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Note for Shareholders who acquired their Biffa shares by way of dividend in specie from Severn Trent Plc.

For the purpose of Capital Gains Tax calculations the base cost of the old Severn Trent Plc (“Severn Trent”) shares you held immediately prior to the demerger and share consolidation must be apportioned between your new Severn Trent shares and the Biffa shares received in the following ratio: new Severn Trent shares 78.7%, Biffa shares 21.3%. This is based on:

• the dividend ratio of one Biffa share for each old Severn Trent share held;
• the consolidation of the Severn Trent shares in the ratio of two new Severn Trent shares for every three old Severn Trent shares held;
• a fractional entitlement, by way of cash, for any fraction of a new Severn Trent share as a result of the consolidation; and
• the respective market values on 9 October 2006, determined according to normal CGT rules, of 1440.00 pence for new Severn Trent shares and 259.88 pence for Biffa shares.

For example if you owned 1,000 old Severn Trent shares immediately before the demerger and share consolidation, with a previous base cost of £5.00 per share (a total base cost of £5,000) the base cost for CGT purposes of the 666 new Severn Trent shares held after the demerger and share consolidation would be £3,935 (less the fractional entitlement payment) and the base cost of the 1,000 Biffa shares you received in the demerger would be £1,065. For CGT purposes the base cost of the new Severn Trent shares is adjusted to reflect any fractional payments received.

Please note that if your Severn Trent shares were acquired in a number of transactions at different prices or if you also own other Biffa shares, the determination of the base cost of the shares you sell will also depend on the CGT matching rules. If you are in any doubt about your taxation position you should obtain professional advice.