17th Mar 2005 10:00
Kingfisher PLC17 March 2005 EMBARGOED UNTIL 1000 HOURSThursday 17 March 2005 Kingfisher plc IMPACT FROM THE ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS Kingfisher plc ("Kingfisher") is preparing for the adoption of InternationalFinancial Reporting Standards ("IFRS") as its primary accounting basis for theyear ending 28 January 2006. As part of this transition, Kingfisher ispresenting today financial information prepared in accordance with IFRS for theyear ended 29 January 2005. Results for the year ended 29 January 2005 under UK GAAP were released today andare available on the Group's website www.kingfisher.com. The primary changes to Kingfisher's reported financial information at 29 January2005 from the adoption of IFRS are as a result of the: • recognition of all employee benefit related obligations, principally pensions; • recognition of a relatively small number of building leases as finance leases; • recognition of lease incentives received over the entire term of the lease rather than to the first market rent review; • recognition of deferred tax liabilities on historical property revaluations and other temporary differences; and • recognition of exchange gains and losses in the income statement on inter-company loan balances which do not meet the functional currency requirements under IAS21. For the year ended 29 January 2005 the impact on profits from the adoption ofIFRS would be to reduce retail profit by less than 1% and profit after tax by3%, with an underlying reduction in profit after tax of 5% excluding afunctional currency benefit under IAS 21. Net assets would be reduced by 7% at 1February 2004 and by 11% at 29 January 2005 after the reversal of the propertyrevaluation uplift recorded under UK GAAP. Duncan Tatton-Brown, Group Finance Director, commented: "This announcement provides a detailed analysis of the impacts of IFRS on ourfinancial statements. To help our stakeholders prepare for the change we havere-stated our results for the year ended 29 January 2005, announced earliertoday, under these new rules ahead of their adoption for the year ending 28January 2006." For further information: Kingfisher plcHeather Ward, Head of Investor Relations020 7644 1032 KINGFISHER plcIMPACT FROM ADOPTION OF IFRS CONTENTS 1. Introduction 2. Basis of Preparation 3. Key Impact Analysis 4. Restated IFRS Consolidated Statements- Consolidated Income Statement for the year ended 29 January 2005- Consolidated Statement of Recognised Income and Expense for the year ended 29 January 2005- Consolidated Balance Sheet at 1 February 2004- Consolidated Balance Sheet at 29 January 2005 5. Notes to IFRS Financial Information 6. Other Information Appendix - Detailed reconciliation of UK GAAP to IFRS 1. INTRODUCTION Kingfisher plc and its subsidiaries (the Group) currently prepares itsconsolidated financial statements under UK Generally Accepted AccountingPractice (UK GAAP). Following the adoption of Regulation No. 1606/2002 by theEuropean Parliament on 19 July 2002, the Group has been preparing for theadoption of International Financial Reporting Standards (IFRS)1 as its primaryaccounting basis. IFRS will apply for the first time in the Group's financial statements for theyear ending 28 January 2006. Accordingly, the Group's first quarter sales andretail profit announcement and the financial results for the six month periodending 30 July 2005 will be prepared and reported under IFRS. This press release explains how the Group's reported UK GAAP financialperformance for the year ended 29 January 2005 and its financial position atthat date would have been reported under IFRS. It includes, on an IFRS basis: • the Group's consolidated balance sheet at 1 February 2004, the Group's date of transition (the "opening" balance sheet under IFRS); • the Group's consolidated income statement for the year ended 29 January 2005; • the Group's consolidated statement of recognised income and expense for the year ended 29 January 2005; and • the Group's consolidated balance sheet at 29 January 2005. This document explains all material accounting policy changes from theaccounting policies adopted in the UK GAAP financial statements for the yearended 29 January 2005. A full set of IFRS accounting policies will be publishedin the Group's first IFRS financial statements for the year ending 28 January2006. The financial information presented in this document is unaudited. Reconciliations to assist the reader in understanding the nature and quantum ofdifferences between UK GAAP and IFRS for the financial information above areincluded in the Appendix. 1. References to IFRS throughout this document refer to the application ofInternational Financial Reporting Standards ("IFRS"), including InternationalAccounting Standards ("IAS") and interpretations issued by the InternationalAccounting Standards Board ("IASB") and its committees, and as interpreted byany regulatory bodies applicable to the Group. 2. BASIS OF PREPARATION The financial information presented in this document has been prepared on thebasis of all International Financial Reporting Standards ("IFRS"), includingInternational Accounting Standards ("IAS") and interpretations issued by theInternational Accounting Standards Board ("IASB") and its committees, and asinterpreted by any regulatory bodies applicable to the Group published by 31December 2004. These are subject to ongoing amendment by the IASB andsubsequent endorsement by the European Commission and are therefore subject topossible change. Further standards and interpretations may also be issued thatwill be applicable for financial years beginning on or after 1 January 2005 orthat are applicable to later accounting periods but may be adopted early. TheGroup's first IFRS financial statements may, therefore, be prepared inaccordance with some different accounting policies from the financialinformation presented here. In preparing this financial information, the Group has assumed that the EuropeanCommission will endorse the amendment to IAS 19, "Employee Benefits - ActuarialGains and Losses, Group Plans and Disclosures". On 19 November 2004, the European Commission endorsed an amended version of IAS39, "Financial Instruments: Recognition and Measurement" rather than the fullversion as previously published by the IASB. In accordance with guidance issuedby the UK Accounting Standards Board, the full version of IAS 39, as issued bythe IASB, will be adopted with effect from 30 January 2005 (Kingfisher's 2005/06financial year). 2.1. IFRS 1 First Time Adoption Choices IFRS 1, "First-time Adoption of International Financial Reporting Standards"sets out the procedures that the Group must follow when it adopts IFRS for thefirst time as the basis for preparing its consolidated financial statements. TheGroup is required to establish its IFRS accounting policies as at 28 January2006 and, in general, apply these retrospectively to determine the IFRS openingbalance sheet at its date of transition, 1 February 2004. This standard provides a number of optional exceptions to this generalprinciple. Set out below is a description of the significant first timeadoption choices made by the Group. a) Business combinations before the opening IFRS balance sheet date (IFRS 3, "Business Combinations") The Group has elected not to apply IFRS 3 retrospectively to businesscombinations that took place before the date of transition. As a result, in theopening balance sheet, goodwill arising from past business combinations (£2.5billion) remains as stated under UK GAAP at 1 February 2004. Substantially all of the Group's goodwill arose on the acquisition of theminority interest in Castorama Dubois Investissements S.C.A. and the Group haselected to leave this as a sterling denominated asset. In future, IFRS willrequire goodwill arising on the acquisition of a foreign operation to beaccounted for as a foreign currency asset and to be re-translated each period aspart of the translation of the opening net investment. b) Employee Benefits - actuarial gains and losses (IAS 19, "Employee Benefits") The Group has elected to recognise all cumulative actuarial gains and losses inrelation to employee benefit schemes at the date of transition. The Group hasrecognised actuarial gains and losses in full in the period in which they occurin a statement of recognised income and expense in accordance with the amendmentto IAS 19, issued on 16 December 2004. c) Valuation of properties (IAS 16, "Property, plant and equipment") The Group has previously applied a policy of annual revaluations of property.The Group has now elected to treat the revalued amount of operating propertiesat 1 February 2004 as deemed cost as at that date and will not revalue foraccounts purposes in future. The Group will however provide the current marketvalues as additional disclosure in the financial statements. Investment property was previously revalued annually under UK GAAP. Followingthe disposal of the Chartwell Land investment property portfolio in 2004, theamount of investment property now held by the Group is insignificant. The Grouphas elected to restate the remaining investment property at historical costunder IFRS. There is no material impact of this change on the income statement. d) Share-based Payments (IFRS 2, "Share-based Payment") The Group has elected to apply IFRS 2 only to relevant share based paymenttransactions granted after 7 November 2002. e) Foreign Currency Translation Reserve (IAS 21, "The Effects of Changes inForeign Exchange Rates") The Group has elected to reset the foreign currency translation reserve to zeroat 1 February 2004. Going forward, IFRS requires amounts taken to reserves onthe retranslation of foreign subsidiaries to be recorded in a separate foreigncurrency translation reserve and be included in the future calculation of profitor loss on sale of the subsidiary. f) Financial Instruments (IAS 39, "Financial Instruments : Recognition andMeasurement" and IAS 32, "Financial Instruments: Disclosure and Presentation") The Group has taken the option to defer the implementation of IAS 32 and IAS 39to the financial year ending 28 January 2006. Therefore, financial instrumentswill continue to be accounted for and presented in accordance with UK GAAP forthe year ended 29 January 2005. On 30 January 2005, there will be an adjustmentto reflect the movements from the UK GAAP carrying values to the IAS 39 values.It is the Group's intention to apply hedge accounting where the requirements ofIAS 39 are met. 2.2. Presentation of financial information The primary statements within the financial information contained in thisdocument have been presented in accordance with IAS 1, "Presentation ofFinancial Statements". However, this format and presentation may requiremodification as practice develops and in the event that further guidance isissued. 3. KEY IMPACT ANALYSIS The analysis below sets out the most significant adjustments arising from thetransition to IFRS. 3.1. Presentation of Financial Statements The format of the primary statements contained in this document have beenpresented in accordance with IAS 1, "Presentation of Financial Statements",which are different to their UK GAAP equivalents. The Group will continue to account for its joint venture interests in B&Q Home(Taiwan) and Koctas (Turkey) using the equity method of accounting rather thanthe proportional consolidation method that is permitted under IAS 31. The Groupwill also continue to account for its associate investments using the equityaccounting method. The presentation of the Group's share of the results of joint ventures andassociated undertakings in the Group's consolidated income statement will changeunder IFRS. Under UK GAAP, the Group's share of joint venture and associatedundertaking operating profit, interest and tax have been disclosed separately inthe consolidated income statement. In accordance with IAS 1, the results ofjoint venture and associated undertakings are presented net of interest and taxas a single line item. There is no effect on the result for the financial periodfrom this adjustment. There is no FRS 3 non-operating exceptionals equivalent under IFRS. Items notrelating to underlying business performance, such as profits and losses on thedisposal of property, will now be reported in operating profit. Kingfisher willcontinue to disclose operating exceptionals and provide adjusted earnings pershare to assist stakeholders. 3.2. Intangible Assets a) Goodwill amortisation IFRS 3 "Business Combinations" requires that negative goodwill is recognisedimmediately in the income statement as opposed to being amortised. The negativegoodwill that arose on the acquisition of the shares in Hornbach has beencredited back to opening reserves under IFRS and increases the Group's interestin joint ventures and associates by £19.3m. The removal of the amortisationcredit in the current year reduces profit before tax by £1m. The non-amortisation of positive goodwill required under IFRS has no impact asall positive goodwill held was deemed to have an indefinite life under UK GAAP. b) Computer Software Under UK GAAP, all capitalised computer software is included within tangiblefixed assets on the balance sheet. Under IFRS, only computer software that isintegral to a related item of hardware should be included as property, plant andequipment. All other computer software should be recorded as an intangibleasset. Accordingly, a net reclassification has been made of £65.4m in the openingbalance sheet and of £66.9m in the balance sheet as at 29 January 2005 betweenproperty, plant and equipment and intangible assets. There is no impact on theprofit and loss account from this reclassification. 3.3. Post Employment Benefits The Group currently applies the provisions of SSAP 24 under UK GAAP and providesdetailed disclosure under FRS 17 in accounting for pensions and otherpost-employment benefits. The Group has elected to early adopt the amendment to IAS 19, "Employee Benefits " issued by the IASB on 16 December 2004 which allows all actuarialgains and losses to be charged or credited to equity. The Group's opening IFRS balance sheet reflects the assets and liabilities ofthe Group's defined benefit schemes totalling a net liability of £245.7m. Thisamount represents less than 4% of the Group's market capitalisation at 31January 2004. The transitional adjustment of £220.6m to opening reservescomprises the reversal of entries in relation to UK GAAP accounting under SSAP24 less the recognition of the net liabilities of the Group's defined benefitschemes. The incremental charge arising from the adoption of IAS 19 on theGroup's income statement is as follows: Year ended 29 January 2005 £m Charged to operating profit 0.9Charged to net financing charge 5.1Total charge 6.0 The actuarial loss before tax of £79.3m arising in the year ended 29 January2005 has been recorded in the statement of recognised income and expense. Thepension deficit under IFRS at 29 January 2005 is £325.7m. 3.4. Deferred and Current Taxes The scope of IAS 12, "Income Taxes" is wider than the corresponding UK GAAPstandards, and requires deferred tax to be provided on all temporary differencesrather than just taxable timing differences under UK GAAP. As a result, the Group's IFRS opening balance sheet at 1 February 2004 includesan additional deferred tax liability of £189.4m. The majority of this adjustmentrelates to the deferred tax provided on the revaluation reserve less thedeferred tax asset recognised on the pension deficit at 1 February 2004. As stated in 3.1 above, the Group's share of its joint venture and associatedundertakings' tax charges is shown as part of "Share of post tax result in jointventure and associated undertakings". "Tax on profit on ordinary activities" onthe face of the consolidated income statement comprises the tax charge of theCompany and its subsidiaries under IFRS. The effective overall tax rate on profit is 31.0%. The effective tax rate beforeexceptional items and acquisition goodwill amortisation excluding prior yearadjustments and the impact of the presentation of joint ventures and associatedundertakings is 33.5% compared with 31.6% under UK GAAP. The increase is as aresult of deferred tax being provided on all temporary differences as describedabove. 3.5. Share-based Payments IFRS 2, "Share-based Payment" requires that an expense for equity instrumentsgranted is recognised in the financial statements based on their fair value atthe date of grant. This expense, which is primarily in relation to employeeoption and performance share schemes, is recognised over the vesting period ofthe scheme. As previously mentioned, IFRS 2 allows the measurement of this expense to becalculated only on options granted after 7 November 2002. The Group hasprincipally adopted the Black Scholes model for the purposes of computing fairvalue under IFRS. The additional pre-tax charge arising from the adoption of IFRS 2 on the Group'sincome statement is £1.8m for the year ended 29 January 2005. The impact fromthe adoption of this standard has only a small impact as the Group ceasedoffering share options in 2003 and replaced them with deferred shares for whicha charge equating to the market value of the deferred shares has been recognisedunder UK GAAP. 3.6. Leases a) Capitalisation of building leases IAS 17, "Leases" requires that the land element of leases on land and buildingsis considered separately for the purposes of determining whether the lease is afinance or operating lease. A majority of the Group's buildings are on leases of 25 years or less which areclassified as operating leases under IFRS. This treatment is consistent with UKGAAP. There are a small number of leases greater than 25 years where thebuilding element of the leases have been reclassified as finance leases based onthe criteria set out in IAS 17. As a result, the Group's IFRS opening balance sheet at 1 February 2004 includesadditional tangible fixed assets of £30.6m and additional finance leaseobligations of £47.6m included within current and non-current borrowings. Themain impact on the income statement is that the operating lease payment chargedto operating profit under UK GAAP is replaced with a depreciation charge of theasset (in operating profit) and a financing charge (interest expense). Whilstthe total charge for a lease over the life of the lease will be the same underUK GAAP and IFRS, the profile of the charge is different, with the charge beingmore front loaded under IFRS. The net pre-tax impact on the income statement isa further charge of £1.3m for the year ended 29 January 2005. b) Lease incentives Under UK GAAP, lease incentives were recognised over the period to the firstmarket rent review. Under IFRS (SIC 15), lease incentives are required to berecognised over the entire lease term. As a result, the Group's IFRS opening balance sheet at 1 February 2004 includesadditional deferred income of £21.7m and a reduction in operating profit for theyear ended 29 January 2005 of £4.5m. 3.7. FX Gains and Losses Exchange differences on inter-company loan balances which do not meet the morestringent functional currency requirements of IAS 21 are shown in the incomestatement rather than as reserve movements, giving rise to a pre-tax unrealisedgain of £12m in net finance costs for the year ended 29 January 2005. As theseamounts are generated by exchange movements they will vary from period toperiod. However, there is an equal and opposite amount in reserve movements onconsolidation and net equity is therefore unaffected. 3.8. Post Balance Sheet Events IAS 10, "Events after the Balance Sheet Date" requires that dividends declaredafter the balance sheet date should not be recognised as a liability at thatbalance sheet date as the liability does not represent a present obligation asdefined by IAS 37, "Provisions, Contingent Liabilities and Contingent Assets". The final dividend declared in March 2004 in relation to the financial yearended 31 January 2004 of £143.4m has been reversed in the opening balance sheetand charged to equity in the balance sheet as at 29 January 2005. The finaldividend accrued for the year ended 29 January 2005 of £159.7m has been reversedin the IFRS balance sheet as at 29 January 2005. 3.9. Financial Instruments IAS 32, "Financial Instruments: Disclosure and Presentation" and IAS 39 "Financial Instruments: Recognition and Measurement" address the accounting for,and reporting of, financial instruments. IAS 39 sets out detailed accountingrequirements in relation to financial assets and liabilities. All derivative financial instruments are accounted for at fair market valuewhilst other financial instruments are accounted for either at amortised cost orat fair value depending on their classification. Subject to stringent criteria,derivative financial instruments, financial assets and financial liabilities maybe designated as forming hedge relationships as a result of which fair valuechanges are offset in the income statement or charged/credited to equitydepending on the nature of the hedge relationship. Hedge accounting will be adopted for a majority of the Group's forward currencycontracts which are taken out to hedge the cost of foreign currency inventory,thereby reducing potential volatility in the income statement. Hedge accountingwill also be adopted for the Group's interest rate swaps and underlying capitalmarket debt, thereby reducing potential volatility in the income statement. 3.10. Other Adjustments Other adjustments comprise: - the restatement of investment properties to historical cost;- reclassification of current asset investments to cash and cash equivalents as required by IAS 7;- the inclusion of certain elements of income from suppliers and other similar items in the cost of inventories as required by IAS 2; and- other minor GAAP differences. 4. RESTATED IFRS CONSOLIDATED STATEMENTS CONSOLIDATED INCOME STATEMENTFor the year ended 29 January 2005 UK GAAP IFRS IFRS (unaudited) adjustments (unaudited) IFRS format (unaudited) £m £m £m Revenue 7,649.6 - 7,649.6Cost of sales (4,783.3) (2.4) (4,785.7)Gross profit 2,866.3 (2.4) 2,863.9Selling costs (1,834.4) 1.4 (1,833.0)Administrative expenses (363.4) (7.3) (370.7)Other operating income 16.8 0.2 17.0Other operating expenses (note 5.1) (16.6) 2.9 (13.7)Share of post tax result in joint venture andassociated undertakings 27.5 (12.9) 14.6 Operating profit 696.2 (18.1) 678.1Analysed as:Retail profit 747.9 (5.9) 742.0Other operating costs (36.1) (1.2) (37.3)Acquisition goodwill amortisation 1.0 (1.0) -Exceptional items (note 5.1) (16.6) 2.9 (13.7)Share of joint venture and associate interest and tax - (12.9) (12.9) 696.2 (18.1) 678.1 Net financing charge (25.3) (3.4) (28.7)Gain on retranslation of intercompany loan balance - 12.0 12.0 Net interest payable (25.3) 8.6 (16.7)Profit before tax 670.9 (9.5) 661.4Tax on profit on ordinary activities (201.4) (3.8) (205.2)Profit for the financial period from continuingoperations 469.5 (13.3) 456.2 Attributable to:- Equity shareholders 469.0 (13.3) 455.7- Minority interests 0.5 - 0.5 469.5 (13.3) 456.2 Earnings per share (pence):- Basic 20.3 (0.6) 19.7- Diluted 20.2 (0.6) 19.6 CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSEFor the year ended 29 January 2005 UK GAAP IFRS IFRS (unaudited) adjustments (unaudited) IFRS format (unaudited) £m £m £m Gains on revaluation of properties 175.8 (175.8) -Exchange differences on translation of foreignoperations 65.2 (18.2) 47.0 Actuarial losses on defined benefit pension schemes - (79.3) (79.3) Tax on items taken directly to equity (2.5) 31.7 29.2Net income recognised directly in equity 238.5 (241.6) (3.1)Profit for the financial period 469.5 (13.3) 456.2Total recognised income and expense for the period 708.0 (254.9) 453.1 Attributable to:- Equity shareholders 707.9 (254.9) 453.0- Minority interests 0.1 - 0.1 708.0 (254.9) 453.1 CONSOLIDATED BALANCE SHEETAs at 1 February 2004 (Opening balance sheet) UK GAAP IFRS adjustments IFRS (unaudited) (unaudited) (unaudited) IFRS format £m £m £mNon-current assetsIntangible assets 2,455.3 66.7 2,522.0Property, plant and equipment 2,769.2 (37.1) 2,732.1Investment property 12.0 (6.3) 5.7Investments in joint venture and associates 145.7 19.3 165.0Other investments 0.2 - 0.2Trade and other receivables 25.8 - 25.8 5,408.2 42.6 5,450.8Current assetsInventory 1,071.7 (10.8) 1,060.9Trade and other receivables 491.6 1.2 492.8Income tax 1.4 - 1.4Investments 23.8 (13.8) 10.0Cash and cash equivalents 144.2 13.8 158.0 1,732.7 (9.6) 1,723.1Total assets 7,140.9 33.0 7,173.9 Current liabilitiesShort-term borrowings (267.6) (0.8) (268.4)Income tax liabilities (79.2) - (79.2)Trade and other payables (1,578.4) 124.1 (1,454.3)Provisions (7.0) - (7.0) (1,932.2) 123.3 (1,808.9)Net current liabilities (199.5) 113.7 (85.8) Non-current liabilitiesLong-term borrowings (744.2) (46.8) (791.0)Other payables (0.7) - (0.7)Deferred tax liabilities (14.6) (189.4) (204.0)Post employment benefits (25.1) (220.6) (245.7)Provisions (17.5) - (17.5) (802.1) (456.8) (1,258.9)Net assets 4,406.6 (300.5) 4,106.1 EquityShare capital 2,390.4 - 2,390.4Other reserves 2,013.3 (300.5) 1,712.8Total equity shareholders' funds 4,403.7 (300.5) 4,103.2Minority interests 2.9 - 2.9Total equity 4,406.6 (300.5) 4,106.1 CONSOLIDATED BALANCE SHEETAs at 29 January 2005 UK GAAP IFRS adjustments IFRS (unaudited) (unaudited) (unaudited) IFRS format £m £m £mNon-current assetsIntangible assets 2,463.1 69.9 2,533.0Property, plant and equipment 3,247.9 (216.6) 3,031.3Investment property 22.8 (4.1) 18.7Investments in joint venture and associates 158.3 18.3 176.6Trade and other receivables 26.6 - 26.6 5,918.7 (132.5) 5,786.2Current assetsInventory 1,333.0 (13.0) 1,320.0Trade and other receivables 451.6 2.3 453.9Income tax 8.8 - 8.8Investments 9.4 (9.4) -Cash and cash equivalents 152.7 9.4 162.1 1,955.5 (10.7) 1,944.8Total assets 7,874.2 (143.2) 7,731.0 Current liabilitiesShort-term borrowings (184.0) (0.9) (184.9)Income tax liabilities (113.7) - (113.7)Trade and other payables (1,816.3) 136.6 (1,679.7)Provisions (16.4) - (16.4) (2,130.4) 135.7 (1,994.7)Net current liabilities (174.9) 125.0 (49.9) Non-current liabilitiesLong-term borrowings (772.4) (45.9) (818.3)Other payables (0.9) - (0.9)Deferred tax liabilities (20.8) (171.9) (192.7)Post employment benefits (17.8) (307.9) (325.7)Provisions (7.7) - (7.7) (819.6) (525.7) (1,345.3)Net assets 4,924.2 (533.2) 4,391.0 EquityShare capital 2,434.9 - 2,434.9Other reserves 2,486.6 (533.2) 1,953.4Total equity shareholders' funds 4,921.5 (533.2) 4,388.3Minority interests 2.7 - 2.7Total equity 4,924.2 (533.2) 4,391.0 5. NOTES TO IFRS FINANCIAL INFORMATION 5.1.Exceptional items Exceptional items (other operating expenses) comprise a £4.0m profit on thedisposal of properties and fixed asset investments and a £17.7m charge relatingto the provision against the working capital loan made in connection with thedisposal of ProMarkt. 5.2.Adjusted earnings per share Year ended 29 January 2005 (unaudited) £m Earnings attributable to equity shareholders for basic and diluted earnings pershare 455.7 Items not related to underlying business performance:- Profit on disposal of fixed assets and investments (4.0)- Loss on sale of businesses 17.7- Gain on retranslation of intercompany loan balance (12.0)- Tax on the adjustments (1.7)Earnings attributable to equity shareholders for adjusted earnings per share 455.7 Weighted average number of shares for basic EPS (millions) 2,307.5Weighted average number of shares for diluted EPS (millions) 2,324.4 Basic earnings per share (pence) 19.7Diluted basic earnings per share (pence) 19.6 Adjusted basic earnings per share (pence) 19.7Adjusted diluted basic earnings per share (pence) 19.6 5.3.Net debt Year ended 29 January 2005 (unaudited) £m Net debt under UK GAAP 794.3Additional finance lease liability 46.8Net debt under IFRS 841.1 6. OTHER INFORMATION This document, together with the Appendix will be available on the Group'swebsite www.kingfisher.com Kingfisher plc APPENDIX - Detailed reconciliation of UK GAAP to International FinancialReporting Standards (IFRS) CONTENTS 1. Consolidated Income Statement for the year ended 29 January 2005 2. Consolidated Balance Sheet as at 1 February 2004 3. Consolidated Balance Sheet as at 29 January 2005 These financial reconciliations are for convenience only and do not containsufficient information to allow a full understanding of the impact of thetransition to IFRS on the financial statements of Kingfisher plc or thehistorical results and state of affairs of Kingfisher plc. 1. CONSOLIDATED INCOME STATEMENT (UNAUDITED) For the year ended Reported IAS 1 IFRS 3 IAS 19 IAS 12 IFRS 2 IAS 17 SIC 15 IAS 21 Other Restated29 January 2005 under Joint Business Employee Deferred Share Leases Lease Functional under UK GAAP venture combin- benefits tax based incent- currency IFRS and ation payments ives assoc- iates £m £m £m £m £m £m £m £m £m £m £m Revenue 7,649.6 - - - - - - - - - 7,649.6Cost of sales (4,783.3) - - - - - - (0.3) - (2.1)(4,785.7)Gross profit 2,866.3 - - - - - - (0.3) - (2.1) 2,863.9Selling costs (1,834.4) - - 0.6 - - 5.3 (4.4) - (0.1)(1,833.0)Administrative (363.4) - (1.0) (1.5) - (1.8) (2.2) - - (0.8) (370.7)expenses Other operating 16.8 - - - - - - 0.2 - - 17.0income Other operating (16.6) - - - - - - - - 2.9 (13.7)expenses Share of post tax result in joint venture and 27.5 (12.9) - - - - - - - - 14.6associated undertakings Operating profit 696.2 (12.9) (1.0) (0.9) - (1.8) 3.1 (4.5) - (0.1) 678.1 Net financing charge (25.3) 6.1 - (5.1) - - (4.4) - - - (28.7)Gain on retranslation of intercompany loan balance - - - - - - - - 12.0 - 12.0Profit before tax 670.9 (6.8) (1.0) (6.0) - (1.8) (1.3) (4.5) 12.0 (0.1) 661.4Tax on profit on (201.4) 6.8 - 1.9 (12.1) 0.5 0.4 1.4 (3.6) 0.9 (205.2)ordinary activities Profit for the financial period from 469.5 - (1.0) (4.1) (12.1) (1.3) (0.9) (3.1) 8.4 0.8 456.2continuing operations 2. CONSOLIDATED BALANCE SHEET (UNAUDITED) As at 1 February 2004 Reported IFRS 3 IAS 38 IAS 19 IAS 12 IFRS 2 IAS 17 SIC 15 IAS 18 Other Restated(Opening balance under Business Intang- Employee Deferred Share Leases Lease Dividend undersheet) UKGAAP combin- ibles benefits tax based incent- IFRS (IFRS ations reclas- payments ives format) sifica- tion £m £m £m £m £m £m £m £m £m £m £m Non-current assets Intangible assets 2,455.3 - 68.2 - - - - - - (1.5) 2,522.0Property, plant and 2,769.2 - (68.2) - - - 30.6 6.7 - (6.2) 2,732.1equipment Investment property 12.0 - - - - - - - - (6.3) 5.7Investment in joint 145.7 19.3 - - - - - - - - 165.0ventures and associates Other investments 0.2 - - - - - - - - - 0.2Trade and other 25.8 - - - - - - - - - 25.8receivables 5,408.2 19.3 - - - - 30.6 6.7 - (14.0) 5,450.8Current assets Inventory 1,071.7 - - - - - - - - (10.8) 1,060.9Trade and other 491.6 - - - - - - 2.1 - (0.9) 492.8receivables Income tax 1.4 - - - - - - - - - 1.4Investments 23.8 - - - - - - - - (13.8) 10.0Cash and cash 144.2 - - - - - - - - 13.8 158.0equivalents 1,732.7 - - - - - - 2.1 - (11.7) 1,723.1Total assets 7,140.9 19.3 - - - - 30.6 8.8 - (25.7) 7,173.9 Current liabilities Short-term borrowings (267.6) - - - - - (0.8) - - - (268.4)Income tax liabilities (79.2) - - - - - - - - - (79.2)Trade and other (1,578.4) - - (0.8) - 3.2 - (21.7) 143.4 - (1,454.3)payables Provisions (7.0) - - - - - - - - - (7.0) (1,932.2) - - (0.8) - 3.2 (0.8) (21.7) 143.4 - (1,808.9)Net current liabilities (199.5) - - (0.8) - 3.2 (0.8) (19.6) 143.4 (11.7) (85.8) Non-current liabilities Long-term borrowings (744.2) - - - - - (46.8) - - - (791.0)Other payables (0.7) - - - - - - - - - (0.7)Deferred tax (14.6) - - 66.6 (268.8) 0.1 5.1 3.8 - 3.8 (204.0)liabilities Post employment (25.1) - - (220.6) - - - - - - (245.7)benefits Provisions (17.5) - - - - - - - - - (17.5) (802.1) - - (154.0) (268.8) 0.1 (41.7) 3.8 - 3.8 (1,258.9)Net assets 4,406.6 19.3 - (154.8) (268.8) 3.3 (11.9) (9.1) 143.4 (21.9) 4,106.1 Equity Share capital 2,390.4 - - - - - - - - - 2,390.4Other reserves 2,013.3 19.3 - (154.8) (268.8) 3.3 (11.9) (9.1) 143.4 (21.9) 1,712.8Total equity 4,403.7 19.3 - (154.8) (268.8) 3.3 (11.9) (9.1) 143.4 (21.9) 4,103.2shareholders' funds Minority interests 2.9 - - - - - - - - - 2.9Total equity 4,406.6 19.3 - (154.8) (268.8) 3.3 (11.9) (9.1) 143.4 (21.9) 4,106.1 3. CONSOLIDATED BALANCE SHEET (UNAUDITED) As at 29 Reported IFRS 3 IAS 38 IAS 19 IAS 12 IFRS 2 IAS 17 SIC 15 IAS 16 IAS 18 Other RestatedJanuary under Business Intang- Employee Deferred Share Leases Lease Valuation Dividend under2005 UKGAAP combin- ibles benefits tax based incent- of IFRS (IFRS ation reclas- payments ives proper- format) sifica- ties tion £m £m £m £m £m £m £m £m £m £m £m £mNon-current assets Intangible 2,463.1 - 69.8 - - - - - - - 0.1 2,533.0assets Property, 3,247.9 - (69.8) - - - 28.4 10.7 (185.1) - (0.8) 3,031.3plant and equipment Investment 22.8 - - - - - - - - - (4.1) 18.7property Investment in 158.3 18.3 - - - - - - - - - 176.6joint ventures and associates Trade and 26.6 - - - - - - - - - - 26.6other receivables 5,918.7 18.3 - - - - 28.4 10.7 (185.1) - (4.8) 5,786.2 Current assets Inventory 1,333.0 - - - - - - - - - (13.0) 1,320.0Trade and 451.6 - - - - - - 2.3 - - - 453.9other receivables Income tax 8.8 - - - - - - - - - - 8.8Investments 9.4 - - - - - - - - - (9.4) -Cash and cash 152.7 - - - - - - - - - 9.4 162.1equivalents 1,955.5 - - - - - - 2.3 - - (13.0) 1,944.8Total assets 7,874.2 18.3 - - - - 28.4 13.0 (185.1) - (17.8) 7,731.0 Current liabilities Short-term (184.0) - - - - - (0.9) - - - - (184.9)borrowings Income tax (113.7) - - - - - - - - - - (113.7)liabilities Trade and (1,816.3) - - 1.5 - 7.9 - (30.4) - 159.7 (2.1) (1,679.7)other payables Provisions (16.4) - - - - - - - - - - (16.4) (2,130.4) - - 1.5 - 7.9 (0.9) (30.4) - 159.7 (2.1) (1,994.7)Net current (174.9) - - 1.5 - 7.9 (0.9) (28.1) - 159.7 (15.1) (49.9)liabilities Non-current liabilities Long-term (772.4) - - - - - (45.9) - - - - (818.3)borrowings Other payables (0.9) - - - - - - - - - - (0.9)Deferred tax (20.8) - - 92.0 (279.9) 0.6 5.5 5.2 - - 4.7 (192.7)liabilities Post (17.8) - - (307.9) - - - - - - - (325.7)employment benefits Provisions (7.7) - - - - - - - - - - (7.7) (819.6) - - (215.9) (279.9) 0.6 (40.4) 5.2 - - 4.7 (1,345.3)Net assets 4,924.2 18.3 - (214.4) (279.9) 8.5 (12.9) (12.2) (185.1) 159.7 (15.2) 4,391.0 Equity Share 2,434.9 - - - - - - - - - - 2,434.9capital Other 2,486.6 18.3 - (214.4) (279.9) 8.5 (12.9) (12.2) (185.1) 159.7 (15.2) 1,953.4reserves Total 4,921.5 18.3 - (214.4) (279.9) 8.5 (12.9) (12.2) (185.1) 159.7 (15.2) 4,388.3equity shareholders' funds Minority 2.7 - - - - - - - - - - 2.7interests Total equity 4,924.2 18.3 - (214.4) (279.9) 8.5 (12.9) (12.2) (185.1) 159.7 (15.2) 4,391.0 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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