Annual Report and Accounts 2009 - BG Group

88
Financial Statements
Notes to the accounts continued
6 FINANCE INCOME AND COSTS
Interest receivable (a)
www.bg-group.com
2009
£m
2008
£m
63 276
Net fair value gains and losses on interest rate and currency exchange rate derivatives 12 –
Fair value hedge adjustments (8) –
Finance income 67 276
Interest payable (91) (69)
Finance lease charges (53) (57)
Other finance charges (2) (15)
Less: interest capitalised (b) 31 22
Unwinding of discount on provisions and pension obligations (c) (45) (31)
Exchange losses (a)
(22) –
Net fair value gains and losses on interest rate and currency exchange rate derivatives – (34)
Fair value hedge adjustments – (21)
Finance costs (182) (205)
Net finance (costs)/income (d) (115) 71
(a) Interest receivable includes exchange gains of £25m (2008 net exchange gains of £145m). Exchange losses (2008 net exchange gains) include the retranslation of certain borrowings in subsidiaries. Certain
exposures relating to these borrowings are hedged using interest rate and currency derivative instruments; the net fair value gains and losses on such derivatives are reported separately.
(b) Finance costs associated with general Group central borrowings used to finance major capital projects are capitalised up to the point that the project is ready for its intended use. The weighted average
interest cost applicable to these borrowings is 1.9% per annum (2008 4.8%). Tax relief for capitalised interest is approximately £9m (2008 £6m).
(c) Amount in respect of pension obligations represents the unwinding of discount on the plans’ liabilities offset by the expected return on the plans’ assets (see note 25, page 107). Also includes the unwinding
of discount on decommissioning and other provisions (see note 20, page 102).
(d) Excludes the Group’s share of net finance costs from joint ventures and associates of £47m (2008 £52m).
7 TAXATION
Current tax
UK – corporation tax at 28% and 50% (2008 28.5% and 50%) 1 240 1 710
– petroleum revenue tax at 50% (2008 50%) 14 27
– adjustments in respect of prior periods (73) (13)
– less: double tax relief (460) (627)
UK tax charge 721 1 097
Overseas tax charge 655 990
– adjustments in respect of prior periods 31 (19)
Current tax charge 1 407 2 068
Deferred tax
Temporary differences 209 232
Recognition of previously unrecognised deferred tax asset (20) –
Deferred petroleum revenue tax at 50% (2008 50%) 2 18
Tax charge 1 598 2 318
The tax credit relating to disposals, re-measurements and impairments is £31m (2008 tax charge £70m). This consists of a tax charge on unrealised
re-measurements of £36m (2008 tax charge £71m) and a tax credit on disposals and impairments of £67m (2008 tax credit £1m).
The total tax charge reconciles with the charge calculated using the statutory rates of UK corporation tax as follows:
Profit before taxation 3 862 5 468
Tax at UK statutory rates on profit
Effect on tax charge of:
1 299 1 904
Non tax-deductible or non-taxable items 61 55
Overseas or petroleum revenue taxes at different rates to UK statutory rates 267 374
Prior year and other adjustments including unrelieved overseas tax losses (29) (15)
Tax charge 1 598 2 318
2009
£m
2009
£m
2008
£m
2008
£m