Download full Annual Report and Accounts - Kingfisher

More documents

Recommendations

Info

60 Notes to the consolidated fi nancial statements Kingfi sher plc Annual Report and Accounts 2009/10 1 General information Kingfi sher plc (‘the Company’), its subsidiaries, joint ventures and associates (together ‘the Group’) supply home improvement products and services through a network of retail stores and other channels, located mainly in the United Kingdom, continental Europe and China. Kingfi sher plc is a Company incorporated in the United Kingdom. The nature of the Group’s operations and its principal activities are set out in the Business review on pages 1 to 28. The address of its registered offi ce is 3 Sheldon Square, Paddington, London W2 6PX. The Company is listed on the London Stock Exchange. These consolidated fi nancial statements have been approved for issue by the Board of Directors on 24 March 2010. 2 Principal accounting policies The principal accounting policies applied in the preparation of these consolidated fi nancial statements are set out below. These policies have been consistently applied to the years presented, unless otherwise stated. a. Basis of preparation The consolidated fi nancial statements of the Company, its subsidiaries, joint ventures and associates are made up to the nearest Saturday to 31 January each year, except as disclosed in note 17 and in note 4 of the Company’s separate fi nancial statements. The current fi nancial year is the 52 weeks ended 30 January 2010 (‘the year’). The comparative fi nancial year is the 52 weeks ended 31 January 2009 (‘the prior year’). The directors of Kingfi sher plc, having made appropriate enquiries, consider that adequate resources exist for the Group to continue in operational existence for the foreseeable future and that, therefore, it is appropriate to adopt the going concern basis in preparing the consolidated fi nancial statements for the year ended 30 January 2010. Refer to the Directors’ statement of responsibility on page 34. The consolidated fi nancial statements have been prepared in accordance with International Financial Reporting Standards (‘IFRS’) as adopted by the European Union, IFRIC interpretations and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The following new standards and amendments, which are mandatory for the fi rst time for the fi nancial year beginning 1 February 2009, are relevant for the Group: IAS 1 (revised) IAS 38 (amendment) IFRS 2 (amendment) IFRS 7 (amendment) Presentation of fi nancial statements Requires non-owner changes in equity to be shown in either one performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income). The Group has elected to present two statements. Owner changes in equity are required to be shown in a statement of changes in equity. Intangible assets – Catalogue costs Expenses incurred in printing mail order catalogues are recognised once the catalogues are printed and not when they are distributed to customers. The impact of this on the results presented has not been signifi cant. Share-based payments – Vesting conditions and cancellations Improving disclosures about fi nancial instruments Clarifi es that vesting conditions are service conditions and performance conditions only. Other features that are not vesting conditions are required to be included in the grant date fair value. The impact of this on the results presented has not been signifi cant. The amendments to IFRS 7 introduce a three level hierarchy for fair value measurement disclosures and require entities to provide additional disclosures about the relative reliability of fair value measurements. In addition, the amendments clarify the existing requirements for the disclosure of liquidity risk. These requirements have been incorporated into the relevant fi nancial instrument disclosures. IFRS 8 Operating segments IFRS 8 replaces IAS 14, ‘Segment reporting’. It requires a ‘management approach’ under which segment information is presented on the same basis as that used for internal reporting purposes. This has resulted in Ireland moving from ‘Other International’ to ‘UK & Ireland’ (previously ‘UK’) and the presentation of new segmental assets and other information. Refer to note 4 for further information. The following new standard and interpretation, which are mandatory for the fi rst time for the fi nancial year beginning 1 February 2009, are relevant but were already applied by the Group: – IAS 23, ‘Borrowing costs (revised)’; and – IFRIC 13, ‘Customer loyalty programmes’.
Kingfi sher plc Annual Report and Accounts 2009/10 61 The following amendments to standards and interpretation, which are mandatory for the fi rst time for the fi nancial year beginning 1 February 2009, are either not currently relevant or material for the Group: – IAS 39 (amendment), ‘Financial instruments: Recognition and measurement’; – IAS 39 and IFRS 7 (amendment), ‘Reclassifi cation of fi nancial assets’; and – IFRIC 16, ‘Hedges of a net investment in a foreign operation’. At the date of authorisation of these fi nancial statements, the following new standard and amendments, which are expected to be relevant to the Group’s results, were issued but not yet effective: IAS 27 (amendment) IFRS 3 (amendment) Consolidated and separate fi nancial statements - Non-controlling interests (effective from 1 July 2009) Business combinations (effective from 1 July 2009) IFRS 9 Financial instruments (effective from 1 January 2013) The consolidated fi nancial statements have been prepared under the historical cost convention, as modifi ed by the use of valuations for certain fi nancial instruments, share-based payments and post employment benefi ts. A summary of the Group’s principal accounting policies is set out below. The preparation of fi nancial statements in conformity with IFRS requires the use of certain accounting estimates and assumptions. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving critical accounting estimates and judgements, which are signifi cant to the consolidated fi nancial statements, are disclosed in note 3. Use of non-GAAP measures Kingfi sher believes that retail profi t, adjusted pre-tax profi t, effective tax rate, adjusted post-tax profi t and adjusted earnings per share provide additional useful information on underlying trends to shareholders. These and other non-GAAP measures such as net debt are used by Kingfi sher for internal performance analysis and incentive compensation arrangements for employees. The terms ‘retail profi t’, ‘exceptional items’, ‘adjusted’, ‘effective tax rate’ and ‘net debt’ are not defi ned terms under IFRS and may therefore not be comparable with similarly titled measures reported by other companies. They are not intended to be a substitute for, or superior to, GAAP measures. Retail profi t is defi ned as continuing operating profi t before central costs (principally the costs of the Group’s head offi ce), exceptional items, amortisation of acquisition intangibles and the Group’s share of interest and tax of joint ventures and associates. The separate reporting of non-recurring exceptional items, which are presented as exceptional within their relevant income statement category, helps provide an indication of the Group’s underlying business performance. The principal items which are included as exceptional items are: – non trading items included in operating profi t such as profi ts and losses on the disposal, closure or impairment of subsidiaries, joint ventures, associates and investments which do not form part of the Group’s trading activities; – profi ts and losses on the disposal of properties; and – the costs of signifi cant restructuring and incremental acquisition integration costs. Requires the effects of all transactions with non-controlling (minority) interests to be recorded in equity if there is no change in control. They will no longer result in goodwill or gains and losses. The amended standard also specifi es the accounting when control is lost. Any remaining interest in the entity is remeasured to fair value and a gain or loss is recognised in profi t or loss. This will be applied in the Group’s 2010/11 fi nancial statements. Harmonises business combination accounting with US GAAP. The amended standard will continue to apply the acquisitions method to business combinations, but with certain signifi cant changes. All payments to purchase a business will be recorded at fair value at the acquisition date, with some contingent payments subsequently remeasured at fair value through income. Goodwill and noncontrolling (minority) interests may be calculated on a gross or net basis. All transaction costs will be expensed. This will be applied in the Group’s 2010/11 fi nancial statements. Introduces new requirements for classifying and measuring fi nancial assets. This includes the removal of available-for-sale fi nancial assets and held-to-maturity investments, and the introduction of a new category of fi nancial assets at fair value through other comprehensive income. This is still subject to endorsement by the European Union, but is currently expected to be applied in the Group’s 2013/14 fi nancial statements. The term ‘adjusted’ refers to the relevant measure being reported for continuing operations excluding exceptional items, fi nancing fair value remeasurements, amortisation of acquisition intangibles, related tax items and prior year tax items. Financing fair value remeasurements represent changes in the fair value of fi nancing derivatives, excluding interest accruals, offset by fair value adjustments to the carrying amount of borrowings and other hedged items under fair value hedge relationships. Financing derivatives are those that relate to underlying items of a fi nancing nature. The effective tax rate represents the effective income tax expense as a percentage of continuing profi t before taxation excluding exceptional items. Effective income tax expense is the continuing income tax expense excluding tax on exceptional items and tax adjustments in respect of prior years and changes in tax rates. Net debt comprises borrowings and fi nancing derivatives (excluding accrued interest), less cash and cash equivalents and current other investments. b. Basis of consolidation The consolidated fi nancial statements incorporate the fi nancial statements of the Company, its subsidiaries, joint ventures and associates. (i) Subsidiaries Subsidiary undertakings are all entities over which the Group has the power to govern the fi nancial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. Subsidiary undertakings acquired during the period are recorded under the acquisition method of accounting and their results included from the date of acquisition. The results of subsidiaries which have been disposed of during the period are included up to the effective date of disposal. The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group’s share
Page 1 and 2:
PROGRESS REPORT ON DELIVERING VALUE
Page 3 and 4:
Kingfi sher plc Annual Report and A
Page 5 and 6:
Page 7 and 8:
Page 9 and 10:
Page 11 and 12: Kingfi sher plc Annual Report and A
Page 13 and 14: Si Kingfi sher plc Annual Report an
Page 61: Kingfi sher plc Annual Report and A
Page 113 and 114:
Page 115 and 116:
9 10 Kingfi sher is included in two
show all

Download full Annual Report and Accounts - Kingfisher

Create successful ePaper yourself

Delete template?

Save as template?