FRS 102 LIMITED
Example Financial Statements
For the year ended 31 December 2015
Introduction
These illustrative financial statements are an example of a group and parent company financial statements
prepared for the first time in accordance with FRS 102 The Financial Reporting Standard applicable in
the UK and Republic of Ireland. Their preparation involved striking a balance between helpful guidance
and burdensome detail. The disclosures illustrated, therefore, do not include all possible disclosures as
this would clearly make any guidance too unwieldy to be of wide, practical use. For this reason they
should not be used as a substitute for completing a disclosure checklist.
Whilst every care has been taken in their preparation, users are advised to use these financial statements
as a guide in conjunction with the actual text of the standard and implementation guidance issued,
together with relevant legislation, and to consult their professional advisers before concluding on
accounting treatments and disclosures for their own transactions and circumstances.
To assist the user further, disclosure requirements introduced by FRS 102 or areas of difference in
comparison to existing UK GAAP have been highlighted. Furthermore, two appendices have been
included to illustrate a:
 Statement of Comprehensive Income presented as one statement instead of two (as permitted by
FRS 102.5.2(a))
 Statement of Income and Retained Earnings (as permitted by FRS 102.6.4 in certain circumstances).
In addition, source references for the illustrative disclosures have been included in the right hand margin
of the financial statements. Examples of source references used are:
4.14
s408
Sch 1.66(1)
Conversion report page 13
FRC Guidance
SI 2008/489
Tech 14/13
Paragraph 4.14 of FRS 102
Section 408 of the Companies Act 2006
Paragraph 66(1) of Schedule 1 to Statutory Instrument 2008,
Number 410 The Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations 2008
Grant Thornton guidance 'Key Issues on Conversion to FRS 102'
page 13
FRC guidance on Going Concern and Liquidity Risk for
Directors of UK Companies 2009
The Companies (Disclosure of Auditor Remuneration and
Liability Limitation Agreements) Regulations 2008
ICAEW Guidance: Disclosure of auditor remuneration
© 2014 Grant Thornton UK LLP. All rights reserved
FRS 102 LIMITED
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2015
Note
2015
£'000
2014
£'000
5
xxxx
xxxx
Cost of sales
xxxx
xxxx
Gross profit
xxxx
xxxx
Administrative expenses
Other operating income
xxxx
xxxx
xxxx
xxxx
Operating profit
xxxx
xxxx
5.9B
Share of operating profits of associates
xxxx
xxxx
14.14
xxxx
xxxx
Interest receivable and similar income
xxxx
xxxx 23.30(b)(iii)
Interest payable and similar charges
xxxx
xxxx
Turnover
5.7C
11.48(b)
Profit on ordinary activities before taxation
6
xxxx
xxxx
Tax on profit on ordinary activities
8
xxxx
xxxx
Profit for the financial year
xxxx
xxxx
Profit for the financial year attributable to:
Owners of the parent
xxxx
xxxx
Non-controlling interests
xxxx
xxxx
11.48(b)
Sch 1.66(1)
5.6(a)
Sch 6.17(3)
9.21
* The Balance Sheet and Profit and Loss Account are still required to be presented
in accordance with the Companies Act formats. The titles of these primary
statements could be changed to the FRS 102 titles, ie Statement of Financial
Position and Income Statement, or continue to use the Companies Act format titles,
ie Balance Sheet and Profit and Loss Account.
* A company may present a separate Income Statement and Statement of
Comprehensive Income (see page 2), or combine the two into a single Statement of
Comprehensive Income (see appendix for illustration of one-statement approach).
[Refer to conversion report page 13&14]
© 2014 Grant Thornton UK LLP. All rights reserved
1
FRS 102 LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2015
2015
£'000
2014
£'000
xxxx
xxxx
Total comprehensive income for the financial year
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Total comprehensive income for the financial year attributable
to:
Owners of the parent
Non-controlling interests
xxxx
xxxx
xxxx
xxxx
Profit for the financial year
Currency translation differences on foreign currency net
investments
Share of other comprehensive income of associates
5.5A
30.25(b)
5.6(b)
* The Statement of Comprehensive Income is essentially equivalent to the
Statement of Total Recognised Gains and Losses ('STRGL') under current UK
GAAP. However, the STRGL only presents the parent company's share of profits
and other gains and losses, whereas a the Statement of Comprehensive Income
includes the non-controlling interests share of profit and other gains and losses.
* Disclosure of the allocation of profits and total comprehensive income between
owners of the parent and any non-controlling interests is required.
[Refer to conversion report page 13&14]
© 2014 Grant Thornton UK LLP. All rights reserved
2
FRS 102 LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2015
Note
2015
£'000
2014
£'000
10
11
12
Current assets
Stocks
Debtors
Cash at bank and in hand
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
13
14
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Creditors: amounts falling due within one year
15
xxxx
xxxx
Net current assets
xxxx
xxxx
Total assets less current liabilities
xxxx
xxxx
Fixed assets
Intangible assets
Tangible assets
Investments
Creditors: amounts falling due after more than one year
16
xxxx
xxxx
Provisions for liabilities
17
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Net assets
Capital and reserves
Called up share capital
Share premium account
Foreign exchange translation reserve
Profit and loss account
19
20
20
20
Non-controlling interests
The financial statements were approved by the Board of Directors on
Signed on behalf of the board of directors:
2016.
Chairman
Company registration no: XXXXXX
* FRS 102 has adopted a variety of terminology from IFRS (such as property, plant
& equipment for tangible assets, inventory for stocks, and current liabilities for
creditors: amounts falling due within one year). UK companies will still need to
comply with company law, which stipulates the format of, and headings to be used
in, the Balance Sheet and Profit and Loss Account.
[Refer to conversion report page 13]
© 2014 Grant Thornton UK LLP. All rights reserved
3
FRS 102 LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 December 2015
Note
2015
£'000
2014
£'000
11
12
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Current assets
Stocks
Debtors
Cash at bank and in hand
13
14
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Creditors: amounts falling due within one year
15
xxxx
xxxx
Net current assets
xxxx
xxxx
Total assets less current liabilities
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Fixed assets
Tangible assets
Investments
Provisions for liabilities
17
Net assets
Capital and reserves
Called up share capital
Share premium account
Profit and loss account
19
20
20
The financial statements were approved by the Board of Directors on
Signed on behalf of the board of directors:
2016.
Chairman
Company registration no: XXXXXX
© 2014 Grant Thornton UK LLP. All rights reserved
4
FRS 102 LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
For year ended 31 December 2015
2015
£'000
2014
£'000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Net cash generated from operating activities
xxxx
xxxx
Cash flows from investing activities
Proceeds from sale of tangible assets
Purchases of tangible assets
Purchases of intangible assets
Interest received
Net cash from investing activities
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Cash flows from operating activities
Profit for the financial year
Adjustments for:
Amortisation of intangible assets
Depreciation of tangible assets
Interest paid
Interest received
Taxation
Decrease/(increase) in trade and other debtors
Decrease/(increase) in stocks
Increase/(decrease) in trade creditors
Cash from operations
Income taxes paid
7.4
7.5
7.15
7.6
Cash flows from financing activities
Issue of ordinary share capital
Repayment of bank loans
Repayment of finance lease obligations
Interest paid
Dividends paid
Net cash used in financing activities
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Net increase in cash and cash equivalents
xxxx
xxxx
Foreign exchange translation adjustment
Cash and cash equivalents at the beginning of year
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Cash and cash equivalents at end of year
7.8
7.15
7.16
7.13
* Cash flows are presented under just three headings (operating, investing and
financing), rather than the potential nine available under current UK GAAP.
* Components of cash and cash equivalents to be disclosed and reconciled to the
Statement of Financial Position. However, this is not required if the amount of cash
and cash equivalents is identical to the amount similarly described in the Statement
of Financial Position.
[Refer to conversion report page 16&17]
© 2014 Grant Thornton UK LLP. All rights reserved
5
FRS 102 LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2015
Calledup share
capital
Share
premium
account
£ '000
£ '000
Foreign
exchange
translation
reserve
£ '000
Profit and
Amount
loss
attributable
account to owners of
the parent
£ '000
£ '000
Noncontrolling
interests
Total
£ '000
£ '000
At 1 January
2014
Profit for the
year
Other
comprehensive
income
Foreign
exchange
translation
difference
Share of other
comprehensive
income of
associates
Total
comprehensive
income for the
year
Issue of shares
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
-
-
-
xxxx
xxxx
xxxx
xxxx
-
-
xxxx
xxxx
xxxx
xxxx
xxxx
-
-
xxxx
-
xxxx
xxxx
xxxx
-
-
-
xxxx
xxxx
-
xxxx
-
-
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
-
-
xxxx
-
xxxx
Dividends paid
-
-
-
xxxx
xxxx
-
xxxx
At 31
December
2014
Profit for the
year
Other
comprehensive
income
Foreign
exchange
translation
difference
Share of other
comprehensive
income of
associates
Total
comprehensive
income for the
year
Issue of shares
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
-
-
-
xxxx
xxxx
xxxx
xxxx
6.3(c)(i)
-
-
xxxx
xxxx
xxxx
xxxx
xxxx
6.3(c)(ii)
-
-
xxxx
-
xxxx
xxxx
xxxx
6.3A
-
-
-
xxxx
xxxx
-
xxxx
-
-
xxxx
xxxx
xxxx
xxxx
xxxx
6.3(a)
xxxx
xxxx
-
-
xxxx
-
xxxx
6.3(c)(iii)
Dividends paid
-
-
-
xxxx
xxxx
-
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
At 31
December
2015
© 2014 Grant Thornton UK LLP. All rights reserved
6
FRS 102 LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
For year ended 31 December 2015
Called-up
share
capital
£ '000
Share
premium
account
£ '000
Profit and
loss account
£ '000
Total
£ '000
At 1 January
2014
Profit and total
comprehensive
income for the
year
Issue of shares
Dividends paid
xxxx
xxxx
xxxx
xxxx
-
-
xxxx
xxxx
xxxx
-
xxxx
-
xxxx
xxxx
-
At 31
December
2014
Profit and total
comprehensive
income for the
year
Issue of shares
Dividends paid
xxxx
xxxx
xxxx
xxxx
-
-
xxxx
xxxx
xxxx
-
xxxx
-
xxxx
xxxx
-
At 31
December
2015
xxxx
xxxx
xxxx
xxxx
* A Statement of Changes in Equity is required, although a company is permitted
to present a Statement of Income and Retained Earnings in place of a Statement of
Comprehensive Income and a Statement of Changes in Equity if the only changes
to its equity during the periods presented arise from profit or loss, payment of
dividends and prior period adjustments (see appendix for illustration of the
Statement of Income and Retained Earnings).
* The Companies Act 2006 Section 408 exemption will still be available. This
means that the Statement of Comprehensive Income (whether presented as one
statement or two) is not required for the parent's individual accounts. However the
exemption does not extend to the parent company's Statement of Changes in
Equity, which will be required.
[Refer to conversion report page 15]
© 2014 Grant Thornton UK LLP. All rights reserved
7
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
1
Company information
[The legal form of the entity, its country of incorporation and the address of its
registered office (or principal place of business, if different from the registered office) is
required to be disclosed in the notes.]
3.24(a)
[Disclosure of an entity's principal activities and nature of operations is required (despite
no longer being a disclosure requirement in the directors' report following changes to
company law). If, however, an entity does disclose this information elsewhere in their
annual report, then it need not be repeated here. ]
3.24(b)
2
Basis of preparation
These financial statements have been prepared in accordance with applicable United
Kingdom accounting standards, including Financial Reporting Standard 102 – 'The
Financial Reporting Standard applicable in the United Kingdom and Republic of
Ireland' ('FRS 102'), and with the Companies Act 2006. The financial statements have
been prepared on the historical cost basis except for the modification to a fair value
basis for certain financial instruments as specified in the accounting policies below.
3.3
8.2(a)
This is the first year in which the financial statements have been prepared under FRS
102. Refer to note 26 for an explanation of the transition.
The financial statements are presented in Sterling (£).
3.23(d)
30.26
The group financial statements consolidate the financial statements of FRS 102 Limited
and all its subsidiary undertakings drawn up to 31 December each year.
3.23(b)
9.23(a)
The parent company has taken advantage of section 408 of the Companies Act 2006
and has not included its own Profit and Loss Account in these financial statements.
The parent company's profit for the year was £xxxx (2014: £xxxx).
s408
The individual accounts of FRS 102 Limited have also adopted the following disclosure
exemptions:
- the requirement to present a statement of cash flows and related notes
- financial instrument disclosures, including:
 categories of financial instruments,
 items of income, expenses, gains or losses relating to financial instruments,
and
 exposure to and management of financial risks.
1.11(c)(i)
Going concern
After reviewing the group's forecasts and projections, the directors have a reasonable
expectation that the group has adequate resources to continue in operational existence
for the foreseeable future. The group therefore continues to adopt the going concern
basis in preparing its consolidated financial statements.
3.8&9
FRC
Guidance
© 2014 Grant Thornton UK LLP. All rights reserved
8
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
3
Significant judgements and estimates
Preparation of the financial statements requires management to make significant
judgements and estimates. The items in the financial statements where these judgments
and estimates have been made include:
[An entity shall disclose the judgements, apart from those involving estimations, that
management has made in the process of applying the entity’s accounting policies and
that have the most significant effect on the amounts recognised in the financial
statements.]
8.6
[An entity shall disclose in the notes information about the key assumptions concerning
the future, and other key sources of estimation uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year. In respect of those assets and liabilities, the
notes shall include details of:
(a) their nature; and
(b) their carrying amount as at the end of the reporting period.]
8.7
4
Principal accounting policies
4.1 Business combinations
Acquisitions of subsidiaries and businesses are accounted for using the purchase
method. The cost of the business combination is measured at the aggregate of the fair
values (at the date of exchange) of assets given, liabilities incurred or assumed, and
equity instruments issued by the group in exchange for control of the acquiree plus costs
directly attributable to the business combination.
Any excess of the cost of the business combination over the acquirer's interest in the net
fair value of the identifiable assets and liabilities is recognised as goodwill. If the net fair
value of the identifiable assets and liabilities exceeds the cost of the business
combination the excess is recognised separately on the face of the consolidated
statement of financial position immediately below goodwill.
4.2 Investment in subsidiaries
The consolidated financial statements incorporate the financial statements of the
company and entities (including special purpose entities) controlled by the group (its
subsidiaries). Control is achieved where the group has the power to govern the financial
and operating policies of an entity so as to obtain benefits from its activities.
9.27(b)
The results of subsidiaries acquired or disposed of during the year are included in total
comprehensive income from the effective date of acquisition and up to the effective
date of disposal, as appropriate using accounting policies consistent with those of the
parent. All intra-group transactions, balances, income and expenses are eliminated in full
on consolidation.
Investments in subsidiaries are accounted for at cost less impairment in the individual
financial statements.
© 2014 Grant Thornton UK LLP. All rights reserved
9
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
4.3 Investments in associates
Investments in associates are recognised initially in the consolidated statement of
financial position at the transaction price and subsequently adjusted to reflect the
group's share of total comprehensive income and equity of the associate, less any
impairment.
14.12(a)
9.27(b)
Any excess of the cost of acquisition over the group's share of the net fair value of the
identifiable assets, liabilities and contingent liabilities of the associate recognised at the
date of acquisition, although treated as goodwill, is presented as part of the investment
in the associate. Amortisation is charged so as to allocate the cost of goodwill over its
estimated useful life, using the straight-line method. Losses in excess of the carrying
amount of an investment in an associate are recorded as a provision only when the
company has incurred legal or constructive obligations or has made payments on behalf
of the associate.
Investments in associates are accounted for at cost less impairment in the individual
financial statements.
4.4 Intangible assets
Intangible assets are measured at cost less accumulated amortisation and any
accumulated impairment losses.
Software development costs are recognised as an intangible asset when all of the
following criteria are demonstrated:
The technical feasibility of completing the software so that it will be available for
use or sale.
The intention to complete the software and use or sell it.
The ability to use the software or to sell it.
How the software will generate probable future economic benefits.
The availability of adequate technical, financial and other resources to complete the
development and to use or sell the software.
The ability to measure reliably the expenditure attributable to the software during
its development.
Amortisation is charged so as to allocate the cost of intangibles less their residual values
over their estimated useful lives, using the straight-line method. The intangible assets
are amortised over the following useful economic lives:
Software development costs
5 years
Goodwill
10 years
18.27(a)
&(b)
If there is an indication that there has been a significant change in amortisation rate or
residual value of an asset, the amortisation of that asset is revised prospectively to reflect
the new expectations.
If the net fair value of the identifiable assets and liabilities acquired exceeds the cost of a
business combination, the excess up to the fair value of non-monetary assets acquired is
recognised in profit or loss in the periods in which the non-monetary assets are
recovered. Any excess exceeding the fair value of non-monetary assets acquired is
recognised in profit or loss in the periods expected to be benefitted.
© 2014 Grant Thornton UK LLP. All rights reserved
10
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
4.5 Tangible assets
Tangible fixed assets are measured at cost less accumulated depreciation and any
accumulated impairment losses.
17.31(a)(c)
Depreciation is calculated to write down the cost less estimated residual value of all
tangible fixed assets, other than freehold land, over their expected useful lives, using the
straight-line method. The rates applicable are:
Freehold buildings
45 years
Plant and machinery
8 years
Computer hardware
5 years
Furniture and equipment
10 years
Motor vehicles
4 years
4.6 Impairment of assets
At each reporting date fixed assets are reviewed to determine whether there is any
indication that those assets have suffered an impairment loss. If there is an indication
of possible impairment, the recoverable amount of any affected asset is estimated and
compared with its carrying amount. If estimated recoverable amount is lower, the
carrying amount is reduced to its estimated recoverable amount, and an impairment loss
is recognised immediately in profit or loss.
If an impairment loss subsequently reverses, the carry amount of the asset is increased
to the revised estimate of its recoverable amount, but not in excess of the amount that
would have been determined had no impairment loss been recognised for the asset in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
4.7 Investments
Investments comprise investments in unquoted equity instruments which are measured
at fair value. Changes in fair value are recognised in profit or loss. Fair value is estimated
by using a valuation technique.*
11.40&43
4.8 Stocks
Stock are stated at the lower of cost, using the first in first out method, and selling price
less costs to complete and sell.
13.22(a)
4.9 Debtors
Short term debtors are measured at transaction price, less any impairment. Loans
receivable are measured initially at fair value, net of transaction costs, and are measured
subsequently at amortised cost using the effective interest method, less any impairment.
11.40
* Investments in shares (other than shares of a subsidiary, associate or joint
venture) are required to be carried at fair value through profit or loss, provided that
they are publicly traded, or fair value can be measured reliably, for example by using
a valuation technique. Where fair value cannot be measured reliably, then the
investment is carried at cost less impairment. However, given that a valuation
model of some sort can very often be applied, FRS 102 would appear to allow little
scope for this method.
[Refer to conversion report page 29]
© 2014 Grant Thornton UK LLP. All rights reserved
11
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
4.10 Creditors
Short term trade creditors are measured at the transaction price. Other financial
liabilities, including bank loans, are measured initially at fair value, net of transaction
costs, and are measured subsequently at amortised cost using the effective interest
method.
11.40
4.11 Leases
Leases are classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards of ownership of the leased asset to the group. All
other leases are classified as operating leases.
Assets held under finance leases are recognised initially at the fair value of the leased
asset (or, if lower, the present value of minimum lease payments) at the inception of the
lease. The corresponding liability to the lessor is included in the statement of financial
position as a finance lease obligation. Lease payments are apportioned between finance
charges and reduction of the lease obligation using the effective interest method so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance
charges are deducted in measuring profit or loss. Assets held under finance leases are
included in tangible fixed assets and depreciated and assessed for impairment losses in
the same way as owned assets.
Rentals payable under operating leases are charged to profit or loss on a straight-line
basis over the lease term, unless the rental payments are structured to increase in line
with expected general inflation, in which case the group recognises annual rent expense
equal to amounts owed to the lessor.*
20.15(b)
20.15A
The aggregate benefit of lease incentives are recognised as a reduction to the expense
recognised over the lease term on a straight line basis.*
* Under previous UK GAAP, lease incentives were spread over the period until a
market rental applies. This is usually the date of the first rent review, and thus
shorter than the lease term. There is a transitional relief available for lease
incentives, such that where a lease commenced before date of transition, the
remaining benefit of the lease incentive may continue to be recognised in
accordance with previous UK GAAP.
* Where a lease includes pre-set increases in the rent payable to reflect expected
inflation, then the annual expense is recognised in line with this stepped schedule
(rather than spreading the total cost over the period of the lease, as under previous
UK GAAP).
[Refer to conversion report page 43]
© 2014 Grant Thornton UK LLP. All rights reserved
12
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
4.12 Derivative financial instruments
Derivative financial instruments are recognised at fair value using a valuation technique
with any gains or losses being reported in profit or loss. Outstanding derivatives at
reporting date are included under the appropriate format heading depending on the
nature of the derivative.*
11.40&43
4.13 Provisions for liabilities
Provisions are recognised when the group has a present obligation (legal or
constructive) as a result of a past event, it is probable that the group will be required to
settle the obligation, and a reliable estimate can be made of the amount of the
obligation.
The amount recognised as a provision is the best estimate of the consideration required
to settle the present obligation at the end of the reporting period, taking into account
the risks and uncertainties surrounding the obligation.
Where the effect of the time value of money is material, the amount expected to be
required to settle the obligation is recognised at present value using a pre-tax discount
rate. The unwinding of the discount is recognised as a finance cost in profit or loss in
the period it arises.
The group recognises a provision for annual leave accrued by employees as a result of
services rendered in the current period, and which employees are entitled to carry
forward and use within the next 12 months. The provision is measured at the salary cost
payable for the period of absence.*
28.6
* Non-basic financial instruments include all derivatives, such as: forwards,
swaps, caps or collars. All are recognised on the balance sheet and measured at fair
value through profit or loss. This means that at each period end the instrument is
re-valued to fair value, with the movement posted to the Income Statement (unless
hedge accounting is applied).
[Refer to conversion report page 20]
* Under FRS 102 an accrual for holiday pay is specifically required. The impact of
this is likely to be most significant when the company's holiday year is not the same
as its financial year, and/or employees are entitled to carry forward holiday balances
to future years.
[Refer to conversion report page 38]
© 2014 Grant Thornton UK LLP. All rights reserved
13
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
4.14 Taxation
Current tax is recognised for the amount of income tax payable in respect of the taxable
profit for the current or past reporting periods using the tax rates and laws that that
have been enacted or substantively enacted by the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date,
except as otherwise indicated.
Deferred tax assets are only recognised to the extent that it is probable that they will be
recovered against the reversal of deferred tax liabilities or other future taxable profits.
If and when all conditions for retaining tax allowances for the cost of a fixed asset have
been met, the deferred tax is reversed.
Deferred tax is recognised when income or expenses from a subsidiary or associate have
been recognised, and will be assessed for tax in a future period, except where:
the group is able to control the reversal of the timing difference; and
it is probable that the timing difference will not reverse in the foreseeable future.
A deferred tax liability or asset is recognised for the additional tax that will be paid or
avoided in respect of assets and liabilities that are recognised in a business combination.
The amount attributed to goodwill is adjusted by the amount of deferred tax recognised.
Deferred tax is calculated using the tax rates and laws that that have been enacted or
substantively enacted by the reporting date that are expected to apply to the reversal of
the timing difference.
With the exception of changes arising on the initial recognition of a business
combination, the tax expense (income) is presented either in profit or loss, other
comprehensive income or equity depending on the transaction that resulted in the tax
expense (income).
Deferred tax liabilities are presented within provisions for liabilities and deferred tax
assets within debtors. Deferred tax assets and deferred tax liabilities are offset only if:
the group has a legally enforceable right to set off current tax assets against current
tax liabilities, and
the deferred tax assets and deferred tax liabilities relate to income taxes levied by
the same taxation authority on either the same taxable entity or different taxable
entities which intend either to settle current tax liabilities and assets on a net basis,
or to realise the assets and settle the liabilities simultaneously.
4.15 Turnover
[This policy should be made explicit and specific to the group's / company's
circumstances in line with its business. The revenue recognition policy should be
amplified where the nature of transactions requires such amplification. The key principle
is that the reader should understand how revenue is earned, measured and recognised in
the group's/company's particular circumstances.]
23.30(a)
Turnover is measured at the fair value of the consideration received or receivable, net of
discounts and value added taxes. Turnover includes revenue earned from the sale of
goods and form the rendering of services.
© 2014 Grant Thornton UK LLP. All rights reserved
14
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
4.15 Turnover (continued)
Sale of goods
Turnover from the sale of goods is recognised when the significant risks and rewards of
ownership of the goods has transferred to the buyer. This is usually at the point that the
customer has signed for the delivery of the goods.
23.30(a)
Rendering of services
Turnover from the rendering of services is recognised by reference to the stage of
completion of the contract. The stage of completion of a contract is measured by
comparing the costs incurred for work performed to date to the total estimated contract
costs. Turnover is only recognised to the extent of recoverable expenses when the
outcome of a contract cannot be estimated reliably.
23.30(a)
4.16 Employee benefits
Short-term employee benefits and contributions to defined contribution plans are
recognised as an expense in the period in which they are incurred.
4.17 Foreign currency translation
30.26
Sch 1.70
Functional currency and presentation currency
The individual financial statements of each group entity are presented in the currency of
the primary economic environment in which the entity operates (its functional
currency). For the purpose of the consolidated financial statements, the results and
financial position are presented in Sterling (£).
Transactions and balances
In preparing the financial statements of the individual entities, transactions in currencies
other than the functional currency of the individual entities (foreign currencies) are
recognised at the spot rate at the dates of the transactions, or at an average rate where
this rate approximates the actual rate at the date of the transaction. At the end of each
reporting period, monetary items denominated in foreign currencies are retranslated at
the rates prevailing at that date. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the period in which they arise.
However, in the consolidated financial statements exchange differences arising on
monetary items that form part of the net investment in a foreign operation are
recognised in other comprehensive income and are not reclassified to profit or loss.
Translation of group companies
For the purpose of presenting consolidated financial statements, the assets and liabilities
of the group's foreign operations are translated from their functional currency to
Sterling (£) using the closing exchange rate. Income and expenses are translated using
the average rate for the period, unless exchange rates fluctuated significantly during that
period, in which case the exchange rates at the dates of the transactions are used.
Exchange differences arising on the translation of group companies are recognised in
other comprehensive income and are not reclassified to profit or loss.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are
treated as assets and liabilities of the foreign operation and translated at the closing rate.
© 2014 Grant Thornton UK LLP. All rights reserved
15
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
5
Turnover
.
Turnover, analysed geographically between markets, was as follows:
Europe
Rest of the World
2015
£'000
2014
£'000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
2015
2014
£'000
£'000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
2015
£'000
2014
£'000
Sch 1.68(2)
Turnover, analysed by category, was as follows:
Sales of goods
Rendering of services
6
23.30(b)
Sch 1.68(1)
Profit on ordinary activities before taxation
The profit on ordinary activities before taxation is stated after:
Auditor's remuneration:
Fees payable to the company's auditor for the audit of the
company's annual accounts
Fees payable to the company's auditor and its associates
for other services:
Audit of the accounts of subsidiaries
Tax compliance services
Foreign exchange losses
Other operating lease rentals
SI 2008/489
Tech 14/13
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Changes in fair value of investments
xxxx
xxxx
Changes in fair value of derivatives
Research and development expense
xxxx
xxxx
xxxx
xxxx
© 2014 Grant Thornton UK LLP. All rights reserved
30.25(a)
20.16(b)
11.48(a)
Sch 1.
55(2)(b)(i)
11.48(a)
Sch 1.55
18.29
16
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
7
Directors and employees
Staff costs during the year were as follows:
Wages and salaries
Social security costs
Other pension costs
2015
£'000
2014
£'000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
The company operates a stakeholder defined contribution pension scheme for the benefit
of the employees and directors. The assets of the scheme are administered by an
independent pensions provider. Pension payments recognised as an expense during the
year amount to £xxxx (2014: £xxxx).
s411
28.40
28.40
The average number of employees of the group during the year was:
Sales and trading
Processing and administration
2015
Number
2014
Number
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
2015
£’000
2014
£’000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Remuneration in respect of directors was as follows:
Emoluments
Pension contributions to money purchase pension schemes
During the year x directors (2014: x) participated in money purchase pension schemes.
Sch 5
Sch 5
The amounts set out above include remuneration in respect of the highest paid director as follows:
Emoluments
Pension contributions to money purchase pension schemes
© 2014 Grant Thornton UK LLP. All rights reserved
2015
£'000
2014
£'000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
17
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
8
Tax on profit on ordinary activities
The tax (credit)/charge is based on the profit for the year and represents:
2015
£'000
2014
£'000
29.26
Sch 1.67
UK Corporation Tax
Adjustments in respect of previous periods
Overseas taxation
Total current tax
Deferred taxation: origination and reversal of timing differences
Deferred taxation: changes in tax rates
Tax on results on ordinary activities
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
29.27(b)
The tax assessed for the year is lower than the standard rate of corporation tax in the
United Kingdom at xx% (2014: xx%). The differences are explained as follows:
Profit on ordinary activities before tax
xxxx
xxxx
Profit on ordinary activities multiplied by standard rate of
corporation tax in the United Kingdom of xx% (2014: xx%)
Expenses not deductible for tax purposes
Losses carried back
Difference in tax rates
Prior year adjustments
Overseas tax differences
Tax on results on ordinary activities*
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
* Note: Reconcile to total tax, ie including deferred tax
The aggregate current and deferred tax relating to items that are recognised as items of
other comprehensive income is £xxxx (2014: £xxxx).
29.27(a)
During the year the UK corporation tax rate was decreased. Following Budget 20XX
announcements, there will be a further reduction in the main rate of corporation tax to
XX% from 1 April 20XX.
29.27(d)
9
Dividends
2015
£'000
2014
£'000
Paid during the year
xxxx
xxxx
Declared post year end
xxxx
xxxx
© 2014 Grant Thornton UK LLP. All rights reserved
Sch 1.43
18
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
10
Intangible fixed assets
The group
Software
development
costs
£'000
Goodwill
Total
£'000
£'000
Cost
At 1 January 2015
Additions
Exchange adjustments
At 31 December 2015
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Depreciation and impairment
At 1 January 2015
Charge for the year
Impairment loss
Exchange adjustments
At 31 December 2015
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Net book amount at 31 December 2015
xxxx
xxxx
xxxx
Net book amount at 31 December 2014
xxxx
xxxx
xxxx
19.26
Sch 1.51
18.27(c)&(e)
27.32(a)
Amortisation of intangible fixed assets is included in administrative expenses.
18.27(d)
The group's telephone ordering system is included within software development costs and
has a carrying value of £xxxx, and a remaining amortisation period of 2 years.
18.28(a)
An impairment loss on goodwill was recognised in administrative expenses during the
period due to worse than expected economic performance of operations in France.
27.33A&
27.32(a)
© 2014 Grant Thornton UK LLP. All rights reserved
19
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
11
Tangible fixed assets
The group
Cost
At 1 January 2015
Additions
Disposals
Exchange
adjustments
At 31 December
2015
Computer
hardware
£'000
Furniture
and
Motor Freehold Plant and
equipment vehicles property machinery
£'000
£'000
£'000
£'000
17.31
Total Sch 1.51
£'000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Net book
amount at
31 December
2015
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Net book
amount at
31 December
2014
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Depreciation
At 1 January 2015
Provided in the
year
Disposals
Exchange
adjustments
At 31 December
2015
Included within freehold property is land of £xxxx (2014: £xxxx), which is not depreciated.
Tangible fixed assets with a carrying value of £xxxx (2014: £xxxx) are pledged as
security for the group's bank loans.
Plant and machinery with a carrying value of £xxxx (2014: £xxxx) and motor vehicles
with a carrying value of £xxxx (2014: £xxxx) are held under finance leases.
© 2014 Grant Thornton UK LLP. All rights reserved
17.32(a)
Sch 1.63(1)
20.13(a)
20
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
11
Tangible fixed assets (continued)
The company
Cost
At 1 January 2015
Additions
Disposals
At 31 December 2015
Furniture
Computer
and
hardware equipment
£'000
£'000
Motor
vehicles
£'000
Freehold
property
£'000
Total
£'000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Depreciation
At 1 January 2015
Provided in the year
Disposals
At 31 December 2015
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Net book amount at
31 December 2015
xxxx
xxxx
xxxx
xxxx
xxxx
Net book amount at
31 December 2014
xxxx
xxxx
xxxx
xxxx
xxxx
17.31
Sch 1.51
Included within freehold property is land of £xxxx (2014: £xxxx), which is not
depreciated.
Tangible fixed assets with a carrying value of £xxxx (2014: £xxxx) are pledged as
security for the group's bank loans.
© 2014 Grant Thornton UK LLP. All rights reserved
17.32(a)
Sch 1.63(1)
21
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
12
Investments
Total fixed asset investments comprise:
The group
2015
2014
£'000
£'000
Interests in subsidiaries
Interests in associates
Other fixed asset investments
xxxx
xxxx
xxxx
The company
2015
2014
£'000
£'000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Interests in subsidiaries
At 2015 the group and the company had interests in the following subsidiaries:
Subsidiaries
Brighton Limited
Normandy Ltd
Type of
shares held
Ordinary
Ordinary
Proportion
Country of
held (%) incorporation
Nature of
business
United
Kingdom
France
Retail
Distribution
80%
100%
Sch 4.1 &
4.17
The company
Investment in
subsidiaries
£'000
Cost
At 1 January 2015
Additions in the year
At 31 December 2015
xxxx
xxxx
xxxx
Accumulated impairment
At 1 January 2015
Impairment loss
At 31 December 2015
xxxx
xxxx
xxxx
Net book amount at 31 December 2015
Net book amount at 31 December 2014
xxxx
xxxx
© 2014 Grant Thornton UK LLP. All rights reserved
Sch 1.51
22
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
12
Investments (continued)
Interests in associates
At 2015 the group and the company had interests in the following associates:
Associates
Type of
shares held
Proportion
held (%)
Country of
incorporation
Munich AG
Ordinary
25%
Three Lions Limited
Ordinary
30%
Germany
United
Kingdom
Sch 4.19
The group
At 1 January 2015
Share of profit for the year after taxation
Share of other comprehensive income
At 31 December 2015
Share of
net assets
£'000
Loans
£'000
Total
£'000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Loans
£'000
Total
£'000
xxxx
xxxx
14.14
14.12(b)
The company
Investment
in equity
shares
£'000
At 1 January 2015 and 31 December 2015
xxxx
Munich AG is quoted on the Frankfurt Stock exchange and has a fair value of £xxxx
(2014: £xxxx) based on the published share price as at the reporting date.
14.12(b)
14.12(c)
Other fixed asset investments
The group and company
Valuation
At 1 January 2015
Unquoted
investments
£'000
xxxx
Change in value during the year
xxxx
At 31 December 2015
xxxx
© 2014 Grant Thornton UK LLP. All rights reserved
Sch 1.51
23
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
13
Stocks
The group
2015
2014
£’000
£’000
Raw materials
Finished goods
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
The company
2015
2014
£'000
£'000
xxxx
xxxx
xxxx
13.22(b)
xxxx
xxxx
xxxx
Stock recognised in cost of sales during the year as an expense was £xxxx (2014: £xxxx).
13.22(c)
An impairment loss of £xxxx (2014: £xxxx) was recognised in cost of sales against stock
during the year due to slow-moving and obsolete stock.
13.22(d)
27.33(a)
The total carrying amount of stock is pledged as security for the group's bank loans.
13.22(e)
14
Debtors
The group
2015
2014
£'000
£'000
Trade debtors
Amounts owed by subsidiary undertaking
Amounts owed by associated undertakings
Corporation tax
Derivatives
Prepayments and accrued income
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
The company
2015
2014
£'000
£'000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
11.48(c)
An impairment loss of £xxxx (2014: £xxxx) was recognised against trade debtors.
15
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Creditors: amounts falling due within one year
The group
2015
2014
£'000
£'000
Bank overdrafts
Bank loans
Finance lease obligations
Trade creditors
Amounts owed to subsidiary undertakings
Amounts owed to associated undertakings
Taxation and social security
Corporation tax
Other creditors
Accruals
© 2014 Grant Thornton UK LLP. All rights reserved
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
The company
2015
2014
£'000
£'000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
24
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
16
Creditors: amounts falling due after more than one year
The group
2015
2014
£'000
£'000
Finance lease obligations
Bank loans
xxxx
xxxx
xxxx
The company
2015
2014
£'000
£'000
xxxx
xxxx
xxxx
-
-
Bank loans are repayable as follows:
The group
2015
2014
£'000
£'000
Within one year
Between one to two years
Between two to five years
More than five years
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
The company
2015
2014
£'000
£'000
xxxx
xxxx
xxxx
xxxx
The bank loans and overdrafts are secured against assets of the group and company.
The group has a loan with 1st Paris Bank of £xxxx (2014: £xxxx). The loan is repayable
over the period until xxxx. The interest rate on the loan is EURIBOR + XX%.
17
Sch 1.61
11.42
Sch 1.61
Provisions for liabilities
The group
At 1 January 2015
Additions
Utilised
Reversals
Origination and reversal of timing differences
Changes in tax rates
At 31 December 2015
© 2014 Grant Thornton UK LLP. All rights reserved
Deferred Leave pay
taxation
(note 18)
£'000
£'000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Total
£'000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
21.14(a)
29.23
Sch 1.60
29.26(c)
29.26(d)
25
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
17
Provisions for liabilities (continued)
The company
Deferred Leave pay
taxation
(note 18)
£'000
£'000
Total
£'000
21.14(a)
At 1 January 2015
Additions
Utilised
Reversals
Origination and reversal of timing differences
Changes in tax rates
At 31 December 2015
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
The leave pay provision represents holiday balances accrued as a result of services
rendered in the current period and which employees are entitled to carry forward. The
provision is measured as the salary cost payable for the period of absence.
18
29.26(c)
29.26(d)
21.14(b)
Deferred taxation
Deferred taxation provided for at xx% (2014: xx%) in the financial statements is set out below:
The group
2015
2014
£'000
£'000
Accelerated capital allowance
Derivative contracts
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
The company
2015
2014
£'000
£'000
xxxx
xxxx
xxxx
The amount of the net reversal of deferred tax expected to occur next year is £xxxx
(2014: £xxxx), relating to the reversal of existing timing differences on tangible fixed
assets and derivative contracts and the origination of new timing differences on
intangible fixed assets.
© 2014 Grant Thornton UK LLP. All rights reserved
29.27(e)
xxxx
xxxx
xxxx
29.27(c)
26
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
19
Called up share capital
2015
£'000
2014
£'000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
Authorised, allotted and fully paid:
xxxx founders' shares of £x each
xxxx ordinary shares of £x each
Founder shares rank pari passu to ordinary shares except for voting rights. Every founder
share carried one voting right compared to one vote per one hundred ordinary shares.
Ordinary shares
At 1 January 2015
Share issue
At 31 December 2015
4.12(a)(v)
2015
Number
xxxx
xxxx
xxxx
Consideration received for the allotment of ordinary shares during the year was £xxxx.
20
4.12(a)
Sch 1.47(1)
4.12(a)(iv)
Sch 1.48(b)
Reserves
Called-up share capital – represents the nominal value of shares that have been issued.
4.12(b)
Share premium account – includes any premiums received on issue of share capital. Any
transaction costs associated with the issuing of shares are deducted from share premium.
Foreign exchange translation reserve – comprises translation differences arising from the
translation of financial statements of the Group’s foreign entities into Sterling (£).
Profit and loss account – includes all current and prior period retained profits and losses.
21
Capital commitments
The group had capital commitments for plant and machinery of £xxxx (2014: £xxxx).
© 2014 Grant Thornton UK LLP. All rights reserved
17.32(b)
Sch 1.63(3)
27
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
22
Leasing commitments
The group's future minimum operating lease payments are as follows:
2015
£'000
2014
£'000
xxxx
xxxx
xxxx
xxxx
2015
£'000
2014
£'000
Within one year
Between one and five years
20.16(a)
The group's future minimum finance lease payments are as follows:
20.13(b)
Within one year
Between one and five years
xxxx
xxxx
xxxx
xxxx
2015
£'000
2014
£'000
xxxx
xxxx
xxxx
xxxx
The company's future minimum finance lease payments are as follows:
Within one year
Between one and five years
Certain plant and machinery and motor vehicles are held under finance lease
arrangements. Finance lease liabilities are secured by the related assets held under
finance leases (see note 11). The lease agreements generally include fixed lease
payments and a purchase option at the end of the lease term.
© 2014 Grant Thornton UK LLP. All rights reserved
20.13(b)
20.13(c)
28
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
23
Transactions with related parties
Sales to subsidiary - Brighton Limited*
Sales to associates
Purchases from associates
Interest received on loans to associates
Loans due from associated undertakings
Trade debtor amounts due from associates
Trade creditors amounts due to associates
Key management personnel compensation
Dividends paid to directors
2015
£'000
2014
£'000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
33.9
Sch 1.72
33.7
* Note: The exemption from disclosure of transactions with subsidiaries is
only available where the subsidiary which is party to the transaction is
wholly-owned.
Loans to associates are unsecured and at a fixed interest rate of XX%. A provision of
£xxxx (2014: £xxxx) has been recognised against these loans.
33.9(b)(i)
&(c)
The company has provided a guarantee of £xxxx (2014: £xxxx) in respect of the bank
loan of a subsidiary.
21.17A
33.9(b)(ii)
The company does not have a parent undertaking. The ultimate controlling party of
the group is John Smith.
33.5
Sch 4.8&9
© 2014 Grant Thornton UK LLP. All rights reserved
29
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
24
Financial risk management
11.48A(f)
The group has exposures to three main areas of risk - foreign exchange currency
exposure, liquidity risk and customer credit exposure. To a lesser extent the group is
exposed to interest rate risk.
Foreign exchange transactional currency exposure
The group is exposed to currency exchange rate risk due to a significant proportion of
its receivables and operating expenses being denominated in non-Sterling currencies.
The net exposure of each currency is monitored and managed by the use of forward
foreign exchange contracts, currency loans or overdrafts. The forward foreign
exchange contracts all mature within 12 months. The group's subsidiary, Normandy
Ltd, is exposed to currency exchange risk arising from non-Euro currencies, but as this
is not significant no active management of this risk is undertaken.
Liquidity risk
The objective of the group in managing liquidity risk is to ensure that it can meet its
financial obligations as and when they fall due. The group expects to meet its financial
obligations through operating cash flows. In the event that the operating cash flows
would not cover all the financial obligations the group has credit facilities available.
Given the maturity of the bank loan in note 16, the group is in position to meet its
commitments and obligations as they come due.
Customer credit exposure
The group may offer credit terms to its customers which allow payment of the debt
after delivery of the goods or services. The group is at risk to the extent that a
customer may be unable to pay the debt on the specified due date. This risk is
mitigated by the strong on-going customer relationships and by credit insurance.
Interest rate risk
The group borrows from its bankers using either overdrafts or term loans whose
tenure depends on the nature of the asset and management's view of the future
direction of interest rate.
25
Financial assets and liabilities
Group
2015
£'000
2014
£'000
Financial assets measured at fair value through profit or loss
xxxx
xxxx
11.41(a)
Financial assets measured at amortised cost
xxxx
xxxx
11.41(b)
Financial liabilities measured at amortised cost
xxxx
xxxx
11.41(e)
The fair value of unquoted investments is determined using an earnings multiple valuation
model. Key assumptions used in the model includes the price earnings multiple used. This
is determined by reference to the price earnings multiple of similar quoted companies.
11.43
Sch
1.55(2)(a)
The foreign currency forward contracts are not traded in active markets. These have been
fair valued using observable forward exchange rates and interest rates corresponding to
the maturity of the contract.
11.43
Sch
1.55(2)(a)
© 2014 Grant Thornton UK LLP. All rights reserved
30
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
26
Transition to FRS 102
35.12
The company has adopted FRS 102 for the year ended 2015 and has restated the
comparative prior year amounts.
Explanations
Corrections of prior period errors
1.
Stocks are now measured using the first in first out method, rather than using
a last in first out method.
2.
Investments in associates are now valued at original cost based on the original
exchange rates. Previously they were revalued at closing exchange rates with
the gain or loss in the value of the investment being recognised in profit or
loss and added to the carrying value of the investment.
Changes for FRS 102 adoption
3.
Foreign exchange forward contracts are now recognised at fair value at the
end of the year with changes in fair value recognised in profit or loss.
Previously foreign exchange contracts were not recognised in the statement of
financial position.
4.
35.14
35.13(a)
The group now uses average exchange rates to translate income and expenses
of the group's foreign operations. Previously, the group used the closing
exchange rate.
Transition to FRS 102 - reconciliations
Restated consolidated statement of
financial position
Original shareholders' funds
Stock valuation adjustment
Deferred tax on stock adjustment
Restatement of investment in associates
Financial instruments at fair value
Deferred tax on instruments at fair value
Restated shareholders' funds
Restated company statement of financial
position
Original shareholders' funds
Stock valuation adjustment
Deferred tax on stock adjustment
Restatement of investment in associates
Financial instruments at fair value
Deferred tax on instruments at fair value
Restated shareholders' funds
© 2014 Grant Thornton UK LLP. All rights reserved
Explanation
1
2
3
Explanation
1
2
3
31 December
2014
£’000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
31 December
2014
£’000
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
1 January
2014
£'000
35.13(b)
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
1 January
2014
£'000
35.13(b)
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
31
FRS 102 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2015
26
Transition to FRS 102 (continued)
Restated profit or loss for the year ended
31 December 2014
Original profit on ordinary activities before tax
Add stock provision
Remove the revaluation of investment in associates and
subsidiary
Add financial instruments at fair value
Amendment of principle of consolidation to average
exchange rates
35.13(c)
Explanations
£'000
1
2
xxxx
xxxx
xxxx
3
4
xxxx
xxxx
xxxx
Original tax on ordinary activities
Deferred tax on stock adjustment
Deferred tax on financial instruments at fair value
Amendment of principle of consolidation to average
exchange rates - associate tax
Restated tax on profit on ordinary activities
Restated profit for the financial year
© 2014 Grant Thornton UK LLP. All rights reserved
1
3
4
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
32
APPENDIX
FRS 102 LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (ONE STATEMENT)
For the year ended 31 December 2015
Note
2015
£'000
2014
£'000
Turnover
Cost of sales
Gross profit
Administrative expenses
Other operating income
Operating profit
Share of operating profits of associates
Interest receivable and similar income
Interest payable and similar charges
Profit on ordinary activities before taxation
Tax on profit on ordinary activities
Profit for the financial year
Other comprehensive income
Currency translation differences on foreign currency net investments
Actuarial gains/losses
Share of other comprehensive income of associates
Total comprehensive income for the financial year
Profit for the financial year attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive income for the financial year attributable to:
Owners of the parent
Non-controlling interests
© 2014 Grant Thornton UK LLP. All rights reserved
33
APPENDIX
FRS 102 LIMITED
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
For the year ended 31 December 2015
Note
2015
£'000
2014
£'000
Turnover
Cost of sales
Gross profit
Administrative expenses
Other operating income
Operating profit
Share of operating profits of associates
Interest receivable and similar income
Interest payable and similar charges
Profit on ordinary activities before taxation
Tax on profit on ordinary activities
Profit for the financial year
Retained profits at 1 January
Dividends paid
Retained profits at 31 December
* A company is permitted to present a Statement of Income and Retained
Earnings in place of a Statement of Comprehensive Income and a Statement of
Changes in Equity if the only changes to its equity during the periods presented
arise from profit or loss, payment of dividends and prior period adjustments.
[Refer to conversion report page 15]
© 2014 Grant Thornton UK LLP. All rights reserved
34
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