NOTES TO THE FINANCIAL STATEMENTS OF GKN PLC
1 Significant accounting policies and basis of preparation
The separate financial statements of the Company, incorporated and domiciled in the UK, are presented as required by the Companies Act 2006. They have been prepared on a going concern basis under the historical cost convention except where other measurement bases are required to be applied and in accordance with IFRS under Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (FRS 101). In accordance with FRS 101 the Company has taken advantage of the exemption not to disclose transactions with related parties. As the consolidated financial statements have been prepared in accordance with IFRS 7, the Company is exempt from further disclosure of financial instruments in accordance with FRS 101. The principal accounting policies are summarised below. They have been applied consistently in both years presented.
Fixed asset investments in subsidiaries are shown at cost less provision for impairment.
GKN shares which have been purchased and not cancelled are held as treasury shares and deducted from shareholders’ equity.
Equity-settled share-based payments are measured at fair value at the date of grant. The Company has no employees. Equity-settled share-based payments that are made available to employees of the Company’s subsidiaries are treated as increases in equity over the vesting period of the award, with a corresponding increase in the Company’s investments in subsidiaries, based on an estimate of the number of shares that will eventually vest.
Interest income is recognised using the effective interest method. Dividend income is recognised when the right to receive payment is established. Current tax is recognised in the income statement unless items relate to equity.
The annual final dividend is not provided for until approved at the annual general meeting whilst interim dividends are charged in the period they are paid.
2 Income statement
As permitted by section 408 of the Companies Act 2006 the Company has elected not to present its own Income Statement for the year. The profit for the year ended 31 December 2015 was £3 million (2014: £306 million). Auditors’ remuneration for audit services to the Company was £0.5 million (2014: £0.5 million).
3 Fixed asset investments
Cost and net book amount
At 1 January 2015 Additions – share-based payments At 31 December 2015 A full list of investments in subsidiaries and other undertakings is disclosed in note 8.
3,601 1 3,602
4 Share capital 5 Reserves
Share capital disclosure is shown in note 22 of the consolidated financial statements.
Capital redemption reserve £m
Share premium account £m
Retained earnings £m
At 1 January 2015 Profit for the year Share-based payments Dividends paid to equity shareholders Proceeds from exercise of share options Net proceeds from share placement At 31 December 2015
298 – – – – – 298
139 – – – – 191 330
949 3 1 (142) 2 – 813
GKN plc Annual Report and Accounts 2015