5 year summary - Membership - Investment - Financial Statement

The Trust provides retirement and death benefits for members and their dependants, based on the build-up of a fund of money (which is then used at retirement to purchase an annuity from an insurance company where a regular pension is paid).

During the Scheme year under review, the Trust:

• was open to all UK companies and their employees within the Kingfisher Group, subject to certain employee eligibility conditions;

• was governed by the Definitive Trust Deed and approved by the Inland Revenue as a Simplified Defined Contribution Scheme under the Income and Corporation Taxes Act 1988;

• was contracted-out of the State Second Pension.

This Report should be read in conjunction with the information set out on pages 6 to 11. With effect from 31 March 2004, the employing companies terminated contributions to the Trust. No employees will be admitted to membership of the Trust after that date.

The termination occurred as part of the overall pension review changes
described on page 4. The Trustee Board is considering the available options for securing benefit entitlements accrued under the Trust. Members will be informed of the Trustees’ proposals in due course and given an opportunity to decide how their benefit entitlement should be secured.

* All information is shown as at 5 April except the 2004 Active Member and Deferred Pensioner information which is shown as at 31 March 2004. Following the termination of contributions at 31 March 2004, all active members at that date are thereafter treated as deferred pensioners.

** The Trustees discharge their liability to provide pensions for retired members by purchasing annuity policies on behalf of individual members.

During the Scheme year under review, membership was open to all employees satisfying the entry qualifications set by their employer, which were broadly similar. From 1 April 2004, the Trust was closed to new entrants. During the Scheme year, the
categories of membership within the Trust were:

Active members - currently contributing employees who are members of the Trust.
All active members were automatically members of the Kingfisher Pension Scheme only for the purpose of the lump sum payable on death. This was done in order to provide the benefit in a costeffective way.

Men and women over a recommended age (49 for a woman and 57 for a man) were automatically withdrawn and be reinstated in S2P unless they elected to remain in the Trust or join the final salary Kingfisher Pension Scheme, because from these ages they may not have built up as high a level of benefits under the Trust up to age 60 as they could in S2P.

Deferred pensioners - active members who have left service or otherwise ceased active membership and have the right to a future pension from the Trust.

Pensioners - on retirement, members have the right to purchase an annuity with any approved provider.

* Membership information is shown as at 31 March 2004. Following the termination of contributions at that date, all active members are treated as deferred pensioners at the end of the Trust year (5 April 2004).

** The Trustees discharge their liability to provide pensions for retired members by purchasing immediate annuity policies on behalf of individual members

*** Includes former participating companies Woolworths group, Superdrug, Entertainment UK, MVC and VCI.

All the assets of the Trust, including members’ AVCs but excluding cash required
for transaction purposes, are presently invested in the range of funds managed by
Eagle Star and detailed below.

The Trust’s investment objectives are set out in detail in the ‘Statement of Investment Principles’, a copy of which is available by writing to the Group Pensions Department at the address given on page 60.

Members receive an annual Benefit Statement showing how their funds are building up.
The Trust does not hold shares directly in Kingfisher plc.

THE WITH-PROFITS FUND
The with-profits concept offers the opportunity for good equity-type long-term returns, coupled with the capital security not available from direct investment.

Contributions are invested in a broad range of stocks, shares and property. All of these assets can, of course, fall in value, but the bonus structure of the With-Profits Fund ensures that the fund is able to provide steady growth with a guarantee that if the monies are left in the fund until retirement, they will only increase in value.

When shares and property do well, the bonus will be lower than the increase in the value of the fund, because some of the bonus is held back and put in reserve. In other years, when shares and property may perform poorly, the bonus may be more than the fund has actually earned because this reserve is drawn on to make sure that members receive a steady year-on-year growth.

The default fund used is the Unitised With-Profits Pension Fund of Eagle Star Life Assurance Company Limited.

The With-Profits Fund is closed as an investment option to new schemes. Following from this the membership profile of the Fund is expected to mature over time, and Eagle Star has announced that it will continue to reduce the Fund’s exposure to equities both in the short and longer terms in order to achieve a better balance of investment return and protect guarantees.

Subject to any action that may be taken following the termination of contributions to the Trust on 31 March 2004, the Trustees will continue both to monitor the fund’s performance and assess its continued appropriateness.

The bonus rate declared by Eagle Star has been reduced over the year to reflect market conditions. From April 2003 the annual bonus rate was 2.5%. From April 2004, the annual bonus rate has been set at 1%.

In addition, dependent on market conditions, there may be an additional bonus (the terminal bonus) available. For the year just passed, Eagle Star was remunerated by an annual management charge of approximately 1% of the value of the Fund at the year end.

For Kingfisher Pension Trustee Limited