Marks and Spencer 2006 Annual Report Download - page 87

85Marks and Spencer Group plc
25 DEFERRED INCOME TAX
Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 30% (last year 30%) for UK
differences and the local tax rates for overseas differences.
The movements in deferred tax assets and liabilities (after the offsetting of balances within the same jurisdiction as permitted by
IAS 12) during the period are shown below. Deferred tax assets and liabilities are only offset where there is a legally enforceable
right of offset and there is an intention to settle the balances net.
Deferred tax asset/(liabilities):
Other
Fixed assets Accelerated Pension short-term Total
temporary capital temporary temporary deferred Deferred
differences allowances differences differences tax assets tax liabilities2Total
£m £m £m £m £m £m £m
At 4 April 2004 (151.8) (70.2) 267.0 30.3 75.3 (5.3) 70.0
(Charged)/credited to the income statement11.9 0.8 (48.3) (4.1) (49.7) 0.3 (49.4)
Acquisition of subsidiary – – – (24.0) (24.0) – (24.0)
Disposal of subsidiary 4.2 (4.9) (0.2) (0.7) (1.6) – (1.6)
Credited to equity – – 22.7 1.9 24.6 0.3 24.9
At 2 April 2005 (145.7) (74.3) 241.2 3.4 24.6 (4.7) 19.9
At 2 April 2005 (145.7) (74.3) 241.2 3.4 24.6 (4.7) 19.9
Charged to the income statement (2.7) (10.7) (42.4) (14.9) (70.7) (0.8) (71.5)
Credited/(charged) to equity 5.0 – 52.7 24.7 82.4 (0.6) 81.8
Transferred to discontinued operations – – – (0.8) (0.8) – (0.8)
At 1 April 2006 (143.4) (85.0) 251.5 12.4 35.5 (6.1) 29.4
1The £49.4m charge to the income statement in the year to 2 April 2005 includes £3.0m charge in respect of discontinued operations.
2Deferred tax liabilities relate primarily to overseas fixed assets revaluations and accelerated capital allowances.
In arriving at the deferred tax on fixed asset revaluations, credit has been taken for capital losses with a tax value of £56.1m (last
year £56.1m).
No deferred tax is recognised on the unremitted earnings of overseas subsidiaries. As the earnings are continually reinvested by the
Group, no tax is expected to be payable on them in the foreseeable future. Undistributed profits of overseas subsidiaries amount to
£187.0m (last year £150.0m).
The Group is claiming UK tax relief for losses incurred by some of its current and former European subsidiaries. In the light of
continuing litigation, no asset has been recognised in respect of these claims.
26 SHARE CAPITAL
2006 2005
Shares £m Shares £m
Authorised ordinary shares of 25p each 3,200,000,000 800.0 3,200,000,000 800.0
Allotted, called up and fully paid ordinary shares of 25p each:
At start of year 1,658,095,142 414.5 2,265,144,934 566.3
Purchase of own shares ––(635,359,116) (158.8)
Shares issued on exercise of share options 24,341,872 6.1 28,309,324 7.0
At end of year 1,682,437,014 420.6 1,658,095,142 414.5
Issue of new shares:
24,341,872 (last year 28,309,324) ordinary shares having a nominal value of £6.1m (last year £7.0m) were allotted during the year
under the terms of the Company’s schemes which are described in note 12. The aggregate consideration received was £61.8m
(last year £68.4m).