Marks and Spencer 2004 Annual Report Download - page 50

48
Marks and Spencer Group plc
Notes to the financial statements continued
22. PROVISIONS FOR LIABILITIES AND CHARGES Group
Post-retirement UK Overseas Deferred
health benefits restructuring1restructuring2tax3Total
£m £m £m £m £m
At 30 March 2003 25.0 54.0 44.1 105.3 228.4
Prior year adjustment (0.3) – – (395.8) (396.1)
Transfer to net post-retirement liability (24.7) (3.9) – 382.4 353.8
At 30 March 2003 as restated – 50.1 44.1 91.9 186.1
Provided in the period – 25.3 – 29.1 54.4
Utilised during the period – (39.1) (26.8) – (65.9)
Released – (4.1) – (5.6) (9.7)
Movement in net post-retirement liability – – – (118.9) (118.9)
Exchange differences – – (0.2) – (0.2)
Transfer to deferred tax asset (see note 15) – – – 3.5 3.5
At 3 April 2004 – 32.2 17.1 – 49.3
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, the majority of which are expected to be incurred during the next financial year.
3The deferred tax balance comprises the following:
2004 2003
£m £m
Accelerated capital allowances 72.3 67.1
Pension prepayment (67.2) 35.0
Other short-term timing differences (8.6) (10.2)
Deferred tax (asset)/liability (3.5) 91.9
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 has
been referred to the European Court of Justice, and it may take several years for the issue to be resolved. Were the Group
to be ultimately successful, the Group would receive a corporation tax refund, before interest, of at least £30m. No asset has
been recognised in respect of this claim.
23. 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
2004 2003
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 1,481.6 1,495.0
Current asset investments1325.9 325.9 304.0 304.0
Fixed asset investments 1.5 1.5 20.9 20.9
Cash at bank and in hand1394.7 394.7 167.9 167.9
Other financial assets due after more than one year 6.6 6.6 13.5 13.5
Borrowings due within one year2(377.8) (372.0) (628.3) (652.8)
B shares (84.9) (84.9) (118.2) (118.2)
Financial liabilities due after more than one year2(2,337.5) (2,392.6) (1,677.4) (1,763.2)
Cross currency swaps2– 24.5 – 90.1
Interest rate swaps2– 11.9 – (24.9)
Forward foreign currency contracts2– 3.8 – (8.0)
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.