Marks and Spencer 2006 Annual Report Download - page 101

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99Marks and Spencer Group plc
C7 STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY continued
Share capital Share Capital Profit
Ordinary Non-equity premium redemption Merger and loss
shares B shares account reserve reserve account Total
£m £m £m £m £m £m £m
At 3 April 2005 414.5 65.7 106.6 2,102.8 1,397.3 2,858.2 6,945.1
First time adoption of IAS 32 and IAS 39 – (65.7) ––––(65.7)
414.5 – 106.6 2,102.8 1,397.3 2,858.2 6,879.4
Profit for the year attributable to shareholders –––––202.7 202.7
Dividends –––––(204.1) (204.1)
Shares issued on exercise of share options 6.1 – 55.7–––61.8
Redemption of B shares – – – 11.0 – (11.0) –
At 1 April 2006 420.6 – 162.3 2,113.8 1,397.3 2,845.8 6,939.8
C8 RELATED PARTY TRANSACTIONS
During the year, the Company has received dividends from Marks and Spencer plc of £205.2m (last year £2,573.4m) and has made
loan repayments of £48.4m (last year £64.9m). There were no other related party transactions.
C9 ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS
As at As at
2 April 2005 3 April 2004
£m £m
Net assets and equity under UK GAAP 5,628.8 5,580.0
Adjustments (after taxation)
IAS 10 – ‘Dividend Recognition’ a(81.0) (101.4)
IAS 27 – ‘Consolidated and Separate Financial Statements’ b1,397.3 3,024.0
Net assets and equity under IFRS 6,945.1 8,502.6
Year ended
2 April 2005
£m
Net income under UK GAAP 2,516.6
Adjustments (before taxation)
IAS 10 – ‘Dividend Recognition’ a58.0
IAS 27 – ‘Consolidated and Separate Financial Statements’ b(1,626.7)
Net income under IFRS 947.9
a) IAS 10 – ‘Events after the Balance Sheet Date’
Under UK GAAP, dividends are recognised in the period to which they relate. IAS 10 requires that dividends declared after the balance
sheet date should not be recognised as a liability at that balance sheet date as the liability does not represent a present obligation as
defined by IAS 37 – ‘Provisions, Contingent Liabilities, and Contingent Assets’.
b) IAS 27 – ‘Consolidated and Separate Financial Statements’
Under UK GAAP, the Company’s investment in Marks and Spencer plc was measured at the nominal value of the shares issued. In
accordance with IAS 27 - ‘Consolidated and Separate Financial Statements’, the Company’s investment was restated to the fair
value of shares issued with a corresponding entry being made to a merger reserve. During the year ended 2 April 2005 dividends of
£1,626.7m were paid out of pre-acquisition profits. Under IAS 27 this payment is treated as a reduction in the cost of investment
and a transfer was made between the profit and loss account and the merger reserve.