Rangers could claim for damages of up to £1m from their retail arm over an alleged breach of an intellectual property agreement.

Accounts for Rangers Retail Limited detail a claim from the club, which fellow shareholders Sports Direct say is without "credible basis".

Rangers terminated an IP Licence arrangement with the company in May, effectively barring the manufacture and sale of goods carrying the club's badges.

Despite the move, new replica kits have been distributed for sale in recent weeks featuring a club trademark, a move the club's directors described as "surprising".

The accounts also show a dividend payment of £2.74m was made to shareholders, meaning Rangers received £685,000.

Rangers hold 49% of shares in the company but at the time of the payment held only 25% because of a loan agreement with MASH Holdings Limited, meaning their cut of profit was reduced.

Sports Direct also became liable during the year for a number of costs which were previously either shared by both parties or which fell solely on Rangers.

Staff costs in 2014 were paid by the club before being reclaimed from Rangers Retail Limited.

That changed in 2015, with Sports Direct paying in full salaries of £243,735 before the costs were reclaimed.

Loss-making stores were also closed in 2015. Liabilities of £620,000 were transferred in full to Sports Direct, with no obligation falling on Rangers.

Rangers Retail Limited's auditors Grant Thornton LLP also expressed concern in the accounts, stating they had "not obtained all the information and explanations considered necessary for the purpose of the audit".

They also said they "were unable to determine whether adequate accounting records" had been kept.