The company operates a scheme offering post-retirement healthcare benefits. The cost of providing for these benefits has been accounted for on a basis similar to that used for defined benefit pension schemes.
The liability as at 24 February 1996 of £10m, which was determined in accordance with the advice of qualified actuaries, is being spread forward over the service lives of relevant employees and £1m (1996 £1m) has been charged to the profit and loss account. A provision of £3m (1996 £3m) is being carried in the balance sheet. It is expected that payments will be tax deductible, at the company's tax rate, when made.
