2568.11 kb - Compass Group

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86 Compass Group PLC Annual Report 2007Parent Company balance sheetas at 30 September 20072007 2006Compass Group PLC Notes £m £mFixed assetsInvestments 2 933 915Current assetsDebtors: amounts falling due within one year 3 4,828 3,311Debtors: amounts falling due after more than one year 3 13 22Cash at bank and in hand 678 695Current assets 5,519 4,028Creditors: amounts falling due within one yearCreditors: amounts falling due within one year 4 (3,757) (1,668)Net current assetsNet current assets 1,762 2,360Total assets less current liabilitiesTotal assets less current liabilities 2,695 3,275Creditors: amounts falling due after more than one yearCreditors: amounts falling due after more than one year 4 (1,403) (1,878)Net assetsNet assets 1,292 1,397Capital and reservesCalled up share capital 7, 8 193 210Share premium account 8 122 96Capital redemption reserve 8 33 15Share-based payment reserve 8 144 130Profit and loss account 8 800 946Total equity 1,292 1,397Approved by the Board of directors on 28 November 2007 and signed on their behalf byRichard J Cousins, DirectorAndrew D Martin, Director
87 Compass Group PLC Annual Report 2007Parent Company accounting policiesfor the year ended 30 September 2007IntroductionThe significant accounting policies adoptedin the preparation of the separate financialstatements of the Company are set out below:A Accounting convention and basisof preparationThese financial statements have beenprepared in accordance with applicable UKgenerally accepted accounting principles (UKGAAP) and the Companies Act 1985 usingthe historical cost convention modified for therevaluation of certain financial instruments.B ExemptionsThe Company’s financial statements areincluded in the Compass Group PLCconsolidated financial statements for the yearended 30 September 2007. As permitted bysection 230 of the Companies Act 1985, theCompany has not presented its own profit andloss account. The Company has also takenadvantage of the exemption from presentinga cash flow statement under the terms ofFRS 1 ‘Cash Flow Statements’. The Companyis also exempt under the terms of FRS 8‘Related Party Disclosures’ from disclosingtransactions with other members ofCompass Group.The Compass Group PLC consolidatedfinancial statements for the year ended30 September 2007 contain financialinstrument disclosures which comply withFRS 25 ‘Financial Instruments: Disclosureand Presentation’. Consequently, theCompany has taken advantage of theexemption in FRS 25 not to presentseparate financial instrument disclosuresfor the Company.C Change in accounting policiesThe Company has not applied anyaccounting standards for the first time inthe year ended 30 September 2007.D Investments in subsidiaryundertakingsInvestments are stated at cost less provisionfor any impairment. In the opinion of thedirectors the value of such investments arenot less than shown at the balance sheet date.E Foreign currencyAssets and liabilities in foreign currenciesare translated into sterling at the rates ofexchange ruling at the year end.F BorrowingsBorrowings are recognised initially at fairvalue, net of transaction costs incurred.Borrowings are subsequently stated atamortised cost unless they are part ofa fair value hedge accounting relationship.Borrowings that are part of a fair value hedgeaccounting relationship are measured atamortised cost plus or minus the fair valueattributable to the risk being hedged.G Derivatives and other financialinstrumentsThe Company uses derivative financialinstruments to manage its exposure tofluctuations in foreign exchange rates andinterest rates. Derivative instruments utilisedinclude interest rate swaps, cross currencyswaps and forward foreign exchange contracts.The Company and Group policy is disclosedin the accounting policies to the consolidatedfinancial statements.H DividendsDividends are recognised in the Company’sfinancial statements in the year in which theyare approved in general meeting by theCompany’s shareholders. Interim dividendsare recognised when paid.I Deferred taxDeferred tax is provided at the anticipatedrates on timing differences arising from theinclusion of items of income and expenditurein tax computations in periods different fromthose in which they are included in thefinancial statements. Deferred tax assets arerecognised to the extent that it is regardedas more likely than not that they willbe recovered.J Share-based paymentsThe Group issues equity-settled and cashsettledshare-based payments to certainemployees. Equity-settled share-basedpayments are measured at fair value(excluding the effect of non market-basedvesting conditions) at the date of grant.The fair value determined at the grant dateof the equity-settled share-based paymentsis expensed on a straight-line basis over thevesting period, based on the Group’s estimateof the shares that will eventually vest andadjusted for the effect of non market-basedvesting conditions.Fair value is measured using either thebinomial distribution or Black-Scholes pricingmodels as is most appropriate for eachscheme. The expected life used in the modelshas been adjusted, based on management’sbest estimate, for the effects of exerciserestrictions and behavioural considerations.For cash-settled share-based payments, aliability equal to the portion of the goods orservices received is recognised at the currentfair value determined at each balancesheet date.The issue of share incentives by the Companyto employees of its subsidiaries representsadditional capital contributions. An additionto the Company’s investment in Groupundertakings is reported with a correspondingincrease in shareholders’ funds. For details ofthe charge see note 26 to the consolidatedfinancial statements.
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