Notes to the Interim Financial Statements
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| 1. Basis of preparation | |||
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The financial information contained herein is unaudited and does not constitute statutory accounts as defined by Section 240 of the Companies Act 1985. Statutory accounts for the year to 31 March 2007, which were prepared in accordance with International Financial Reporting Standards (‘IFRS’) and relevant IFRIC interpretations issued by the International Accounting Standards Board (‘IASB’) and IFRIC Committee respectively and adopted by the European Union (‘EU’) and upon which the auditors have given an unqualified and unmodified report and which contained no statement under Section 237 of the Companies Act 1985, have been delivered to the Registrar of Companies and were posted to shareholders on 11 June 2007. The financial statements for the half year to 30 September 2007 have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’ and the Disclosure and Transparency Rules of the Financial Services Authority. Except for the change below, the accounting policies applied in these interim financial statements are consistent with those set out and applied in the Group’s Annual Report for the year to 31 March 2007. On 30 March 2007 the Group Board announced that it intended to separate its brokerage business. As a result, Brokerage was reclassified as a discontinued operation in the Group’s financial statements for the year ended 31 March 2007 and in these interim financial statements up to 19 July 2007, the date of disposal. In these interim financial statements the Group income statement for the comparative period has been restated to show Brokerage as a discontinued operation but the Group balance sheet at 30 September 2006 is not restated. In accordance with the change in presentation made in the 2007 Annual Report to gross up Brokerage assets and liabilities relating to its repurchase agreements to maturity transactions, the presentation of the comparative figures at 30 September 2006 has been changed in the Group balance sheet. The gross-up of assets is included in: non-current investments $3,166 million; non-current receivables $3,227 million; short-term investments $3,399 million; and current trade and other receivables $844 million. The gross-up of liabilities is included in: non-current trade payables $6,393 million and current payables $4,243 million. There is no impact on the income statement or on net assets or cash flow in the comparative period. The reason for this change is discussed in section Z of the Principal Accounting Policies note in the 2007 Annual Report. The classification of interest income on loans to fund products has been changed to include it in revenue instead of finance income, on the basis that it is akin to management and other fees earned from fund products. The comparative periods have been restated accordingly. Interest income on loans to fund products was $22 million for the half year to 30 September 2007 (half year to 30 September 2006: $28 million; year to 31 March 2007: $51 million). A number of new standards, amendments to existing standards and interpretations have been issued, some of which are mandatory for the financial year ending 31 March 2008, with the remaining becoming effective in future years. IFRS 7 ‘Financial Instruments: Disclosures’ and an amendment to IAS 1 ‘Presentation of Financial Statements’ on financial instruments disclosures and capital disclosures respectively, have been adopted by the Group for reporting in its financial year ending 31 March 2008, and full disclosures will be given in the annual financial statements.
The following interpretations are effective for the financial year
ending 31 March 2008: IFRS 8 ‘Operating segments’ has been issued and, subject to EU endorsement, it will be adopted by the Group for reporting in its financial year ending 31 March 2009. The adoption of any new standards, amendments to existing standards, and interpretations will not have a material impact on the results or financial position of the Group. |
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