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The UK statutory earnings figures in the above table and elsewhere in the operating
and financial review are presented in accordance with recent guidance from the Accounting Standards
Board and the UK Listing Authority. In order to provide a fairer reflection of the underlying trend in
earnings for the Group, the measure of 'profit before goodwill amortisation and exceptional items' is
also used and results for the year ended December 2002 are compared with those of the continuing
Automotive and Aerospace businesses in 2001 (see page 7). Operating cash flow is defined as cash
flow from operations after capital expenditure and proceeds from the disposal of fixed assets.
* 2001 earnings per share have been restated to reflect the adoption of FRS19 -
Deferred Tax
** 2001 dividend per share is pro forma based on the final dividend for the year
being two-thirds of the total.
- Increase of 9% in profit before tax, goodwill amortisation and
exceptional items.
- Interest cover 6.6 times (2001 - 5.0 times).
- Strong cash flow despite higher pension contributions and exceptional items.
- Net debt reduced by £51 million. Average maturity extended to 11 years.
- Final dividend of 7.6p per share - 11.3p for the year, a 3% increase and covered 2.2
times.
- New Torque Systems Group established within
GKN Driveline to address high growth advanced driveline systems market.
- Acquisition of 33.3% of Japanese torque management leader - Tochigi Fuji Sangyo -
with option to take control.
- Improved performance in Powder Metallurgy. Hoeganaes and European Sinter plants
running well. Steady improvements by GKN Sinter Metals in the US.
- Robust performance by GKN OffHighway Systems in difficult markets. GKN
AutoComponents takes over Land Rover chassis supply contract and with Dana of the US is
awarded the supply contract for new Land Rover platform.
- Two US aerospace acquisitions bring new technologies to GKN Aerospace Services which
wins first business on F-35 and A380 and joins Boeing technology development team on
new airliner.
- Completion of restructuring of Aerospace Services in response to civil downturn. Effect of
downturn mitigated by strong focus on military programmes. Approximately 80% of GKN's
overall aerospace revenues derive from military sector.
- AgustaWestland teams with Lockheed Martin to take EH101 into the US. Consolidation
of UK operations. Strong order intake. £4.7 billion order book.
Sales for the year of £4.5 billion were 3% higher than the comparable figure for
2001. The negative impact of currency translation was £62 million and the net favourable impact of
acquisitions and divestments was £50 million.
Operating profit before goodwill amortisation and exceptional items was 3% higher
at £315 million. The net impact of currency translation, acquisitions and divestments was insignificant.
Operating profit after goodwill amortisation and exceptional items was £230 million
(2001 - £161 million).
Operating cash flow after net capital expenditure was again strong at £174 million
(2001 - £210 million).
Net debt reduced to £834 million at the end of 2002 from £885 million a year earlier.
Interest was covered 6.6 times (2001 - 5.0 times).
"As our performance demonstrates, 2002 was a year of hard won achievement in
uncertain times.
"Western European car and light vehicle output fell by 2% and there were wide
variations in customer demand. Some of our German driveline plants were operating at the upper
extent of their capacity but our Italian operations were impacted by the problems experienced by Fiat.
"By contrast, North American car and light vehicle output rose by 6%. This was
unexpected as industry forecasters had anticipated that production would fall. Again, there were mixed
performances by manufacturers which led to variations in demand across our businesses.
"A strategic priority for 2002 was to continue our recovery actions in Powder
Metallurgy which had been impacted in 2001 by a combination of market and operational issues.
During 2002 the business has shown significant improvement.
"Our smaller automotive businesses faced mixed conditions. The early promise of an
upturn in the market for agricultural equipment was short-lived but we were pleased to support Land
Rover by taking over chassis production for a key model after a supplier went into receivership.
"In Aerospace we completed the restructuring initiated in 2001 to bring our business
into line with the depressed conditions in the civil aerospace market. The environment for the civil
structures business remains difficult and it may be some years before any upturn in demand for civil
airliners. We are however well positioned to take advantage of the recovery when it comes.
"By contrast, the market for military aircraft, which accounts for some 80% of our
Aerospace sales, is growing as the US and Western Europe bring new front line fixed and rotary wing
aircraft into service. The combined market for fighters and helicopters is forecast to increase by 50% to
$30 billion per annum during the period 2003 to 2007.
"AgustaWestland delivered another good performance in 2002. In early 2002
AgustaWestland consolidated its UK operations which incurred redundancy and reorganisation costs of
£22 million. GKN's £11 million share of the costs was charged to operating profit in the first half of
2002.
"The outlook for the major automotive markets remains uncertain. Some
weakening is anticipated compared with 2002, particularly in the first half, but currently there are no
indications of a substantial reduction in demand, notwithstanding anxieties about conflict in the Middle
East.
"The outlook for aerospace has more clarity, but with significant contrasts in the
prospects for civil and military. Civil markets look certain to remain depressed until 2004 and beyond,
while demand for military aircraft, which accounts for some 80% of our aerospace sales, is likely to
grow.
"With increasingly competitive markets, pricing pressure from customers and
additional pension costs, it is certain that 2003 will be another challenging year. However continuing
benefit should be seen from the ongoing recovery in Powder Metallurgy and the specific actions we
have already taken to reduce costs across the Group.
"Our businesses are clearly focused with leading market positions and considerable
underlying strength. This, together with the strategic initiatives we are pursuing, gives GKN a solid
foundation for future growth."
Automotive sales of £2,950 million were £106 million (4%) above 2001. The net
favourable effect of acquisitions and divestments was £40 million while the adverse impact of currency
translation (related mainly to the US dollar, Japanese yen and Brazilian real) was £51 million. Excluding
these factors sales rose by £117 million.
Operating profit before goodwill amortisation and exceptional items was £197 million
compared with £187 million in 2001, an increase of £10 million (5%). The net impact of currency,
acquisitions and divestments was negligible.
Operating profit after goodwill amortisation and exceptional items was £139 million
(2001 - £129 million).
In a highly competitive market GKN Driveline continued to grow its sales and
market share. 2002 was also a year of significant strategic activity. This saw a continued enlargement
of Driveline's presence within Japan and a related drive to develop a leading position within the growing
market for advanced torque management devices. GKN is already the world leader in constant velocity
jointed driveline components and torque management is a closely related systems application. A
specialist Torque Systems Group was established within GKN Driveline to expand its presence in this
area.
In March the Group acquired a 33.3% stake in Tochigi Fuji Sangyo (TFS), a leading
Japanese supplier of advanced automotive driveline devices for £29 million. GKN also obtained the
option to bring its potential holding to 50.4%. TFS and GKN Driveline have been partners for 16 years
in a viscous coupling joint venture in Japan. The Japanese automotive industry leads the world in
torque management technology and TFS is one of the leaders in the field.
During the year GKN Driveline increased its 51% shareholding in GKN Driveshafts
(India) Ltd to 96.4% for a total consideration of £5 million. This follows a number of transactions in
recent years which has seen GKN Driveline acquire control of joint venture businesses in the world's
emerging markets.
For GKN's Powder Metallurgy businesses - GKN Sinter Metals and Hoeganaes - 2002
has been a year of significant recovery after a difficult period during the previous year.
Management action has involved the closure of a number of plants in the US and a
cost reduction programme at Lichfield in the UK. Hoeganaes has overcome the start-up problems
associated with its new plant in Gallatin, Tennessee in the US and is now operating well. GKN Sinter
Metals' European plants performed strongly and there was encouraging progress in the recovery within
US operations. Steady progress is now anticipated as management works hard to bring all of its plants
closer to the level of its best performers.
In April GKN Sinter Metals took 100% ownership of the former joint venture
company, Mahindra Sintered Products Ltd (India) for a cash consideration of £9 million. The new
subsidiary, GKN Sinter Metals Ltd, is India's largest producer of powder metal components. The
transaction is a key step in GKN Sinter Metals' Asian strategy and aligns closely with GKN's Group-wide
determination to serve its customers on a global basis.
There were signs in early 2002 of a recovery in the US off-highway market but this
was short-lived. However, GKN OffHighway Systems was able to take advantage of a slightly stronger
European market and once more confirmed its ability to generate cash and deliver profits in challenging
conditions.
Following a customer's decision to relocate tractor assembly operations out of the
UK, GKN announced the closure of its cab systems business at Telford in the UK. The closure,
scheduled for mid-2003, will result in approximately 150 redundancies. The costs are included in the
2002 results.
During 2002 the supply of the chassis for an important Land Rover model was
threatened when a supplier went into receivership. GKN AutoComponents assumed control of the
insolvent supplier's manufacturing operation in Wolverhampton in the UK and secured the chassis
supply contract.
Land Rover has also awarded the contract to produce the chassis frame for a mid-
sized platform to a partnership between GKN and Dana of the US which will use a new metal forming
technology.
Emitec, the 50:50 joint venture with Siemens VDO, held US sales at the same level
as 2001 but sales in Europe declined slightly due to the weaker market and higher sales of diesel
engined cars which are subject to less stringent emission legislation.
Aerospace sales of £1,502 million were level with 2001 but with different year-on-
year performance in subsidiaries and joint ventures. Subsidiary sales of £559 million were £71 million
(11%) lower as a consequence of the fall in demand for civil aircraft. Joint venture and associate sales
(mainly AgustaWestland) were £943 million, an increase of £80 million (9%) as production peaked on
EH101 and Apache.
Operating profit before goodwill amortisation and exceptional items, after charging
GKN's £11 million share of redundancy and reorganisation costs in AgustaWestland, was £118 million
compared with £119 million in 2001.
There was no net impact from currency, acquisitions and divestments on either
sales or profit. On a reported basis, profits of subsidiaries of £23 million were £9 million (28%) lower
than last year with joint ventures and associates £8 million (9%) higher at £95 million. However, in
addition to redundancy and reorganisation costs, currency and acquisitions, these comparisons are also
affected by the treatment of one-off fees paid in 2001. Adjusting for all these items, the subsidiaries'
profits of £23 million represented a £1 million (4%) reduction while joint ventures and associates were
level at £95 million.
Operating profit after goodwill amortisation and exceptional items was £91 million
(2001 - £32 million).
The downturn in civil aerospace was exacerbated for GKN by BAE Systems'
cancellation of its RJX regional jet programme and the financial collapse of Fairchild Dornier in early
2002. GKN was a significant supplier to both. A rationalisation of Aerospace Services' civil operations in
the UK announced in late 2001 resulted in more than 800 redundancies mainly at Cowes on the Isle of
Wight. The rationalisation was mostly completed in the first half of 2002. The business is now operating
at a size appropriate to current demand but the management task continues to be challenging.
In 2002, two small but significant US transactions brought new technology to the
business. In January, GKN acquired the assets of Boeing's Thermal Joining Center (TJC) in Kent,
Washington State. The facility produces a critical titanium assembly for the F/A-22. The TJC, acquired
for $2.5 million, has the largest electron beam welding chamber in the US. In May, GKN acquired
ASTECH Inc of the US for $32 million. ASTECH is a US technology leader in super alloy, honeycomb
structures based in Santa Ana, California in the US.
GKN is a leader in the development of new composite technologies such as Resin
Film Infusion (RFI) and Resin Transfer Moulding (RTM) which enable higher levels of precision, quality
and productivity. During 2002 a new composite engineering centre was opened at Meriden,
Connecticut in the US and the largest RTM facility in the US was established at the St Louis, Missouri
facility.
On the F-35 Joint Strike Fighter GKN has been selected to develop and manufacture
critical composite structures on the aircraft's F-135 engine using its new RTM technology. It will also
supply titanium components for the F-135.
The Airbus A380 will utilise GKN's RFI and RTM composite manufacturing
technology. GKN has been awarded a number of contracts on the A380 with a value of $2 million per
aircraft.
During 2002 GKN joined Boeing's technology development team working on the
radical Sonic Cruiser concept but which is now focused on a more conventional aircraft which will still
require a high content of advanced materials. This is GKN's first major involvement as a tier one
supplier to Boeing's commercial operations.
AgustaWestland, a 50:50 joint venture between GKN and Finmeccanica, continued
to perform well and, on the basis of reported revenues, maintained its position as the world's largest
helicopter company. After a series of export wins in 2001 and 2002, the order book currently stands at
£4.7 billion.
In early 2002, anticipating the completion of UK military orders for 66 EH101
helicopters, UK operations were consolidated on to the Yeovil site in Somerset and the smaller nearby
facility at Weston-Super-Mare was closed. The UK workforce of AgustaWestland was reduced by some
800. The consolidation was announced in January 2002 and completed by mid-year.
EH101 export programmes for Portugal and Denmark were confirmed and Oman
ordered 16 Super Lynx 300. The UK Ministry of Defence (MoD) also placed a £30 million engineering
study with AgustaWestland to examine the feasibility of an upgrade of the British Army's existing Lynx
fleet to meet a requirement for a new battlefield light utility helicopter (BLUH). In its announcement the
MoD estimated that BLUH could be worth £1 billion to AgustaWestland.
At the Farnborough Airshow in July 2002 AgustaWestland and Lockheed Martin
announced that they had signed a 10-year definitive agreement to jointly market, produce and support
a medium-lift helicopter in the US. The US101, an American version of the EH101, will initially be
offered to three key markets where there are emerging opportunities - US Air Force combat search
and rescue, US Coast Guard civilian search and rescue and US Marine Corps executive transport. It is
estimated that these three programmes represent a combined requirement for 200 aircraft over 10
years.
In August 2001 the Group demerged its Industrial Services businesses. In the 2001
report and accounts, pro forma financial information was presented for the continuing businesses in
order to provide comparability of results of those businesses. For 2002, separate financial statements
with pro forma 2001 comparatives are included and all references in this review are to the figures in
those statements. The financial statements including the 2001 results of the Industrial Services
businesses up to the date of the demerger are also attached.
In this press release, in addition to the statutory measures of earnings, we have
included references to profit before goodwill amortisation and exceptional items since we believe this
shows most clearly the underlying trend in performance.
A new accounting policy FRS 19 'Deferred Tax' has been implemented during the
year and the prior year figures have been restated accordingly.
Sales and operating profit both before and after goodwill amortisation and
exceptional items are discussed by business in the Operating Review.
Total sales were £4,452 million compared with £4,337 million last year, an increase
of £115 million (2.7%). The impact of currency, acquisitions, divestments and changes in status was
not material and the underlying increase was 3.0%.
Automotive sales of £2,950 million were £106 million (3.7%) above last year with
an underlying increase of 4.2%. As described in the Operating Review, 2002 was a year of uncertain
market conditions, with lower demand in European markets contrasting with unexpectedly resilient
demand in North America.
Aerospace sales of £1,502 million were much in line with last year, with increases in
military sales being offset by reduced civil demand.
Operating profit after goodwill amortisation and exceptional items was £230 million
(2001 - £161 million), a 43% increase.
Operating profit before goodwill amortisation and exceptional items of £315 million
was £9 million (2.9%) above 2001 with an underlying increase of 2.6%. Automotive operating profit
on this basis increased by £10 million (5.3%) to £197 million while Aerospace showed a marginal
reduction from £119 million to £118 million. This was after charging an £11 million share of
redundancy and reorganisation costs in AgustaWestland in the first half of the year.
Notwithstanding this charge, AgustaWestland performed well, achieving operating
profits above last year's underlying level, adjusted for a non-recurring charge from Aerospace subsidiaries to Helicopters of £8 million in 2001.
Our Aerospace subsidiaries had a mixed year with good performances by the
military, largely US, businesses being negated by difficult conditions in the European plants which
predominantly serve the civil market. Adjusting for the non-recurring £8 million charge to Helicopters in
2001, Aerospace subsidiaries' operating profits of £23 million were slightly down from £24 million in the
previous year.
Exceptional costs charged to operating profit in the period totalled £37 million. They
related to restructuring actions announced in October 2001 but only implemented in 2002 and arose in
both Automotive and Aerospace businesses. The cash cost of operating exceptional charges in the
period was £52 million due mainly to the timing of severance payments in connection with
restructuring announced in 2001.
Exceptional losses arising on the sale or closure of businesses totalled £2 million. The
main elements were a combination of cost and asset write-downs of £7 million on the closure of the
OffHighway Systems cabs business, partially offset by a profit of £5 million on the sale of the Group's
shareholding in GKN Ayra Cardan SA to Dana Corporation in return for their shareholding in GKN
Driveshafts Ltd.
Amortisation of goodwill was £48 million (2001 - £43 million) which includes an £11
million accelerated write-down in respect of a Sinter Metals plant acquired in January 2001 and
therefore in its first year of review for impairment. Given the difficulties in Sinter Metals North America
over the intervening period, the goodwill on the purchase of this plant has been substantially written
down. No other goodwill impairments have arisen during the year.
Net interest payable by subsidiaries was £47 million (2001 - £59 million). £10 million
of the reduction arose from the benefits of lower foreign currency interest rates, as the Group hedges
its balance sheet, effectively switching its borrowings into the currency in which its assets are held. This
allowed it to benefit from low US dollar interest rates, the largest such currency. This benefit cannot be
assumed to recur in 2003 as the Group has reduced its level of foreign currency asset hedging,
although some compensation may be gained from recent reductions in sterling interest rates.
Interest was covered 6.6 times (2001 - 5.0 times) by Group operating profit before
goodwill amortisation and exceptional items.
Profit before tax, goodwill amortisation and exceptional items was £267 million
compared with £245 million in 2001, an increase of 9%.
After goodwill amortisation and exceptional items, profit before tax was £180 million.
This compared with the 2001 figure of £107 million.
Taxation increased to £77 million from £64 million in 2001. The rate of tax
expressed as a percentage of profit before goodwill amortisation and exceptional items for the year was
30.0% compared with a 2001 figure of 27.4%, the increase being largely attributable to a reduction in
credits arising from settlement of prior year tax liabilities. As noted above, FRS 19 'Deferred Tax' was
implemented during the year and, as a result, has contributed an additional 1.5% to the 2002 tax rate.
The underlying rate in 2003 and beyond is expected to show a modest, progressive
increase as a result of future changes in the geographical mix of profits. There may, however, be some
favourable impact from the satisfactory resolution of outstanding tax issues.
Tax relief on exceptional items was £3 million (2001 - £3 million).
The effective tax rate based on profits after goodwill amortisation and exceptional
items was 42.8% (2001 - 59.8 %).
The impact of FRS 19 on the prior year balance sheet was to increase the net
deferred tax provision by £50 million.
Earnings per share before goodwill amortisation and exceptional items increased by
5.0% to 25.2p (after these items - 13.7p; 2001 - 5.3p).
A final dividend of 7.6p per share is proposed, payable on 16 May 2003 to
shareholders on the Register at 14 March 2003.
Shareholders may choose to reinvest this dividend under the Dividend
Reinvestment Plan ("DRIP"). The closing date for DRIP mandates is 1 May, 2003.
Together with the interim dividend of 3.7p the total dividend for the year will be
11.3p, an increase of 2.7% over the equivalent figure for last year. The total dividend is covered 2.2
times by earnings before goodwill amortisation and exceptional items (2001 - 2.2 times).
Operating cash flow, which GKN defines as cash inflow from operating activities
adjusted for capital expenditure and proceeds from the disposal of fixed assets was again very strong.
This year's figure of £174 million is somewhat ahead of last year's pro forma amount of £210 million,
allowing for the one-off receipt in 2001 of £49 million of customer advances and the £52 million cash
cost of exceptional operating costs in 2002 (pro forma 2001-£27 million).
Tight management control led to a reduction of £29 million in working capital and
capital expenditure was reduced to £213 million (pro forma 2001 - £246 million). This represented
120% of depreciation, a reduction from the 149% of the previous year, as a number of major
investments were completed.
Dividends from joint ventures and associates were £45 million (2001 - £49 million)
with the major receipt being from AgustaWestland which has a policy of 100% distribution of earnings
unless otherwise agreed by the shareholders.
The net impact of acquisitions and divestments on the cash flow was an outflow of
£75 million (2001 - £136 million) leaving a net cash inflow for the year of £72 million (pro forma 2001 -
£29 million).
The Group has transactional currency exposures arising from sales or purchases by
operating subsidiaries in currencies other than the subsidiaries' functional currency. Under the Group's
foreign exchange policy, such transaction exposures are hedged once they are known, mainly through
the use of forward foreign exchange contracts.
At the year end the balance sheet showed goodwill of £470 million in relation to
subsidiaries and a further £114 million within the equity value of joint ventures and associates.
At the end of the year the Group had net borrowings of £834 million (2001: £885
million). These included the benefit of customer advances of £42 million (2001: £50 million), which are
shown in short term creditors in the balance sheet. There were no net borrowings in joint ventures
which, overall, held substantial cash balances at 31 December 2002.
The reduction in net debt seen in the year was encouraging and arose from the
strong performance in operating cash flow. The net cost of acquisitions and divestments was £75
million. A one-off benefit of £66 million arose as a consequence of our balance sheet hedging policy.
During the year the Group's debt maturity profile was improved by tapping the
existing £300 million 6.75% bond maturing in 2019 for a further £50 million and issuing, in two
tranches, a new £325 million 7% bond maturing in 2012. This brought the weighted average maturity
profile of the Group's committed borrowings to 11.3 years leaving the Group well placed to fund its
strategic growth plans and withstand any sudden changes in liquidity in financial markets. None of the
Group's borrowing facilities are linked to specific Credit Ratings ascribed by Rating Agencies.
At the year-end the Group had committed borrowing facilities of £1,490 million, of
which £873 million was drawn.
Shareholders' equity was £950 million at the end of the year compared with £970
million, as restated for the impact of FRS 19, at the end of 2001. Retained profits were £17 million
which were more than offset by £43 million adverse impact of currency.
Pension and post retirement costs in these accounts have been accounted for on a
SSAP 24 basis. The total charge to Group profit in respect of defined benefit schemes was £49 million
(2001 - £42 million).
The progressive implementation of FRS 17 'Accounting for Retirement Benefits', has
been accompanied by considerable debate about its suitability as a measure of present and future
pension liabilities. In line with the latest guidance from The Accounting Standards Board, the Group has
not adopted FRS 17 in its 2002 accounts, but is disclosing fully the effects had it done so. Details of
both the balance sheet and profit and loss account impacts are attached at note 4 of the appendix to
this release.
Much of the external focus is on the Group's UK Pension Scheme which has
approximately 60,000 members of whom only 10% are currently in service with the remainder either
deferred or current pensioners. As a UK Defined Benefit scheme, this is run on a funded basis with
funds set aside in trust to cover future liabilities to members. The Scheme was in surplus on both an
SSAP 24 and FRS 17 basis at 31 December 2000. Due to substantial falls in world stock markets and
declines in interest rates used to calculate the net present value of liabilities, the FRS 17 figures now
show a significant deterioration to a gross fund deficit of £551 million. After taking account of deferred
taxation this reduces to £415 million.
Recognising that in the short term at least, some of this deficit is unlikely to be made
up simply through the recovery in asset values, the Group has already been making higher payments
into this Fund. In addition to the regular £15 million cost of current service entitlements, in 2002 it
increased its discretionary contributions to £18 million (2001 £8 million) bringing total annual company
contributions to the Fund in the year to £33 million.
The next formal actuarial valuation of the scheme on an SSAP 24 basis will take
place in April 2003 and it is therefore not possible to give precise guidance on the likely contribution rate
for 2003 and beyond. However, the Group's plans for 2003 assume a further increase in contributions
of up to £20 million bringing the total annual cash cost up to £53 million. This increase is well within the
cash flow and balance sheet capability of the Group.
Under SSAP 24 the charge to profit for the UK scheme was £17 million (2001 - £14
million). The charge in 2003, which will not be known until after the actuarial valuation in April, is likely
to rise in line with the additional contribution.
FRS 17 also values post retirement benefits in other parts of the Group, including
those countries where schemes are unfunded and it is already the practice to provide for the liability in
the balance sheet.
The principal regions involved are the US and Continental Europe and the detailed
assumptions underlying the FRS 17 additional net liabilities in those territories, of £36 million and £18
million respectively, are set out in note 4 to the appendix to this release.
In total, at 31 December 2002 on the FRS 17 basis, there would have been an
overall additional liability on all pension/post-retirement obligations of £527 million (2001 - £169
million). This is after allowance for the net £157 million (2001- £144 million) already included in the net
liabilities on the balance sheet and a deferred tax credit of £202 million (2001 - £87 million) which, it
should be noted, has been restricted by the forecast availability of UK taxable profits.
The impact on the profit and loss account of adopting FRS 17 would have been
insignificant. GKN has not benefited from abnormally low pension charges nor taken a pension
contribution holiday in recent years.
The equity value of joint ventures will also be affected by the implementation of FRS
17 and the adjustment at the end of 2002 would have reduced shareholders' funds by £58 million.
Both the UK Accounting Standards Board and the International Accounting
Standards Board published exposure drafts during the year which will require the value of all share
options granted after 7 November 2002 to be charged to the profit and loss account. These are likely to
become standard for accounting periods commencing after 1 January 2004. On the basis that existing
option arrangements continue but with a reduced level of discount on the all-employee sharesave
scheme, the cost of all current schemes, including the long-term incentive plan, is estimated to be in
the region of £3 million in 2003 rising incrementally to some £8 million in 2005.
For a PDF version of the appendices for this document please click here
GKN Corporate Communications
Tel: 020 7463 2354
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