54 | FINANCIAL STATEMENTS | Accounting Policies


(s) Provisions A provision is recognised in the Statement of Financial Position when the Group has a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. No provision is established where a reliable estimate of the obligation cannot be made.


Where the Group expects some or all of a provision to be recovered from external parties, the recovery is recognised as a separate asset but only when the reimbursement is virtually certain.


Where the Group has obligations under property leases and where the space has ceased to be used for the purposes of the business, full provision is made for future net outstanding liabilities under such leases after taking into account the effect of any expected sub-letting arrangements.


(t) Share capital When shares are issued, any component that creates a financial liability of the Company or Group is presented as a liability in the Statement of Financial Position, measured initially at fair value, net of transaction costs and thereafter at amortised cost until extinguished on conversion or redemption.


(v) New standards and interpretations not applied


The International Accounting Standards Board has issued the following standards, relevant to the Group, which have not yet been applied and have an effective date after the date of these Financial Statements:


Effective for International Accounting Standards (IAS/IFRS)


Endorsed by the European Union and available for early adoption: IFRS 7 Amendment


Not yet endorsed by the European Union: IFRS 1 Amendment


IAS 12 Amendment IAS 1 Amendment IFRS 10 IFRS 11 IFRS 12 IFRS 13


IAS 27 Revised IAS 28 Revised


IAS 19 Amendment IFRS 7 Amendment IAS 32 Amendment IFRS 9


Disclosures – Transfers of financial assets


Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters


Deferred Tax: Recovery of Underlying Assets


Presentation of Items of Other Comprehensive Income Consolidated Financial Statements Joint Arrangements


Disclosure of Interests in Other Entities Fair Value Measurement


Separate Financial Statements


Investments in Associates and Joint Ventures Employee Benefits


Disclosures – Offsetting Financial Assets and Financial Liabilities Offsetting Financial Assets and Financial Liabilities Financial Instruments (issued in 2009 and 2010)


accounting periods beginning on or after


1 July 2011 1 July 2011


1 January 2012 1 July 2012


1 January 2013 1 January 2013 1 January 2013 1 January 2013 1 January 2013 1 January 2013 1 January 2013 1 January 2013 1 January 2014 1 January 2015


One of the changes in respect of the IAS 19 Amendment for the defined benefit pension arrangements is that the Net Interest Cost will replace the Interest Cost and Expected Return on Assets. The discount rate will be used to calculate the Net Interest Cost instead of a separate assumption for “asset returns”. In addition administrative expenses will require to be shown separately and not within the Net Interest Cost. The overall impact on the Income Statement will depend on the size of the defined benefit deficit and the differential between the expected return rate and the discount rate. It is expected that there will be a slight increase in the net expense as a result of these changes.


The Directors are investigating the impact of the other new and revised standards. It is anticipated that, at a minimum, additional disclosures will be required. The Group intends to adopt the standards in the reporting period in which they become effective.


The remainder of the issue proceeds is allocated to the equity component and included in shareholders’ equity, net of transaction costs.


Ordinary Share capital When Ordinary Shares are repurchased, the amounts of consideration paid, including directly attributable costs, are recognised in the own share reserve included within retained earnings and are classified as deductions in equity. The Company’s dealings in its own shares are reflected through equity.


Dividends on Ordinary Shares are recognised on the date of payment, or if subject to approval, the date approved by the shareholders.


(u) Accounting for Employee Benefit Trusts (EBTs) The Group has several EBTs which own shares in the Company and other investments to enable it to satisfy certain future settlements of share-based awards. The assets of the EBTs, which relate to unvested awards, are consolidated into the Group’s results, with these own shares included within retained earnings at cost. Consideration received for such shares is also recognised in retained earnings. No gain or loss is recognised in the performance statements on the purchase, sale, issue or cancellation of equity shares. Other investments held by EBTs are recognised as assets in the Statement of Financial Position.


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