Woolworths Group plc
 
 
                      Adoption of International Financial
 
                              Reporting Standards
 
                                  5 July 2005
 
 
 
 
 
 
 
Woolworths Group plc
 
----------------------------------------------------------------
 
 
 
Contents
 
1      INTRODUCTION
2.     SUMMARY OF FINANCIAL IMPACT
3      BASIS OF PREPARATION
4      KEY IMPACT ANALYSIS
5      RESTATED IFRS CONSOLIDATED STATEMENTS
6      NOTES TO IFRS FINANCIAL INFORMATION
7      FAIR VALUE OF SHARE BASED PAYMENTS
8      OTHER INFORMATION
 
Appendices - Detailed reconciliation of UK GAAP to IFRS
 
 
1.     INTRODUCTION
 
Woolworths Group plc and its subsidiaries (the 'Group') have historically
prepared consolidated financial statements under UK Generally Accepted
Accounting Practice ('UK GAAP'). For the year ending 28 January 2006 the Group
will be required to prepare its financial statements in accordance with
International Financial Reporting Standards ('IFRS'). Accordingly, the Group's
interim results for the 6 month period ending 30 July 2005 will be prepared and
reported under IFRS.
 
 
This document explains how the Group's reported UK GAAP financial results for
the year ended 29 January 2005 and its financial position as at that date would
have been reported under IFRS. It includes:
 
 
  • the Group's consolidated balance sheet at 1 February 2004, the Group's
    date of transition to IFRS (the 'opening' IFRS balance sheet);
 
  • the Group's consolidated income statement for the financial year ended 29
    January 2005;
 
  • the Group's consolidated statement of recognised income and expense for
    the financial year ended 29 January 2005;
 
  • the Group's consolidated balance sheet at 29 January 2005.
 
 
The financial information presented in this document is unaudited.
 
 
Detailed reconciiations to assist the reader in understanding the nature and
size of differences between UK GAAP and IFRS are included in the Appendices.
 
 
 
 
 
 2.      SUMMARY OF FINANCIAL IMPACT:
 
 
The following table summarises the impact of IFRS:-
 
 
 
                          Profit before                    
                       tax, exceptional                               
                              costs and                          
                               goodwill       Profit                              
                           amortisation    after tax            Net assets                        
                                   2005         2005          2005      2004 
                                     £m           £m            £m        £m 
 
  Total reported under 
  UK GAAP                         73.1          2.2          464.8     457.3                                           
 
  Pensions                        (2.4)        (1.7)         (68.2)    (66.1) 
 
  Share based payments            (1.7)        (1.8)           0.9       1.0 
 
  Lease incentives                (1.6)        (1.0)         (14.8)    (13.7) 
 
  Reversal of                      
  dividend accrual                   -            -              -      16.1                                           
 
  Goodwill                     
  amortisation                                                               
  write back                         -          2.9            2.9       3.1                                            
  Joint venture             
  acquisition gain                                                           
  adjustment                         -          2.9           (1.2)        -                                            
 
  Amortisation of            
  intangible assets               (1.0)        (1.0)          (1.0)        -                                            
 
  IAS 12 tax                      
  adjustments                        -         (1.8)         (14.0)    (12.2)                                           
 
  Other                           (0.5)        (0.3)          (0.4)        - 
 
  Total reported                  65.9          0.4          369.0     385.5 
  under IFRS
 
 
3      BASIS OF PREPARATION
 
The financial information presented in this document has been prepared on the
basis of all International Financial Reporting Standards ('IFRS'), including
International Accounting Standards ('IAS') and interpretations issued by the
International Accounting Standards Board ('IASB') and its committees, and as
interpreted by any regulatory bodies applicable to the Group published by 31
December 2004. These are subject to ongoing amendment by the IASB and subsequent
endorsement by the European Commission and are therefore subject to possible
change. Further standards and interpretations may also be issued that will be
applicable for financial years beginning on or after 1 January 2005 or that are
applicable to later accounting periods but may be adopted early. The Group's
first IFRS financial statements may, therefore, be prepared in accordance with
some different accounting policies from the financial information presented
here.
 
In preparing this financial information, the Group has assumed that the European
Commission will endorse the amendment to IAS 19, 'Employee Benefits - Actuarial
Gains and Losses, Group Plans and Disclosures'.
 
On 19 November 2004, the European Commission endorsed an amended version of IAS
39, 'Financial Instruments: Recognition and Measurement' rather than the full
version as previously published by the IASB. In accordance with guidance issued
by the UK Accounting Standards Board, the full version of IAS 39, as issued by
the IASB, will be adopted with effect from 30 January 2005 (being the
commencement of Woolworths 2005/06 financial year).
 
 
3.1.      Presentation of financial information
 
The primary statements within the financial information contained in this
document have been presented in accordance with IAS 1, 'Presentation of
Financial Statements'. It is likely that these formats may be modified going
forward.
 
 
3.2.     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 the
first time as the basis for preparing its consolidated financial statements. The
Group is required to establish its IFRS accounting policies as at 28 January
2006 and, in general, apply these retrospectively to determine the IFRS opening
balance sheet at its date of transition, 1 February 2004.
 
 
This standard provides a number of optional exemptions to this general
principle. Set out below is a description of the significant first time adoption
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 business
combinations that took place before the date of transition.
 
The valuation of the VCI business was reviewed at transition date and no
impairment was found necessary. As a result, goodwill arising from the VCI
business combination at transition remains as stated under UK GAAP at 1
February 2004 (£45.9m).
 
During the year the Group entered into a joint venture with BBC Worldwide to
form 2entertain Limited. The net effect of this transaction was to dispose
of a 60% share of the VCI business in return for a 40% share in the joint
venture. This transaction completed on 27 September 2005. An impairment
review on goodwill was undertaken as at 29 January 2005 and no impairment
was considered necessary.
 
b) Employee Benefits - actuarial gains and losses (IAS 19, 'Employee
   Benefits')
 
The Group has elected to recognise all cumulative actuarial gains and losses
in relation to employee benefit schemes at the date of transition. The Group
has recognised actuarial gains and losses in full in the period in which
they occur in a statement of recognised income and expense in accordance
with the amendment to IAS 19, issued on 16 December 2004.
 
 
c) Valuation of properties (IAS 16, 'Property, plant and equipment')
 
The Group owns few freehold properties and no investment properties. The
Group has elected to treat the revalued amount of operating properties at 1
February 2004 as deemed cost as at that date and will not revalue for
accounts purposes in future. The Group will however provide the current
market values as additional disclosure in the financial statements.
 
 
d) Share-based Payments (IFRS 2, 'Share-based Payment')
 
The Group has not adopted the exemption to apply IFRS 2 only to awards
granted after 7 November 2002. Instead, a full retrospective approach has
been followed on all awards granted but not fully vested at the date of
transition to maintain consistency across reporting periods.
 
 
e) Financial Instruments (IAS 39, 'Financial Instruments: Recognition
   and Measurement' and IAS 32, 'Financial Instruments: Disclosure and
   Presentation')
 
The Group has taken the option to defer the implementation of IAS 32 and
IAS 39 to the financial year ending 28 January 2006. Therefore,
financial instruments will continue to be accounted for and presented in
accordance with UK GAAP for the year ended 29 January 2005. To the
extent that any adjustment is required, this would be in order to
reflect the movements from UK GAAP carrying values to IAS 39 values. It
is the Group's intention to apply hedge accounting where the
requirements of IAS 39 are met.
 
 
 
 
4   KEY IMPACT ANALYSIS
 
The analysis below sets out the most significant adjustments arising from the
transition to IFRS.
 
 
4.1. Presentation of Financial Statements
 
The Group has chosen to account for its joint venture interests in 2entertain
Limited and Flogistics Limited using the proportionate consolidation method
permitted under IAS 31. The Group will continue to account for its associate
investments using the equity accounting method.
 
 
The presentation of the Group's share of the results of joint ventures in the
Group's consolidated income statement will therefore change under IFRS. Under UK
GAAP, the Group's share of joint venture operating profit, interest and tax have
been disclosed separately in the consolidated income statement. In accordance
with IAS 31, the results of joint ventures are presented on a proportionate
basis. There is no net effect on the result for the financial period from this
adjustment.
 
 
Woolworths will continue to disclose material items which by virtue of their
size and significance to the business would previously have been disclosed as
operating exceptional items as permitted by IAS 1 and provide adjusted earnings
per share to assist stakeholders.
 
 
4.2. Intangible Assets
 
a) Goodwill amortisation
 
 
Under IFRS 3, goodwill is no longer amortised on a straight-line basis but is
instead subject to annual impairment testing. Consequently, the goodwill
balances have been reviewed for impairment as at 1 February 2004 and 29
January 2005. No impairment was found to be necessary. The non-amortisation
of positive goodwill increases profits for 2004/05.
 
 
 
b) Amortisation of Intangibles
 
 
IAS 38 requires all separately identifiable brands and intangible assets
acquired to be shown as intangible assets rather than included as goodwill. As a
result, £30.1m of intangibles arising on the acquisition of the Group's share in
2entertain Limited have been reallocated from goodwill. The Group has taken
advantage of the exemption, under IFRS 3, which permits the use of provisional
values for a period of a year from the date of acquisition. These assets are
being written off over ten years and the effect on profit is a £1.0m charge in
2004/05 reflecting the charge since the formation of the joint venture during
the year.
 
 
c) Computer Software
 
 
Under UK GAAP, all capitalised computer software is included within tangible
fixed assets on the balance sheet. Under IFRS, only computer software that
is integral to a related item of hardware should be included as property,
plant and equipment. All other computer software should be recorded as an
intangible asset.
 
 
Accordingly, a reclassification has been made of £29.3m as at 1 February 2004
and of £24.9m in the balance sheet as at 29 January 2005 from property, plant
and equipment to intangible assets. There is no impact on the profit and loss
account from this reclassification.
 
 
4.3. Post Employment Benefits
 
 
The Group currently applies the provisions of SSAP 24 under UK GAAP and
provides detailed disclosure under FRS 17 in accounting for pensions and
other post-employment benefits.
 
 
The Group has elected to undertake the early adoption of the amendment to IAS
19, 'Employee Benefits' issued by the IASB on 16 December 2004 which allows all
actuarial gains and losses to be charged or credited to equity.
 
 
The Group's IFRS balance sheet as at 1 February 2004 reflects the assets and
liabilities of the Group's defined benefit schemes comprising a net liability of
£66.1m. (£94.5m gross deficit before deferred tax at £28.4m - calculated at the
UK corporate tax rate of 30%). The incremental charge arising from the adoption
of IAS 19 on the Group's income statement includes an increased operating charge
of £0.9m and a net financing charge of £1.5m.
 
 
The actuarial loss before tax of £0.6m arising in the year ended 29 January 2005
has been recorded in the statement of recognised income and expense. The net
pension deficit under IFRS at 29 January 2005 is £68.2m (£97.5m gross deficit
before deferred tax of £29.3m.)
 
 
4.4. Deferred and Current Taxes
 
The scope of IAS 12, 'Income Taxes' is wider than the corresponding UK GAAP
standards, and requires deferred tax to be provided on all temporary
differences rather than just taxable timing differences under UK GAAP. As a
result, the Group's IFRS opening balance sheet at 1 February 2004 includes
an additional deferred tax liability of £3.6m in addition to the deferred
tax asset on pensions referred to in note 4.3 above. The majority of this
adjustment relates to the deferred tax provided on held-over and rolled-over
gains partly offset by the lease incentive deferred tax credit. At 29
January 2005, the additional deferred tax liability was £13.9m, which
primarily reflects the impact of the deferred tax liability relating to the
2entertain Limited transaction which was completed during that year.
 
 
'Income tax expense' on the face of the consolidated income statement
comprises the tax charge of Woolworths and its joint ventures under IFRS.
 
 
The tax effect of the IFRS accounting adjustments has been reflected where
appropriate.
 
 
The effective tax rate before exceptional items is 33.5% compared with 30.6%
under UK GAAP.  The increase is as a result of certain adjustments to
profits which have no tax effect and deferred tax being provided on
temporary differences as described above.
 
 
4.5. Share-based Payments
 
IFRS 2, 'Share-based Payment' requires that an expense for equity instruments
granted is recognised in the financial statements based on their fair value
at the date of grant. This expense, which is primarily in relation to
employee option and performance share schemes, is recognised over the
vesting period of the scheme.
 
 
The Group has principally adopted the Black Scholes model for the purposes of
calculating the fair value under IFRS.
 
 
The additional pre-tax charge arising from the adoption of IFRS 2 on the Group's
income statement is £1.7m for the year ended 29 January 2005. The impact from
the adoption of this standard is relatively small going forward as the Group
ceased offering executive share options in 2004 and replaced them with share
awards for which a charge equating to the market value of the deferred shares
has been recognised under UK GAAP.
 
 
4.6. Leases
 
 
a) Capitalisation of building leases
 
 
IAS 17, 'Leases' requires that the building element of leases on land and
buildings is considered separately for the purposes of determining whether
the lease is a finance or operating lease.
 
 
In response to this requirement a review has been undertaken of the Group's
leased property portfolio to assess whether the building element of these leases
could be categorised as finance in nature. Based on this review and the
assessment of the expected useful economic life of the properties at the point
of inception it is considered that the respective building elements are
operating in nature.
 
 
b) Lease incentives
 
 
Under UK GAAP, lease incentives were recognised over the period up to the first
market rent review. Under Standing Interpretations Committee 15, lease
incentives are required to be recognised over the entire lease term.
 
 
As a result, the Group's IFRS opening balance sheet at 1 February 2004 includes
additional deferred income of £19.6m and a reduction in operating profit for the
year ended 29 January 2005 of £1.6m.
 
 
4.7. Post Balance Sheet Events
 
 
IAS 10, 'Events after the Balance Sheet Date' requires that dividends
declared after the balance sheet date should not be recognised as a
liability at that balance sheet date as the liability does not represent a
present obligation as defined by IAS 37, 'Provisions, Contingent Liabilities
and Contingent Assets'.
 
 
The final dividend declared in March 2004 in relation to the financial year
ended 31 January 2004 of £16.1m has been reversed in the opening balance sheet
and charged to equity in the balance sheet as at 29 January 2005. There was no
final dividend accrued for the year ended 29 January 2005.
 
4.8. Other Adjustments
 
The main adjustment relates to foreign currency adjustments under IAS 21 which
requires all foreign currency transactions to be recorded at the rate of
exchange ruling at the date of the transaction, with monetary items retranslated
at period end. Under UK GAAP the Group has used the one-transaction approach
with transactions booked at a relevant contracted rate for the year with any
foreign exchange gains or losses deferred until the related stock is sold. The
impact of this adjustment is to reduce profit by £0.6m in the year 2004/05 with
reductions to stock and creditors of £4.2m and £3.6m respectively.
 
 
 
5. RESTATED IFRS CONSOLIDATED STATEMENTS
 
Group Income Statement
 
For the 52 weeks to 29 January 2005
 
 
 
 
                         2005       2005       2005            2005          
 
                                                           Comprising:       
 
                       (under    Adjust-  (restated  Exceptional       Before
                           UK  ments for      under        items  exceptional
                        GAAP)       IFRS      IFRS)   (Note 6.1)        items 
                                              Total                          
                Note      £m          £m         £m           £m           £m 
 
  Turnover -                                                                 
  Group and                                                                  
  share of                                                                   
  joint                                                                      
  ventures                                                                   
 
  Continuing      
  operations         2,897.1           -    2,897.1            -      2,897.1                                           
 
  Less: share        
  of joint                                                                   
  venture's                                                                  
  turnover            (41.9)        41.9          -            -            -                                           
 
 
  Group          
  turnover           2,855.2        41.9    2,897.1            -      2,897.1                                           
 
 
  Cost of          
  sales             (2,116.5)      (21.8)  (2,138.3)       (17.3)    (2,121.0)        
 
  Gross             
  profit               738.7        20.1      758.8        (17.3)       776.1                                           
 
 
  Selling        
  expenses            (568.8)       (8.3)    (577.1)         0.2       (577.3)                                          
 
       
  Administrative    
  expenses            (177.7)       (4.6)    (182.3)       (43.6)      (138.7)                                          
 
  Other               
  operating                                                                  
  income                15.7         3.3       19.0          2.9         16.1                                           
 
 
  Group           
  operating                                                                  
  profit                 7.9        10.5       18.4       (57.8)         76.2                                           
 
 
  Share of            
  operating                                                                  
  profit in                                                                  
  joint                                                                      
  ventures                                                                   
  after                                                                      
  amortisation                                                               
  of goodwill                                                                
  of £0.9m              10.2       (10.2)         -           -             -                                           
 
 
  Operating             
  profit                                                                     
  including                                                                  
  joint                                                                      
  ventures              18.1         0.3       18.4       (57.8)         76.2                                           
 
 
  Finance             
  income                 3.2           -        3.2            -          3.2                                           
 
 
  Finance            
  costs                (12.0)       (1.5)     (13.5)           -        (13.5)                                          
 
 
  Profit                 
  before                                                                     
  taxation               9.3        (1.2)       8.1        (57.8)        65.9                                           
 
 
  Income tax          
  expense               (7.1)       (0.6)      (7.7)        14.4        (22.1)                                          
 
 
  Profit on           
  ordinary                                                                   
  activities                                                                 
  after                                                                      
  taxation               2.2        (1.8)       0.4        (43.4)        43.8                                           
 
 
 
  Attributable 
  to:                                                                        
 
  Equity               
  holders of                                                                 
  the company            2.0       (1.8)        0.2                                                                     
 
 
  Minority          
  interest               0.2           -        0.2                                                                     
 
 
                         2.2       (1.8)        0.4    
 
  Earnings                                                                
  per share                                                                  
  (pence)       6.2                                                             
 
  Basic                  0.1       (0.1)          -                          
 
  Diluted                0.1       (0.1)          -                          
 
 
 
Group Statement of Recognised Income and Expense 
For the 52 weeks to 29 January 2005  
 
 
                                       2005            2005              2005 
                                  (under UK     Adjustments   (restated under
                                      GAAP)        for IFRS             IFRS) 
                                                                        Total  
                        Note             £m             £m                £m
 
  Profit for the                   
  financial year                        2.2           (1.8)              0.4                              
 
  Gain on formation      
  of joint venture       6.1            4.1           (4.1)                -                                            
 
  Actuarial loss on               
  defined benefit                                                            
  scheme                                  -           (0.6)             (0.6)                                           
 
  Total gains/loss                   
  recognised                            6.3           (6.5)             (0.2)                                         
 
 
 
5. RESTATED IFRS CONSOLIDATED STATEMENTS
 
Group Balance Sheet
 
At 29 January 2005 and 31 January 2004
 
 
                           2005             2005          2005          2004 
                      (under UK      Adjustments     (restated     (restated
                          GAAP)         for IFRS   under IFRS)   under IFRS) 
                             £m               £m            £m            £m 
  Assets                                                                     
 
  Non-current                                                                
  assets                                                                     
 
  Property, plant       
  and equipment           312.1           (24.4)         287.7         294.4                                            
 
 
  Intangible              
  fixed assets             12.0             56.0          68.0          91.1                                            
 
 
  Investments -        
  associates                0.2                -           0.2           0.2                                            
 
 
  - joint            
    ventures -                                                                 
    share of gross                                                             
    assets                 49.2            (49.2)            -             - 
 
  - share of          
    gross                                                                      
    liabilities           (43.5)            43.5             -             -                                            
 
 
  - goodwill               51.2           (19.4)          31.8             - 
 
  Deferred tax       
  asset                       -             29.3          29.3          28.4                                            
 
                          381.2             35.8         417.0         414.1 
 
  Current assets                                                             
 
  Stocks                  371.1             (1.0)        370.1         359.5 
 
  Trade and other      
  receivables             148.8             34.0         182.8         166.9                                            
 
 
  Cash and cash          
  equivalents             208.4              6.8         215.2         155.2 
 
                          728.3             39.8         768.1         681.6 
 
  Total assets          1,109.5             75.6       1,185.1       1,095.7 
 
 
  Equity                                                                     
 
  Called up share       
  capital                 184.6                -         184.6         177.8                                            
 
 
  Other reserves           27.1                -          27.1          27.2 
 
  Retained              
  earnings                253.1            (95.8)        157.3         180.3 
 
                          464.8            (95.8)        369.0         385.3 
 
  Minority                 
  interests                   -                -             -           0.2 
 
  Total equity            464.8           (95.8)         369.0         385.5 
 
  Liabilities                                                                
 
  Non-current                                                                
  liabilities                                                                
 
  Borrowings               99.6                -          99.6          98.5 
 
  Deferred income      
  tax liabilities          20.3             13.9          34.2          27.6 
 
  Retirement                  
  benefit                                                                    
  obligations                 -             97.5          97.5          94.5                                            
 
 
  Provisions for          
  other                                                                      
  liabilities and                                                            
  charges                  25.7             (0.2)         25.5           3.8                                            
 
 
                          145.6             111.2         256.8         224.4 
 
  Current                                                                    
  liabilities                                                                
 
  Trade and other       
  payables                494.1             60.2         554.3         466.0                                            
 
 
  Current income           
  tax liabilities           5.0                -           5.0          16.0                                            
 
 
  Borrowings                  -                -             -           3.8 
 
                          499.1             60.2         559.3         485.8 
 
  Total                   644.7            171.4         816.1         710.2 
  liabilities                                                                
 
  Total equity          1,109.5             75.6       1,185.1       1,095.7
  and liabilities
 
 
                                                         
6.      Notes to IFRS Financial Information
 
6.1 Exceptional items
 
 
                                  2005     2005 Adjustments             2005 
                             (under UK             for IFRS        (restated
                                 GAAP)                            under IFRS) 
                                   £m                    £m               £m 
 
  Stock disposals and          (17.3)                     -           (17.3) 
  store clearance                                                            
 
  Disposal of leases         
  and reconfiguration                                                        
  of the out-of-town                                                         
  estate                       (37.6)                   0.2           (37.4)                                            
 
  Other                         (6.0)                     -            (6.0) 
 
  Gain arising on                   -                   2.9              2.9 
  formation of Joint                                                         
  Venture                                                                    
 
  Total operating              (60.9)                   3.1           (57.8) 
  exceptional items                                                          
 
In March 2004, the Group announced that Woolworths big W as traded from its
existing portfolio did not represent a secure source of long-term profitability.
As a result, a number of stores have been disposed of and in others excess space
has been vacated, cut down or is in the process of being sold and/or vacated.
 
The gain on the formation of the 2entertain joint venture of £4.1m originally
shown in the statement of total recognised gains and losses is now shown as an
exceptional item. The gain has reduced by £1.2m reflecting Woolworths share of
the impact of re-crediting the 2004/5 amortisation charge for goodwill on the
VCI business.
 
 
 
 
6.2 Adjusted earnings per share
 
                                                              2005     2005 
 
                                                 Weighted  Restated    Under
                                                  average     under       UK
                                                               IFRS     GAAP 
                                                   number       Per      Per
                                                       of     share    share  
               Earnings  Adjustments   Earnings    shares    Amount   Amount 
                            for IFRS                                         
                     £m           £m         £m         m     Pence    Pence 
  Basic                                                                      
  earnings                                                                   
  per share                                                                  
 
  Earnings          
  attributable                                                               
  to ordinary                                                                
  shareholders      2.0        (1.8)        0.2   1,406.1         -      0.1                                            
 
                                                                             
  Effect of                                                             
  dilutive                                                                   
  share                                                                      
  options                                            19.3 
 
  Diluted           
  earnings                                                                   
  per share         2.0        (1.8)        0.2   1,425.4         -      0.1                                            
 
 
  Supplementary                                                              
  earnings                                                                 
  per share                                                                  
 
  Basic                                                                      
  earnings                                                                   
  per share         2.0        (1.8)        0.2   1,406.1         -      0.1                                            
 
 
  Effect of       
  exceptional                                                                
  items            60.9        (3.1)       57.8         -       4.1      4.3 
 
  Tax impact     
  arising on                                                                 
  exceptional                                                                
  items           (14.4)          -       (14.4)        -      (1.0)    (1.0)                                           
 
 
  Basic           
  earnings                                                                   
  per share                                                                  
  before                                                                     
  exceptional                                                                
  items            48.5        (4.9)       43.6   1,406.1       3.1      3.4                                            
 
 
  Amortisation      
  of                                                                         
  acquisition                                                                
  goodwill          2.9        (2.9)          -         -         -      0.2 
 
  Basic -        
  adjusted                                                                   
  earnings                                                                   
  per share        51.4        (7.8)       43.6   1,406.1       3.1      3.6 
 
  Diluted        
  earnings          
  per share         2.0        (1.8)        0.2   1.425.4         -      0.1                                            
 
 
  Effect of       
  exceptional                                                                
  items            60.9        (3.1)       57.8         -       4.1      4.3 
 
  Tax impact     
  arising on                                                                 
  exceptional                                                                
  items           (14.4)          -       (14.4)        -      (1.0)    (1.0)                       
 
  Diluted         
  earnings                                                                   
  per share                                                                  
  before                                                                     
  exceptional                                                                
  items            48.5        (4.9)       43.6   1,425.4       3.1      3.4                                            
 
  Amortisation   
  of                                                                         
  acquisition                                                                
  goodwill          2.9        (2.9)          -         -         -      0.2                                            
 
 
  Diluted -        
  adjusted                                                                   
  earnings                                                                   
  per share        51.4        (7.8)       43.6   1,425.4       3.1      3.6                                            
 
 
 
 
7.     Fair Value of Share based Payments
 
As required by IFRS 2 the fair value of grants made before 7 November 2002 that
impact the Group 2004/05 profit and loss account are shown below
 
 
 
  Grant date         Description           Vesting period       Fair value of    
                                                                individual award 
                                                                at grant date    
                                                                (pence per       
                                                                share)
 
  26 September       Executive Share       3.5 years            8.0        
  2001               Option       
 
  24 April 2002      Executive Share       3 years              11.8       
                     Option                                                  
 
  11 September       Executive Share       3 years              7.2        
  2002               Option                                                  
 
  6 June 2002        Sharesave Option      3.11 years           11.8     
 
 
 
 
 
8.      Other information
 
The enclosed financial information is derived from the full Group Financial
Statements for the 52 weeks ended 29 January 2005 and does not constitute the
full statutory statements of Woolworths Group plc within the meaning of section
240 of the Companies Act 1985 (as amended).
 
 
 
 
 
 
APPENDICES
 
CONSOLIDATED INCOME STATEMENT
For the 52 weeks to 29 January 2005
 
                 Repor-     Joint      IAS   IFRS      IAS     SIC    IFRS    IAS      Gain   Other   Restated
                    ted   venture       19      3       38      15       2     12        on     (FX      under
                  under  proport- Employee  Busi-  Amorti-   Lease   Share  Taxa-    forma-     and       IFRS
                     UK    ionate    bene-   ness   sation  incen-   based   tion      tion holiday 
                   GAAP  consoli-     fits   com-   charge   tives    pay-               of    pay)
                          dation            bina-       on           ments            joint
                                            tions   intan-                          venture
                                                    gibles
                     £m       £m       £m      £m       £m      £m      £m     £m        £m      £m         £m
 
Revenue         2,855.2     41.9                                                                       2,897.1
 
Cost of        (2,116.5)   (21.8)                                                                     (2,138.3)
sales
 
Gross profit      738.7     20.1                                                                         758.8
 
Selling          (568.8)    (6.5)    (0.4)                    (1.4)             -                       (577.1)
costs
 
Administrative   (177.7)    (3.8)    (0.5)    2.9     (1.0)           (1.7)     -              (0.5)    (182.3)
expenses
 
Other              15.7      0.4                                                -       2.9               19.0
operating
income
 
Group               7.9     10.2     (0.9)    2.9     (1.0)   (1.4)   (1.7)     -       2.9    (0.5)      18.4
operating
profit
 
Share of           10.2    (10.2)                                               -                            -
operating
profit in
joint
ventures
 
Operating          18.1        -     (0.9)    2.9     (1.0)   (1.4)   (1.7)     -       2.9    (0.5)      18.4
profit
including
joint
ventures
 
Finance             3.2                                                                                    3.2
income
 
Finance           (12.0)       -     (1.5)      -        -       -       -      -         -       -      (13.5)
costs
 
Profit before       9.3        -     (2.4)    2.9     (1.0)   (1.4)   (1.7)     -       2.9    (0.5)       8.1
taxation
 
Tax on profit      (7.1)       -      0.7       -        -     0.4    (0.1)  (1.8)        -     0.2       (7.7)
on ordinary
activities
 
Profit after        2.2        -     (1.7)    2.9     (1.0)   (1.0)   (1.8)  (1.8)      2.9    (0.3)       0.4
taxation
 
 
 
CONSOLIDATED BALANCE SHEET
As at 1 February 2004
 
               Repor-  Reallo-      IFRS      IAS Proport-    IFRS     IAS      SIC  Other  Restated
                  ted   cation         3       19   ionate       2      12       15   (FX,     under
                under       to     Busi- Employee consoli-   Share   Taxa-    Lease  divi-      IFRS
                   UK   intan-      ness    bene-   dation   based    tion   incen-  dend,      
                 GAAP    gible    combi-     fits       of    pay-            tives  holi-
                        assets   nations                JV   ments                     day
                                                                                      pay)
                   £m       £m        £m       £m       £m      £m      £m      £m      £m        £m
Non-current
assets
 
Property,       323.7    (29.3)                                                                294.4
plant and
equipment
 
Intangible       58.7     29.3       3.1                                                        91.1
fixed
assets
 
Investments -     0.2                                                                            0.2
associates
 
Joint            12.0                                (12.0)                                        -
ventures
- share of
gross
assets
- share of      (12.0)                                12.0                                         -
gross
liabilities
 
Deferred tax        -                        28.4                                               28.4
asset
 
                382.6                3.1     28.4                                              414.1
 
Current
assets
 
Stocks          363.4                                  0.1                            (4.0)    359.5
 
Trade and       166.3                                  0.6                                     166.9
other
receivables
 
Cash and cash   155.2                                                                          155.2
equivalents
 
                684.9                                  0.7                            (4.0)    681.6
 
Total         1,067.5        -       3.1     28.4      0.7       -       -       -    (4.0)  1,095.7
assets
 
Equity
 
Called up       177.8                                                                          177.8
share
capital
 
Other            27.2                                                                           27.2
reserves
 
Retained        252.1                3.1    (66.1)             1.0   (12.2)  (13.7)   16.1     180.3
earnings
 
                457.1                3.1    (66.1)             1.0   (12.2)  (13.7)   16.1     385.3
 
Minority          0.2                                            -                               0.2
interests
 
Total           457.3                3.1    (66.1)             1.0   (12.2)  (13.7)   16.1     385.5
equity
 
 
Liabilities
 
Non-current
liabilities
 
Borrowings       98.5                                                                           98.5
 
Deferred         24.0                                         (1.0)   12.2    (5.9)   (1.7)     27.6
income tax
liabilities
 
Retirement          -                        94.5                                               94.5
benefit
obligations
 
Provisions        3.8                                                                            3.8
for other
liabilities
and charges
 
                126.3                        94.5             (1.0)   12.2    (5.9)   (1.7)    224.4
 
Current
liabilities
 
Trade and       464.1                                  0.7                    19.6   (18.4)    466.0
other
payables
 
Current          16.0                                                                           16.0
income tax
liabilities
 
Borrowings        3.8                                                                            3.8
 
                483.9                                  0.7                    19.6   (18.4)    485.8
 
Total           610.2                        94.5      0.7    (1.0)   12.2    13.7   (18.4)    710.2
liabilities
 
Total equity  1,067.5        -       3.1     28.4      0.7       -       -       -    (4.0)  1,095.7
and
liabilities
 
 
CONSOLIDATED BALANCE SHEET
As at 29 January 2005
 
               Repor-  Reallo-     IFRS        IAS Proport-    IFRS     IAS     SIC    Other Restated
                  ted   cation        3         19   ionate       2      12      15     (FX,    under
                under       to    Busi-   Employee consoli-   Share   Taxa-   Lease holiday      IFRS
                   UK   intan-     ness   benefits   dation   based    tion  incen-    pay)      
                 GAAP    gible   combi-                  of    pay-           tives
                        assets   nation                  JV   ments
                   £m       £m       £m         £m       £m      £m      £m      £m      £m        £m
Non-current
assets
 
Property,       312.1    (24.9)                         0.5                                     287.7
plant and
equipment
 
Intangible       12.0     54.0                          2.0                                      68.0
fixed
assets
 
Investments -     0.2                                                                             0.2
associates
 
Joint            49.2                                 (49.2)                                        -
ventures
- share of
gross
assets
- share of      (43.5)                                 43.5                                         -
gross
liabilities
- goodwill       51.2    (30.1)    10.7                                                          31.8
 
Deferred tax        -                         29.3                                               29.3
asset
 
                381.2     (1.0)    10.7       29.3     (3.2)                                    417.0
 
Current
assets
 
Stocks          371.1                                   3.2                            (4.2)    370.1
 
Trade and       148.8                                  34.0                                     182.8
other
receivables
 
Cash and cash   208.4                                   6.8                                     215.2
equivalents
 
                728.3                                  44.0                            (4.2)    768.1
 
Total         1,109.5     (1.0)    10.7       29.3     40.8       -       -       -    (4.2)  1,185.1
assets
 
Equity
 
Called up       184.6                                                                           184.6
share
capital
 
Other            27.1                                                                            27.1
reserves
 
Retained        253.1     (1.0)     1.7      (68.2)             0.9   (14.0)  (14.8)   (0.4)    157.3
earnings
 
Total           464.8     (1.0)     1.7      (68.2)             0.9   (14.0)  (14.8)   (0.4)    369.0
Equity
 
Liabilities
 
Non-current
liabilities
 
Borrowings       99.6                                                                            99.6
 
Deferred         20.3               9.0                        (0.9)   14.0    (6.4)   (1.8)     34.2
income tax
liabilities
 
Retirement          -                         97.5                                               97.5
benefit
obligations
 
Provisions       25.7                                  (0.2)                                     25.5
for other
liabilities
and charges
 
                145.6               9.0       97.5     (0.2)   (0.9)   14.0    (6.4)   (1.8)    256.8
 
Current
liabilities
 
Trade and       494.1                                  41.0                    21.2    (2.0)    554.3
other
payables
 
Current           5.0                                                                             5.0
income tax
liabilities
 
                499.1                                  41.0                    21.2    (2.0)    559.3
 
 
Total           644.7               9.0       97.5     40.8    (0.9)   14.0    14.8    (3.8)    816.1
liabilities
 
Total equity  1,109.5     (1.0)    10.7       29.3     40.8       -       -       -    (4.2)  1,185.1
and
liabilities