YOUR INVESTMENT CHOICES

THE ROLE OF THE TRUSTEES

CHOOSING YOUR OWN FUNDS

APPENDIX 1 - INVESTMENT REMINDERS

You have a choice over how to invest your own Lifestyle account. You can spread your investment amongst the nine available funds in whatever way you choose.

However, if you don’t feel comfortable managing your own investments, there is an automatic, default, arrangement. The default strategy has been designed to provide a carefully worked out investment strategy that can be suitable for many members through their careers. However, there could be a number of reasons why you might want to override the automatic arrangements and make your own investment choices, perhaps after seeking independent

financial advice.

It is important to understand that in a money purchase arrangement such as the Lifestyle Plan it is the responsibility of members to ensure that the funds in which they are invested are best suited to their individual requirements. Whilst over the long-term the expectation remains that funds with high equity (investment in companies on the stock market) content will provide a higher return than funds invested in bonds or cash, albeit with higher volatility, this cannot be guaranteed.

The role of the Trustees is to provide an appropriate range of funds for members and to review the investment strategies of the various funds from time to time, but it should be stressed this does not include the Trustees trying to forecast investment market movements.

The investment strategy aims to reduce some volatility by investing in “index tracking” funds. This simply means that the investments are made in a broad range of shares or bonds in such a way that the return should be virtually identical to the overall return of the relevant stock market

index. You should remember though that investments in equities, corporate bonds and government stocks can all go up and down as a result of market movements generally. The Trustees have appointed Legal and General Investment Management Limited to carry out the index tracking strategy.

The Trustees’ investment strategy is set out in their Statement of Investment Principles, which is available on our website www.gmgpensions.co.uk or from the Pensions Department.

You can specify how you want your Lifestyle account to be invested, split between the available funds listed below.

(If you wish, you can choose one investment split for your existing accumulated Lifestyle fund and choose a different investment split for future contributions).

• Long Term Fund

• Short Term Fund (Bonds)

• Short Term Fund (Cash)

• UK Equity Fund

• Overseas Equity Fund

• Ethical Global Equity Fund

• Corporate Bond Fund

• UK Government Stocks Fund

• UK Government Index-Linked Stocks Fund

You should monitor the relative investment returns and make further changes as required. Adjustments to your investments will take place on the next available “dealing day” after receipt of your instructions. This often occurs on a Wednesday of each week and on the last working day of every month but there are exceptions so you should check on our website www.gmgpensions.co.uk or with the Pensions Department if you require exact details.

WHEN THE DEFAULT STRATEGY MAY BE UNSUITABLE

• If you plan to take your benefits before age 65 ... You should consider setting your own TRD (see above).

• If you want more (or less) invested in equities.

• If you do not intend taking a tax free lump sum at retirement (almost everyone does because it is tax free!).

• If, at retirement, you are planning to transfer your Lifestyle account into an “income drawdown” arrangement (i.e. not immediately purchasing an annuity (pension)).

Further details of investment options and switching procedures are in the Investment Guide available from the Pensions Department, call 020 3353 2000 or e-mail pensions@gmgplc.co.uk

The GMG LifesTyLe PLan(formerly The G & meN lifesTyle PlaN)

invesTMenT BuLLeTin for year ended 31 March 2012

The Trustees of the Lifestyle Plan have appointed Legal & General Investment Management to invest the Plan’s assets in “index tracking” funds. The Plan’s investment advisers, Mercer Limited, carry out an independent assessment of the results and their latest report is summarised below.

The majority of the Plan’s assets are invested in the three main Funds that have been available since inception. The market values and underlying performance of the Funds over the year to 31 March 2012 are set out in the table below:

FUNDMARKETVALUE

£

PERFORMANCE%

DIFFERENCEFROM

BENCHMARK%

Long Term Fund

Short Term Fund (Bonds)

Short Term Fund (Cash)

184,579,632

27,652,698

12,049,395

+3.3

+13.5

+0.7

+0.1

+0.2

+0.2

COMMENTS FROM THE PLAN’S INVESTMENT ADVISERS ...

The year to 31 March 2012 was a volatile period, with equity markets falling sharply over the 3rd quarter 2011 on the back of concerns in the Eurozone and then performing strongly over the following six months. Against this background, the Long Term Fund produced a modest overall return over the period.

The Short Term Fund (Bonds) performed strongly over the year as high quality bonds were perceived as a safe haven compared with equity markets.

With bank base rates unchanged at 0.5% throughout the year, the return on the Short Term Fund (Cash) remained low.

AUTOMATIC (DEFAULT) INVESTMENT STRATEGY

If you don’t feel comfortable managing your own investments and specifying your own mix of funds, then your Lifestyle account will be invested in accordance with the default strategy. Under this arrangement, your account is normally invested in the Long Term Fund, (70% equities / 30% bonds). The value of equity investments can be volatile from time to time and can sometimes suffer sharp setbacks in times of economic or political difficulty. Despite this volatility and the absence of guarantees, equity investments are nevertheless generally considered appropriate for long term growth.

As you approach retirement, it is usually helpful to try to reduce volatility by switching your Lifestyle Account into the Short Term Fund which is currently invested in Bonds and

Cash. Whilst Bonds can fluctuate, they tend to move in line with interest rates generally thus giving some stability to the pension which you can purchase with your accumulated account. However, Bonds cannot protect against changes in other factors which insurance companies use to determine annuity rates such as mortality trends.

The default strategy has been designed to provide a carefully worked out investment strategy that can be suitable for many members through their careers. However, there could be a number of reasons why you might want to override the automatic arrangements and make your own investment choices, perhaps after seeking independent financial advice.

SWITCHING - DEFAULT STRATEGY

As you approach retirement, it is usually helpful to try to reduce volatility by switching your Lifestyle account into the Short Term Fund.

The Lifestyle Plan will normally automatically switch 10% of your accumulated account in each of the ten years before your Target Retirement Date (TRD) from the Long Term Fund to the Short Term Fund. Thus, during the last year the whole of your account will be in the Short Term Fund. For some members, the switching period is 5,6,7,8 or 9 years dependent on how far away from TRD they were at 1st April 2003.

Default TRD is age 65 (see below re choosing your own TRD).

You should bear in mind that the automatic switching arrangements into the Short Term Fund may not be suitable if, for example, you are intending to choose a non- conventional annuity or income drawdown arrangement (see the brochure “Your Pension Your Choice” for more information regarding these choices at retirement).

CHOOSING YOUR OWN TARGET RETIREMENT DATE (TRD)

This is normally set to age 65 for everyone on joining the Plan. For the purpose of the automatic switching you can set your own TRD to any age between 50 and 65, so that the switching will take place over the 10 year period up to your chosen TRD. You can change your TRD at any time.

Remember that if you joined the Plan after 5th April 2006, then you can only take your benefits from age 55 onwards.

If you change your target retirement date the adjustment to your investments will take place on the next available “dealing day”. This often occurs on a Wednesday of each week and on the last working day of every month but there are exceptions so you should check on our website www.gmgpensions.co.uk or ask the Pensions Department if you require exact details.

WHERE THE LONG TERM FUND IS INVESTED ... STAND ALONE FUNDS MONTH END UNIT PRICES FOR YEAR ENDED 31 MARCH 2012

FURTHER INFORMATION

This Investment Bulletin is designed to provide a summary of the investments of the Lifestyle Plan. More detailed financial information will be contained in the full Report and Accounts of the Lifestyle Plan which are published later in the year.

Appendix 1, overleaf, gives a reminder of your investment choices and other information.

If you would like to discuss any aspect of the Lifestyle Plan please contact GMG Pensions Department, call 020 3353 2000 or e-mail pensions@gmgplc.co.uk

• Equities are ordinary shares in companies. i.e. stock market investments.

• The main asset split of 70% equities / 30% bonds (within control ranges of +/- 2%) remains constant, however the % invested in both UK equities, and in the various Overseas Equity markets, changes in line with the asset allocation changes of average actively managed pension funds.

• Appendix 1 – Investment Reminders, gives further information regarding the Long Term Fund and the Lifestyle Plan’s automatic (default) investment strategy

• Prior to January 2010, the Long Term Fund was invested 85% in equities and 15% in Corporate Bonds. This was changed on a phased basis, reaching the target 70% equities / 30% bond split in March 2011.

• Prior to April 2003 the Long Term Fund was invested 100% in equities.

PERFORMANCE COMPARISONS

Six additional stand-alone funds are available to members and the market values and underlying performance of the Funds over the year to 31 March 2012 are set out in the table below:

The UK Government Stocks Funds produced the strongest returns over the year as bonds significantly outperformed equities. The Overseas Equity Fund produced a negative return and was the worst performer over the period.

FUNDMARKETVALUE

£

PERFORMANCE%

DIFFERENCEFROM

BENCHMARK%

UK Equity Fund

Overseas Equity Fund

Ethical Global Equity Fund

UK Government Stocks Fund

Corporate Bond Fund

Index-Linked UK Government Stocks Fund

2,104,719

1,553,028

584,010

422,355

338,473

1,215,190

+1.8

-1.8

+1.2

+14.4

+8.7

+18.1

0.0

-0.2

+0.2

-0.1

+0.1

0.0

UNIT VALUES

The values of the Lifestyle funds are normally assessed weekly. The unit price for each of the funds is then used as the basis for all transactions (e.g. adding each month’s contributions to your Lifestyle account or withdrawing your Lifestyle funds to secure a pension at retirement etc). The month end unit prices during the year ended 31 March 2012 are shown overleaf.

The above performance figures are based on interim results supplied by the Plan’s investment advisers. The full Report and Accounts of the Lifestyle Plan to be published later in the year will contain the final performance figures.

Long Term Fund

Short Term Fund

(Bonds)

Short Term Fund

(Cash)

UK Equities

Overseas Equities Gilts Corporate

Bond

Ethical Global Equity Fund

Index Linked UK

Government Stocks Fund

100p @ Apr 1990

100p @ Apr 1990

100p @ Apr 1990

100p @ Mar 2003

100p @ Mar 2003

100p @ Mar 2003

100p @ Mar 2003

100p @ Aug 2004

100p @Aug 2004

MAR 2011 479.62 675.44 302.71 240.28 230.21 145.50 140.44 157.29 150.54

APR 491.13 702.74 302.85 247.84 233.06 148.27 143.50 158.71 153.42

MAY 488.67 709.00 302.97 246.36 229.83 150.03 144.55 157.11 155.63

JUN 487.14 692.22 303.10 245.29 229.75 149.13 143.05 158.63 156.61

JUL 479.13 722.08 303.23 239.75 222.03 153.91 146.94 151.89 161.66

AUG 457.15 724.69 303.37 223.33 205.77 156.19 145.79 141.70 160.38

SEP 439.44 761.78 303.52 209.90 190.50 161.47 146.96 135.72 166.51

OCT 464.92 776.16 303.67 226.32 205.21 163.26 148.01 144.24 166.09

NOV 461.04 762.01 303.83 227.59 201.31 166.52 145.47 142.04 175.93

DEC 463.59 781.38 304.01 228.92 203.51 169.47 150.37 144.46 180.55

JAN 2012 480.39 797.50 304.16 236.06 214.51 170.18 152.75 149.84 181.45

FEB 494.87 782.86 304.29 246.36 224.02 167.87 153.00 156.24 178.14

MAR 496.85 774.19 304.43 244.38 225.24 166.49 152.81 158.58 177.82

UK Equities 21.5%

Overseas Equities:

North America 22%

Europe 10%

Japan 4.5%

Asia Pacific (excl Japan) 4.5%

World Emerging Markets 7.5%

48.5%

ToTaL eQuiTies 70%

Corporate Bonds 20%

Fixed Interest Gilts 5%

Index-Linked Gilts 5%

ToTaL Bonds 30%

Grand ToTaL 100%