Tesco 2010 Annual Report Download - page 118

Notes to the Group financial statements continued
Note 28 Post-employment benefits continued
Post-employment benefits other than pensions
The Company operates a scheme offering retirement healthcare benefits. The cost of providing these benefits has been accounted for on a similar basis
to that used for defined benefit pension schemes.
The liability as at 27 February 2010 of £12m (2009 – £10m) was determined in accordance with the advice of independent actuaries. In 2010,
£0.7m (2009 – £0.7m) has been charged to the Group Income Statement and £0.5m (2009 – £0.5m) of benefits were paid.
A change of 1.0% in assumed healthcare cost trend rates would have the following effect:
2010 2009
£m £m
Effect of a 1% increase in assumed healthcare cost trend rate on:
Service and interest cost 0.1 0.1
Defined benefit obligation 1.5 1.6
Effect of a 1% decrease in assumed healthcare cost trend rate on:
Service and interest cost (0.1) (0.1)
Defined benefit obligation (1.5) (1.3)
Expected contributions
A formal actuarial valuation is carried out triennially for the scheme trustees by a professionally qualified independent actuary. The purpose of the
valuation is to agree a funding plan to ensure that present and future contributions should be sufficient to meet future liabilities. The actuarial
valuation of approved schemes as at 31 March 2008 has been concluded and the Group’s contributions are increasing to 11.1% from 10.9%. On this
basis the Group expects to make contributions of approximately £430m to defined benefit pension schemes in the year ending 27 February 2011.
Note 29 Called up share capital
2010 2009
Ordinary shares of 5p each Ordinary shares of 5p each
Number £m Number £m
Authorised:
At beginning of year 10,858,000,000 543 10,858,000,000 543
Authorised during the year 2,500,000,000 125 – –
At end of year 13,358,000,000 668 10,858,000,000 543
Allotted, called up and fully paid:
At beginning of year 7,895,344,018 395 7,863,498,783 393
Share options 62,329,535 3 57,060,046 3
Share bonus scheme 27,370,504 1 – –
Share buy-back – – (25,214,811) (1)
At end of year 7,985,044,057 399 7,895,344,018 395
During the financial year, 62 million (2009 – 57 million) shares of 5p each were issued in relation to share options for aggregate consideration of
£166m (2009 – £130m).
During the financial year, 27 million (2009 – nil) shares of 5p each were issued in relation to share bonus awards for consideration of £1m (2009 – £nil).
During the year, the Company purchased and subsequently cancelled no shares of 5p each. During 2009, the Company purchased and subsequently
cancelled 25,214,811 shares of 5p each, representing 0% of the called up share capital, at an average share price of 3.98 per share. The total
consideration, including expenses, £100m. The excess of the consideration over the nominal value was charged to retained earnings.
Between 28 February 2010 and 16 April 2010 options over 3,722,750 ordinary shares have been exercised under the terms of the Savings-related
Share Option Scheme (1981) and the Irish Savings-related Share Option Scheme (2000). Between 28 February 2010 and 16 April 2010, options over
5,592,493 ordinary shares have been exercised under the terms of the Executive Share Option Schemes (1994 and 1996) and the Discretionary Share
Option Plan (2004).
As at 27 February 2010, the Directors were authorised to purchase up to a maximum in aggregate of 790.1 million (2009 – 784.8 million) ordinary shares.
The owners of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at the meetings
of the Company.
Capital redemption reserve
Upon cancellation of the shares purchased as part of the share buy-back, a capital redemption reserve is created representing the nominal value
of the shares cancelled. This is a non-distributable reserve.
116 Tesco PLC Annual Report and Financial Statements 2010