1.3.3 Business combinations
All business combinations are accounted for by applying the purchase method. The cost of a business
combination is measured as the aggregate of the fair values, at the acquisition date, of the assets
given, liabilities incurred or assumed, and equity instruments issued by the Group, plus any costs
directly attributable to the combination. The identifiable assets, liabilities and contingent liabilities of
the acquiree are measured initially at fair value at the acquisition date, irrespective of the extent of any
minority interest. The excess of the cost of the business combination over the Group’s interest in the
net fair value of the identifiable assets, liabilities and contingent liabilities is recognised as goodwill.
1.4 Foreign currency
The functional currency of the Group and the Company is the Euro.
1.4.1 Foreign currency transactions
Transactions in foreign currencies are translated to the Euro at the foreign exchange rates ruling at the
dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the
balance sheet date are translated to the Euro at the foreign exchange rate ruling at that date. Foreign
exchange differences arising on translation are recognised in the consolidated income statement.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency
are translated using the exchange rate at the date of the transaction.
1.4.2 Financial statements of foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising
on consolidation, are translated to the Euro at foreign exchange rates ruling at the balance sheet date.
The revenues and expenses of foreign operations are translated to the Euro at rates approximating to
the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising
on retranslation are recognised directly in a separate component of equity.
1.5 Property, plant and equipment
1.5.1 Owned assets
Property, plant and equipment are stated at cost, less accumulated depreciation (see 1.5.2. below)
and impairment losses (see accounting policy 1.7). Where parts of an item of property, plant and
equipment have different useful lives, they are accounted for as separate items of property, plant
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives
of each part of an item of property, plant and equipment. The estimated useful lives are as follows:
Fixtures and fittings: 3 years
The residual value, if not insignificant, is reassessed annually.