Marks and Spencer 2005 Annual Report Download - page 53

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MARKS AND SPENCER GROUP PLC 51
23 PROVISIONS FOR LIABILITIES AND CHARGES Group
UK Overseas Deferred
restructuring1restructuring2tax3Total
£m £m £m £m
At 4 April 2004 32.2 17.1 – 49.3
Transfer from deferred tax asset (see note 16A) – – (3.5) (3.5)
Provided in the period 30.4 – 54.4 84.8
Net closure profit in Continental Europe – 1.2 – 1.2
Utilised during the period (26.0) – – (26.0)
Movement in net post-retirement liability – – (21.2) (21.2)
Disposal of subsidiaries – – 5.8 5.8
Released (1.4) (9.7) – (11.1)
Exchange differences – 1.1 – 1.1
At 2 April 2005 35.2 9.7 35.5 80.4
1The provision for UK restructuring costs relates to the costs of restructuring the Group’s UK operations. The majority of these costs are expected
to be incurred during the next financial year.
2The provision for Overseas restructuring costs primarily relates to further closure costs in respect of the Group’s discontinued operations
in Continental Europe.
3The deferred tax balance comprises the following:
2005 2004
£m £m
Accelerated capital allowances 76.4 72.3
Pension prepayment (40.2) (67.2)
Other short-term timing differences (0.7) (8.6)
Deferred tax liability/(asset) 35.5 (3.5)
Deferred tax is not provided in respect of liabilities which might arise on the distribution of unappropriated profits of international subsidiaries.
The Group is claiming UK tax relief for losses incurred by some of its current and former European subsidiaries. The case was heard by the European Court of
Justice (ECJ) on 1 February 2005 and the judgement of the ECJ should be received later this year. No asset has been recognised in respect of this claim.
24 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
A Fair values of financial instruments
Set out below is a comparison of fair and book values of all the Group’s financial instruments by category. Where market prices are not
available for a particular instrument, fair values have been calculated by discounting cash flows at prevailing interest rates and exchange
rates.
Group
2005 2004
Book value Fair value Book value Fair value
Assets/(liabilities) £m £m £m £m
Customer advances falling due in more than one year ––1,711.6 1,712.3
Current asset investments167.0 67.0 325.9 325.9
Fixed asset investments 0.3 0.3 1.5 1.5
Cash at bank and in hand1212.6 212.6 394.7 394.7
Other financial assets due after more than one year 4.2 4.2 6.6 6.6
Borrowings due within one year2(476.7) (476.4) (377.8) (372.0)
B shares (65.7) (65.7) (84.9) (84.9)
Financial liabilities due after more than one year2(1,901.9) (1,935.8) (2,337.5) (2,392.6)
Cross currency swaps2– 56.3 – 24.5
Interest rate swaps2– 3.7 – 11.9
Forward foreign currency contracts2– (0.4) – 3.8
1Current asset investments and cash at bank are predominantly short-term deposits placed with banks, financial institutions and on money markets, and
investments in short-term securities. Therefore, these fair values closely approximate book values.
2Interest rate, cross currency swaps and forward foreign currency contracts have been marked to market to produce a fair value figure.