Annual Report 2010 in PDF - BBA Aviation

Financial statements Notes to the Consolidated Financial Statements – continued
85 Independent Auditor’s
Report to the Members of
BBA Aviation plc in Respect
of the Consolidated
Financial Statements
3. Investment income, fnance costs and other gains and losses
86 Consolidated Income
Statement
Interest on bank
2010 2009
£m £m
deposits 4.1 7.9
Net finance income from pension schemes 0.1 –
87 Consolidated Statement of
Comprehensive Income Total investment income 4.2 7.9
88 Consolidated Balance Sheet
89 Consolidated Cash Flow
Statement
Interest
on bank loans and overdrafts (11.2) (19.8)
Interest on obligations under finance leases (0.4) (0.7)
90
91
Consolidated Statement of
Changes in Equity
Accounting Policies of
the Group
Net finance expense from pension schemes
Other finance costs
Total borrowing costs
–
(1.3)
(12.9)
(1.5)
(0.9)
(22.9)
95 Notes to the Consolidated
Financial Statements
Less amounts included in the cost of qualifying assets 0.2 0.4
126 Independent Auditor’s Fair value losses on interest rate swaps designated as cash flow hedges transferred from equity (6.7) (7.7)
Report to the Members of
BBA Aviation plc in Respect Total
of the Parent Company
Financial Statements
127 Company Balance sheet
128 Accounting Policies of
the Company
129 Notes to the Company
Financial Statements
finance costs (19.4) (30.2)
Borrowing costs included in the cost of qualifying assets during the year arose on the general borrowing pool and are calculated by applying a
capitalisation rate of 2.0% (2009: 3.2%) to expenditure on such assets, which represents the weighted average interest rate for the currency in
which expenditure has been made.
4. Income tax expense
134 Principal Subsidiary 2010 2009
Undertakings £m £m
135 Five Year Summary
Current tax 12.4 11.5
136 Shareholder Information Adjustments in respect of prior years – current tax (4.5) 0.7
Deferred tax (note 20) 8.0 3.9
Adjustments in respect of prior years – deferred tax 4.3 (1.6)
Income tax expense for the year 20.2 14.5
98 — Consolidated Financial Statements
Domestic income tax is calculated at 28% (2009: 28%) of the estimated assessable proft for the year. Taxation for other jurisdictions is calculated
at the rates prevailing in the relevant jurisdictions.
The total charge for the year can be reconciled to the accounting proft as follows:
2010 2009
£m £m
Profit before tax: 85.2 60.0
Tax at the rates prevailing in the relevant tax jurisdictions 23.9% (2009: 22.7%) 20.3 13.6
Tax effect of expenses that are not deductible in determining taxable profit 2.7 9.9
Items on which deferred tax has not been recognised (4.2) (7.8)
Tax rate changes 0.1 –
Difference in tax rates on overseas earnings 1.5 (0.3)
Adjustments in respect of prior years (0.2) (0.9)
Tax expense for the year 20.2 14.5
The applicable tax rate of 23.9% (2009: 22.7%) represents a blend of the tax rates of the jurisdictions in which taxable profts have arisen.
The change on prior year is due to a change in the proportion of taxable profts that have arisen in each jurisdiction and the benef ts associated
with certain fnancing structures implemented .
In addition to the income tax expense charged to proft or loss, a current tax credit of £0.7 million (2009: charge £1.7 million) and a deferred
tax credit of £0.6 million (2009: charge £1.5 million) has been recognised in equity in the year. These changes primarily represent pension and
foreign exchange movements recognised through equity.