31st Mar 2005 06:00
AnnouncementUPDATE ON ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS ('IFRS')PART I(Part II of this document contains detailed reconciliations betweenthe UK GAAP and IFRS numbers shown below. It is available from the Cable &Wireless website (www.cw.com))As part of the transition to IFRS as its primary accounting basis for the yearending 31 March 2006, Cable and Wireless plc ('Cable & Wireless' or the'Group') has prepared consolidated group financial information for the yearended 31 March 2004, and an opening consolidated group balance sheet at 1April 2003, in accordance with IFRS.Charles Herlinger, Chief Financial Officer said:'The adoption of IFRS on Cable & Wireless' consolidated accountsfor the year ended 31 March 2004 has a modest impact on the earnings per shareand free cash flow of the Group.The reclassification of Dhiraagu, our Maldives business, from asubsidiary to a joint venture is the largest single impact on the Group'sconsolidated income statement in the year to 31 March 2004. This reducesprofit before tax by ‚£13 million but has no impact on earnings per shareattributable to equity shareholders.The single largest impact on the Group's consolidated balance sheetat 31 March 2004 is that of pension accounting, which under IFRS reduces netassets by ‚£451 million, with a negligible impact on the consolidated incomestatement. This amount is consistent with that disclosed under the UK pensionstandard FRS 17 previously detailed in our 2003/4 annual report.We anticipate that the scale of the IFRS adjustments seen in theconsolidated accounts for the year ended 31 March 2004 will be broadlyreplicated for the year ended 31 March 2005. Cable & Wireless has chosen toutilise exemptions relating to IAS 32 and IAS 39 and, as a result, theadjustments for the year ended 31 March 2006 are likely to rise.'This financial information and discussion of the principal changes aredetailed below.Full year 2003/4 results from PBT EPS Net cash Net assetscontinuing activities ‚£m pence ‚£m ‚£mAs reported under UK GAAP beforeexceptional items 317 8.0p 1,448 1,952Reclassification of share ofassociates' tax charge aboveprofit before tax (10) - - -UK GAAP after IFRSreclassification 307 8.0p 1,448 1,952Deconsolidation of Maldivesbusiness (13) - (35) (36)Pensions 2 0.1p - (451)Share based payments (4) (0.2p) - -Others (1) (0.1p) - 51As restated under IFRS beforesignificant items* 291 7.8p 1,413 1,516* Significant items comprise impairment and restructuring chargeswhich were previously reported as exceptional items under UK GAAP inaccordance with FRS 3.The primary changes to Cable & Wireless' reported consolidated financialinformation for the year ended 31 March 2004 from the adoption of IFRS are asa result of:- equity accounting for Dhivehi Raajjeyge Gulhun Private Limited('Dhiraagu') the Group's Maldives business, resulting from itsreclassification from subsidiary to joint venture (IAS 27, `Consolidated andseparate financial statements');- recognition of all employee-benefit related assets andobligations, principally the inclusion of the accounting pension deficit onthe balance sheet (IAS 19, `Employee benefits'). These are consistent withamounts disclosed under UK GAAP in respect of FRS 17 `Retirement benefits';- recognition of a fair value expense in relation to grants ofshares and share options (IFRS 2, `Share-based payments'); and- the change in the way that discontinued operations are presentedin the income statement in a single line below profit after tax (IFRS 5,`Non-current assets held for sale and discontinued operations').Cable & Wireless has chosen to apply certain exemptions containedin the transition arrangements of IFRS 1. As a result, some internationalstandards will be applied prospectively from 1 April 2005. The principalchanges from 1 April 2005 will be:- the recognition of certain financial instruments, includingembedded derivatives, at fair value with consequent volatility in the incomestatement from the revaluation of these instruments (IAS 39, `Financialinstruments: recognition and measurement'); and- the separation of the convertible bond into its debt andconversion options (IAS 32, `Financial instruments: disclosure andpresentation').Contents Page Introduction 5Consolidated income statement for the year ended 31 March 62004Consolidated balance sheet as at 31 March 2004 7Consolidated cash flow statement for the year ended 31 8March 2004Notes to financial information 9Impact on future financial information 14Appendices Statement of recognised income and expenses for the yearended 31 March 2004 16Consolidated balance sheet as at 1 April 2003 (the date of 17transition) INTRODUCTIONEU regulated companies are required to file consolidated financialstatements that have been prepared in accordance with International FinancialReporting Standards ('IFRS') for accounting periods beginning on or after 1January 2005. Accordingly, IFRS will apply for the first time to Cable &Wireless' consolidated financial statements for the year ending 31 March 2006.Consequently, all the Group's public reporting in respect of accountingperiods beginning on or after 1 April 2005 will be prepared in accordance withIFRS.This press release sets out how the Group's previously reported UKGAAP financial statements will be reported under IFRS. It includes, on an IFRSbasis:- The Group's consolidated income statement for the year ended 31March 2004;- The Group's consolidated balance sheet at 31 March 2004;- The Group's consolidated cash flow statement for the year ended31 March 2004; and- The Appendix includes the Group's consolidated balance sheet at 1April 2003, the Group's planned date of transition to IFRS, and theconsolidated statement of recognised income and expense for the year ended 31March 2004.Each of the above statements have been prepared in a format thatenables the results presented under UK GAAP to be compared to the IFRSfigures.The financial information presented has been prepared in accordancewith IFRS effective as at 31 December 2004 as set out in the notes and asinterpreted by any regulatory bodies applicable to the Group. These standardsand interpretations are subject to ongoing amendment by the IASB andendorsement by the European Commission and are therefore subject to possiblechange. As a result, information contained within this press release mayrequire updating for any subsequent amendment to IFRS required for first timeadoption or any new standards that the Group may elect to adopt early. Inpreparing this financial information, the Group has assumed that the EuropeanCommission will endorse the amendment to IAS 19.The UK GAAP information has been extracted from the Group's auditedfinancial statements for the years ending 31 March 2003 and 31 March 2004. Inthe year ending 31 March 2005 the Group has adopted the provisions of UrgentIssue Task Force ('UITF'), Abstract 38, `Accounting for Employee ShareOwnership Plan' which has resulted in the adoption of a revised accountingpolicy for employee share awards in the period. The reported balance sheetshave been restated to reflect reclassification of shares held by the ESOPtrust from fixed asset investment into `Own Shares Held' within equity. Theimpact on the Group's prior period profit and loss accounts is immaterial andaccordingly these have not been restated.Consolidated income statement for the year ended 31 March 2004 UK GAAP IFRS IFRS IFRS IFRS IFRS format* adjustment Pre-significant Significant items items (unaudited) (unaudited) (unaudited) (unaudited) ‚£m ‚£m ‚£m ‚£m ‚£mRevenue 3,384 (44) 3,340 3,340 -Out payments (1,213) - (1,213) (1,213) -Staff costs (675) (1) (676) (563) (113)Cost of sales relating to (316) 13 (303) (303) -equipment salesOther operating costs (600) 14 (586) (582) (4)Property costs and operating (326) - (326) (234) (92)lease rentalsDepreciation (776) 7 (769) (243) (526)Amortisation (7) (3) (10) - (10)Operating profit/(loss) oncontinuing operations (529) (14) (543) 202 (745)Profit/(losses) on sale offixed assets and businesses 40 - 40 26 14Share of associates' profits 18 - 18 18 -Share of joint ventures' 13 11 24 24 -profitsNet interest 21 - 21 21 -Profit/(loss) before taxationon continuing operations (437) (3) (440) 291 (731)Taxation 26 (1) 25 (48) 73Profit/(loss) after taxationon continuing operations (411) (4) (415) 243 (658)Discontinued operations 199 45 244 (43) 287Profit/(loss) for the year (212) 41 (171) 200 (371)Attributable to:Minority interest 25 (11) 14 62 (48)Equity shareholders (237) 52 (185) 138 (323) (212) 41 (171) 200 (371)* Reconciliation to reported UK GAAP format financial statements is containedin Part 2 of this document located on the Cable &Wireless website(http://www.cw.com)Consolidated balance sheet as at 31 March 2004 Note UK GAAP Reclassification IFRS IFRS IFRS format* adjustment (unaudited) (unaudited) (unaudited) ‚£m ‚£m ‚£m ‚£mNon-current assetsIntangible assets d(ii) - 39 39Goodwill d (9) - 9 -Property, plant and equipment 1,214 - (68) 1,146 d(ii),jInvestments in associates and 208 - 30 238joint venturesTrade investments 58 - 2 60Tax recoverable e - 17 (15) 2Deferred tax asset - 28 7 35Retirement benefit assets g - 103 (68) 35Trade and other receivables - 27 1 28 1,471 175 (63) 1,583Current assetsInventory j 38 - (9) 29Tax recoverable - 7 (2) 5Trade and other receivables 1,050 (182) (4) 864Current asset investments 2,229 (2,216) - 13Cash and cash equivalents m 138 2,216 (35) 2,319 3,455 (175) (50) 3,230Current liabilitiesTrade and other payables 1,668 (388) 1 1,281Short term borrowings - 44 - 44Current tax liabilities - 271 (1) 270Dividend payable i - 73 (73) - 1,668 - (73) 1,595Net current assets 1,787 (175) 23 1,635Total assets less current 3,258 - (40) 3,218liabilities Non-current liabilitiesLong term borrowings 875 - (1) 874Deferred tax liabilities - 25 13 38Retirement benefit obligation g - 50 383 433Provisions for liabilities 431 (75) - 356and chargesOther payables - - 1 1 1,306 - 396 1,702Net assets 1,952 - (436) 1,516 EquityCalled up share capital 596 - - 596Share premium account 2 - - 2Other reserves 1,105 - (397) 708Total equity shareholders' 1,703 - (397) 1,306fundsMinority interest 249 - (39) 210Capital employed 1,952 - (436) 1,516* Reconciliation to reported UK GAAP format financial statements is containedin Part 2 of this document located on the Cable & Wireless website(http://www.cw.com)Consolidated cash flow statement for the year ended 31 March 2004 UK GAAP IFRS IFRS IFRS format* adjustment (unaudited) (unaudited) ‚£m ‚£m ‚£m Net cash flows from operating (60) (28) (88)activities Interest received 103 - 103Dividends received from associates 13 2 15Dividends received from joint 12 - 12venturesOther investment income 5 - 5Proceeds on disposal of current 229 - 229asset investmentsDisposal of trade investments 39 - 39Disposal of associate 7 - 7Disposal of subsidiary (net of cashand cash equivalents disposed) (139) - (139)Proceeds on disposal of property,plant & equipment 38 - 38Purchase of property, plant & (342) 35 (307)equipmentPurchase of software - (27) (27)Acquisition of subsidiary (net of (5) - (5)cash acquired)Purchase of trade investments (4) - (4)Purchase of current asset (1) - (1)investmentNet cash flows from investing (45) 10 (35)activities Issue of ordinary share capital 2 - 2Increase/(decrease) in debt (863) 5 (858)Repayments of finance leases (1) - (1)Dividend to minority interest (75) 3 (72)Bank loans raised 280 - 280Net cash flows from financing (657) 8 (649)activities Net decrease in cash and cash (762) (10) (772)equivalentsCash and cash equivalents at thebeginning of the year 3,152 (25) 3,127Exchange losses on cash and cash (36) - (36)equivalentsCash and cash equivalents at theend of the year 2,354 (35) 2,319 * Reconciliation to reported UK GAAP format financial statements is containedin Part 2 of this document located on the Cable & Wireless website(http://www.cw.com)NOTES TO FINANCIAL INFORMATIONa. Transitional arrangementsThe Group is required to establish its IFRS accounting policies forthe year ended 31 March 2006 and apply these retrospectively to determine theIFRS opening balance sheet at its date of transition, 1 April 2003, exceptwhere permitted by IFRS 1, `First-time adoption of International FinancialReporting Standards'.The general requirement of IFRS 1 is full retrospective adoption ofall accounting standards effective at the reporting date. However there aresome exemptions permitted where the cost or time involved in fullretrospective adoption is likely to exceed benefits to the users of thefinancial information. In other cases, retrospective application is notpermitted.IFRS 1 requires companies to make decisions on whether to takeadvantage of the exceptions and exemptions. The decisions taken by Cable &Wireless with respect to these transitional arrangements are detailed below.b. Presentation of financial informationThe primary financial statements contained in this document havebeen presented substantially in accordance with IAS 1, `Presentation offinancial statements'. This format and presentation will be refined as theGroup prepares its first full IFRS financial statements for the year ending 31March 2006.Discontinued operations have been presented in the Group's incomestatement for the year ended 31 March 2004 in accordance with the presentationrequirements of IFRS 5, 'Non-current assets held for sale and discontinuedoperations' as this will be the standard applicable to the Group's first setof financial statements under IFRS. The financial information has not beenremeasured in accordance with IFRS 5 as suitable fair value information wasnot available at that time. Measurement is therefore on a historic cost basisafter allowing for impairment. IFRS 5 is applied from 1 April 2004 as this isthe earliest date from which suitable fair value information was available atthat time.c. Scope of consolidationThe Group currently accounts for its investment in Dhiraagu, a 45%shareholding, as a subsidiary.Under UK GAAP, the revenue, operating profit and financing costs ofDhiraagu are consolidated in full in the income statement with a correspondingallocation to minority interest.IAS 27, `Consolidated and separate financial statements', defines asubsidiary as an entity that is controlled by another entity.The IFRS basis of determining control differs from that of UK GAAP;consequently, under IFRS, the Group considers this investment to be a jointventure. The Group has adopted equity accounting as permitted under IAS 31,`Interests in joint ventures' as the method of accounting for its jointventures, including Dhiraagu.Under equity accounting, the Group recognises its share of profitsas a one-line entry in the income statement. The deconsolidation of Dhiraaguhas no net impact on the loss for the year. The net impact on revenue andprofit before tax for the year ended 31 March 2004 was a reduction of ‚£44million and ‚£13 million respectively.Under UK GAAP, the assets and liabilities of Dhiraagu are fullyconsolidated in the balance sheet with a minority interest calculated. TheIFRS consolidated balance sheets at 1 April 2003 and 31 March 2004 reflect theequity accounting of the Group's interest in Dhiraagu. Accordingly, the UKGAAP minority interest balance in respect of Dhiraagu is eliminated from theconsolidated balance sheets.The deconsolidation of Dhiraagu also has an impact on theconsolidated cash position. The gross cash balance as at 31 March 2004 isreduced by ‚£35 million. The change in accounting has no effect on the Group'sability to access the cash in this business.d. Intangible assetsIFRS allows companies to elect not to apply IFRS 3, `Businesscombinations' retrospectively to business combinations which occurred beforethe date of transition to IFRS.The Group has elected to take advantage of this exemption and notapply IFRS 3 retrospectively to business combinations that took place before 1April 2003, the date of transition. As a result, in the opening balance sheet,positive goodwill arising from past business combinations of ‚£10 millionremains as stated under UK GAAP at 31 March 2003. This was written off as partof an impairment during the year ended 31 March 2004. Negative goodwill of ‚£12million has been credited to reserves on transition at 1 April 2003 as IFRS 3does not allow negative goodwill to be carried on the balance sheet.i) Goodwill and acquired intangible asset amortisationUnder UK GAAP goodwill is amortised over its expected useful life,and is tested for impairment in specific circumstances.IFRS 3 requires that goodwill is not amortised but is reviewed onan annual basis for impairment.The net impact of the change in treatment to goodwill arising fromthe adoption of IFRS 3 on the Group's consolidated income statement in theyear ended 31 March 2004 is a reduction in operating profit of ‚£3 million,resulting from the reversal of the amortisation of the negative goodwill.ii) Software reclassificationUnder UK GAAP software is classified as property, plant andequipment.Under IAS 38, software that is not integral to a related item ofhardware is classified as an intangible asset.A detailed exercise has been carried out by the Group to identifyany such software and has resulted in a reclassification between intangibleassets and property, plant and equipment in the balance sheet as at 1 April2003 and 31 March 2004 of ‚£57 million and ‚£41 million. Softwarereclassification has not resulted in a revision of useful economic lives andhas not affected operating profit.e. Deferred and current taxesUnder UK GAAP deferred tax is provided on timing differences.IAS 12, `Income taxes' requires deferred tax to be provided on alltemporary differences rather than just timing differences.The net impact of adopting IAS 12 on the Group is a reduction inconsolidated net assets of ‚£13 million at 1 April 2003 and ‚£23 million at 31March 2004 and a ‚£1 million tax charge in the year ended 31 March 2004primarily due to the derecognition of tax assets recognised under UK GAAP thatdo not meet the recognition criteria under IFRS. Deferred tax has beenrecognised on the employee benefits of overseas companies, and this results inan increase in consolidated net assets of ‚£4 million at 1 April 2003 and adecrease in consolidated net assets of ‚£5 million at 31 March 2004. Theseamounts are included within the above figures. As with other UK deferred taxassets, the deferred tax relating to the UK pension deficit will only berecognised when there is sufficient evidence of its recoverability.Under UK GAAP the Group's share of associates' and joint ventures'tax charges is part of the Group's tax charge.Under IAS 31, the Group's share of associates' and joint ventures'tax charges is included as part of 'Share of result in associates' profits'and 'Share of joint venture profits', on the face of the consolidated incomestatement. This reclassification results in a reduction of profit before taxof ‚£10 million in the year ended 31 March 2004 but has no impact on earningsper share.f. Share-based paymentsUnder UK GAAP share based awards are accounted for on an intrinsic basis whichtypically leads to a nil or low charge to profit. In addition, no chargesapply to the Group's Save as You Earn (`SAYE') schemes.Under IFRS 2, an expense is recognised in the income statement for grants ofequity instruments in relation to employee options and performance shareschemes including SAYE schemes. The expense recognised is based on the fairvalue of the shares or options at the date of grant and is recognised over thevesting period of the scheme.IFRS 1 permits a company to apply IFRS 2 only to grants of equity settledshare based awards granted after 7 November 2002 that have not vested by thelater of the date of transition to IFRS and 1 January 2005. The Group hastaken advantage of this exemption.The Group has used the binomial and Black-Scholes models, as appropriate, forthe purposes of computing fair values under IFRS 2.The existing charge under UK GAAP is zero and the charge arising from theadoption of IFRS 2 on the Group's consolidated income statement is ‚£4 millionin the year ended 31 March 2004. As noted above, this charge only reflectscalculations for options granted after 7 November 2002, effectively valuingone year of three year rolling schemes. The impact on the income statementgoing forward is therefore expected to increase although this is alsodependent on the design and size of future schemes.g. Employee benefitsThe Group has elected, in accordance with IAS 19, to adopt a policyof accounting for defined benefit employee retirement schemes through fullrecognition of the schemes' surpluses or deficits on balance sheet at eachyear end. Actuarial gains and losses are included in the statement ofrecognised income and expenditure ('SORIE'). This is similar to the approachrequired by the UK standard FRS 17 `Retirement benefits' for which the Grouphas previously provided transitional disclosure information. At transitiondate, as permitted by IFRS 1, all cumulative actuarial gains and losses arerecognised in the balance sheet. The impact of adopting IAS 19 is a reductionin net assets of ‚£531 million and ‚£348 million at 1 April 2003 and 31 March2004 respectively. In addition, the prepayment under SSAP 24 `Accounting forpension costs' is also reversed, further reducing net assets by ‚£112 millionand ‚£103 million at 1 April 2003 and 31 March 2004 respectively.The net impact of adopting IAS 19 on the Group's consolidatedincome statement for the year ended 31 March 2004 is a ‚£2 million credit. Theactuarial gains recognised through the SORIE are ‚£196 million. The deferredtax impact of employee benefits is dealt with in the section on tax, above.Under UK GAAP, in line with common practice, the Group does notaccount for holiday pay accruals unless legally obliged to make cashsettlement. IAS 19 explicitly requires appropriate provision to be made forthe cost of holiday entitlements not taken at the balance sheet date. Theimpact of the change is a ‚£10 million and ‚£9 million reduction in net assetsat 1 April 2003 and 31 March 2004 respectively and a ‚£1 million credit to theGroup's consolidated income statement for the year ended 31 March 2004.h. Financial instrumentsFinancial instruments continue to be an area of complexity forcompanies in the transition to IFRS. As permitted, the Group has elected toadopt IAS 32 and IAS 39 on a prospective basis and accordingly UK GAAP numbershave been retained for comparative purposes only. There is therefore no impacton the reported results for the year ended 31 March 2004.Information on the likely impact in future years is provided in thesection below entitled 'Impact on future financial information'.i. DividendsUnder UK GAAP, dividends relating to the current year but declared after thebalance sheet date are recognised as a liability at the year end. Under IAS10, `Events after the balance sheet date', such dividends are not permitted tobe recognised as a liability at that balance sheet date as the liability doesnot represent a present obligation as defined by IAS 37, `Provisions,contingent liabilities and contingent assets'.As a result the dividends declared after the balance sheet date and accrued inthe balance sheet as at 31 March 2004 of ‚£73 million are reversed. No dividendwas declared with respect to the year ended 31 March 2003, therefore noadjustment is required to the opening balance sheet.j. Fixed assetsIFRS 1 permits, in accordance with IAS 16, `Property, plant andequipment', entities to value property, plant and equipment at the date oftransition using fair value as deemed cost or using a revaluation carried outat an earlier date as deemed cost. In certain limited cases around the Group,assets have been recognised on a deemed cost basis.Under UK GAAP maintenance parts held for own use are included instock. Under IFRS these are considered to be part of property, plant andequipment.k. Cumulative translation differencesUnder IAS 21, `The effects of changes in foreign exchange rates',cumulative translation differences arising from translation of foreignoperations are recorded in equity and then recycled as a gain or loss ondisposal when the operation is sold. IFRS 1 permits entities an exemption fromIAS 21; cumulative translation differences up to the date of transition arenot recycled. However, from this date onwards, translation differences arerecorded in accordance with IAS 21.The Group has taken advantage of this exemption and, as such, the cumulativetranslation differences at the date of transition have been deemed to be zero.Translation differences from 1 April 2003 in respect of the US and Yemenoperations, which were disposed of during the 2003/4 year, have been includedin the calculation of profit on disposal. The inclusion of these nettranslation gains gave rise to a ‚£45 million credit to the Group'sconsolidated income statement which is included within the results ofdiscontinued operations.l. Customer acquisition costsUnder UK GAAP, Group policy is to defer certain customeracquisition costs subject to an assessment of recoverability. During the yearended 31 March 2004 these costs were assessed as being irrecoverable and anexceptional charge of ‚£13 million was incurred. No further such costs havebeen capitalised since.Under IFRS these costs would not have met the definition of anintangible asset and would not have been capitalised at 1 April 2003and hencethe charge in 2003/4 is reversed. No such item is expected to recur in futureperiods.m. Cash and cash equivalentsThe definition of gross cash differs between UK GAAP and IFRS.Under UK GAAP cash comprises cash on hand and demand deposits. IFRS includesshort-term, highly liquid investments (ie those that can be turned into cashwith insignificant changes in value) within cash equivalents. Under UK GAAPthese are shown as short-term investments.The difference in definition has no impact on the Group'spreviously reported consolidated net cash balance (including treasuryinstruments).IMPACT ON FUTURE FINANCIAL INFORMATIONFinancial instrumentsAs discussed above, Cable & Wireless will adopt IAS 39 and IAS 32prospectively from 1 April 2005. The principal areas of future impact forCable and Wireless are in respect of derivative accounting (including embeddedderivatives), the revaluation of certain financial assets and liabilities tofair value and the accounting for the Group's convertible bonds.Under IFRS, generally all derivative financial instruments are accounted forat fair value. Other financial instruments are accounted for either atamortised cost or at fair value depending on their classification and whetherthey are part of a qualifying hedge. The marking to market of derivativefinancial instruments will introduce volatility into the Group's incomestatement which, by its nature, cannot be forecast.Under IFRS, the Group's convertible bond is required to be split into a debtelement and conversion options (the derivative elements). As a result of thischange, the finance charge in the income statement will increase from 2005/6onwards. The charge in 2005/6 is forecast to be ‚£8 million. In addition, thederivative elements will be revalued at each reporting date with changes infair value taken to the income statement. Changes in fair value will depend onmarket factors that by their nature cannot be forecast. These accountingchanges have no impact on the cash cost of the bond.AppendicesStatement of recognised income and expenses for the year ended 31 March 2004 UK GAAP* IFRS IFRS IFRS format adjustment (unaudited) (unaudited) ‚£m ‚£m ‚£m Loss for the year (212) 41 (171) Actuarial gains on retirement - 196 196benefit schemes Currency translation differences onforeign currency net investmentsand related borrowings (97) (45) (142) Total (losses)/gains recognised (309) 192 (117) * Reconciliation to reported UK GAAP format financial statements is containedin Part 2 of this document located on the Cable & Wireless website(http://www.cw.com)Consolidated balance sheet as at 1 April 2003 (the date of transition) UK GAAP Reclassification IFRS IFRS IFRS format* adjustment Note (unaudited) (unaudited) (unaudited) ‚£m ‚£m ‚£m ‚£m Non-current assetsIntangible assets d(ii) - - 57 57Goodwill d(i) (2) - 12 10Property, plant and equipment d(ii),j 1,937 - (91) 1,846 Investments in associates and 232 - 26 258joint venturesOther investments 85 49 - 134Tax recoverable e - 15 (15) -Deferred tax assets - 1 9 10Retirement benefit asset g - 112 (97) 15 2,252 177 (99) 2,330Current assetsInventory j 51 - (8) 43Tax recoverable - 11 (1) 10Trade and other receivables 1,621 (139) (17) 1,465Current asset investments 3,204 (3,005) - 199Cash and cash equivalents m 196 2,956 (25) 3,127 5,072 (177) (51) 4,844Current liabilitiesTrade and other payables 3,275 (1,045) 2 2,232Short term borrowings - 825 (2) 823Current tax liabilities - 220 - 220 3,275 - - 3,275 Net current assets 1,797 (177) (51) 1,569Total assets less current 4,049 - (150) 3,899liabilities Non-current liabilitiesLong term borrowings 807 (86) (4) 717Deferred tax liabilities - 67 6 73Provisions for liabilities and 760 (105) - 655chargesRetirement benefit obligation g - 38 546 584Other payables - 86 1 87 1,567 - 549 2,116 Net assets 2,482 - (699) 1,783 EquityCalled up share capital 596 - - 596Share premium account 1,745 - - 1,745Other reserves (230) - (662) (892)Total equity shareholders' 2,111 - (662) 1,449fundsMinority interest 371 - (37) 334 Capital employed 2,482 - (699) 1,783* Reconciliation to reported UK GAAP format financial statements iscontained in Part 2 of this document is located on the Cable & Wirelesswebsite (http://www.cw.com)Contacts:Investor Relations:Louise BreenDirector, Investor RelationsTel: +44 20 7315 4460 Craig Thornton,Manager, Investor RelationsTel: +44 20 7315 6225 Virginia PorterVP, Investor Relations and Assoc. General CounselTel: +1 212 239 3581Media:Lesley SmithGroup Director Corporate and Public AffairsTel: +44 (0)1344 726945Steve DoubleGroup Head of Media CommunicationsTel: +44 (0)1344 726946Mob: +44 (0)7917 067580Cable & Wireless press officeTel: 01344 818888FinsburyRollo Head - 0207 251 3801ENDCable & Wireless PLCRelated Shares:
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