Full Annual Report - Inchcape

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Financial statements Notes to the accounts continued 16 Deferred tax Net deferred tax asset / (liability) Pension and other postretirement benefits £m Cash flow hedges £m Share-based payments £m Tax losses £m Accelerated tax depreciation £m Provisions and other timing differences £m At 1 January 2009 (7.0) (36.6) – 1.8 14.1 (29.9) (57.6) Businesses acquired – – – – – (1.1) (1.1) Credited / (charged) to the consolidated income statement 7.0 4.4 0.7 (0.3) (3.1) 10.1 18.8 Credited to shareholders’ equity 22.6 38.0 0.6 – – – 61.2 Effect of foreign exchange rate changes – 0.3 – (0.2) 0.1 0.7 0.9 At 31 December 2009 22.6 6.1 1.3 1.3 11.1 (20.2) 22.2 Analysed as: Deferred tax assets 37.6 11.5 Deferred tax liabilities (15.4) (69.1) 22.2 (57.6) The Group has unrecognised deferred tax assets of £30m (2008 – £24m) relating to tax relief on trading losses. The asset represents £122m (2008 – £101m) of losses at the standard blended rate of 24.8%. The asset is not recognised as it relates to losses which exist within legal entities that are not forecast to generate taxable income with reasonable certainty in the foreseeable future. The deferred tax asset of £1.3m (2008 – £1.8m) relates to trading losses in Belgium where future profits are anticipated with reasonable certainty. The Group has unrecognised deferred tax assets of £37m (2008 – £38m restated at the UK rate) relating to capital losses. The asset represents £132m (2008 – £135m) of losses at the UK standard rate of 28.0%. The key territory holding the losses is the UK. No deferred tax is recognised on unremitted earnings of overseas subsidiaries and joint ventures. Due to the enactment of the 2009 Finance Act, the majority of overseas reserves can now be repatriated to the UK with no tax cost. If all overseas earnings were repatriated with immediate effect, no tax charge (2008 – £71m) would be payable. The £20.2m deferred tax liability for ‘Provisions and other timing differences’ consists of a £33.5m (2008 – £45.2m) liability in respect of the net book value of tangible fixed assets that do not qualify for tax allowances and property revaluations, and a £13.3m (2008 – £15.3m) deferred tax asset in respect of provisions and other temporary differences between the accounts base and the tax base. The key temporary differences are £3.9m for Greece, £5.8m for Australia and £3.6m in other territories. 17 Inventories Raw materials and work in progress 8.1 10.1 Finished goods and merchandise 764.6 1,074.0 772.7 1,084.1 Vehicles held on consignment which are in substance assets of the Group amount to £110.0m (2008 – £175.5m). These have been included in ‘finished goods and merchandise’ with the corresponding liability included within ‘trade and other payables’. Payment becomes due when title passes to the Group, which is generally the earlier of six months from delivery or the date of sale. An amount of £31.4m (2008 – £48.7m) has been provided against the gross cost of inventory at the year end. The cost of inventories recognised as an expense in the year is £3,892.8m (2008 – £4,308.8m). The write down of inventory to net realisable value recognised as an expense during the year was £14.6m (2008 – £31.5m). All of these items have been included within ‘cost of sales’ in the consolidated income statement. 2009 £m 2009 £m Total £m 2008 £m 2008 £m 116 Inchcape plc ¦ Annual Report and Accounts 2009
Section Three Financial statements 18 Cash and cash equivalents Cash at bank and in hand 319.6 351.3 Short-term deposits 61.7 106.7 2009 £m 2008 £m 381.3 458.0 Cash and cash equivalents are generally subject to floating interest rates determined by reference to short-term benchmark rates applicable in the relevant currency or market (primarily LIBOR or the local equivalent). At 31 December 2009, the weighted average floating rate was 0.6% (2008 – 1.9%). £22.0m (2008 – £44.0m) of cash and cash equivalents is held in countries where prior approval is required to transfer funds abroad. If the Group complies with the required procedures, such liquid funds are at its disposition within a reasonable period of time. At 31 December 2009, short-term deposits have a weighted average period to maturity of 41 days (2008 – 32 days). 19 Assets held for sale Assets held for sale 6.6 5.4 Assets held for sale relate to a surplus property that was disposed of in February 2010. 20 Trade and other payables 2009 £m Current 2008 £m 2009 £m 2009 £m 2008 £m Non-current 2008 £m Trade payables: payments received on account 55.5 49.9 0.1 0.2 vehicle funding agreements 67.9 61.6 – – other trade payables 579.3 793.2 24.8 30.8 Other taxation and social security payable 18.8 25.8 – – Accruals and deferred income 191.0 178.4 25.1 35.6 Amounts payable to related parties 6.3 4.6 – – Other payables 20.3 10.4 18.8 11.5 939.1 1,123.9 68.8 78.1 The Group entered into vehicle funding agreements whereby the Group is able to refinance interest bearing amounts due to suppliers on similar terms. Amounts outstanding under these agreements are included within vehicle funding agreements above and interest charged under this agreement is included within stock holding interest. At 31 December 2009 current other trade payables includes £313.6m (2008 – £473.2m) of creditors where payment is made on deferred terms and is subject to a weighted average floating interest rate of 2.0% (2008 – 4.7%). Interest charged on these balances is included within stock holding interest. Management considers the carrying amount of trade and other payables to approximate to their fair value. Long-term payables have been discounted where the time value of money is considered to be material. www.inchcape.com 117
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Annual Report and Accounts 2009 Ind
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Section One Business review Financi
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The Inchcape business model Section
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The Inchcape Advantage Section One
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Global experience Section One Busin
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Superior customer service driving g
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Section Two Governance Governance 5
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Section Two Two Governance Inchcape
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Full Annual Report - Inchcape

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