Low & Bonar PLC - Pension Scheme Financing

Following the sale of the Group’s Plastics Division for £25.75m, completed on 8 September 2005, Low & Bonar announces its intention to inject a total of £10m into the Low & Bonar Group Retirement Benefit Scheme, the Group’s UK defined benefit scheme, (the “Scheme”) which was closed to new entrants on 1 November 2002. The Company has also committed to make total cash contributions of c.£3.7m per annum in the financial years ending 30 November 2007 and 2008 (2004: £2.695m).

The Company has agreed these funding arrangements with the Scheme’s Trustee Board, following the completion of the actuarial valuation of the Low & Bonar Group Retirement Benefit Pension Scheme at 31 March 2005. The actuarial valuation detailed a shortfall of £33m between the market value of the assets of the UK scheme (£114m) and the assessment of the liabilities (£147m). This represents a funding level of 78%.

In addition, Low & Bonar announces that it will be adopting accounting standard FRS 17 (Retirement Benefits) for the year ending 30 November 2005. As a consequence of adopting FRS 17, the FRS 17 deficit will now be reflected on the Group’s current and prior year balance sheet.

Jon Kempster, Finance Director of Low & Bonar PLC, said: “Low & Bonar is committed to ensuring its Defined Benefit Pension Scheme is adequately funded. By taking this action we are providing reassurance to the Scheme members.”