Annual Report 2008 in PDF - GKN

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116 Notes to the Financial Statements continued 26 Post-employment obligations continued Movement in schemes’ assets during the year UK Americas Europe ROW Total £m £m £m £m £m At 1 January 2008 2,248 212 21 14 2,495 Expected return on assets 144 17 1 1 163 Actuarial gains and losses (539) (87) — (4) (630) Contributions by Group 22 12 1 2 37 Contributions by participants 7 — — — 7 Benefits paid (123) (11) (1) (2) (137) Currency variations — 59 7 8 74 At 31 December 2008 1,759 202 29 19 2,009 At 1 January 2007 2,187 196 19 13 2,415 Subsidiaries acquired — — — — — Expected return on assets 131 14 1 — 146 Actuarial gains and losses 21 — (1) (1) 19 Contributions by Group 19 15 1 2 37 Contributions by participants 11 — — — 11 Benefits paid (121) (11) (1) (1) (134) Currency variations — (2) 2 1 1 At 31 December 2007 2,248 212 21 14 2,495 The defined benefit obligation is analysed between funded and unfunded schemes as follows: UK Americas Europe ROW Total 2007 £m £m £m £m £m £m Funded (2,031) (354) (20) (39) (2,444) (2,528) Unfunded (12) (47) (333) (7) (399) (298) (2,043) (401) (353) (46) (2,843) (2,826) The fair value of the assets in the schemes and the expected rates of return were: UK Americas Europe ROW Long term Long term Long term Long term rate of rate of rate of rate of return return return return expected Value expected Value expected Value expected Value % £m % £m % £m % £m At 31 December 2008 Equities (inc. hedge funds) 8.0 667 8.5 125 — — 5.6 7 Bonds 5.3 912 5.5 70 — — 1.6 8 Property 6.8 80 — — — — — — Cash/short term mandate 2.0 74 4.4 7 — — 1.1 2 Other assets 6.5 26 — — 5.6 29 0.9 2 At 31 December 2007 1,759 202 29 19 Equities (inc. hedge funds) 8.0 1,114 8.5 142 — — 6.2 8 Bonds Property 5.1 6.7 810 102 5.5 — 57 — — — — — 1.3 — 4 — Cash/short term mandate 5.7 190 4.7 13 — — 1.0 1 Other assets 5.8 32 — — 5.1 21 0.9 1 2,248 212 21 14 The expected return on plan assets is a blended average of projected long term returns for the various asset classes. Equity returns are developed based on the selection of the equity risk premium above the risk-free rate which is measured in accordance with the yield on government bonds. Bond returns are selected by reference to the yields on government and corporate debt, as appropriate to the plan’s holdings of these instruments, all other asset classes returns are determined by reference to current experience. The actual return on plan assets was negative £467 million (2007 – £165 million positive). GKN plc Annual Report 2008 2008
Financial Statements Notes to the Financial Statements 26 Post-employment obligations continued History of experience gains and losses UK Americas Europe ROW 2008 Experience adjustments arising on scheme assets: Amount — £m (539) (86) — (4) Percentage of scheme assets Experience gains and losses on scheme liabilities: (30.6%) (43.1%) 0.0% (21.0%) Amount — £m 7 2 (5) — Percentage of the present value of scheme liabilities 0.3% 0.5% (1.4%) 0.0% Present value of scheme liabilities — £m (2,043) (401) (353) (46) Fair value of scheme assets — £m 1,759 202 29 19 Deficit — £m 2007 Experience adjustments arising on scheme assets: (284) (199) (324) (27) Amount — £m 21 — (1) (1) Percentage of scheme assets Experience gains and losses on scheme liabilities: 0.9% — (4.8%) (7.1%) Amount — £m (7) 4 (3) — Percentage of the present value of scheme liabilities (0.3%) 1.6% (1.4%) 0.0% Present value of scheme liabilities — £m (2,264) (270) (268) (24) Fair value of scheme assets — £m 2,248 212 21 14 Deficit — £m 2006 Experience adjustments arising on scheme assets: (16) (58) (247) (10) Amount — £m 35 15 (1) — Percentage of scheme assets Experience gains and losses on scheme liabilities: 1.6% 7.6% (4.5%) — Amount — £m 15 — — (1) Percentage of the present value of scheme liabilities 0.6% 0.0% 0.0% (6.7%) Present value of scheme liabilities — £m (2,375) (301) (277) (23) Fair value of scheme assets — £m 2,187 196 19 13 Deficit — £m 2005 Experience adjustments arising on scheme assets: (188) (105) (258) (10) Amount — £m 187 (1) 1 2 Percentage of scheme assets Experience gains and losses on scheme liabilities: 9.7% (0.7%) 5.0% 14.7% Amount — £m (22) 3 (5) (1) Percentage of the present value of scheme liabilities (0.9%) 0.9% (1.8%) (3.0%) Present value of scheme liabilities — £m (2,381) (316) (284) (23) Fair value of scheme assets — £m 1,915 170 20 14 Deficit — £m 2004 Experience adjustments arising on scheme assets: (466) (146) (264) (9) Amount — £m 68 4 (1) (3) Percentage of scheme assets Experience gains and losses on scheme liabilities: 4.0% 3.1% (7.3%) (17.6%) Amount — £m (8) 1 — 1 Percentage of the present value of scheme liabilities (0.4%) (0.4%) 0.0% 1.2% Present value of scheme liabilities — £m (2,152) (262) (260) (41) Fair value of scheme assets — £m 1,697 128 19 17 Deficit — £m (455) (134) (241) (24) (c) Defined contribution schemes The Group operates a number of defined contribution schemes outside the United Kingdom. The charge to the income statement in the year was £14 million (2007 – £10 million). www.gkn.com 117
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GKN plc Annual Report and Accounts
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Our Objective GKN is committed to p
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2008 Performance* Group results sig
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Although we expect 2009 to be a ver
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Constant velocity joints (CVJs) rev
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Off-highway driveshaft Blended wing
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Strategy and business objectives Th
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Operating cash flow performance of
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Restructuring and impairment costs
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2008 2007 Tax charge analysis % % W
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Overseas pensions The principal cou
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GKN received the prestigious Nissan
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GKN Driveline manufactures across a
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2008 2007 GKN Driveline £m £m Sal
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Continuing evolution of powder meta
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Despite a £6 million positive impa
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GKN OffHighway is a first tier supp
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Trading profit of subsidiaries of
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In January 2009 GKN completed the a
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Divisional strategy GKN Aerospace
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Financing The following section des
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Competitive markets and competition
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Living the Values GKN is a group of
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Delivering advanced technology Deli
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Engaging more fully with our employ
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Accident frequency rate (AFR) Numbe
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Contributing to our communities We
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Andrew Reynolds Smith (42) Chief Ex
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Dividend An interim dividend of 4.5
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On joining the Board, a Director re
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Directors’ attendance record The
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Audit Committee Report Role of the
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Directors’ Remuneration Report Ro
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The companies making up the compara
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Page 79 and 80: Consolidated Statement of Recognise
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Page 83 and 84: charges relating to the Group-wide
Page 85 and 86: Financial Statements Notes to the F
Page 89 and 90: 2 Segmental analysis continued Prim
Page 91 and 92: 3 Operating profit continued (v) Au
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Page 95 and 96: 5 Taxation continued Financial Stat
Page 101 and 102: 11 Goodwill and other intangible as
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Page 105 and 106: 14 Other receivables and investment
Page 107 and 108: 18 Net borrowings continued Financi
Page 111 and 112: Financial Statements 19 Financial r
Page 115 and 116: 24 Acquisitions There were no acqui
Page 117 and 118: 26 Post-employment obligations Fina
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Page 123 and 124: Independent Auditors’ Report to t
Page 125 and 126: Notes to the Financial Statements o
Page 127 and 128: Group Financial Record For the year
Page 129 and 130: OffHighway GKN OffHighway Ltd GKN W
Page 131 and 132: Unsolicited mail GKN is obliged by
Page 133 and 134: Contact Details GKN plc PO Box 55 I
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