MEA -Mjpnotes MINUTES of a MEETING of the MANX ELECTRICITY AUTHORITY HELD on WEDNESDAY 28 JANUARY

MINUTES OF A MEETING OF THE MANX ELECTRICITY AUTHORITY HELD ON WEDNESDAY 28 JANUARY 2004, IN THE BOARDROOM, BALLACOTTIER, BRADDAN, ISLE OF MAN AT 11.00AM

Present: Chairman Mr W J McCallion Deputy Chairman Mr T D Mackay Mr T Ferrer Dr J C Taylor

Apologies: Mr J C Fargher In attendance: Chief Executive Mr M J Proffitt PA Mrs A J Cottier

01/04 Minutes The Minutes of the previous meeting held on 11 December 2003 having been previously circulated to Members, were taken as read, confirmed as a correct record and signed by the Chairman.

Matters Arising (a) Manx Gas Media Statement The Chief Executive advised on the true case of Manx Gas Prices following a statement on local radio Mr C Sidley, Managing Director, Manx Gas on the MEA being responsible for the Natural Gas Prices being charged.

(b) Minute 83(b) - Remuneration Committee For clarity it was noted that the terms and conditions set by the Remuneration Committee in relation to the Chief Executive's remuneration, received the full and unanimous support of the Board.

(c) Minute 77(f) — Steam Turbine The Chief Executive confirmed that Mann Turbo had cleared the Steam Turbine for use and that their were no problems with corrosion t was purely 'over protection' issues by Mann Turbo's personnel.

Minute 87(a) — Gas & Electricity Bill The Chief Executive confirmed that a letter had been sent to the DTI regarding the problems with gas sales vires. IT WAS AGREED that the Chief Executive send a follow-up letter in order to obtain a response from the DTI.

Minute 76(a) — Boeing/ManStar The Chief Executive discussed questions being posed to ManStar/Boeing/Manx Telecom by Deloitte & Touche regarding due diligence. The Chief Executive presented the questions to Members at the meeting. The Chief Executive confirmed that once Deloitte & Touche had completed their work the Chief Executive would send a letter to ManStar from MEA based on the findings of Deloitte & Touche.

IT WAS NOTED that question 10 of questions posed to ManStar referred to impropriety. IT WAS FURTHER NOTED that a Company Search had shown Mannin Investments as a shareholder of ManSat and that Mr Walter Gilbey was a contr lling shareholder of Mannin Investments and on the Board of Manx Telecom. ManSat owns 90% • ManStar. IT WAS NOTED that Mr W Gilbey was Chairman of Manx Telecom at the time of e ring the Tromode lease.

Minute 77 1 — 12-33kV Overhead Li, ection \51- The Chief Executive confirme the wire was replaced and agreedtdvise the recce tr' conductors were purchased fro . 4../ /" c.p 54 — 1;19 if Y. V10 rti 7 ,- - il v 'e -1 C\ ( g) Minute 88(c) — Bonus Allocation The Remuneration Committee advised the Board of the bonuses that they had set for the Chief Executive and his senior team in relation to the successful completion of the Capital Investment Program.

IT WAS NOTED that the Remuneration Committee's award had the unanimous support of the Board.

(h) Chief Minister's Letter The Chief Executive presented a letter received from the Chief Minister wishing the Board to confirm that a future MEA Chief Executive's Employment Contract details would be made available to the Council of Ministers.

IT WAS AGREED that the Chief Executive write to the Chief Minister and advise that the letter had been passed to the Authority's Chairman who would deal with it accordingly.

(i) Minute 88(d) — OffPeak Heating IT WAS AGREED that the Chief Executive would present information on OffPeak heating to the February Board Meeting, inclusive of Tariffs for discussion in April.

03/04 Chief Executive's Report The Contents of Paper No MEA 04/01 were noted.

(a) CCGT IT WAS NOTED that there was 32% thermal efficiency at the Plant being achieved by the Gas Turbines instead of 38%. IT WAS FURTHER NOTED that Liquidated Damages (LD's) were claimable if the efficiency could not be improved. GE have responded to this and have affirmed that the specified thermal efficiency will be achieved.

IT WAS NOTED that there was an issue with the Steam Turbine on the non-return valve on GT6 which had jammed closed which may indicate that GT7 has the same problem. Both valves are to be replaced with better products. A further design flaw has been detected regarding temperature readings on the Gas Turbine's, which has resulted in rewiring work with better insulation to protect the wires from heat on both Turbines.

IT WAS FURTHER NOTED that no work would undertaken on D Station until after British Summertime begins including the demolition of the old stack in order that any trading activities can be taken advantage of until that time.

IT WAS NOTED that the water treatment plant is working extremely well and Imissions are well below the levels of the planning approval.

(b) Skyward The Chief Executive confirmed that presentations had been made by the Chairman and himself to the Chief Minister, Treasury Minister and DTI Minister together with CoMin on the Telecoms Strategy.

The Chief Executive confirmed that he had met with Mr David Varney, Chairman, MMO2. The Chief Executive further advised Mr Varney that there were many positive reasons why the Authority should purchase Manx Telecom including the obvious synergies between the two organisations, the ability to keep cash on the Island and the political advantage of guaranteeing service levels. The combination of all of these items would deliver more success in attracting inward investment into the Island and consequently the economy of the Island. The Chief Executive further advised that Mr Varney had questioned the political support. The Chief Executive responded by confirming that he had had tacit support but could not confirm that was still in force. The Chief Executive indicated to Mr Varney that should Mr Varney receive an offer letter from the Manx Electricity Authority to purchase Manx Telecom it would have already received the support of Council of Ministers. The Chief Executive confirmed to Mr Varney that the new telecom setup could include MMO2 as a `technology uncle' for the use of Island telecoms as a test-bed area for new technology. Mr Varney and the Chief Executive agreed to meet again in March to discuss the Valuation Philosophy in order to progress the concept.

-2- The Chief Executive confirmed that he had also met with Chris Hall, Managing Director of Manx Telecom.

IT WAS AGREED that the Chairman and Chief Executive request a meeting with the Chief Minister, Treasury Minister and DTI Minister as a follow-up to the presentation.

IT WAS NOTED that Politicians had postponed the delegation to Scottish and Southern Electric due to problems with attendance.

(c) Tariffs The Chief Executive advised that the standing charge rebate, which effectively is worth £.1.8M per year, would be cancelled in April 2004.

(d) WEC IT WAS UNANIMOUSLY AGREED by the Board that first class travel be approved for the Chairman, Chief Executive and their wives to the World Energy Congress in Sydney Australia during September 2004. IT WAS NOTED that the Chief Executive was a "Presenting Author" at the Congress and was representing both the Authority and the Isle of Man on the World Stage of the Energy Industry.

(IT WAS NOTED that Mr Charles Fargher was not present at the meeting but his concurrence had been obtained by the Chief Executive following the meeting).

IT WAS NOTED that a great deal of enquiries had been received from various parts of the World looking for information/engineering solutions, which were being processed.

(e) Potential New Authority Members The Chief Executive outlined Mr Michael Grasby's background to the Board prior to introduction at the Board lunch during the recess.

The meeting was adjourned a 13.15hrs The meeting reconvened at 14.50hrs

The Board discussed Mr Grasby as a potential Board Member and it was agreed that the post be offered to Mr Grasby.. IT WAS FURTHER AGREED that Mr M J Proffitt, Chief Executive be presented as a further Board Member to bring the Board up to full compliment under the new Gas & Electricity Act. IT WAS FURTHER NOTED that Mr Proffitt was required on the Board as suggested by Michael Brindle QC from a legal perspective.

IT WAS AGREED that the Chairman send a letter to Hon A F Downie, DTI Minister to put the proposal forward for the two new Board Members.

Accounts IT WAS AGREED that Mr Proffitt redesign the entire Financial Commentary and produce a matrix for the finance section (how much exported, generated, sold).

The Chief Executive advised that payments for gas were being received from Manx Gas slowly and usually past the 30 day requirement.

04/04 Operational Report (a) Incinerator Fuel Supply IT WAS CONFIRMED that the Authority had not been approached for a Natural Gas Supply to the Incinerator Plant.

(b) Internal Audit Mr Mackay presented a paper on Risk Strategy to Non-Audit Committee members which was to be presented across the entire business. If agreeable, Mr Mackay suggested Mr Paul Dewar put together a paper recommendation on how to proceed.

- 3 - 05/04 Any Other Business (a) Barclays Loan IT WAS RESOLVED that:

1 The authority accepts the overdraft facility of £5,000,000 offered by BPCI Ltd in the attached facility letter, the terms and conditions of which have been exhibited to and accepted by the Board:

2 the acceptance of the facility is considered to be in the best interest of and to the advantage and further benefit of the company; and

3 the facility letter to BPCI Ltd now produced is approved and

M J Proffitt and W J McCallion

be and are hereby duly authorised to sign the acceptance of the said facility letter on behalf of the company and to bind the company to the terms and conditions stated therein.

(b) Third-party damage to North Quay Substation IT WAS NOTED that third party damage had been received at North Quay substation due to underpinning not being put into place by the Contractor resultant in a temporary substation being built. IT WAS FURTHER NOTED that the structural engineers John Gray were working on the project together with Dandara. A claim from the MEA will be submitted.

06/04 Next Meeting IT WAS AGREED that the next meeting be held on 26 February 2004 at 9.30am.

There being no further business the meeting concluded at 4.15pm.

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Proffitt, Mike

From: Shallcross [shallcross©manx.net] Sent: 25 February 2004 13:01 To: Proffitt, Mike Subject: Re: February Forum Hi Mike.

I understand and appreciate what you are saying. The Council has arranged the next forum ( nothing to do with Telecommunications) on 25th March. Additionally our Forum Committee has arranged a Forum with Chris Hall on 27th April

The background to Chris Corlett's talk is that a Council member had heard him talk about the DTI at a breakfast meeting through the Manx Business Connection and was impressed. It was decided to invite him to do a talk with us.

I was disturbed to read that Chris Corlett had not titled his talk. As we never select titles ourselves and the Club always requests a title from the speaker to save confusion, I immediately looked into the matter. Apparently we emailed Chris Corlett asking for a title. We received an email reply (which I have seen) from his Personal Secretary, Helen Goldsmith saying:-

"As requested, subject title of the talk is as follows: IOM Telecoms strategy-an update on the MEA update."

Our Chairman of the night did change the wording a little, by leaving out one of the words 'update' to make it read better.

Chris is therefore incorrect to say that the title was not originated from him.

Perhaps we can talk a possible date for a follow up Forum from yourself over the telephone tomorrow morning as then I can give you an update on Chris Corletts talk which takes place this evening.

Sincerely

Eddie

Original Message From: Proffitt, Mike To: 'Shallcross' Sent: Thursday, February 19, 2004 9:46 AM Subject: RE: February Forum

Eddie, Chris as CEO, DTI acts as a political liason between MEA Board and Government. He does not set MEA policy, which is the task of the Board. I have spoken to Chris and he was not involved with crafting the title of his talk. He has agreed to clarify this at the beginning of his address. In summary, to have Chriis Hall give MT's view of the future, followed by the DTI's balanced view, would it not be logical to have me next to "reply". I would appreciate the exposure. Could you try and arrange? Best regards and see you when back on Island. Mike.

Original Message From: Shallcross trnailto:[email protected] ] Sent: 17 February 2004 11:55

26/02/04 Page 2 of 2

To: [email protected] .im Subject: Fw: February Forum

Dear Mike

Just to keep you informed. I will be attending the forum as detailed attached and will let you know of how the evening went.

Regards

Eddie Original Message From: Lyndsay Tyer To: Lyndsay Tyer Sent: Tuesday, February 03, 2004 2:09 PM Subject: February Forum

Dear Members,

Please see attached the details of the next Executive Club Forum Dinner being held at the Claremont Hotel on Wednesday 25th February 2004.

Places are as always limited therefore should you wish to attend, please don't hesitate to contact me by return email.

Kindest regards Lyndsay Tyer Lyndsay Tyer Club Secretary

telephone : +44 (0) 1624 639399 fax: : +44 (0) 1624 661009 email : [email protected]

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26/02/04 03/04/02 Page 1 of

'i= POSSIBLE OFFER FOR JERSEY NEW WATERWORKS COMPANY LTD - posted 13/01/04

EMBARGOED UNTIL 0900 HRS TUESDAY 13TH JANUARY, 2004

Please note that the time of the embargo has been chosen In order to ensure staff and the London Stock Exchange are briefed prior to any media coverage.

The Board of The Jersey Electricity Company Limited (JEC), announces today, 13th January, 2004, that it has made a preliminary approach to Jersey New Waterworks Company Limited (JNWW) which may lead to an offer being made by JEC for the issued share capital of JNWW.

If it proceeds, the acquisition would enable JEC to provide Jersey's water industry with greater financial strength to safeguard the future availability, quality and affordability of water supplies, and ensure that ownership of the water industry remains in local hands.

JEC's Managing Director, Mike Liston, said: 'The water industry in Jersey, as elsewhere, is facing substantial investment costs to tackle the threats of water shortages caused by increasing demand and changing rainfall patterns, legislation on water purity, ageing water distribution infrastructure, and environmental constraints on the development of new water sources.'

'As it stands, JNWW's future will, in our view, inevitably be affected by a number of circumstances, including its requirement to fund necessary infrastructure investments given its already high borrowings, and the possible appeal to the States of Jersey, which has had to underwrite JNWW's debts, of divesting itself of its holding in JNWW,' he added.

The acquisition, if successful, would allow the States to retain control of this vital water service through its presently r 62% shareholding in JEC.

The JEC has a proven track record of commitment to infrastructure investment, cost competitiveness, reliability and environmental responsibility. It takes pride in having invested more than £100M during the past 10 years in its electricity system, which is now capable of importing all the Island's needs from Europe - where the company 'shops for' the cheapest and cleanest power available - but retains the strategic independence of its own power generating capacity in Jersey,

JEC believes the complementary nature of the two organisations offers opportunities for cost savings in the administration of the businesses and the management of infrastructure.

JEC acknowledges that some cost savings would involve job losses but cannot confirm how many at this time. A clearer picture will not emerge until the terms of any offer, if progressed, have been finally negotiated and accepted by the shareholders of both organisations.

Mr Liston said: 'Any Waterworks staff worried about their jobs should be comforted by the reputation we've built for responsible behaviour as we've steadily reduced our own workforce by one-third over the past 10 years - we still enjoy good industrial relations having always consulted honestly and fairly with our staff and their unions and offering generous redundancy packages.'

JEC can confirm that although not yet in place, it will comply in principle with the requirements of the Jersey Competition Law and expects it will have no difficulty in demonstrating to the Jersey Competition Regulatory Authority (JCRA) that the acquisition is in the best interests of both water and electricity consumers.

7 A further announcement will be made as soon as practicable.

For further information contact: Mike Liston Managing Director of Jersey Electricity Tel: 01534 505320 y Issued by Kate Newman White Knight PR Tel: 01534 510015 / 077977 31155

s://s, http://www.jec.co.uldnews_stories/13_01_04.htm 23/02/I Page 1 of 2

THIS IS c Evening For kcal I . ;P.r1r, JERSEY i'l""'55ff'''",Y At thetteaort of Wand fife

JEC bid for Waterworks

THE JEC are planning to take over the Waterworks Company. They say it would make strategic sense if the two companies - in which the States have majority interests - became one.

The JEC have yet to put a bid together and have not put a price on Waterworks, which has a share value of only

just over £1 million but owns considerable land and assets and makes an annual profit of around £3

million.After today's announcement of the proposed acquisition, the electricity company will now pore through

the water company's books to prepare the bid. The JEC say a takeover will ensure that the water utility remains

in local hands and will help to safeguard future supplies.It would also mean job losses at Waterworks. Staff

there were informed of the potential bid this morning and their chairman, David Norman, said that the news

was greeted with surprise and concern. 'They are human beings, they would have some anxieties,' he said.It is

clear that the Waterworks Company have not invited, nor expected, the bid and the first Mr Norman knew about

it was at a meeting yesterday with JEC chairman Derek Maltwood, JEC managing director Mike Liston and water

company chief engineer Howard Snowden.Mr Norman said that until the bid was actually forthcoming, he was

not in a position to comment about its merits. The JEC say there are 'synergies' between the two companies but

they will not say whether they expect water bills to come down as a result of a takeover.Mr Liston said the

company would be keen to put more homes on meters and encourage water conservation. He also said it was

likely that water and electricity consumers would get a single bill in future.The Finance and Economics

Committee have given their approval for the bid to be prepared, although they are taking a 'neutral' position on

the merits of it.Finance act on behalf of the States as major shareholders in both companies and in theory there

would be no requirement for the bid to go to the States for approval, although it seems unlikely that the House

would not be given an opportunity to debate the takeover.Finance president Senator Terry Le Sueur said: 'We

will be taking independent legal and professional advice to ensure that it acts at all times in a responsible and

ethical manner, recognising also the obligations owed to the public as consumers of water and electricity. ' An

announcement was made to the London Stock Exchange this morning, as the JEC is a floated company. BY ANTHONY LEWIS

Copyright of this article resides with Jersey Evening Post Limited. Unauthorised copying or transmission of this material is illegal.

A separate WorldPay receipt will be sent to you by email but you should print this screen for future reference.

Details of your order: JEP Email Article from 13/01/04

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Your address: PO Box 177 Douglas Isle of Man

Your telephone:

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https://select.worldpay.com/wcdpurchase 23/02/04 Lewis, Ashton

From: Proffitt, Mike Sent: 20 February 2004 09:56 To: Lewis, Ashton Subject: lord street

Ashton, What's the latest on the 3rd party damage to the likv substation. What's our claim value? etc,etc. Mike.

Mike Proffitt Chief Executive Manx Electricity Authority PO Box 177 — Douglas — Isle of Man —1M99 1PS Tel: (01624) 687798 — Fax: (01624) 687611 e-mail: [email protected] web: www.manxelectricity.com

WARNING If you are not the intended addressee of this e-mail, you must not copy or deliver it to anyone else or use it in any unauthorised manner.

/6) oCa_e, .i 2 7) 060

a-464-4 Cei3C 2.0 see°

LL,5 Ait_ c.z 1-1 14..644 Proffitt, Mike

To: BEA Executive & Membership cc: BEA Members' Alternative Contacts

Dear Colleagues Please note the UKTI invitation below and pass to your relevant exhibition / promotions department for urgent action as necessary. Kind regards Di

Di Hammet BEA Membership Secretary Tel / Fax: 020 8767 9744 e-Mail: [email protected] **************************** INVITATION FROM U.K. TRADE & INVESTMENT

Dear Colleagues

19th World Energy Congress & Exhibition, Sydney - 5-9 September 2004 "Delivering Sustainability: Opportunities and Challenges for the Energy Industry"

UK Trade & Investment is planning to host a pavilion to showcase the expertise of British companies operating in the energy sector at the 1 World Energy Congress Exhibition in Sydney that will run concurrently with this WEC Congress later this year.

As you are aware, this Congress is the leading gathering of senior executives associated with the global energy industry. It is the triennial climax of the work of the World Energy Council (WEC). The WEC is represented in 98 countries by the principal energy industries and practitioners in each of its member nations. In the UK, the British Energy Association/WEC, has 44 companies in its membership and British organisations are expecting to deliver ten technical papers to the Congress programme. The event will attract senior executives from the energy sector around the world.

The focus of the Congress is always on a topical aspect of international policy. There can be nothing more timely than to focus on the opportunities and challenges for business arising from delivering sustainable energy solutions. The Sydney Energy Exhibition therefore presents a unique opportunity to promote individual business activities in the UK context. British energy policy is widely renowned and particularly in the area of sustainable development where the UK is seen to be taking a vigorous lead in world policy.

This presents an ideal opportunity for companies to showcase their expertise at little cost to themselves as part of the UK exhibit and to attract international attention from their own part of the exhibit, from the high level material of other exhibitors and from the reflected pre-eminence of UK policies and energy technologies.

UK Trade & Investment is proposing to pay for stand space at this event and proposes to offer promotional space to a limited number of companies on the basis of a contribution of E1000 per company, conditional upon there being a company representative available for the event.

We would be delighted to hear from interested companies. Please contact Ivan Youd by Tuesday 24 February ([email protected] ) or on 0207 855 4619 if you have any questions.

For more details of and to register for the Congress and Exhibition go to:

Remember, BEA Members will benefit from reduced SWEC Congress fees.

Regards

Peter Hollis Manager Power Projects International Sectors Group lb UK Trade & Investment Bay 110, Elizabeth House, 39 York Road, Waterloo, London SE1 7LJ Tel: 0207 855 4623 Fax: 0207 855 4590

Communications Commission Oaseirys chellinsh

Salisbury House isle of Man DIRECTOR Victoria Street Government Anthony R. Hewitt FCIS MCMI Douglas Rays Egan Vann ln ISLE OF MAN IMI 2LW Telephone: (01624) 677022 Fax: (01624) 626499 Mr Mike Proffitt Chief Executive Manx Electricity Authority PO Box 177 Douglas ISLE OF MAN Our Ref: 2172.MTL.ARH/MK

27 October 2003 Dom, kie.

mm02

David Varney, Chairman of rnm02 plc, parent company of Manx Telecom, has copied to me his letter of 22 October 2003 to you. Should it become known that it was being contemplated, however speculatively, that major parts of the Island's telecommunications infrastructure could be taken into public ownership, by whatever vehicle, it would be 1.,,X3 -4)‘' immensely damaging to business on the Islandjarticularly to the finance and IT sectors. Such a move would be contrary to every development in telecommunications best practCT ta,,-) not only here but across Europe and the globe over the past two decades.

I shall, of course, appraise my Chairman, Hon R P Braidwood MHK, of this correspondence. It may be that the Commission, in the light of this development, will wish to examine very closely indeed any approach from the MEA or a subsidiary of it to enter the telecommunications sector. This would include a thorough reappraisal of the •ro•osal to light e to carry commercia tra ic. a • ast year approved that in principle, but subject to stringent ring-tence tests.

You and I have been proposing to meet to discuss the current scene. It may be appropriate if such a meeting were held sooner rather than later.

I am copying this letter to Hon Alex Downie MHK, to whom David Varney's letter was also copied, as well as to my Chairman.

Anthony R Hewitt FCIS Director .L. • g", gm. d6..0L.-- 01 r>.— Q..--.1- c..b4/1.1:Lr. fri 14 4-1 z.-4-r g foe p, iszol, ; ea v 8.411,4,;p „I ,,,ag(e •

Cottier, Alison

From: Cottier, Alison Sent: 04 February 2004 10:21 To: Proffitt, Mike Subject: Board Meeting - Reminders

• Follow-up letter to Chris Corlett re gas sale vires.

• Offpeak heating issue to Feb Board Meeting. \

• Chairman's letter to Minister Downie re Mike Grocby/MJP appointment to the Board,.

Alison Cottier PA & PR Manager Manx Electricity Authority PO Box 177 — Douglas — Isle of Man —1M99 1PS Tel: (01624) 687798 — Fax: (01624) 687611 e-mail: [email protected]

WARNING If you are not the intended addressee of this e-mail, you must not copy or deliver it to anyone else or use it in any unauthorised manner.

1 MEA CE OFFICE 16 *687611 20/02 '04 16:17 F.] :05/09

INTERNAL MEMORANDUM

Henry Davey

Julia Jackson

19th February 2004

Manx Electricity Authority Telecommunications

Manx Telecom Manx Telecom (MT) was formed in 1987 and is wholly owned subsidiary of mm02. The company holds licences to run fixed and mobile networks on the isle of Man it of M).

Since MT began operating in January 1987, they have paid a licence tee each year. typically in excess of it' lmilhon. MT recycles around iT5million back into the local community. may be the result of the licence condition that 15% of !vii 's profit has to be released for competition).

MT's Growth During the last financial year tbe mobile customer base grew by 23.7% to 58,985, around 76% of the Island's population. The fixed line customer base eirew by nearly 3%. At the end of 2003, there were nearly 59,000 business and residential fixed line customers.

Words from the Managing Director The Managing Director (Chris Hall) of MT said that the biggest task of the corning year (2003) is negotiating the terms of the licence, Fle said, "whilst we arc happy to see the market on the Island opened up, this should be done in a way which prevents negative impact on investment." He went on further to say, "what would not he good for the island would be to encourage 'cherry pickers' who arc unwilling to provide services to less profitabie customers and essential services to the community".

Source: http:iiwww.manx-telecom.com

AT/mm02 Muleteer

The effects of the Demerger and the agreements gover ► ing the continuing reiationsttp between BT Group plc and min02 plc, and the separation or their businesses, assets and liabilities, including guarantees are described in the, '13T circular to shareholders — our plans to create two new holding companies'.. September 2001. The circular explains that, on 18 September 2001, BT, BT Group plc, mm02 plc and 02 Limited enter ed into a separation agreement (the "Separation Agreement").

Following the Demerger becoming effective, BT Group plc and mrn02 plc have agreed to allocate certain assets and liabilities and rights and obligations, in, each case relating to the mm02 business, between their respective groups. mm02 plc will ne responsible fur insuring the ongoing activities of its business following the Demerger becoming, effecti.c. The allocation of assets and liabilities in the Separation Agreement suppLments the assets and MEA CE OFFICE Tri +687611 20/02 '04 16:18 571J :06/09

share transfer agreements entered into between members of the BT Group an mniC2 Group to effect the internal reorganisation which took place to create the mm02 Group as a distinct sub-woup of the Group.

The relevant section is attached of the circular for the Separation Agreement. jean. Woe (.1o)n Edward's trainee has been unable to obtain this Agreement. I. believe John i, considering instructing an T of M solicitors to aid m this research),

BT In 1980 a name was gi.cn to the telecommunications business of the Post OFfice - British Telecom - following a Government decision to separate the major Post Office operations. Sir Keith Joseph, Industry Secretary, had announced in the House of Commons iii July the Government's intentions to restructure the Post Office and relax the monopoly over Terminal equipment and value-added services. However, British Telecom remained part of the Post Office until the following year.

In 1981, British Teleomtnunications, trading as British Telecom, severed its links with the Post Office under the British Telecommunications Act, 1981 and became a totally separate puhhc corporation on 1 October. They were now two separate organisations with their own chairmen and boards of directors.

The transfer to British Telecommunications plc from British Telecom as a statutory corporation of its business, its property rights and liabilities took place on 6 August 1984. Initially, all shares were owned by the government, but in November 1)84, 50.2`A of the new company was offered for sale to the public and employees in this first Natation of' a public utility.

The company's Transfer into the public sector continued in December 1991 when the Government sold around half of its remaining 47.6°.4t of shares reducing its stake to 21 Virtually all the Gosemment's remaining shares were subsequently sold in a third floatation in July 1993.

BT & Manx In 1986, the franchise to operate the I ui M's telecommunications system .{as awarded to Bntish Telecom's Manx Telecom. On 1 January 1987, Manx Telecom Ltd came into operation as a wholly owned subsidiary of British Telecom with a 20-yea• licence to operate the 1 of M telecommunications system.

Mm02 & Manx As a crown dependency, the I of M has political autonomy from the UK and h.as its own telecommunications regulator, the 1 of M Government Communications Corrumssi on.

In 1987, Manx Telecom was awarded a 20-year licence to operate the I of M telecommunications network. The licence originally covered fixed line telephony but was expanded in 1994 to include GSM services and in 1999 to include LMTS sorvi;.-7es

The principal licence relating to the fixed network operations in the I of M, or the Fixed Licence, was issued on 27 June 1986 and came into force on i January 1987. It continues force until 31 December 200. The principal licence relating the mobile network operations

■ 4441 1 1, _I. 3 MEA CE OFFICE 13 +687611 20/02 '04 16:18 5 ;07/09

in the I of Vii, or the Mobile Licence, was issued en 28 October 1994, 'rhe Mobile Licence expires on 31 December 2006.

Source -, mmO2 plc - summary of listing particulars.

zu,0'.:4 1 Lei

lvlEA CE +687611 20/02. '04 16:19 :0a/09

INTERNAL MEMORANDUM

John Edwards

Jean Woo

19th February 2004

30841460 Manx Telecom

Background information on Manx Telecom

• Key Dates 1982 • "British Telecom- launched and separated from the General Post Office • British Telecom's principal business stated as .tinoitg%: oihers") the provision of telecommunication services to customers in isle of Man, 1984 • British Telecom became a plc in August with 50.2°, s, of the C ,impany offered for sale to the public and the employees • Manx Telecom ("MT") incorporated by Act of Par ;arriont • No mention of MT within British Telecom's Listing Particulars 1986 • MT mentioned in Financial Times (")Fr) article: BT retains licence to provide all telecommunications services for Isle of Man. MT mentioned as BT's wholly owned subsidiary company, which will take over the service on that day. • Article mentions that the Manx Government is "lukewarm - about a stake in the MT and that Greenhill (person responsible for MT) is confident that they will be able to offer shares to investors about 2 years. 1991 • British Telecom became BT. Government sold hall of its reinanwig shares in BT Z001 • BT dernerged into 2 holding companies BT Group plc and ram02, with Manx Telecom becoming a subsidiary under mai02. • Derrierger Circular refers to a Separation Agreement whioh sets out the allocation of assets and liabilities between BT Group and mm ►2 (unable to obtain copy of separation agreement) • nun02 listed on London Stock Exchalase

NB: Unable to obtain public information on the assets which MT owns Checks done at Registry of Companies (for Isle of Man) show that no company accounts were filed. MEA CE OFFICE IT +687611 20/02 '04 1 6:19 ;09/09

Communications Commission

The Communications Commission the "Commission") is empowered under the Telecommunications Act, 1984 of Tynwald (the "Act") to ensure that ali those who Tun telecommunications systems are licensed to do so and that each licensee operates under the terms and conditions of his licence. The Commission also keeps a close eye ois changes in telecommunications supply and licensing in the British Island, particularly the progress in pricing.

Information obtained from the isle ofMan government website states the Commission is a statutory board which is individually constituted with a membership divided between members of Tynwald members and non-Tynwald members. The Chairman of the Commission is the Minister for Home Affairs and the Commission (prcsuniabl> Hen R P Braidwood Milk. as mentioned in a letter dated 27 October 2003 by A R Hew in to Mike Profill) and has between 3 ro 5 members. (Only Mr AR Hewitt — Director and Mr R illiamson -- Technical Director listed in website)

NB: The Act sets out powers of the Commission but makes no mention of the powers of the Chairman andiar Directors.

MEA CE OFFICE IT +687611 20/02 '04 16;16 5 :ViC9'

Cottier, Alison

From: Jackson, Ju!ia [JulierJaCKson@herbertSniqh,comi Sant: 20 February 2004 14:54 To 'rnike..proffitternea.gov .rn Cc: Davey, Henri: Woo, Jean Subjact: FW: Telecoms

17 3taruirci_ta mike,

Je:in Woo and me have oompleted some resarch 7n cne telecom matter for Henri Davey and : have, attached the two memos and an article from the FM 1 99 6 , about HT.

Regards,

Paralegal Projects and Utilities Herbert Smith

Diroc Line: 02•)7 466 2994

-----orilnal message-- - Froin: jw [mailto:jwi :sect : 19 February 2004 16:51 To, Woo, Jean Sdhject• scanned 17nage

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June 2.4. 1986, Tuesday

SECTION: PURVEY; Pg

LENGTH; 965 words

HEADLINE: Isle Of Man 3; Showpiece Promised

BYLINE: Stuart Alexander

BODY: It took British Telecom less than four Months to be.7z Cable and Wireless's Mercury subsidiary ant; retain the ;ice , ce to ;.;.1 TCV the telecommunications services for the Isle of Man.

But that was only the beginhning cf lengthy negotiations with the c-,overnment over exactly how those services wJi be prov i ded when the franchise cores operation on January 1 1987 for an initial 20-year period. There are several conflicts of interest to be resolved.

For the company which wFii take over the service on the: day w,;i be Manx Telecom and it will be expected to stand alone, tight &one and make b,- 0L; alone while at the same time providing a public service, it wiry nave to fuif,la;! the promises offered and extracted in those negutiat!ons. :.:orripiete investment programme and satisfy the differing needs of inte7riat.nra! and village communities.

Although a wholly-owned subsidiary of British Telecom or tKe mainland, will have to look after a customer base that is a microcosm of that availab:e to its parent and operate as an overseas division. It will have mist 23,()C0 customers, compared with the 20 en of British Telecom.

The man %Nilo must make the whole thing work, and who describes ;-.Irt -,3eif as the one left holding the darco! when Vic m s.c stoppeo, s _'in-1 Greenhili, a

genial Geordie with a no - nonsense, sleeves roiled up apprOacn. The scam, of the job he is tackling is summed up in the much-publicise i,;4-.mary ai m of Manx Telecom, "to establish on the Isle of Man a world showpiece of telecommunications."

That is a tail order. It is based on a plan to make the islz..rid's et-,gy p a :-itoe.` for British Telecom to show to other potential custc-miers arouri,1 the -forld just how they can look after the needs of both large and Sria:i countries. everyone eise, British Telecom has not been slow tc cavails- e oh its expertise and market it throuvh a consultancy division.

Greenhill is also the man who trust persuade private investors to !Du., his company. There are signs that the Manx Government is, to say the moist,

lukewarm about taking an equity stake but Greenhill is corifide -, t that no be able to offer shares to investors after aoout two years.

to shouid nave no difficulty convincing peopie about Ims acil+ty to spend money but he will also be required to demonstrate that there is a good c.nz.:h7e of making profits.

At the moment he is committed to something n P‘,) ,_..-ic•; a year for each of the 20 years of the le,.- trice. This is on too of tn .:. 8 MEP. CFFICE +687611 20/02 '04 1616 5 :03/09

spent in the past five years and is compecated by the front enc.*, ceuir) ,; vvhm+ will see half of that 20 m pds spent in the first five years

So there will have to be s.lbstaneai growth iii demand it there ist,.-; 2;44 acl adequate return on the investment Anich trie company is making and. consequently, any hope of either dividends or capital growth fur st-12., reriokier!:. And that means growth in both tee size and requirements the busine5s users.

All of which means some toug recisions on the new ta•ff structure. Historically, charges in the Iele of Man were set at the same level as the rest of the UK but, in making its pre sentation to the isle of Man Geeer- nrnent, British TeieCOM said "developments in recent years nave made a dIferenr. appreacn now both possible and desiraoie.

It went on to say teat Manx Telecom would be tree to and set prices "especially tai lored to meet the needs of the Isireed'S COmMur.ity,"

Without making any promises, that general policy statement .'.fee:: on to see that one of the options included a reduction in call prices 1'487. So can Manx subscribers look forward to smaller bees from next year

Jim Greenhill Is clear about the need for balance. While some ;siancer5 5eE Manx Telecom as a public service and would even like local cane to be free, those sentiments have to be balanced by commercial reality. Tree variety of services to be provided by Manx Telecom to such a small community wi; ne,,e to be paid for.

The commercial sector understands this but even they will want to see expensive facilities like packet switching available at a reasonable price. The peaks and troughs of demand caused by the tourist season can mean Much spare capacity in the off season; there are major investments in fibre optiea1 cable links which help communications with Europe; and .re bt":CelOte Levee station to improve communications with North America,

And there are those items to be offered by Manx TeleCCITI required to match the attractions of Cable and Wireless. Cee of them ,s itemised billing, which Manx Telecom is committed to introauceig n Doegias next year and after that tnrougnout the isand.

Not everyone be,eves tnat itemised balling 15 particularly benef)eiae is meeee extra expense in changing the billing system and, at domestic levee be az, much a cause of strife as a budget control mechanism.

Add in the introduction of cellular radio and mobile phones, rai.10 pE;;J)9 erre video-conference studio, staffing up to carry out functions pre•i.Le.is4 caree] out on the mainland and instailing the iates: digital systems wrirch wig see. each of the island's 11 exchanges rep%ecee by 1990 and the pressures on .:irn Greenhill and his new board of directors are obvious

So the answer is that, when final submissions are made in 3uiy, ,v;me changes may be reouced in the next 18 months, others wie riot and there may even have to de some weich are higher than on the mainland oecause cf tne high cost, low traffic equation.

In strict financial terms Manx Teecorres success is cepender -v.: on tee growth of the island as a business centre. Without that .be 71..tkie a large, glearnng system running very expensively,

Project Rat: Jean Woo/30841.460 MEA CE OFFICE ri +687611 20/02 '04 16:17:04/09

use of this serv ,ce ;5 gover1-111 by Tef'rna_P-..0 ese , c"-"t!'", : tits. Ccyncil): :12004 Joxsriexia5roura a tl,iisiori of E;sever ojit,) :_tc2 All '.7,)hu; &t.:t.:''vv:1 Isle of Man Page 1 of 1 HISTORY OF TELECOMMS ON THE ISLE OF MAN

Set in the Irish Sea, the Isle of Man measures just 33 miles by 13, and has the world's oldest continuous parliament, Tynwald. Her Majesty the Queen as Lord of Mann is Head of State. Her personal representative on the island is His Excellency the Lieutenant Governor, who is appointed by the Crown for a five-year term. The island is a Crown Dependency that, through its ancient parliament enjoys a high degree of domestic legislative and political autonomy. The U.K. Government is, by convention, responsible for the conduct of the external relations and defence of the island.

Unlike Guernsey and Jersey, the Isle of Man operations remained a part of the Post Office when it was created from the GPO in October 1969. Postal services were controlled by the Head Postmaster Douglas whilst telephone services were controlled by the Telephone Manager, Liverpool.

In July 1973, control of postal services passed to the Isle of Man Postal Office Authority, a self-financing Statutory Board of the Isle of Man Government. The IoMPOA has retained much closer links with the British Post Office than either Jersey or Guernsey and retains the red livery and double-line lettering.

Turning to Manx Telecom Limited, this remained part of the Post Office until 1981 when it became part of British Telecommunications. After flotation of British Telecom, Manx Telecom was established as a wholly owned subsidiary of BT in 1987. It is an Isle of Man registered company and was probably established to benefit from the island's taxation policy. There has been a rapid development of the island's communication services with digital exchanges and the provision of a new digital mobile network, using the GSM world standard. The island is served by both microwave radio and fibre optic submarine cable links to the UK. Situation as at December 2000.

[Material extracted from an article on the adminstrations' road vehicles by Christopher Hogan in Post Horn, the magazine of the Post Office Vehicle Club.]

History index

http://www.sigtel.corri/tel_hist_man.html 18/02/04 1984 - 1990 Page 4 of 10

The Martlesham switched star cable TV and interactive services network was introduced in Westminster.

British Telecom placed an order for around £100 million in March for an AXE 10 (System Y) digital switching system to provide a competitive alternative to System X. The contract was awarded through Thorn Ericsson.

The first AXE 10 exchange was opened the following year at Sevenoaks. As well as being an alternative to System X, introduction of AXE 10 exchanges into the network allowed the modernisation programme of the network to be speeded up. AXE 10 exchanges provided the same range of extra facilities known as Star Services (later known as Select Services) as Systems X, including code calling, repeat last call, three way calling, call diversion, call waiting, call barring, reminder call and charge advice.

A £160 million payphone investment programme was launched. As part of the modernisation the new generation of telephone kiosks began to appear, the KX 100 - 400 series. The first of these new-style booths was unveiled in London's Leicester Square. They were cheaper to maintain, more resistant to vandalism and were designed to blend in with any surroundings. Special attention was paid to environmental considerations, acoustics, weather protection, lighting and ventilation after intensive market research was conducted into customers' needs. Constructed in a variety of designs they were hardwearing and contained paint-free finishes of anodised aluminium and stainless steel. They were also fitted with sound proofing, vandal-resistant panelling and improved lighting. The designs assisted customers with disabilities and allowed access to wheelchair users.

The modernisation programme was completed in 1988. The UK's public payphone system had not been amongst the most efficient in the world, but in the 1988 Quality of Service report it was listed as having a 96 per cent reliability. This success rate continued, compared to only 72 per cent in 1987. As a result of the programme, there were 80,000 of the stainless steel design kiosks in service by 1996, in addition to 30,000 hooded/canopied phones in locations such as railway stations or shopping centres and 15,000 old style red boxes in heritage sites.

BT introduced a new design in 1996, the KX + range, following widespread research into public opinion, and which built on the successful features of the stainless steel kiosks.

In 1999, BT operated a network of 137,000 public payphones of various designs across the UK, compared to 81,000 ten years previously, with an average of 5,000 new units being installed each year.

Britain's first credit-card-operated public payphone was introduced. Creditcall, like the Phonecard, was another cashless payphone service, enabling customers to make calls using major credit cards. It was installed on a trial basis in London at Heathrow Airport and Waterloo BR station.

BT Japan was set up to represent BT's corporate interests in Japan (BT is listed on the Tokyo Stock Exchange). BT Japan managed BT's relations with Japanese carriers, press and governmental authorities. It was also responsible for new business development activity and for sales of systems and services to the financial community. In 1998 it contributed to the creation of BT Communications Services, the BT / Marubeni joint venture company in Japan.

Teletex, a new automatic high speed message transmission service, was inaugurated on 11 April.

The Singapore office of British Telecom was opened.

British Telecom acquired CTB Inc.

The Message Master radiopager was launched. It was the first pager with a mini screen for written messages.

http://www.ht.corn/arehives/history/19841990.htm 18/02/04 1984 - 1990 Page 3 of 10

Voicebank voice messaging service was inaugurated.

Star Services were launched, and provided new push-button facilities such as 'repeat last call' and 'call barring'. This facility was available to customers connected to 'System X' exchanges, and began at Cheltenham on 26 January.

The first 'System X' exchange in Hull was opened on 28 November, exactly 80 years after the opening of the town's first municipal exchange.

The search for a new voice for the speaking clock ended on 5 December when Brian Cobby, an assistant supervisor in a telephone exchange at Withdean, Brighton, was selected from 12 finalists in British Telecom's Golden Voice competition.

The new speaking clock was inaugurated on 2 April 1985.

The Internet forerunner, ARPANET, was divided into two networks, one to serve the military (MILNET) and the other to support academic research (ARPANET). The US Department of Defense continued to support both networks.

1985

Cellnet, the British Telecom and Securicor joint venture cellular radio service, was launched on 7 January. It replaced the existing radiophone service operated by British Telecom. Its competitor Racal Vodafone was also launched the same year.

The joint venture company was relaunched as BT Cellnet in 1999. In July 1999 BT announced it would be acquiring Securicor's minority stake in the joint venture.

The first new-style British Telecom shop opened in Southend-on-Sea High Street on 3 January, selling a wide range of telephones, business equipment and telephone accessories. The new shop was an extension of the existing chain of 53 phoneshops, mostly sited in department stores or in local telephone area offices.

The new speaking clock was inaugurated at 11 o'clock on 2 April when the voice of Brian Cobby replaced that of Pat Simmons, the voice of the clock for the previous 22 years. The new clock was digital and, with no moving parts, more reliable and accurate than the old equipment.

From 1 November it was possible to rent an exchange line alone from BT without having to pay rental for a telephone instrument.

Modernisation of the trunk network began with the opening of 'System X' exchanges in Birmingham, Coventry, Leeds and the City of London. The initial phase of the modernisation was completed in November 1988 with the opening of the 53rd 'System X' trunk exchange in Norwich. The last analogue trunk exchange at Thurso, Scotland was closed in July 1990 and the BT long-distance network thereby became totally digital, the first major system in the world to do so.

The first Stored Programme Control telex inland exchange was opened.

The first UK operational undersea optical fibre cable was laid, linking the Isle of Wight to the mainland across the Solent.

British Telecom trialled its first Integrated Services Digital Network (ISDN).

Trials of the Linkline 0800 and 0345 services began on 12 November. An International 0800 service was opened from the United States.

Linkline was later marketed as Freefone and Lo-Call. http://www.bt.com/archives/history/19841990.htm 18/02/04 1984 - 1990 Page 2 of 10

tubular steel barrel vaults spanning the atrium. In style it is modern and forward looking, but in building materials it echoes the old GPO West - which housed the Central Telegraph Office for so many years - and the neighbouring St Paul's cathedral, also built of Portland stone. The interior of the building was extensively refurbished from 1997 to 1999 to make better use of space, conform to modern approaches to working, and exploit the latest telecommunications technology for more effective and fulfilling working.

Much larger than the building it replaced, BT Centre now completely covers the route of the old Bath Street, closed in 1934, and the site adjoining the old CTO. The main entrance of BT Centre follows the line of the lost street. Modern in design and appearance, BT Centre is a reflection of BT - a company committed to meeting today's telecommunications needs.

The first UK, and the world's largest, digital international telephone exchange was opened at Keybridge House in London on 23 May. The new exchange was supplied by Thorn Ericsson Telecommunications Ltd, and was based on the AXE10 (System Y) design. It provided an extra 13,800 lines, and could handle up to 144,000 call attempts an hour.

London's first satellite earth station was opened on a 3.5 acre site in Pier Road, North Woolwich near the old King George V Dock in Dockland. It was designed to handle two main areas of satellite telecommunications business: the demand for business services from from the City and the provision of transmission facilities for satellite television and radio companies.

The Teleport began operations in February, transmitting commercial cable TV broadcasts using the European Communications Satellite (ECS). It was originally called the London North Woolwich Earth Station, but was renamed the London Teleport in April, coinciding with an official visit by HRH The Duke of Edinburgh. It was opened officially in October.

The Teleport was sited in North Woolwich because, with the Thames at its southern boundary, the site was protected from any future high rise development which might impede the clear outlook required by the antennas to transmit and receive signals to and from satellites. The area was also free from any radio interference.

The London Teleport was the hub of BT's international SatStream service, videoconferencing and several other specialised satellite services from computer data transfer, facsimile transmission, telex and telephone communications over private leased lines.

Ships using INMARSAT - the maritime satellite system - could access a wide range of computers and databases round the world from 9 January through the International Packet Switching Service (IPSS) provided by British Telecom International.

International Kilostream was launched, a new digital transmission service using satellite technology especially suited to the transfer of large amounts of data to overseas destinations on a daily basis.

The world's first 140 Mbitls single-mode optical fibre system was opened between Milton Keynes and Luton.

British Telecom's first overseas office was opened in New York.

The telephone directory was redesigned in conjunction with consultants Wolff Olins and relaunched as the Phone Book - first, in central Manchester in March.

Prestel received the Queen's Award for Technological Achievement.

Prestel Mailbox was introduced nationwide on 15 October.

Trainphone, the first public payphone on a train, was introduced on a trial basis on services from Paddington to South Wales and the West Country. It operated via the Cellnet network.

Slimtel was launched, the first telephone instrument designed and manufactured by British Telecom. http ://www.bt. corn/archives/hi story/ 19841990. htm 18/02/04 1984 - 1990 Page 1 of 10 BT Archives

Events in Telecommunications History

Index to Events in Telecommunications History

1984

The Telecommunications Bill, delayed the previous year because of the General Election, received Royal Assent on 12 April and became an Act of Parliament. British Telecommunications had been incorporated as a public limited company (plc) in anticipation of the Act on 1 April. The transfer to British Telecommunications plc from British Telecom as a statutory corporation of its business, its property, rights and liabilities took place on 6 August.

Initially, all shares in the new plc were owned by the Government, but in November 50.2 per cent of the new company was offered for sale to the public and employees in this first flotation of a public utility. Shares were listed in London, New York and Toronto. British Telecom's flotation was the first of a series of privatisations of state-owned utilities throughout the 1980s and into the 1990s. The company's transfer into the private sector continued in December 1991 when the Government sold around half its remaining holding of 47.6 per cent of shares reducing its stake to 21.8 per cent. Virtually all the Government's remaining shares were subsequently sold in a third flotation in July 1993, raising £5 billion for the treasury and introducing 750,000 new shareholders to the company.

In July 1997 the new Labour Government relinquished its Special Share ("Golden Share"), retained at the time of the flotation, which had effectively given it the power to block a takeover of the company, and to appoint two non-executive directors to the Board.

As a plc, British Telecom had to operate under normal company law, particularly in the manner prescribed for public limited companies. Privatisation also released the new company from the constraints of the Public Sector Borrowing Requirement (PSBR), allowing British Telecom greater freedom in borrowing and investment.

The 1984 Act, in addition to providing for the privatisation of British Telecom, abolished the exclusive privilege of running telecommunications systems and established a framework to safeguard the workings of competition. This meant that British Telecom finally lost its monopoly in running telecommunications systems, which it had technically retained under the 1981 Act despite the Secretary of State's licensing powers. British Telecom was now required to hold a licence to run such a system in the same way as any other telecommunications operator. The 1984 Act, in fact, made running a telecommunications system without a licence a criminal offence. The licence granted to BT lays down strict and extensive conditions affecting the range of its activities, and is subject to close scrutiny and review by the Director General of Telecommunications, the head of the Office of Telecommunications (Oftel) which was set up at this time. A system of regulation in the field of telecommunications had been recommended the previous year in the Littlechild Report.

The creation of Oftel as a non-ministerial Government department to regulate the telecommunications industry completed the separation of regulatory and operational functions begun by the 1981 Act. In particular, Oftel was to promote competition in the industry and protect the rights of consumers. Oftel could achieve this by the enforcement of the various licences granted to those operating telecommunications services, employing powers defined in the 1984 Act which could include seeking licence amendments. The political responsibility for UK telecommunications policy remained with the Secretary of State for Trade and Industry.

BT Centre, the company's new headquarters building designed by the Property Services Agency, was opened in June at 81 Newgate Street in the City of London. Construction of the building had begun in 1980 on the site of the Old Central Telegraph Office. The new design was a large granite and Portland stone building around an atrium, with its mass offset by curved corners and considerable use of glass, notably the extensive use of glazed http://www.bt.com/archives/history/19841990.htm 18/02/04 Conity Heat — Utt Peak Heating Retail management are now progressing with the creation of a viable and efficient plan of operation for off-peak heating sales, installation and after sales support.

Dimplex home heating systems are currently under review and a local distributor is being consulted with a view to sourcing necessary equipment.

Queries stored on the Comfy Heat answer phone over the last number of weeks have now been accessed by retail management, who have contacted all customers with queries. Details of specific billing and technical queries have been passed on to the correct area of the organisation for action.

Initial enquiries for installation of the off peak heating systems are at present being passed to Edmundsons who are using Arden and Druggan to produce a specification report. This is then passed back to MEA Showrooms for ordering through Edmundsons, with Arden and Druggan again used to install the product. This is the route retail management will now use to get the Comfy Heat product launched.

It is the intention of MEA Showrooms to actively promote customer awareness of the comfy heat systems and tan-ifs, along with the benefits of off peak heating. This will be achieved by means of radio and press advertising, along with instore displays. A review of all literature relating to off-peak heating is underway which will display a totally refreshed and modern way of heating a home.

An update on progress will be included in next months board submission.