Marks and Spencer 2007 Annual Report Download - page 86

25 DEFERRED 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 – ‘Income Taxes’) 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 assets/(liabilities)
Other
Fixed assets Accelerated Pension short-term Total
temporary capital temporary temporary deferred Deferred
differences allowances differences differences tax assets tax liabilities1Total
£m £m £m £m £m £m £m
At 3 April 2005 as previously reported (145.7) (74.3) 241.2 3.4 24.6 (4.7) 19.9
Prior year adjustment248.4–––48.4 – 48.4
At 3 April 2005 restated (97.3) (74.3) 241.2 3.4 73.0 (4.7) 68.3
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 20062(95.0) (85.0) 251.5 12.4 83.9 (6.1) 77.8
At 2 April 2006 (
(9955..00))((8855..00))225511..551122..448833..99((66..11))7777..88
Credited/(charged) to the income statement 4
4..44((1188..22))((7711..44))((1122..55))((9977..77))((00..33))((9988..00))
Credited/(charged) to equity –
–––33..442222..002255..44((00..99))2244..55
At 31 March 2007 (90.6) (103.2) 183.5 21.9 11.6 (7.3) 4.3
1Deferred tax liabilities relate primarily to overseas fixed assets and accelerated capital allowances.
2Following a change in external interpretation of IAS 12 – ‘Income Taxes’ the opening balance sheet at 3 April 2005 has been restated to recognise £48.4m of additional
deferred tax assets arising on fixed asset temporary differences. At 1 April 2006 this balance was previously reported as £143.4m and has been restated to £95.0m.
In arriving at the deferred tax on fixed assets, credit has been taken for capital losses with a tax value of £57.0m (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
£226.7m (last year £187.0m).
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
2007 2006
Shares £m Shares £m
Authorised ordinary shares of 25p each 3
3,,220000,,000000,,000000880000..003,200,000,000 800.0
Allotted, called up and fully paid ordinary shares of 25p each:
At start of year 1
1,,668822,,443377,,001144442200..661,658,095,142 414.5
Shares issued on exercise of share options 1
177,,333366,,00886644..3324,341,872 6.1
AAtt eenndd ooff yyeeaarr11,,669999,,777733,,110000442244..991,682,437,014 420.6
Issue of new shares
17,336,086 (last year 24,341,872) ordinary shares having a nominal value of £4.3m (last year £6.1m) were allotted during the year
under the terms of the Company’s schemes which are described in note 12. The aggregate consideration received was £44.9m
(last year £61.8m).
Notes to the financial statements continued
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