60 Research and Development ("R&D") In 2007, E.ON significantly enhanced its R&D to promote the introduction of new technologies. Our wide range of R&D activities aims to increase energy efficiency, conserve resources, and improve economic efficiency. R&D expenditures totaled 37 million in 2007 against 27 mil- lion in the prior year. Overall, 190 employees work in R&D at the E.ON Group: 70 at Central Europe, 55 at U.K., 34 at Pan-European Gas, 24 at Nordic, and 7 at U.S. Midwest. Innovative ideas often result from the interaction between basic research and practical experience. For this reason, E.ON enhanced its support for basic research and increased funding for energy research at universities and institutes to 5.5 million. E.ON's investments in new technology (which include support for university research, R&D, and demonstration projects) totaled 83 million in 2007 compared with 57 million in the prior year. Innovative technologies are the backbone of our company. As part of our groupwide research initiative called innovate.on, we launched a number of large-scale demonstration projects for new technologies in 2007. Going forward, we will continue to focus on promising key technologies that will help us meet the challenge of delivering an economically priced, environ- mentally friendly, and secure supply of energy. Once devel- oped in our R&D programs, processes are put into practical application. Examples of our R&D projects in 2007: · carbon capture at Karlshamn power plant in Sweden · research on carbon storage as part of an EU project in Germany · upgrading of biogas to pipeline quality for injection into the natural gas pipeline system at demonstration facilities in Germany · a pilot unit to study the corrosive effects of co-firing biomass in the United Kingdom · applied research through the test of batteries to store electricity in the United Kingdom · scientific field study with approximately 80 heat pumps that have replaced old oil furnaces in residential dwellings · tests with a variety of natural gas heat pumps that con- serve fuel by tapping a renewable resource: the heat of outside air. A detailed description of our activities in the area of new technologies is on pages 80­82 of this report. This program has been a true success over the past ten years, with over 75 percent of its graduates having found an apprenticeship or a job. We have another program aimed at helping physically and mentally challanged people find a job at an E.ON company in Germany. The program is part of a national initiative run by German Federal Ministry for Labor and Social Security. Overview of the Compensation Systems for the Board of Management and Supervisory Board We have compiled a Compensation Report for the 2007 financial year which provides an overview of the compensa- tion systems for the Board of Management and Supervisory Board and each board member's compensation within the E.ON Group. The report applies the regulations of the Ger- man Commercial Code amended to reflect the Management Board Compensation Disclosure Law as well as the princi- ples of the German Corporate Governance Code. The Com- pensation Report, which is to be considered part of this Combined Group Management Report, can be found in the Corporate Governance Report on pages 117­121 and there- fore does not appear here. Information about board com- pensation for E.ON AG is shown in the Notes to the Financial Statements of E.ON AG.