(n) Taxation
Corporation tax payable is provided on
taxable profits at the current rate. Deferred tax
is provided in respect of capital allowances
in excess of depreciation and all other timing
differences that have originated but not
reversed at the balance sheet date using
future tax rates that have been enacted
at the balance sheet date. The balance is
discounted, using the yield to maturity on
government gilts, to reflect the time value of
money over the period between the balance
sheet date and the date on which the
timing differences are expected to reverse. A
deferred tax asset is recognised only when,
on the basis of all available evidence, it is
regarded as more likely than not that there
will be suitable taxable profits from which the
reversal in the future can be deducted.
(o) Financial Instruments
Financial Assets
All financial assets, being cash and cash
equivalents, debtors and loans receivable, are
categorised as “loans and receivables” which
are measured at amortised cost. Cash and
cash equivalents comprise cash at bank and
in hand and short-term deposits.
Financial Liabilities
Financial liabilities other than derivative
financial liabilities (see Hedge Accounting
below) are initially measured at fair value and
subsequently measured at amortised cost.
The premium/discount and costs of issue
are amortised over the life of the instrument,
with the amortisation being included in the
effective interest rate of the instrument which
is included in finance charges (net) in the
profit and loss account.
(p) Hedge Accounting
The Group designates certain hedging
instruments, including derivatives, as cash
flow hedges. At inception of the hedge
relationships, the Group documents
the relationships between the hedging
instruments and the hedged items along with
the Group’s risk management strategy and
objectives in relation to each hedge. At the
inception of the hedges, and on an ongoing
basis, the Group documents whether the
hedging instruments are highly effective in
offsetting changes in cash flows of hedged
items.
The effective proportion of changes in
fair value of hedging instruments that
are designated and qualify as cash flow
hedges are deferred in equity (net of tax) in
a hedging reserve. The gain or loss relating
to the ineffective proportion is recognised
immediately in the profit and loss account.
The amounts deferred in the hedging reserve
are recycled to the profit and loss account
in the periods when the hedged items are
recognised in the profit and loss account.
(q) Related Party Transactions
As at 31 March 2015, the Company was
an indirectly wholly owned subsidiary
undertaking of Hydriades IV Limited, the
ultimate parent company in the United
Kingdom. As such, the Company has taken
advantage of the exemption in FRS 8 “Related
Party Disclosures” from disclosing transactions
with other members of the group headed by
Hydriades IV Limited, as consolidated financial
statements for this company in which the
accounts of the Company and its subsidiaries
are included, are publicly available. The
Group has no other related party transactions
requiring disclosure other than those
disclosed in note 30.
Hedge accounting is discontinued when
the Group de-designates the hedging
relationships, the hedging instruments expire,
are terminated or are sold or they no longer
qualify for hedge accounting. Any cumulative
gain or loss that remains in the hedging
reserve at that time is recognised when
hedged forecast transactions are ultimately
recognised in the profit and loss account.
When forecast transactions are no longer
expected to occur, the cumulative gains or
losses are recognised immediately in the profit
and loss account.
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