Tesco 2000 Annual Report Download - page 39

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TESCO PLC
37
NOTE 25 Share options continued
Executive share option scheme (1994)Shares
Number of under option Subscription
Date of grant executives 26 Feb 2000 prices (pence)
27 April 1995 7 741,954 90.3
13 October 1995 312 7,924,787 104.0
Executive share option scheme (1996)Shares
Number of under option Subscription
Date of grant executives 26 Feb 2000 prices (pence)
3 July 1996 22 2,624,106 98.3
23 September 1996 593 16,018,351 99.7
17 April 1997 1,012 19,760,589 117.7
7 October 1997 40 4,662,588 151.7
17 November 1997 2 446,373 160.3
21 May 1998 1,287 21,859,618 176.7
30 September 1998 36 1,521,695 164.0
28 January 1999 1,358 22,025,669 178.0
24 May 1999 8 882,044 179.4
9 November 1999 43 2,356,085 184.0
30 November 1999 8 1,098,962 173.0
International executive share option scheme Shares
Number of under option Subscription
Date of grant executives 26 Feb 2000 prices (pence)
7 October 1997 117 1,869,690 151.7
21 May 1998 284 2,775,000 176.7
28 January 1999 359 3,727,500 178.0
24 May 1999 18 520,746 179.4
NOTE 26 Pension commitments
The Group operates a funded defined benefit pension scheme for full-time employees in the UK, the assets of which are held as
a segregated fund and administered by trustees.The total cost of the scheme to the Group was £60m (1999 – £55m).
An independent actuary, using the projected unit method, carried out the latest actuarial assessment of the scheme at 5 April 1999.
The assumptions that have the most significant effects on the results of the valuation are those relating to the rate of return on investments
and the rate of increase in salaries and pensions.
The key assumptions made were:
Rate of return on investments 7.25%
Rate of increase in salaries 4.50%
Rate of increase in pensions 2.75%
At the date of the latest actuarial valuation, the market value of the scheme’s assets was £1,297m and the actuarial value of these assets
represented 96% of the benefits that had accrued to members, after allowing for expected future increases in earnings.The actuarial
shortfall of £53m will be met via increased contributions over a period of 11 years, being the expected average remaining service lifetime
of employed members.
The Group also operates a defined contribution pension scheme for part-time employees which was introduced on 6 April 1988. The
assets of the scheme are held separately from those of the Group, being invested with an insurance company. The pension cost represents
contributions payable by the Group to the insurance company and amounted to £19m (1999 – £17m). There were no material amounts
outstanding to the insurance company at the year end.
The Group operates a number of pension schemes worldwide, most of which are defined contribution schemes.The contributions
payable for non-UK schemes of £3m (1999 – £1m) have been fully expensed against profits in the current year. A defined benefit scheme
operates in the Republic of Ireland. At the latest actuarial valuation carried out at 1 April 1998, the market value of the scheme’s assets was
£42m and the actuarial value of these assets represented 129% of the benefits that had accrued to members, after allowing for expected
future increases in earnings.