a new UK accounting standard, FRS 17 Retirement
benefits, the method of accounting for defined
benefit pensions will be substantially changed. The
Accounting Standards Board has delayed the full adoption
of this new standard until our 2006 financial year.
The pension cost charged to the profit and loss account
would have been lower under FRS 17 than SSAP 24 in the
2003 financial year. Net financing costs will be volatile
reflecting movements in the value of the scheme assets
and interest rates. Pension fund actuarial gains and
losses, including investment returns varying from the
assumed returns, will be recorded in full in the statement
of total recognised gains and losses annually. Pension
fund deficits, calculated in accordance with prescribed
rules in the standard, will be shown on the balance
sheet as will any surpluses to the extent we expect
to obtain value from them in the foreseeable future.
In accordance with the transitional rules of the standard
the pension fund deficit and profit and loss charge
calculated under FRS 17 is disclosed in note 31. It
should be noted that the deficit is largely dependent
on the strength of equity markets at the balance sheet
date and is expected to be volatile.