Annual Report and Accounts 2012 - Scapa

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Group Accounting Policies continued (b) Loans, receivables and payables Loans, receivables and payables are non-derivative financial assets and liabilities with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor or creditor with no intention of trading the receivable or payable. They are included in current assets or liabilities, except for maturities greater than 12 months after the Balance Sheet date. These are classified as non-current assets or liabilities. Loans and receivables are included in trade and other receivables or trade and other payables in the Balance Sheet. Loans, receivables and payables are measured at invoice or historic cost less any impairment. Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, first-out (FIFO) method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads allocated on a systematic basis (based on normal operating capacity). It excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Provision is made for obsolete, slow moving and defective inventory on a line by line basis, or by grouping similar or related items, by reference to accumulated experience. Trade receivables Trade receivables are recognised initially at invoice value, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The provision is recognised in the Income Statement as an operating charge. Insurance receivables Where some or all of the cost of a provision is reimbursed by another party, the Group recognises that reimbursement when it is virtually certain it will be received. Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the Balance Sheet. Share capital Ordinary shares are classified as equity. Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the Company’s shareholders or in respect of interim dividends when approved by Directors. Trade payables Trade payables are recognised at their initial fair value. Borrowings Borrowings are recognised initially at fair value, net of transaction costs incurred and subsequently stated at amortised cost. Interest charges are recognised in the Income Statement over the period of the borrowings, using the effective interest method. Borrowings are classified as current liabilities unless the Group has a right to defer settlement of the liability for at least 12 months after the Balance Sheet date. Deferred taxation The charge for taxation, comprising both UK and non-UK taxation, is based on the taxable profits for the year and also takes into account deferred taxation. Deferred taxation is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, if the deferred taxation arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not accounted for. Deferred taxation is determined using tax rates (and laws) that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred taxation assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle on a net basis. Employee benefits (a) Pension obligations Group companies operate various pension schemes. The schemes are funded through payments to trustee-administered funds, determined by periodic actuarial calculations. The Group has both defined benefit and defined contribution plans. A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. 44 Scapa Group plc Annual Report and Accounts 2012
The liability recognised in the Balance Sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the Balance Sheet date less the fair value of plan assets, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit obligation is calculated by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to shareholders’ equity. Past-service costs are recognised immediately in the Income Statement, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past-service costs are amortised on a straight-line basis over the vesting period. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available. (b) Share-based compensation The Group operates an equity-settled, share-based compensation plan. The fair value of the employee services received in exchange for the grant of the options is calculated using appropriate valuation models and is recognised as an expense over the vesting period. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted. At each balance sheet date, the entity revises its estimates of the number of options that are expected to become exercisable. It recognises the impact of the revision of original estimates, if any, in the Income Statement, and a corresponding adjustment to equity, over the remaining vesting period. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised. (c) Holiday pay The Group recognises an asset or liability relating to holiday pay obligations at the Balance Sheet date. Movements in the period are taken to the Income Statement. (d) Bonus plans The Group recognises a liability and an expense for bonuses based on a pre-determined formula for key performance indicators. The Group recognises a provision where contractually obliged or where past practice has created a constructive obligation. (e) Share price incentive plan The Group accounts for the share price incentive plan in line with IAS 19 as the basis of compensation is not an award of shares and therefore does not fall under the remit of IFRS 2. Provisions Provisions for environmental restoration, restructuring costs and legal claims are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Where the effect is material, provisions are discounted in line with IAS 37 using a pre-tax nominal discount rate. The discount rate does not reflect risks for which the estimated future outflows have already been adjusted. Critical accounting estimates and judgements The Group’s accounting policies have been set by management and approved by the Audit Committee. The application of these accounting policies to specific scenarios requires reasonable estimates and assumptions to be made concerning the future. These are continually evaluated based on historical experience and expectations of future events. The resulting accounting estimates will, by definition, seldom equal the related actual results. Under IFRSs estimates or judgements are considered critical where they involve a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities from period to period. This may be because the estimate or judgement involves matters which are highly uncertain, or because different estimation methods or assumptions could reasonably have been used. Scapa Group plc Annual Report and Accounts 2012 45 Overview Business Review Governance Financial Statements
Page 1 and 2: Annual Report and Accounts 2012 Gro
Page 3 and 4: Sector split Electronics Healthcare
Page 5 and 6: Chairman’s Statement A focus on s
Page 7 and 8: “Our goal is to deliver sustainab
Page 9 and 10: Revenue £145.9m +0.2% 74.6% of Gro
Page 11 and 12: Revenue £39.5m +16.9% 20.2%of Grou
Page 13 and 14: Revenue £10.2m -20.9% 5.2% of Grou
Page 15 and 16: KPIs Return on sales (*1) 5.5% Trad
Page 17 and 18: Lost Time Accidents (LTAs) FY12 FY1
Page 19 and 20: We take the view that the policies
Page 21 and 22: Introduction At the heart of how Sc
Page 23 and 24: Leadership Team L-R: Ian Marchant,
Page 25 and 26: Scapa has a combination of unionise
Page 27 and 28: Directors’ Remuneration Report Th
Page 29 and 30: Other benefits Purpose Policy for e
Page 31 and 32: Directors’ interests As of 31 Mar
Page 33 and 34: Corporate Governance “ Good gover
Page 35 and 36: Internal control system In accordan
Page 37 and 38: Under its terms of reference, the A
Page 39 and 40: Independent Auditor’s Report to t
Page 41 and 42: Consolidated Balance Sheet As at 31
Page 43 and 44: Consolidated Cash Flow Statement Fo
Page 45 and 46: Consolidation The consolidated fina
Page 47: Property, plant and equipment (incl
Page 51 and 52: Notes on the Accounts 1. Segmental
Page 53 and 54: 2. Segment assets and liabilities c
Page 55 and 56: 6. Key management compensation and
Page 57 and 58: 9. Taxation continued Movement in u
Page 59 and 60: 13. Goodwill Cost 1 April 34.2 45.8
Page 61 and 62: 16. Assets held for sale During the
Page 63 and 64: 22. Borrowings Amounts due within o
Page 65 and 66: 23. Derivative financial instrument
Page 67 and 68: 24. Provisions continued During the
Page 69 and 70: 25. Retirement benefit liabilities
Page 75 and 76: 27. Share options continued US Stoc
Page 77 and 78: 29. Commitments Capital commitments
Page 79 and 80: Scapa Group plc Parent Company Fina
Page 81 and 82: Company Balance Sheet As at 31 Marc
Page 83 and 84: Foreign currencies Transactions in
Page 85 and 86: 4. Investments Shares in Group unde
Page 87 and 88: 10. Share capital Allotted, issued
Page 89 and 90: 12. Pension schemes continued Five
Page 91 and 92: Designed by luminous.co.uk

Annual Report and Accounts 2012 - Scapa

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