TIDMSPD
RNS Number : 3207R
Financial Reporting Review Panel
08 December 2016
Findings of the Financial Reporting Review Panel in respect of
the accounts of Sports Direct International plc for the year ended
26 April 2015
FRRP PN 70/16 8 December 2016
The Financial Reporting Council (FRC) today announces the
following matters in relation to the annual report and accounts of
Sports Direct International plc (the company) for the year ended 26
April 2015.
The FRC has discussed certain issues with the company following
its review of the 2015 annual report and accounts.
The principal issue arising related to whether the 2015
strategic report complied with the Companies Act 2006 requirement
to be balanced and comprehensive. In this regard the FRC noted
that
-- there was no discussion of the development and performance of
the company's international stores in its Sports Retail division,
which represent a significant part of the company's operations in
terms of the number of stores, total revenue, operating result and
gross profit;
-- one of the company's key performance indicators, Sports
Retail like-for-like stores gross contribution, excludes stores
that have not been owned by the company for the full 12 months in
both periods. Therefore, in 2015 this key performance indicator
excluded the contribution from the stores in Austria and the Baltic
states acquired in 2014; and
-- there was no discussion of the performance of these stores or
their effect on the company's results.
The FRC noted the continuing lack of discussion about Sports
Retail's international stores in the 2016 strategic report even
though the key performance indicator of Sports Retail like-for-like
stores gross contribution did include the stores in Austria and the
Baltic states and this measure had decreased to (0.8%) from
7.4%.
On the basis of information provided by the company, the FRC
also considered whether the aggregation of the UK and international
Sports Retail stores was in accordance with IFRS 8 'Operating
Segments'.
Following discussion with the FRC the directors have decided to
include specific commentary about Sports Retail's international
stores in its narrative reporting, including the strategic report,
and to present separately segmental information about these stores
in the accounts. This has resulted in the additional information in
the commentary provided in the company's 2016 interim results,
announced today, and the restatement of comparative amounts in the
segmental disclosures. These changes will also be reflected in the
company's 2017 annual report and accounts that it expects to
publish in August 2017.
Following the corrective action taken by the company, the FRC
regards the enquiries arising from its review of the company's
annual report and accounts for the year ended 26 April 2015,
initiated on 26 February 2016, as concluded.
Notes to Editors
1. The FRC is responsible for promoting high quality corporate
governance and reporting to foster investment. We set the UK
Corporate Governance and Stewardship Codes as well as UK standards
for accounting, auditing and actuarial work. We represent UK
interests in international standard-setting. We also monitor and
take action to promote the quality of corporate reporting and
auditing. We operate independent disciplinary arrangements for
accountants and actuaries; and oversee the regulatory activities of
the accountancy and actuarial professional bodies.
2. The FRC's Conduct Committee is a body authorised under the
Companies Act 2006 (the Act) to review and investigate the annual
accounts, strategic and directors' reports of public and large
private companies to see whether they comply with the requirements
of the Act, including applicable accounting standards. Following
implementation of the Accounting Regulation (EC) No. 1606/2002,
this may mean compliance with UK or International Financial
Reporting Standards.
3. Where breaches of the Act are discovered the Conduct
Committee seeks to take corrective action that is proportionate to
the nature and effect of the defects, taking account of market and
user needs. Where a company's accounts, strategic or directors'
report are defective in a material respect the Conduct Committee
will, wherever possible, try to secure their revision by voluntary
means. If this approach fails, the Conduct Committee is empowered
to make an application to the court under section 456 of the Act
for an order for revision. To date no court applications have been
made.
4. Section 414C of the Companies Act 2006 states that the
purpose of the strategic report is to inform members of the company
and help them assess how the directors have performed their duty
under section 172 to promote the success of the company. It
requires the strategic report to contain a fair review of the
group's business that is a balanced and comprehensive analysis of
its development and performance during the financial year, and its
position at the end of that year.
5. The core principle of IFRS 8 'Operating Segments' requires an
entity to disclose information that enables users of its financial
statements to evaluate the nature and financial effects of the
business activities in which it engages and the economic
environments in which it operates.
6. Paragraph 12 of IFRS 8 permits two or more operating segments
to be aggregated into a single operating segment if aggregation is
consistent with the core principle of the standard, the segments
have similar economic characteristics and the segments are similar
in each of five specified criteria.
7. The Conduct Committee maintains a Financial Reporting Review
Panel (FRRP). The Chairman is Geoffrey Green and the Deputy Chairs
are Joanna Osborne and John Hitchins. There are currently 25 other
members drawn from a broad spectrum of commerce and the
professions. Individual cases may be dealt with by a specially
constituted Review Group of the FRRP.
8. On 28 November 2016 the FRC announced investigations under
the Accountancy Scheme and the Audit Enforcement Procedure in
relation to the preparation, approval and audit of the financial
statements of Sports Direct International plc (Sports Direct) for
the 52 week period ended 24 April 2016. These decisions follow
reports of an arrangement between Sports Direct and Barlin Delivery
Limited which was not disclosed as a related party in the company's
financial statements.
9. All Press enquiries should be directed to:
-- Peter Timberlake, Head of Communications on telephone: 020
7492 2395 / 07718 086898, or email p.timberlake@frc.org.uk.
-- Alana Sinnen, Communications Manager, on telephone: 020 7492 2395 / 07949 005526 or email: a.sinnen@frc.org.uk.
-- Rita Carolan, Communications Manager on telephone: 020 7492 2307 / 07428 149096 or email: r.carolan@frc.org.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCTPBLTMBTMMJF
(END) Dow Jones Newswires
December 08, 2016 04:25 ET (09:25 GMT)
Frasers (LSE:FRAS)
Historical Stock Chart
From Apr 2024 to May 2024
Frasers (LSE:FRAS)
Historical Stock Chart
From May 2023 to May 2024