Tullett Prebon plc Annual Report 2010
for the year ended 31 December 2010
1. General information Tullett Prebon plc is a company incorporated in England and Wales under the Companies Act. The address of the registered ofﬁce is given on page 92. The nature of the Group’s operations and its principal activities are set out in the Directors’ Report on pages 26 and 27 and in the Business Review on pages 05 to 23. 2. Basis of preparation (a) Basis of accounting The Group Financial Statements have been prepared in accordance with International Financial Reporting Standards (‘IFRSs’) adopted by the European Union and comply with Article 4 of the EU IAS Regulation. The ﬁnancial statements have been prepared on the historical cost basis, except for the revaluation of certain ﬁnancial instruments. As discussed on page 31 of the Corporate Governance Report the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the going concern basis continues to be used in preparing these ﬁnancial statements. The ﬁnancial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Group operates and are rounded to the nearest hundred thousand (expressed as millions to one decimal place – £m), except where otherwise indicated. The signiﬁcant accounting policies are set out in Note 3. (b) Basis of consolidation The Group consolidated ﬁnancial statements incorporate the ﬁnancial statements of the Company and entities controlled by the Company made up to 31 December each year. Control is achieved where the Company has the power to govern the ﬁnancial and operating policies of an investee enterprise so as to obtain beneﬁts from its activities. The results of subsidiaries acquired or disposed of during the year are included in the Consolidated Income Statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the ﬁnancial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All inter-company transactions, balances, income and expenses are eliminated on consolidation. Non-controlling interests, also referred to as minority interests, in subsidiaries are identiﬁed separately from the Group’s equity therein. The interests of non-controlling shareholders may be initially measured at fair value or at the non-controlling interests’ proportionate share of the fair value of identiﬁable net assets. The choice of measurement is made on an acquisition by acquisition basis. Subsequent to acquisition, the carrying amount of noncontrolling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interest having a deﬁcit balance.
Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amount of the Group’s interests and the non-controlling interests are adjusted to reﬂect the changes in their relative interests in the subsidiaries. Any differences between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to the owners of the Company. When the Group loses control of a subsidiary, the proﬁt or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets, including goodwill, less liabilities of the subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for in the same manner as would be required if the relevant assets or liabilities are disposed of. The fair value of any investment retained in the former subsidiary at the date when control was lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39 ‘Financial Instruments: Recognition and Measurement’ or, when applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity. (c) Adoption of new and revised Standards In the current year, the following new and revised Standards and Interpretations have been adopted which affected the ﬁnancial statements: – IFRS 3 (2008) ‘Business Combinations’, IAS 27 (2008) ‘Consolidation and Separate Financial Statements’, IAS 28 (2008) ‘Investments in Associates’ and IAS 31 (2008) ‘Interests in Joint Ventures’. These standards introduced a number of changes in the accounting for business combinations when acquiring a subsidiary, an associate or investing in a joint venture. These changes are reﬂected in Note 2(b) ‘Basis of consolidation’ and 3(b) ‘Business combinations’. IFRS 3 (2008) also introduced additional disclosure requirements for acquisitions. The revisions and amendments to these standards apply prospectively to business combinations acquired after 1 January 2010. The following new and revised Standards and Interpretations have been adopted in the current year although their adoption has not had any signiﬁcant impact on the ﬁnancial statements: – Amendments to IFRS 2 ‘Share-based Payment’ relating to group cash settled share-based payment transactions; – Amendment to IAS 39 ‘Financial Instruments: Recognition and Measurement’ relating to eligible hedged items; – Improvements to IFRSs (2009); – IFRIC 17 ‘Distributions of Non-Cash Assets to Owners’; and – IFRIC 18 ‘Transfers of Assets from Customers’.
CHAIRMAN’S STATEMENT & BUSINESS REVIEW
Notes to the Consolidated Financial Statements