Making the difference to your business Employee Consultation Forum Meeting 24 th July 2012

Proposal  Move pay date for all existing employees currently paid on 15 th month to 28 th (Or last working day prior to 28 th where the 28 th falls on a weekend)

Business Benefits  Significant positive impact on DUK Cash Flow  DUK is financially strong (Plimsoll report)  Business is trading profitably and cash generative but…  We have intra month pressures that impact supplier payments  Big message from employee survey was need to address supplier payment concerns  In-line with majority of UK Payrolls  Return to one payroll as opposed to current two (all new starters since Sept 2011 and Executive Leadership Team are paid at end of month)  Reduces exposure to overpayments for leavers  Increased time for internal payroll checking – linked to month end results

Employee Impact  Basic Salary plus any fixed payments (e.g. shift/ allowances)  Currently paid monthly, half in advance and half in arrears  Move to monthly in arrears  In the transition month employees will be paid 2 weeks later than usual  Commission/Bonus payment  Currently paid 1 month in arrears  Orders not verified currently go into following months payment  Date change will allow all payments to be included  Overtime & Other variable Allowances  Currently paid 1 month in arrears, approx. 22 nd - 22 nd each month  This reference period will move back by 2 weeks

Employee Support  2 months advance notice to manage financial commitments  Advice and guidance through Q&A documents to all affected employee e.g. payments such as mortgages, bills, loans  121’s with nominated Manager/HR as required to answer questions and discuss any individual concerns/requests  Mid month interim loan available to employees on request and repayable over agreed term: e.g. a loan equivalent to 25% of monthly net (after tax and NI) base salary, paid back over 6 months Loan Example Base salary of £24,000. Loan equivalent to (£24,000/12 months) = 25% = £500 (minus approximate tax and NI deductions). Paid back from November 2012 for 6 months – Last payment April 2013

Employee Support (cont.)  Time and support during working hours to make any necessary personal arrangements  Communications running up to the pay date change  If the transition is agreed by end August, October payment will include 6 weeks of overtime for relevant employees  If majority of affected employees requested  December payroll date can be paid prior to Christmas, 5 working days prior to 25 th December

Transition Proposal/Timescales  The sooner in place, cash benefits available to Company  2 month notice in advance of the date changing  Consultation with affected employees over next 2 weeks  Further ECF meeting on 7th August to review feedback  Guidance and meetings during following 4 weeks  Proposed transition in the month of October 2012

Transition Proposal/Timescales How it works  September payroll paid on 15 th September  Employee loan paid on 15 th October (for employees who require it)  October payroll paid on 26 th October (last working day before 28 th )  November payroll paid on 28 th November  December payroll paid on 18 th December (5 working days prior to 25 th ).  January 2013 onwards payroll paid on 28 th month or last working day before 28 th if it falls on weekend (with exception of December to be agreed)

Q & A