Oxford Catalysts Group PLC Annual Report and Accounts 2010

Annual Reportand Accounts2010Oxford CatalystsGroup PLCNotes to the Accounts1 General InformationOxford Catalysts Group PLC is a company incorporated in England and Wales and domiciled in England. The nature of theGroup’s operations and its principal activities are set out in the summary on the inside front cover and in the Chairman’sStatement and Chief Executive’s Report on pages 2 to 5.The Company is a public limited company which is listed on AIM.2 Accounting PoliciesThe principal accounting policies applied in the preparation of these consolidated financial statements are summarisedbelow. The policies have been consistently applied to all the years presented unless otherwise stated.Basis of PreparationThe consolidated financial statements have been prepared in accordance with International Financial Reporting Standardsas adopted by the European Union (IFRSs as adopted by the EU), IFRIC Interpretations and the Companies Act 2006applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under thehistorical cost convention.The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. Italso requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areasinvolving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to theconsolidated financial statements, are disclosed in note 3.Change in Accounting PolicyFollowing a review of the allocation of costs between cost of sales and unfunded research costs, there has been areclassification of certain costs between these categories. Costs of sales consists of the direct costs attributable to therevenue earned and certain costs which had previously been allocated to cost of sales were considered by Management tobe related to unfunded research and development costs and so have been reclassified accordingly. The impact on theconsolidated income statement for the year ended 31 December 2010 was to reduce cost of sales and increase unfundedresearch and development cost by £2,260,000 (2009: decrease cost of sales and increase unfunded research anddevelopment costs by £1,798,000). There was no impact to loss for the financial year attributable to the equity holders ofthe Company.Accounting DevelopmentsThe following new standards, amendments to standards and interpretations are mandatory for the first time for thefinancial year beginning 1 January 2010, but are not currently relevant for the Group.• IFRS 3 (revised), ‘Business combinations’, and consequential amendments to IAS 27, ‘Consolidated and separatefinancial statements’, IAS 28, ‘Investments in associates’, and IAS 31, ‘Interests in joint ventures’, are effectiveprospectively to business combinations for which the acquisition date is on or after the beginning of the first annualreporting period beginning on or after 1 July 2009.• IAS 39 (amendment),‘Financial instruments: Recognition and measurement’ (effective 1 July 2009) has been amendedto be consistent with IFRS 8,Operating segments, which requires disclosure for segments to be based on informationreported to the chief operating decision-maker.• IAS 27 (revised),‘Consolidated and separate financial statements’, and IFRS 1 (revised),‘First time adoption’ (botheffective 1 July 2009), allow first time adopters to use a deemed cost of either fair value or the carrying amount underprevious accounting practice to measure the initial cost of investments in subsidiaries, jointly controlled entities andassociates in the separate financial statements. The amendment also removes the definition of the cost method fromIAS 27 and replaces it with a requirement to present dividends as income in the separate financial statements of theinvestor. The revised standard also specifies the accounting where there is no change in control or control is lost.Where there is a change in control, the effects of all transactions with non-controlling interests are recorded in equityand these transactions will no longer result in goodwill or gains and losses. Any remaining interest in the entity is remeasuredto fair value and a gain or loss is recognised in profit or loss.Improvements to International Financial Reporting Standards 2009 were issued in April 2009. The effective dates varystandard by standard:• IFRS 2 (Amendment), ‘Share based payments – Group cash-settled share-based payment transactions’;26