Punch Taverns plc 2011 Annual Report

76
Punch Taverns plc
Annual Report and Financial Statements 2011
Notes to the financial statements continued
for the 52 weeks ended 21 August 2011
17 Deferred tax continued
Deferred tax liabilities
Group
Accelerated
capital
allowances
£m
At 22 August 2009 165.7
Credited to income statement (5.7)
At 21 August 2010 160.0
Charged to income statement 4.8
Demerger of the Spirit business (66.8)
At 20 August 2011 98.0
At the balance sheet date, the Group has unused tax losses of £57.7m (August 2010: £300.3m) and unused capital losses of
£1,656.6m (August 2010: £2,561.3m) available for offset against future profits. A deferred tax asset has been recognised in respect
of £56.0m (August 2010: £97.4m) of such losses, which are expected to be utilised against future profit streams within the Group.
No deferred tax asset has been recognised in respect of the remaining £1,658.9m (August 2010: £2,764.2m) of losses due to the
unpredictability of future profit streams. Current legislation deems that these losses may be carried forward for an unlimited number
of years.
The 2011 Budget on 23 March 2011 announced that the UK corporation tax rate will reduce to 23% over a period of four years
from 2011. The first reduction in the UK corporation tax rate from 28% to 27% (effective from 1 April 2011) was substantively
enacted on 20 July 2010, and further reductions to 26% (effective from 1 April 2011) and 25% (effective from 1 April 2012)
were substantively enacted on 29 March 2011 and 5 July 2011 respectively. This will reduce the Group’s future current tax charge
accordingly. The deferred tax liability at 20 August 2011 has been calculated based on the rate of 25% substantively enacted at the
balance sheet date. It has not yet been possible to quantify the full anticipated effect of the announced further 2% rate reduction,
although this will further reduce the Group’s future current tax charge and reduce the Group’s deferred tax asset accordingly. Had
further tax rate changes been substantively enacted on or before the balance sheet date it would have had the effect of reducing
the deferred tax liability recognised at that date by £0.1m per percentage point reduction.
18 Inventories
20 August
2011
£m
21 August
2010
£m
Goods held for resale – 7.8
The Group consumed £178.7m of inventories during the year (August 2010: £186.3m) and charged £nil to the income statement for
the write down of inventories during the year (August 2010: £nil).
19 Cash
Group
Company
20 August
2011
£m
21 August
2010
£m
20 August
2011
£m
21 August
2010
£m
Cash and cash equivalents 196.5 316.5 0.6 166.6