Marks and Spencer 2003 Annual Report Download - page 39

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10. Employees continued Number of shares Option
Options granted 2003 2002 price Option dates
(2000 Scheme +4%)
September 2000 2,511,067 3,341,639 215p Sept 2003 – Sept 2010
December 2000 443,358 574,358 195p Dec 2003 – Dec 2010
March 2001 270,641 270,641 218p Mar 2004 – Mar 2011
June 2001 3,264,203 3,454,239 256p June 2004 – June 2011
July 2001 156,626 156,626 249p July 2004 – July 2011
December 2001 1,027,586 1,034,056 350p Dec 2004 – Dec 2011
(2002 Scheme +3%)
June 2002 4,585,112 – 350p June 2005 – June 2012
November 2002 575,115 – 353p Nov 2005 – Nov 2012
January 2003 242,424 – 297p Jan 2006 – Jan 2013
March 2003 282,678 – 306p Mar 2006 – Mar 2013
March 2003 111,486 – 296p Mar 2006 – Mar 2013
(2002 Scheme +4%)
June 2002 3,900,988 – 350p June 2005 – June 2012
November 2002 338,142 – 353p Nov 2005 – Nov 2012
January 2003 222,222 – 297p Jan 2006 – Jan 2013
March 2003 272,875 – 306p Mar 2006 – Mar 2013
March 2003 101,351 – 296p Mar 2006 – Mar 2013
G Executive Share Matching Plan
An Executive Share Matching Plan for senior management was approved by shareholders at the AGM in 2002 and was
introduced for the first time in July 2002. The plan currently operates for around 25 members of senior management.
Participants are required to invest one-third of any annual bonus earned in shares in the Company. The balance may be
invested voluntarily.
The pre-tax value of the invested bonus will be matched by an award of shares, with the extent of the match determined by
performance conditions over a three year period. Further details of the plan are given in the Remuneration Report on page 14.
£0.5m (last year £nil) has been charged against profits for this year.
11. Pension costs
A SSAP 24 disclosure
The total pension cost for the Group was £144.8m (last year £147.9m) of which £135.7m (last year £138.5m) relates to the UK
defined benefit pension scheme.
The latest full actuarial valuation of the UK defined benefit pension scheme was carried out at 1 April 2001 by an
independent actuary using the projected unit method. The key assumptions adopted were: %
Inflation rate 2.5
Rate of increase in pensions in payment 2.5
Rate of increase in salaries 4.0
Discount rate and rate of return on investments 6.0
This actuarial valuation revealed a shortfall of £134m in the market value of the assets of the UK Scheme of £3,102m
compared to the actuarial liability for pension benefits. This represents a funding level of 96%.
The shortfall of £134m together with the unamortised accounting deficit relating to prior periods gives a total unamortised
deficit of £177m. This is being amortised in accordance with SSAP 24 over a period of 12 years from 1 April 2001, being the
remaining estimated service lives of the current Scheme members.
The total UK pension cost under the defined benefit pension scheme is analysed as follows: 2003 2002
£m £m
Normal pension cost1114.9 116.1
Amortisation of deficit 14.8 14.8
Net interest elements 6.0 7.6
Tot al 135.7 138.5
1At standard contribution rate of 19.7% (last year 19.7%).
As shown in note 15, the Group has prepaid pension costs of £161.0m in relation to the UK scheme. This includes the partial
funding of the deficit, offset by the amortisation and interest elements shown above, with the balance being prepaid
contributions to the UK scheme.