NOTES TO THE CONSOLIDATED ACCOUNTS General information Segmental - PDF document

OUR FINANCIALS NOTES TO THE CONSOLIDATED ACCOUNTS General information Segmental reporting The Group’s chief operating decision-maker Consort Medical plc is a public limited company listed is considered to be the Executive Committee. on the London Stock Exchange and is incorporated This committee is responsible for the executive and domiciled under the laws of England and management of the Group and comprises the Wales, registered number 406711. The address of the Chief Executive Officer, the Chief Financial Officer, registered office is given on page 150. The nature of the Company Secretary/Group General Counsel, the Group’s operations and its principal activities are the Managing Directors of the Group’s Bespak and set out in the Strategic Report on pages 2 to 41. Aesica businesses and the Director of Group Human 1. Presentation of the financial statements Resources. The Executive Committee meets regularly and accounting policies to make decisions on operational and strategic Basis of preparation matters, other than those reserved for the Board, including allocation of resources and assessment The financial statements have been prepared in of the performance of the Group. The Group’s accordance with the Companies Act 2006 applicable operating segments are determined with reference to those companies reporting under IFRS, Article 4 to the information that is supplied to the Executive of the IAS Regulation and International Accounting Committee in order for it to allocate the Group’s Standards and International Financial Reporting resources and to monitor the performance of the Standards (collectively referred to as “IFRS”) and Group. Following the acquisition of Aesica Holdco related interpretations, as adopted for use in the Limited (‘Aesica’) on 12 November 2014, the Executive European Union in all cases. Committee focuses on the operations of the Group by Accounting convention treating the Bespak and Aesica divisions as individual The financial statements have been prepared using operating segments and, as a result, the Group has the historical cost convention, as modified by certain two operating segments. financial assets and financial liabilities (including Subsidiaries derivative instruments) at fair value. The specific accounting policies adopted, which have been The consolidated financial statements combine the approved by the Board and which have been applied financial statements of the parent company and all its consistently in all years presented, are described within subsidiaries made up to 30 April 2018. Subsidiaries are this note. entities which are directly or indirectly controlled by the Group. The Group controls an entity when the Group Going concern is exposed to, or has rights to, variable returns from its After making enquiries, the directors have a involvement with the entity and has the ability to affect reasonable expectation that the Group and the those returns through its power to direct the activities Company have adequate resources to continue in of the entity. Subsidiaries are fully consolidated from operation for the foreseeable future and to meet their the date on which control is transferred to the Group. obligations as they fall due. As at 30 April 2018 the They are deconsolidated from the date that control Group reported net debt of £95.5m (2017: £92.6m) ceases. The acquisition method of accounting is used which compared with committed banking facilities to account for the acquisition of subsidiaries by the of £168.6m, leaving £51.3m of headroom undrawn. Group. The cost of an acquisition is measured as the fair The Group’s primary committed financing facility value of the assets given, equity instruments issued and is available to September 2019. Accordingly these liabilities incurred or assumed at the date of completion. financial statements have been prepared on a going Identifiable assets acquired and liabilities and concern basis. contingent liabilities assumed in a business combination are measured initially at their fair values at the Consolidation acquisition date. The excess of the cost of acquisition The financial statements include the financial over the fair value of the Group’s share of the statements of the Company and all the subsidiaries identifiable net assets acquired is recorded as goodwill. during the years reported for the periods during which If the cost of acquisition is less than the fair value of the they were members of the Consort Medical plc group net assets of the subsidiary acquired, the difference is (“the Group”). recognised directly in the income statement. Costs of acquisition are charged to the income statement in the period in which they are incurred. consortmedical.com 98 Stock Code: CSRT

OUR FINANCIALS 1. Presentation of the financial statements Exchange differences arising from the translation of the and accounting policies continued net investment in foreign entities, and of borrowings and other currency instruments designated as hedges Any contingent consideration to be transferred by the of such investments, are recognised in the translation Group is recognised at fair value at the acquisition date. reserve within other comprehensive income. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability Goodwill and fair value adjustments arising on the is recognised in accordance with IAS 39, either in profit acquisition of a foreign entity are treated as assets or loss or as a change in other comprehensive income. and liabilities of the foreign entity and translated at the Inter-company transactions, balances and unrealised closing rate. gains or losses on transactions between Group The principal exchange rates applied in the undertakings are eliminated. Unrealised losses are also preparation of the financial statements were as follows: eliminated but considered an impairment indicator of the asset transferred. Uniform accounting policies have been adopted across the Group. 2018 2017 Investments GBP : EUR at the end of the year 1.14 1.19 Equity investments in entities that are neither associates GBP : USD at the end of the year 1.38 1.29 nor subsidiaries are held at fair value. GBP : EUR average for the year 1.13 1.18 Foreign currencies GBP : USD average for the year 1.34 1.29 Items included in the financial statements of all Revenue Group undertakings are measured using that entity’s functional currency, which is the currency of the Revenue comprises the fair value of the consideration primary economic environment in which the entity received or receivable for the sale of goods and operates. The consolidated financial statements are services. Revenue from sales of products is recognised presented in Sterling, which is the parent company’s when the risks and rewards of ownership pass to the functional and presentation currency. customer, and is stated net of value added tax and other sales taxes. The point at which risk and reward is Foreign currency transactions are translated transferred is usually determined from shipping terms, into the functional currency using the exchange which vary from customer to customer. Revenue from rates prevailing at the dates of the transactions. sales of services is recognised in the period in which Foreign exchange gains and losses resulting from the related chargeable costs are incurred or when the settlement of such transactions and from the revenue is earned under contractual obligations. translation at period-end exchange rates of monetary Revenue from sales of tooling is recognised on a net assets and liabilities denominated in foreign currencies basis, having regard to the transfer of risks and rewards. are recognised in the consolidated income statement, Revenue is recognised when it is probable that except when deferred in equity as qualifying cash flow economic benefits associated with the transaction will hedges and qualifying net investment hedges. flow to the Group. The results and financial position of all Group Advance payments received from customers are undertakings that have a functional currency different credited to deferred income and the related revenue from the presentation currency are translated into is released to the income statement in accordance the presentation currency with: (i) assets and liabilities with the recognition criteria described above. for each balance sheet translated at the closing rate at the date of that balance sheet; (ii) income Where a manufacturing contract includes variable and expenses for each income statement translated consideration (such as a minimum order guarantee), at average exchange rates for the period; and (iii) the transaction price includes management’s best all resulting exchange differences recognised as a estimate of the variable consideration receivable at component of other comprehensive income. In the the balance sheet date. case of subsidiaries acquired during a financial year, the average exchange rate takes into account the period of ownership only. CONSORT MEDICAL PLC 99 Annual Report and Accounts for the year ended 30 April 2018