Marks and Spencer 2008 Annual Report Download - page 87

23 Provisions UK Overseas
restructuring restructuring Total
£m £m £m
At 2 April 2006 19.3 9.0 28.3
Provided in the year 2.0 – 2.0
Released in the year (1.1) – (1.1)
Utilised during the year (6.1) (0.5) (6.6)
Exchange differences – (0.1) (0.1)
At 31 March 2007 14.1 8.4 22.5
At 1 April 2007 14.1 8.4 22.5
Provided in the year 11.5 0.1 11.6
Released in the year (3.2) (2.0) (5.2)
Utilised during the year (4.2) (0.3) (4.5)
Exchange differences – 1.3 1.3
At 29 March 2008 18.2 7.5 25.7
Analysis of total provisions:
2008 2007
£m £m
Current 11.1 5.7
Non-current 14.6 16.8
Total provisions 25.7 22.5
The provision for UK restructuring primarily relates to costs of closing Lifestore, restructuring of the Direct operation and head
office restructuring.
The provision for overseas restructuring costs primarily relates to future closure costs in respect of discontinued operations
in Continental Europe.
The non-current provisions relate to closure costs of discontinued operations in Continental Europe, the closure of Lifestore
operations and the restructuring of the Direct operation and are expected to be utilised over a period of 10 years.
24 Deferred tax
Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 28% (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) Fixed Other
assets Accelerated Pension short-term Total UK Overseas
temporary capital temporary temporary deferred deferred
differences allowances differences differences tax tax Total
£m £m £m £m £m £m £m
At 2 April 2006 (95.0) (85.0) 251.5 12.4 83.9 (6.1) 77.8
Credited/(charged) to the income statement 4.4 (18.2) (71.4) (12.5) (97.7) (0.3) (98.0)
Credited/(charged) to equity – – 3.4 22.0 25.4 (0.9) 24.5
At 31 March 2007 (90.6) (103.2) 183.5 21.9 11.6 (7.3) 4.3
At 1 April 2007 (90.6) (103.2) 183.5 21.9 11.6 (7.3) 4.3
Credited/(charged) to the income statement 13.7 (41.4) (150.5) (12.9) (191.1) 0.4 (190.7)
Credited/(charged) to equity – – (172.4) (15.1) (187.5) 1.8 (185.7)
At 29 March 2008 (76.9) (144.6) (139.4) (6.1) (367.0) (5.1) (372.1)
In arriving at the deferred tax on fixed assets, credit has been taken for capital losses with a tax value of £53.0m (last year
£57.0m). 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 £295.1m (last year £226.7m).
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.
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