1. Accounting policies

Basis of preparation

This condensed set of financial statements for the half year ended 30 June 2014 has been prepared in accordance with IAS 34 'Interim Financial Reporting'.

The Interim management report has been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs) as adopted by the European Union and in accordance with those disclosed in the annual report for the year ended 31 December 2013, which was filed with the Registrar of Companies on 6 May 2014.

Going concern

In determining the basis of preparation for the Interim management report, the directors have considered the Group's business activities, together with the factors likely to affect its future development, performance and position which are set out in the Financial Overview. This includes an overview of the Group's financial position, cash flows, liquidity position and borrowing facilities.

The Group meets its working capital requirements through a combination of committed and uncommitted facilities and overdrafts. The overdrafts and uncommitted facilities are repayable on demand but the committed facilities are due for renewal as set out below. There is sufficient headroom in the committed facility covenants to assume that these facilities can be operated as contracted for the foreseeable future.

The committed facilities as at 30 June 2014 were as follows:

  • £125m Revolving Credit Facility maturing 31 August 2016
  • €125m Revolving Credit Facility maturing 1 March 2018
  • $10m Letter of Credit Facility maturing 31 August 2016

On 3 July 2014, the £125m and €125m revolving credit facilities were replaced by a single committed revolving credit facility for £230m, maturing on 3 July 2019.

The Group's forecasts and projections, which cover a period of at least 12 months from the date of approval of this Interim management report, taking account of reasonable potential changes in trading performance, show that the Group should be able to operate within the level of its current committed facilities.

The directors have reviewed forecasts and projections for the Group's markets and services, assessing the committed facility and financial covenant headroom, central liquidity and the Group's ability to access further funding. The directors also reviewed downside sensitivity analysis over the forecast period, thereby taking into account the uncertainties arising from the current economic environment. Following this review, the directors have formed a judgement, at the time of approving the condensed financial statements, that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason the directors continue to adopt the going concern basis in preparing the condensed financial statements.

Changes in accounting policies

The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest annual audited financial statements.

The adoption of the following standards, at 1 January 2014, has had no material impact on the Group's financial statements:

  • IFRS 10 'Consolidated Financial Statements' was issued in May 2011, is effective for periods commencing on or after 1 January 2013 and was endorsed by the EU on 1 January 2014.
  • IFRS 11 'Joint Arrangements' was issued in May 2011, is effective for periods commencing on or after 1 January 2013 and was endorsed by the EU on 1 January 2014.
  • IFRS 12 'Disclosure of Interests in Other Entities' was issued in May 2011, is effective for periods commencing on or after 1 January 2013 and was endorsed by the EU on 1 January 2014.
  • IAS 27 (revised) 'Separate Financial Statements' was issued in May 2011, is effective for periods commencing on or after 1 January 2013 and was endorsed by the EU on 1 January 2014.
  • IAS 28 (revised) 'Investments in Associates and Joint Ventures' was issued in May 2011, is effective for periods commencing on or after 1 January 2013 and was endorsed by the EU on 1 January 2014.
  • Amendments to IAS 32 'Offsetting Financial Assets and Financial Liabilities' was issued in December 2011, is effective for periods commencing on or after 1 January 2014 and was endorsed by the EU on 1 January 2014.
  • Amendments to IAS 36 'Recoverable Amount Disclosures for Non-Financial Assets' was issued in May 2013, is effective for periods commencing on or after 1 January 2014 and was endorsed by the EU on 1 January 2014.
  • Amendments to IAS 39 'Novation of Derivatives and Continuation of Hedge Accounting' was issued in June 2013, is effective for periods commencing on or after 1 January 2014 and was endorsed by the EU on 1 January 2014.