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SIG » Topics » Capital and other financial commitments

This excerpt taken from the SIG 20-F filed May 9, 2008.
Capital and other financial commitments
 Capital commitments at 2 February 2008 for which no provision has been made in these consolidated accounts were as follows:
  2008   2007  
  $m   $m  
Contracted 37.4   24.4  

25. Contingent liabilities
The Group is not party to any legal proceedings considered to be material to profit, financial position or cash flow including any bankruptcy, receivership or similar proceedings involving the Group or any of its subsidiaries. No director, officer or affiliate of the Group or any associate of any such director has been a party adverse to the Group or any of its subsidiaries or has a material interest adverse to the Group or any of its subsidiaries.

A class lawsuit for an unspecified amount has been filed against Sterling Jewelers Inc, a subsidiary of Signet Group plc, in the New York federal court. The lawsuit alleges that US store-level employment practices are discriminatory as to compensation and promotional activities. The Group denies these allegations and intends to defend them vigorously.

The Group has assigned or sub-let UK property leases in the normal course of business. Should the assignees or sub-tenants fail to fulfil any obligation in respect of these leases, the Group may be liable for those defaults. The number of such claims arising to date has been small, and the liability, which is charged to the income statement as it arises, has not been material.

26. Financial instruments
Currency derivatives
The Group operates in both the US and the UK and it is exposed to foreign exchange risk arising from various currency exposures. The Group enters into the forward purchase of foreign currencies, principally the US dollar, in order to limit the impact of movements in foreign exchange rates on its forecast foreign currency purchases.

The Group also enters into forward purchase contracts for commodities in order that values of assets should not be unnecessarily exposed to significant movements in the price of the underlying precious metal raw material.
  Fair values as at   Fair values as at  
  2 February 2008   3 February 2007  
  Assets   Liabilities   Assets   Liabilities  
  $m   $m   $m   $m  
Cash flow hedges:                
Forward foreign currency contracts 1.9   –   –   (0.8 )
Forward commodity contracts 9.6   –   8.3   –  
  11.5   –   8.3   (0.8 )

Foreign currency exchange contracts not designated as cash flow hedges are used to hedge currency flows through the Signet Group plc bank accounts to ensure the Group is not exposed to foreign currency exchange risk in its cash and borrowings. As at 2 February 2008 the fair value of outstanding cross currency swaps was a liability of $1.6 million (2007: asset of $0.2 million).

The fair values of all financial instruments shown above are based on market value equivalents at the balance sheet date and are held as assets and liabilities within other receivables and other payables, and all contracts have a maturity of less than one year.

Gains of $10.2 million (2007: loss of $1.5 million) have been transferred to inventories in respect of contracts that matured during the period. Changes in the fair value of non-hedging foreign currency financial instruments amounting to $1.3 million (2007: $0.2 million) have been credited to the income statement during the period. The ineffective portion of hedging instruments taken to the income statement was $1.0 million (2007: $nil).

 

112 Signet Group plc Annual Report & Accounts year ended 2 February 2008

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  Financial statements
   
   
   

This excerpt taken from the SIG 6-K filed May 1, 2008.
Capital and other financial commitments
 Capital commitments at 2 February 2008 for which no provision has been made in these consolidated accounts were as follows:
  2008   2007  
  $m   $m  
Contracted 37.4   24.4  

25. Contingent liabilities
The Group is not party to any legal proceedings considered to be material to profit, financial position or cash flow including any bankruptcy, receivership or similar proceedings involving the Group or any of its subsidiaries. No director, officer or affiliate of the Group or any associate of any such director has been a party adverse to the Group or any of its subsidiaries or has a material interest adverse to the Group or any of its subsidiaries.

A class lawsuit for an unspecified amount has been filed against Sterling Jewelers Inc, a subsidiary of Signet Group plc, in the New York federal court. The lawsuit alleges that US store-level employment practices are discriminatory as to compensation and promotional activities. The Group denies these allegations and intends to defend them vigorously.

The Group has assigned or sub-let UK property leases in the normal course of business. Should the assignees or sub-tenants fail to fulfil any obligation in respect of these leases, the Group may be liable for those defaults. The number of such claims arising to date has been small, and the liability, which is charged to the income statement as it arises, has not been material.

26. Financial instruments
Currency derivatives
The Group operates in both the US and the UK and it is exposed to foreign exchange risk arising from various currency exposures. The Group enters into the forward purchase of foreign currencies, principally the US dollar, in order to limit the impact of movements in foreign exchange rates on its forecast foreign currency purchases.

The Group also enters into forward purchase contracts for commodities in order that values of assets should not be unnecessarily exposed to significant movements in the price of the underlying precious metal raw material.
  Fair values as at   Fair values as at  
  2 February 2008   3 February 2007  
  Assets   Liabilities   Assets   Liabilities  
  $m   $m   $m   $m  
Cash flow hedges:                
Forward foreign currency contracts 1.9   –   –   (0.8 )
Forward commodity contracts 9.6   –   8.3   –  
  11.5   –   8.3   (0.8 )

Foreign currency exchange contracts not designated as cash flow hedges are used to hedge currency flows through the Signet Group plc bank accounts to ensure the Group is not exposed to foreign currency exchange risk in its cash and borrowings. As at 2 February 2008 the fair value of outstanding cross currency swaps was a liability of $1.6 million (2007: asset of $0.2 million).

The fair values of all financial instruments shown above are based on market value equivalents at the balance sheet date and are held as assets and liabilities within other receivables and other payables, and all contracts have a maturity of less than one year.

Gains of $10.2 million (2007: loss of $1.5 million) have been transferred to inventories in respect of contracts that matured during the period. Changes in the fair value of non-hedging foreign currency financial instruments amounting to $1.3 million (2007: $0.2 million) have been credited to the income statement during the period. The ineffective portion of hedging instruments taken to the income statement was $1.0 million (2007: $nil).

 

112 Signet Group plc Annual Report & Accounts year ended 2 February 2008

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  Financial statements
   
   
   

This excerpt taken from the SIG 20-F filed May 4, 2007.
Capital and other financial commitments
Capital commitments at 3 February 2007 for which no provision has been made in these consolidated accounts were as follows:

  2007   2006  
  £m   £m  
 
Contracted 12.4   11.2  
 
   
26. Contingent liabilities
The Group is not party to any legal proceedings considered to be material to profit, financial position or cash flow including any bankruptcy, receivership or similar proceedings involving the Group or any of its significant subsidiaries. No director, officer or affiliate of the Group or any associate of any such director has been party adverse to the Group or any of its subsidiaries or has a material interest adverse to the Group or any of its subsidiaries.

The Group has assigned or sub-let UK property leases in the normal course of business. Should the assignees or sub-tenants fail to fulfil any obligation in respect of these leases, the Group may be liable for those defaults. The number of such claims arising to date has been small, and the liability, which is charged to the income statement as it arises, has not been material.

The Group’s US operation gives its customers the option of purchasing a lifetime service plan on most of the products sold. Such service plans cover the cost of repair, subject to certain terms and conditions.

27. Financial instruments
Currency derivatives

The Group enters into the forward purchase of foreign currencies, principally the US dollar, in order to limit the impact of movements in foreign exchange rates on its forecast foreign currency purchases. It is the policy of the Group to ensure identified foreign currency exposures are hedged to at least the following levels:
 
Less than 3 months 100.0%
3 – 6 months  75.0 %
6 – 12 months  50.0 %

The Group also enters into forward purchase contracts for commodities in order that values of assets should not be unnecessarily exposed to significant movements in the price of the underlying precious metal raw material.

  Fair values as at   Fair values as at  
  3 February 2007   28 January 2006  
  Assets   Liabilities   Assets   Liabilities  
  £m   £m   £m   £m  
 
Cash flow hedges:                
Forward foreign currency contracts –   (0.4 ) 0.5   –  
Forward commodity contracts 4.1   –   1.5   –  
 
  4.1   (0.4 ) 2.0   –  
 

 

Signet Group plc Annual Report & Accounts 53 weeks ended 3 February 2007

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    103

 

Foreign currency exchange contracts not designated as cash flow hedges are used to hedge currency flows through the Signet Group plc bank accounts to ensure the Group is not exposed to foreign currency exchange risk in its cash and borrowings. As at 3 February 2007 the fair value of outstanding cross currency swaps were £0.1 million.

The fair values of all financial instruments shown above are based on market value equivalents at the balance sheet date and are held as assets and liabilities within other receivables and other payables, and all contracts have a maturity of less than one year.

Amounts of £0.8 million have been transferred to inventories in respect of contracts that matured during the period. Changes in the fair value of non-hedging foreign currency financial instruments amounting to £0.1 million have been credited to the income statement during the period.

The Group does not currently designate its foreign currency borrowings as a hedging instrument for the purpose of hedging the translation of its foreign operations.

This excerpt taken from the SIG 6-K filed May 4, 2007.
Capital and other financial commitments
Capital commitments at 3 February 2007 for which no provision has been made in these consolidated accounts were as follows:

  2007   2006  
  £m   £m  
 
Contracted 12.4   11.2  
 
   
26. Contingent liabilities
The Group is not party to any legal proceedings considered to be material to profit, financial position or cash flow including any bankruptcy, receivership or similar proceedings involving the Group or any of its significant subsidiaries. No director, officer or affiliate of the Group or any associate of any such director has been party adverse to the Group or any of its subsidiaries or has a material interest adverse to the Group or any of its subsidiaries.

The Group has assigned or sub-let UK property leases in the normal course of business. Should the assignees or sub-tenants fail to fulfil any obligation in respect of these leases, the Group may be liable for those defaults. The number of such claims arising to date has been small, and the liability, which is charged to the income statement as it arises, has not been material.

The Group’s US operation gives its customers the option of purchasing a lifetime service plan on most of the products sold. Such service plans cover the cost of repair, subject to certain terms and conditions.

27. Financial instruments
Currency derivatives

The Group enters into the forward purchase of foreign currencies, principally the US dollar, in order to limit the impact of movements in foreign exchange rates on its forecast foreign currency purchases. It is the policy of the Group to ensure identified foreign currency exposures are hedged to at least the following levels:
 
Less than 3 months 100.0%
3 – 6 months  75.0 %
6 – 12 months  50.0 %

The Group also enters into forward purchase contracts for commodities in order that values of assets should not be unnecessarily exposed to significant movements in the price of the underlying precious metal raw material.

  Fair values as at   Fair values as at  
  3 February 2007   28 January 2006  
  Assets   Liabilities   Assets   Liabilities  
  £m   £m   £m   £m  
 
Cash flow hedges:                
Forward foreign currency contracts –   (0.4 ) 0.5   –  
Forward commodity contracts 4.1   –   1.5   –  
 
  4.1   (0.4 ) 2.0   –  
 

 

Signet Group plc Annual Report & Accounts 53 weeks ended 3 February 2007

Back to Contents

    103

 

Foreign currency exchange contracts not designated as cash flow hedges are used to hedge currency flows through the Signet Group plc bank accounts to ensure the Group is not exposed to foreign currency exchange risk in its cash and borrowings. As at 3 February 2007 the fair value of outstanding cross currency swaps were £0.1 million.

The fair values of all financial instruments shown above are based on market value equivalents at the balance sheet date and are held as assets and liabilities within other receivables and other payables, and all contracts have a maturity of less than one year.

Amounts of £0.8 million have been transferred to inventories in respect of contracts that matured during the period. Changes in the fair value of non-hedging foreign currency financial instruments amounting to £0.1 million have been credited to the income statement during the period.

The Group does not currently designate its foreign currency borrowings as a hedging instrument for the purpose of hedging the translation of its foreign operations.

EXCERPTS ON THIS PAGE:

20-F
May 9, 2008
6-K
May 1, 2008
20-F
May 4, 2007
6-K
May 4, 2007

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