IMI plc annual report 2012

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ENGINEERINGADVANTAGENotes to the Financial Statements7. Taxation (continued)7.4 Recognised outside of the income statement2012 2011£m £mDeferred tax:On equity-settled transactions (1.8) 0.9On change in value of effective net investment hedge derivatives 0.3 0.5On available for sale financial assets 0.1 0.5On actuarial losses (11.6) (16.2)On foreign currency translation differences 0.1 (0.1)(12.9) (14.4)Current tax:On equity-settled transactions (4.1) (2.5)(17.0) (16.9)Of which the following amounts are credited:to the statement of comprehensive income (11.1) (15.3)to the statement of changes in equity (5.9) (1.6)(17.0) (16.9)7.5 Recognised deferred tax assets and liabilitiesDeferred taxes record the tax consequences of temporary differences between the accounting and taxation recognition ofcertain items, as explained below:Assets Liabilities Net2012 2011 2012 2011 2012 2011£m £m £m £m £m £mNon-current assets 3.9 2.7 (59.3) (53.2) (55.4) (50.5)Inventories 5.3 8.3 (6.1) (5.6) (0.8) 2.7On foreign exchange and revaluationof derivatives 0.8 0.9 (0.6) (1.2) 0.2 (0.3)Employee benefits and provisions 84.8 83.1 (4.3) (4.7) 80.5 78.4Other tax assets 4.4 5.8 - - 4.4 5.899.2 100.8 (70.3) (64.7) 28.9 36.1Set off of tax (33.6) (25.1) 33.6 25.1 - -Total deferred tax assets and liabilities(balance sheet) 65.6 75.7 (36.7) (39.6) 28.9 36.198 Financial statements
Movement in deferred taxes during the year:Restated Recognised(Note 1) in the RecognisedBalance at income directly in Acquisitions/ Balance at1 Jan 12 statement equity Exchange disposals 31 Dec 12£m £m £m £m £m £mNon-current assets (50.5) 6.1 - 3.1 (14.1) (55.4)Inventories 2.7 (3.7) - 0.1 0.1 (0.8)On foreign exchange andrevaluation of derivatives (0.3) 0.9 (0.4) - - 0.2Employee benefits and provisions 78.4 (10.7) 13.3 (1.1) 0.6 80.5Other tax assets 5.8 (1.6) - (0.1) 0.3 4.4Net deferred tax asset 36.1 (9.0) 12.9 2.0 (13.1) 28.9Recognisedin the RecognisedBalance at income directly in Acquisitions/ Balance at1 Jan 11 statement equity Exchange disposals 31 Dec 11£m £m £m £m £m £mNon-current assets (53.8) 4.8 - 0.8 (2.3) (50.5)Inventories 1.0 1.8 - (0.1) - 2.7On foreign exchange andrevaluation of derivatives (1.6) 1.8 (0.4) (0.1) - (0.3)Employee benefits and provisions 87.3 (23.8) 14.8 0.1 - 78.4Other tax assets 2.9 2.9 - (0.1) 0.1 5.8Net deferred tax asset 35.8 (12.5) 14.4 0.6 (2.2) 36.1All exchange movements are taken through the translation reserve.7.6 Unrecognised deferred tax assets and liabilitiesDeferred tax assets of £27.1m (2011: £25.4m) have not been recognised in respect of tax losses of £120.4m (2011: £99.4m).The majority of the tax losses have no expiry date, but have not been recognised as deferred tax assets due to uncertaintyover their recoverability.It is likely that the majority of unremitted earnings of overseas subsidiaries would qualify for the UK dividend exemption.However £75.4m (2011: £59.9m) of those earnings may still result in a tax liability principally as a result of withholding taxeslevied by the overseas jurisdictions in which those subsidiaries operate. These tax liabilities are not expected to exceed£7.9m (2011: £5.7m), of which only £1.5m (2011: £1.5m) has been provided as the group is able to control the timing of thedividends. It is not expected that further amounts will crystallise in the foreseeable future.7.7 UK corporation taxAs IMI’s head office and parent company is domiciled in the UK, the Group references its effective tax rate to the UKcorporation tax rate, despite only a small proportion of the Group’s business being now based in the UK. In recent years theGroup has made substantial payments to its UK retirement benefit plans, which had the effect of reducing the Group’s UKcorporation tax liability. In the current year, the UK tax charge was £11.9m (2011: £1.6m credit).The Finance Act 2012 enacted reductions in the UK corporation tax rates from 25% to 24% from 1 April 2012 and to 23%from 1 April 2013. An additional change to the main rate of UK corporation tax is proposed, to reduce the rate to 21% by1 April 2014. This change had not been substantively enacted at the balance sheet date and consequently its effects arenot included in these financial statements. Accordingly, the average weighted rate of corporation tax in the UK for the 2012calendar year was 24.5% (2011: 26.5%). UK deferred tax assets and liabilities have been calculated using a tax rate of 23%(2011: 25%).BUSINESS OVERVIEW GROUP OPERATING REVIEW RESPONSIBLE BUSINESS BOARD REPORTSFINANCIAL STATEMENTSIMI plc Annual Report 201299
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ENGINEERINGADVANTAGEIMI plc annual
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IMI is a global engineering group f
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RetailDispense22%FluidControls78%Fa
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UKWesternEuropeEmergingMarketsNorth
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ENGINEERINGADVANTAGEFLUID CONTROLS
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ENGINEERINGADVANTAGEPRINCIPAL RISKS
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IMI plc annual report 2012

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