SEC Company Response from SIGNET JEWELERS LTD (SIG) (CIK 0000832988) (SIG) — Sep 28, 2007
SIGNET JEWELERS LTD (SIG) (CIK 0000832988)
Date: Sept. 28, 2007 · CIK: 0000832988 · Accession: 0000909518-07-000854
AI Filing Summary & Sentiment
Referenced dates: February 28, 2005, September 14, 2007
Letter
William H. Thompson Branch Chief Division of Corporation Finance Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 September 28, 2007
RE: SIGNET GROUP PLC FORM 20-F FOR FISCAL YEAR ENDED FEBRUARY 3, 2007 FILED MAY 5, 2007 FILE NO. 1-32349
Dear Mr. Thompson,
Thank you very much for your letter dated September 14, 2007 setting forth comments of the staff of the Division of Corporation Finance (the "Staff") of the Securities and Exchange Commission (the "Commission") on the Form 20-F (the "2006/07 Form 20-F") for the fiscal year ended February 3, 2007 of Signet Group plc (the "Company").
Please find attached the Company's responses to the comments raised in your letter. To facilitate the Staff's review, the Company has reproduced the captions and numbered comments from the Staff's comment letter below in italics. The Company's response follows each comment.
General -------
1. Please revise to check the appropriate boxes on the face page of the filing.
The Company notes that the boxes appear checked on the face page of the 2006/07 Form 20-F that is available on the Commission's website at www.sec.gov.
Annual Report & Accounts ------------------------
Consolidated cash flow statement, page 78
2. Please tell us the items and their amounts included in the "other non-cash movements" line item for each year presented. We believe you should provide separate disclosure for any material items included in this line item. In that regard, please separately disclose non-cash items such as provisions, deferred taxes, unrealized foreign currency gains and losses, undistributed profits of associates, minority interests and stock-based compensation. Refer to paragraph 20 of IAS 7.
<PAGE>
Other non-cash movements comprised the following:
2007 2006 2005 (pound)m (pound)m (pound)m
Share-based payments 3.6 4.5 4.9 Movement in provisions (1.1) 0.4 (0.6) Retirement benefits (0.1) -- 0.2 ------- ------- ------- Total other non-cash movements 2.4 4.9 4.5 ======= ======= =======
The above items were not disclosed separately by the Company in its consolidated cash flow statement as they were not considered material.
The Company notes, however, that the non-cash movements relating to share-based payments represent a significant proportion of the total of "other non-cash movements" and that they are larger than certain other items that are separately disclosed in the consolidated cash flow statement. Therefore, the Company will disclose this item separately in the consolidated cash flow statement in future filings.
Notes to the accounts, page 80 ------------------------------
Note 1. Principal accounting policies, page 80 ------- --------------------------------------
(d) Revenue recognition, page 80 --------------------------------
3. Please disclose each significant category of revenue recognized during the periods presented including revenue from rendering services, the sale of extended warranty contracts and warranty commissions. Refer to IAS 18, paragraph 35.
The Company considers the sale of jewellery to be its only significant category of revenue, on the basis that the aggregate of all other revenue streams represents significantly less than ten percent of total sales. The Company has referred to paragraph 35 of IAS 14, which uses a figure of ten percent to define reportable segments, and Rule 5.03(b) of Regulation S-X, which permits income classes amounting to less than ten percent to be combined, in order to interpret the term "significant category of revenue" in paragraph 35 of IAS 18.
4. Please tell us the terms of the extended service/warranty contracts for which you retain the contractual obligation. With respect to lifetime service/warranty contracts, please tell us how you recognize revenue for these contracts including how you determine the historical claims experience for lifetime warranties.
The Company retains a contractual warranty obligation, subject to certain inspection practices over the period of ownership, for certain products sold. A provision is maintained for potential costs under this obligation based on historical experience.
The Company also sells extended service/warranty contracts. The terms of such contracts provide, subject to certain conditions, for lifetime cover for repair beyond normal wear and tear. These contracts have been sold under similar terms for many years.
<PAGE>
With respect to the recognition of revenue for lifetime service/warranty contracts sold by the Company, the Company refers back to response 23 in its letters to the Commission dated February 28, 2005 and March 31, 2005. In the letter dated February 28, 2005, the Company confirmed that, following the adoption of the amendment to FRS 5, it applied the following accounting treatment to the sale of warranties in the U.S. under UK GAAP:
"...revenue from the sale of warranties in the U.S. is now deferred and recognised net of direct costs arising from the initial sale over the anticipated period of claims."
As previously confirmed in the Company's letter to the Commission dated March 31, 2005, the Company allocates the revenue over the anticipated period of claims in proportion to the costs expected to be incurred in performing services under the contracts.
Following the move to Adopted IFRS, the Company concluded that it was appropriate to continue to apply the same accounting treatment to the sale of these warranties as had been applied under UK GAAP. In reaching this conclusion, the Company referred, in particular, to paragraphs 20 and 21 of IAS 18, which state that:
"When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction shall be recognised by reference to the stage of completion of the transaction at the balance sheet date...Under this method, revenue is recognised in the accounting periods in which the services are rendered."
Under U.S. GAAP, the Company continues to follow the provisions of FTB 90-1 "Accounting for Separately Priced Extended Warranty and Product Maintenance Contracts" as discussed in its letter to the Commission dated March 31, 2005. As a result, the policies applied under Adopted IFRS and U.S. GAAP are consistent.
In order to determine historical claims experience for lifetime warranties, the Company performs a detailed analysis of the historical claims experience of the U.S. business. To ensure that the basis of revenue recognition remains appropriate, the Company reviews the pattern of claims at the end of each year and incorporates any significant trends. This data covers a period of many years and the pattern of claims has been consistent since these warranty contracts were introduced.
Note 22. Share capital, page 99 --------------------------------
5. Please provide an analysis of changes in share capital for each year for which an income statement is required. Please also provide an analysis of changes in share premium and reserves for each year for which an income statement is required in note 23. Refer to Rule 3-04 of Regulation S-X and IAS 1.
The Company will include this disclosure in future filings.
The relevant disclosures for the periods ended February 3, 2007, January 28, 2006 and January 29, 2005 were as follows:
<PAGE>
22. Share capital
<TABLE> <CAPTION> <S> <C> <C> <C> 2007 2006 2005 (pound)m (pound)m (pound)m ------------------------------------------------------------------------------------------------------------------
Authorised: 5,929,874,019 shares of 0.5p each (2006: 5,929,874,019; 2005: 5,929,874,019) 29.6 29.6 29.6
------------------------------------------------------------------------------------------------------------------
Allotted, called up and fully paid: 1,713,553,809 shares of 0.5p each (2006: 1,738,843,382; 2005: 1,735,615,152) 8.6 8.7 8.7 ------------------------------------------------------------------------------------------------------------------
2007 2007 Number of (pound)m shares ------------------------------------------------------------------------------------------------------------------ Allotted, called up and fully paid: Shares of 0.5p each: At 28 January 2006 1,738,843,382 8.7 Shares issued to 2004 ESOT 3,356,399 -- Share buyback (30,271,522) (0.1) Other share options exercised 1,625,550 --
------------------------------------------------------------------------------------------------------------------
At 3 February 2007 total allotted, called up and fully paid 1,713,553,809 8.6 ------------------------------------------------------------------------------------------------------------------ </TABLE>
23. Share premium and reserves
<TABLE> <CAPTION> Other reserves Retained earnings ------------------------ ------------------------------------------------ Share Purchase premium Capital Special of own Hedging Translation Retained account redemption reserves shares reserve reserve reserve Total (pound)m (pound)m (pound)m (pound)m (pound)m (pound)m (pound)m (pound)m ------------------------------------------------------------------------------------------------------------------------------------ <S> <C> <C> <C> <C> <C> <C> <C> <C> At 31 January 2004 60.7 -- 142.2 -- -- (99.1) 587.8 691.6 Recognised income and expense: - profit for the financial period -- -- -- -- -- -- 134.8 134.8 - translation differences -- -- -- -- -- (18.9) (18.9) - actuarial loss (net) -- -- -- -- -- -- (3.9) (3.9) Dividends -- -- -- -- -- -- (43.8) (43.8) Transfer on property disposals -- -- -- -- -- -- 1.2 1.2 Equity settled transactions (net) -- -- -- -- -- -- 5.1 5.1 Share options exercised 4.8 -- -- 1.6 -- -- -- 6.4 Purchase of own shares by ESOT -- -- -- (9.5) -- -- -- (9.5) Shares issued to QUEST/ESOTs 2.5 -- -- -- -- -- (2.5) --
------------------------------------------------------------------------------------------------------------------------------------ At 29 January 2005 68.0 -- 142.2 (7.9) -- (118.0) 678.7 763.0 Recognised income and expense: - profit for the financial period -- -- -- -- -- -- 130.8 130.8 - cash flow hedges (net) -- -- -- -- 1.4 -- -- 1.4 - translation differences -- -- -- -- -- 33.1 -- 33.1 - actuarial loss (net) -- -- -- -- -- -- (11.4) (11.4) Dividends -- -- -- -- -- -- (52.7) (52.7) Equity settled transactions (net) -- -- -- -- -- -- 4.1 4.1 Share options exercised 2.3 -- -- 1.6 -- -- -- 3.9 Purchase of own shares by ESOT -- -- -- (2.0) -- -- -- (2.0) Shares issued to ESOTs 1.4 -- -- -- -- -- (1.4) --
------------------------------------------------------------------------------------------------------------------------------------ At 28 January 2006 71.7 -- 142.2 (8.3) 1.4 (84.9) 748.1 870.2 Recognised income and expense: - profit for the financial period -- -- -- -- -- -- 141.5 141.5 - cash flow hedges (net) -- -- -- -- 1.2 -- -- 1.2 - translation differences -- -- -- -- (63.4) -- (63.4) - actuarial gain (net) -- -- -- -- -- -- 11.2 11.2 Dividends -- -- -- -- -- -- (57.8) (57.8) Equity settled transactions (net) -- -- -- -- -- -- 4.3 4.3 Share options exercised 4.6 -- -- 1.1 -- -- (1.6) 4.1 Purchase of own shares -- 0.1 -- -- -- -- (33.7) (33.6) Shares issued to ESOTs 0.7 -- -- -- -- -- (0.7) --
------------------------------------------------------------------------------------------------------------------------------------ At 3 February 2007 77.0 0.1 142.2 (7.2) 2.6 (148.3) 811.3 877.7 -
Show Raw Text
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
William H. Thompson
Branch Chief
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
September 28, 2007
RE: SIGNET GROUP PLC
FORM 20-F FOR FISCAL YEAR ENDED FEBRUARY 3, 2007
FILED MAY 5, 2007
FILE NO. 1-32349
Dear Mr. Thompson,
Thank you very much for your letter dated September 14, 2007 setting forth
comments of the staff of the Division of Corporation Finance (the "Staff") of
the Securities and Exchange Commission (the "Commission") on the Form 20-F (the
"2006/07 Form 20-F") for the fiscal year ended February 3, 2007 of Signet Group
plc (the "Company").
Please find attached the Company's responses to the comments raised in your
letter. To facilitate the Staff's review, the Company has reproduced the
captions and numbered comments from the Staff's comment letter below in italics.
The Company's response follows each comment.
General
-------
1. Please revise to check the appropriate boxes on the face page of the
filing.
The Company notes that the boxes appear checked on the face page of the 2006/07
Form 20-F that is available on the Commission's website at www.sec.gov.
Annual Report & Accounts
------------------------
Consolidated cash flow statement, page 78
2. Please tell us the items and their amounts included in the "other
non-cash movements" line item for each year presented. We believe you
should provide separate disclosure for any material items included in
this line item. In that regard, please separately disclose non-cash
items such as provisions, deferred taxes, unrealized foreign currency
gains and losses, undistributed profits of associates, minority
interests and stock-based compensation. Refer to paragraph 20 of IAS 7.
<PAGE>
Other non-cash movements comprised the following:
2007 2006 2005
(pound)m (pound)m (pound)m
Share-based payments 3.6 4.5 4.9
Movement in provisions (1.1) 0.4 (0.6)
Retirement benefits (0.1) -- 0.2
------- ------- -------
Total other non-cash movements 2.4 4.9 4.5
======= ======= =======
The above items were not disclosed separately by the Company in its consolidated
cash flow statement as they were not considered material.
The Company notes, however, that the non-cash movements relating to share-based
payments represent a significant proportion of the total of "other non-cash
movements" and that they are larger than certain other items that are separately
disclosed in the consolidated cash flow statement. Therefore, the Company will
disclose this item separately in the consolidated cash flow statement in future
filings.
Notes to the accounts, page 80
------------------------------
Note 1. Principal accounting policies, page 80
------- --------------------------------------
(d) Revenue recognition, page 80
--------------------------------
3. Please disclose each significant category of revenue recognized during
the periods presented including revenue from rendering services, the
sale of extended warranty contracts and warranty commissions. Refer to
IAS 18, paragraph 35.
The Company considers the sale of jewellery to be its only significant category
of revenue, on the basis that the aggregate of all other revenue streams
represents significantly less than ten percent of total sales. The Company has
referred to paragraph 35 of IAS 14, which uses a figure of ten percent to define
reportable segments, and Rule 5.03(b) of Regulation S-X, which permits income
classes amounting to less than ten percent to be combined, in order to interpret
the term "significant category of revenue" in paragraph 35 of IAS 18.
4. Please tell us the terms of the extended service/warranty contracts for
which you retain the contractual obligation. With respect to lifetime
service/warranty contracts, please tell us how you recognize revenue
for these contracts including how you determine the historical claims
experience for lifetime warranties.
The Company retains a contractual warranty obligation, subject to certain
inspection practices over the period of ownership, for certain products sold. A
provision is maintained for potential costs under this obligation based on
historical experience.
The Company also sells extended service/warranty contracts. The terms of such
contracts provide, subject to certain conditions, for lifetime cover for repair
beyond normal wear and tear. These contracts have been sold under similar terms
for many years.
2
<PAGE>
With respect to the recognition of revenue for lifetime service/warranty
contracts sold by the Company, the Company refers back to response 23 in its
letters to the Commission dated February 28, 2005 and March 31, 2005. In the
letter dated February 28, 2005, the Company confirmed that, following the
adoption of the amendment to FRS 5, it applied the following accounting
treatment to the sale of warranties in the U.S. under UK GAAP:
"...revenue from the sale of warranties in the U.S. is now deferred and
recognised net of direct costs arising from the initial sale over the
anticipated period of claims."
As previously confirmed in the Company's letter to the Commission dated March
31, 2005, the Company allocates the revenue over the anticipated period of
claims in proportion to the costs expected to be incurred in performing services
under the contracts.
Following the move to Adopted IFRS, the Company concluded that it was
appropriate to continue to apply the same accounting treatment to the sale of
these warranties as had been applied under UK GAAP. In reaching this conclusion,
the Company referred, in particular, to paragraphs 20 and 21 of IAS 18, which
state that:
"When the outcome of a transaction involving the rendering of services can be
estimated reliably, revenue associated with the transaction shall be recognised
by reference to the stage of completion of the transaction at the balance sheet
date...Under this method, revenue is recognised in the accounting periods in
which the services are rendered."
Under U.S. GAAP, the Company continues to follow the provisions of FTB 90-1
"Accounting for Separately Priced Extended Warranty and Product Maintenance
Contracts" as discussed in its letter to the Commission dated March 31, 2005. As
a result, the policies applied under Adopted IFRS and U.S. GAAP are consistent.
In order to determine historical claims experience for lifetime warranties, the
Company performs a detailed analysis of the historical claims experience of the
U.S. business. To ensure that the basis of revenue recognition remains
appropriate, the Company reviews the pattern of claims at the end of each year
and incorporates any significant trends. This data covers a period of many years
and the pattern of claims has been consistent since these warranty contracts
were introduced.
Note 22. Share capital, page 99
--------------------------------
5. Please provide an analysis of changes in share capital for each year
for which an income statement is required. Please also provide an
analysis of changes in share premium and reserves for each year for
which an income statement is required in note 23. Refer to Rule 3-04 of
Regulation S-X and IAS 1.
The Company will include this disclosure in future filings.
The relevant disclosures for the periods ended February 3, 2007, January 28,
2006 and January 29, 2005 were as follows:
3
<PAGE>
22. Share capital
<TABLE>
<CAPTION>
<S> <C> <C> <C>
2007 2006 2005
(pound)m (pound)m (pound)m
------------------------------------------------------------------------------------------------------------------
Authorised:
5,929,874,019 shares of 0.5p each (2006: 5,929,874,019; 2005: 5,929,874,019) 29.6 29.6 29.6
------------------------------------------------------------------------------------------------------------------
Allotted, called up and fully paid:
1,713,553,809 shares of 0.5p each (2006: 1,738,843,382; 2005: 1,735,615,152) 8.6 8.7 8.7
------------------------------------------------------------------------------------------------------------------
2007 2007
Number of (pound)m
shares
------------------------------------------------------------------------------------------------------------------
Allotted, called up and fully paid:
Shares of 0.5p each:
At 28 January 2006 1,738,843,382 8.7
Shares issued to 2004 ESOT 3,356,399 --
Share buyback (30,271,522) (0.1)
Other share options exercised 1,625,550 --
------------------------------------------------------------------------------------------------------------------
At 3 February 2007 total allotted, called up and fully paid 1,713,553,809 8.6
------------------------------------------------------------------------------------------------------------------
</TABLE>
23. Share premium and reserves
<TABLE>
<CAPTION>
Other reserves Retained earnings
------------------------ ------------------------------------------------
Share Purchase
premium Capital Special of own Hedging Translation Retained
account redemption reserves shares reserve reserve reserve Total
(pound)m (pound)m (pound)m (pound)m (pound)m (pound)m (pound)m (pound)m
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
At 31 January 2004 60.7 -- 142.2 -- -- (99.1) 587.8 691.6
Recognised income and expense:
- profit for the financial
period -- -- -- -- -- -- 134.8 134.8
- translation differences -- -- -- -- -- (18.9) (18.9)
- actuarial loss (net) -- -- -- -- -- -- (3.9) (3.9)
Dividends -- -- -- -- -- -- (43.8) (43.8)
Transfer on property disposals -- -- -- -- -- -- 1.2 1.2
Equity settled transactions (net) -- -- -- -- -- -- 5.1 5.1
Share options exercised 4.8 -- -- 1.6 -- -- -- 6.4
Purchase of own shares by ESOT -- -- -- (9.5) -- -- -- (9.5)
Shares issued to QUEST/ESOTs 2.5 -- -- -- -- -- (2.5) --
------------------------------------------------------------------------------------------------------------------------------------
At 29 January 2005 68.0 -- 142.2 (7.9) -- (118.0) 678.7 763.0
Recognised income and expense:
- profit for the financial
period -- -- -- -- -- -- 130.8 130.8
- cash flow hedges (net) -- -- -- -- 1.4 -- -- 1.4
- translation differences -- -- -- -- -- 33.1 -- 33.1
- actuarial loss (net) -- -- -- -- -- -- (11.4) (11.4)
Dividends -- -- -- -- -- -- (52.7) (52.7)
Equity settled transactions (net) -- -- -- -- -- -- 4.1 4.1
Share options exercised 2.3 -- -- 1.6 -- -- -- 3.9
Purchase of own shares by ESOT -- -- -- (2.0) -- -- -- (2.0)
Shares issued to ESOTs 1.4 -- -- -- -- -- (1.4) --
------------------------------------------------------------------------------------------------------------------------------------
At 28 January 2006 71.7 -- 142.2 (8.3) 1.4 (84.9) 748.1 870.2
Recognised income and expense:
- profit for the financial
period -- -- -- -- -- -- 141.5 141.5
- cash flow hedges (net) -- -- -- -- 1.2 -- -- 1.2
- translation differences -- -- -- -- (63.4) -- (63.4)
- actuarial gain (net) -- -- -- -- -- -- 11.2 11.2
Dividends -- -- -- -- -- -- (57.8) (57.8)
Equity settled transactions (net) -- -- -- -- -- -- 4.3 4.3
Share options exercised 4.6 -- -- 1.1 -- -- (1.6) 4.1
Purchase of own shares -- 0.1 -- -- -- -- (33.7) (33.6)
Shares issued to ESOTs 0.7 -- -- -- -- -- (0.7) --
------------------------------------------------------------------------------------------------------------------------------------
At 3 February 2007 77.0 0.1 142.2 (7.2) 2.6 (148.3) 811.3 877.7
-