DS Smith Plc – Annual report – 30 April 2020
Notes to the parent Company financial statements (extract)
1. Principal accounting policies (extracts)
1. Principal accounting policies
(a) Basis of preparation
These financial statements of DS Smith Plc (the ‘Company’) have been prepared on the going concern basis and in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and the UK Companies Act.
The accounts are prepared under the historical cost convention with the exception of certain financial instruments and employee benefit plans that are stated at their fair value and share-based payments that are stated at their grant date fair value.
Under section 408 of the Companies Act 2006 the Company is exempt from the requirement to present its own income statement or statement of comprehensive income.
In these financial statements, the Company has applied the exemptions available under FRS 101 in respect of the following disclosures:
- statement of cash flows and related notes;
- a comparative period reconciliation for share capital;
- disclosures in respect of transactions with wholly-owned subsidiaries;
- comparative period reconciliations for tangible fixed assets and intangible assets;
- disclosures in respect of capital management;
- the effects of new but not yet effective IFRSs; and
- disclosures in respect of Key Management Personnel.
As the Group financial statements include the equivalent disclosures, the Company has also taken advantage of the exemptions under FRS 101 available in respect of the following disclosures:
- IAS 24 Related Party Disclosure in respect of transactions entered with wholly-owned subsidiaries;
- IFRS 2 Share-based Payment in respect of Group settled share-based payments; and
- IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial Instruments.
The Company adopted the following new accounting standards, amendments or interpretations as of 1 May 2019:
- IFRS 16 Leases;
- IFRIC Interpretation 23 Uncertainty over Income Tax Treatments;
- Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures; and
- Amendments to IAS 19 Plan Amendment, Curtailment or Settlement.
The impact of IFRS 16 Leases was to bring a right-of-use lease asset within property, plant and equipment and equal and opposite lease liability on to the balance sheet on the 1 May 2019 transition date.
The adoption of the remaining standards, interpretations and amendments has not had a material effect on the results for the year.
(h) Employee benefits
(i) Defined benefit schemes
The Company is the sponsoring employer for a UK funded, defined benefit scheme, the DS Smith Group Pension scheme (the ‘Group Scheme’).
The Group has in place a stated policy for allocating the net defined benefit cost relating to the Group Scheme to participating Group entities.
Accordingly, both the Company’s statement of financial position and income statement reflect the Company’s share of the net defined benefit liability and net defined benefit cost in respect of the Group
scheme, allocated per the stated policy. Actuarial gains and losses are recognised immediately in the statement of comprehensive income.