20645_Scapa_AR_160504

GROUP ACCOUNTING POLICIES CONTINUED
CONSOLIDATION
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its
subsidiaries) made up to 31 March each year. Control is achieved when the Company has power over the investee, is exposed, or has rights,
to variable returns from its involvement with the investee and has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more
of the elements listed above.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the
subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the year are included in the Consolidated Income Statement
from the date the Company gains control of the subsidiary or until the date when the Company ceases to control the subsidiary.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring accounting policies used into line with the Group’s
accounting policies. All intra-Group assets and liabilities, equity, income, expenses and cash flows relating to transactions between Group
companies are eliminated on consolidation.
The Group has an interest in Scapa Scottish Limited Partnership, whose head office is located at 13 Queens Road, Aberdeen. The financial
statements of the Group include the results and financial position of the Group’s interest in Scapa Scottish Limited Partnership. Accordingly
advantage has been taken of the exemptions provided by Regulation 7 of the Partnership (Accounts) Regulations 2008 from the requirements
for the preparation, delivery and publication of the partnership’s accounts.
SEGMENTAL REPORTING
IFRS 8 Operating Segments requires that the segments should be reported on the same basis as the internal reporting information that is
provided to the chief operating decision maker. The Group adopts this policy and the chief operating decision maker has been identified as the
Board of Directors. The Directors consider there to be three reportable segments, being the main customer groups which the Group serves in:
Industrial, Healthcare and Electronics (business units).
Internal reports reviewed regularly by the Board provide information to allow the chief operating decision maker to allocate resources and make
decisions about the operations. The internal reporting focuses on these business units. The chief operating decision maker relies primarily on
turnover and trading profit to assess the performance of the Group and make decisions about resources to be allocated to the segment. Trading
profit is reconciled to operating profit on the face of the Income Statement.
REVENUE RECOGNITION
Revenue comprises the fair value for the sale of goods, net of value-added tax, rebates and discounts and after eliminating sales within the
Group. Revenue is recognised as follows:
(a) Sales of goods
Sales of goods are recognised when the significant risks and rewards of ownership of the goods have been transferred to the buyer,
and when the Group entity has no continuing managerial involvement nor effective control over the goods.
Where items are sold with a right of return, accumulated experience is used to estimate and provide for such returns at the time of sale.
(b) Interest income
Interest income is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be
measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that
asset’s net carrying amount on initial recognition.
TRADING PROFIT
Trading profit is the profit the Group derives from its trading activities. Items which are both material, either qualitatively or quantitatively,
and non recurring in nature are excluded from trading profit so that trading profit provides a better indication of the Group’s underlying
business performance.
EXCEPTIONAL ITEMS
Items which are both material, either qualitatively or quantitatively, and non-recurring in nature are presented as exceptional items so as to
provide a better indication of the Group’s underlying business performance and are shown separately on the face of the Income Statement.
Items classed as exceptional in the Income Statement are treated as exceptional in the cash flow until the items are fully unwound.
OPERATING PROFIT
Operating profit is trading profit stated after charging all exceptional costs, pension administration costs and the amortisation of intangible assets,
but before investment income and finance costs.
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SCAPA GROUP PLC ANNUAL REPORT AND ACCOUNTS 2016
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Annual Report and Accounts 2016 Scapa Group plc