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Company balance sheet
32. Company balance sheet
| 3 February 2007 £m |
28 January 2006 £m |
Notes | |
|---|---|---|---|
| Fixed assets: | |||
| Tangible assets | – | 74.9 | 32(c) |
| Investments | 766.8 | 766.8 | 32(k) |
| 766.8 | 841.7 | ||
| Current assets | |||
| Debtors | 827.6 | 541.3 | 32(d) |
| Cash at bank and in hand | 55.8 | 21.9 | 32(e) |
| 883.4 | 563.2 | ||
| Creditors: amounts falling due within one year | (624.2) | (595.4) | 32(f) |
| Net current assets/(liabilities) | 259.2 | (32.2) | |
| Total assets less current liabilities | 1,026.0 | 809.5 | |
| Creditors: amounts falling due after more than one year | (192.9) | (2.1) | 32(g) |
| Net assets | 833.1 | 807.4 | |
| Equity: | |||
| Capital and reserves | |||
| Share capital | 8.6 | 8.7 | 22 |
| Share premium | 77.0 | 71.7 | 32(h) |
| Capital redemption reserve | 0.1 | – | 32(h) |
| Special reserve | 565.1 | 565.1 | 32(h) |
| Retained earnings | 182.3 | 161.9 | 32(h) |
| Shareholders' funds | 833.1 | 807.4 | |
These accounts were approved by the Board of Directors on 18 April 2007, and were signed on its behalf by:
Terry Burman Director
Walker Boyd Director
(a) Principal accounting policies
The Company accounts of Signet Group plc are prepared in accordance with generally accepted accounting principles in the UK ("UK GAAP"). The following accounting policies are applied consistently in dealing with items which are considered material in relation to the accounts of the Company.
(i) Basis of preparation
The Company accounts have been prepared in accordance with applicable UK law and accounting standards and under the historical cost convention except for derivative financial instruments which are stated at fair value.
In accordance with section 230 of the Companies Act 1985, the Company is exempt from the requirement to present its own profit and loss account.
(ii) Foreign currency translation
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the balance sheet date and the gains or losses on translation are included in the profit and loss account.
The company has taken the exemptions granted by paragraph 3(c) of FRS 8 'related party disclosures', not to disclose transactions with companies within the Group.
(iii) Depreciation and amortisation
Premiums paid and incentives received in order to acquire short leasehold properties are amortised over the lease term. Provision is made for future net lease obligations in respect of onerous leases of vacant, partially vacant or sublet properties. Depreciation on other fixed assets is provided on a straight line basis at the following annual rates:
Plant, machinery and vehicles
- 10%, 20%, 33⅓%,
Shopfronts, fixtures and fittings
- rates up to 33⅓%,
During the year the Company's fixed assets were sold to other Group companies at their net book value.
Where the renewal of a lease is reasonably assured, the depreciation period for shopfronts, fixtures and fittings may exceed the remaining lease term.
Where appropriate, provision is made on assets that have a recoverable amount less than book value. Potentially impaired assets are identified by reviewing the cash contribution of individual stores where trading since the initial opening of the store has reached a mature stage. Where such stores deliver a low or negative cash contribution, the related store assets are considered for impairment by reference to the higher of net realisable value and value in use. Additionally, provision is made against tangible fixed assets relating to stores planned for closure.
(iv) Shares in subsidiary undertakings
Shares in subsidiary undertakings are stated at cost, less amounts written off for any impairment in value.
(v) Taxation
The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes. Deferred tax is recognised in respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS 19.
(vi) Employee benefits
The Company participates in a defined benefit pension scheme ("the Group Scheme") in the UK which ceased to admit new employees from April 2004. The Group Scheme, covering two of the executive directors and participating eligible employees in the UK, provides benefits based on members' salaries at retirement. The Group Scheme's assets are held by the trustees and are completely separate from those of the Group.
The Company is unable to identify its share of underlying assets and liabilities of the Group Scheme on a consistent and reasonable basis and therefore, as required by FRS 17 'Retirement benefits', accounts for these as if it were a defined contribution scheme. As a result, the amount charged to the profit and loss account represents the contributions payable to the Group Scheme in respect of the accounting period. For details of the Group Scheme see note 21.
Where appropriate, supplementary pensions and life assurance benefits for UK directors and senior executives were until 5 April 2006 provided through the Signet Group Funded Unapproved Retirement Benefits Scheme ("FURBS") and were charged to the profit and loss account as incurred. The FURBS has now been closed and in substitution a supplement of the same amount is now paid directly to the members.
The parent company has issued shares to employees to satisfy the exercise of employee share options. Full details of shares issued to the ESOT and employees are disclosed in note 22. No share options have been granted by the Company to its directors, with all grants being made though subsidiary companies.
(vii) Financial instruments
Changes in the fair value of financial instruments that are designated and effective as hedges of future cash flows are recognised directly in equity. Any ineffective portion of the gain or loss is recognised immediately in the profit and loss account. For cash flow hedges that result in the recognition of a non-financial asset or liability, amounts previously deferred in equity are included in the measurement of the asset or liability. For cash flow hedges that result in the recognition of a financial asset or liability, amounts previously recognised in equity are recognised in the profit and loss account in the same period in which the hedged item affects net profit or loss. The Company applies the hedge accounting provisions of FRS 26 'Financial instruments' as they relate to forward currency and commodity contracts in order to minimise future volatility.
Derivative financial instruments are recognised at fair value. The gain or loss on remeasurement to fair value is recognised immediately in the profit and loss account. However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends upon the nature of the item being hedged.
(viii) Cash at bank and in hand
Cash at bank and in hand includes money market deposits and amounts placed with external fund managers with an original maturity of three months or less, and are carried at cost which approximates to fair value. For the purpose of these financial statements, bank overdrafts are included in 'Creditors: amounts falling due within one year'.
(ix) Borrowings
Borrowings comprise interest bearing bank loans, private placement loan notes and bank overdrafts and are recorded at the proceeds received net of any transaction costs incurred. Interest bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the profit and loss account over the period of the borrowings on an effective interest basis.
(x) Share capital
When new shares are issued, they are recorded in share capital at their par value. The excess of the issue price over the par value is recorded in the share premium reserve.
The cost of own shares purchased to satisfy the exercise of employee share options is charged to total equity and the proceeds of their reissue are credited to total equity.
(xi) Dividends
Dividends are only provided for in the period in which they are formally approved.
(b) Profit for the financial period
The profit attributable to shareholders dealt with in the accounts of the Company is £110.1 million (2006: £52.1 million). The profit is stated after foreign exchange losses of £3.2 million (2006: £0.5 million gains).
Audit and non-audit fees are disclosed in note 3. Details of directors' remuneration are given in the Directors' remuneration report. The Company has no employees.
(c) Tangible fixed assets
| Short leasehold land and buildings £m |
Plant, machinery and vehicles £m |
Shopfronts, fixtures and fittings £m |
Total £m |
||||
|---|---|---|---|---|---|---|---|
| Cost: | |||||||
| At 28 January 2006 | 5.9 | 14.8 | 101.4 | 122.1 | |||
| Additions | 0.1 | 3.0 | 5.7 | 8.8 | |||
| Disposals | (6.0) | (17.8) | (107.1) | (130.9) | |||
| At 3 February 2007 | – | – | – | – | |||
| Depreciation: | |||||||
| At 28 January 2006 | 3.7 | 7.0 | 36.5 | 47.2 | |||
| Charged in the period | 0.2 | 2.3 | 12.2 | 14.7 | |||
| Disposals | (3.9) | (9.3) | (48.7) | (61.9) | |||
| At 3 February 2007 | – | – | – | – | |||
| Net book value: | |||||||
| At 3 February 2007 | – | – | – | – | |||
| At 28 January 2006 | 2.2 | 7.8 | 64.9 | 74.9 | |||
During the year all of the Company's fixed assets were sold to other Group companies.
(d) Debtors
| 2007 £m |
2006 £m |
|
|---|---|---|
| Debtors recoverable within one year – amounts owed by subsidiary undertakings | 823.4 | 539.3 |
| Derivative fair values | 4.2 | 2.0 |
| 827.6 | 541.3 | |
(e) Cash at bank and in hand
| 2007 £m |
2006 £m |
|
|---|---|---|
| Bank deposits | 55.8 | 21.9 |
(f) Creditors: amounts falling due within one year
| 2007 £m |
2006 £m |
|
|---|---|---|
| Bank overdrafts | 7.9 | 17.4 |
| Amounts owed to subsidiary undertakings | 605.7 | 570.5 |
| Derivative fair values | 0.4 | – |
| Corporation tax | 6.6 | 5.4 |
| Accruals and deferred income | 3.6 | 2.1 |
| 624.2 | 595.4 | |
The number of days' purchases outstanding at 3 February 2007 was nil.
(g) Creditors: amounts falling due after more than one year
| 2007 £m |
2006 £m |
|
|---|---|---|
| US Private Placement | 192.9 | – |
| Deferred taxation | – | 2.1 |
| 192.9 | 2.1 | |
| Details of the Private Placement are given in note 18. | ||
(h) Reserves
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(i) Commitments
The Company does not occupy any property or hold any plant, machinery and vehicles under operating leases.
| Capital commitments at 3 February 2007 for which no provision has been made in these accounts were as follows: | ||
|---|---|---|
| 2007 £m |
2006 £m |
|
| Contracted | – | 1.1 |
(j) Contingent liabilities
The Company is not party to any legal proceedings considered to be material to its profit, financial position or cash flow including any bankruptcy, receivership or similar proceedings involving the Company or any of its significant subsidiaries. No director, officer or affiliate of the Company or any associate of any such director, officer or affiliate has been a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.
The Company has assigned or sub-let UK property leases in the normal course of business. Should the assignees or sub-tenants fail to fulfil any obligations in respect of these leases, the Company may be liable for those defaults. The number of such claims arising to date has been small and the liability, which is charged to the profit and loss account as it arises, has not been material.
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within the Group, the Company considers these to be insurance arrangements, and accounts for them as such. In this respect, the Company treats the guarantee contract as a contingent liability until such time as it becomes probable that the Company will be required to make a payment under the guarantee.
(k) Investments
| Shares in subsidiary undertakings £m |
|
|---|---|
| Cost at 3 February 2007 and 28 January 2006 | 766.8 |
| A list of the principal subsidiaries is given in note 29. | |