Marks and Spencer 2010 Annual Report Download - page 93

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Directors’ report p01
Financial statements
Other information p117
To find out more, visit www.marksandspencer.com/annualreport2010 89
7 Income tax expense
A. Taxation charge
2010
£m
2009
£m
Current tax
UK corporation tax at 28% (last year 28%)
– current year 170.3 127.4
– prior years (5.2) (10.7)
165.1 116.7
Overseas current taxation 6.1 5.1
Total current taxation 171.2 121.8
Deferred tax (see note 24)
– current year 5.4 70.1
– prior years 3.1 7.5
Total deferred taxation 8.5 77.6
Total income tax expense 179.7 199.4
B. Taxation reconciliation
2010
£m
2009
£m
Profit before tax 702.7 706.2
Taxation at the standard UK corporation tax rate of 28% (last year 28%) 196.8 197.7
Depreciation, charges and other amounts on non-qualifying fixed assets 1.4 (4.0)
Other income and expenses not taxable or deductible (10.1) 2.9
Exceptional costs –7.5
Overseas profits taxed at lower rates (6.3) (1.5)
Adjustments to tax charge in respect of prior periods (2.1) (3.2)
Total income tax expense 179.7 199.4
The post-exceptional effective tax rate was 25.6% (last year 28.2%) and the pre-exceptional effective tax rate was 25.6% (last year 27.0%).
8 Earnings per share
The calculation of earnings per ordinary share is based on earnings after tax and the weighted average number of ordinary shares in issue
during the year.
The adjusted earnings per share figures have also been calculated based on earnings excluding the effect of property disposals and
exceptional items. These have been calculated to allow the shareholders to gain an understanding of the underlying trading performance
of the Group.
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive
potential ordinary shares. The Group has only one class of dilutive potential ordinary shares being those share options granted to employees
where the exercise price is less than the average market price of the Company’s ordinary shares during the year.
Details of the adjusted earnings per share are set out below:
2010
£m
2009
£m
Earnings after tax 526.3 508.0
Property disposals (net of tax) (8.1) (6.4)
Exceptional costs (net of tax) –105.7
Exceptional pension credit (net of tax) –(166.6)
Adjusted earnings after tax 518.2 440.7
Million Million
Weighted average number of ordinary shares in issue 1,572.2 1,573.2
Potentially dilutive share options under Group’s share option schemes 14.3 0.8
Weighted average number of diluted ordinary shares 1,586.5 1,574.0