Annual Report and Accounts January 2013
6. Exceptional items
Sale of property development stock
Prior year VAT recovery
Associated tax charge
Profit on sale of Ventura
During the year the Group reviewed the operation of the defined benefit section of its pension plan, which was closed to new members in 2000. From November 2012, the future accrual of benefits for remaining employee members is based on pensionable earnings at that time, rather than final earnings. This change gave rise to a one-off accounting gain of £42.1m.
In June 2012 a second tranche of pensions in payment were subject to a buy-in arrangement. The Plan paid £23.4m to an insurance company and in return will receive payments equal to those pensions. This eliminates the Plan's exposure to the interest, inflation and longevity risks of those pensions. The contract also allows for the buy-in to be converted to a buy-out, following which the insurance company would become directly responsible for those pensions, and steps are being taken to proceed on this basis. Accordingly, the transaction has been accounted for as a settlement, with the £6.3m accounting charge presented in the income statement as an exceptional item.
During the year the Group sold its last remaining stock from its property development activities for £15.0m which had a book value of £5.9m. The £9.1m gain is presented as an exceptional item because of its size and non-recurring nature.
Last year, the Group reached agreement with HM Revenue & Customs for the recovery of overpaid VAT on product sales made during the period from 1973 to 1988. The total amount recoverable was £9.2m, comprising £3.1m of VAT and interest of £6.1m.
The Group sold its customer services management business, Ventura, which resulted in an exceptional gain of £38.0m last year. Net cash proceeds of £63.0m were received on completion and the final balance of £1.5m was received in the current year.
In this section
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
Notes to the consolidated financial statements
Company balance sheet
Company statement of changes in equity
Company cash flow statement
Notes to the parent company financial statements