Pace plc Annual Report and Accounts 2012 - Financial Statements

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Financial StatementsNotesContinued27 Employee benefitsPension plansThe Group contributes to several defined contribution Group Personal Pension Plans, which all executive directors andemployees are entitled to join. The total expense relating to these plans in the current year was $5.9 million (2011: $5.2 million).At 31 December 2012 contributions of $Nil (2011: $Nil) were outstanding.Share-based paymentsDetails of the Company’s share option plans are included in Notes 21 and 24 and the Directors’ Remuneration Report. The numberand weighted average exercise price of share options is as follows:WeightedWeightedaverageaverageexercise Number exercise Numberprice of options price of options2012 2012 2011 2011Outstanding at the beginning of the period 165.6c 18,203,949 176.2c 16,240,965Granted during the period 121.7c 3,194,644 187.1c 5,629,830Forfeited during the period 205.9c (3,747,162) 271.4c (3,073,283)Exercised during the period 120.6c (4,926,242) 121.6c (593,563)Outstanding at the end of the period 171.1c 12,725,189 165.6c 18,203,949Exercisable at the end of the period 146.6c 4,090,597 119.8c 5,874,980Of the share options exercised during the year 130,000 were issued by the Pace plc Employee Benefit Trust (2011: Nil).Outstanding options were as follows:Weighted averageremainingNumber at contractual life Weighted averageRange of exercise prices (pence) 31 December 2012 months exercise price47 pence – 75 pence 5,861,004 91 107c85.5 pence – 97.75 pence 2,528,024 82 144c128 pence – 208 pence 4,336,161 58 278c12,725,189 78 172cThe weighted average exercise price of options granted in the period was 121.7 cents (2011: 187.1 cents).The weighted average fair value at the measurement date of options granted in the year was 57.1 cents (2011: 72.3 cents).The weighted average exercise price at the date of exercise for options exercised in the year was 120.6 cents (2011: 121.6 cents).The weighted average share price during the year was 202.8 cents (2011: 291.4 cents).The fair value of services received in return for share options granted are measured by reference to the fair value of share optionsgranted. The estimate of the fair value of the services received is measured based on a Black-Scholes model. The following tablegives the assumptions applied to the options granted in the respective periods shown. Expectations of early exercise areincorporated into the model, where appropriate.2012 2011Average share price (cents) 202.3c 191.9cWeighted average exercise price (cents) 172.0c 165.6cExpected volatility (%) 50% 50%Option life (years) 10 10Dividend yield (%) 1.4% 1.4%Risk free interest rate (%) 5.0% 5.0%The expected volatility is based on the historic volatility (calculated based on the weighted average remaining life of the shareoptions), adjusted for any expected changes to future volatility due to publicly available information.The charge for share-based payments is $7.9 million (2011: $7.8 million) which is comprised entirely of equity settled transactions.74Annual Report and Accounts 2012 Pace plc
28 Leasing commitmentsTotal amounts payable under non-cancellable operating lease rentals are as follows:Land and buildingsGroupCompany2012 2011 2012 2011$m $m $m $mWithin one year 8.6 9.2 1.1 1.2Between two and five years 23.5 24.1 2.3 4.8In five years of more 6.2 9.6 — —38.3 42.9 3.4 6.029 Related partiesIdentity of related partiesThe Group has a related party relationship with its subsidiaries and with its directors.Transactions with subsidiariesThe main transactions between the Company and its subsidiaries consist mainly of payments by the Company for distribution,engineering and administrative support services provided by Pace Americas Inc, Pace France and Pace Micro Technology (India)Private Limited. Total transactions of $1,224.6 million were made in the year (2011: $759.5 million).The amounts due to and from these subsidiaries are shown within Notes 16 and 17.Transactions with key management personnelKey management of the Group is through the executive directors of the Company. The main transactions with these individualsare disclosed in the Directors’ Remuneration Report on pages 23 to 30.Of the share-based payments charge of $7.9 million (2011: $7.8 million) made in the period, 19% (2011: 42%) relates to optionsgranted to the executive directors.30 Free cash flow and cash investment in acquisitions2012 2011$m $mFree cash flowCash generated from operations 297.6 150.0Tax paid (23.8) (29.7)Purchase of property, plant and equipment (22.6) (41.5)Development expenditure (57.4) (57.0)Net interest paid (11.1) (13.6)Free cash flow 182.7 8.2Cash investment in acquisitions in the year2012 2011$m $mAcquisition of subsidiaries, net of cash acquired (15.7) (6.4)Cash investment in acquisitions in the year (15.7) (6.4)31 Post balance sheet eventsThere are no significant or disclosable post balance sheet events.Annual Report and Accounts 2012 Pace plc 75
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Pace plc Annual Report and Accounts 2012 - Financial Statements

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