The Development division comprises three businesses which operate outside the scope of our two core divisions, but in markets with high growth potential. In the near future, all three face significant milestones and will benefit from continued support to expand their services to customers. Decisions will be made on the best way forward for these businesses once it is apparent whether they are able to move closer to the Group's core purpose.

RAIL SYSTEMS
Our Rail Systems business provides signalling and control systems to both the mainline rail and mass transit market sectors. Both areas are seeing increasing growth as countries around the globe seek to ease road congestion through improved rail infrastructure.

The business has operating subsidiaries in Australia, Spain, the UK and the US, with a network of customer support and project offices around the world. In Europe, we expect major contracts from the upgrading of high-speed mainline railways, as well as the expansion and renewal of mass transit and underground railways. At the same time, we are looking to expand our rail maintenance logistics services beyond North America, where we have a major market share.

WIND POWER
Over the next five years, wind power is forecast to have an estimated annual growth rate of 16% (source: BTM Consult).

Our Wind Power business manufactures precision gear units for wind power generation turbines. To meet the growing demand for our products, we are investing £46 million (€75 million) over four years in a new production facility in Belgium to manufacture, assemble and test gear boxes for large wind turbine drives. With the factory due to be operational by the end of 2003 and at maximum production capacity by 2005, the business is focused on expanding its customer base.

POWER COMPONENTS
Our Power Components business is a leading provider of standard and custom power supply solutions for telecommunications, IT, medical, office and industrial markets worldwide. Its AC/DC and DC/DC power solutions range from a few watts on a surface mount module to kilowatts of high voltage power in a turnkey system. Severely affected by the recent market downturn, the business is filling out its product range and has signed key technology agreements. Design wins are running at twice last year's level, although major customers continue to delay production schedules.