Experian 2007 Annual Report Download - page 113

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30. Acquisitions and demerger of Home Retail Group (continued)
(b) Demerger of Home Retail Group
As indicated in note 2, the distribution of shares in Home Retail Group plc to shareholders in GUS plc at the date of demerger has been accounted
for as a dividend in specie. This represents the Group’s share of the net assets of Home Retail Group at the date of demerger which comprised:
US$m
Intangible assets 3,716
Property, plant and equipment 1,299
Deferred tax assets 211
Retirement benefit assets 41
Inventories 1,765
Trade and other receivables 1,036
Cash and cash equivalents 518
Trade and other payables (2,156)
Current tax payable (72)
Loans and borrowings (435)
Deferred tax liabilities (122)
Provisions (174)
Group’s share of net assets of Home Retail Group on demerger 5,627
31. Share-based payment arrangements
Prior to the demerger,Experian employees participated in share-based incentive plans in respect of the Ordinaryshares in GUS plc. On demerger,
certain GUS awards vested early and Experian incurred an exceptional charge of US$15m on the acceleration of these awards.
On demerger, the majority of Experian participants’ outstanding GUS share and option awards rolled-over into Experian equivalent awards. A limited
number of share and share option awards remained as GUS awards and participants had entitlement to one Home Retail Group share and one
Experian sharein lieu of each GUS shareallocated. Experian rolled-over awards areshare-based incentive plans in respect of the Ordinary shares in
Experian Group Limited. The quantity and exercise price of grants were modified to adjust for the difference between the GUS and Experian share
prices. The roll-over resulted in an incremental change in fair value of US$8m, which was incurred as an exceptional item. The incremental fair value
was primarily as a result of an assumption in respect of the higher volatility of the Experian share price.
Early vesting and modification changes have been recorded as an exceptional item (note 7).
Option and shareprices are disclosed in Sterling reflecting the currency in which the Ordinary shares of GUS plc and Experian Group Limited are
quoted.
(a) Options in respect of Ordinary shares
(i) Summary of arrangements
Experian demerger plan – Experian Share Option Plan
The Experian Share Option Plan includes awards made at and after demerger together with awards rolled-over from former GUS plans and
arrangements were as follows:
Nature Grant of options
Vesting conditions:
–Service period 3 and 4 years
–Performance/Other n/a
Expected outcome of meeting performance criteria (at grant date) n/a
Maximum term 10 years
Method of settlement Share distribution
Expected departures (at grant date) 5%
Option exercise price calculation1Market price over the 3 dealing days preceding the grant
1. Three day averages arecalculated by taking middle market quotations of an Experian Group Limited share from the London Stock Exchange
daily official list.
Experian Annual Report2007 |111