Marks and Spencer 2002 Annual Report Download - page 37

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www.marksandspencer.com 35
7. Taxation on ordinary activities continued
B Taxation reconciliation 2002 2001
£m £m
Profit before taxation 335.9 145.5
Taxation at the standard UK corporation tax rate of 30% (last year 30%) 100.8 43.7
Permanent differences 18.4 24.5
Capital allowances (in excess of)/less than depreciation (3.3) 0.8
Other timing differences (5.6) 5.0
Utilisation of tax losses –(0.7)
Net effect of restructuring charges (24.2) 85.9
Write-off of goodwill for which no tax relief available 110.5 –
Net effect of different rates of tax in overseas businesses (2.0) (6.7)
Adjustments to tax charge in respect of prior periods 4.4 (6.3)
Other differences 1.7 1.5
Total current taxation 200.7 147.7
C Implementation of Financial Reporting Standard 19
The adoption of Financial Reporting Standard (FRS) 19 ‘Accounting for deferred tax’ has resulted in changes in the
method of accounting for deferred tax. FRS 19 requires, subject to certain exemptions, that deferred tax be
recognised in respect of all timing differences that have originated but not reversed by the balance sheet date. The
Group’s previous accounting policy was to recognise a liability or asset in respect of deferred tax to the extent that it
was likely to be payable or recoverable.
As a result of this change in accounting policy, comparatives have been restated as follows:
Profit and loss account Tax charge Profit/(loss) Adjusted
for the attributable to Earnings earnings
period shareholders per share per share
£m £m pence pence
Period to 31 March 2001 – as reported (142.7) 1.3 0.0p 11.4p
Implementation of FRS 19 (6.8) (6.8) (0.2)p (0.2)p
Period to 31 March 2001 – as restated (149.5) (5.5) (0.2)p 11.2p
In the current year, the effect of this change in accounting policy has been to increase the total tax charge for the
period by £3.3m.
Balance sheet Deferred tax Shareholders’
provision funds
£m £m
31 March 2001 – as reported (43.5) 4,645.4
Implementation of FRS 19 (79.6) (79.6)
31 March 2001 – as restated (123.1) 4,565.8
8. Profit for the financial year
As permitted by Section 230 of the Companies Act 1985, the profit and loss account of the Company is not
presented as part of these financial statements.
The consolidated profit for the financial year of £153.0m (last year £5.5m loss) includes a £134.0m profit which is dealt
with in the financial statements of the Company.
9. Dividends 2002 2001
£m £m
Ordinary shares
Interim paid of 3.7p per share (last year 3.7p) 105.2 106.3
Proposed final of 5.8p per share (last year 5.3p) 133.7 152.0
Total ordinary dividend of 9.5p per share (last year 9.0p) 238.9 258.3