Capital Gains Tax

Viridian Group Ltd effected a Return of Capital to shareholders and a Share Capital Consolidation in August 2005.

For UK tax purposes the market values of Viridian Group Ltd ordinary shares of 27 7/9 pence each ("ordinary shares") and B Shares on the first day of trading following the Share Capital Consolidation, i.e. Monday 15 August 2005, and the base cost apportionment percentage are as follows:

	Market Value	Base Cost Apportionment Percentage (between shares received)
Ordinary shares	765 pence	90.41%
B Shares	73 pence	9.59%

This can be illustrated by the example below.
If you are in any doubt as to your tax position you should seek professional tax advice.

Example

A shareholder bought 100 Northern Ireland Electricity plc ('NIE') shares during the Offer for Sale in 1993 at £2.20 each. Under the reorganisation on 9 February 1998 these shares became 100 Viridian Group Unsecured Loan Notes (“Loan Notes”) and 90 ordinary shares of 25 pence each in Viridian Group Ltd. The 90 ordinary shares then became under the Return of Capital and Share Consolidation on 15 August 2005, 90 B Shares and 81 new ordinary shares of 27 ⁷/₉ pence each in Viridian Group Ltd. The base cost of the 81 new ordinary shares can be calculated as follows:

The base cost of the NIE shares (£220) to be apportioned between ordinary shares and Loan Notes according to their respective market values on 9 February 1998 was as follows:

Ordinary shares 90 x 561 pence = £504.90 (91.43%)

Loan Notes 100 x 47.34 pence = £47.34 (8.57%)

The base cost of the 100 NIE shares (£220) was therefore allocated to the Viridian holding on 9 February 1998 as follows:

Ordinary shares £220 x 91.43% = £201.15

Loan Notes £220 x 8.57% = £18.85

The revised base cost (£201.15) for the existing 90 ordinary shares is to be apportioned between new ordinary shares and B Shares according to their respective market values on 15 August 2005:

Ordinary shares 81 x 765 pence = £619.65 (90.41%)

B Shares 90 x 73 pence = £65.70 (9.59%)

The base cost of the 81 new ordinary shares (£201.15) is therefore allocated to the new holding as follows:

Ordinary shares £201.15 x 90.41% = £181.86

B Shares £201.15 x 9.59% = £19.29

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Final Redemption of B Shares

B Shares held on 6 April 2006 (Final Redemption Date) were redeemed at 73 pence per B Share. Shareholders who elected for Final Redemption, in respect of some or all of their B Shares, were sent cheques for Final Redemption and B Share Continuing Dividend on 18 April 2006 (Final Payment Date).

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1998 Scheme of Arrangement

Outstanding unsecured loan notes issued in 1998 were redeemed on 14 February 2000 at their nominal value of 47.4 pence each.