Marks and Spencer 2002 Annual Report Download - page 40

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38 Marks and Spencer Group p.l.c.
Notes to the financial statements
11. Employees continued
The Group financial statements already reflect a number of liabilities and assets relating to the retirement benefit
schemes which give rise to the net post-retirement liabilities of £293m. If FRS 17 had been adopted in the financial
statements, the net effect of this change on shareholders’ funds would be as follows: £m
Net post-retirement liability (293)
Amounts currently recognised in:
Debtors – prepayments and accrued income (50)
Provisions for liabilities and charges
– unfunded pension plans 5
– post-retirement healthcare 25
– deferred tax 6
Effect on shareholders’ funds (307)
The Group’s net assets at 30 March 2002 would be as follows: £m
Net assets, excluding post-retirement liability 3,081
Effect on shareholders’ funds (above) (307)
Net assets, including post-retirement liability 2,774
B Post-retirement health benefits
The Group has a commitment to pay all or a proportion of the health insurance premiums for a number of its retired
employees and their spouses, the last of whom retired in 1988. There is no commitment in respect of current
employees or those who have retired since 1988.
At 30 March 2002, the Group reassessed this liability in accordance with the advice of an independent qualified
actuary. The discounted present value of £25.3m (see note 22) has been fully provided. The valuation assumed a
premium inflation of 7.5% and an after-tax discount rate of 5.9%. There is a matching deferred taxation asset of £7.6m.
The next actuarial valuation will be carried out as at 31 March 2005.
C United Kingdom and Republic of Ireland profit sharing schemes
The amount of profit which will be allocated this year, in the form of ordinary shares in the Company, has been fixed
at £12.6m (last year £8.5m), representing 2.5% (last year 1.75%) of the earnings of 44,197 (last year 43,741) eligible
employees.
These shares are purchased in the market: 3,066,891 ordinary shares were purchased by the Profit Sharing Trustees in
respect of the 2000/2001 allocation.
D United Kingdom Employees’ Save As You Earn Share Option Scheme
Under the terms of the Scheme, the Board may offer options to purchase ordinary shares in the Company once in
each financial year to those employees who enter into an Inland Revenue approved Save As You Earn (SAYE) savings
contract. The price at which options may be offered is 80% of the market price for three consecutive dealing days
preceding the date of offer. The options may normally be exercised during the period of six months after the
completion of the SAYE contract, either three, five or seven years after entering the Scheme.
Outstanding options granted under the United Kingdom Employees’ Save As You Earn Share Option Scheme are
as follows:
Number of shares Option
Options granted 2002 2001 price
January 1994 Expired 518,636 319p
January 1995 1,564,963 2,793,633 322p
January 1996 2,240,437 3,536,269 330p
January 1997 3,542,787 5,384,139 389p
January 1998 3,234,005 3,877,749 467p
January 1999 6,350,030 7,896,779 324p
January 2000 20,736,825 23,856,114 223p
January 2001 29,106,220 32,355,154 156p
January 2002 11,706,883 – 250p