Peachtree 2015 Annual Report Download - page 146

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The Sage Group plc | Annual Report & Accounts 2015
144
Net debt and capital structure continued
13 Financial instruments continued
13.5 Sensitivity analysis continued
2015 2014
Income
(losses)/gains
£m
Equity
(losses)/gains
£m
Income
(losses)/gains
£m
Equity
(losses)/gains
£m
1% increase in market interest rates (1.4) (1.4) (2.5) (2.5)
1% decrease in market interest rates 1.2 1.2 2.5 2.5
10% strengthening of sterling versus the US Dollar (6.1) (30.1) (3.9) (17.4)
10% strengthening of sterling versus the Euro (7.1) (20.9) (5.9) (28.0)
10% weakening of sterling versus the US Dollar 6.7 33.2 4.3 19.2
10% weakening of sterling versus the Euro 7.9 23.0 6.5 30.8
13.6 The minimum lease payments under finance leases fall due as follows:
2015
£m
2014
£m
In less than one year 0.6 1.1
In more than one year but not more than five years 0.4 0.4
1.0 1.5
Future finance charges on finance leases ––
Present value of finance lease liabilities 1.0 1.5
13.7 Hedge accounting
Accounting policy
The Group’s external US Dollar and Euro denominated borrowings are designated as a hedge of the net investment in its subsidiaries
in the US and Eurozone. The portion of the gain or loss on an instrument used to hedge a net investment in a foreign operation which
is determined to be an effective hedge and is recognised in other comprehensive income. The ineffective portion is recognised
immediately in profit or loss. On disposal of the net investment, the foreign exchange gains and losses on the hedging instrument
are recycled to the income statement from equity.
14 Equity
This note analyses the movements recorded through shareholders’ equity that are not explained elsewhere in the financial statements,
being changes in the amount which shareholders have invested in the Group.
The Group utilises share award schemes as part of its employee remuneration package. Share option schemes for our employees
include The Sage Group Performance Share Plan for directors and senior executives and The Sage Group Savings-related Share Option
Plan (the “SAYE Plan”) for all qualifying employees. We incur a cost in respect of these schemes in our income statement, which is set out
below along with a detailed description of each scheme and the number of options outstanding.
This note also shows the dividends paid in the year and any dividends that are to be proposed and paid post year-end. Dividends are paid
as an amount per ordinary share held.
Accounting policy
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown
in equity as a deduction, net of tax, from the proceeds.
Where any Group company purchases the Company’s equity share capital (treasury shares), the consideration paid, including any
directly attributable incremental costs (net of income taxes), is deducted from equity attributable to the owners of the Company until
the shares are cancelled or reissued.