Tullett Prebon plc Annual Report 2010
for the year ended 31 December 2010
1. Basis of preparation (a) Basis of accounting The separate ﬁnancial statements of the Company are presented as required by the Companies Act. They have been prepared under the historical cost convention and in accordance with applicable United Kingdom law and United Kingdom Generally Accepted Accounting Practice. (b) Cash ﬂow statement The results, assets and liabilities of the Company are included in the consolidated ﬁnancial statements of Tullett Prebon plc. Consequently, the Company has taken advantage of the exemption available from preparing a cash ﬂow statement under the terms of FRS 1 (revised) ‘Cash ﬂow statements’. (c) Financial instruments As disclosures equivalent to that required under FRS 29 ‘Financial Instruments: Disclosures’ are given in the publicly available consolidated ﬁnancial statements of Tullett Prebon plc the Company is exempt from the disclosures required by FRS 29 in its own accounts. 2. Signiﬁcant accounting policies The principal accounting policies are summarised below. They have all been applied consistently throughout the year.
At acquisition, the cost of investment in a subsidiary is measured at the fair value of the consideration payable, except for subsidiaries acquired through the issue of shares qualifying for merger relief where cost is measured by reference to the nominal value of the shares issued. (b) Taxation Current taxation is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future, or a right to pay less tax in the future, have occurred at the balance sheet date. Timing differences are differences between the Company’s taxable proﬁts and its results as stated in the ﬁnancial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the ﬁnancial statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not they will be recovered. Deferred tax assets and liabilities are not discounted. (c) Share-based payments The Company has applied the requirements of FRS 20 (IFRS 2) ‘Share-based payment’ and UITF Abstract 44 (IFRIC Interpretation 11) ‘FRS 20 (IFRS 2) – Group and Treasury Share Transactions’. The Company has share-based payment arrangements involving employees of its subsidiaries. The cost of these arrangements is measured by reference to the fair value of equity instruments on the date they are granted. Cost is recognised in ‘investment in subsidiary undertakings’ and credited to the ‘proﬁt and loss account’ reserves on a straight-line basis over the vesting period. Where the cost is subsequently recharged to the subsidiary, it is recognised as a reduction in ‘investment in subsidiary undertakings’. (d) Financial assets and ﬁnancial liabilities The Company has adopted FRS 25 ‘Financial Instruments: Presentation’, FRS 26 ‘Financial Instruments: Recognition and Measurement’.
Loans and receivables Loans and receivables are non-derivative ﬁnancial instruments that have ﬁxed or determinable payments that are not listed in an active market. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised using the effective interest rate, except for short term receivables when the recognition of interest would be immaterial. Other ﬁnancial liabilities Other ﬁnancial liabilities, including borrowings, are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
Financial assets are classiﬁed on initial recognition as ‘loans and receivables’. Financial liabilities are classiﬁed on initial recognition as ‘other ﬁnancial liabilities’.
(a) Investments Fixed asset investments in subsidiary undertakings are shown at cost less provision for impairment.
CHAIRMAN’S STATEMENT & BUSINESS REVIEW
Notes to the Financial Statements