Annual report 2010 - Imperial Tobacco Group

Notes to the Financial Statements continued18 Retirement Benefit Schemes continuedHistory of the plans for current and prior years£ million 2010 2009 2008 2007 2006At 30 SeptemberPresent value of defined benefit obligations 3,802 3,592 2,874 3,033 3,072Fair value of total plan assets 2,960 2,798 2,769 3,238 3,035Net total surplus/(deficit) on plans (842) (794) (105) 205 (37)Experience gain/(loss) on total plan liabilities 63 8 (18) (19) –Experience gain/(loss) on total plan assets 146 (58) (633) 121 144Strategy Performance Governance FinancialsThe main UK Group scheme is the Imperial Tobacco Pension Fund (the ITPF). An actuarial valuation of the ITPF (the triennialvaluation for funding purposes) was made at 31 March 2007 by Watson Wyatt Limited. The assumptions which had themost significant effect when valuing the ITPF’s liabilities were those relating to the rate of investment return on the ITPF’sexisting assets, the rates of increase in pay and pensions and estimated mortality rates. On the basis that the ITPF iscontinuing, it was assumed that the future investment returns relative to market values at the valuation date would be5.2 per cent per annum and that pay and pension increases would average 4.5 per cent and 3.0 per cent respectively.The assets were brought into account at their market value.At 31 March 2007 the market value of the invested assets of the ITPF was £2,951 million. The total assets were sufficientto cover 114 per cent of the benefits that had accrued to members for past service, after allowing for expected future payincreases. The total assets were sufficient to cover 102 per cent of the total benefits that had accrued to members for pastservice and future service benefits for current members. As there was no actuarial deficiency, it was agreed with the trusteesthat, with effect from 31 March 2007, no employer contributions are required. The financial position of the ITPF and the levelof contributions to be paid will be reviewed at the next triennial valuation, which is expected to be completed by the end of2010 and will consider the scheme as at 31 March 2010.During the current year, the Group announced that with effect from 1 October 2010 new employees will no longer be eligibleto join the UK defined benefit pension scheme but will be offered a defined contribution arrangement instead.19 Provisions£ million Restructuring Other TotalAt 1 October 2009 614 454 1,068Additional provisions charged to the income statement 38 81 119Unwind of discount on redundancy and social plan liabilities 15 – 15Amounts used (147) (91) (238)Unused amounts reversed (39) (40) (79)Exchange movements (31) (20) (51)At 30 September 2010 450 384 834Analysed as:£ million 2010 2009Current 187 292Non-current 647 776834 1,068Restructuring provisions relate primarily to European Integration projects announced in June 2008 as part of the integrationof Imperial Tobacco and Altadis. They affect sales and marketing, manufacturing and central support functions in a numberof markets and will be implemented progressively over a period of three years. These liabilities are expected to crystalliseover a number of years. Redundancy and social plan costs have been discounted at 5.0 per cent.Other provisions principally relate to commercial legal claims and disputes. The majority of other provisions represent thefair value at acquisition of current and potential Altadis commercial disputes, litigation and duty claims arising in the normalcourse of business. These liabilities are expected to crystallise within the next five years.20 Share Capital£ million 2010 2009Authorised56,040,000,000 ordinary shares of 10p each (2009: 56,040,000,000) 5,604 5,604Issued and fully paid1,067,942,881 ordinary shares of 10p each (2009: 1,067,942,881) 107 107144