Marks and Spencer 2003 Annual Report Download - page 37

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10. Employees
A Aggregate remuneration
The aggregate remuneration and associated costs of Group employees were:
2003 2002
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
£m £m £m £m £m £m
Wages and salaries 835.1 – 835.1 799.7 87.0 886.7
Share Incentive Plan (see note 10D) 8.8 – 8.8 12.6 – 12.6
Social security costs 47.7 – 47.7 48.8 11.5 60.3
Pension costs (see note 11A) 144.8 – 144.8 142.7 5.2 147.9
Employee welfare and other personnel costs 79.8 – 79.8 89.8 9.7 99.5
Employee costs 1,116.2 – 1,116.2 1,093.6 113.4 1,207.0
Classified as:
Employee costs (see note 3) 1,116.2 – 1,116.2 1,093.6 99.8 1,193.4
Manufacturing cost of sales –––– 13.6 13.6
1,116.2 – 1,116.2 1,093.6 113.4 1,207.0
B Average number of employees
The average number of employees of the Group during the year was: 2003 2002
UK stores Management and supervisory categories 4,335 3,939
Other 53,191 50,583
UK head office Management and supervisory categories 2,616 2,369
Other 997 1,038
Financial Services Management and supervisory categories 200 208
Other 1,267 1,370
Overseas Continuing operations 4,527 4,988
Discontinued operations –5,404
67,133 69,899
If the number of hours worked was converted on the basis of a normal working week, the equivalent average number of
full-time employees for continuing operations would have been 47,756 (last year 45,979).
C 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 resulting discounted present value of £25.3m was fully provided at 30 March 2002. The valuation assumed a premium
inflation of 7.5% and an after-tax discount rate of 5.9%.
The current provision, which is included in the accounts on a SSAP 24 basis, is £25.0m (see note 22). There is a matching
deferred taxation asset of £7.5m. The provision has been estimated to be £24m on an FRS 17 basis (last year £25m).
See note 11.
The next actuarial valuation will be carried out as at 31 March 2005.
D United Kingdom Share Incentive Plan and Republic of Ireland Profit Share Scheme
The last payment under the 1997 UK Profit Sharing Scheme was made in June 2002, in respect of the financial year ending
30 March 2002. The Company has now adopted the free share element of the new all-employee Share Incentive Plan,
which is approved by the Inland Revenue. This is a discretionary plan and the Company will decide each year whether
an award is to be made, depending upon the year-end profits. The Republic of Ireland Profit Sharing Scheme remains
unchanged. An award will be made in July 2003 in respect of the financial year ending 29 March 2003. This has been fixed
at £8.8m (last year £12.6m), representing 2.0% (last year 2.5%) of the earnings of 53,418 (last year 44,197) eligible employees
(with a maximum award of approximately £220).
These shares are purchased in the market: 2,846,100 ordinary shares were purchased by the Profit Sharing Trustees in respect
of the 2001/2002 allocation.
E 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.