Peachtree 2015 Annual Report Download - page 160

The Sage Group plc | Annual Report & Accounts 2015
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Governance
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Financial statements
Company accounting policies
Company accounting policies
Basis of accounting
These financial statements are prepared on the going concern basis, under the historical cost convention, and in accordance with the
Companies Act 2006 and applicable accounting standards in the United Kingdom. A summary of the more important Company accounting
policies, which have been consistently applied, is set out below.
Foreign currencies
Monetary assets and liabilities expressed in foreign currencies are translated into sterling at rates of exchange prevailing at the date of the
balance sheet or at the agreed contractual rate. Transactions in foreign currencies are converted into sterling at the rate prevailing at the
dates of the transactions. All differences on exchange are taken to the profit and loss account.
Investments
Fixed asset investments are stated at cost less provision for any diminution in value.
Parent Company profit and loss account
The amount of profit for the financial year before dividends within the accounts of the parent Company is £64.3m (2014: £538.0m). There is
no material difference between the profits and losses as reported above and historical cost profits and losses and there are no other gains
or losses in the year.
No profit and loss account or cash flow statement is presented for the Company as permitted by section 408 of the Companies Act 2006.
Auditors’ remuneration
The audit fees payable in relation to the audit of the financial statements of the Company are £30,000 (2014: £27,000).
Directors’ remuneration
Details of the remuneration of Executive and Non-Executive Directors and their interest in shares and options of the Company are given
in the audited part of the Directors’ Remuneration Report on pages 74 to 92.
Share-based payments
The Company issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at
fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date
of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company’s estimate
of the shares that will eventually vest allowing for the effect of non-market-based vesting conditions.
Fair value is measured using the Black-Scholes or the Monte Carlo pricing models. The expected life used in the model has been adjusted
based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
The Company also provides certain employees with the ability to purchase the Company’s ordinary shares at a discount to the current
market value at the date of the grant. The Company records an expense, based on its estimate of the discount related to shares expected
to vest, on a straight-line basis over the vesting period.
At the end of each reporting period, the entity revises its estimates for the number of options expected to vest. It recognises the impact
of the revision to original estimates, if any, in the profit and loss account, with a corresponding adjustment to equity.
The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium
when the options are exercised.
Financial instruments
The accounting policy of the Company for financial instruments is the same as that shown in the Group accounting policies. This policy
is in accordance with FRS 26, “Financial Instruments: Recognition and Measurement”.