Annual Report & Accounts 2014 - NOTES TO THE COMPANY FINANCIAL STATEMENTS
1. aCCoUntinG poliCieS
A summary of the significant accounting policies are set out below, these policies have been applied consistently to the
periods presented, unless otherwise stated.
1.1 basis of preparation
The financial information has been prepared on the historical cost basis with the exception of those assets and liabilities
which are carried at fair value, and in accordance with applicable Isle of Man law and United Kingdom accounting standards
including FRS 26 'Financial Instruments: Recognition and Measurement.'
Investments in subsidiary undertakings are stated at cost less amounts written off.
1.3 Foreign Currency translation
The Company maintains its accounting records in Euro and the balance sheet and profit and loss account are expressed in
this currency. Income and charges are translated at the exchange rates ruling at the transaction date. Fixed assets are
valued using historical exchange rates. Other current assets and liabilities expressed in foreign currencies are translated
into Euros at the rates of exchange in effect at the balance sheet date. Realised exchange gains and losses and unrealised
exchange losses are recognised in the profit and loss account.
1.4 Fixed assets
Investments in subsidiaries are shown as fixed assets in the Company balance sheet, and are valued at cost less any
provision for impairment in value.
1.5 Share based payments
The Group has share option schemes which allow Group employees and contractors to acquire shares of the Company.
The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair
value is measured at grant date and spread over the period during which the employees become unconditionally entitled to
The fair value of the options granted are measured using either a binomial or Monte Carlo valuation model. This valuation
method takes into account the terms and conditions upon which the options were granted. The amount recognised as an
expense is adjusted to reflect the actual number of share options that vest.
Payments made to repurchase or cancel vested awards are accounted for with the fair value of the options cancelled,
measured at the date of cancellation being taken to retained earnings; the balance is taken to the income statement. Also
on cancellation an accelerated charge would be recognised immediately.
1.6 Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions
of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair
value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised immediately in profit or loss.
1.6.1 Non-Derivative Financial Instruments
Non-derivative financial instruments comprise debtors, loans and borrowings, and trade and other creditors. Non-derivative
financial instruments are recognised initially at fair value, plus, for instruments not at fair value through profit or loss, any
directly attributable transaction costs. Subsequent to initial recognition, non-derivative financial instruments are measured
at amortised cost using the effective interest method. Provisions for impairment are made against financial assets if
considered appropriate and any impairment is recognised in profit or loss.
ANNUAL REPORT 2014 70
noteS to the Company FinanCial StatementS
for the year ended 31 December 2014