Experian 2008 Annual Report Download - page 137

135Experian Annual Report 2008
Introduction 2 – 5
Business review 6 – 37
Governance 38 – 64
Financial statements Company financial statements Financial statements Company financial statements
B. Basis of preparation and significant accounting policies (continued)
The interest differential reflected in forward foreign exchange contracts is taken to interest expense. Forward foreign
exchange contracts are recognised at fair value, based on forward foreign exchange market rates at the balance sheet date.
Gains or losses on forward foreign exchange contracts are taken directly to net foreign exchange gains or losses in the profit
and loss account.
Deferred tax
Deferred tax is provided in respect of timing differences that have originated but not reversed at the balance sheet date and
is determined using the tax rates that are expected to apply when the timing differences reverse. Deferred tax assets are
recognised only to the extent that they are expected to be recoverable.
Own shares
The Experian Group Limited Employee Share Trust, the Experian UK Approved All-Employee Share Plan and the GUS plc
ESOP Trust are separately administered trusts. Liabilities of these trusts are guaranteed by the Company and the assets
of the trusts mainly comprise shares in the Company. The assets, liabilities and expenses of the trusts are included in the
Company’s financial statements as if they were the Company’s own. Such shares held by the trusts are shown as a deduction
from total equity shareholders’ funds at cost.
Share-based payments
The Group has a number of equity settled, share-based compensation plans. These include options and awards in respect of
shares in the Company made at or after demerger together with options and awards previously granted in respect of shares
in GUS plc which were rolled over into options and awards in respect of shares in the Company at demerger.
The fair value of such options and awards granted to employees of the Company is recognised after taking into account the
Company’s best estimate of the number of options and awards expected to vest. The Company revises the vesting estimate
at each balance sheet date and non-market performance conditions are included in the vesting estimates. Amounts are
recognised over the vesting period. Fair value is measured at the date of grant using whichever of the Black-Scholes model,
Monte Carlo model and closing market price is most appropriate to the award. Market based performance conditions are
included in the fair value measurement on grant date and are not revised for actual performance.
The issuance by the Company of share incentives to employees of its subsidiaries represents additional capital contributions
and the fair value of such options and awards is therefore recognised as an increase in the Company’s investment in group
undertakings with a corresponding increase in total equity shareholders’ funds.
C. Operating loss
The operating loss is stated after charging:
2008 2007
(i) Staff costs £m £m
Directors’ fees 1.1 0.4
Wages and salaries 0.4 0.2
1.5 0.6
The Company employed an average of two (2007: one) employees during the year. Executive directors of the Company are
employed by other companies within the Group.
Details of the remuneration of directors are given in the audited part of the report on directors’ remuneration on pages 58 to 63.
2008 2007
(ii) Fees payable to the Company’s auditor and its associates £m £m
Fees payable to the Company’s auditor for the audit of the Group financial statements 0.3 0.3
Fees payable to the Company’s auditor and its associates for other services:
Services in respect of the demerger (included in exceptional items) – 0.6
0.3 0.9
Fees payable to the Company’s auditor for the audit of the parent company financial statements were £40,000 (2007: £30,000).
2008 2007
(iii) Exceptional items £m £m
Costs incurred relating to the demerger of Home Retail Group and Experian – 4.6