Accounts

Notes 11 - 15

11 Reserves

£ millions Share premium account Other reserves Profit and loss account Total
At 31 January 2010 2,191 711 1,365 4,267
Loss for the year - - (20) (20)
Actuarial gains on defined benefit pension scheme - - 4 4
Tax on items recognised directly in equity shareholders' funds - - (1) (1)
Share-based compensation - - 5 5
Shares issued under share schemes 3 - - 3
Own shares disposed - - 7 7
Dividends - - (129) (129)
At 29 January 2011 2,194 711 1,231 4,136

The other reserves represent the premium on the issue of convertible loan stock in 1993 and the merger reserve relating to the acquisition of Darty.

The value of own shares deducted from the profit and loss reserve at 29 January 2011 is £42m (2009/10: £54m).

12 Reconciliation of movement in equity shareholders' funds

£ millions 2010/11 2009/10
(Loss)/profit for the year (20) 464
Dividends (129) (125)
  (149) 339
Actuarial gains/(losses) on defined benefit pension scheme 4 (5)
Tax on items recognised directly in equity shareholders’ funds (1) 1
Share-based compensation 5 5
Shares issued under share schemes 3 3
Own shares purchased - (7)
Own shares disposed 7 2
Net (decrease)/increase in equity shareholders' funds (131) 338
Equity shareholders' funds at beginning of year 4,638 4,300
Equity shareholders' funds at end of year 4,507 4,638

13 Share options

Options to subscribe under the various schemes for ordinary shares of 155/7p, including those held by the executive Directors disclosed in the Directors' remuneration report, are shown below:

        2010/11   2009/10
  Date of
grant
Exercisable
from
Exercise
price
£
Options
Number
  Options
Number
Kingfisher Incentive Share Scheme 11/04/07 11/04/10 - -   1,401,842
  21/04/08 21/04/11 - 2,237,612   2,717,585
  21/04/09 21/04/12 - 2,749,334   3,299,353
  06/04/10 06/04/13 - 2,492,904   -
  05/05/10 05/05/13 - 6,199,727   -
        13,679,577   7,418,780
Restricted Special Awards 30/04/07 30/04/10 - -   12,962
  01/05/07 01/05/10 - -   36,463
  18/06/07 18/06/10 - -   6,191
  20/11/08 01/04/12 - 20,000   20,000
  01/04/09 01/04/12 - 70,000   70,000
  01/06/09 09/05/10 - -   8,368
  01/06/09 09/05/11 - 4,463   4,463
  10/08/09 04/07/11 - 7,929   7,929
  23/11/09 01/04/11 - -   14,127
  23/11/09 01/04/12 - -   14,427
  06/04/10 21/04/11 - 42,190   -
  06/04/10 21/04/12 - 65,835   -
  06/04/10 21/04/13 - 19,762   -
  30/04/10 21/04/11 - 12,065   -
  30/04/10 21/04/12 - 12,065   -
  24/08/10 24/08/13 - 23,095   -
  10/01/11 21/04/12 - 4,192   -
  18/01/11 09/06/13 - 6,815   -
        288,411   194,930
Performance Share Plan 11/04/07 11/04/10 - -   833,815
  01/10/07 01/10/10 - 106,226   1,469,187
  01/02/08 01/02/11 - 1,271,132   1,193,477
01/02/08 01/02/12 - 1,271,132   1,193,477
  21/04/08 21/04/12 - 9,437,283   10,961,747
  24/07/08 24/07/12 - 1,419,213   1,328,997
  01/10/08 01/10/11 - 1,401,896   1,369,602
  01/10/08 01/10/12 - 1,346,220   1,314,763
  21/04/09 21/04/12 - 3,785,833   3,695,056
  30/10/09 21/04/12 - 671,317   655,859
  30/10/09 21/04/13 - 281,469   274,986
  05/05/10 05/05/13 - 9,154,859   -
  21/10/10 21/04/12 - 50,778   -
  21/10/10 05/05/13 - 67,800   -
        30,265,158   24,290,966
Kingfisher Retention Plan 21/04/08 21/04/11 - 892,500   1,055,000
  21/04/08 21/04/12 - 1,700,000   2,015,000
        2,592,500   3,070,000
Store Manager Incentive Plan 21/04/09 21/04/11 - 1,732,667   2,047,500
  21/04/09 21/04/12 - 6,579,941   7,427,250
  30/10/09 21/04/12 - 1,208,840   1,208,840
        9,521,448   10,683,590
UK and International ShareSave 22/10/04 01/12/09 2.45 -   526,620
  27/10/05 01/12/10 1.76 170,453   600,783
  26/10/06 01/12/09 1.97 -   405,455
  26/10/06 01/12/11 1.97 636,289   662,929
  01/11/07 01/12/10 1.55 420,335   1,782,137
  01/11/07 01/12/12 1.55 1,008,945   1,020,667
  29/10/08 01/12/11 1.09 5,560,311   5,749,294
  29/10/08 01/12/13 1.09 3,773,705   3,859,139
  03/11/09 01/12/12 1.72 3,496,313   3,534,320
  03/11/09 01/12/14 1.72 1,600,509   1,605,016
  28/10/10 01/12/13 1.87 1,598,554   -
  28/10/10 01/12/15 1.87 747,473   -
        19,012,887   19,746,360
Executive, International Executive and Phantom Share Options 17/04/00 17/04/04 3.93 -   892,027
  25/09/00 25/09/04 3.57 -   416,232
  26/09/01 26/09/04 2.10 413,247   526,941
  26/09/01 26/09/05 2.07 471,031   471,031
  09/04/02 09/04/05 2.90 1,271,925   1,635,731
  09/04/02 09/04/06 2.86 701,976   701,976
  08/10/02 08/10/05 1.95 962,923   1,307,525
  08/10/02 08/10/06 1.95 587,119   789,059
  17/04/03 17/04/06 2.38 1,710,578   2,508,231
  17/04/03 17/04/07 2.38 700,663   1,263,652
        6,819,462   10,512,405
Total        82,179,443   75,917,031

The Kingfisher Incentive Share Scheme ('KISS') and Performance Share Plan are described as part of the Directors' remuneration report. Restricted Special Awards are granted as one-off compensatory awards granted under the rules of the KISS.  They are nil cost options, as with the KISS, but do not accrue dividends until after they are exercised. Vesting dates may vary according to individual grants.

Certain employees, excluding Directors, have been granted contingent share awards under the Kingfisher Retention Plan.

The Store Manager Incentive Plan provided provisional awards to store managers in 2009 that will vest in April 2011 and April 2012. There are performance conditions based on store standards and an award will lapse if these are not maintained throughout the performance period. These awards do not accrue dividends during the vesting period.

Under the UK ShareSave scheme, eligible UK employees have been invited to enter into HMRC approved savings contracts for a period of three or five years, whereby shares may be acquired with repayments under the contract. The option price is the average market price over three days shortly before an offer to subscribe, discounted by 20%. Options are exercisable within a six month period from the conclusion of a three or five year period. The International ShareSave scheme, which operates along the lines of the UK ShareSave scheme, includes eligible employees in certain overseas locations.

The last grant of options under the Executive, International Executive and Phantom Share Option schemes was made in April 2003. Under these schemes, participants received a bi-annual grant of options based on their position in the Group. These options are normally exercisable from the third anniversary of the date of the grant (up to the tenth anniversary), except where the performance condition has not been met, in which case this date is deferred accordingly. The performance conditions for all options have now been met, except for the grant made in April 2003. On the exercise of Phantom Share Options, participants receive in cash the increase in value of the allocated number of shares in the Company.

The rules of all schemes include provision for the early exercise of options in certain circumstances.

Under FRS 20, 'Share-based payment', the Company recognises a charge for share options granted after 7 November 2002. The Company has not repeated the disclosures required by FRS 20 as these are already included in note 30 of the Kingfisher plc consolidated financial statements.

The Employee Share Ownership Plan Trust ('ESOP')

The ESOP is funded by an interest free loan from the Company of £45m (2009/10: £51m) to enable it to acquire shares in Kingfisher plc. The shares are used to satisfy options awarded under the KISS, Performance Share Plan, Kingfisher Retention Plan, Store Manager Incentive Plan, International ShareSave, Executive, International Executive and Phantom Share Options schemes.

The ESOP's shareholding at 29 January 2011 is 12 million shares (2009/10: 15 million shares) with a nominal value of £2m (2009/10: £2m) and a market value of £30m (2009/10: £32m). Dividends on these shares were waived for the interim and final dividends.

14 Contingent liabilities

The Company has an obligation to provide a bank guarantee for £50m (2009/10: £50m) to the liquidators of Kingfisher International France Limited in the event that the Company's credit rating falls below 'BBB'. The obligation arises from an indemnity provided in June 2003 as a result of the demerger of Kesa Electricals.

In addition, the Group has arranged for certain bank guarantees to be provided to third parties in the ordinary course of business. The total amount outstanding at 29 January 2011 is £4m (2009/10: £4m).

15 Related party transactions

During the year, the Company carried out a number of transactions with related parties in the normal course of business and on an arm's length basis. The names of the related parties, the nature of these transactions and their total value are shown below:

  2010/11   2009/10
£ millions Income/
(expense)
Receivable/
(payable)
  Income/
(expense)
Receivable/
(payable)
Transactions with Koçtaş Yapi Marketleri Ticaret A.S. in which the Group holds a 50% interest          
Commission and other income 0.3 0.3   0.3 0.2
Transactions with Hornbach Holding A.G. in which the Group holds a 21% interest          
Other expenses (0.2) -   (0.2) -
Transactions with Kingfisher Pension Scheme          
Provision of administrative services 1.4 0.1   1.5 0.1

Services are usually negotiated with related parties on a cost-plus basis. Goods are sold or bought on the basis of the price lists in force with non-related parties.

The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No provisions have been made for bad and doubtful debts in respect of the amounts owed by related parties.

Directors' remuneration and details of share option exercises are disclosed in the Directors' remuneration report.