets underlying the units are held by independent corporate custodians which are regularly reviewed by external auditors
Legal amp Generals investment brief is to apply cash flows to or from and make switches between the funds 11 shown below (which are sections within the policy) in accordance with instructions received from the Trustees or their authorised Administrators
n Transaction Details
Valuation as 28 February 2010 No of Units Unit Price (pence) Valuet] () 2037 Index-Linked Gilt 25009978 1152890p pound28833754
lj 2047 Index-Linked Gilt 25509237 1141650p pound29122620
2055 Index-Linked Gilt 20993495 1404210p - pound29479276
11 Cash 8954772 6303530p pound56446674
TOTAL AT 26 FEBRUARY 2010 ~14388232~
Notes Prices are based cm the value of the underlying securities at close of business on 26 February 2010 Activity for this pricing date is included in this valuation
lJ Investment Value and Distribution Value and Distribution Fund at 20 May 2009 at 1 March 2010
u GBP GBP
lJ 0 2037 Index-Linked Gilt 281422 200 289003 201
2047 Index-Linked Gilt 281028 200 292162 203
lJ 2055 Index-Linked Gilt
Cash
281027
564305
200
400
295740
564467
205
391
IJ Total Assets 1407782 1000 1441372 1000
Notes The unit prices for these valuations were based on market closing prices on the previous working day The values shown include any activity that took place on the valuation day
IJ f---~- ---P-erformance- --middotmiddot-~-middotmiddot-middot--middotmiddot---middot---middotmiddot-- -shy
1J~-- -_--- rh~ tirr1~ -w~ight~d i~v~t~~~t ~t~ms o-~-th~-s~h~-~~~ts--~~~e ~~-t~i~~~-- --~
lJ For the Cash Fund which is not index tracking the index returns shown in the table below are for comparison purposes only
lJ 10
u
~I n
BOWER GROUP RETIREMENT BENEFITS SCHEME
n Investment Sector Fund Fund Index
n 2037 Index-Linked Gilt +27 +27
2047 Index-Linked Gilt +40 +39n 2055 Index-Linked Gilt +52 +52
n Cash +04 +03
Total Assets +25 na
n ROYAL LONDON ASSET MANAGEMENT LTD - RLPPC UK CORPORATE BOND
1-1 1(~ I) FUND
Investment aim To outperform the benchmark (iBoxx Sterling Non-Gilt All Maturities Index) by 08 per annum n gross of fees
Custody Arrangements The Custodian for the Fund is HSBC Securities Services at 8 Canada Square London E14 5HQ I Fund performance _ During the period between the funds inception date on 20th May 2009 to 28th February 2010 the I RLPPC UK Corporate Bond Fund outperformed the benchmark The fund returned 179 during the period compared to middota benchmark return of 15
LJ The positive performance recorded was primarily due to the following key factors
bull The sector allocation decision to remain overweight in credit bonds relative toLJ supranational bonds
bull The overweight positions in the best performing sectors eg subordinated financials LJ L) structured real estate and social housing
The table below shows the performance of the fund net of fees) and the benchmark index for the three months ending 31 March 2010
LJ Fund) Benchmark) Relative )
Quarter 1 495 394 101
LJ 12 months 2983 2095 888 3 years pa 314 410 -096 5 years pa 385 420 o35 Since inception (pa) 638 588 050LJ
----~--~---shy-rnenunclreturns irnne a5ove-ta6le middotare net of fees -amiddotncnnclude the -impact ofcash holdings over
~ C -the peritrd~--- --- - - ~------ ~--- ~~~~------~~--~ ---~--~~--- -_-_ -- ---- ~- --~-----~ ~~~---~~ ~~~- ~~ ~shy
Portfolio Value Fund GBP) LJ 20th May 2009 141076286
LJ
I I J
11
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
281h February 2010 166374512
n n n n n u() 7 I
[_]
u LJ
LJ Cgt
LJ
LJ
LJ
Change over the period 25298226 Inflows (outflows) overthe period 00
Ten Largest Bond Holdings as at 31 March 2010
Royal Bank of Scotland 7 5 2024 Finance for Residence Soc Housing 1113 2058 General Electric Capital 55 Vrn 2066
Annington Finance No1 8 2021 Qm_~gon Healthcare 5333 Vrn 2035 Lloyds TSB Bank 75 15042024
KFW 55 2015 Phoenix Natural Gas Fin 55 2017
NRW Bank 2625 2012
HSBC Holdings 675 12028
Sector breakdown
12
12
09
09
09
08
08
08
08
08
Banks amp financial services
Consumer goods
Consumer Services Foreign fixed interest sovereigns
General industrials
UK government bonds
Insurance
Investment trusts
Real estate
Social Housing
Structured
f--- shy ~upranationalsamp-agencies--middot- ----shyLJ-~ ~~~T~lecommUnicaUons~~~--~~- ~---- ----------shy
Utility
J TOTAL
u
251277 47
34 44
32 11
00 40
27 00
03 5151 01
55 1635 0962 99210
-~et2-~------middot----middot-------middot--------- -- ---- -~sa------------ ----- -- --- ------shy---~3~--~-----------middot ~- __ ---------~~--~--~-middot-~-~
93116 1000010000
12
I iJ
BOWER GROUP RETIREMENT BENEFITS SCHEME
AVCINVESTMENT
The Trustees hold assets invested separately from the main fund in the form of either individual accounts with Bristol amp West (Bank of Ireland Group) or individual funds managed by Clerical Medical
During the Scheme year no additional voluntary contributions (AVCs) were made Each member receives an annual statement at the year end confirming the amount held in their account and the movements in the year
FURTHER INFORMATION
Further disclosures required by legislation are included in the compliance statement Requests for additional information about the Scheme generally or queries relating to members own benefits should be made to Sterling Pension Management Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN telephone no 020 7537 6930
Signed on behalf of the Trustees
fdpound- ~cJt-e Trustee Date~~ Date
13
BOWER GROUP RETIREMENT BENEFITS SCHEME
INDEPENDENT AUDITORS REPORT to the Trustees of the Bower Group Retirement Benefits Pension Scheme
We have audited the financial statements on pages 16 to 22
This report is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors report and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this report or for the opinions we have formed
Respective responsibilities of the trustees and the auditors The trustees responsibilities for obtaining an annual report including audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustees Responsibilities
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board
We report to you our opinion as to whether the financial statements show a true and fair view and contain the information required by the relevant legislation We also report to you if in our opinion we have not received all the information and explanations we require for our audit or if the information specified by law is not disclosed
We read other information contained in the annual report and consider the implications for our report if we Imiddot become aware of any apparent misstatements or material inconsistencies with the financial statements The other information comprises [the Trustees Report the Investment Report the Actuarial Statement the Actuarial Certificate the Compliance Statement and the Members Information]
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements It also includes an assessment of the significant estimates and judgements made by the trustees in the preparation of the financial statements and of whether the accounting policies are appropriate to the Schemes circumstances consistently applied and adequately disclosed
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
Opinion In our opinion the financial statements show a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the financial transactions of the Scheme during the scheme year ended 28 February 2010 and of the amount and disposition at that date of its assets and liabilities other than liabilities to pay pensions and benefits after the end of the year and contain the information specified in Regulation 3 of and the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 made under the Pensions Act 1995
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
_Q)(b Date
14
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
LJ
I
j
u 17
i_j
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
-LJ
LJ
u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
n I l
n n n n ll0
n -1 I
lJ
IJ l_j
J(J
i I l___j
u LJ
~ I LJ
IJ J
BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
n
r1 BOWER GROUP RETIREMENT BENEFITS SCHEME n Market Review n All Index returns are sourced from FTSE World Indices as quoted by Nomura FTSE and Datastream and quoted in sterling gross of fees (CAPS middotreturns are quoted net of fees)
n Ten Largest Equity Holdings as at 31 March 2010
Vodafone Group pie UK 43
GlaxoSmithKline pie UK 40 n Norway (Kingdom of) 65 15052013 UK 28
Smith amp Nephew PLC UK 24
11 ETFS Agriculture DJ -AIGSM UK 23
Deutsche Telecom AG UK 22
Millicom Intl Cellular UK 22~ (J Newcrest Mining Ltd UK 21
rl Roche Hldgs AG UK 20
Bayer AG UK 20
l-J Fund Performance
[j In order to measure the performance of the Fund the Manager participates in the RussellMellon CAPS Pooled Pension Fund Survey This service measures the performance of several similar pooled pension funds under discretionary management A summary of the results are detailed in the table below
LJ
)_J 12 months () 168 398
J l_) 3 years( pa)
5 years( pa)
105
118
33
85
u Source Newton as at 28 February 2010 unless otherwise stated
Returns are calculated using close of business offer prices net of fees
u The total value of the Newton Managed Intrepid Fund was pound1632278 as at 31 March 2010
LJ
~u~
J
8
r-1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n Close Teams LtdESCHER ( Formerly Escher UK Asset Management LTD) n Close TEAMS Limited operates a Manager of Managers service whereby the govermmce of the Schemes investments is delegated to a professional third party It operates sector specific funds run by individual fund n management houses selected for their exp-ertise by the TEAMS Investment Committee The TEAMS
n Investment Committee continually reviews the performance and suitability of these managers The Committee monitors the performance processes and personnel associated with each manager to ensure that appropriate managers are retained for each investment sector Quarterly performance reports and periodic stewardship reports are prepared and issued to the Trustees by the Committeemiddot
The TEAMS Investment Committee calculates and monitors performance on a quarterly basis Quarterly
Ii performance is assessed and reported as at 31 March 30 June 30 September and 31 December each year
n Close TEAMS is responsible for selecting monitoring and if necessary replacing the specialist investment managers used for each TEAMS fund In discharging this duty Close TEAMS ensures that every decision taken is in the best interests of clients
Close TEAMS ensures transparency in selection and monitoring processes by having an independent member - representing client interests - sitting on the decision making body the TEAMS Investment
llrtmiddot ) Committee The independent member is dapital Cranfield Trustees a renowned independent trustee
company The TEAMS Investment Committeeshy
[1 1 Professionally interprets investment performance data and statistical analysis 2 Monitors managers on a continuous and consistent basis 3 Keeps risk tightlycontrolled
r-j 4 Evaluates why managers achieve (or fail to achieve) performance targets over meaningful and statistically significant time periods
5 Assesses the future performance potential of existing managers and potential replacement managers 6 Makes timely decisions on changing managers n TEAMS funds are held in insurance polices issued by Winterthur Life UK Limited a Credit Suisse Group Company
l_j Transaction Details
Valuation as 28 February 2010 No ofUnits Unit Price (pence) ValuetJ
TEAMS 6040 Global Eq 2 Outperform 1 286246 143Sp pound1845763u() TOT AL AT 26 FEBRUARY 2010 ~18457631
u --- shy
Performance (specified gross of fees)
TEAMS 6040 Global Equitie$ 2 Outperformance Fund LJ 1 yr to 31 Mar 501 (benchmark495) u 3yrs (annualized) 18 pa (benchmark 15) 5yrs (annualized) 76 pa (benchmark 82)
- - -- ~~--~------- ---~--shy~u--~- -nvestment~Management~Fees -- ~- - - - - -- - - - shy
Deducted from the unit pricing (rather than being charged directly to the client)
9 J 1J
n n
BOWER GROUP RETIREMENT BENEFITS SCHEMEmiddot
Legal amp General Assurance (Pensions Management) Limited
n The assets of the Scheme are invested in an insurance policy with Legal amp General Assurance (Pensions Management) Limited part ofthe Legal amp General Group which ls one of the largest financial institutions in the United Kingdom shyn The policy is designed for corporate and public sector Pension Schemes and takes full advantage of the tax exemptions available to an insurance policy ofthis type It is a unitised policy and the value of the units fluctuates directly in relation to the value or the value of the underlying assets All units are redeemable at bidmiddot prices that are calculated from independent external pricing resources The assets underlying the units are held by independent corporate custodians which are regularly reviewed by external auditors
Legal amp Generals investment brief is to apply cash flows to or from and make switches between the funds 11 shown below (which are sections within the policy) in accordance with instructions received from the Trustees or their authorised Administrators
n Transaction Details
Valuation as 28 February 2010 No of Units Unit Price (pence) Valuet] () 2037 Index-Linked Gilt 25009978 1152890p pound28833754
lj 2047 Index-Linked Gilt 25509237 1141650p pound29122620
2055 Index-Linked Gilt 20993495 1404210p - pound29479276
11 Cash 8954772 6303530p pound56446674
TOTAL AT 26 FEBRUARY 2010 ~14388232~
Notes Prices are based cm the value of the underlying securities at close of business on 26 February 2010 Activity for this pricing date is included in this valuation
lJ Investment Value and Distribution Value and Distribution Fund at 20 May 2009 at 1 March 2010
u GBP GBP
lJ 0 2037 Index-Linked Gilt 281422 200 289003 201
2047 Index-Linked Gilt 281028 200 292162 203
lJ 2055 Index-Linked Gilt
Cash
281027
564305
200
400
295740
564467
205
391
IJ Total Assets 1407782 1000 1441372 1000
Notes The unit prices for these valuations were based on market closing prices on the previous working day The values shown include any activity that took place on the valuation day
IJ f---~- ---P-erformance- --middotmiddot-~-middotmiddot-middot--middotmiddot---middot---middotmiddot-- -shy
1J~-- -_--- rh~ tirr1~ -w~ight~d i~v~t~~~t ~t~ms o-~-th~-s~h~-~~~ts--~~~e ~~-t~i~~~-- --~
lJ For the Cash Fund which is not index tracking the index returns shown in the table below are for comparison purposes only
lJ 10
u
~I n
BOWER GROUP RETIREMENT BENEFITS SCHEME
n Investment Sector Fund Fund Index
n 2037 Index-Linked Gilt +27 +27
2047 Index-Linked Gilt +40 +39n 2055 Index-Linked Gilt +52 +52
n Cash +04 +03
Total Assets +25 na
n ROYAL LONDON ASSET MANAGEMENT LTD - RLPPC UK CORPORATE BOND
1-1 1(~ I) FUND
Investment aim To outperform the benchmark (iBoxx Sterling Non-Gilt All Maturities Index) by 08 per annum n gross of fees
Custody Arrangements The Custodian for the Fund is HSBC Securities Services at 8 Canada Square London E14 5HQ I Fund performance _ During the period between the funds inception date on 20th May 2009 to 28th February 2010 the I RLPPC UK Corporate Bond Fund outperformed the benchmark The fund returned 179 during the period compared to middota benchmark return of 15
LJ The positive performance recorded was primarily due to the following key factors
bull The sector allocation decision to remain overweight in credit bonds relative toLJ supranational bonds
bull The overweight positions in the best performing sectors eg subordinated financials LJ L) structured real estate and social housing
The table below shows the performance of the fund net of fees) and the benchmark index for the three months ending 31 March 2010
LJ Fund) Benchmark) Relative )
Quarter 1 495 394 101
LJ 12 months 2983 2095 888 3 years pa 314 410 -096 5 years pa 385 420 o35 Since inception (pa) 638 588 050LJ
----~--~---shy-rnenunclreturns irnne a5ove-ta6le middotare net of fees -amiddotncnnclude the -impact ofcash holdings over
~ C -the peritrd~--- --- - - ~------ ~--- ~~~~------~~--~ ---~--~~--- -_-_ -- ---- ~- --~-----~ ~~~---~~ ~~~- ~~ ~shy
Portfolio Value Fund GBP) LJ 20th May 2009 141076286
LJ
I I J
11
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
281h February 2010 166374512
n n n n n u() 7 I
[_]
u LJ
LJ Cgt
LJ
LJ
LJ
Change over the period 25298226 Inflows (outflows) overthe period 00
Ten Largest Bond Holdings as at 31 March 2010
Royal Bank of Scotland 7 5 2024 Finance for Residence Soc Housing 1113 2058 General Electric Capital 55 Vrn 2066
Annington Finance No1 8 2021 Qm_~gon Healthcare 5333 Vrn 2035 Lloyds TSB Bank 75 15042024
KFW 55 2015 Phoenix Natural Gas Fin 55 2017
NRW Bank 2625 2012
HSBC Holdings 675 12028
Sector breakdown
12
12
09
09
09
08
08
08
08
08
Banks amp financial services
Consumer goods
Consumer Services Foreign fixed interest sovereigns
General industrials
UK government bonds
Insurance
Investment trusts
Real estate
Social Housing
Structured
f--- shy ~upranationalsamp-agencies--middot- ----shyLJ-~ ~~~T~lecommUnicaUons~~~--~~- ~---- ----------shy
Utility
J TOTAL
u
251277 47
34 44
32 11
00 40
27 00
03 5151 01
55 1635 0962 99210
-~et2-~------middot----middot-------middot--------- -- ---- -~sa------------ ----- -- --- ------shy---~3~--~-----------middot ~- __ ---------~~--~--~-middot-~-~
93116 1000010000
12
I iJ
BOWER GROUP RETIREMENT BENEFITS SCHEME
AVCINVESTMENT
The Trustees hold assets invested separately from the main fund in the form of either individual accounts with Bristol amp West (Bank of Ireland Group) or individual funds managed by Clerical Medical
During the Scheme year no additional voluntary contributions (AVCs) were made Each member receives an annual statement at the year end confirming the amount held in their account and the movements in the year
FURTHER INFORMATION
Further disclosures required by legislation are included in the compliance statement Requests for additional information about the Scheme generally or queries relating to members own benefits should be made to Sterling Pension Management Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN telephone no 020 7537 6930
Signed on behalf of the Trustees
fdpound- ~cJt-e Trustee Date~~ Date
13
BOWER GROUP RETIREMENT BENEFITS SCHEME
INDEPENDENT AUDITORS REPORT to the Trustees of the Bower Group Retirement Benefits Pension Scheme
We have audited the financial statements on pages 16 to 22
This report is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors report and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this report or for the opinions we have formed
Respective responsibilities of the trustees and the auditors The trustees responsibilities for obtaining an annual report including audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustees Responsibilities
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board
We report to you our opinion as to whether the financial statements show a true and fair view and contain the information required by the relevant legislation We also report to you if in our opinion we have not received all the information and explanations we require for our audit or if the information specified by law is not disclosed
We read other information contained in the annual report and consider the implications for our report if we Imiddot become aware of any apparent misstatements or material inconsistencies with the financial statements The other information comprises [the Trustees Report the Investment Report the Actuarial Statement the Actuarial Certificate the Compliance Statement and the Members Information]
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements It also includes an assessment of the significant estimates and judgements made by the trustees in the preparation of the financial statements and of whether the accounting policies are appropriate to the Schemes circumstances consistently applied and adequately disclosed
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
Opinion In our opinion the financial statements show a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the financial transactions of the Scheme during the scheme year ended 28 February 2010 and of the amount and disposition at that date of its assets and liabilities other than liabilities to pay pensions and benefits after the end of the year and contain the information specified in Regulation 3 of and the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 made under the Pensions Act 1995
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
_Q)(b Date
14
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
LJ
I
j
u 17
i_j
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
-LJ
LJ
u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
n I l
n n n n ll0
n -1 I
lJ
IJ l_j
J(J
i I l___j
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~ I LJ
IJ J
BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
r-1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n Close Teams LtdESCHER ( Formerly Escher UK Asset Management LTD) n Close TEAMS Limited operates a Manager of Managers service whereby the govermmce of the Schemes investments is delegated to a professional third party It operates sector specific funds run by individual fund n management houses selected for their exp-ertise by the TEAMS Investment Committee The TEAMS
n Investment Committee continually reviews the performance and suitability of these managers The Committee monitors the performance processes and personnel associated with each manager to ensure that appropriate managers are retained for each investment sector Quarterly performance reports and periodic stewardship reports are prepared and issued to the Trustees by the Committeemiddot
The TEAMS Investment Committee calculates and monitors performance on a quarterly basis Quarterly
Ii performance is assessed and reported as at 31 March 30 June 30 September and 31 December each year
n Close TEAMS is responsible for selecting monitoring and if necessary replacing the specialist investment managers used for each TEAMS fund In discharging this duty Close TEAMS ensures that every decision taken is in the best interests of clients
Close TEAMS ensures transparency in selection and monitoring processes by having an independent member - representing client interests - sitting on the decision making body the TEAMS Investment
llrtmiddot ) Committee The independent member is dapital Cranfield Trustees a renowned independent trustee
company The TEAMS Investment Committeeshy
[1 1 Professionally interprets investment performance data and statistical analysis 2 Monitors managers on a continuous and consistent basis 3 Keeps risk tightlycontrolled
r-j 4 Evaluates why managers achieve (or fail to achieve) performance targets over meaningful and statistically significant time periods
5 Assesses the future performance potential of existing managers and potential replacement managers 6 Makes timely decisions on changing managers n TEAMS funds are held in insurance polices issued by Winterthur Life UK Limited a Credit Suisse Group Company
l_j Transaction Details
Valuation as 28 February 2010 No ofUnits Unit Price (pence) ValuetJ
TEAMS 6040 Global Eq 2 Outperform 1 286246 143Sp pound1845763u() TOT AL AT 26 FEBRUARY 2010 ~18457631
u --- shy
Performance (specified gross of fees)
TEAMS 6040 Global Equitie$ 2 Outperformance Fund LJ 1 yr to 31 Mar 501 (benchmark495) u 3yrs (annualized) 18 pa (benchmark 15) 5yrs (annualized) 76 pa (benchmark 82)
- - -- ~~--~------- ---~--shy~u--~- -nvestment~Management~Fees -- ~- - - - - -- - - - shy
Deducted from the unit pricing (rather than being charged directly to the client)
9 J 1J
n n
BOWER GROUP RETIREMENT BENEFITS SCHEMEmiddot
Legal amp General Assurance (Pensions Management) Limited
n The assets of the Scheme are invested in an insurance policy with Legal amp General Assurance (Pensions Management) Limited part ofthe Legal amp General Group which ls one of the largest financial institutions in the United Kingdom shyn The policy is designed for corporate and public sector Pension Schemes and takes full advantage of the tax exemptions available to an insurance policy ofthis type It is a unitised policy and the value of the units fluctuates directly in relation to the value or the value of the underlying assets All units are redeemable at bidmiddot prices that are calculated from independent external pricing resources The assets underlying the units are held by independent corporate custodians which are regularly reviewed by external auditors
Legal amp Generals investment brief is to apply cash flows to or from and make switches between the funds 11 shown below (which are sections within the policy) in accordance with instructions received from the Trustees or their authorised Administrators
n Transaction Details
Valuation as 28 February 2010 No of Units Unit Price (pence) Valuet] () 2037 Index-Linked Gilt 25009978 1152890p pound28833754
lj 2047 Index-Linked Gilt 25509237 1141650p pound29122620
2055 Index-Linked Gilt 20993495 1404210p - pound29479276
11 Cash 8954772 6303530p pound56446674
TOTAL AT 26 FEBRUARY 2010 ~14388232~
Notes Prices are based cm the value of the underlying securities at close of business on 26 February 2010 Activity for this pricing date is included in this valuation
lJ Investment Value and Distribution Value and Distribution Fund at 20 May 2009 at 1 March 2010
u GBP GBP
lJ 0 2037 Index-Linked Gilt 281422 200 289003 201
2047 Index-Linked Gilt 281028 200 292162 203
lJ 2055 Index-Linked Gilt
Cash
281027
564305
200
400
295740
564467
205
391
IJ Total Assets 1407782 1000 1441372 1000
Notes The unit prices for these valuations were based on market closing prices on the previous working day The values shown include any activity that took place on the valuation day
IJ f---~- ---P-erformance- --middotmiddot-~-middotmiddot-middot--middotmiddot---middot---middotmiddot-- -shy
1J~-- -_--- rh~ tirr1~ -w~ight~d i~v~t~~~t ~t~ms o-~-th~-s~h~-~~~ts--~~~e ~~-t~i~~~-- --~
lJ For the Cash Fund which is not index tracking the index returns shown in the table below are for comparison purposes only
lJ 10
u
~I n
BOWER GROUP RETIREMENT BENEFITS SCHEME
n Investment Sector Fund Fund Index
n 2037 Index-Linked Gilt +27 +27
2047 Index-Linked Gilt +40 +39n 2055 Index-Linked Gilt +52 +52
n Cash +04 +03
Total Assets +25 na
n ROYAL LONDON ASSET MANAGEMENT LTD - RLPPC UK CORPORATE BOND
1-1 1(~ I) FUND
Investment aim To outperform the benchmark (iBoxx Sterling Non-Gilt All Maturities Index) by 08 per annum n gross of fees
Custody Arrangements The Custodian for the Fund is HSBC Securities Services at 8 Canada Square London E14 5HQ I Fund performance _ During the period between the funds inception date on 20th May 2009 to 28th February 2010 the I RLPPC UK Corporate Bond Fund outperformed the benchmark The fund returned 179 during the period compared to middota benchmark return of 15
LJ The positive performance recorded was primarily due to the following key factors
bull The sector allocation decision to remain overweight in credit bonds relative toLJ supranational bonds
bull The overweight positions in the best performing sectors eg subordinated financials LJ L) structured real estate and social housing
The table below shows the performance of the fund net of fees) and the benchmark index for the three months ending 31 March 2010
LJ Fund) Benchmark) Relative )
Quarter 1 495 394 101
LJ 12 months 2983 2095 888 3 years pa 314 410 -096 5 years pa 385 420 o35 Since inception (pa) 638 588 050LJ
----~--~---shy-rnenunclreturns irnne a5ove-ta6le middotare net of fees -amiddotncnnclude the -impact ofcash holdings over
~ C -the peritrd~--- --- - - ~------ ~--- ~~~~------~~--~ ---~--~~--- -_-_ -- ---- ~- --~-----~ ~~~---~~ ~~~- ~~ ~shy
Portfolio Value Fund GBP) LJ 20th May 2009 141076286
LJ
I I J
11
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
281h February 2010 166374512
n n n n n u() 7 I
[_]
u LJ
LJ Cgt
LJ
LJ
LJ
Change over the period 25298226 Inflows (outflows) overthe period 00
Ten Largest Bond Holdings as at 31 March 2010
Royal Bank of Scotland 7 5 2024 Finance for Residence Soc Housing 1113 2058 General Electric Capital 55 Vrn 2066
Annington Finance No1 8 2021 Qm_~gon Healthcare 5333 Vrn 2035 Lloyds TSB Bank 75 15042024
KFW 55 2015 Phoenix Natural Gas Fin 55 2017
NRW Bank 2625 2012
HSBC Holdings 675 12028
Sector breakdown
12
12
09
09
09
08
08
08
08
08
Banks amp financial services
Consumer goods
Consumer Services Foreign fixed interest sovereigns
General industrials
UK government bonds
Insurance
Investment trusts
Real estate
Social Housing
Structured
f--- shy ~upranationalsamp-agencies--middot- ----shyLJ-~ ~~~T~lecommUnicaUons~~~--~~- ~---- ----------shy
Utility
J TOTAL
u
251277 47
34 44
32 11
00 40
27 00
03 5151 01
55 1635 0962 99210
-~et2-~------middot----middot-------middot--------- -- ---- -~sa------------ ----- -- --- ------shy---~3~--~-----------middot ~- __ ---------~~--~--~-middot-~-~
93116 1000010000
12
I iJ
BOWER GROUP RETIREMENT BENEFITS SCHEME
AVCINVESTMENT
The Trustees hold assets invested separately from the main fund in the form of either individual accounts with Bristol amp West (Bank of Ireland Group) or individual funds managed by Clerical Medical
During the Scheme year no additional voluntary contributions (AVCs) were made Each member receives an annual statement at the year end confirming the amount held in their account and the movements in the year
FURTHER INFORMATION
Further disclosures required by legislation are included in the compliance statement Requests for additional information about the Scheme generally or queries relating to members own benefits should be made to Sterling Pension Management Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN telephone no 020 7537 6930
Signed on behalf of the Trustees
fdpound- ~cJt-e Trustee Date~~ Date
13
BOWER GROUP RETIREMENT BENEFITS SCHEME
INDEPENDENT AUDITORS REPORT to the Trustees of the Bower Group Retirement Benefits Pension Scheme
We have audited the financial statements on pages 16 to 22
This report is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors report and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this report or for the opinions we have formed
Respective responsibilities of the trustees and the auditors The trustees responsibilities for obtaining an annual report including audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustees Responsibilities
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board
We report to you our opinion as to whether the financial statements show a true and fair view and contain the information required by the relevant legislation We also report to you if in our opinion we have not received all the information and explanations we require for our audit or if the information specified by law is not disclosed
We read other information contained in the annual report and consider the implications for our report if we Imiddot become aware of any apparent misstatements or material inconsistencies with the financial statements The other information comprises [the Trustees Report the Investment Report the Actuarial Statement the Actuarial Certificate the Compliance Statement and the Members Information]
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements It also includes an assessment of the significant estimates and judgements made by the trustees in the preparation of the financial statements and of whether the accounting policies are appropriate to the Schemes circumstances consistently applied and adequately disclosed
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
Opinion In our opinion the financial statements show a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the financial transactions of the Scheme during the scheme year ended 28 February 2010 and of the amount and disposition at that date of its assets and liabilities other than liabilities to pay pensions and benefits after the end of the year and contain the information specified in Regulation 3 of and the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 made under the Pensions Act 1995
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
_Q)(b Date
14
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
LJ
I
j
u 17
i_j
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
-LJ
LJ
u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
n I l
n n n n ll0
n -1 I
lJ
IJ l_j
J(J
i I l___j
u LJ
~ I LJ
IJ J
BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
n n
BOWER GROUP RETIREMENT BENEFITS SCHEMEmiddot
Legal amp General Assurance (Pensions Management) Limited
n The assets of the Scheme are invested in an insurance policy with Legal amp General Assurance (Pensions Management) Limited part ofthe Legal amp General Group which ls one of the largest financial institutions in the United Kingdom shyn The policy is designed for corporate and public sector Pension Schemes and takes full advantage of the tax exemptions available to an insurance policy ofthis type It is a unitised policy and the value of the units fluctuates directly in relation to the value or the value of the underlying assets All units are redeemable at bidmiddot prices that are calculated from independent external pricing resources The assets underlying the units are held by independent corporate custodians which are regularly reviewed by external auditors
Legal amp Generals investment brief is to apply cash flows to or from and make switches between the funds 11 shown below (which are sections within the policy) in accordance with instructions received from the Trustees or their authorised Administrators
n Transaction Details
Valuation as 28 February 2010 No of Units Unit Price (pence) Valuet] () 2037 Index-Linked Gilt 25009978 1152890p pound28833754
lj 2047 Index-Linked Gilt 25509237 1141650p pound29122620
2055 Index-Linked Gilt 20993495 1404210p - pound29479276
11 Cash 8954772 6303530p pound56446674
TOTAL AT 26 FEBRUARY 2010 ~14388232~
Notes Prices are based cm the value of the underlying securities at close of business on 26 February 2010 Activity for this pricing date is included in this valuation
lJ Investment Value and Distribution Value and Distribution Fund at 20 May 2009 at 1 March 2010
u GBP GBP
lJ 0 2037 Index-Linked Gilt 281422 200 289003 201
2047 Index-Linked Gilt 281028 200 292162 203
lJ 2055 Index-Linked Gilt
Cash
281027
564305
200
400
295740
564467
205
391
IJ Total Assets 1407782 1000 1441372 1000
Notes The unit prices for these valuations were based on market closing prices on the previous working day The values shown include any activity that took place on the valuation day
IJ f---~- ---P-erformance- --middotmiddot-~-middotmiddot-middot--middotmiddot---middot---middotmiddot-- -shy
1J~-- -_--- rh~ tirr1~ -w~ight~d i~v~t~~~t ~t~ms o-~-th~-s~h~-~~~ts--~~~e ~~-t~i~~~-- --~
lJ For the Cash Fund which is not index tracking the index returns shown in the table below are for comparison purposes only
lJ 10
u
~I n
BOWER GROUP RETIREMENT BENEFITS SCHEME
n Investment Sector Fund Fund Index
n 2037 Index-Linked Gilt +27 +27
2047 Index-Linked Gilt +40 +39n 2055 Index-Linked Gilt +52 +52
n Cash +04 +03
Total Assets +25 na
n ROYAL LONDON ASSET MANAGEMENT LTD - RLPPC UK CORPORATE BOND
1-1 1(~ I) FUND
Investment aim To outperform the benchmark (iBoxx Sterling Non-Gilt All Maturities Index) by 08 per annum n gross of fees
Custody Arrangements The Custodian for the Fund is HSBC Securities Services at 8 Canada Square London E14 5HQ I Fund performance _ During the period between the funds inception date on 20th May 2009 to 28th February 2010 the I RLPPC UK Corporate Bond Fund outperformed the benchmark The fund returned 179 during the period compared to middota benchmark return of 15
LJ The positive performance recorded was primarily due to the following key factors
bull The sector allocation decision to remain overweight in credit bonds relative toLJ supranational bonds
bull The overweight positions in the best performing sectors eg subordinated financials LJ L) structured real estate and social housing
The table below shows the performance of the fund net of fees) and the benchmark index for the three months ending 31 March 2010
LJ Fund) Benchmark) Relative )
Quarter 1 495 394 101
LJ 12 months 2983 2095 888 3 years pa 314 410 -096 5 years pa 385 420 o35 Since inception (pa) 638 588 050LJ
----~--~---shy-rnenunclreturns irnne a5ove-ta6le middotare net of fees -amiddotncnnclude the -impact ofcash holdings over
~ C -the peritrd~--- --- - - ~------ ~--- ~~~~------~~--~ ---~--~~--- -_-_ -- ---- ~- --~-----~ ~~~---~~ ~~~- ~~ ~shy
Portfolio Value Fund GBP) LJ 20th May 2009 141076286
LJ
I I J
11
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
281h February 2010 166374512
n n n n n u() 7 I
[_]
u LJ
LJ Cgt
LJ
LJ
LJ
Change over the period 25298226 Inflows (outflows) overthe period 00
Ten Largest Bond Holdings as at 31 March 2010
Royal Bank of Scotland 7 5 2024 Finance for Residence Soc Housing 1113 2058 General Electric Capital 55 Vrn 2066
Annington Finance No1 8 2021 Qm_~gon Healthcare 5333 Vrn 2035 Lloyds TSB Bank 75 15042024
KFW 55 2015 Phoenix Natural Gas Fin 55 2017
NRW Bank 2625 2012
HSBC Holdings 675 12028
Sector breakdown
12
12
09
09
09
08
08
08
08
08
Banks amp financial services
Consumer goods
Consumer Services Foreign fixed interest sovereigns
General industrials
UK government bonds
Insurance
Investment trusts
Real estate
Social Housing
Structured
f--- shy ~upranationalsamp-agencies--middot- ----shyLJ-~ ~~~T~lecommUnicaUons~~~--~~- ~---- ----------shy
Utility
J TOTAL
u
251277 47
34 44
32 11
00 40
27 00
03 5151 01
55 1635 0962 99210
-~et2-~------middot----middot-------middot--------- -- ---- -~sa------------ ----- -- --- ------shy---~3~--~-----------middot ~- __ ---------~~--~--~-middot-~-~
93116 1000010000
12
I iJ
BOWER GROUP RETIREMENT BENEFITS SCHEME
AVCINVESTMENT
The Trustees hold assets invested separately from the main fund in the form of either individual accounts with Bristol amp West (Bank of Ireland Group) or individual funds managed by Clerical Medical
During the Scheme year no additional voluntary contributions (AVCs) were made Each member receives an annual statement at the year end confirming the amount held in their account and the movements in the year
FURTHER INFORMATION
Further disclosures required by legislation are included in the compliance statement Requests for additional information about the Scheme generally or queries relating to members own benefits should be made to Sterling Pension Management Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN telephone no 020 7537 6930
Signed on behalf of the Trustees
fdpound- ~cJt-e Trustee Date~~ Date
13
BOWER GROUP RETIREMENT BENEFITS SCHEME
INDEPENDENT AUDITORS REPORT to the Trustees of the Bower Group Retirement Benefits Pension Scheme
We have audited the financial statements on pages 16 to 22
This report is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors report and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this report or for the opinions we have formed
Respective responsibilities of the trustees and the auditors The trustees responsibilities for obtaining an annual report including audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustees Responsibilities
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board
We report to you our opinion as to whether the financial statements show a true and fair view and contain the information required by the relevant legislation We also report to you if in our opinion we have not received all the information and explanations we require for our audit or if the information specified by law is not disclosed
We read other information contained in the annual report and consider the implications for our report if we Imiddot become aware of any apparent misstatements or material inconsistencies with the financial statements The other information comprises [the Trustees Report the Investment Report the Actuarial Statement the Actuarial Certificate the Compliance Statement and the Members Information]
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements It also includes an assessment of the significant estimates and judgements made by the trustees in the preparation of the financial statements and of whether the accounting policies are appropriate to the Schemes circumstances consistently applied and adequately disclosed
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
Opinion In our opinion the financial statements show a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the financial transactions of the Scheme during the scheme year ended 28 February 2010 and of the amount and disposition at that date of its assets and liabilities other than liabilities to pay pensions and benefits after the end of the year and contain the information specified in Regulation 3 of and the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 made under the Pensions Act 1995
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
_Q)(b Date
14
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
LJ
I
j
u 17
i_j
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
-LJ
LJ
u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
n I l
n n n n ll0
n -1 I
lJ
IJ l_j
J(J
i I l___j
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~ I LJ
IJ J
BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
~I n
BOWER GROUP RETIREMENT BENEFITS SCHEME
n Investment Sector Fund Fund Index
n 2037 Index-Linked Gilt +27 +27
2047 Index-Linked Gilt +40 +39n 2055 Index-Linked Gilt +52 +52
n Cash +04 +03
Total Assets +25 na
n ROYAL LONDON ASSET MANAGEMENT LTD - RLPPC UK CORPORATE BOND
1-1 1(~ I) FUND
Investment aim To outperform the benchmark (iBoxx Sterling Non-Gilt All Maturities Index) by 08 per annum n gross of fees
Custody Arrangements The Custodian for the Fund is HSBC Securities Services at 8 Canada Square London E14 5HQ I Fund performance _ During the period between the funds inception date on 20th May 2009 to 28th February 2010 the I RLPPC UK Corporate Bond Fund outperformed the benchmark The fund returned 179 during the period compared to middota benchmark return of 15
LJ The positive performance recorded was primarily due to the following key factors
bull The sector allocation decision to remain overweight in credit bonds relative toLJ supranational bonds
bull The overweight positions in the best performing sectors eg subordinated financials LJ L) structured real estate and social housing
The table below shows the performance of the fund net of fees) and the benchmark index for the three months ending 31 March 2010
LJ Fund) Benchmark) Relative )
Quarter 1 495 394 101
LJ 12 months 2983 2095 888 3 years pa 314 410 -096 5 years pa 385 420 o35 Since inception (pa) 638 588 050LJ
----~--~---shy-rnenunclreturns irnne a5ove-ta6le middotare net of fees -amiddotncnnclude the -impact ofcash holdings over
~ C -the peritrd~--- --- - - ~------ ~--- ~~~~------~~--~ ---~--~~--- -_-_ -- ---- ~- --~-----~ ~~~---~~ ~~~- ~~ ~shy
Portfolio Value Fund GBP) LJ 20th May 2009 141076286
LJ
I I J
11
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
281h February 2010 166374512
n n n n n u() 7 I
[_]
u LJ
LJ Cgt
LJ
LJ
LJ
Change over the period 25298226 Inflows (outflows) overthe period 00
Ten Largest Bond Holdings as at 31 March 2010
Royal Bank of Scotland 7 5 2024 Finance for Residence Soc Housing 1113 2058 General Electric Capital 55 Vrn 2066
Annington Finance No1 8 2021 Qm_~gon Healthcare 5333 Vrn 2035 Lloyds TSB Bank 75 15042024
KFW 55 2015 Phoenix Natural Gas Fin 55 2017
NRW Bank 2625 2012
HSBC Holdings 675 12028
Sector breakdown
12
12
09
09
09
08
08
08
08
08
Banks amp financial services
Consumer goods
Consumer Services Foreign fixed interest sovereigns
General industrials
UK government bonds
Insurance
Investment trusts
Real estate
Social Housing
Structured
f--- shy ~upranationalsamp-agencies--middot- ----shyLJ-~ ~~~T~lecommUnicaUons~~~--~~- ~---- ----------shy
Utility
J TOTAL
u
251277 47
34 44
32 11
00 40
27 00
03 5151 01
55 1635 0962 99210
-~et2-~------middot----middot-------middot--------- -- ---- -~sa------------ ----- -- --- ------shy---~3~--~-----------middot ~- __ ---------~~--~--~-middot-~-~
93116 1000010000
12
I iJ
BOWER GROUP RETIREMENT BENEFITS SCHEME
AVCINVESTMENT
The Trustees hold assets invested separately from the main fund in the form of either individual accounts with Bristol amp West (Bank of Ireland Group) or individual funds managed by Clerical Medical
During the Scheme year no additional voluntary contributions (AVCs) were made Each member receives an annual statement at the year end confirming the amount held in their account and the movements in the year
FURTHER INFORMATION
Further disclosures required by legislation are included in the compliance statement Requests for additional information about the Scheme generally or queries relating to members own benefits should be made to Sterling Pension Management Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN telephone no 020 7537 6930
Signed on behalf of the Trustees
fdpound- ~cJt-e Trustee Date~~ Date
13
BOWER GROUP RETIREMENT BENEFITS SCHEME
INDEPENDENT AUDITORS REPORT to the Trustees of the Bower Group Retirement Benefits Pension Scheme
We have audited the financial statements on pages 16 to 22
This report is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors report and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this report or for the opinions we have formed
Respective responsibilities of the trustees and the auditors The trustees responsibilities for obtaining an annual report including audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustees Responsibilities
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board
We report to you our opinion as to whether the financial statements show a true and fair view and contain the information required by the relevant legislation We also report to you if in our opinion we have not received all the information and explanations we require for our audit or if the information specified by law is not disclosed
We read other information contained in the annual report and consider the implications for our report if we Imiddot become aware of any apparent misstatements or material inconsistencies with the financial statements The other information comprises [the Trustees Report the Investment Report the Actuarial Statement the Actuarial Certificate the Compliance Statement and the Members Information]
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements It also includes an assessment of the significant estimates and judgements made by the trustees in the preparation of the financial statements and of whether the accounting policies are appropriate to the Schemes circumstances consistently applied and adequately disclosed
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
Opinion In our opinion the financial statements show a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the financial transactions of the Scheme during the scheme year ended 28 February 2010 and of the amount and disposition at that date of its assets and liabilities other than liabilities to pay pensions and benefits after the end of the year and contain the information specified in Regulation 3 of and the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 made under the Pensions Act 1995
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
_Q)(b Date
14
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
LJ
I
j
u 17
i_j
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
-LJ
LJ
u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
n I l
n n n n ll0
n -1 I
lJ
IJ l_j
J(J
i I l___j
u LJ
~ I LJ
IJ J
BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
281h February 2010 166374512
n n n n n u() 7 I
[_]
u LJ
LJ Cgt
LJ
LJ
LJ
Change over the period 25298226 Inflows (outflows) overthe period 00
Ten Largest Bond Holdings as at 31 March 2010
Royal Bank of Scotland 7 5 2024 Finance for Residence Soc Housing 1113 2058 General Electric Capital 55 Vrn 2066
Annington Finance No1 8 2021 Qm_~gon Healthcare 5333 Vrn 2035 Lloyds TSB Bank 75 15042024
KFW 55 2015 Phoenix Natural Gas Fin 55 2017
NRW Bank 2625 2012
HSBC Holdings 675 12028
Sector breakdown
12
12
09
09
09
08
08
08
08
08
Banks amp financial services
Consumer goods
Consumer Services Foreign fixed interest sovereigns
General industrials
UK government bonds
Insurance
Investment trusts
Real estate
Social Housing
Structured
f--- shy ~upranationalsamp-agencies--middot- ----shyLJ-~ ~~~T~lecommUnicaUons~~~--~~- ~---- ----------shy
Utility
J TOTAL
u
251277 47
34 44
32 11
00 40
27 00
03 5151 01
55 1635 0962 99210
-~et2-~------middot----middot-------middot--------- -- ---- -~sa------------ ----- -- --- ------shy---~3~--~-----------middot ~- __ ---------~~--~--~-middot-~-~
93116 1000010000
12
I iJ
BOWER GROUP RETIREMENT BENEFITS SCHEME
AVCINVESTMENT
The Trustees hold assets invested separately from the main fund in the form of either individual accounts with Bristol amp West (Bank of Ireland Group) or individual funds managed by Clerical Medical
During the Scheme year no additional voluntary contributions (AVCs) were made Each member receives an annual statement at the year end confirming the amount held in their account and the movements in the year
FURTHER INFORMATION
Further disclosures required by legislation are included in the compliance statement Requests for additional information about the Scheme generally or queries relating to members own benefits should be made to Sterling Pension Management Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN telephone no 020 7537 6930
Signed on behalf of the Trustees
fdpound- ~cJt-e Trustee Date~~ Date
13
BOWER GROUP RETIREMENT BENEFITS SCHEME
INDEPENDENT AUDITORS REPORT to the Trustees of the Bower Group Retirement Benefits Pension Scheme
We have audited the financial statements on pages 16 to 22
This report is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors report and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this report or for the opinions we have formed
Respective responsibilities of the trustees and the auditors The trustees responsibilities for obtaining an annual report including audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustees Responsibilities
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board
We report to you our opinion as to whether the financial statements show a true and fair view and contain the information required by the relevant legislation We also report to you if in our opinion we have not received all the information and explanations we require for our audit or if the information specified by law is not disclosed
We read other information contained in the annual report and consider the implications for our report if we Imiddot become aware of any apparent misstatements or material inconsistencies with the financial statements The other information comprises [the Trustees Report the Investment Report the Actuarial Statement the Actuarial Certificate the Compliance Statement and the Members Information]
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements It also includes an assessment of the significant estimates and judgements made by the trustees in the preparation of the financial statements and of whether the accounting policies are appropriate to the Schemes circumstances consistently applied and adequately disclosed
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
Opinion In our opinion the financial statements show a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the financial transactions of the Scheme during the scheme year ended 28 February 2010 and of the amount and disposition at that date of its assets and liabilities other than liabilities to pay pensions and benefits after the end of the year and contain the information specified in Regulation 3 of and the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 made under the Pensions Act 1995
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
_Q)(b Date
14
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
LJ
I
j
u 17
i_j
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
-LJ
LJ
u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
n I l
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BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
BOWER GROUP RETIREMENT BENEFITS SCHEME
AVCINVESTMENT
The Trustees hold assets invested separately from the main fund in the form of either individual accounts with Bristol amp West (Bank of Ireland Group) or individual funds managed by Clerical Medical
During the Scheme year no additional voluntary contributions (AVCs) were made Each member receives an annual statement at the year end confirming the amount held in their account and the movements in the year
FURTHER INFORMATION
Further disclosures required by legislation are included in the compliance statement Requests for additional information about the Scheme generally or queries relating to members own benefits should be made to Sterling Pension Management Limited City Reach 5 Greenwich View Place Millharbour London E14 9NN telephone no 020 7537 6930
Signed on behalf of the Trustees
fdpound- ~cJt-e Trustee Date~~ Date
13
BOWER GROUP RETIREMENT BENEFITS SCHEME
INDEPENDENT AUDITORS REPORT to the Trustees of the Bower Group Retirement Benefits Pension Scheme
We have audited the financial statements on pages 16 to 22
This report is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors report and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this report or for the opinions we have formed
Respective responsibilities of the trustees and the auditors The trustees responsibilities for obtaining an annual report including audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustees Responsibilities
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board
We report to you our opinion as to whether the financial statements show a true and fair view and contain the information required by the relevant legislation We also report to you if in our opinion we have not received all the information and explanations we require for our audit or if the information specified by law is not disclosed
We read other information contained in the annual report and consider the implications for our report if we Imiddot become aware of any apparent misstatements or material inconsistencies with the financial statements The other information comprises [the Trustees Report the Investment Report the Actuarial Statement the Actuarial Certificate the Compliance Statement and the Members Information]
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements It also includes an assessment of the significant estimates and judgements made by the trustees in the preparation of the financial statements and of whether the accounting policies are appropriate to the Schemes circumstances consistently applied and adequately disclosed
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
Opinion In our opinion the financial statements show a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the financial transactions of the Scheme during the scheme year ended 28 February 2010 and of the amount and disposition at that date of its assets and liabilities other than liabilities to pay pensions and benefits after the end of the year and contain the information specified in Regulation 3 of and the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 made under the Pensions Act 1995
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
_Q)(b Date
14
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
LJ
I
j
u 17
i_j
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
-LJ
LJ
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BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
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BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
BOWER GROUP RETIREMENT BENEFITS SCHEME
INDEPENDENT AUDITORS REPORT to the Trustees of the Bower Group Retirement Benefits Pension Scheme
We have audited the financial statements on pages 16 to 22
This report is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors report and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this report or for the opinions we have formed
Respective responsibilities of the trustees and the auditors The trustees responsibilities for obtaining an annual report including audited financial statements prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of Trustees Responsibilities
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board
We report to you our opinion as to whether the financial statements show a true and fair view and contain the information required by the relevant legislation We also report to you if in our opinion we have not received all the information and explanations we require for our audit or if the information specified by law is not disclosed
We read other information contained in the annual report and consider the implications for our report if we Imiddot become aware of any apparent misstatements or material inconsistencies with the financial statements The other information comprises [the Trustees Report the Investment Report the Actuarial Statement the Actuarial Certificate the Compliance Statement and the Members Information]
Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board An audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements It also includes an assessment of the significant estimates and judgements made by the trustees in the preparation of the financial statements and of whether the accounting policies are appropriate to the Schemes circumstances consistently applied and adequately disclosed
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements
Opinion In our opinion the financial statements show a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the financial transactions of the Scheme during the scheme year ended 28 February 2010 and of the amount and disposition at that date of its assets and liabilities other than liabilities to pay pensions and benefits after the end of the year and contain the information specified in Regulation 3 of and the Schedule to the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 made under the Pensions Act 1995
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
_Q)(b Date
14
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
LJ
I
j
u 17
i_j
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
-LJ
LJ
u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
n I l
n n n n ll0
n -1 I
lJ
IJ l_j
J(J
i I l___j
u LJ
~ I LJ
IJ J
BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
BOWER GROUP RETIREMENT BENEFITS SCHEME
Independent Auditors Statement about Contributions under Regulation 4 of The Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations 1996 to the Trustees of the Bower Group Retirement Benefits Scheme
We have examined the summary of contributions payable to the Bower Group Retirement Benefits Scheme on page 16 in respect of the scheme year ended 28 February 2010
This statement is made solely to the schemes trustees as a body in accordance with the Pensions Act 1995 Our audit work has been undertaken so that we might state to the schemes trustees those matters we are required to state to them in an auditors statement and for no other purpose To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the scheme and the schemes trustees as a body for our audit work for this statement or for the opinions we have formed
Respective responsibilities of trustees and auditors As described on page 4 the schemes trustees are responsible for ensuring that there is prepared maintained and from time to time revised a schedule of contributions which sets out the rates and due dates of certain contributions payable towards the scheme by or on behalf of the employer and the active members of the scheme The trustees are also responsible for keeping records in respect of contributions received in respect of any active member of the scheme and for monitoring whether contributions are made to the scheme by the employer in accordance with the schedule of contributions
It is our responsibility to provide a statement about contributions paid under the schedule of contributions and to report our opinion to you
Basis of statement about contributions We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to give reasonable assurance that contributions reported in the attached summary of contributions have in all material respects been paid at least in accordance with the relevant requirements For this purpose the work that we carried out included examination on a test basis of evidence relevant to the amounts of contributions payable to the scheme and the timing of those payments under the schedule of contributions Our Statement about contributions is required to refer to those breaches of the schedule of contributions which come to our attention in the course of our work
Statement about contributions In our opinion the contributions for the scheme year ended 28 February 2010 as reported in the attached summary of contributions on page 16 have in all material respects been paid at least in accordance with the schedule of contributions certified by the actuary on 22 April 2010
BAKER TILLY UK AUDIT LLP
Registered Auditor 2 Whitehall Quay Leeds LS1 4HG
15
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
LJ
I
j
u 17
i_j
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
-LJ
LJ
u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
n I l
n n n n ll0
n -1 I
lJ
IJ l_j
J(J
i I l___j
u LJ
~ I LJ
IJ J
BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
----
----
BOWER GROUP RETIREMENT BENEFITS SCHEME
SUMMARY OF CONTRIBUTIONS PAID IN THE YEAR ENDED
28 FEBRUARY 2010
During the year the contributions paid to the scheme by the Employer under the Schedule of Contributions were as follows
Contributions paid under the Schedule of Contributions
A Employer
B Employee
Contributions paid not included on the Schedule of Contributions
C Employer
D Contributions receivable per Fund Account
Signed on behalf of the Trustees
pound
- Normal Nil
- Normal Nil
- Normal 105006 - Special Nil
~ O~e
Sf1vJvtL A J Y ~
Date chv
pound
Nil
105006
105006
16
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
LJ
I
j
u 17
i_j
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
-LJ
LJ
u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
n I l
n n n n ll0
n -1 I
lJ
IJ l_j
J(J
i I l___j
u LJ
~ I LJ
IJ J
BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
n BOWER GROUP RETIREMENT BENEFITS SCHEME n FINANCIAL STATEMENTS
n FUND ACCOUNT FOR YEAR ENDED 28 FEBRUARY 2010
n Note 2010 2009 Member related transactions
pound pound pound pound n Additions Contributions 3 105006 388628 Other Income 4 15610 32987
tl 120616 421615
Withdrawalsn Benefits 5 (110042) (97918) Leavers 6 (52457) (76195) Administrative expenses 7 (198727 23143211 (-) (361 226) (405545)
-~ Net additions from Member related transactions (240610) 16070
l Returns on investments Change in market value of investments 8 1215027 1676854[j Net returns on investment 1215027 (1676854)
l i Net (decrease)increase in the 974417 (1660784) fund
l I Net Assets at 29 February 2009 6111294 7772078
uu Net Assets at 28 February 2010 7085711 6111294
LJ The notes on pages 19 to 22 form part of these financial statements
LJ
LJ
I
j
u 17
i_j
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
-LJ
LJ
u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
n I l
n n n n ll0
n -1 I
lJ
IJ l_j
J(J
i I l___j
u LJ
~ I LJ
IJ J
BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
l
BOWER GROUP RETIREMENT BENEFITS SCHEME
NET ASSETS STATEMENT FOR YEAR ENDED 28 FEBRUARY 2010
Note 2010 2009
pound pound
Investments 8 6627674 5404681
Current Assets 9 677571 990242
Current Liabilities 10 (219534) (283629)
Net Assets at 28 February 201 0 7085711 6111294
The Financial Statements summarise the transactions of the Scheme and deal with the net assets at the disposal of the Trustees They do not take account of obligations to pay pensions and other benefits which fall due after the end of the Scheme year The actuarial position of the Scheme which takes account of such obligations is dealt within the statements by the Actuary (appended to this report) and these financial statements should be read in conjunction with them
The notes on pages 19 to 22 form part of these financial statements
The financial statements on pages 16 to 22 were approved by the Trustees
z~ rol-U Jot a on lt1-
Signed on behalf of the Trustees
) (efj Q W -~ Trustee
Sft0J~ 6 Trustee
18
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
-LJ
LJ
u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
n I l
n n n n ll0
n -1 I
lJ
IJ l_j
J(J
i I l___j
u LJ
~ I LJ
IJ J
BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
n n
BOWER GROUP RETIREMENT BENEFITS SCHEME
NOTES TO THE FINANCIAL STATEMENTS- 28 FEBRUARY 2010
n n 1 BASIS OFPREPARATION
The financial statements have been prepared in accordance with the Occupational Pension Schemes (Requirement to obtain Audited Accounts and a Statement from the Auditor) Regulations n 1996 and with the guidefines set out in the Statement of Recommended Practice (2007) Financial Reports of Pension Schemes
n 2 ACCOUNTING POLICIES
n 21 Accruals Concept
7 The financial statements have been prepared on an accruals basis )I I
-
22 Fund Account
n i) Contribution Income
11 The employer and employee contributions relate to the wages and salaries earned and deducted up to the year end using the rates agreed between the Trustees and the employer based on the recommendations of the Actuary
ii) Benefits 1 l
Benefits payable represent all valid benefit claims in respect of the Scheme year
lL iii) Transfers
Individual transfer values represent the amounts received or paid during the year Allu the values are based on methods and assumptions determined by the Actuary for the Trustees
l 1 (J iv) Administrative Expenses ~-shy
Administrative expenses are met by the Scheme
lJ v) Investments
Managed fund units are stated at bid price at the year end quoted by the fund LJ managers as at 28 February 2010
The change in market value of investments during the year comprises all increases LJ and decreases in the market value of investments held at any time during the year
________ -~---i11cluding_profits__ and-losses-realised-on-the-sales-0f-investments-dur-ing-the-year--~-~-~--~--------shy
LJ
LJ
l j
19
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
-LJ
LJ
u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
n I l
n n n n ll0
n -1 I
lJ
IJ l_j
J(J
i I l___j
u LJ
~ I LJ
IJ J
BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
------------------- ----
r-1
n BOWER GROUP RETIREMENT BENEFITS SCHEME
n n 3 CONTRIBUTIONS
n 2010
pound
n Employer- Normal (under Schedule of Contributions)
fl Normal 105006 (nof included in-Schedule ofContributions)n 105006
t I ) 4 OTHER INCOME
pound
Interest on cash deposits 485 Annuities 15125
ll Other 15610
j 5 BENEFITS
I_I pound
Pensions 110042
ll 110042
uu 6 PAYMENTS RELATED TO LEAVERS
ll pound
Lump sum payments and death benefits 52457 Individual transfers to other schemes
52457LJ
lJ 1--------- -- ----- --------- - shy
-UshyJ ~
20
j
2009
pound
288000
100628
388628
pound
17112 15125
750 32987
pound
97918 97918
pound
58104 18091 76195
---- ---------~---shy
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
-LJ
LJ
u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
n I l
n n n n ll0
n -1 I
lJ
IJ l_j
J(J
i I l___j
u LJ
~ I LJ
IJ J
BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
--
----
-
r n n n 11
n j (Jl middot-
~)
rJ
[l
u u uu u u u
-LJ
LJ
u lj
BOWER GROUP RETIREMENT BENEFITS SCHEME
7 ADMINISTRATIVE EXPENSES
Legal Fees Actuarial AdministrationPension Consultancy Audit Audit overprovision Bank charges
2010 2009
pound pound
2500 13110 2790 8178
195209 206032 3750 3750
(5938) 416 362
198727 231432
Investment management charges are deducted by an adjustment to the daily unit price
8 INVESTMENT
AXA Sun Life Mixed Close Teams Newton Intrepid Bristol ampWest (Bank of Ireland) Clerical Medical Royal London Legal amp General
Value at 132009
Purchases at cost
Sales at cost
Change In market
value
Value at 2822010
pound pound pound pound pound
694249 3791795
849500 546911
(688646) (2671824)
(5603) 725792 203730
1845763 1600141
48603 20534
--
5404681
1410763 1410763 3368487 (3360470
7516 252982
30609 1215026
48603 28050
1663745 1441372 6627674
AVC investment comprised the following
Bristol amp West (Bank of Ireland) Clerical Medical Clerical Medical
Unit Linked With Profits
21
2010
pound
48603 26581
____1_46_9_ ----~----66middot53shy
2009
pound
48603 19094 1440
-----~-~-~-middot middot 69~137-~ ---- - shy
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
n I l
n n n n ll0
n -1 I
lJ
IJ l_j
J(J
i I l___j
u LJ
~ I LJ
IJ J
BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
1 BOWER GROUP RETIREMENT BENEFITS SCHEME
n n n n n ii l-1 )
l-1
11
I_ j
IJ u 1U i_J
u LJ IJ
l
9 CURRENT ASSETS
Cash deposits held Others
10 CURRENT LIABILITIES
Pension Accrual Lump sum Other HMRC Professional Fees Reimbursable to Employer
11 POST NET ASSETS STATEMENT EVENTS
2010 2009
pound pound
373857 671128 303714 319114 67571 990242
2010 2009 pound pound
46941 46941 2649 2649
522 522 55971 52336
3750 83885 109701 97296 219534 283629
There were no post net assets statement events for the year under review
12 EMPLOYER RELATED TRANSACTIONS
During the Scheme year the Principal Employer paid the pension payroll The Scheme reimbursed the Principal Employer each month the total reimbursement for the Scheme year being pound110042 (2009 pound97918)
----- -------~shy
LJ 22
r1 7
I
n I l
n n n n ll0
n -1 I
lJ
IJ l_j
J(J
i I l___j
u LJ
~ I LJ
IJ J
BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
=--=--- ---~-~ -- bull -~ --- -- bullbull------ --- --- ------- - ------ -- - - - - ------ ~---- -- shy
23
r1 7
I
n I l
n n n n ll0
n -1 I
lJ
IJ l_j
J(J
i I l___j
u LJ
~ I LJ
IJ J
BOWER GROUP RETIREMENT BENEFITS SCHEME
COMPLIANCE STATEMENT
The purpose of this compliance statement is to disclose some additional information required by law but which is not considered to be of such significance to Scheme members that it requires the more prominent disclosure afforded by inclusion in the Trustees report
CONSTITUTION
The Bower Group Retirement Benefits Scheme is governed by the Consolidated Trust Deed and Rules dated 28 July 2000
TAXATION STATUS
The Scheme is exempt approved under Chapter I Part XIV of the Income and Corporation Taxes Act 1988 The reference number ismiddotSF44428 The Trustees know of no reason why this approval maybe-prej11diced or withdrawn shy
PENSION INCREASES
No increases to pensions in payment other than those required by statute were made during the year under review
CALCULATION- OF TRANSFER VALUES
Cash equivalents paid during the Scheme year with respect to transfers have been calculated and verified in the manner prescribed by the Pension Schemes Act 1993
No increases to pensions in payment are allowed for in the calculation of transfer values other than that required by statute
INVESTMENT
The Scheme has no employeMelated investments within the meaning of section 40(2) of the Pensions Act 1995
All investment managers appointed on behalf of the Trustees to manage funds under section 34( 4) ofthe Pensions Act 1995 are appropriately authorised under the Financial Services Act 1986 to manage investments or are specifically exempt from the requirements of the Act All investment managers appointed have the appropriate knowledge and experience necessary to manage the particular investments delegated to them
A Statement of Investment Principles has been produced as required by section 35 of the Pensions Act 1995 and is available on request middot
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