Illustrative Individual Financial Statements for a UK … Individual Financial Statements for a UK Parent Company applying FRS 101 (Reduced Disclosure Framework), transitioning from

Illustrative Individual Financial Statements for a UK Parent Company applying FRS 101 (Reduced Disclosure Framework), transitioning from UK GAAPComplying with FRS 101, the Companies Act 2006, and other UK requirements extant 31 December 2013

31 December 2013

Illustrative Individual Financial

Statements for a UK Parent Company applying FRS 101 (Reduced Disclosure Framework), transitioning from UK GAAP 31 December 2013

Complying with FRS 101, the Companies Act 2006, and other UK requirements extant 31 December 2013

© Copyright Ernst & Young LLP 2013.

The United Kingdom firm Ernst & Young LLP is a limited liability partnership registered in England and Wales with a registered number OC300001 and is a member practice of Ernst & Young Global.

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Financial Reporting Group Ernst & Young LLP 1 More London Place London SE1 2AF United Kingdom

Published 2013 by:

Ernst & Young LLP

This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgement. Accordingly, to the fullest extent permitted by law, neither Ernst & Young LLP nor any other member of the global Ernst & Young organisation accept or assume any responsibility or liability for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate adviser.

The Illustrative Financial Statements have been prepared by the Financial Reporting Group of Ernst & Young LLP.

Contents

i

INTRODUCTION ............................................................................................................................. II

ABBREVIATIONS ........................................................................................................................... IV Strategic report and directors' report……………………………………………………………………………………………. 3

Statement of directors’ responsibilities for the parent company financial statements ............... 5 Independent auditor's report……………………………………………………………………………………………………………7

Company statement of comprehensive income……………………………………………………………………..…… 11

Company balance sheet………………………………………………………………………………………………………………….13

Company statement of changes in equity……………………………………………………………………………………..17

Notes to the company financial statements………………………………………………………………………………….19

1. Accounting policies ................................................................................................ 19 2. Deferred Tax .......................................................................................................... 39 3. Dividends paid and proposed ................................................................................... 39 4. Profit attributable to members of the parent company ............................................. 41 5. Tangible fixed assets .............................................................................................. 41 6. Investments – non-current ...................................................................................... 43 7. Stocks.................................................................................................................... 45 8. Debtors .................................................................................................................. 47 9. Creditors: amounts falling due within one year......................................................... 47 10. Creditors: amounts falling due after more than one year .......................................... 49 11. Loans .................................................................................................................... 49 12. Obligations under leases and hire purchase contracts .............................................. 51 13. Provisions for liabilities ........................................................................................... 51 14. Derivative financial instruments .............................................................................. 53 15. Called up share capital ............................................................................................ 53 16. Own Shares ............................................................................................................ 55 17. Pensions and other post-employment benefits ......................................................... 57 18. Share-based payments ........................................................................................... 59 19. Post balance sheet event ........................................................................................ 61 20. Capital commitments .............................................................................................. 61 21. Contingent liabilities ............................................................................................... 61 22. Auditors’ remuneration ........................................................................................... 63 23. Related Party Transactions ..................................................................................... 63 24. Off-balance sheet arrangements ............................................................................. 65 25. Reserves ................................................................................................................ 65 26. Transition to FRS 101 ............................................................................................. 67

ii

Introduction

This publication contains the parent company individual financial statements of a fictional UK company, Listed UK Group plc, a public company preparing consolidated financial statements under EU-adopted IFRS and individual financial statements in accordance with FRS 101 (Reduced Disclosure Framework). The IFRS Consolidated financial statements and accompanying Group directors’ report are not contained in this document. The financial statements are illustrative only and do not attempt to show all possible disclosure requirements. If there is doubt as to the applicable legal or other requirements, readers should refer to the relevant source and, where necessary, seek professional advice.

This publication is laid out with the commentary on the left hand pages and the illustrative disclosures on the right hand pages. Gaps between items exist to align commentary with the relevant disclosure item, as far as possible, for the convenience of users.

Although the illustrative financial statements attempt only to show the likely disclosure requirements of parent companies, they should not be regarded as a comprehensive checklist of statutory and accounting requirements. They comply with FRS 101, the Companies Act 2006 and with other requirements in force at 31 December 2013. The Company has transitioned from previously extant UK GAAP, and is continuing to prepare Companies Act individual accounts in accordance with s395(1)(a) of the Act.

Narrative accompanying the illustrative financial statements

The narrative accompanying the illustrative financial statements (on the left-hand pages) contains source references to the Companies Act, FRS 101, International Financial Reporting Standards, Interpretations of the IFRS Interpretations Committee, and pronouncements of the Institute of Chartered Accountants in England and Wales. When the narrative accompanying the financial statements is italicised, it indicates that the requirement discussed is not in fact illustrated. Such narrative has not been given for every conceivable disclosure requirement. Accordingly the narrative should not be regarded as a comprehensive checklist.

Listed Group UK plc

These are the financial statements of a public company preparing its individual accounts under FRS 101 and taking advantage of all of the IFRS disclosure exemptions allowed under this standard which are applicable to this entity.

Listed Group UK plc is a qualifying entity in accordance with FRS 100, and therefore these are not IAS Accounts as defined by section 395(1) (b) of the Companies Act 2006, so the entity must make amendments to EU-adopted IFRS requirements where necessary, in order that the financial statements it prepares are Companies Act individual accounts as defined by s395(1)(a) of the Act.

The financial statements are illustrative only and they should not be regarded as a pro forma set of financial statements.

These financial statements have been prepared for the year ended 31 December 2013, and therefore IFRS 13 Fair Value Measurement, IAS 19 Revised Employee Benefits and IAS 1 (Amendment) Presentation of Financial Statements have all been adopted as these are mandatory for this year end.

IFRSs 10-12 and the revised versions of IAS27 and IAS 28 have not been applied as they are not mandatory before accounting periods beginning on or after 1 January 2014.

Introduction

iii

Narrative accompanying the illustrative financial statements (continued)

FRS 101

FRS 101 was issued in November 2012 and is part of the Financial Reporting Council’s (FRC’s) revised financial reporting standards in the United Kingdom and Republic of Ireland. The revisions fundamentally reform financial reporting, replacing almost all extant standards with three Financial Reporting Standards:

FRS 100 Application of Financial Reporting Requirements (November 2012)

FRS 101 Reduced Disclosure Framework (November 2012); and

FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (March 2013).

FRS 101 applies to the individual financial statements of a qualifying entity, as defined below, that are intended to give a true and fair view of the assets, liabilities and financial position and of the profit or loss for a period.

A qualifying entity is a “member of a group where the parent of that group prepares publicly available consolidated financial statements which are intended to give a true and fair view (of the assets, liabilities, financial position and profit or loss) and that member is included in the consolidation (as set out in s474(1) of the Companies Act.” A charity may not be a qualifying entity.

In applying FRS 101, a qualifying entity may take advantage of the disclosure exemptions in the standard. In order to take advantage of these disclosure exemptions:

Its shareholders must have been notified in writing about, and do not object to, the used of the disclosure exemptions.

It otherwise applies as its financial reporting framework the recognition, measurement and disclosure requirements of EU adopted IFRS, but makes amendments to EU adopted IFRS requirements where necessary in order to comply with the Act and the Regulations, given that the financial statements that it prepares are Companies Act accounts as defined in section 395(1)(b) of the Act.

It discloses in the notes to its financial statements:

o A brief narrative summary of the disclosure exemptions adopted; and

o The name of the parent of the group in whose consolidated financial statements it financial statements are consolidated and from where those financial statements may be obtained.

Listed Group UK plc complies with Schedule 1 of the Companies Act 2006, and is not a financial institution.

A qualifying entity which is a financial institution may not take advantage of the exemptions from IFRS 7, IFRS 13 (in respect of disclosures of financial instruments) and paragraphs 134 to 136 of IAS 1.

FRS 101 is effective for accounting periods beginning on or after 1 January 2015, although early application is permitted. If the entity applies this FRS before 1 January 2015 it must disclose this fact.

Formats

The formats used in the illustrative financial statements are taken from Schedule 1 to the Regulations. The balance sheet is in format 1.

iv

Abbreviations

The following abbreviations are used in these illustrative financial statements:

Companies Act The Companies Act 2006

s235(3) Companies Act, Section 235, paragraph 3

7 Sch 2(1) Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008, Schedule 7, paragraph 2(1)

APB Auditing Practices Board

FRC Financial Reporting Council

FRS101.10 Financial Reporting Standard 101, paragraph 10

FRS 101.AG1(k) Financial Reporting Standard 101, Application Guidance paragraph AG1 subsection (k)

IFRS 1.39 International Financial Reporting Standard 1, paragraph 39

IAS 39.AG71 International Accounting Standard 39, application guidance, paragraph 71

IAS 39.G.1 Guidance on Implementing IAS 39: Financial Instruments: Recognition and Measurement, Section G, item G.1

IASB International Accounting Standards Board

ICAS The Institute of Chartered Accountants in Scotland

ISA (UK&I) 700(14) International Standard on Auditing (UK and Ireland) No. 700, paragraph 14

ICAEW The Institute of Chartered Accountants in England and Wales

IFRIC Interpretations issued by the IFRS Interpretations Committee

Regulations Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008

SI 2011/2198 The Companies (Disclosure of Auditor Remuneration and Liability Limitation Agreements) (Amendment) Regulations 2011 (Statutory Instrument 2011 No. 2198)

SIC 12.8 SIC Interpretation 12, paragraph 8

TECH 2/10 Technical Release 02/10, issued by the ICAEW and ICAS

Listed UK Group PLC

1

Listed Parent Company Financial

Statements under FRS 101 31 December 2013

These financial statements of the parent company have been prepared in accordance with FRS 101 – Reduced Disclosure Framework. They represent the parent company financial statements that would be presented with consolidated financial statements prepared in accordance with IFRS. For this reason neither a Strategic Report nor a Directors’ Report has not been presented as this would form part of the group Annual Report.

The commentary given in respect of the parent company financial statements is restricted to the disclosures which have been made therein. It is not designed to represent a complete list of requirements for applying FRS101 with reduced disclosures.

Illustrative financial statements

Comments on the Strategic Report and Directors’ Report

2

These are the Illustrative individual financial statements of a parent which will be presented together with the Group Financial statements. As such no individual Strategic Report and Directors’ Report has been illustrated. Refer to FRS 101 Illustrative Financial Statements of Entity UK Limited for an Illustrative Strategic Report and Directors’ Report for a company preparing financial statements under FRS 101.

Listed UK Group PLC

Strategic Report and Directors’ Report

3

Refer to the Strategic Report and Directors’ Report in FRS 101 Illustrative Financial Statements Entity UK Limited, for an example of a Strategic Report and Directors’ Report for a company

preparing financial statements under FRS 101.


Comments on the Directors’ responsibilities statement

4

Directors’ responsibilities in respect of the financial statements

APB 2010/02 App 17

An illustrative example of a directors’ responsibilities statement for a non-publicly traded company appears in Appendix 17 of APB 2010/02. This has been replicated in Entity UK Limited except for the fourth bullet point on going concern since a separate statement on going concern is included in the Directors’ Report. The third bullet point does not apply to Small or Medium-Sized companies.

Listed UK Group PLC

Directors’ responsibilities statement

5

Statement of directors’ responsibilities for the parent company financial statements

The directors are responsible for preparing the Directors’ Report and the financial statements in accordance with applicable UK law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss for that period.

In preparing those financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;

make judgements and estimates that are reasonable and prudent; and

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on a going concern basis, unless they consider that to be inappropriate.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.


Comments on the independent auditor’s report

6

Independent auditor’s report

s495(1)

An auditor’s report is required to be attached to all annual accounts of the company of which copies are required to be sent to members under s423 (a private company) or which are to be laid before the company in general meeting under s437 ( a public company).

s495(2)

The auditor’s report must include:

an introduction identifying the annual accounts that are the subject of the audit and the financial reporting framework that has been applied in their preparation;

a description of the scope of the audit identifying the auditing standards in accordance with which the audit was conducted.

s495(3)

The auditor’s report must state clearly whether, in the auditor’s opinion, the annual accounts:

give a true and fair view of the company and/or group at the end of the financial year and of the profit or loss for the financial year;

have been properly prepared in accordance with the relevant financial reporting framework; and

have been prepared in accordance with the requirement of the Companies Act 2006 (and, where applicable, Article 4 of the IAS Regulation).

s495(4)

The auditor’s report must be either unqualified or qualified and must include a reference to any matters to which the auditor wishes to draw attention by way of emphasis without qualifying the report.

s496

The auditor must state in his report on the annual accounts whether in his opinion the information given in the directors’ report is consistent with the financial statements.

s497

The auditor must state in his report on the annual accounts whether in his opinion the auditable part of the directors’ remuneration report has been properly prepared in accordance with the requirements of the Companies Act 2006.

s498(2)

The auditor shall state in his report if he is of the opinion that:

adequate accounting records have not been kept, or that returns adequate for the audit have not been received from branches not visited by him;

the company’s individual accounts are not in agreement with the accounting records or returns; or

that the auditable part of the directors’ remuneration report is not in agreement with the accounting records and returns.

s498(3)

The auditor must state in his report if he fails to obtain all the information and explanations which, to the best of his knowledge and belief, are necessary for the purposes of his audit.

s498(4)

If the requirements related to disclosure of directors’ benefits under s412 and remuneration under s421 are not complied with the auditor must include a statement in his report giving the required particulars.

s503(3)

The auditor’s report must state the name of the auditor and be signed and dated. Where the auditor is an individual, the report must be signed by him. Where the auditor is a firm, the report must be signed by the senior statutory auditor in his own name, for and on behalf of the auditor.

Listed UK Group PLC


to the members of Listed UK Group PLC

7

We have audited the financial statements of Listed UK Group PLC for the year ended 31 December 2013 which comprise the Statement of Other Comprehensive Income, Statement of Changes in Equity, the Balance Sheet, and the related notes 1 to 26. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor

As explained more fully in the Directors’ Responsibilities Statement set out on page 23, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Report and Financial Statements to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the financial statements:

give a true and fair view of the state of the company’s affairs as at 31 December 2013;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion

the part of the Directors’ Remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006; and

the information given in the Strategic Report and Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements.


8

Listed UK Group PLC


to the members of Listed UK Group PLC

9

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

the Company financial statements and the part of the Directors’ remuneration report to be audited are not in agreement with the accounting records and returns; or

the financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors’ remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

[Signature

John Smith (Senior statutory auditor)

for and on behalf of Ernst & Young LLP, Statutory Auditor

City

Date]

Preparers should ensure that the wording of the audit report complies with current guidance from the APB and PPD and is tailored to the specific circumstances of the reporting entity.

Audit teams should also ensure that they apply the most recent internal guidance on the format of the signatures required on the audit reports to be delivered to the company and to the registrar.

Companies House have issued a document detailing the most common reasons why a set of submitted annual accounts is rejected. This document can be found at www.companieshouse.gov.uk/about/pdf/commonAccountsRejections.pdf


Comments on the statement of comprehensive income

10

Statement of comprehensive income

IAS 1.81A

The statement of profit or loss and other comprehensive income (statement of comprehensive income) shall present, in addition to the profit or loss and other comprehensive income sections:

(a) profit or loss; (b) total other comprehensive income; (c) comprehensive income for the period, being the total of profit or loss and other comprehensive income. If an entity presents a separate statement of profit or loss it does not present the profit or loss section in the statement presenting comprehensive income.

IAS 1.81B

An entity shall present the following items, in addition to the profit or loss and other comprehensive income sections, as allocation of profit or loss and other comprehensive income for the period: (b) comprehensive income for the period attributable to:

(i) non-controlling interests, and

(ii) owners of the parent.

FRS 101.AG1(i)

A qualifying entity shall present the components of profit or loss in the statement of comprehensive income (in either a the single statement or two statement approach) in accordance with the profit and loss account formats requirements of the Act instead of paragraphs 82 and 84 to 86 of IAS 1 Presentation of financial statements. The entity may elect to apply the requirements of those paragraphs so long as the resulting statement of comprehensive income complies with the profit and loss account format requirements of the Act.

Author’s note The disclosure above is not required if it conflicts with the Companies Act.

IAS 1.90

An entity shall disclose the amount of income tax relating to each component of other comprehensive income, including reclassification adjustments, either in the statement of comprehensive income or in the notes.

IAS 1.91

An entity may present components of other comprehensive income either:

net of related tax

effects, or before related tax effects

with one amount shown for the aggregate amount of income tax relating to those components.

If the entity elects alternative (b), it shall allocate the tax between the items that might be reclassified subsequently to the profit or loss section and those that will not be reclassified subsequently to the profit and loss account.

IAS 1.92 - 94

An entity shall disclose reclassification adjustments relating to components of other comprehensive income. Other IFRSs specify whether and when amounts previously recognised in other comprehensive income are reclassified to profit or loss. Such reclassifications are referred to in this Standard as reclassification adjustments. A reclassification adjustment is included with the related component of other comprehensive income in the period that the adjustment is reclassified to profit or loss. For example, gains realised on the disposal of available-for-sale financial assets are included in profit or loss of the current period. These amounts may have been recognised in other comprehensive income as unrealised gains in the current or previous periods. Those unrealised gains must be deducted from other comprehensive income in the period in which the realised gains are reclassified to profit or loss to avoid including them in

total comprehensive income twice. An entity may present reclassification adjustments in the statement of comprehensive income or in the notes. An entity presenting reclassification adjustments in the notes presents the components of other comprehensive income after any related reclassification adjustments.

IAS 12.61A Current tax and deferred tax shall be recognised outside profit or loss if the tax relates to items that are recognised, in the same or a different period, outside profit or loss. Therefore, current tax and deferred tax that relates to items that are recognised, in the same or a different period:

in other comprehensive income, shall be recognised in other comprehensive income (examples of such items include revaluations of property, plant and equipment).

Non-publication of performance statements and related notes

Author’s note

Only the parent company balance sheet has been published by Listed UK Group PLC. The company has taken the exemption under s408 of the Companies Act not to publish the parent company profit and loss account. Practice in the United Kingdom has developed whereby an entity taking the s408 exemption does not publish a SOCI either. By virtue of s472(2), the exemption from publication under s408 extends to the notes to the profit and loss account. A SOCIE has been presented as there is no exemption in FRS 101 from the requirement under IAS 1.10(c).

Listed UK Group PLC

Company statement of comprehensive income

at 31 December 2013

11

Notes

2013 2012

£000 £000 Profit/(loss) for the financial year 5,393 (3,990)

Other comprehensive income:

Items that can be reclassified to profit or loss:

Available for sale financial assets:

(Losses) on re-measurement of available-for-sale financial assets (5) (2)

Other comprehensive (loss)/income for the year, net of tax (5) (2)

Total comprehensive income/(loss) for the year 5,388 (3,992)


Comments on the company balance sheet

12

Formats

1 Sch 1, 1 Sch 4(2), (3), 1 Sch 5, 6 Sch 17, 21

The face of every balance sheet must show the items denoted by letters or Roman numbers in the format specified by the Companies Act, unless the amounts are nil in both years. The items must be shown under the headings and subheadings specified by the formats. Items to which Arabic numbers are assigned may be combined on the face of the financial statements if they are either not material or the combination facilitates assessment (providing, in the latter case, the individual items are disclosed in the notes). With balance sheet format 1, the total can be presented at the Total Assets less Current Liabilities level or anywhere thereafter.

Author’s note

Format 1 of 1 Sch as amended by 6 Sch is illustrated opposite.

1 Sch 4(1)

The arrangement and headings of items denoted by an Arabic number in the formats should be adapted to suit any special nature of a company’s business.

1 Sch 3

Greater detail can be given in the financial statements than that prescribed by the formats. New items may be inserted for assets or liabilities not otherwise covered.

1 Sch 2

The format chosen may not be changed from year to year unless, in the directors’ opinion, there are special reasons for a change. Particulars of any change must be disclosed and the reasons for the change must be explained in a note to the financial statements.

IAS 1.53A, FRS 101 AG1(h)

A qualifying entity shall comply with the balance sheet format requirements of the Act* instead of paragraphs 54 to 76 of IAS 1 Presentation of Financial Statements, unless the entity elects to apply those paragraphs and the resulting statement of financial position

complies with the balance sheet format requirements of the Act.

*An entity shall apply, as required by company law, either Part 1 “General Rules and Formats” of Schedule 1 to the Regulations; Part 1 “General Rules and Formats” of Schedule 2 to the Regulations; Part 1 “General Rules and Formats” to Schedule 3 of the Regulations; or Part 1 “General Rules and Formats” of Schedule 1 to the LLP Regulations.

FRS 101 A2.3

Accounts prepared in accordance with EU-adopted IFRS are “IAS accounts” , and are within the scope of EU Regulation 1606/2002 (IAS Regulation). Where a qualifying entity prepares accounts in accordance with FRS 101, it prepares Companies Act accounts as referred to in section 395 of the Act. Those accounts must comply with the applicable provisions of Parts 15 and 16 of the Act and with the Regulations.

IAS 1.54

As a minimum, the statement of financial position shall include line items that present the following amounts:

property, plant and

equipment;

investment property;

intangible assets;

financial assets (excluding investments accounted for using the equity method, trade and other receivables and cash and cash equivalents);

investments accounted for

using the equity method;

biological assets;

inventories;

trade and other

receivables;

cash and cash equivalents;

the total of assets classified as held for sale and assets included in disposal groups classified as held for sale in accordance with IFRS 5 Non-current Assets Held

for Sale and Discontinued Operations;

trade and other payables;

provisions;

financial liabilities (excluding trade and other payables and provisions);

liabilities and assets for current tax, as defined in IAS 12 Income Taxes;

deferred tax liabilities and deferred tax assets as defined in IAS 12;

liabilities included in disposal groups classified as held for sale in accordance with IFRS 5.

Non-controlling interests, presented within equity; and

issued capital and reserves attributable to owners of the parent.

IAS 1.55

Additional line items, headings and subtotals shall be presented in the statement of financial position when such presentation is relevant to an understanding of the entity’s financial position.

Current/non-current presentation

IAS 1.60

An entity shall present current and non-current assets, and current and non-current liabilities as separate classifications in its statement of financial position, except when a presentation based on liquidity provides information that is reliable and is more relevant. When that exception applies, all assets and liabilities shall be presented in order of their liquidity.

IFRS 1.6

An entity shall prepare and present an opening IFRS statement of financial position at the date of transition to IFRSs. This is the starting point for its accounting in accordance with IFRSs.

Listed UK Group PLC

Company balance sheet

at 31 December 2013

13

2013 2012 2011

Notes £000 £000 £000 Fixed assets Tangible assets 5 15,840 14,101 13,331

Investments 6 31,314 16,819 16,811

47,154 30,920 30,142 Current assets Stocks 7 11,620 7,125 8,252

Debtors:

Amounts falling due within one year 20,118 18.977 20,527

Amounts falling due after one year 6,900 6,350 6,000

8 27,018 25,327 26,527

Cash at bank and in hand 3,652 6,576 5,260

42,290 39,028 40,039

Creditors: amounts falling due within one year 9 (26,322) (21,843)

(18,554)

Net current assets 15,968 17,185 21,485

Total assets less current liabilities 63,122 48,105 51,627

Creditors: amounts falling due after more than one year

Financial Liabilities 10 (12,605) (12,086) (10,756) Government Grants (1,456) (1,100) (249) Provisions for liabilities 2,13 (681) (1,085) (1,031)

Net Assets 48,380 33,834 39,591

Capital and reserves Called up share capital 15 25,163 22,028 22,028 Share premium account 11,773 3,853 3,853 Merger reserve 25 2,500 2,500 2,500 Reserve for own shares 16 (774) (774) (774) Other equity 25 78 78 78 Revaluation reserve 25 2,765 3,154 2,954 AFS reserve 25 3 8 10

Profit and loss account 6,872 2,987 8,942

48,380 33,834 39,591

Professor M C Holman P A MacBryde

Chairman Finance Director

22 February 2014 22 February 2014


Comments on the company balance sheet

14

Current/non-current presentation (continued)

IAS 1.61

Whichever method of presentation is adopted, an entity shall disclose the amount expected to be recovered or settled after more than twelve months for each asset and liability line item that combines amounts expected to be recovered or settled (a) no more than twelve months after the reporting period and (b) more than twelve months after the reporting period.

IAS 1.66 An entity shall classify an asset as current when: it expects to realise or

intends to sell or consume it in its normal operating cycle;

is held primarily for the purpose of trading;

it is expected to be realised within twelve months after the reporting period; or

it is cash or a cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets should be classified as non-current. IAS 1.69 A liability shall be classified as current when: it is expected to be settled in

the entity’s normal operating cycle;

it is held primarily for the purpose of trading;

it is due to be settled within twelve months after the reporting period; or

the entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.

All other liabilities should be classified as non-current.

IAS 1.72 An entity classifies its financial liabilities as current when they are due to be settled within twelve months after the reporting period, even if:

the original term was for a period longer than twelve months; and

an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the financial statements are authorised for issue.

IAS 1.77

An entity shall disclose, either in the statement of financial position or in the notes, further sub classifications of the line items presented, classified in a manner appropriate to the entity’s operations.

FRS 101.A2.10

In most cases it will be satisfactory to disclose the size of the debtors due after more than one year in the notes to the accounts. There will be some instances, however, where the amount is so material in the context of the total net current assets that in the absence of disclosure of the debtors due after more than one year on the face of the balance sheet readers may misinterpret the accounts. In such circumstances, the amount should be disclosed on the face of the balance sheet within current assets.

Offset

IAS 1.32

Assets and liabilities, and income and expenses, shall not be offset unless required or permitted by a Standard or an Interpretation.

Author’s note

As per IAS 1.53A a Company should only apply paragraphs 54 to 76 of IAS 1 if it does not conflict with the Act. Listed UK Group plc has elected not to apply these paragraphs.

Fixed assets

1 Sch 17-20

Fixed assets should be stated at purchase price or production cost, subject to provisions for depreciation or impairment in value, unless they are carried at valuation.

Current assets

1 Sch 23, 24

Current assets are to be valued at the lower of purchase price or

production cost and net realisable value.

Capital and Reserves

s610(1)

If a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account called “the share premium account”.

s612

Where the issuing company has secured at least a 90% equity holding in another company in pursuance of an arrangement providing for the allotment of equity shares in the issuing company on terms that the consideration for shares allotted is to be provided:

by the issue or transfer to the issuing company of equity shares in the other company; or

by the cancellation of any such shares not held by the issuing company

Signature and date

s414, s445(3), s446(3), s433

The parent company balance sheet published with the Group financial statements must be signed by a director of the company. Only one director need sign the balance sheet on behalf of the board. The copy of the balance sheet delivered to the Registrar of the Companies must be signed.

Every copy of the balance sheet which is laid before the company in general meeting, or which is otherwise circulated, published or issued, shall state the name of the person who signed the balance sheet on behalf of the board.

IAS 10.17

An entity shall disclose the date when the financial statements were authorised for issue and who gave that authorisation. If the entity’s owners or others have the power to amend the financial statements after issue, the entity shall disclose that fact.

Listed UK Group PLC

15


Comments on the balance sheet and statement of

changes in equity

16

Assets and liabilities in disposal groups held for sale

IFRS 5.38, 5.39

An entity shall present a non-current asset classified as held for sale and the assets of a disposal group classified as held for sale separately from other assets in the statement of financial position. The liabilities of a disposal group classified as held for sale shall be presented separately from other liabilities in the statement of financial position. Those assets and liabilities shall not be offset and presented as a single amount. Except in the case of a newly acquired subsidiary classified as held for sale on acquisition, the major classes of assets and liabilities classified as held for sale shall be separately disclosed either on the face of the statement of financial position or in the notes. An entity shall present separately any cumulative income or expense recognised directly in other comprehensive income relating to a non-current asset (or disposal group) classified as held for sale.

IFRS 5.40

An entity shall not reclassify or re-present amounts presented for non-current assets or for the assets and liabilities of disposal groups classified as held for sale in the statements of financial position for prior periods to reflect the classification in the statement of financial position for the latest period presented.

Author’s note

A one-line presentation of assets and liabilities held for sale on the balance sheet is not permitted by the Regulations. As a practical solution, this can be presented aggregate assets and aggregate liabilities held for sale as a memorandum cross referenced to the detailed analysis in the notes.

Statement of changes in equity

IAS 1.106

An entity shall present a statement of changes in equity showing in the statement:

total comprehensive income for the period, showing separately the total amounts attributable to owners of the parent and to non-controlling interests;

for each component of equity, the effects of changes in accounting policies and corrections of errors recognised in accordance with IAS 8;

for each component of equity, a reconciliation between the carrying amount at the beginning and the end of the period, separately disclosing changes resulting from:

- profit or loss;

- other comprehensive income: and

- transactions with owners in their capacity as owners, showing separately contributions by and distributions to owners and changes in ownership interests in subsidiaries that do not result in a loss of control.

IAS 1.106A

Disclose for each component of equity, either in the statement in changes of equity or in the notes, an analysis of other comprehensive income by item.

IAS 1.107

An entity shall present, either in the statement of changes in equity or in the notes, the amount of dividends recognised as distributions to owners during the period, and the related amount per share.

IAS 19.122

Remeasurements of net defined benefit liability (asset) recognised in other comprehensive income shall not be reclassified to profit or loss in a subsequent period. However, the entity may transfer those amounts recognised in other comprehensive income within equity.

Reserves

1 Sch 59

Disclose movements in all reserves and the opening and closing balances. Corresponding amounts are not required.

IAS 1.79(b)

An entity shall provide a description of the nature and purpose of each reserve within equity, either on the face of the balance sheet or in the notes.

Listed UK Group PLC

Company statement of changes in equity

at 31 December 2013

17

Called up

share

capital

Share

premium

account

Merger

reserve

Reserve

for own

shares

Other equity

Revaluation

reserve

AFS

Reserve

Profit and

loss

account Total

£000 £000 £000 £000

£000

£000 £000 £000 £000

At 1 January 2012 22,028 3,853 2,500 (774) 78 2,954 10 8,942 39,591

(Loss) for the financial year - - - - - 200 - (4,190) (3,990)

Other comprehensive income - - - - - - (2) - (2)

Total comprehensive income for the year - - - -

-

200 (2) (4,190) (3,992)

Share-based payment transactions - - - - - - - 207 207

Equity dividends paid (Note 3 ) - - - - - - - (1,972) (1,972)

At 31 December 2012 22,028 3,853 2,500 (774) 78 3,154 8 2,987 33,834

Profit for the financial year - - - - - - - 5,782 5,393

Other comprehensive income - - - - - - (5) - (5)

Total comprehensive income for

the year - - - -

-

(398) (5) 5,782 5,388

Shares issued 3,000 7,740 - - - - - - 10,740

Share issue costs - (38) - - - - - - (38)

Shares issued - exercise of options 135 218 - - - - - - 353

Share-based payment transactions - - - - - - - 222 222

Equity dividends paid (Note 3) - - - - - - - (2,119) (2,119)

At 31 December 2013 25,163 11,773 2,500 (774) 78 2,765 3 6,872 48,380


Comments on notes to the company financial statements

18

Authorisation of financial statements and statement of compliance with FRS101

IAS 10.17

An entity shall disclose the date when the financial statements were authorised for issue and who gave that authorisation. If the entity’s owners or others have the power to amend the financial statements after issue, the entity shall disclose that fact.

IAS 1.138

An entity shall disclose the following if not disclosed elsewhere in information published with the financial statements:

the domicile and legal form of the entity, its country of incorporation and the address of the registered office (or principal place of business, if different from the registered office);

a description of the nature of the entity’s operations and its principal activities; and

the name of the parent and the ultimate parent of the group.

IAS 1.51(b), (c)

An entity shall display the following information prominently, and repeat it when necessary for the information presented to be understandable:

whether the financial statements cover the individual entity or a group of entities; and

the date of the end of the reporting period or the period covered by the financial statements or notes.

Statement of compliance

FRS101.10 Where a qualifying entity prepares its financial statements in accordance with FRS 101, it shall state in the notes to the financial statements: ‘‘These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework” The financial statements of such an entity do not comply with all of the requirements of EU-adopted IFRS and should not

therefore contain the unreserved statement of compliance set out in paragraph 3 of IFRS 1 First-time Adoption of International Financial Reporting Standards and paragraph 16 of IAS 1 Presentation of Financial Statements.

IAS 1.51(d)-(e)

An entity shall display the following information prominently, and repeat it when necessary for the information presented to be understandable:

the presentation currency, as

defined in IAS 21; and

the level of rounding used in

presenting amounts in the

financial statements.

Accounting policies – General

1 Sch 44

Disclose a description of each of the accounting policies that is material in the context of an entity’s financial statements. This must include the policies with respect to the depreciation and diminution in value of assets.

1 Sch 10-15

Disclose if any fundamental accounting concept (going concern, consistency, prudence and accruals) has not been observed, giving the nature of the departure, the reason and the effect. In the absence of such disclosure there is a presumption that the four fundamental concepts have been observed.

Basis of preparation

FRS 101.5(c)

A qualifying entity applying this FRS to its individual financial statements may take advantage of the disclosure exemptions in paragraphs 8 to 9, in accordance with paragraphs 6 to 7, provided that:

(c) It discloses in the notes to its financial statements

a brief narrative summary of the disclosure exemptions adopted; and

the name of the parent of the group whose consolidated financial statements its financial

statements are consolidated, and from where those financial statements may be obtained.

1 Sch 45

State whether the financial statements have been prepared in accordance with applicable accounting standards. The particulars of any material departure from those standards should be given along with the reason for it.

s408

The parent company’s profit and loss account, although required to be prepared and approved by the board of directors, need not be presented with the group financial statements. Where this exemption is taken, that fact must be disclosed. By virtue of s472(2), this exemption extends to omitting the related notes.

FRS 101.8 This paragraph provides details of disclosure exemptions available under the standard. The disclosure exemptions taken by this entity are listed opposite. See FRS 101 for a full list of disclosure exemptions that are available.

FRS 101.9 Reference should be made to the Application guidance to FRS 100 in deciding whether the consolidated financial statements of the group provide disclosures which are equivalent to the requirements of EU-adopted IFRS, from which relief in paragraph 8 of FRS 101.

IAS 1.112

The notes shall:

present information about the basis of preparation of the financial statements and the specific accounting policies used in accordance with paragraphs 117-124;

disclose the information required by IFRSs that is not presented elsewhere in the financial statements; and

provide information that is not presented elsewhere in the financial statements, but is relevant to an understanding of any of them.

Listed UK Group PLC

Notes to the company financial statements

at 31 December 2013

19

Authorisation of financial statements and statement of compliance with FRS 101

The parent company financial statements of Listed UK Group PLC (the “Company”) for the year ended 31 December 2013 were authorised for issue by the board of directors on 22 February 2014 and the balance sheet was signed on the board’s behalf by Professor M C Holman and P A MacBryde. Listed UK Group PLC is a public limited company incorporated and domiciled in England and Wales. The Company’s ordinary shares are traded on the London Stock Exchange.

These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101). The financial statements are prepared under the historical cost convention modified to include the revaluation of investment properties.

No profit and loss account is presented by the Company as permitted by Section 408 of the Companies Act 2006.

The results of Listed UK Group PLC are included in the consolidated financial statements of Listed UK Group PLC which are available from Homefire House, Ashdown Square, London EC2A 3XS.

The accounting policies which follow set out those policies which apply in preparing the financial statements for the year ended 31 December 2013. The financial statements are prepared in Sterling and are rounded to the nearest thousand pounds (£000).

1. Accounting policies

Basis of preparation The Company has transitioned to FRS 101 from previously extant UK Generally Accepted Accounting Practice for all periods presented. The Company has adopted FRS 101 early which

is permitted under the Standard. Transition tables showing all material adjustments are disclosed in note 26. The accounting policies which follow set out those policies which apply in preparing the financial statements for the year ended 31 December 2013.

The Company has taken advantage of the following disclosure exemptions under FRS 101:

(a) the requirements of paragraphs 45(b)

and 46-52 of IFRS 2 Share based Payment: [for an ultimate parent, the share based payment arrangement must concern its own equity instruments and its separate financial statements must be consolidated financial statements of the group; And in both cases, this exemption requires that equivalent disclosures are included in the consolidated financial statements of the group in which the entity is consolidated. ] (b) The requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64 (o)(ii), B64(p), B64(q)(ii), B66 and B67of IFRS 3 Business Combinations [this exemption requires that equivalent disclosures are included in the consolidated financial statements of the group in which the entity is consolidated.] (d) the requirements of IFRS 7 Financial Instruments: Disclosures, [this exemption requires that equivalent disclosures are included in the consolidated financial statements of the group in which the entity is consolidated. ] (e) the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement,[ this exemption requires that equivalent disclosures are included in the financial statements of the group in which the entity is consolidated.]


Comments on the notes to the company financial statements

20

Basis of preparation (continued)

IAS 1.113

An entity shall, as far as practicable, present notes in a systematic manner. An entity shall cross-reference each item in the statements of financial position and of comprehensive income, in the separate income statement (if presented), and in the statements of changes in equity and of cash flows to any related information in the notes.

IAS 1.117

An entity shall disclose in the summary of significant accounting policies:

the measurement basis (or bases) used in preparing the financial statements; and

the other accounting policies used that are relevant to an understanding of the financial statements.

IAS 1.119

In deciding whether a particular accounting policy should be disclosed, management considers whether disclosure would assist users in understanding how transactions, other events and conditions are reflected in the reported financial performance and financial position. Disclosure of particular accounting policies is especially useful to users when those policies are selected from alternatives allowed in IFRS. Some Standards specifically require disclosure of particular accounting policies, including choices made by management between different policies they allow.

IAS 1.121

An accounting policy may be significant because of the nature of the entity’s operations even if amounts shown for current and prior periods are not material. It is also appropriate to disclose each significant accounting policy that is not specifically required by IFRSs, but selected and applied in accordance with IAS 8.

Change in accounting policy

IAS 8.28

When initial application of an IFRS has an effect on the current period

or any prior period, would have such an effect except that it is impracticable to determine the amount of the adjustment, or might have an effect on future periods, an entity shall disclose:

the title of the IFRS;

when applicable, that the change in accounting policy is made in accordance with its transitional provisions;

the nature of the change in accounting policy;

when applicable, a description of the transitional provisions;

when applicable, the transitional provisions that might have an effect on future periods;

for the current period and each prior period presented, to the extent practicable, the amount of the adjustment:

– for each financial statement line item affected; and

– if IAS 33 applies to the entity, for basic and diluted earnings per share;

the amount of the adjustment relating to periods before those presented, to the extent practicable; and

if retrospective application required by paragraph 19(a) or (b) is impracticable for a particular prior period, or for periods before those presented, the circumstances that led to the existence of that condition and a description of how and from when the change in accounting policy has been applied.

Financial statements of subsequent periods need not repeat these disclosures.

IAS 8.29

When a voluntary change in accounting policy has an effect on the current period or any prior period, would have an effect on that period except that it is impracticable to determine the amount of the adjustment, or might have an effect on future periods, an entity shall disclose:

the nature of the change in accounting policy;

the reasons why applying the new accounting policy provides reliable and more relevant information;

for the current period and each prior period presented, to the extent practicable, the amount of the adjustment:

– for each financial statement line item affected; and – if IAS 33 applies to the entity, for basic and diluted earnings per share;

the amount of the adjustment relating to periods before those presented, to the extent practicable; and

if retrospective application is impracticable for a particular prior period, or for periods before those presented, the circumstances that led to the existence of that condition and a description of how and from when the change in accounting policy has been applied.

Financial statements of subsequent periods need not repeat these disclosures.

Author’s note

In some cases, a description has been provided of changes to reporting standards effective in 2013 despite the fact that they are not relevant to the activities of Entity UK Limited and consequently have no financial effect. These illustrative disclosures have been provided to assist users of this publication who might need to implement these new or revised requirements. If in reality an entity concludes that a new requirement is not relevant to its activities, there is no benefit in making such detailed disclosure.

Author’s note

All mandatory new accounting standards have been adopted as part of the transition to FRS 101.

Listed UK Group PLC


at 31 December 2013

21

1. Accounting policies (continued)

Basis of preparation (continued)

(f) the requirement in paragraph 38 of IAS 1 ‘Presentation of Financial Statements’ to present comparative information in respect of:

(i) paragraph 79(a)(iv) of IAS 1; (ii) paragraph 73(e) of IAS 16 Property, Plant and Equipment; (iii) paragraph 118(e) of IAS 38 Intangible Assets; (iv) paragraphs 76 and 79(d) of IAS 40 Investment Property; and (v) paragraph 50 of IAS 41 Agriculture.

(g) the requirements of paragraphs 10(d), 10(f), 39(c) and 134-136 of IAS 1 Presentation of Financial Statements; (h) the requirements of IAS 7 Statement of Cash Flows; (i) the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors; (j) the requirements of paragraph 17 of IAS 24 Related Party Disclosures; (l) the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member; and (m) the requirements of paragraphs 134(d)-134(f) and 135(c)-135(e) of IAS 36 Impairment of Assets, [this exemption requires that equivalent disclosures are included in the consolidated financial statements of the group in which the entity is consolidated.]



22

Disclosure of significant judgements (apart from those involving estimation)

IAS 1.122

An entity shall disclose, in the summary of significant accounting policies or other notes, the judgements, apart from those involving estimations, that management has made in the process of applying the entity’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

IAS 1.123

Examples of the judgments (apart from those involving estimations) that management makes and that can significantly affect the amounts recognised in the financial statements include:

whether financial assets are held-to-maturity investments;

whether substantially all the significant risks and rewards of ownership of financial assets and lease assets are transferred to other entities;

whether, in substance, particular sales of goods are financing arrangements and therefore do not give rise to revenue; and

whether the substance of the relationship between the entity and a special purpose entity indicates that the entity controls the special purpose entity.

Author’s note

Entities often combine disclosure of accounting judgements and sources of estimation uncertainty. Whilst this is not prohibited, preparers should acknowledge the very different disclosure requirements.

IAS 1.122 asks entities to describe judgements having a material effect on amounts recognised in the financial statements. This relates therefore to judgements as to whether an asset or liability exists; whether an asset of liability is derecognised; or whether an arrangement should be treated as an equity transaction. The disclosure requirement does not relate to judgements concerning the measurement of those items, which

is a matter for the disclosures about estimation uncertainty in IAS 1.125.

This does not mean that every accounting judgement should be disclosed. However, disclosure would be appropriate in cases where the accounting outcome is materially different dependent on the judgement taken. For example, when management has concluded that an entity is not a subsidiary despite holding more than 50% of the voting rights; when a significant sale and leaseback transaction has resulted in derecognition of the related asset; or when an internally developed intangible asset is determined to meet the criteria for recognition.

Disclosure of major sources of estimation uncertainty

IAS 1.125

An entity shall disclose in the notes information about the assumptions it makes about the future, and other major sources of estimation uncertainty at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year. In respect of those assets and liabilities, the notes shall include details of:

their nature; and

their carrying amount as at the end of the reporting period.

IAS 1.129

An entity presents the disclosures in paragraph 125 in a manner that helps users of financial statements to understand the judgements that management makes about the future and about other sources of estimation uncertainty. The nature and extent of the information provided vary according to the nature of the assumption and other circumstances. Examples of the types of disclosures an entity makes are:

the nature of the assumption or other estimation uncertainty;

the sensitivity of carrying amounts to the methods, assumptions and estimates underlying their calculation, including the reasons for the sensitivity;

the expected resolution of an uncertainty and the range of reasonably possible outcomes within the next financial year in respect of the carrying amounts of the assets and liabilities affected; and

an explanation of changes made to past assumptions concerning those assets and liabilities, if the uncertainty remains unresolved.

IAS 1.130

IAS 1 does not require an entity to disclose budget information or forecasts in making the disclosures in paragraph 125.

Listed UK Group PLC


at 31 December 2013

23

Judgements and key sources of estimation uncertainty

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates.

As noted opposite, IAS 1.122 requires disclosures of the significant judgements that affect the amounts recognised in the financial statements.

This does not mean that every accounting judgement should be disclosed. However, disclosure would be appropriate in cases where the accounting outcome is materially different dependent on the judgement taken.

The following estimates are dependent upon assumptions which could change in the next financial year and have a material effect on the carrying amounts of assets and liabilities recognised at the balance sheet date:

Revaluation of Land and buildings

The Company measures its land and buildings at fair value with changes in fair value being recognised through other comprehensive income. The Company engaged independent valuation specialists to determine fair value at 31 December 2013. The valuer used a valuation technique based on a discounted cash flow model due to a lack of observable market data because of the nature of the assets.

The fair value of the land and buildings equipment is most sensitive to the assumption concerning the discount rate.

Revaluation of investment properties

The Company measures its investment properties at fair value, with changes in fair values being recognised in profit and loss. The Company engaged independent valuation specialists to determine fair value as at 31 December 2013. The valuer used a valuation technique based on a discounted cash flow model due to a lack of observable market data because of the nature of the property.

The fair value of investment properties is most sensitive to the assumptions concerning discount rate and the long term vacancy rate.



24

Investment properties

IAS 40.20

An investment property shall be measured initially at its cost. Transaction costs shall be included in the initial measurement.

IAS 40.30, IAS 40.34

Where a property interest is held by a lessee under an operating lease and is classified as an investment property, the fair value model shall be applied. In all other circumstances, an entity shall choose as its accounting policy either the fair value model or the cost model and shall apply that policy to all of its investment property.

IAS 40.66

An investment property shall be derecognised (eliminated from the balance sheet) on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal.

IAS 40.69

Gains or losses arising from the retirement or disposal of investment property shall be determined as the difference between the net disposal proceeds and the carrying amount of the asset and shall be recognised in profit or loss (unless IAS 17 requires otherwise on a sale and leaseback) in the period of the retirement or disposal.

Tangible fixed assets

1 Sch 18

The difference between the purchase price or production cost (or revalued amount) and estimated residual value of a fixed asset which has a limited useful economic life should be allocated on a systematic basis to each accounting period during the useful economic life of the asset. The depreciation charge for each period should be recognised as an expense in the profit and loss account unless it is permitted to be included in the carrying amount of another asset. For each major class of depreciable asset the method of depreciation and the useful economic lives (or depreciation rates) should be disclosed.

1 Sch 33, 3(1)

On revaluation of assets other than investment properties, the revalued amount less any residual value

should be depreciated over the remaining useful economic life. Depreciation charged prior to the revaluation should not be written back to the profit and loss account, except to the extent that it relates to a provision for diminution in value which is subsequently found to be unnecessary.

IAS 16.73(a)-(c)

The financial statements shall disclose, for each class of property, plant and equipment:

the measurement bases used for determining the gross carrying amount;

the depreciation methods used; and

the useful lives or the depreciation rates used.

IAS 23.8

An entity shall capitalise borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. An entity shall recognise other borrowing costs as an expense in the period in which it incurs them.

IAS 16.29

An entity shall choose either the cost model or the revaluation model as its accounting policy and shall apply that policy to an entire class of property, plant and equipment.

IAS 16.67

The carrying amount of an item of property, plant and equipment shall be derecognised:

on disposal; or

when no future economic benefits are expected from its use or disposal.

IAS 16.68

The gain or loss arising from the derecognition of an item of property, plant and equipment shall be included in profit or loss when the item is derecognised. Gains shall not be classified as revenue.

Impairment of assets

IAS 36.9

An entity shall assess at each reporting date whether there is any indication that an asset may be impaired. If any such indication exists, the entity shall estimate the recoverable amount of the asset.

IAS 36.18

This Standard defines recoverable amount as the higher of an asset’s or cash generating unit’s fair value less costs to sell and its value in use.

IAS 36.119

A reversal of an impairment loss for an asset other than goodwill shall be recognised immediately in profit or loss, unless the asset is carried at revalued amount in accordance with another IFRS (for example, the revaluation model in IAS 16). Any reversal of an impairment loss of a revalued asset shall be treated as a revaluation increase in accordance with that other IFRS.

FRS 101.AG1(s)

Paragraph 124 of IAS 36 Impairment of Assets is amended as follows:

An impairment loss recognised for goodwill shall not be reversed in a subsequent period, if and only if, the reasons for the impairment loss have ceased to apply.

Intangible assets

FRS 101.A2.8

A qualifying entity preparing accounts in accordance with FRS 101 may have recognised goodwill which, in accordance with IFRS 3 Business Combinations, is not amortised. The non-amortisation of goodwill conflicts with paragraph 22 of Schedule 1 to the Regulations, which requires acquired goodwill to be reduced by provisions for depreciation calculated to write off the amount systematically over a period chosen by the directors, not exceeding its useful economic life. As such the non-amortisation of goodwill will usually be a departure, for the overriding purpose of giving a true and fair view, from the requirement of paragraph 22 of Schedule 1 to the Regulations. In this circumstance there will need to be given in the notes to the accounts ‘particulars of the departure, the reasons for it and its effect (paragraph 10(2) of Schedule 1 to the Regulations). This is not a new instance of the use of the ‘true and fair override’ as paragraph 18 of FRS 10 Goodwill and intangible assets noted that it would have been required by companies applying paragraph 17 of FRS 10 which states ‘where goodwill and intangible assets are regarded as having indefinite useful lives, they should not be amortised.

Listed UK Group PLC


at 31 December 2013

25


Investment properties

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value. Gains or losses arising from changes in the fair values of investment properties are included in profit or loss in the period in which they arise.

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of investment property, is recognised in the income statement in the period of derecognition.

Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. If owner occupied property becomes an investment property, the Group accounts for such property in accordance with the policy stated under property, plant and equipment up to the date of change in use.


Plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses. Cost comprises the aggregate amount paid and the fair value of any other consideration given to acquire the asset and includes costs directly attributable to making the asset capable of operating as intended. Borrowing costs directly attributable to assets under construction and which meet the recognition criteria in IAS 23 are capitalised as part of the cost of that asset.

Land and buildings are recognised initially at cost and thereafter carried at fair value less depreciation and impairment charged subsequent to the date of the revaluation. Fair value is based on periodic valuations by an external independent valuer and is determined from market-based evidence by appraisal. Valuations are performed frequently enough to ensure that the fair value of a revalued asset does not differ materially from its carrying

amount. Fair value gains and losses are recognised in other comprehensive income.

Any revaluation surplus is credited to the revaluation reserve in equity except to the extent that it reverses a decrease in the carrying value of the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except to the extent of any existing surplus in respect of that asset in the revaluation reserve.

An annual transfer is made from the revaluation reserve to retained earnings for the difference between depreciation based on the carrying amount of the assets and that based on the assets’ original cost. Additionally, accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Upon disposal any revaluation reserve relating to the particular asset being sold is transferred to retained earnings.

Depreciation is provided on all property, plant and equipment, other than land, on a straight-line basis over its expected useful life as follows:

Buildings – over 20 to 50 years

Plant and equipment

– over 5 to 15 years

The carrying values of property, plant and equipment are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable, and are written down immediately to their recoverable amount. Useful lives and residual values are reviewed annually and where adjustments are required these are made prospectively.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the derecognition of the asset is included in the income statement in the period of derecognition.



26

Government grants

IAS 20.39(a)

The accounting policy adopted for government grants, including the methods of presentation adopted in the financial statements should be disclosed.

FRS 101 AG1 (m)

Paragraph 24 of IAS 20 is amended as follows: Government grants related to assets, including non-monetary grants at fair value, shall be presented in the statement of financial position either by setting up the grant as deferred income or by deducting the grant in arriving at the carrying amount of the asset.

FRS 101.AG1(o)

Paragraph 26 of IAS 20 Accounting for Government Grants is amended as follows: One method recognises the The grant is recognised as deferred income that is recognised in profit or loss on a systematic basis over the useful life of the asset.

Stocks

1 Sch 24

Stocks and work in progress should be valued at the lower of cost and net realisable value.

1 Sch 28

Companies Act allows the use of FIFO, LIFO, weighted average price and other similar methods for valuing stocks and fungible assets but the method chosen must appear to the directors to be appropriate. LIFO is not considered to be an appropriate method of stock valuation by IAS 2.

IAS 2.36(a)

The financial statements shall disclose the accounting policies adopted in measuring inventories, including the cost formula used.

Trade and other debtors

IAS 39.46(a)

Loans and receivables shall be measured at amortised cost using the effective interest method.

Provisions for liabilities

IAS 37.14

A provision shall be recognised when:

an entity has a present obligation (legal or constructive) as a result of a past event;

it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

a reliable estimate can be made of the amount of the obligation.

If these conditions are not met, no provision shall be recognised.

Income taxes

IAS 12.46

Current tax liabilities (assets) for the current and prior periods shall be measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

IAS 12.15

A deferred tax liability shall be recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from: the initial recognition of

goodwill; or the initial recognition of an

asset or liability in a transaction which: - is not a business combination;

and - at the time of the transaction,

affects neither accounting profit nor taxable profit (tax loss).

However, for taxable temporary differences associated with investments in subsidiaries, branches and associates, and interests in joint ventures, a deferred tax liability shall be recognised in accordance with IAS 12.39.

IAS 12.39

An entity shall recognise a deferred tax liability for all taxable temporary differences associated with investments in subsidiaries,

branches and associates, and interests in joint ventures, except to the extent that both of the following conditions are satisfied:

the parent, investor or venturer is able to control the timing of the reversal of the temporary difference; and

it is probable that the temporary difference will not reverse in the foreseeable future.

IAS 12.24

A deferred tax asset shall be recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised, unless the deferred tax asset arises from the initial recognition of an asset or liability in a transaction that:

is not a business combination; and

at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

However, for deductible temporary differences associated with investments in subsidiaries, branches and associates, and interests in joint ventures, a deferred tax asset shall be recognised in accordance with IAS 12.44.

IAS 12.44

An entity shall recognise a deferred tax asset for all deductible temporary differences arising from investments in subsidiaries, branches and associates, and interests in joint ventures, to the extent that, and only to the extent that, it is probable that:

the temporary difference will reverse in the foreseeable future; and

taxable profit will be available against which the temporary difference can be utilised.

IAS 12.53

Deferred tax assets and liabilities shall not be discounted.

Listed UK Group PLC


at 31 December 2013

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Government grants

Government grants are recognised when it is reasonable to expect that the grants will be received and that all related conditions will be met, usually on submission of a valid claim for payment. Government grants in respect of capital expenditure are credited to a deferred income account and are released as income by equal annual amounts over the expected useful lives of the relevant assets. Grants of a revenue nature are credited to income so as to match them with the expenditure to which they relate.

Stocks

Stocks are stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringing each product to its present location and condition, as follows:

Raw materials and consumables - purchase cost on a first-in, first-out basis

Work in progress and finished goods - cost of direct materials and labour plus attributable overheads based on a normal level of activity, excluding borrowing costs

Cost of stocks includes the transfer from equity of gains and losses on qualifying cash flow hedges in respect of the purchase of materials. Net realisable value is based on estimated selling price less any further costs expected to be incurred to completion and disposal.

Trade and other debtors

Trade debtors, which generally have 30-90 day terms, are recognised and carried at the lower of their original invoiced value and recoverable amount. Where the time value of money is material, receivables are carried at amortised cost. Provision is made when there is objective evidence that the Company will not be able to recover balances in full. Balances are written off when the probability of recovery is assessed as being remote.


A provision is recognised when the Company has a legal or constructive obligation as a result of a past event; it is probable that an

outflow of economic benefits will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation.

Where the effect of the time value of money is material provisions are discounted.

Where the company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when recovery is virtually certain.

Income taxes

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities based on tax rates and laws that are enacted or substantively enacted by the balance sheet date.

Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, with the following exceptions:

where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss;

in respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; and

deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carried forward tax credits or tax losses can be utilised.



28

Income taxes (continued)

IAS 12.61A

Current tax and deferred tax shall be recognised outside profit or loss if the tax relates to items that are recognised, in the same or a different period, outside profit or loss. Therefore, current tax and deferred tax that relates to items that are recognised, in the same or a different period: in other comprehensive income,

shall be recognized in other comprehensive income.

Directly in equity, shall be recognized directly in equity.

Foreign currencies

1 Sch 70

Disclose the basis of translation of foreign currency balances and transactions and the treatment of exchange differences.

IAS 21.21

A foreign currency transaction should be recorded, on initial recognition in the functional currency, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.

IAS 21.23

At the end of each reporting period:

foreign currency monetary items shall be translated using the closing date;

non-monetary items that are measured in terms of historical cost in a foreign currency shall be translated using the exchange rate at the date of the transaction; and

non-monetary items that are measured at fair value in a foreign currency shall be translated using the exchange rates at the date when the fair value was determined.

IAS 21.28

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements shall be recognised in profit or loss in the period in which they arise, except as described in IAS 21.32

IAS 21.32

Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation shall be recognised in profit or loss in the separate financial statements of the reporting entity or the individual financial statements of the foreign operation, as appropriate.

IAS 21.53

When the presentation currency is different from the functional currency, that fact shall be stated, together with disclosure of the functional currency and the reason for using a different presentation currency.

IAS 21.54

When there is a change in the functional currency of either the reporting entity or a significant foreign operation, that fact and the reason for the change in functional currency shall be disclosed.

IAS 21.55

When an entity presents its financial statements in a currency that is different from its functional currency, it shall describe the financial statements as complying with IFRS only if they comply with all the requirements of each applicable Standard and each applicable Interpretation of those Standards including the translation method.

IAS 21.57

When an entity displays its financial statements or other financial information in a currency that is different from either its functional currency or its presentation currency and the requirements of paragraph 55 are not met, it shall:

clearly identity the information as supplementary information to distinguish it from the information that complies with IFRS;

disclose the currency in which the supplementary information is displayed; and

disclose the entity’s functional currency and the method of translation used to determine the supplementary information.

Financial Assets

Author’s Note

Although the disclosures required by IFRS 7 are exempt under FRS 101, IAS 1.117 requires an entity to disclose in the summary of significant accounting policies:

(a) the measurement basis (or bases) used in preparing the financial statements, and

(b) the other accounting policies used that are relevant to an understanding of the financial statements.

Non-current assets held for sale

IFRS 5.6

An entity shall classify a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use.

Listed UK Group PLC


at 31 December 2013

29


Income taxes (continued)

Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date.

Foreign currencies

The Company’s functional currency and presentation currency is pounds sterling. Transactions in foreign currencies are initially recorded in the functional currency by applying the spot exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the balance sheet date. All differences are taken to the profit and loss account.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

The company does not apply hedge accounting of foreign exchange risks in its company financial statements.

Investments

Investments in subsidiaries, associates and joint ventures are accounted for at cost less any provision for impairment.

Financial Assets

Initial Recognition and measurement

Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit and loss, loans and receivables or available for sale financial assets, as appropriate. The Company determines the classification of its financial assets at initial recognition. All financial assets are recognised initially at fair value plus directly attributable transaction costs.

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest (EIR) method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance revenue in the income statement. The losses arising from impairment are recognised in the income statement in other operating expenses.

Available for sale financial assets

Available for sale financial investments include equity securities. Equity investments classified as available for sale are those, which are neither classified as held for trading nor designated at fair value through profit or loss. After initial measurement, available for sale financial investments are subsequently measured at fair value with unrealised gains or losses recognised as other comprehensive income in the unrealised gains and losses reserve until the investment is derecognised, at which time the cumulative gain or loss is recognised in other operating income, or determined to be impaired, at which time the cumulative loss is recognised in the income statement in other operating expenses and removed from the unrealised gains and losses reserve.

The Company evaluates it available for sale financial assets and whether the ability and intent to sell them in the near term is still appropriate. When the Company is unable to trade these financial assets due to inactive markets and management’s intent significantly changes to do so in the foreseeable future, the Company may elect to reclassify these financial instruments in rare circumstances. Reclassification to loans and receivables is permitted when the financial asset meets the definition of loans and receivables and when the Company has the intent and ability to hold these assets for the foreseeable future or until maturity.



30

Leasing and hire purchase commitments

IAS 17.7

The classification of leases adopted in this Standard is based on the extent to which risks and rewards incidental to ownership of a leased asset lie with the lessor or the lessee. Risks include the possibilities of losses from idle capacity or technological obsolescence and of variations in return because of changing economic conditions. Rewards may be represented by the expectation of profitable operation over the asset’s economic life and of gain from appreciation in value or realisation of a residual value.

IAS 17.8

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

SIC 15.4

The lessor should recognise the aggregate cost of incentives as a reduction of the rental income.

Pensions and other post-retirement benefits

IAS 19.41 An entity participating in a defined benefit plan that shares risks between entities under common control shall obtain information about the plan as a whole measured in accordance with this Standard on the basis of assumptions that apply to the plan as a whole. If there is a contractual agreement or stated policy for charging to individual group entities the net defined benefit cost for the plan as a whole measured in accordance with this Standard, the entity shall, in its separate or individual financial statements, recognise the net defined benefit cost so charged. If there is no such agreement or

policy, the net defined benefit cost shall be recognised in the separate or individual financial statements of the group entity that is legally the sponsoring employer for the plan. The other group entities shall, in their separate or individual financial statements, recognise a cost equal to their contribution payable for the period.

Listed UK Group PLC


at 31 December 2013

31


Derecognition of financial assets

A financial asset is derecognised when (i) the rights to receive cash flows from the asset have expired or (ii) the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass through” arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Impairment of financial assets

The Company assesses at each reporting date whether there is any objective evidence that a financial asset or group of financial assets is impaired.

If there is objective evidence that an impairment loss on loans and receivables carried at amortise cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have been incurred) discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced, with the amount of the loss recognised in administration costs.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss in recognised in the profit and loss account, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

In the case of equity investments classified as held for sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost, where ‘significant’ is estimated to be around 20% of the original cost of the investment and ‘prolonged’ is more than 12 months. Where there is evidence of impairment, the

cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the income statement – is removed from other comprehensive income and recognised in the income statement. Impairment losses on equity investments are not reversed through the income statement; increases in their fair value after impairment are recognised directly in other comprehensive income.

Leasing and hire purchase commitments

Assets held under finance leases, which transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease, with a corresponding liability being recognised for the lower of the fair value of the leased asset and the present value of the minimum lease payments. Lease payments are apportioned between the reduction of the lease liability and finance charges in the income statement so as to achieve a constant rate of interest on the remaining balance of the liability. Assets held under finance leases are depreciated over the shorter of the estimated useful life of the asset and the lease term.

Leases where the lessor retains a significant portion of the risks and benefits of ownership of the asset are classified as operating leases and rentals payable are charged in the income statement on a straight line basis over the lease term.


The Company participates in a defined benefit pension scheme which shares risks between entities under common control, and which requires contributions to be made to a separately administered fund. The scheme was closed to new members in June 2002 from which time membership of a defined contribution plan is available.

As there is no contractual agreement or stated policy for charging to individual group entities the net defined benefit cost, the company has recognised a cost equal to their contribution payable in the period.

Contributions to the defined contribution scheme are recognised in profit or loss in the period in which they become payable.



32

Share-based payments

IFRS 2.10

For equity-settled share-based payment transactions, the entity shall measure the goods or services received, and the corresponding increase in equity, directly, at the fair value of the goods or services received, unless that fair value cannot be estimated reliably. If the entity cannot estimate reliably the fair value of the goods or services received, the entity shall measure their value, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted.

IFRS 2.30

For cash-settled share-based payment transactions, the entity shall measure the goods or services acquired and the liability incurred at the fair value of the liability. Until the liability is settled, the entity shall remeasure the fair value of the liability at each reporting date and at the date of settlement, with any changes in fair value recognised in profit or loss for the period.

IFRS 2.21

Market conditions, such as a target share price upon which vesting (or exercisability) is conditioned, shall be taken into account when estimating the fair value of the equity instruments granted. Therefore, for grants of equity instruments with market conditions, the entity shall recognise the goods or services received from a counterparty that satisfies all other vesting conditions (e.g. services received from an employee who remains in service for the specified period of service), irrespective of whether that market condition is satisfied.

IFRS 2.21A

Similarly, an entity shall take into account all non-vesting conditions when estimating the fair value of the equity instruments granted. Therefore, for grants of equity instruments with non-vesting conditions, the entity shall recognise the goods or services received from a counterparty that satisfies all vesting conditions that are not market conditions (e.g. services received from an employee who remains in service for the specified period of service), irrespective of whether those non-vesting conditions are satisfied.

Listed UK Group PLC


at 31 December 2013

33



Equity-settled transactions

The cost of equity-settled transactions with employees of the Company is measured by reference to the fair value at the date at which they are granted and is recognised as an expense over the vesting period, which ends on the date on which the relevant employees become fully entitled to the award.

Fair value is determined by an external valuer using an appropriate pricing model. In valuing equity-settled transactions, no account is taken of any service and performance (vesting conditions), other than performance conditions linked to the price of the shares of the Company (market conditions). Any other conditions which are required to be met in order for an employee to become fully entitled to an award are considered to be non-vesting conditions. The financial effect of awards by the Company of options over its equity shares to employees of subsidiary undertakings are recognised by the Company in its individual financial statements as an increase in its investment in subsidiaries with a credit to equity equivalent to the IFRS 2 cost in subsidiary undertakings.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market vesting condition or a non-vesting condition, which are treated as vesting irrespective of whether or not the market vesting condition or non-vesting condition is satisfied, provided that all other non-market vesting conditions are satisfied.

At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to which the vesting period has expired and management’s best estimate of the achievement or otherwise of non-market vesting conditions and of the number of equity instruments that will ultimately vest or in the case of an instrument subject to a market condition or a non-vesting condition, be treated as vesting as described above. The movement in cumulative expense since the previous balance sheet date is recognised in the income statement, with a corresponding entry in equity.



34

Interest-bearing loans and borrowings

IAS 39.43

When a financial asset or financial liability is recognised initially, an entity shall measure it at its fair value plus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.

IAS 39.47 (a)-(c)

After initial recognition, an entity shall measure all financial liabilities at amortised cost using the effective interest method, except for:

financial liabilities at fair value

through profit or loss;

financial liabilities that arise

when a transfer of a financial

asset does not qualify for

derecognition; and

financial liabilities that arise

when a transfer of a non-

financial asset does not qualify

for derecognition

Classification of shares as debt or equity

IAS 32.15

The issuer of a financial instrument shall classify the instrument, or its component parts, on recognition as a financial liability, financial asset or equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, financial asset and an equity instrument.

IAS 32.18

A preference share that provides for mandatory redemption by the issuer for a fixed or determined amount at a fixed or determinable future date, or gives the holder the right to require the issuer to redeem the instrument at or after a particular date for a fixed or determinable amount, is a financial liability.

IAS 32.28

The issuer of a non-derivative financial instrument shall evaluate the terms of the financial instrument to determine whether it contains both a liability and an equity component. Such components shall be classified separately as financial liabilities, financial assets or equity instruments in accordance with IAS 32.15.

IAS 32.29

An entity recognises separately the components of a financial instrument that (a) creates a financial liability of the entity and (b) grants an option to the holder of the instrument to convert it into an equity instrument of the entity. From the perspective of the entity such an instrument comprises two components, a financial liability (the contractual arrangement to deliver cash or another financial asset) and an equity instrument (the call option).

Accordingly, in all cases the entity presents the liability and equity components separately on the balance sheet.

IAS 32.32

The issuer of a bond convertible into ordinary shares first determines the carrying amount of the liability component by measuring the fair value of a similar liability that does not have an associated equity component. The carrying amount of the equity instrument represented by the option to convert the instrument into ordinary shares is then determined by deducting the fair value of the financial liability from the fair value of the compound financial instrument as a whole.

Listed UK Group PLC


at 31 December 2013

35


Equity-settled transactions (continued)

Where the terms of an equity-settled award are modified or a new award is designated as replacing a cancelled or settled award, the cost based on the original award terms continues to be recognised over the original vesting period. In addition, an expense is recognised over the remainder of the new vesting period for the incremental fair value of any modification, based on the difference between the fair value of the original award and the fair value of the modified award, both as measured on the date of the modification. No reduction is recognised if this difference is negative.

Where an equity-settled award is cancelled (including when a non-vesting condition within the control of the entity or employee is not met), it is treated as if it had vested on the date of cancellation, and any cost not yet recognised in the income statement for the award is expensed immediately. Any compensation paid up to the fair value of the award at the cancellation or settlement date is deducted from equity, with any excess over fair value being treated as an expense in the income statement.

On transition to IFRS, the Group did not apply the measurement rules of IFRS 2 to equity settled awards granted before 7 November 2002 or granted after that date and vested before 1 January 2005. However later modifications of such equity instruments are measured under IFRS 2.

Cash-settled transactions

The cost of cash-settled transactions is measured initially at fair value at the grant date using a Black-Scholes model. This fair value is expensed over the period until the vesting date with recognition of a corresponding liability. The liability is remeasured to fair value at each reporting date up to and including the settlement date, with changes in fair value recognised in profit or loss for the period.

Interest-bearing loans and borrowings

All loans and borrowings are initially recognised at fair value less directly attributable transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at

amortised cost using the effective interest method.

Gains and losses arising on the repurchase, settlement or otherwise cancellation of liabilities are recognised respectively in interest income and interest expense.

Classification of shares as debt or equity

An equity instrument is a contract that evidences a residual interest in the assets of an entity after deducting all its liabilities. Accordingly, a financial instrument is treated as equity if:

(i) there is no contractual obligation to deliver cash or other financial assets or to exchange financial assets or liabilities on terms that may be unfavourable; and

(ii) the instrument is a non-derivative that contains no contractual obligations to deliver a variable number of shares or is a derivative that will be settled only by the Company exchanging a fixed amount of cash or other assets for a fixed number of the Company’s own equity instruments.

When shares are issued, any component that creates a financial liability of the Company is presented as a liability in the balance sheet; measured initially at fair value net of transaction costs and thereafter at amortised cost until extinguished on conversion or redemption. The corresponding dividends relating to the liability component are charged as interest expense in the income statement. The initial fair value of the liability component is determined using a market rate for an equivalent liability without a conversion feature.

The remainder of the proceeds on issue is allocated to the equity component and included in shareholders’ equity, net of transaction costs. The carrying amount of the equity component is not re-measured in subsequent years.

Transaction costs are apportioned between the liability and equity components of the shares based on the allocation of proceeds to the liability and equity components when the instruments are first recognised.



36

Treasury shares

IAS 32.33

If an entity reacquires its own equity instruments, those instruments (“treasury shares”) shall be deducted from equity. No gain or loss shall be recognised in profit and loss on the purchase, sale, issue or cancellation of an entity’s own equity instruments. Such treasury shares may be held by the entity or by other members of the consolidated Group. Consideration paid or received shall be recognised directly in equity.

s731(3)

Where shares held as treasury shares are sold, the excess of the proceeds of sale over the purchase price paid shall be transferred to share premium.

Listed UK Group PLC


at 31 December 2013

37


Classification of shares as debt or equity (continued)

The Company’s 7% non-cumulative redeemable preference shares have been accounted for as such a hybrid instrument.

Treasury shares

Listed UK Group PLC’s shares held by the Company are classified in capital and reserves, as “reserve for own shares” and recognised at cost. Consideration received for the sale of such shares is also recognised in equity, with any difference between the proceeds from sale and the original cost taken to share premium. No gain or loss is recognised on the purchase, sale, issue or cancellation of equity shares.



38

Tax

IAS 12.46

Current tax liabilities (assets) for the current and prior periods shall be measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

IAS 12.15

A deferred tax liability shall be recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from:

the initial recognition of goodwill; or

the initial recognition of an asset or liability in a transaction which:

- is not a business combination; and

- at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

However, for taxable temporary differences associated with investments in subsidiaries, branches and associates, and interests in joint ventures, a deferred tax liability shall be recognised in accordance with IAS 12.39.

IAS 12.53

Deferred tax assets and liabilities shall not be discounted.

IAS 12.82

An entity shall disclose the amount of a deferred tax asset and the nature of the evidence supporting its recognition, when:

the utilisation of the deferred tax asset is dependent on future taxable profits in excess of the profits arising from the reversal of existing taxable temporary differences; and

the entity has suffered a loss in either the current or preceding period in the tax jurisdiction to which the deferred tax asset relates.

Author’s note

IAS 12.47 states that deferred tax assets and liabilities shall be measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based on tax rates that have been enacted or substantively enacted by the end of the reporting period. The change in tax rate will have no effect on current tax liabilities arising prior to the effective date of change; however the change will result in a reduction in deferred tax assets and liabilities.

At year-end, an analysis of when the deferred tax balance is expected to reverse and the rate that will be applicable in the period of reversal should be presented. The reduction in the tax rate will not affect the deferred tax expected to reverse prior to the effective date of the change, however it will affect subsequent reversals.

IAS 12.74

An entity shall offset deferred tax assets and deferred tax liabilities if any only if:

the entity has a legally enforceable right to set off current tax assets against current tax liabilities; and

the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

(i) the same taxable entity; or

(ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Dividends paid and proposed

IAS 1.107

An entity shall present, either in the statement of changes in

equity, or in the notes, the amount of dividends recognised as distributions to owners during the period, and the related amount of dividends per share.

IAS 1.137

An entity shall disclose in the notes:

the amount of dividends proposed or declared before the financial statements were authorised for issue but not recognised as a distribution to owners during the period, and the related amount per share; and

the amount of any cumulative preference dividends not recognised.

IAS 10.12

If an entity declares dividends to holders of equity instruments after the reporting period, the entity shall not recognise those dividends as a liability at the end of the reporting period.

1 Sch 43(b)-(c)

Disclose:

the aggregate amount of dividends paid in the financial year (other than those for which a liability existed at the immediately preceding balance sheet date); and

the aggregate amount of dividends that the company is liable to pay at the balance sheet date.

1 Sch 43(d)

Dividends declared (ie appropriately authorised and no longer at the discretion of the entity) after the balance sheet date but before the financial statements are authorised for issue are not a liability at the balance sheet date but are disclosed in the notes to the financial statements.

1 Sch 62

Disclose the amount and period for which each class of fixed cumulative dividend is in arrears.

Listed UK Group PLC


at 31 December 2013

39

2. Deferred Tax

The deferred tax included in the balance sheet is as follows:

2013 2012

£000 £000 Deferred tax asset Liability component of preference shares 17 18

Share-based payment 78 66

96 84

Revaluation of investment properties (608) (725)

Accelerated capital allowances (86) (414)

(693) (1,140)

Net liability disclosed on the balance sheet (598) (1,055)

£000 At 1 January 2012 including deferred tax on defined benefit pension liability (1,055) Deferred tax credit in the income statement 457

Amount credited to statement of comprehensive income -

At 31 December 2012 including deferred tax on defined benefit pension liability (598)

Change in Corporation Tax rate

Following the Budget on 21 March 2012 a resolution under the provisional collection of taxes act resulted in the UK Corporation tax rate reducing to 24% from 1 April 2012. The budget on 21 March 2012 also announced a further reduction of 1% per annum in the main rate of corporation tax down to 22% by April 2014. A reduction from 26% to 24% was substantively enacted on 26 March 2012, effective from 1 April 2012, with a further reduction to 23% effective from 1 April 2013, substantively enacted on 3 July 2012.

Any deferred tax expected to reverse in the year to 31 December 2013 has been remeasured using the reduced rate.

3. Dividends paid and proposed

2013 2012

£000 £000 Declared and paid during the year: Equity dividends on ordinary shares: Final dividend for 2012: 5.01p (2011: 5.58p) 1,087 1,112 First Interim for 2013: 2.41p (2012: 4.58p) 523 860

Second Interim for 2013: 2.35p (2012: Nil) 509 –

Dividends paid 2,119 1,972

Proposed for approval by shareholders at the AGM:

Final dividend for 2013: 3.52p (2012: 5.01p) 874 1,087



40

Profit attributable to members of the parent company

s408(1)(b)

Disclose the profit or loss for the financial year of the parent company when taking the exemption not to include the parent’s profit and loss account.

Fixed assets (intangible, tangible and investments)

IAS 16.73(d), 1 Sch 51

The financial statements shall disclose, for each class of property, plant and equipment:

the gross carrying amount and the accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end of the period;

a reconciliation of the carrying amount at the beginning and end of the period showing:

– additions;

– assets classified as held for sale or included in a disposal group classified as held for sale in accordance with IFRS 5 and other disposals;

– acquisitions through business combinations;

– increases or decreases resulting from revaluations and from impairment losses recognised or reversed in other comprehensive income in accordance with IAS 36;

– impairment losses recognised in profit or loss in accordance with IAS 36;

– impairment losses reversed in profit or loss in accordance with IAS 36;

– depreciation;

– the net exchange differences arising on the translation of the financial statements from the functional currency into a different presentation currency, including the translation of a foreign operation into the presentation currency of the reporting entity; and

– other changes.

Author’s note

There is an exemption under FRS 101.8(f) from the requirement to show comparatives for the above information.

IAS 16.74

The financial statements shall also disclose:

the existence and amounts of restrictions on title, and property, plant and equipment pledged as security for liabilities;

the amount of expenditures recognised in the carrying amount of an item of property, plant and equipment in the course of its construction;


1 Sch 53

Distinguish between freeholds, long leaseholds (over 50 years unexpired) and short leaseholds.

IAS 17.49

Lessors shall present assets subject to operating leases in their statements of financial position according to the nature of the asset.

IAS 40.75(a)-(e), (g), (h)

An entity shall disclose:

whether it applies the fair value model or the cost model;

if it applies the fair value model, whether, and in what circumstances, property interests held under operating leases are classified and accounted for as investment property;

when classification is difficult (see IAS 40.14), the criteria it uses to distinguish investment property from owner-occupied property and from property held for sale in the ordinary course of business;

the methods and significant assumptions applied in determining the fair value of investment property, including a statement whether the determination of fair value was supported by market evidence or was more heavily based on other factors (which the entity shall

disclose) because of the nature of the property and lack of comparable market data;

the extent to which the fair value of investment property (as measured or disclosed in the financial statements) is based on a valuation by an independent valuer who holds a recognised and relevant professional qualification and has recent experience in the location and category of the investment property being valued. If there has been no such valuation, that fact shall be disclosed;

the existence and amounts of restrictions on the realisability of investment property or the remittance of income and proceeds of disposal; and

contractual obligations to purchase, construct or develop investment property or for repairs, maintenance or enhancements.

IAS 40.76

An entity that applies the fair value model shall disclose a reconciliation of the carrying amount of investment property at the beginning and end of the period showing the following:

additions, disclosing separately those additions resulting from acquisitions and those resulting from subsequent expenditure recognised in the carrying amount of an asset;

additions resulting from acquisitions through business combinations;

assets classified as held for sale or included in a disposal group classified as held for sale in accordance with IFRS 5 and other disposals;

net gains or losses from fair value adjustments;

the net exchange differences arising on the translation of the financial statements into a different presentation currency, and on translation of a foreign operation into the presentation currency of the reporting entity;

transfers to and from inventories and owner-occupied property; and

other changes.

Listed UK Group PLC


at 31 December 2013

41

4. Profit attributable to members of the parent company

The profit dealt with in the financial statements of the parent Company is £5,554,000 (2012 loss: £4,000,000).

5. Tangible fixed assets

Land and

buildings

Plant and

machinery

Total £000 £000 £000 Cost or fair value: At 1 January 2013 8,304 9,450 17,754 Additions 2,275 3,475 5,750 Deficit on revaluation (154) – (154) Disposals (625) (4,000) (4,625)

At 31 December 2013 9,800 8,925 18,725

Depreciation: At 1 January 2013 500 3,153 3,653 Provided during the year 250 1,032 1,282 Disposals – (2,050) (2,050)

At 31 December 2013 750 2,135 2,885

Carrying amount:

at 31 December 2013 9,050 6,790 15,840

at 1 January 2013 7,804 6,297 14,101

The carrying amount of land and buildings comprises:

2013 2012

£000 £000 Investment properties at fair value: Long leasehold 4,184 3,900

Other properties at fair value: Long leasehold 3,986 2,936

Short leasehold 880 968

9,050 7,804

The long leasehold investment properties were valued by Chartered Surveyors & Co. as at 31 December 2013, on the basis of open market value in accordance with the Appraisal and Valuation Manual of The Royal Institution of Chartered Surveyors.

The historical cost of investment properties included at fair value is £1,419,000 at 31 December 2013 (2012: £746,000).

Investment properties: 2013

£000

Fair value as at 1 January 3,900

Additions – subsequent expenditure 438

Fair value remeasurement losses (154)

Fair value as at 31 December 4,184



42

Investment Property

IAS 40.77

When a valuation obtained for investment property is adjusted significantly for the purpose of the financial statements, for example to avoid double-counting of assets or liabilities that are recognised as separate assets and liabilities, the entity shall disclose a reconciliation between the valuation obtained and the adjusted valuation included in the financial statements, showing separately the aggregate amount of any recognised lease obligations that have been added back, and any other significant adjustments.

IAS 40.78

In the exceptional cases when an entity measures investment properties using the cost model in IAS 16 the reconciliation required above should disclose amounts relating to that investment property separately from amounts relating to other investment property. For the detailed requirements, please refer to IAS 40.78.

IAS 40.79

Additional disclosures are required by an entity that applies the cost model, including the depreciation methods used; gross carrying amount and the accumulated depreciation at the beginning and end of the period; and a reconciliation of the carrying amount of investment property at the beginning and end of the period showing movements similar to those required for property, plant and equipment under IAS 16.73. For the detailed requirements, please refer to IAS 40.79.

Author’s note

There is an exemption under FRS 101.8(f) from the requirement to show comparatives for the above information.

Revaluations

IAS 16.77

If items of property, plant and equipment are stated at revalued

amounts, the following shall be disclosed:

the effective date of the revaluation;

whether an independent valuer was involved;

the methods and significant assumptions applied in estimating the items’ fair values;

the extent to which the items’ fair values were determined directly by reference to observable prices in an active market or recent market transactions on arm’s length terms or were estimated using other valuation techniques;

for each revalued class of property, plant and equipment, the carrying amount that would have been recognised had the assets been carried under the cost model; and

the revaluation surplus, indicating the change for the period and any restrictions on the distribution of the balance to shareholders.

1 Sch 52, 1 Sch 34 (2)

For assets shown at valuation, disclose the years in which the assets were valued, amounts of valuation, the items affected and the basis of valuation. If made during the current year, also disclose the names or the qualifications of valuers and bases of valuation.

1 Sch 34(3), (4)

For each balance sheet category containing revalued assets, give comparable amounts under the historical cost convention or the differences between those comparable amounts and the revalued amounts. “Comparable amounts” refers to both aggregate cost and aggregate depreciation.

1 Sch 58 Where investment property is included in the accounts at fair value: The balance sheet items

affected and the basis of valuation adopted in determining the amounts of

the assets in question in the case of each such item must be disclosed in a note to the accounts.

For each balance sheet item affected there must be shown, either separately in the balance sheet or in a note to the accounts—

the comparable amounts determined according to the historical cost accounting rules, or

the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item.

Finance leases

IAS 17.31(a)

In respect of finance leases, lessees should disclose, for each class of asset, the net carrying amount at the end of the reporting period.

Investments - non-current

1 Sch Formats,

Shares in subsidiary undertakings, associated undertakings and other participating interests should be distinguished from loans to these undertakings. For the purposes of this example it has been assumed there are no participating interests other than those which are associates and joint ventures.

1 Sch 54

Investments should be split between listed and unlisted investments. Investments in companies traded on the Alternative Investment Market are not “listed”.

4 Sch 1, 3, 17

For all subsidiary undertakings at the end of the year disclose:

the name of the undertaking;

the country of incorporation if it is outside the UK;

if unincorporated, the address of its principal place of business; and

the no, description, and amount (proportion) of shares in the company held by or on behalf of subsidiary undertakings.

Listed UK Group PLC


at 31 December 2013

43

5. Tangible fixed assets (continued)

Revaluation of land and buildings

The Company’s land and buildings were valued by Chartered Surveyors & Co. as at 31 December 2013, on the basis of fair value supported by market evidence in accordance with the Appraisal and Valuation Manual of The Royal Institution of Chartered Surveyors. The previous valuation was carried out by Chartered Surveyors & Co on the same basis as at 31 December 2012. If the land and buildings were measured using the cost model, the carrying amounts would be as follows:

2011 2010

£000 £000 Cost 9,800 8,304

Accumulated depreciation (750) (500)

Net carrying amount 9,050 7,804

Included in the amounts for plant and machinery above are the following amounts relating to leased assets and assets acquired under hire purchase contracts:

£000 Cost: At 1 January and 31 December 2013 1,802

Depreciation: At 1 January 2013 872

Depreciation provided during the year 308

At 31 December 2013 1,180

Carrying amount:

At 31 December 2013 622

At 1 January 2013 930

6. Investments – non-current

Subsidiary

undertakings

Joint ventures

and associates

Available

for sale

investments Total

£000 £000 £000 £000 Cost or fair value: At 1 January 2012 14,860 675 2,101 17,636 Fair value adjustments - - (2) (2) Additions - - 10 10

At 1 January 2013 14,860 675 2,109 17,644

Fair value adjustments - - (5) (5)

Additions 14,400 – 100 14,500

At 31 December 2013 29,260 675 2,204 32,139

Amounts provided:

At 1 January and 31 December 2013 825 – – 825

Carrying amount:

at 31 December 2013 28,435 675 2,204 31,314

at 1 January 2013 14,035 675 2,109 16,819

At 1 January 2012 14,035 675 2,101 16,811

Available for sale investments consist of investments in listed equity shares, which by their nature have no fixed maturity date or coupon rate. Quoted market prices, have been used to determine the fair value of listed available-for-sale financial assets.



44

Investments (continued)

4 Sch 4-5

For all significant holdings (more than 20% of the nominal value of any class of shares or if the amount of holding in the company’s individual accounts exceeds one-fifth of the company’s assets) which are not subsidiaries, joint ventures or associates at the end of the financial year for undertakings which are not subsidiaries, disclose:

the name of the undertaking

the country of incorporation if it is outside the UK;

if unincorporated, the address of its principal place of business; and

the identity of each class of shares in the undertaking held and the proportion of the nominal value of the shares of that class represented by those shares.

1 Sch 55

Where financial instruments have been at fair value, there must be stated:

the significant assumptions underlying the valuation models and techniques used where the fair value of the instruments has been determined in accordance with paragraph 37(4)

for each category of financial instrument, the fair value of the instruments in that category and the changes in value

included in the profit and loss account, or

credited to or debited from the fair value reserve, in respect of those instruments, and

for each class of derivatives, the extent and nature of the instruments, including significant terms and conditions that may affect the amount, timing and certainty of future cash flows.

Where any amount is transferred to or from the fair value reserve during the financial year, there must be stated in tabular form:

The amount of the reserve as at the date of the beginning of the financial year and as at the balance sheet date respectively,

The amount transferred to or from reserves during that year, and

The source and application respectively of the amounts so transferred.

IAS 27.42

When separate financial statements are prepared for a parent that, in accordance with paragraph 10, elects not to prepare consolidated financial statements, those separate financial statements shall disclose:

(a) the fact that the financial statements are separate financial statements; that the exemption from consolidation has been used; the name and country of incorporation or residence of the entity whose consolidated financial statements that comply with International Financial Reporting Standards have been produced for public use; and the address where those consolidated financial statements are obtainable;

(b) a list of significant investments in subsidiaries, jointly controlled entities and associates, including the name, country of incorporation or residence, proportion of ownership interest and, if different, proportion of voting power held; and

(c) a description of the method used to account for the investments listed under (b).

4 Sch 6, 20

For all significant holdings which are not subsidiaries, joint ventures or associated undertakings held by the company or group disclose:

the aggregate amount of its capital and reserves as at the end of its relevant financial year; and

its profit or loss for that year;

The information is also not required if not material or if the subsidiary undertaking is not required to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish it and the company’s holding is less than 50% of the nominal value of the shares in the undertaking.

s410

When the number of related undertakings is such that the directors are of the opinion that compliance would result in information of excessive length, the information need only be given in

respect of those undertakings whose results or financial position principally affected the financial statements and of those subsidiary undertakings* excluded from consolidation under s405(3) (undertakings excluded on grounds other than materiality). If advantage is taken of this exemption, disclosure of that fact must be made and the full information (both that included in the notes to the accounts and that excluded) must be annexed to the company’s next annual return.

s409(3)-(5)

The information required by 4 Sch about related undertakings need not be given if disclosure of an investment in an undertaking incorporated, or carrying on business, outside the UK would be seriously prejudicial and the Secretary of State agrees that the information need not be disclosed. The fact that advantage has been taken of the exemption must be stated.

Stocks

1 Sch formats,

Show separate amounts for all significant stock categories.

1 Sch 28(3)-(5)

Disclose the difference, if material, for each category of stock, between carrying value and replacement cost. The most recent purchase price or production cost may be used but only if it constitutes, in the directors’ opinion, a more appropriate standard of comparison than replacement cost. This need not be given if the stock is stated at actual cost.

IAS 2.36(b), (c), (h)

The financial statements shall disclose:

the total carrying amount of

inventories and the carrying

amount in classifications

appropriate to the entity;

the carrying amount of

inventories carried at fair

value less costs to sell; and

the carrying amount of

inventories pledged as security

for liabilities.

Listed UK Group PLC


at 31 December 2013

45

6. Investments – non-current (continued)

On 28 November 2013, the Company acquired 80% of the voting shares of Caledonian Circuits Limited for consideration of £14,400,000 satisfied by the issue of 3,000,000 shares, cash of £3,000,000 and contingent consideration of £660,000.

Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Name of company Holding

Proportion

of voting

rights and

shares held Nature of Business Subsidiary undertakings Extinguishers Limited Ordinary shares 100% Fire prevention equipment Caledonian Circuits Limited* Ordinary shares 80% Electronics Bright Sparks Limited Ordinary shares 95% Electronics Preference shares 45% ‡ Wireworks Inc. Common stock 98% Electronics Sprinklers Inc. Common stock 100% Fire prevention equipment Lightbulbs Limited Ordinary shares 100% Investment property Hose Limited Ordinary shares 100% Rubber equipment

Joint venture Showers Limited Ordinary shares 50% Fire prevention equipment

Associate Power Works Limited Ordinary shares 25% ^ Electronics ‡ 450,000 shares held by a subsidiary undertaking. Incorporated in the United States. * Acquired on 28 November 2013. ^ 70,000 shares (7%) held by a subsidiary undertaking.

7. Stocks

2013 2012 2011

£000 £000 £000 Raw materials and consumables 3,155 2,300 2,500 Work in progress 4,715 3,125 3,852

Finished goods and goods for resale 3,750 1,700 1,900

11,620 7,125 8,252

The difference between purchase price or production cost of stocks and their replacement cost is not material.



46

Debtors

1 Sch formats note 5

For each item included under debtors, disclose the amount falling due after more than one year.

1 Sch formats

Where applicable, disclose separately amounts shown in the company’s balance sheet due from group undertakings.

IAS 1.78(b)

The detail provided in subclassifications depends on the requirements of IFRSs and on the size, nature and function of the amounts involved. The factors set out in IAS 1.58 are also used to decide the basis of subclassification. The disclosures vary for each item, for example: receivables are disaggregated into amounts receivable from trade customers, receivables from related parties, prepayments and other amounts.

Creditors


Show separately amounts due within one year and amounts due in more than one year.

1 Sch formats

Where applicable, disclose separately amounts should in the company’s balance sheet due to group undertakings.

1 Sch 61

For each item, also disclose the aggregate amount of secured liabilities and give an indication of the nature of the securities.

Taxation and social security costs


The amount for creditors in respect of taxation and social security costs must be shown separately from the amounts for other creditors.

Listed UK Group PLC


at 31 December 2013

47

8. Debtors

2013 2012 2011

£000 £000 £000 Trade debtors 7,745 4,027 5,157 Amounts owed by Group undertakings 6,900 6,350 6,000

Other debtors 12,373 14,950 15,100

Trade and other receivables 27,018 25,327 26,257

Amounts falling due after more than one year included above are:

Amounts owed by Group undertakings 6,900 6,350 6,000

9. Creditors: amounts falling due within one year

2013 2012 2011

£000 £000 £000 Loans – current portion 1,580 1,411 1,200 Bank overdraft 235 176 - Obligations under finance leases and hire purchase contracts 70 65 60 Trade creditors 13,506 8,405 8,475 Income tax payable 2,310 3,164 1,510 Other taxes and social security costs 60 95 70 Contingent consideration 660 - - Other creditors 3,883 4,351 3,335 Accruals 4,014 4,172 3,900 Derivative financial instruments (note 14) 4 4 4

26,322 21,843 18,554

The bank overdrafts are secured by a floating charge over certain of the Company’s assets.



48

Loans

1 Sch 61(1)

In respect of each item shown under creditors in the balance sheet disclose the aggregate of the following amounts:

(a) the amount of any debts included in creditor which are payable or repayable otherwise than by instalments and fall due for payment or repayment after the end of the period of five years beginning with the day next following the end of the financial year; and

(b) for debts which are payable or repayable by instalments, the amount of any which fall due for payment after the end of that period.

1 Sch 61(2), (3)

Repayment terms and rates of interest must be given for each debt wholly or partly repayable later than five years from the balance sheet date. Where a statement would be of excessive length, only a general indication of the repayment terms and rates of interest is required.

1 Sch 61(4)

For each item, also disclose the aggregate amount of secured liabilities and give an indication of the nature of the securities.

Convertible non-cumulative redeemable preference shares

1 Sch formats Note 7

The amount of any convertible loan shall be shown separately.

IAS 32.15

The issuer of a financial instrument shall classify the instrument, or its component parts, on initial recognition as a financial liability, a financial asset or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, a financial asset and an equity instrument.

IAS 32.20, IAS 32.18

When a preference share provides for mandatory redemption by the issuer for a fixed or determinable amount at a fixed or determinable future date, or gives the holder the right to require the issuer to redeem the share at or after a particular date for a fixed or determinable amount, the instrument meets the definition of a financial liability and is classified as such. A preference share that does not establish such a contractual obligation explicitly may establish an obligation through its terms and conditions. For example:

a financial liability may contain a non-financial obligation that must be settled if, and only if, the entity fails to make distributions or to redeem the instrument. If the entity can avoid a transfer of cash or another financial asset only by settling the non-financial obligations, the financial instrument is a financial liability;

a financial instrument is a financial liability if it provides

that on settlement the entity will deliver either:

(a) cash or another financial asset; or

(b) its own shares whose value is determined to exceed substantially the value of the cash or other financial asset; and

although the entity does not have an explicit contractual obligation to deliver cash or another financial asset, the value of the share settlement alternative is such that the entity will settle in cash. In any event, the holder has in substance been guaranteed receipt of an amount that is at least equal to the cash settlement option.

1 Sch 47(2)

In the case of any part of the allotted share capital that consists of redeemable shares disclose:

the earliest and latest dates on which the company has power to redeem those shares;

whether those shares must be redeemed in any event or are liable to be redeemed at the option of the company or of the shareholder; and

whether any (and, if so, what) premium is payable upon redemption.

1 Sch 49(1)

With respect to any contingent right to the allotment of shares in the company the following particulars shall be given:

the number, description and amount of the shares in relation to which the right is exercisable;

the period during which it is exercisable; and

the price to be paid for the shares allotted

Listed UK Group PLC


at 31 December 2013

49

10. Creditors: amounts falling due after more than one year

2013 2012 2011

£000 £000 £000 Loans – non-current portion 8,390 8,218 7,047 Liability component of convertible preference shares 2,839 2,696 2,696 Obligations under finance leases and hire purchase contracts 933 842 754 Cash-settled share-based payment 410 299 230

Derivative financial instruments (note 14) 33 31 29

12,605 12,086 10,756

Convertible non-cumulative redeemable preference shares

At 31 December 2013 and 2012, there were 2,500,000 of convertible non-cumulative redeemable preference shares in issue. Each share has a nominal value of £1 and is convertible at the option of the holder at 1 January 2015 on the basis of one ordinary share for every three preference shares held. The preference shares are redeemable at the option of the shareholder for a price of £1.20 per share on 1 January 2016. Any preference shares not converted will be redeemed on 31 December 2017 at a price of £1.20 per share. The preference shares carry a dividend of 7% per annum, payable half yearly in arrears on 30 June and 31 December. When the preference shares were issued, the prevailing market interest rate for similar shares without conversion options was higher than the interest rate at which the preference shares were issued. The dividend rights are non-cumulative.

11. Loans

Loans repayable, included within creditors, are analysed as follows:

2013 2012 2011

£000 £000 £000

Wholly repayable within five years 4,523 4,361 3,147

Not wholly repayable within five years 5,447 5,268 5,100

9,970 9,629 8,247

Details of loans not wholly repayable within five years are as follows:

8.25% secured loan of US$ 3,600,000 repayable on 31 May 2019

1,972 1,894 1,756

£3,500,000 8% debentures 2012-2021 3,475 3,374 3,344

5,447 5,268 5,100

The US dollar loan is secured by a first charge over land and buildings and is repayable on 31 May 2019. The 8% debentures are repayable in 10 equal annual instalments of £350,000 commencing on 1 March 2014.



50

Obligations under leases and hire purchase contracts

IAS 17.31(b)-(e)

Lessees shall, in addition to the requirements of IFRS 7, make the following disclosures for finance leases:

a reconciliation between the total of future minimum lease payments at the end of the reporting period, and their present value. In addition, an entity shall disclose the total of future minimum lease payments at the end of the reporting period, and their present value, for each of the following periods:

– not later than one year;

– later than one year and not later than five years; and

– later than five years;

contingent rents recognised as an expense in the period;

the total of future minimum sublease payments expected to be received under non-cancellable subleases at the end of the reporting period; and

a general description of the lessee’s material leasing arrangements including, but not limited to, the following:

– the basis on which contingent rent payable is determined;

– the existence and terms of renewal or purchase options and escalation clauses; and

– restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leasing.

IAS 17.65

Disclosure requirements for lessees and lessors apply equally to sale and leaseback transactions. The required description of material leasing arrangements leads to disclosure of unique or unusual provisions of the agreement or terms of the sale and leaseback transactions.

Operating lease commitments

IAS 17.35(a), (b), (d)

Lessees shall, in addition to meeting the requirements of IFRS 7, make the following disclosures for operating leases:

the total of future minimum lease payments under non-cancellable operating leases for each of the following periods:

– not later than one year;

– later than one year and not later than five years; and

– later than five years;

the total of future minimum sublease payments expected to be received under non-cancellable subleases at the end of the reporting period; and

a general description of the lessee’s significant leasing arrangements including, but not limited to, the following:

– the basis on which contingent rent payable is determined;

– the existence and terms of renewal or purchase options and escalation clauses; and

– restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leasing.


1 Sch 59

Disclose the amount of each of the provisions at the beginning

and end of the year and the movements during the year and the source or application of the movements.

1 Sch 60

The amounts of any provisions for taxation other than deferred taxation should be shown.

IAS 37.84

For each class of provision, an entity shall disclose:

the carrying amount at the beginning and end of the period;

additional provisions made in the period, including increases to existing provisions;

amounts used (i.e. incurred and charged against the provision) during the period;

unused amounts reversed during the period; and

the increase during the period in the discounted amount arising from the passage of time and the effect of any change in the discount rate.

Comparative information is not required.

IAS 37.85

An entity shall disclose the following for each class of provision:

a brief description of the nature of the obligation and the expected timing of any resulting outflows of economic benefits;

an indication of the uncertainties about the amount or timing of those outflows. Where necessary to provide adequate information, an entity shall disclose the major assumptions made concerning future events; and

the amount of any expected reimbursement, stating the amount of any asset that has been recognised for that expected reimbursement.

Listed UK Group PLC


at 31 December 2013

51

12. Obligations under leases and hire purchase contracts

The Company uses finance leases and hire purchase contracts to acquire plant and machinery. These leases have terms of renewal but no purchase options and escalation clauses. Renewals are at the option of the lessee. Future minimum lease payments under finance leases and hire purchase contracts are as follows:

2013 2012

£000 £000 Amounts payable: Within one year 75 71

In two to five years 971 865

1,046 936

less: finance charges allocated to future periods (43) (29)

1,003 907

The present value of minimum lease payments is analysed as follows:

Not later than one year 73 69

After one year but not more than five years 930 838

1,003 907

Operating lease agreements where the Company is lessee

The Company has entered into commercial leases on certain properties, motor vehicles and items of machinery. These leases have an average duration of between 3 and 10 years. Only the property lease agreements contain an option for renewal, with such options being exercisable three months before the expiry of the lease term at rentals based on market prices at the time of exercise. There are no restrictions placed upon the lessee by entering into these leases.

Future minimum rentals payable under non-cancellable operating leases are as follows:

2013 2012

£000 £000 Not later than one year 177 170 After one year but not more than five years 429 408

After five years 287 272

893 850

13. Provisions for liabilities

Waste National Deferred

electrical Insurance tax

& electronic on share (note 2)

equipment options Total

£000 £000 £000 £000 At 1 January 2013 – 30 1,055 1,085 Utilised during the year - - (457) (457)

Arising during the year 26 27 - 53

At 31 December 2013 26 57 598 681

Waste electrical and electronic equipment

The provision for waste electrical and electronic equipment is calculated based on sales in the current year and expected disposals of old waste.



52

Derivative financial instruments

1 Sch 55(2)

There must be stated

where the fair value of the instruments has been determined in accordance with paragraph 37(4), the significant assumptions underlying the valuation models and techniques used;

for each category of financial instrument, the fair value of the instruments in that category and the changes in value –

- included in the profit and loss account, or

- credited to or (as the case may be) debited from the fair value reserve, in respect of those instruments; and

- for each class of derivatives, the extent and nature of the instruments, including significant terms and conditions that may affect the amount, timing and certainty of future cash flows.

1 Sch 55(3)

Where any amount is transferred to or from the fair value reserve during the financial year, there must be stated in tabular form –

the amount of the reserve as at the date of the beginning of the financial year and as at the balance sheet date respectively;

the amount transferred to or from the reserve during that year; and

the source and application respectively of the amounts so transferred.

1 Sch 56

Where a company has derivatives that it has not included at fair value, there must be stated for each class of such derivatives:

(a) the fair value, if that can be determined; and

(b) the extent and nature of the derivatives.

Called up share capital

1 Sch 47(1)

In respect of the company’s share capital disclose:

the number and aggregate nominal value of each class of shares allotted; and

where shares are held as treasury shares, the number and aggregate nominal value of the treasury shares and, where shares of more than one class have been allotted, the number and aggregate nominal value of the shares of each class held as treasury shares.


The amount of allotted share capital and the amount of called up share capital which has been paid up should be shown separately.

1 Sch 48

For all shares allotted during the year give, class by class, the classes of shares, the number allotted, the aggregate nominal value and the consideration received.

1 Sch 49

For any contingent right to the allotment of shares in the company give the number, description and amount of the shares in relation to which the right is exercisable, the period during which it is exercisable and the price to be paid for the shares allotted.

The “contingent right to the allotment of shares” means any option to subscribe for shares and any other right to require the allotment of shares to any person whether arising on the conversion into shares or securities of any other description or otherwise.

1 Sch 47(2)

For redeemable shares disclose:

the earliest and latest dates on which the company has power to redeem those shares;

whether those shares must be redeemed in any event or are liable to be redeemed at the option of the company or of the shareholder; and

whether any (and, if so, what) premium is payable on redemption.

IAS 1.76(a)

An entity shall disclose the following, either in the statement of financial position or in the notes.

For each class of share capital:

the number of shares authorised;

the number of shares issued and fully paid, and issued but not fully paid;

par value per share, or that the shares have no par value;

a reconciliation of the number of shares outstanding at the beginning and at the end of the period;

the rights, preferences and restrictions attaching to that class including restrictions on the distribution of dividends and the repayment of capital;

shares in the entity held by the entity or by its subsidiaries or associates; and

shares reserved for issue under options and contracts for the sale of shares, including the terms and amounts.

Listed UK Group PLC


at 31 December 2013

53

13. Provisions for liabilities (continued)

National Insurance contributions on share options

Provision has been made for National Insurance contributions on share options awarded under unapproved share option schemes, which are expected to be exercised. The provision has been calculated based on the difference between the year-end share price of £4.45 and the weighted average exercise price of outstanding shares and is being allocated over the period from the date of award to the date the employee will become unconditionally entitled to the options.

All provisions are expected to be utilised within the next two years.

14. Derivative financial instruments

2013 2012 2011

£000 £000 £000

Interest rate swap 37 35 33

At 31 December 2013, 31 December 2012 and 31 December 2011, the Company had an interest rate swap in place with a notional amount of US$ 3,600,000 whereby it receives a fixed rate of interest of 8.25% and pays a variable rate based on LIBOR on the notional amount. The swap is being used to hedge the exposure to changes in the fair value of its 8.25% secured loan. The secured loan and interest rate swap have the same critical terms. The fair value of interest rate swap at the balance sheet date was £37,000 (2012: £35,000, 2011: 33,000). The non-current portion of the interest rate swap is £33,000 (2012: £34,000, 2011: £29,000).

The fair value of interest rate swaps has been determined by discounted cash flow analysis using interest rates for similar instruments.

15. Called up share capital

2013 2012 2013 2012

Thousands thousands £000 £000 Allotted, called up and fully paid Ordinary shares of £1 each 25,163 22,028 25,163 22,028 7% convertible non-cumulative redeemable

preference shares of £1 each 3,000 2,500 2,500 2,500

27,663 24,528

During the year the authorised share capital was increased by £2,500,000 by the creation of 2,500,000 ordinary shares of £1 each.

On 28 November 2013, 3,000,000 ordinary shares with aggregate nominal value of £3,000,000 were issued at £3.58 each in part consideration for the issued share capital of Caledonian Circuits Limited (note 5). On 1 November 2013, 135,000 ordinary shares with aggregate nominal value of £135,000 were allotted for cash at £2.62 each on the exercise of share options.

The 7% convertible non-cumulative redeemable preference shares, which were issued at par on 1 January 2005, are convertible at the option of the Company or the shareholder into ordinary shares on 1 January 2015 on the basis of one ordinary share for every three preference shares. They are redeemable at the option of the shareholder on 1 January 2016 at £1.20 per share. Any preference shares not converted are redeemable at £1.20 per share on 31 December 2019.

The preference shares carry a dividend of 7% per annum, payable half-yearly in arrears on 30 June and 31 December. The dividend rights are cumulative. The preference shares carry no votes at meetings unless the dividend thereon is six months or more in arrears or the Company fails to redeem the shares on the redemption date or the business of the meeting includes a resolution for the winding up of the Company or reducing its share capital, in which event each holder will be entitled to one vote on a show of hands or one vote per share on a poll.



54

Own shares

IAS 32.33

If an entity reacquires its own equity instruments, those instruments (“treasury shares”) shall be deducted from equity. No gain or loss shall be recognised in profit or loss on the purchase, sale, issue or cancellation of an entity’s own equity instruments. Such treasury shares may be acquired and held by the entity or by other members of the consolidated group. Consideration paid or received shall be recognised directly in equity.

IAS 32.34

The amount of treasury shares held is disclosed separately either on the face of the balance sheet or in the notes. An entity provides disclosure in accordance with IAS24 Related Party Disclosures if the entity reacquires its own equity instruments from related parties.

1 Sch 47(1)(b)

The following information shall be given with respect to the company’s share capital where shares are held as treasury shares: the number and aggregate nominal value of the treasury shares; and, where shares of more than one class have been allotted, the number and aggregate nominal value of the shares of each class held as treasury shares.

Listed UK Group PLC


at 31 December 2011

55

15. Called up share capital (continued)

On a winding up of the Company the preference shareholders have a right to receive, in preference to payments to ordinary shareholders, £1 per share plus any accrued dividend.

In November 2013 the Company announced an £11,200,000 share buy-back programme. On 30 December 2013 the Company entered into an irrevocable non-discretionary programme with ABC Investment Bank to purchase up to a maximum of 2,000,000 shares at up to £2.80 a share, from 31 December 2013 to 15 February 2013, on their behalf. This agreement entered into regarding share buy-backs during the close period has been recognised as a financial liability.

16. Own Shares

Own Shares represents the cost of Listed UK Group PLC shares purchased in the market and held by the Listed Group Employee Trust to satisfy future exercise of options under the Company’s share option schemes.

At 31 December 2013 the Company held 283,000 (2012: 283,000, 2011:283,000) of its own shares at an average cost of £2.16 (2012: £2.16, 2011:£2.16). The market value of these shares as at 31 December 2013 was £1,103,000 (2012: £1,160,000, 2011:£1,120,000).



56


Defined benefit plans under common control

IAS 19.40

Defined benefit plans that share risks between various entities under common control, for example, a parent and its subsidiaries, are not multi-employer plans.

IAS 19.41

An entity participating in such a plan, shall obtain information about the plan as a whole measured in accordance with the Standard on the basis of assumptions that apply to the plan as a whole. If there is a contractual agreement or stated policy for charging to individual group entities the net defined benefit cost for the plan as a whole measured in accordance with the Standard the entity shall , in its separate or individual financial statements recognise the defined benefit cost so charged. If there is no such agreement or policy, the net defined benefit cost shall be recognised in the separate or individual financial statements of the group entity that is legally the sponsoring employer for the plan. The other group entities shall, in their separate or individual financial statements, recognise a cost equal to their contribution payable for the period.

IAS 19.42

Participation in such a plan is a related party transaction for each individual group entity. An entity shall therefore, in its separate or individual financial statements disclose the information required by paragraph 149.

IAS 19.149

If an entity participates in a defined benefit plan that shares risks between entities under common control, it shall disclose:

(a) the contractual agreement or stated policy for charging the net defined benefit cost or the fact that there is no such policy

(b) the policy for determining the contribution to be paid by the entity

(c) if the entity accounts for an allocation of the net defined benefit cost as noted in paragraph 41, all

the information about the plan as a whole required by paragraphs 135-147

(d) if the entity accounts for the contribution payable for the period as noted in paragraph 41, the information about the plan as a whole required by paragraphs 135-137, 139, 142-144 and 147 (a) and (b).

IAS 19.150 The information required by paragraph 149(c) and (d) can be disclosed by cross-reference to disclosures in another group entity’s financial statements if: (a) that group entity’s financial statements separately identify and disclose the information required about the plan; and (b) that group entity’s financial statements are available to users of the financial statements on the same terms as the financial statements of the entity and at the same time as, or earlier than, the financial statements of the entity.

Listed UK Group PLC


at 31 December 2013

57

17. Pensions and other post-employment benefits

The Company participates in a final salary defined benefit pension scheme in the United Kingdom, the Listed Group Employee Pension Scheme which is funded by the payment of contributions to a separately administered trust fund. This is a defined benefit plan which shares risks between entities under common control.

There is no contractual arrangement or policy for charging the net benefit cost between the entities who participate in this scheme. The company has therefore recorded the contributions paid to the scheme as a charge to the income statement. Pension contributions are determined with the advice of independent qualified actuaries. The levels of contributions are based on the current service costs and the expected future cash flows of the defined benefit scheme.

Details of this scheme are given in the group financial statements of Listed UK Group plc, which are publicly available.



58


IFRS 2.44

An entity shall disclose information that enables users of the financial statements to understand the nature and extent of share-based payment arrangements that existed during the period.

IFRS 2.45(a)

To give effect to the principle in paragraph 44, the entity shall disclose at least the following:

A description of each type of share-based payment arrangement that existed at any time during the period, including the general terms and conditions of each arrangement, such as vesting requirements, the maximum term of options granted, and the method of settlement (e.g., whether in cash or equity). An entity with substantially similar types of share-based payment arrangements may aggregate this information, unless separate disclosure of each arrangement is necessary to satisfy the principle in paragraph 44;

IFRS 2.45(c)

For share options exercised during the period, the weighted average share price at the date of exercise. If options were exercised on a regular basis throughout the period, the entity may instead disclose the weighted average share price during the period; and

IFRS 2.45(d)

For share options outstanding at the end of the period, the range of exercise prices and weighted average remaining contractual life. If the range of exercise prices is wide, the outstanding options shall be divided into ranges that are meaningful for assessing the number and timing of additional shares that may be issued and the cash that may be received upon exercise of those options.

Listed UK Group PLC


at 31 December 2013

59

18. Share-based payments

Senior Executive Plan (‘SEP’)

Share options are granted to senior executives with more than 12 months’ service. The exercise price of the options is equal to the market price of the shares on the date of grant. The options vest if and when the Group’s basic earnings per share increases by 10% more than the increase in the RPI over a period starting from the grant date of the options. The options will not vest unless this targeted increase is achieved within three years of the date of grant and the employee remains in the group’s employment. The contractual life of each option is five years. There are no cash settlement alternatives.

All Employee Share-option Plan (‘AESOP’)

All other employees are entitled to a grant of options once they have been in service for two years. The options will vest if the employee remains in service for a period of three years from the date of grant, the volume of sales of a particular product increases by an average of 6% per year during the three-year service period and the share price attains an average increase of 5% per year during the three-year period from the date of grant. The contractual life of the options is five years and there are no cash settlement alternatives.

Save-as-you-earn (SAYE) scheme

In November 2013 Listed UK Group Plc introduced a SAYE scheme. Under the scheme employees may elect to save between £5 and £250 per month. The option exercise price is set at the date the employee enters into the scheme and is at a 20% discount to the share price at that date.

Share-based payment plan for employees working in the business development group (‘SPP’)

Employees in the business development group within the electronics segment are granted share options, which may only be settled in cash. These will vest when a specified target number of new sales contracts are closed, with a maximum number of three years from grant date and provided the employee remains in the group’s employment. The contractual life of the options is six years.

The following table illustrates the number and weighted average exercise prices (WAEP) of share options exercised during the year.

2013 2013 2012 2012

No. WAEP(£) No. WAEP(£) Exercised (135,000) 2.621 (75,000) 2.332 Outstanding at 31 December 740,000 3.27 725,000 3.28

1 The weighted average share price at the date of exercise for the options exercised is £2.98.

2 The weighted average share price at the date of exercise for the options exercised is £3.13.

For the share options outstanding as at 31 December 2013, the weighted average remaining contractual life is 3.70 years (2012: 2.94 years).



60

Post balance sheet events

1 Sch 13(b)

Include all material adjusting events up to the date that the financial statements are formally approved by the directors.

IAS 10.10

An entity shall not adjust the amounts recognised in its financial statements to reflect non-adjusting events after the balance sheet date.

IAS 10.19

If an entity receives information after the reporting period about conditions that existed at the end of the reporting period, it shall update disclosures that relate to those conditions, in the light of the new information.

IAS 10.21

If non-adjusting events after the reporting period are material, non-disclosure could influence the economic decisions that users make on the basis of the financial statements. Accordingly, an entity shall disclose the following for each material category of non-adjusting event after the reporting period:

the nature of the event; and

an estimate of its financial effect or a statement that such an estimate cannot be made.

Capital commitments

1 Sch 63(3)

Give capital commitments contracted but not provided for.

1 Sch 73

Separate disclosure should be made in respect of any commitments undertaken on behalf of or for the benefit of:

any parent or fellow subsidiary

undertaking;

any subsidiary undertaking;

and

any other person.

IAS 16.74(c)

The financial statements shall also disclose the amount of contractual commitments for the acquisition of property, plant and equipment.

IAS 38.122(e)

The financial statements shall also disclose the amount of contractual

commitments for the acquisition of intangible assets.

Contingent liabilities

1 Sch 63(2),

All material contingent losses should be disclosed with an estimate of the financial effect, its legal nature and details of any security. Unless the possibility of any transfer in settlement is remote, an indication of the uncertainties relating to the amount or timing of any outflow and the possibility of any reimbursement should be disclosed. If this is not practicable, that fact should be stated.

Since the Companies Act requires disclosure of all material contingent liabilities, the exemption in IAS 37 from disclosing remote contingent losses is not available to entities reporting under the Companies Act.

IAS 37.86

Unless the possibility of any outflow in settlement is remote, an entity shall disclose for each class of contingent liability at the end of the reporting period a brief description of the nature of the contingent liability and, where practicable:

an estimate of its financial effect, measured using the principles set out for provisions;

an indication of the uncertainties relating to the amount or timing of any outflow; and

the possibility of any reimbursement.

IAS 37.89

Where an inflow of economic benefits is probable, an entity shall disclose a brief description of the nature of the contingent assets at the end of the reporting period, and, where practicable, an estimate of their financial effect, measured using the principles set out for provisions.

IAS 37.91

Where the information required by IAS 37.86 or 89 is not disclosed because it is not practicable to do so, that fact shall be stated.

IAS 12.88

An entity discloses any tax-related contingent liabilities and contingent assets in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets. Contingent liabilities and

contingent assets may arise, for example, from unresolved disputes with taxation authorities.

IAS 11.45

An entity discloses any contingent liabilities and contingent assets in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets. Contingent liabilities and contingent assets may arise from such items as warranty costs, claims, penalties or possible losses.

IAS 39.47(c)

Financial guarantee contracts as defined in paragraph 9. After initial recognition, an issuer of such a contract shall (unless paragraph 47(a) or (b) applies) measure it at the higher of:

(i) the amount determined in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets; and

(ii) the amount initially recognised (see paragraph IAS 18.43) less, when appropriate, cumulative amortisation.

Listed UK Group PLC


at 31 December 2011

61

19. Post balance sheet event

On 14 January 2014, a short leasehold building with a net book value of £880,000 was severely damaged by flooding. It is expected that insurance proceeds will fall short of the costs of rebuilding and loss of stocks by some £350,000. No provision has been made in these financial statements for this loss.

20. Capital commitments

Amounts contracted for but not provided in the financial statements for the purchase of plant, property and equipment amounted to £1,750,000 for the Company (2012: £950,000).

21. Contingent liabilities

An overseas customer has commenced an action against the Company in respect of equipment claimed to be defective. It has been estimated that the liability should the action be successful is £850,000. A trial date has not yet been set and therefore it is not practicable to state the timing of any payment.

The Company has been advised by Counsel that it is possible, but not probable, the action will succeed and accordingly no provision for any liability has been made in these financial statements.

The Company has guaranteed the bank overdraft of a subsidiary undertaking to the extent of £1,500,000 (2012: £1,000,000), of which £760,000 was utilised at 31 December 2013 (2012: £375,000). The risk of default by this subsidiary is considered low, and as such the initial fair value of this guarantee has been included in ‘other creditors’ in note 9.



62

Auditors’ remuneration

s494, SI 2011/2198

For companies which are not small or medium disclose the amount of remuneration receivable by the auditors for services other than the auditing of the accounts, analysed under the following headings and separately in respect of services to the company and its subsidiaries on the one hand and to associated pension schemes on the other:

the auditing the accounts of associates of the company;

audit related assurance services;

taxation compliance services;

all taxation advisory services not falling within paragraph 3;

internal audit services;

all assurance services not falling within paragraphs 1 to 5;

all services relating to corporate finance transactions entered into by or on behalf of the company and any of its associates not falling within paragraphs 1 to 6;

all non-audit services not falling within paragraphs 2 to 7.

Individual accounts of parents that prepare group accounts and subsidiaries that are not required to disclose amounts in respect of non-audit services provided the group accounts are required to make the disclosures and the individual accounts state this. The audit fee reported should include amounts for remuneration receivable by the company’s auditor or its associates for auditing the accounts.

References to ‘associates’ in the categories actually mean subsidiaries (except those subject to severe long term restrictions) and associated pension schemes. Fees for services to associated pension schemes must be disclosed separately from fees to ‘associates’. In the descriptions used in the accounts, companies may wish to refer to subsidiaries, where appropriate, to avoid confusion. Individual accounts of parents that prepare group accounts and subsidiaries that are not required to disclose amounts in respect of non-audit services provided the group

accounts are required to make the disclosures and the individual accounts state this. The audit fee reported should include amounts for remuneration receivable by the company’s auditor or its associates for auditing the accounts.

TECH 04/11(21.1)

If the audit fee changed in the year includes an amount carried out in the previous year by the previous auditor (if for example, the fee has been under-accrued), this amount should be disclosed separately as required by the Regulations. There is no explicit requirement for separate disclosure where there has been no change of auditors.

Related party transactions

IAS 24.20

The classification of amounts payable to, and receivable from, related parties in the different categories is an extension of the disclosure requirement in IAS 1 for information to be presented either in the statement of financial position or in the notes. The categories are extended to provide a more comprehensive analysis of related party balances and apply to related party transactions.

IAS 24.24

Items of a similar nature may be disclosed in aggregate except when separate disclosure is necessary for an understanding of the effects of related party transactions on the financial statements of the entity.

IAS 24.23

Disclosures that related party transactions were made on terms equivalent to those that prevail in arm’s length transactions are made only if such terms can be substantiated.

IAS 24.4

Related party transactions and outstanding balances with other entities in a group are disclosed in an entity’s financial statements. Intra group related party transactions and outstanding balances are eliminated in the preparation of consolidated financial statements of the group.

Author’s note

Paragraph 8 (k) of FRS 101, exempts a qualifying entity for the

requirements in IAS 24 to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.

1 Sch 72(1)

Particulars may be given of transactions which the company has entered into with related parties, and must be given if such transactions are material and have not been concluded under normal market conditions.

Author’s note

Medium-sized companies are exempt from the disclosures required by 1 Sch 72. However, they are not exempt from the disclosure requirements of IAS 24 unless these are exempt under FRS 101.

1 Sch 72(2),

Where material related party transactions have been undertaken by the reporting entity, the following should be disclosed, irrespective of whether a price was charged:

the names of the transacting

related parties;

a description of the relationship

between the parties;

a description of the

transactions;

the amounts involved;

any other elements of the

transactions necessary for an

understanding of the financial

statements;

the amounts due to or from

related parties at the balance

sheet date and provisions for

doubtful debts due from such

parties at that date; and

amounts written off in the

period in respect of debts due to

or from related parties.

Listed UK Group PLC


at 31 December 2013

63

22. Auditors’ remuneration

The Company paid £51,000 (2012: £47,000) to its auditors in respect of the audit of the financial statements of the Company.

Fees paid to Chartered Accountants & Co. LLP and its associates for non-audit services to the Company itself are not disclosed in the individual accounts of Listed UK Group PLC because group financial statements are prepared which disclose such fees on a consolidated basis.

23. Related Party Transactions

At the Annual General Meeting held on 21 April 2012 approval was given for an interest-free loan up to a maximum of £18,000 to be made as necessary to J N Smith to enable him to meet expenditure to be incurred in his capacity as chief executive at marketing exhibitions and tours in the United States. Details of transactions on that loan account, included in receivables, are as follows: 2013 2012

£000 £000 As at 1 January 13 12 Advances 12 13

Repayments (11) (12)

As at 31 December 14 13

The maximum outstanding balance during the year was £15,000 (2012: £17,000).

Details of Directors’ Remuneration are provided in the Directors’ Remuneration Report.

During the year, purchases totalling £525,000 (2012: £510,000), at normal market prices have been made by the Company from UK Gnome Industries Limited, of which P A MacBryde’s wife is a director and controlling shareholder. £12,000 was outstanding at 31 December 2013 (2012: £10,000).

Sir David Connor was interested throughout the year, through his 25% equity interest in Home Fires Limited, in a contract for the supply of fire extinguishers to that company. During the year the Company supplied extinguishers to Home Fires Limited to a value of £250,000 (2012: £225,000) at normal market prices. At 31 December 2013, Home Fires Limited owed £25,000 (2012: £20,000) to the Company.

During the year the Company entered into transactions in the ordinary course of business with its 95% subsidiary, Bright Sparks Limited and its joint venture Showers Limited. Transactions entered into and trading balances outstanding at 31 December are as follows.

Sales to

Bright Sparks

Purchases from

Showers Limited

Amounts owed

from Bright Sparks

Amounts owed to

Showers Limited

£000 £000 £000 £000

2013 241 607 159 527

2012 184 489 121 325

Compensation of key management personnel (including directors)

2013 2012

£000 £000 Short-term employee benefits 929 885 Post- employment benefits 131 125 Other long-term benefits 5 5 Share based payment 19 18

Termination benefits - 40

As at 31 December 1,084 1,073


Comments on the notes to the financial statements

64

Related party transactions (continued)

1 Sch 72(3),

Transactions may generally be disclosed on an aggregated basis unless disclosure of an individual transaction, or connected transactions, is necessary for an understanding of the impact of the transactions on the financial statements of the reporting entity or is required by law. However, a material related party transaction with an individual may not be concealed in an aggregated disclosure.

Author’s note

The Companies Act 2006 requirements in respect of directors’ loans and interests apply to transactions occurring on or after 1 October 2007. The Companies Act 1985 requirements in respect of directors’ loans and interest applied to transactions occurring prior to 1 October 2007.

s413(1)-(2)

Disclose details of:

advances and credit granted to directors of the company by the company or any of its subsidiary undertakings; and

guarantees of any kind entered into on behalf of the directors of the parent company, by that company, or any of its subsidiary undertakings.

s413(3)

Details required to be disclosed for an advance or credit are:

the amount;

an indication of the

interest rate;

the main conditions; and

any amounts repaid;

the totals of such amounts

must also be disclosed.

s413(4)

Details required to be disclosed for guarantees are:

its main terms;

the amount of the maximum

liability that may be incurred

by the company (or its

subsidiary); and

any amount paid and any

liability incurred by the

company (or its subsidiary)

for the purpose of fulfilling

the guarantee (including any

loss incurred by reason of

enforcement of the

guarantee).

any amounts repaid

The totals of such amounts must also be disclosed.

s413(6)-(7)

Disclosure is required in respect of transactions with any person who was (or was connected with) a director of the company thereof at any time during the period, irrespective of whether he was (or was connected with) such a director at any time that the transaction arrangement was made.

s413(7)

References to a ‘subsidiary’ include any company which was a subsidiary of the company at any time during the period, irrespective of whether or not it was a subsidiary at the time that the transaction or arrangement was made.

Off-balance sheet arrangements

s410A

If the company is or has been party to arrangements that are not reflected in its balance sheet and the risks or benefits arising from these arrangements are material at the balance sheet date disclose:

the nature and purpose of

the arrangements; and

the financial impact of the

arrangements on the

company (large companies

only).

The information need only be given to the extent necessary for enabling the financial position of the company to be assessed.

Author’s note

Neither the Companies Act nor the related EC Directive provides a definition of an “Off-balance sheet arrangement”. The UITF has issued the following points by way of guidance:

- When a company provides disclosures in accordance with s410A it should consider the types of transactions envisaged by the EC and the aim of the legislation;

- s410A only applies where the risks or benefits arising from the arrangements are material;

- disclosure need only be given to the extent necessary for enabling the financial position of the company to be assessed; and

- some accounting standards already require disclosures of off-balance sheet items. Companies will, in addition, need to consider whether arrangements outside of the scope of these standards quire disclosure in the financial statements;

- Examples of the types of transactions that the EC envisaged for disclosure include risk and benefit-sharing arrangements or obligations arising from a contract such as debt factoring, combined sale and repurchase arrangements, consignment stock arrangements, securitisation arranged through separate companies, and unincorporated entities, pledged assets, operating lease arrangements, outsourcing and the like.

Reserves

IAS 1.79(b)

An entity shall provide a description of the nature and purpose of each reserve within equity, either on the face of the balance sheet or in the notes.

Share premium account

s610(2)(3)

There are restrictions on the use of the share premium account. When on issuing shares, a company has transferred a sum to the share premium account it may use that sum only:

to write off the expenses of the issue of those shares;

to write off any commissions paid on the issue of those shares; or

to pay up new shares to be allotted to members as fully paid bonus shares.

Listed UK Group PLC


65

24. Off-balance sheet arrangements

The company enters into operating lease arrangements for the hire of buildings and plant & equipment as these arrangements are a cost effective way of obtaining the short-term benefits of these assets. The annual commitments under these arrangements are disclosed in Note 11. There are no other material off-balance sheet arrangements.

25. Reserves

Equity share capital

The balance classified as equity share capital includes the total net proceeds (both nominal value and share premium) on issue of the Company’s equity share capital, comprising £1 ordinary shares.

Other equity

The balance held in other equity relates to the convertible non-cumulative redeemable preference shares. This balance represents the equity component of the instrument, net of deferred tax provided in relation to the separation of the instrument between its debt and equity components on adopting IAS 32 and IAS 39 on 1 January 2005.

Revaluation reserve

The balance held in the revaluation reserve relates to changes in the fair value of investment properties.

AFS reserve

The balance held in the AFS reserve relates to the changes in the fair value of AFS investments.


Comments on the notes to the company financial

statements

66

The transition to FRS 101

Explanation of the transition

FRS 100.11 On first time application of this FRS, or when an entity changes the basis of preparation of its financial statements within the requirements of this FRS, it shall apply the transitional arrangements relevant to its circumstances as follows: An entity transitioning to EU-

adopted IFRS shall apply the transitional arrangements set out in IFRS 1 First time Adoption of International Financial Reporting standards as adopted by the EU.

A qualifying entity transitioning to FRS 101 shall, unless it is applying EU-adopted IFRS prior to the date of transition, apply the requirements of paragraphs 6 to 33 of IFRS 1 as adopted by the EU including the relevant appendices; references to IFRSs in IFRS 1 are interpreted to mean EU-adopted IFRS as amended in accordance with paragraph 5(b) of FRS 101.

FRS100.16b

A qualifying entity transitioning to FRS101 shall, unless it is applying EU adopted IFRS at the date of transition, apply the requirements of paragraphs 6-33 of IFRS 1”First time adoption of International Financial Standards” including the relevant appendices, references to IFRS’s in IFRS are interpreted to mean EU-adopted IFRS as amended in accordance with paragraph 7(b) of IFRS 101.

IFRS 1.23

An entity shall explain how the transition from previous GAAP to IFRS affected its reported statement of financial position, financial performance and cash flows.

IFRS 1.24

To comply with paragraph 23, an entity’s first IFRS financial statements shall include:

(a) reconciliations of its equity reported in accordance with previous GAAP to its equity in accordance with IFRSs for both the following dates:

(i) the date of transition to IFRS

(ii) the end of the latest period presented in the entity’s most recent annual financial statements in accordance with previous GAAP.

(b) a reconciliation to its total comprehensive income in accordance with IFRSs for the latest period in the entity’s most recent annual financial statements. The starting point for that reconciliation shall be total comprehensive income in accordance with previous GAAP for the same period or, if an entity did not report such a total, profit or loss under previous GAAP.

(c) if the entity recognised or reversed any impairment losses for the first time in preparing its opening IFRS statement of financial position, the disclosures that IAS 36 Impairment of Assets would have required if the entity had recognised those impairment losses or reversals in the period beginning with the date of transition to IFRSs.

IFRS 1.25

The reconciliations required under paragraph 24(a) and (b) shall give sufficient detail to enable users to understand the material adjustments to the statement of financial position and statement of comprehensive income. If an entity presented a statement of cash flows under its previous GAAP, it shall also explain the material adjustments to the statement of cash flows.

IFRS 1.26

If an entity becomes aware of errors made under the previous GAAP, the reconciliations required by paragraph 24(a) and (b) shall distinguish between the correction of those errors from changes in accounting policies.

IFRS 1.27

IAS 8 does not apply to the changes in accounting policies an entity makes when it adopts IFRSs or to changes in those policies until after it presents its first financial statements. Therefore IAS 8’s requirements about changes in accounting policies do not apply in an entity’s first IFRS financial statements.

IFRS 1.29

An entity is permitted to designate a previously recognised financial

asset or financial liability at fair value through profit or loss or a financial asset as available for sale in accordance with paragraph D19. The entity shall disclose the fair value of financial assets or financial liabilities designated into each category at the date of designation and their classification and carrying amount in the previous financial statements.

IFRS 1.30

If an entity uses fair value in its opening IFRS statement of financial position as deemed cost for an item of property, plant and equipment, an investment property or an intangible asset (see paragraphs D5 and D7), the entity’s first IFRS financial statements shall disclose, for each line item in the opening IFRS statement of financial position:

(a) the aggregate of those fair values; and

(b) the aggregate adjustment to the carrying amounts reported under the previous GAAP.

Author’s note

This note illustrates how a company, applying FRS101 for the first time in its financial statements for the year ending 31 December 2013 might choose to set out its explanation of the transition to FRS 101 in 2013.

Readers should also note that the example illustrates the narrative disclosure that might be given to explain each restatement on transition to FRS 101, but that not every GAAP difference in the example is accompanied by an illustration of the narrative disclosure.

In all cases, companies should ensure that the disclosure of the transition to FRS 101, and the explanation of differences are consistent with other communications issued by the company.

Listed UK Group PLC


at 31 December 2013

67

26. Transition to FRS 101

For all periods up to and including the year ended 31 December 2012, the Company prepared its financial statements in accordance with previously extant United Kingdom generally accepted accounting practice (UK GAAP). These financial statements, for the year ended 31 December 2013, are the first the Company has prepared in accordance with FRS 101.

Accordingly, the Company has prepared individual financial statements which comply with FRS 101 applicable for periods beginning on or after 1 January 2012 and the significant accounting policies meeting those requirements are described in the relevant notes.

In preparing these financial statements, the Company has started from an opening balance sheet as at 1 January 2012, the Company’s date of transition to FRS101, and made those changes in accounting policies and other restatements required for the first-time adoption of FRS 101. As such, this note explains the principal adjustments made by the Company in restating its balance sheet as at 1 January 2011 prepared under previously extant UK GAAP and its previously published UK GAAP financial statements for the year ended 31 December 2012.

On transition to FRS 101, the company has applied the requirements of paragraphs 6-33 of IFRS 1 “First time adoption of International Financial Reporting Standards”.

Exemptions Applied

IFRS 1 allows first-time adopters certain exemptions from the general requirements to apply IFRSs as effective for December 2013 year ends retrospectively. The Company has taken advantage of the following exemptions:

IFRS 2 Share based payment has not been applied to any equity instruments that were granted on or before 7 November 2002, nor has it been applied to equity instruments granted after 7 November 2002 that vested before 1 January 2005. This is treatment is consistent with the transitional provisions taken when the company adopted FRS 20, the UK equivalent standard.

Cumulative actuarial gains and losses on pensions and other post employment benefits are recognised in full in equity on the date of transition to IFRS. This is the same treatment as under UK GAAP.


68

Listed UK Group PLC


at 31 December 2013

69

26. Transition to FRS101 (continued)

Reconciliation of equity as at 1 January 2012

UK GAAP

FRS101 Re-

classifications/

Re-

measurements

FRS 101

Notes £000 £000 £000 Fixed assets Tangible fixed assets 13,331 – 13,331

Investments 2 16,801 10 16,811

30,132 10 30,142

Current assets Stocks 8,252 - 8,252

Debtors

26,527 -

26,527

Cash at bank and in hand 5,260 - 5,260

40,039 - 40,039

Creditors: amounts falling due within one year

3 18,542 12 18,554

Net current assets 21,497 (12) 21,485 Total assets less current liabilities

51,629 (2) 51,627

Creditors: amounts falling due after more than one year

Financial liabilities 10,756 – 10,756 Other payables 249 – 249 Government grants - - - Provisions for liabilities 1 407 624 1,031

Net assets 40,217 (626) 39,591

Capital and reserves Called up share capital 22,028 – 22,028 Share premium account 3,853 – 3,853 Merger relief reserve 2,500 – 2,500 Other equity 78 - 78 Revaluation reserve 2,954 - 2,954 AFS reserve - 10 10 Reserve for own shares (774) – (774)

Profit and loss account 9,578 (634) 8,952

Total equity attributable to owners of the parent

40,217 (626) 39,591


70

Listed UK Group PLC


at 31 December 2013

71

26. Transition to FRS101 (continued)

Reconciliation of equity as at 31 December 2012 UK GAAP

FRS 101Re-

classifications

and Re-

measurements

IFRS

Total

Notes £000 £000 £000 Fixed assets Tangible fixed assets 14,101 - 14,101

Investments 2 16,811 8 16,819

30,912 8 30,920

Current assets Stocks 7,125 - 7,125 Debtors 25,327 - 25,327

Cash at bank and in hand 6,576 - 6,576

39,028 - 39,028 Creditors: amounts falling due within one year 3 21,826 17 21,843

Net current assets 17,202 (17) 17,185 Total assets less current liabilities 48,114 (9) 48,105 Creditors: amounts falling due after more than one year Financial liabilities 12,086 – 12,086 Government grants 1,100 – 1,100 Provisions for liabilities 1 457 628 1,085

Net assets 34,463 (637) 33,834

Capital and reserves Called up share capital 22,028 – 22,028 Share premium account 3,853 – 3,853 Merger reserve 2,500 – 2,500 Share buy back reserve - – - Other equity 78 - 78 Revaluation reserve 3,154 - 3,154 AFS Reserve - 8 8 Reserve for own shares (774) – (774)

Profit and loss account 3,624 (637) 2,987

Total Equity attributable to owners of the parent 34,463 (637) 33,834



72

Notes to the restatement of equity and reported income from UK GAAP to FRS 101

Author’s note

The narrative on the right hand page has been included to give an indication of the level of disclosure that would be expected in the first FRS 101 financial statements for a parent company taking advantage of the disclosure exemptions.

.

Listed UK Group PLC


at 31 December 2013

73

26. Transition to IFRSs (continued)

Restatement of equity from UK GAAP to FRS 101

1. Current and deferred tax

a) Remeasurements Because IFRSs defines deferred tax in relation to temporary differences between carrying values and their related tax bases, rather than timing differences in the income statement, adjustments are required to recognise a number of items for which no deferred tax was recognised under UK GAAP, as follows:

1 January

2012

31 December

2012

Deferred tax liability £000 £000

Liability component of preference shares (20) (18) Revaluation reserve 750 725

Increase in deferred tax liabilities 624 628

Deferred tax was not provided under UK GAAP on the revaluation of investment properties, as the Company had no intention to dispose of them in a manner that would give rise to current tax. IFRS requires that deferred tax be recognised.

Deferred tax was not provided under UK GAAP on the liability component of preference shares, IFRS requires that deferred tax be recognised.

2. Valuation of financial assets

Previously under UK GAAP, investments are held at cost less provisions for any permanent diminution in value. Under IFRS, investments are initially recognised at cost and subsequently are usually measured at their fair value at the balance sheet date unless held to maturity. The company’s investments consist of listed investments which have been designated as “available for sale” investments and accordingly are included in the balance sheet at market value with any movements in fair valued taken to equity until the investment is sold. The impact has been to increase the balance sheet carrying value of available for sale investments at 1 January 2012 by £10,000 and at 31 December 2012 by £8,000.



74

FRS 101. A2.15

Entities measuring investment properties, living animals or plants, or financial instruments at fair value should note that they may transfer such amounts to a separate non-distributable reserve instead of carrying them forward in retained earnings but are not required to do so. Presenting fair value movements that are not distributable profits in a separate reserve may assist with the identification of profits for that purpose

.

Listed UK Group PLC


at 31 December 2013

75

26. Transition to IFRSs (continued)

Restatement of equity from UK GAAP to IFRS (continued)

3. Employee Benefits

Holiday pay accrual

On transition to FRS 101, a holiday pay accrual has been accounted for of £17,000 at 31 December 2012 (£12,000 at 1 January 2012).

4. Revaluation of investment properties

IAS 40 requires that changes in the fair value of investment properties are recognised in the profit and loss account in the period in which they arise, rather than being recorded in the STRGL under UK GAAP.

5. Other remeasurements

The effect of the other remeasurement differences on reported on reported profit of the Company for the year ended 31 December 2012 is as follows:

£000

Loss for the year ended 31 December 2012

under UK GAAP (3,545) Revaluation of investment properties (note 4) 200 Holiday pay accrual (note 3) (17)

Deferred tax liabilities (note 1) (628)

Reduction in reported profit for the year (445)

Loss for the year ended 31 December 2012 under IFRS (3,990)

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Information in this publication is intended to provide only a general outline of the subjects covered. It should neither be regarded as comprehensive nor sufficient for making decisions, nor should it be used in place of professional advice. Ernst & Young LLP accepts no responsibility for any loss arising from any action taken or not taken by anyone using this material.

ey.com/uk

EY | Assurance | Tax | Transactions | Advisory

About EYEY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

Ernst & Young LLPThe UK firm Ernst & Young LLP is a limited liability partnership registered in England and Wales with registered number OC300001 and is a member firm of Ernst & Young Global Limited.

Ernst & Young LLP, 1 More London Place, London, SE1 2AF.

© 2013 Ernst & Young LLP. Published in the UK. All Rights Reserved.

ED None

1374812.indd (UK) 11/13. Artwork by Creative Services Group Design.

In line with EY’s commitment to minimise its impact on the environment, this document has been printed on paper with a high recycled content.

Information in this publication is intended to provide only a general outline of the subjects covered. It should neither be regarded as comprehensive nor sufficient for making decisions, nor should it be used in place of professional advice. Ernst & Young LLP accepts no responsibility for any loss arising from any action taken or not taken by anyone using this material.

ey.com/uk

EY | Assurance | Tax | Transactions | Advisory

Documents

Illustrative Individual Financial Statements for a UK … Individual Financial Statements for a UK Parent Company applying FRS 101 (Reduced Disclosure Framework), transitioning from