Sports Direct Is The UK's Leading Sports Retailer - Sports Direct ...

1. aCCountinG poliCies
notes to the Company finanCial statements
These accounts have been prepared in accordance with applicable United Kingdom accounting standards. A summary of the more important accounting policies adopted
are described below.
Basis of accounting
The accounts have been prepared under the historical cost convention.
As permitted by Section 408 of the Companies Act 2006, a profit and loss account of the Company is not presented. The Company’s profit or the 52 week period 26 April
2009 was £27,694,000 (2008 £184,687,000 profit).
investments
Fixed asset investments are stated at cost less any provision for impairment.
Cost represents cash consideration or the amount of ordinary shares issued by the Company at nominal value after taking account of merger relief available under s612
of the Companies Act 2006 plus related acquisition costs capitalised at fair value.
deferred taxation
Deferred tax is provided for on a full provision basis on all timing differences, which have arisen but not reversed at the balance sheet date. No timing differences are
recognised in respect of gains on sale of assets where those gains have been rolled over into replacement assets. A deferred tax asset is not recognised to the extent
that the transfer of economic benefit in future is uncertain.
Deferred tax is calculated on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and
laws enacted or substantively enacted at the balance sheet date.
foreign currencies
Items arising from transactions denominated in foreign currencies are translated at the rate of exchange ruling at the date of the transaction. At the balance sheet date
all monetary assets and liabilities denominated in foreign currencies are translated at the closing rate or at the rate of exchange at which the transaction is contracted to
be settled in the future. All exchange differences are dealt with in the profit and loss account.
dividends
Dividends on the Company’s ordinary shares are recognised as a liability in the Company’s financial statements, and as a deduction from equity, in the period in which
the dividends are declared. Where such dividends are proposed subject to the approval of the Company’s shareholders, the dividends are only declared once shareholder
approval has been obtained.
equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the
Company, with the exception of those accounted for via merger relief available under s612 of the Companies Act 2006, are recorded at the proceeds received, net of any
direct issue costs.
income from group undertakings
Income from group undertakings is recognised when qualifying consideration is received from the group undertaking.
related party transactions
The Company has taken advantage of the exemption in Financial Reporting Standard 8 from reporting related party transactions as its own Financial Statements are
presented together with its Consolidated Financial Statements.
Share-based payments
share-based payments
The Company has applied the requirements of FRS 20, “Share-based Payment”. The Company issues equity-settled share-based payments to certain directors and
employees of the Company and its subsidiaries. These are measured at fair value at the date of grant which is expensed to the consolidated income statement on a
straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest.
Fair value is measured by use of a Monte Carlo method. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of
non-transferability, exercise restrictions, and behavioural considerations. No share-based payment charge was recognised for the 52 weeks ended 26 April 2009 as the
directors did not consider it material to the Group’s financial results or position.
2. investments
Shares in group undertakings:
As at 27 April 2008 989,290
Additions 7,518
As at 26 April 2009 996,808
None of the Company’s investments are listed.
The Company is the principal holding company of the Group. The principal subsidiary undertakings of the Company are set out in note 37 to the Group financial
statements.
2009
£’000
Sports Direct International PLC Annual Report 2009 69