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Financial Statements
The fair value of the options granted without market based vesting conditions
are estimated using a Black-Scholes model taking in to account the terms and
conditions upon which the options were granted. The fair value of the options
granted with market based vesting conditions are estimated using a Monte
Carlo model taking into account the terms and conditions upon which the
options were granted.
On 28 February 2010, 1,395,000 of the EPS related March 2008 options
became fully vested and were exercised during the year. Following the year
end, 979,848 of the TSR relatedMarch 2008 options became fully vested and
were exercised.
The options under the Incentive Plan have no lapse date.
Movements in the Period
The following table illustrates the number (No.) and weighted average exercise
prices (WAEP) of, and movements in, share options during the period:
2011 2011
2010
2010
No.'000 WAEP No.'000 WAEP
Outstanding at 1 March
8,932 £0.28 6,544
0.38
Granted during the period
-
-
2,388
£nil
Exercised during the period (1,395)
£nil
-
£nil
Outstanding at 28 February 7,537 £0.28 8,932 £0.28
Exercisable at 28 February 1,504
1,395
The following table lists the inputs to the models used for the periods ended
28 February 2011 and 29 February 2010:
2009 Share Options
SEEP options SEEP Options
subject to TSR subject to EPS
Dividend yield (%)
5.7
5.7
Expected volatility (%)
23
23
Risk-free interest rate (%)
1.82
1.82
Expected life of options (years)
3
3
Weighted average share price (£)
1.13
1.13
Model Used
Monte Carlo Black-Scholes
2008 Share Options
SEEP options SEEP Options
subject to TSR subject to EPS
Dividend yield (%)
6.0
6.0
Expected volatility (%)
35
35
Risk-free interest rate (%)
4.0
4.0
Expected life of options (years)
3
3
Weighted average share price (£)
1.21
1.17
Model Used
Monte Carlo Black-Scholes
2007 Share Options
Share options
Dividend yield (%)
5.4
Expected volatility (%)
30
Risk-free interest rate (%)
4.9
Expected life of options (years)
3
Weighted average share price (£)
1.66
Model Used
Black-Scholes
The expected life of the options is based on historical data and is not necessarily
indicative of exercise patterns that may occur. The expected volatility reflects
the assumption that the historical volatility is indicative of future trends, which
may also not necessarily be the actual outcome.
The weighted average fair value, at date of grant, of the share options granted
in the prior year is 72p. No share options were granted in the current year.
24. Deferred Tax
2011
2010
£’000
£’000
Accelerated allowances on plant & machinery
5,889
4,647
Rollover relief
4,111
-
Revaluation of properties to fair value on acquisition 17,573
18,224
Brands recognised on acquisition
16,200
16,800
Other temporary differences
(3,893)
(5,428)
39,880
34,243
Deferred tax assets have been recognised in respect of certain tax losses and
other temporary differences giving rise to deferred tax assets because it is
probable that the assets will be recovered.
Deferred tax has not been provided on trading losses of £24.3m (2010:
£30.1m) carried forward in the Group on the basis that they may not be
relievable against chargeable profits in future.
25. Issued Share Capital and Reserves
2011
2010
£’000
£’000
Authorised share capital – Ordinary Shares
Authorised – 300,000,000
(2010: 300,000,000) shares of 10p each
30,000
30,000
£
£
Authorised share capital – Deferred Shares
Authorised – 1,000 shares of 0.1p each
1
1
Number of Share Number of Share
shares Capital
shares Capital
2011
2010
'000 £’000
'000 £’000
Ordinary Shares of 10p each issued and fully paid
At beginning of period 250,788 25,079 241,746 24,175
Issued during the period 14,377 1,438
9,042
904
Total share capital
265,165 26,517 250,788 25,079
On 23 March 2010 11,278,195 ordinary shares were issued upon the
investment in Stobart Biomass Products Limited. These shares had a fair
value of 133p.
On 14April 2010 a further 3,098,440Ordinary shareswere issued on conversion
of 3,628,158 Income Shares. The share price at the date of conversionwas 117p.
Voting Rights
Ordinary shareholders are entitled to vote at all general meetings.
The Deferred Shares have no voting rights.
Capital Entitlement
The deferred shareholders are entitled to the repayment of the amounts
paid up on the Deferred Shares after payment in respect of each Ordinary
Share and £1m
Nature and purpose of other reserves
Own shares held by EBT:
This comprises the weighted average cost of own
shares held by the employee benefit trust.
Foreign currency exchange reserve:
Gains/losses arising on retranslating
the net assets of overseas operations into Sterling.
Hedge reserve:
The hedge reserve is used to record the effect of a cashflow
hedge.