Ordinary shares in the Company are held in two trusts:
As part of the long-term incentive plan (LTIP), the Rolls-Royce 1999 Executive Share Option Plan and other employee share schemes (see directors’ remuneration report).
The shares held by this independently managed trust were purchased on the open market:
December 19, 2003
370,000 at £1.87 per share
At December 31, 2003, these shares had a market value of £0.5m. In accordance with UITF 17 ‘Employee share schemes’, the Group is required to amortise the cost of likely awards over each separate performance measurement period and to include this charge as part of the cost of ‘wages and salaries’. The UITF is a committee of the Accounting Standards Board.
In respect of a Qualifying Employee Share Trust (QUEST), which provides employees with shares under Inland Revenue approved Save As You Earn (SAYE) share schemes.
As permitted by UITF 17, no amortisation charge has been made. At December 31, 2003, a total of 401,283 of these shares had still not been allocated to option holders, their market value being £0.7m. These outstanding allocations are expected to occur in 2004.
Both trusts have waived dividends and voting rights, and their costs of administration have been changed to the Group's profit and loss account.