Marks and Spencer 2000 Annual Report Download - page 29

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3. OPERATING PROFIT (continued)
(1) Included in ‘Other costs’ is the remuneration to the auditors for audit and non-audit services as follows:
THE GROUP THE COMPANY
2000 1999 2000 1999
£m £m £m £m
Audit fees 1.1 0.9 0.4 0.4
Non-audit services 2.8 0.5 2.2 –
Fees paid for non-audit services are for taxation advice, corporate finance and consulting services.
(2) Included in ‘Total net operating expenses’ are rentals under operating leases, comprising £2.3m for hire of plant and machinery
(last year £8.9m) and £123.4m of other rental costs (last year £111.4m).
4. EXCEPTIONAL ITEM S
A Exceptional operating charges 2000 1999
£m £m
UK redundancy costs(1) 63.3 24.5
European restructuring costs(2) 8.7 –
Provision for impairment(3) –64.0
Total exceptional operating charges 72.0 88.5
(1) The £63.3m charge for the year (of which £16m was reported at the half year) is in respect of the restructuring of UK Retail into
customer business units, the rationalisation of store management and the refocussing of existing store roles to customer facing
activities, and the closure of two distribution centres. The £24.5m charge last year represents the cost of rationalising the Group’s
head office functions.
(2) The European restructuring costs are in respect of store closures in France and Germany announced during the year.
(3) The £64.0m charge last year was in respect of the provision made to adjust the carrying value of European fixed assets in
accordance with FRS11 ‘Impairment of Fixed Assets and Goodwill’.
B Loss on termination of Canadian operations
On 28 April 1999 the Group announced the closure of its Canadian operations. As a consequence its subsidiary, Marks and Spencer
Canada Inc, ceased to trade in the first half of the year to 31 March 2000.
The loss on closure of the operations of £45.4m arises as follows: 2000 1999
£m £m
Trading losses since 28 April 1999 0.6 –
Net closure costs 20.4 –
Loss before goodwill previously written off to reserves 21.0 –
Goodwill previously written off to reserves 24.4 –
Loss on termination of operations 45.4 –
C (Loss)/ profit on sale of property and other fixed assets 2000 1999
£m £m
Loss on sale of properties relating to European store closures(1) (8.3) –
Loss on sale of investment properties(2) (16.1) –
Profit arising on other disposals 2.1 6.2
(Loss)/profit on sale of property and other fixed assets (22.3) 6.2
(1) The loss of £8.3m relates to the European store closures announced during the year. Including the restructuring cost of £8.7m
disclosed in note 4A above this gives rise to total closure costs of £17.0m.
(2) The loss on the sale of investment properties is in respect of the disposals of The Gyle Shopping Centre and a property in Newcastle.
Overall, the Group has realised a profit of £58.1m based on the original purchase cost which has not been reflected in the profit and
loss account. The properties have been revalued annually since their acquisition by the Group and the cumulative revaluation
surplus of £74.2m has been recognised through the Statement of Total Recognised Gains and Losses in previous years.
27 Annual Report and Financial Statements 2000