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Notes to the Consolidated Financial Statements
For the year to 28 February 2011
54
Financial Statements
1. Accounting policies of Stobart Group Limited
Basis of preparation and Statement of Compliance
The principal accounting policies adopted in the preparation of the Financial
Statements are set out below. The policies have been consistently applied to
all the years presented, unless otherwise stated.
These Group Financial Statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs and IFRIC interpretations) as
adopted by the European Union ("adopted IFRSs"). The Financial Statements
for the Company are presented after the Financial Statements for the Group.
The Financial Statements of the Group are also prepared in accordance with
the Companies (Guernsey) Law 2008.
Stobart Group Limited is a Guernsey registered company. The Company’s
ordinary shares and income shares are traded on the London Stock Exchange.
Restatement of prior year Income Statement
The prior year financial statements have been restated following the
reclassification of our property business operations to continuing operations.
These were classified in discontinued operations in the prior year. The resulting
impact is to reduce the prior year continuing profit before tax by £770,000
being losses made in the property related companies.
Changes in Accounting Policy and Disclosures
The accounting policies adopted are consistent with those of the previous
financial period except as follows:
(a) New standards, amendments to existing standards and
interpretations to existing standards adopted by the Group:
Amendment to IFRS2 Group Cash-settled Share-based Payment
Arrangements. The amendment clarifies the accounting for Group cash-
settled share-based payment transactions, where a subsidiary receives
goods or services from employees but the parent or another entity in the
Group pays for those goods or services. This amendment did not have
any impact on the financial position or performance of the Group.
IFRS3 (revised) Business Combinations. The revised standard increases the
number of transactions to which it must be applied including business
combinations of mutual entities and combinations without consideration.
IFRS3 (revised) introduces significant changes in the accounting for
business combinations such as the valuation of non-controlling interests,
business combinations achieved in stages, the initial recognition and
subsequent measurement of a contingent consideration and the
accounting for transaction costs. These changes could have a significant
impact on profit or loss reported in the period of an acquisition, the
amount of goodwill recognised in a business combination and profit or
loss reported in future periods.
IAS27 (amended) Consolidated and Separate Financial Statements.
The amended standard requires that a change in the ownership
interest of a subsidiary (without loss of control) is accounted for as a
transaction with owners in their capacity as owners and these
transactions will no longer give rise to goodwill or gains and losses.
The standard also specifies the accounting when control is lost and
any retained interest is remeasured to fair value with gains or losses
recognised in profit or loss. This amendment does not have any impact
on the current year Financial Statements.
IAS32 Financial Instruments : Presentation – Classification of Rights
Issues (amendment). This amendment to IAS32 amended the definition
of a financial liability in order to classify rights issues (and certain
options or warrants) as equity instruments in cases where such rights
are given pro rata to all of the existing owners of the same class of an
entity’s non-derivative equity instruments, or to acquire a fixed number
of the entity’s own equity instruments for a fixed amount in any
currency. This amendment does not have any impact on the current
year Financial Statements.
Amendment to IAS39 Financial Instruments: Recognition and
Measurement – Eligible Hedged Items. The amendment clarifies that an
entity is permitted to designate a portion of the fair value changes of cash
flow variability of a financial instruments as a hedged item. This also
covers the designation of inflation as a hedged risk or portion in particular
situations. The Group has concluded that the amendment did not have
any impact on the financial position or performance of the Group.
IFRIC17 Distribution of Non-cash Assets to Owners. The interpretation
provides guidance on accounting for arrangements whereby an entity
distributes non-cash assets to shareholders either as a distribution of
reserves or as dividends. The adoption of this interpretation did not have
an impact on the Group.
Improvements to IFRSs (issued 2009). In May 2009 the Board issued its
second omnibus of amendments to its standards, primarily with a view to
removing inconsistencies and clarifying wording. There are separate
transitional provisions for each amendment. The adoption of the
amendments has resulted in some changes to accounting policies but did
not have any impact on the financial position or performance of the Group.
(b) New standards and interpretations not applied:
The following standards and interpretations have an effective date after
the date of these Financial Statements:
International Accounting Standards (IAS / IFRSs)
Effective date*
IFRS 1
Amendments to IFRS 1 – Limited Exemption
from Comparative IFRS 7 disclosures
1 July 2010
IFRS 7
Financial Instruments: Disclosure
(amendment)
1 July 2011
IFRS 9
Financial Instruments: Classification
and Measurement Income Taxes
(Amendment)
1 January 2013
IAS12
Income Taxes (Amendment) –
Deferred Taxes: Recovery of
Underlying Assets
1 January 2012
IAS 24
Related Party Disclosures (revised)
1 January 2011
International Financial Reporting Interpretations Committee (IFRIC)
IFRIC 14
Amendment: Prepayments of a
Minimum Funding Requirement
1 January 2011
IFRIC 19
Extinguishing Financial Liabilities
with Equity Instruments
1 July 2010
Improvements to IFRS (issued May 2010)
Various Dates
* The effective dates stated above are those given in the original IFRIC
standards and interpretations. As the Group prepares its Financial Statements
in accordance with IFRS as adopted by the European Union, the application
of new standards and interpretations will be subject to them having been
endorsed for use in the EU via the EU Endorsement Mechanism. In the
majority of cases this will result in an effective date consistent with that given
in the original standard or interpretation but the need for endorsement
restricts the Group’s discretion to early adopt standards.
The Directors do not anticipate that the adoption of these standards and
interpretations will have amaterial impact on the Group’s Financial Statements.
Summary of Significant Accounting Policies
Revenue
Revenue from the Eddie Stobart, Stobart Ports and Stobart Air business
segments and the rail freight revenue in the Stobart Rail segment is recognised
in the income statement as the fair value of consideration receivable on the
delivery of services delivered at the statement of financial position date net of
discounts and VAT.
Stobart Rail infrastructure engineering contract revenue is recognised to match
the sales value of work performed up to the statement of financial position
date based on stage of completion. Stage completion is determined by internal
quantity surveyors.
Revenue is analysed by segment in Note 5.
Functional and Presentation Currency
The Company’s functional currency is Pounds Sterling (GBP) and it has adopted
Pounds Sterling (GBP) as its presentational currency.