1 Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and International Financial Reporting Interpretations Committee interpretations (IFRICs) issued by the International Accounting Standards Board as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies preparing their accounts under IFRS.
The principal accounting policies are described in note 2. The accounting policies are consistent with those applied in the year ended 31st December 2008 as amended to reflect the adoption of the following new standards, amendments and interpretations which are mandatory for the year ended 31st December 2009.
| IFRS 2 | Share-based Payment – amendment (effective from 1st January 2009) |
| IFRS 7 | Financial Instruments: Disclosures – amendment (effective from 1st July 2009) |
| IFRS 8 | Operating Segments (effective from 1st January 2009) |
| IAS 1 | Presentation of Financial Statements – amendment (effective from 1st January 2009) |
| IAS 23 | Borrowing Costs – amendment (effective from 1st January 2009) |
| Improvements to IFRS issued in 2008 | |
At the date of authorisation of these financial statements, the following standards and interpretations applicable to the group’s financial statements which have not been applied in these financial statements were in issue but not effective at the year end. All are deemed not relevant to the group or to have no material impact on the financial statements of the group when the relevant standards come into effect.
| IFRS 3 | Business Combinations – revised (effective from 1st July 2009) |
| IAS 27 | Consolidated and Separate Financial Statements – amendment (effective from 1st July 2009) |
| IAS 32 | Financial Instruments – amendment (effective from 1st July 2009) |
| IAS 39 | Financial Instruments: Recognition and Measurement – amendment (effective from 1st July 2009) |
| IFRIC 17 | Distributions of Non-cash Assets to Owners (effective from 1st July 2009) |
| IFRIC 18 | Transfer of Assets from Customers (effective from 1st July 2009) |
UK companies can only adopt IFRSs and IFRICs after they have been endorsed by the European Union. The following standards have been issued but not yet endorsed by the European Union at the date these accounts were signed:
| IFRS 2 | Share-based Payment – amendment |
| IFRS 9 | Financial Instruments |
| IAS 24 | Related Party Disclosures – revised |
| IFRIC 14/ IAS 19 |
Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction – amendments |
| IFRIC 19 | Extinguishing Financial Liabilities with Equity Instruments |
| Improvements to IFRS issued in 2009 | |
Critical accounting estimates and judgements
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates and judgements. It also requires management to exercise judgement in the process of applying the group’s accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Although these estimates are based on management’s best knowledge of the amount, event or actions, actual results may differ from those estimates. Additional detail is provided in note 3.