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Contents
1. Overview 2. Financial presentation under IFRS 3. Summary of accounting policy differences
1. Overview
IFRS headlines
No material impact on cash resources Banking covenants not affected Main adjustments are:
- accounting for goodwill on disposals and goodwill amortisation (IFRS 1 and 3) - capitalisation of development costs (IAS 38) - foreign currency movements related to debt (IAS 21)
Notes: 1. Before exceptional items, goodwill amortisation, goodwill impairment and foreign exchange gains/(losses).
Notes: 1. This analysis has been prepared to illustrate the impact of currency movements and includes a number of approximations. 2. Relevant external net debt is debt held in Group companies with a funtional currency different from the debt.
(304)
(510)
Adjustments: Capitalisation of development costs (IAS 38) Goodwill (IFRS 3) Leases (IAS 17) Employee benefits (IAS 19) Taxation (IAS 12) Equity deficit under IFRS 48 (10) (20) (15) (301) 56 25 (10) (21) (16) (476)
10
Employee benefits
Leases
Discontinue d operations
IFRS 2,803
Sales
(120) (120)
2,803
OPBIT
- Continuing - Discontinued
(1) 3
187 187
(1)
Restructuring costs Transition costs Refinancing costs Fixed asset impairment Product recall costs Goodwill amortisation Goodwill impairment PBIT pre corporate exceptionals
11
OPBIT:
Continuing
187
71
46
51
19
Restructuring costs Transition costs Refinancing costs Fixed asset impairment Product recall costs Goodwill amortisation Goodwill impairment PBIT pre corporate exceptionals
(17) (2) 52
(13) (3) 30
12
Leases 2
PBIT pre corporate exceptionals Profit on sale/closure Goodwill write off Loss on sale of fixed assets PBIT Foreign exchange gains Interest FRS 17/IAS 19 finance charges PBT Taxation Loss - continuing Profit - discontinued Loss for the year
(1)
(3) 16
(27)
(1)
(1)
13
(1)
(27) 1 (26) 26
(1)
13
(1)
(1)
13
(1)
Attributable to: Equity holders Minority interests (473) (11) (484) 8 358 1 (1) 13 (1) 8 358 1 (1) 13 (1) (95) (11) (106)
13
14
Note: 1. Before exceptional items, goodwill impairment and foreign exchange gains/(losses).
15
16
17
Tangible assets Intangible assets - goodwill Intangible assets - other Net trading assets Deferred taxation Net pension liability
(16) 83 67 (11)
434 310 83 827 84 (11) (574) 25 25 25 25 326 (609) 133 (476) 802 (21) (16) 326
56 56 56 56
(10) (10) 10 -
Share capital and reserves Minority interests Total equity interests Net debt
18
Notes: 1. Including net cash divested 18m. 2. Including pre-disposal working capital movement (11)m.
19
Drawn Cash
Drawn
Undrawn million
(years)
non-cash
million 663 1 106 24 262 363 25 34 1,478 (10) (27) 1,441 (309) (26) (111) (193) (639) 802
million
High Yield 144A 144A EMTN 2nd Lien Term Loan B RCF Bonding Other debt Total gross debt (before costs & discount) High yield discount Debt issuance costs Total gross debt (after costs & discount) Escrow account EMTN deposit Cash collateral Other cash Total cash Net debt
Notes: 1. Excluding scheduled repayments. 2. L+ = margin over LIBOR. 3. Cash subject to escrow restrictions on usage.
(3)
20
Notes: 1. The pension charge comprises service cost, finance charge and settlement/curtailments for defined benefit schemes only. 2. Represents the Groups defined benefit pension deficit. 3. Changes in value of investments and liabilities.
21
FRS 17/IAS 19
million (Deficit) at 31 March 2004 Return on assets less interest cost on liabilities Contributions and unfunded benefit payments less service cost Experience gains, settlements and disposals Exchange (Deficit) at 30 September 2004 Return on assets less interest cost on liabilities Contributions and unfunded benefit payments less service cost Experience gains, settlements and disposals Change in discount rate Exchange (Deficit) at 31 March 2005 (606) (64) 54 20 (4) (600) 81 28 1 (91) 7 (574)
22
23
24
Balance sheet impact Capitalisation of hardware and software development costs at Rail Systems & Process Systems. No basis for capitalisation of costs at other business groups Capitalisation of separable development spend from point of technical & commercial feasibility of product. No capitalisation of stand-alone software development costs
25
Income statement impact Loss on disposal of businesses changes by 331m Reversal of 28m amortisation charge
IFRS 1 Exemption Business combinations before 1 April 2004 are not restated
26
Income statement impact - 16m FX gain Cumulative FX differences on disposal of foreign operations Principal difference On disposal of foreign operations the cumulative FX differences deferred in a separate component of equity are recognised in the income statement (3m loss)
27
28
Impact No effect on Group operating profit as share option schemes are not extensively used and impact of SAYE schemes is minimal Balance sheet impact minimal
29
Other standards
Leases IAS 17 More specific guidance on finance lease criteria has resulted in reclassification of two property operating leases as finance leases and a few equipment leases Balance sheet impact decrease in net assets of 10m from reclassification from operating to finance leases Income statement impact minimal
Taxation IAS 12 Reflects mainly impact of tax on undistributed overseas retained earnings and tax impact of IAS 38 adjustments Balance sheet impact increase in liabilities of 15m at March 2004 Income statement impact minimal
30
Other standards
Employee benefits IAS 19 No impact on accounting for pensions as Invensys applied FRS 17 at March 2004 Change reflects increased accruals for accumulating compensated absences Balance sheet impact 20m at March 2004 Income statement impact minimal
31