Annual report and financial statements 2011 - Analist.nl

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102 Notes to the financial statements continued 23 Financial instruments continued The following table presents the changes in Level 3 instruments: Opening balance (60.5) (53.3) Additions (see note 5) 20.3 – Gains and losses recognised in the income statement 48.9 (7.2) Closing balance 8.7 (60.5) The gains recognised in the income statement in 2010/11 relate to the valuation of the put option over a non-controlling interest. A discount unwind of £5.4m has been recorded within underlying interest charges, with the fair value movement of £54.3m treated as adjustment to reported profit (see note 5). Fair value of financial instruments With the exception of the Group’s fixed rate bond debt, there were no material differences between the carrying value of non-derivative financial assets and financial liabilities and their fair values as at the balance sheet date. The carrying value of the Group’s fixed rate bond debt was £2,159.0m (last year £2,183.9m); the fair value of this debt was £2,080.1m (last year £2,107.7m). Capital policy The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide optimal returns for shareholders and to maintain an efficient capital structure to reduce the cost of capital. In doing so the Group’s strategy is to maintain a capital structure commensurate with an investment grade credit rating and to retain appropriate levels of liquidity headroom to ensure financial stability and flexibility. To achieve this strategy the Group regularly monitors key credit metrics such as the gearing ratio, cash flow to net debt (see note 29) and fixed charge cover to maintain this position. In addition the Group ensures a combination of appropriate committed short-term liquidity headroom with a diverse and balanced longterm debt maturity profile. As at the balance sheet date the Group’s average debt maturity profile was nine years (last year ten years). During the year the Group maintained an investment grade credit rating of Baa3 (stable) with Moody’s and BBB- (stable) with Standard & Poor’s. In order to maintain or realign the capital structure, the Group may adjust the number of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. 24 Provisions At start of year 51.1 103.8 Provided in the year 10.8 5.1 Released in the year (1.7) (14.2) Utilised during the year (15.4) (43.4) Exchange differences (0.1) (0.2) At end of year 44.7 51.1 Analysis of provisions: Current 22.7 25.6 Non-current 22.0 25.5 Total provisions 44.7 51.1 The provisions are primarily comprised of one-off costs related to the strategic restructure in the UK in 2008/09, including onerous leases. The current element of the provision primarily relates to costs relating to the property exit costs and redundancies. The non-current element of the provision relates to store closures, primarily onerous leases, and are expected to be utilised over a period of ten years. 2011 £m 2011 £m 2010 £m 2010 £m Marks and Spencer Group plc Annual report and financial statements 2011
103 25 Deferred tax Deferred tax is provided under the balance sheet liability method using a tax rate of 26% (last year 28%) for UK differences and local tax rates for overseas differences. See note 7 for details of the changes to the UK corporation tax rate and the impact on the Group. The movements in deferred tax assets and liabilities (after the offsetting of balances within the same jurisdiction as permitted by IAS 12 – ‘Income Taxes’) during the year are shown below. Deferred tax assets/(liabilities) Fixed assets temporary differences £m Accelerated capital allowances £m Pension temporary differences £m Other short-term temporary differences £m At 29 March 2009 (78.9) (127.3) 28.5 (41.3) (219.0) (4.9) (223.9) Credited/(charged) to the income statement 4.6 3.6 (19.0) (0.1) (10.9) 2.4 (8.5) Credited/(charged) to equity – – 71.7 38.2 109.9 (3.3) 106.6 At 3 April 2010 (74.3) (123.7) 81.2 (3.2) (120.0) (5.8) (125.8) At 4 April 2010 (74.3) (123.7) 81.2 (3.2) (120.0) (5.8) (125.8) Credited/(charged) to the income statement 10.5 18.9 3.0 7.1 39.5 (3.2) 36.3 Credited/(charged) to equity – – (112.0) 6.1 (105.9) (1.1) (107.0) At 2 April 2011 (63.8) (104.8) (27.8) 10.0 (186.4) (10.1) (196.5) The deferred tax liability on fixed assets is stated net of the benefit of capital losses with a tax value of £65.0m (last year £65.5m). No benefit has been recognised in respect of unexpired trading losses carried forward in overseas jurisdictions with a tax value of £16.1m (last year £8.8m). In addition, the Group is claiming UK tax relief for losses incurred by some of its current and former European subsidiaries. In light of the continuing litigation no asset has been recognised in respect of these claims. No deferred tax has been recognised in respect of the temporary differences arising on investments in overseas subsidiaries and joint ventures as the Group is able to control the timing of the reversals of those differences, and it is probable that the temporary differences will not reverse in the foreseeable future. The aggregate temporary difference in respect of these overseas investments is £93.5m (last year £95.7m). 26 Ordinary share capital Total UK deferred tax £m Overseas deferred tax £m Total £m 2011 2010 Shares £m Shares £m Allotted, called up and fully paid ordinary shares of 25p each At start of year 1,582,316,581 395.5 1,577,794,919 394.4 Shares issued on exercise of share options 2,547,301 0.7 4,521,662 1.1 At end of year 1,584,863,882 396.2 1,582,316,581 395.5 Issue of new shares 2,547,301 (last year 4,521,662) ordinary shares having a nominal value of £0.7m (last year £1.1m) were allotted during the year under the terms of the Company’s schemes which are described in note 13. The aggregate consideration received was £8.4m (last year £12.4m). Strategy Performance & Marketplace Operating review Financial review Governance Financial statements & other information To find out more visit marksandspencer.com/annualreport2011 Financial statements
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Annual report and financial stateme
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What’s in this report? P04 Read a
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How we’re governed Group Board Th
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05 Overview Investment in our UK bu
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07 Overview Total investment in our
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09 Overview Do Your Thing In April
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11 Overview Underlying Group profit
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13 Overview Consumer confidence ind
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Our campaigns highlight how we adap
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Lingerie and Beauty Value lingerie
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Fun fashion Our Autograph striped s
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We are never complacent and we cont
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Terribly Clever In September we lau
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Try it - then buy it In November we
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27 Overview Myleene’s Makeovers
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Made to measure Shoppers in our Sky
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31 Overview Autograph Leaves collec
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33 Overview Keeping up to date We
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35 Overview Summary of results Grou
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37 Overview Capital expenditure Yea
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39 Overview Progress has begun on s
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41 Overview What is our approach to
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43 Overview Ensuring the Board is r
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Accountability 45 Overview We belie
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47 Overview Risk description Mitiga
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Governance report Our Pensions 49 O
Page 53 and 54: Audit Committee 51 Overview Chairma
Page 55 and 56: 53 Chairman’s introduction PART 1
Page 57 and 58: 55 Chairman’s introduction For ex
Page 59 and 60: 57 Chairman’s introduction Deputy
Page 61 and 62: 59 Chairman’s introduction Execut
Page 63 and 64: 61 Chairman’s introduction Contra
Page 65 and 66: 63 Chairman’s introduction PART 2
Page 67 and 68: 65 Chairman’s introduction Share
Page 69 and 70: 67 Chairman’s introduction Direct
Page 71 and 72: 69 Overview A special resolution wi
Page 73 and 74: 71 Overview treatment regardless of
Page 75 and 76: Independent auditors’ report to t
Page 77 and 78: 75 Consolidated statement of financ
Page 79 and 80: 77 Consolidated cash flow informati
Page 81 and 82: 79 1 Accounting policies continued
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Page 85 and 86: 83 3 Expense analysis Underlying £
Page 87 and 88: 85 7 Income tax expense A. Tax char
Page 89 and 90: 87 10 Employees A. Aggregate remune
Page 91 and 92: 89 11 Retirement benefits continued
Page 93 and 94: 91 12 Marks & Spencer UK Pension Sc
Page 95 and 96: 93 14 Intangible assets Goodwill £
Page 97 and 98: 95 16 Investment property Cost At s
Page 99 and 100: 97 22 Borrowings and other financia
Page 101 and 102: 99 23 Financial instruments continu
Page 103: 101 23 Financial instruments contin
Page 107 and 108: 105 29 Analysis of net debt A. Reco
Page 109 and 110: 107 Company statement of financial
Page 111 and 112: 109 C5 Investments continued B. Pri
Page 113 and 114: Shareholder information 111 Overvie
Page 115 and 116: Index A Page Accountability 45 Acco
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