PWC - Ifrs

International Financial Reporting Standards
Illustrative Corporate Financial Statements 2002
Guiding disclosure through IFRS

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International Financial Reporting Standards Illustrative Corporate Financial Statements Year ended 31 December 2002
In May 2002 the International Accounting Standards Board (IASB) published a revised Preface to International Financial Reporting Standards which denes International Financial Reporting Standards (IFRS) to include standards and interpretations approved by the IASB as well as International Accounting Standards (IAS) and SIC Interpretations issued by the previous International Accounting Standards Committee. This publication provides an illustrative set of consolidated nancial statements, prepared in accordance with International Financial Reporting Standards, for a ctitious multinational corporation. These nancial statements include the disclosures required by International Financial Reporting Standards published up to and including June 2002. The example disclosures in these illustrative nancial statements should not be considered to be the only acceptable form of presentation. The form and content of the reporting entitys nancial statements are the responsibility of the entitys management, and other forms of presentation which are equally acceptable may be preferred and adopted, provided they include the specic disclosures prescribed in International Financial Reporting Standards. These illustrative nancial statements are not a substitute for reading the Standards and Interpretations themselves or for professional judgement as to fairness of presentation. They do not cover all possible disclosures required by International Financial Reporting Standards, nor do they take account of any specic legal framework. Depending on the circumstances, further specic information may be required in order to ensure fair presentation under International Financial Reporting Standards and we recommend that reference is made to our separate publication International Financial Reporting Standards Disclosure Checklist 2002. Additional accounting disclosures may be required in order to comply with local laws, national nancial reporting standards and stock exchange regulations.
Structure of publication
General information and operating and nancial review Consolidated income statement Consolidated balance sheet Consolidated statement of changes in shareholders equity Consolidated cash ow statement Accounting policies Financial risk management Notes to the consolidated nancial statements Report of the auditors Index of International Financial Reporting Standards disclosure requirements
Page
23 4 5 6 7 818 1921 2256 57 5860
Format of IFRS Illustrative Corporate Financial Statements

The references in the left margin of the nancial statements represent the paragraph of the Standards in which the disclosure appears for example, 8p40 indicates IAS 8 paragraph 40. The designation DV (Disclosure voluntary) indicates that the relevant IFRS encourages, but does not require, the disclosure. Additional notes and explanations are shown in italics.
PricewaterhouseCoopers
International Financial Reporting Standards Illustrative Corporate Financial Statements ABC Group Year ended 31 December 2002
General information
1p102(b) ABC Group (the Group) provides products and services worldwide in three separate industries paints, construction and vehicle rental. During the year ended 31 December 2002 the glass manufacture division was sold. The Group has operations in over 20 countries and employs over 1,700 people. The parent company of the Group is ABC Holdings (the Company), which is a limited liability company and is incorporated and domiciled in [name of country]. The address of its registered ofce is as follows: [address of registered ofce]. The company has its primary listing on the [name] stock exchange, with further listings in [name].
1p102(a)
Operating and nancial review

International Financial Reporting Standards do not address the requirements for information to be included in a directors report or nancial review. Generally such requires are determined by local laws and regulations. IAS 1 encourages, but does not require an enterprise to present, outside the nancial statements, a nancial review by management which describes and explains the main features of the enterprises nancial performance and nancial position and the principal uncertainties that it faces. In 1998, the International Organisation of Securities Commissions (IOSCO) issued International Disclosure Standards for Cross-Border Offerings and Initial Listings for Foreign Issuers, comprising recommended disclosure standards including an operating and nancial review and discussion of future prospects. IOSCO standards for prospectuses are not mandatory but they will increasingly be incorporated in national stock exchange requirements both for prospectuses and annual reports. The text of IOSCOs Standard on Operating and Financial Reviews and Prospects is reproduced below: Discuss the companys nancial condition, changes in nancial condition and results of operations for each year and interim period for which nancial statements are required, including the causes of material changes from year to year in nancial statement line items, to the extent necessary for an understanding of the companys business as a whole. Information provided also shall relate to all separate segments of the company. Provide the information specied below as well as such other information that is necessary for an investors understanding of the companys nancial condition, changes in nancial condition and results of operations. A. Operating Results. Provide information regarding signicant factors, including unusual or infrequent events or new developments, materially affecting the companys income from operations, indicating the extent to which income was so affected. Describe any other signicant component of revenue or expenses necessary to understand the companys results of operations. 1. To the extent that the nancial statements disclose material changes in net sales or revenues, provide a narrative discussion of the extent to which such changes are attributable to changes in prices or to changes in the volume or amount of products or services being sold or to the introduction of new products or services. 2. Describe the impact of ination, if material. If the currency in which nancial statements are presented is of a country that has experienced hyperination, the existence of such ination, a ve year history of the annual rate of ination and a discussion of the impact of hyperination on the companys business shall be disclosed. 3. Provide information regarding the impact of foreign currency uctuations on the company, if material, and the extent to which foreign currency net investments are hedged by currency borrowings and other hedging instruments.
DV,1p8
DV,1p9
Operating and nancial review (continued)

4. Provide information regarding any governmental economic, scal, monetary or political policies or factors that have materially affected, or could materially affect, directly or indirectly, the companys operations or investments by host country shareholders. B. Liquidity and Capital Resources. The following information shall be provided: 1. Information regarding the companys liquidity (both short and long term), including: (a) a description of the internal and external sources of liquidity and a brief discussion of any material unused sources of liquidity. Include a statement by the company that, in its opinion, the working capital is sufcient for the companys present requirements, or, if not, how it proposes to provide the additional working capital needed. (b) an evaluation of the sources and amounts of the companys cash ows, including the nature and extent of any legal or economic restrictions on the ability of subsidiaries to transfer funds to the company in the form of cash dividends, loans or advances and the impact such restrictions have had or are expected to have on the ability of the company to meet its cash obligations. (c) information on the level of borrowings at the end of the period under review, the seasonality of borrowing requirements and the maturity prole of borrowings and committed borrowing facilities, with a description of any restrictions on their use. 2. Information regarding the type of nancial instruments used, the maturity prole of debt, currency and interest rate structure. The discussion also should include funding and treasury policies and objectives in terms of the manner in which treasury activities are controlled, the currencies in which cash and cash equivalents are held, the extent to which borrowings are at xed rates, and the use of nancial instruments for hedging purposes. 3. Information regarding the companys material commitments for capital expenditures as of the end of the latest nancial year and any subsequent interim period and an indication of the general purpose of such commitments and the anticipated sources of funds needed to full such commitments. C. Research and Development, Patents and Licenses, etc. Provide a description of the companys research and development policies for the last three years, where it is signicant, including the amount spent during each of the last three nancial years on company-sponsored research and development activities. D. Trend Information. The company should identify the most signicant recent trends in production, sales and inventory, the state of the order book and costs and selling prices since the latest nancial year. The company also should discuss, for at least the current nancial year, any known trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on the companys net sales or revenues, income from continuing operations, protability, liquidity or capital resources, or that would cause reported nancial information not necessarily to be indicative of future operating results or nancial condition.
Consolidated income statement

Year ended 31 December
1p75, 1p82 1p75(a) 1p82 1p82 1p82 1p82 1p82 1p82 35p39 1p75(b) 1p75(c) 1p75(d) 12p77 1p75(f) 1p75(g) 1p75(h) 1p75(i) 33p47 (all amounts in [name of currency] thousands) Sales Cost of sales Gross prot Other operating income Distribution costs Administrative expenses Other operating expenses Loss on sale of discontinuing operation Prot from operations Finance costs net Share of results of associates before tax Prot before tax Income tax expense Prot from ordinary activities after tax Extraordinary item Group prot before minority interest Minority interest Net prot Earnings per share (expressed in LC per share) basic diluted 1p80 8 8 1.03 0.96 0.87 0.83 32 7 6 4 13 3 Notes 1 2002 211,034 (85,040) 125,994 6,301 (48,966) (28,786) (8,825) (959) 44,759 (863) (260) 43,636 (14,706) 28,930 (1,228) 27,702 (2,548) 25,154 2001 112,360 (45,682) 66,678 2,195 (19,528) (10,434) (3,958) 34,953 (7,540) 216 27,629 (8,936) 18,693 18,693 (856) 17,837
As an alternative to the presentation of costs by function shown above, the Group is permitted under IAS 1 to present the analysis of costs using the nature of expenditure format, for which the following disclosures would typically be made on the face of the income statement:
2002 Sales Other operating income Changes in inventories of nished goods and work in progress Raw materials and consumables used Staff costs (Note 5) Depreciation and amortisation All other operating expenses 211,034 6,301 1,972 (66,173) (40,090) (35,238) (32,088) (959) (172,576) 44,759 2001 112,360 2,195 2,309 (40,912) (15,500) (13,064) (12,435) (79,602) 34,953
35p39
Loss on sale of discontinuing operation (Note 3) Total operating expenses Prot from operations
Consolidated balance sheet

1p66 (all amounts in [name of currency] thousands) ASSETS 1p53 1p66(a) 1p67 1p66(b) 1p66(d) 1p66(c) 1p66(f) 1p66(i) 1p53 1p66(e) 1p67 1p67 1p66(f) 1p66(c) 1p66(c) 1p66(g) Non-current assets Property, plant and equipment Investment property Intangible assets Investments in associates Available-for-sale investments Receivables Deferred tax assets Current assets Inventories Assets held for sale Construction contract work in progress Receivables and prepayments Available-for-sale investments Trading investments Cash and cash equivalents Total assets 1p66(m) 1p73(e) 1p73(e) 1p73(e) 1p73(e) 1p73(e) SHAREHOLDERS EQUITY Ordinary shares Share premium Treasury shares Fair value and other reserves Retained earnings Total shareholders equity 1p66(l) Minority interest LIABILITIES 1p53 1p66(k) 1p66(i) 1p66(j) 1p66(j) 1p66(h) 1p53 1p66(h) 1p66(i) 1p66(k) 1p66(j) Non-current liabilities Borrowings Deferred tax liabilities Retirement benet obligations Provisions Other liabilities Current liabilities Trade and other payables Current tax liabilities Borrowings Provisions Total liabilities Total equity and liabilities 10p16 22 27 21 22 25 26 27 32 31 31 31 33 16 16 17 18 14 19 20 10 11 12 13 14 15 25 Notes
As at 31 December 2002 2001
115,817 16,276 14,056 12,984 17,420 4,936 5,395 186,884 19,722 3,666 1,312 18,615 1,950 11,820 26,358 83,443 270,327
84,980 15,690 19,600 13,244 14,910 3,430 3,110 154,964 17,740 3,002 1,050 13,168 7,972 36,212 79,144 234,108
25,300 18,656 (2,564) 8,393 76,906 126,691 8,484
21,000 11,316 7,500 59,271 99,087 1,806
86,076 11,263 4,540 320 3,557 105,756 15,722 2,942 8,510 2,222 29,396 135,152 270,327
88,336 8,538 2,130 274 756 100,034 12,365 2,846 15,670 2,300 33,181 133,215 234,108
These nancial statements have been approved for issue by the Board of Directors on [date] 2003.
PricewaterhouseCoopers 5
Consolidated statement of changes in shareholders equity

1p86(f) 1p86(e) (all amounts in [name of currency] thousands)
Notes Share Share capital premium Treasury shares Fair value and other reserves Retained earnings Total
1p86(c) 1p86(b) 16p64(f) 39p170(a) 1p86(b) 39p169(c )(i) 39p169(c )(ii)
Balance at 1 January 2001 Net fair value gains, net of tax: land and buildings available-for-sale investments Cash ow hedges: net fair value gains, net of tax reclassied and reported in net prot 33 33 33
20,000 10,424 33
33
6,364 759 82 28 (36) (12) (6) 18 (87)

390
57,083 87
93,871 759 82 28 (36) (12) (6) 18

390
39p169(c )(iii) reclassied and added to PPE 39p169(c )(iii) reclassied and added to inventory tax on reclassied amounts 16p39 21p30(c) 1p86(b) 1p86(d) 1p86(a) 1p86(d) Depreciation transfer
Currency translation differences
Net gains not recognised in net prot Dividend relating to 2000 Net prot
Issue of share capital share options 31
9
1,000

892
1,136
87 17,837
1,223 17,837
1,892
(15,736) (15,736)
Balance at 31 December 2001/ 1 January 2002 16p39 1p86(b) 39p170(a) 1p86(b) 39p169(c)(i) 1p86(b) 21p30(c) 21p37 1p86(b) 1p86(b) 16p39 1p86(b) 1p86(d) 1p86(a) 1p86(d) 1p86(d) 1p86(d) 32p23 Depreciation transfer Net fair value gains, net of tax: available-for-sale investments Cash ow hedges: Net fair value gains, net of tax Currency translation differences: amount arising in year to net prot on disposal of subsidiary Subsidiary sold in year: Goodwill transfer to net prot
Fair value gains on PPE
21,000 11,316 33 33 33 33 3 3
33
7,500 (100) 40 35
59,271 100 1,245

1,238
99,087 40 35 (4,898) 354 1,245
(4,898)
354
(1,238)
Net gains/(losses) not recognised in net prot Dividend relating to 2001 Net prot Issue of share capital acquisition Issue of share capital share options Purchase of treasury shares
Convertible bond equity component
9 31 31 31
23
6,450 890
(5,807) (2,564)
2,583 25,154
(3,224) 25,154 10,000 1,640 (2,564)

6,700
3,550 750
(10,102) (10,102)
6,700
Balance at 31 December 2002
25,300 18,656
(2,564)
8,393
76,906 126,691
Consolidated cash ow statement

Year ended 31 December 7p10 7p18(b) Cash ows from operating activities Cash generated from operations 7p31 7p35 Interest paid Tax paid Net cash from operating activities 7p21 7p39 7p16(a) 7p16(a) 7p16(c) 7p16(e) 7p39 7p16(b) 7p16(f) 7p31 7p31 Cash ows from investing activities Acquisition of subsidiary, net of cash acquired Purchase of property, plant and equipment Purchase of intangible assets Purchase of available-for-sale investments Loans made Disposal of subsidiary, net of cash disposed Proceeds from sale of PPE Loan repayments received Interest received Dividends received Government grants received Net cash used in investing activities 7p21 7p17(c) 7p17(c) 7p17(a) 7p17(b) 7p17(c) 7p17(d) 7p17(e) 7p31 7p31 Cash ows from nancing activities Proceeds from issue of convertible bond Proceeds from issue of redeemable pref shares Proceeds from issue of ordinary shares Purchase of treasury shares Proceeds from borrowings Repayments of borrowings Finance lease principal payments Dividends paid to group shareholders Dividends paid to minority interests Net cash used in nancing activities Effects of exchange rate changes Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 20 9 32 23 24 31 31 50,000 1,640 (2,564) 8,500 (76,676) (2,450) (10,102) (1,920) (33,572) (2,201) (6,040) 29,748 23,708 30,000 1,892 18,000 (37,450) (2,852) (15,736) (550) (6,696) 1,567 12,161 17,587 29,748 3 34 12 14 35 (3,950) (42,197) (2,370) (981) (1,854) 12,449 11,765 1,250 705 4,672 1,469 (19,042) (16,349) (2,700) (4,626) (1,426) 8,544 2,566 359 1,396 4,441 (7,795) 34 70,235 (7,255) (14,205) 48,775 43,246 (7,187) (10,974) 25,085 (all amounts in [name of currency] thousands) Notes 2002 2001
Accounting policies
In presenting the accounting policies on pages 9 to 18, it is recognised that certain items may not necessarily apply to a particular reporting entity. For example, if the reporting entity does not have investment property, it is not necessary to include disclosure of the accounting policy for investment property. The reporting entity should describe each specic accounting policy that is necessary for a proper understanding of the nancial statements.
Index to accounting policies

Page A B C Basis of preparation Group accounting (including subsidiaries, associates, and joint ventures Foreign currency translation 9 9 10 10 11 L Trade receivables Page 15 15 15 16 16 16 18 18 18 18 18 18
M Cash and cash equivalents N Share capital O Borrowings P Deferred income taxes
D Property, plant and equipment E F Investment property Intangible assets (including goodwill, research and development, computer software development costs)
Q Employee benets R Government grants relating to purchase of property, plant and equipment Provisions Revenue recognition
12 13 13 14 14 14 S T
G Impairment of long lived assets H Investments I J K Leases Inventories Construction contracts
U Dividends V Segmental reporting
W Comparatives
Accounting policies (continued)

1p91(a) 1p97(b)
The principal accounting policies adopted in the preparation of these consolidated nancial statements are set out below:
A Basis of preparation
1p11 1p97(a)
The consolidated nancial statements have been prepared in accordance with International Financial Reporting Standards. The consolidated nancial statements have been prepared under the historical cost convention as modied by the revaluation of land and buildings, investment property, available-for-sale investment securities, and nancial assets and nancial liabilities held-for-trading. The preparation of nancial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the nancial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on managements best knowledge of current event and actions, actual results ultimately may differ from those estimates. The Group adopted IAS 39 Financial Instruments: Recognition and Measurement and IAS 40 Investment Property in 2001. The nancial effects of adopting these standards were reported in the previous years consolidated nancial statements.
B Group accounting
(1) Subsidiaries
1p99(b) 27p11
Subsidiaries, which are those entities (including Special Purpose Entities) in which the Group has an interest of more than one half of the voting rights or otherwise has power to govern the nancial and operating policies are consolidated. The existence and effect of potential voting rights that are presently exercisable or presently convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus costs directly attributable to the acquisition. The excess of the cost of acquisition over the fair value of the net assets of the subsidiary acquired is recorded as goodwill. See note F for the accounting policy on goodwill. Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, accounting policies of subsidiaries have been changed to ensure consistency with the policies adopted by the Group. (2) Associates
SIC33p3
1p99(c)
27p17
1p99(b) 28p27(b)
SIC3p34
SIC20p6
Investments in associates are accounted for by the equity method of accounting. Under this method the companys share of the post-acquisition prots or losses of associates is recognised in the income statement and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the cost of the investment. Associates are entities over which the Group generally has between 20% and 50% of the voting rights, or over which the Group has signicant inuence, but which it does not control. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Groups interest in the associates; unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The Groups investment in associates includes goodwill (net of accumulated amortisation)on acquisition. When the Groups share of losses in an associate equals or exceeds its interest in the associate, the Group does not to recognise further losses, unless the Group has incurred obligations or made payments on behalf of the associates.
PricewaterhouseCoopers 9

B Group accounting (continued)
(3) Joint ventures
1p99(d)
The Groups interest in jointly controlled entities are accounted for by proportionate consolidation. The Group combines its share of the joint ventures individual income and expenses, assets and liabilities and cash ows on a line-by-line basis with similar items in the Groups nancial statements. The Group recognises the portion of gains or losses on the sale of assets by the Group to the joint venture that it is attributable to the other venturers. The Group does not recognise its share of prots or losses from the joint venture that result from the purchase of assets by the Group from the joint venture until it resells the assets to an independent party. However, if a loss on the transaction provides evidence of a reduction in the net realisable value of current assets or an impairment loss, the loss is recognised immediately.
C Foreign currency translation

(1) Measurement currency Items included in the nancial statements of each entity in the Group are measured using the currency that best reects the economic substance of the underlying events and circumstances relevant to that entity (the measurement currency).The consolidated nancial statements are presented in [name of currency], which is the measurement currency of the parent. (2) Transactions and balances
1p99(p)
Foreign currency transactions are translated into the measurement currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognised in the income statement, except when deferred in equity as qualifying cash ow hedges. Translation differences on debt securities and other monetary nancial assets measured at fair value are included in foreign exchange gains and losses. Translation differences on non-monetary items such as equities held for trading are reported as part of the fair value gain or loss. Translation differences on available-for-sale equities are included in the revaluation reserve in equity. (3) Group companies
1p99(p) 1p74(b)
Income statements and cash ows of foreign entities are translated into the Groups reporting currency at average exchange rates for the year and their balance sheets are translated at the exchange rates ruling on 31 December. Exchange differences arising from the translation of the net investment in foreign entities and of borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders equity. When a foreign entity is sold, such exchange differences are recognised in the income statement as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.
21p45
D Property, plant and equipment

16p60(a) 1p99(e) 39p160
Land and buildings (except for investment property see note E) comprise mainly factories and ofces and are shown at fair value, based on triennial valuations by external independent valuers, less subsequent depreciation for buildings. All other property, plant and equipment is stated at historical cost less depreciation. Cost includes transfers from equity of any gains / losses on qualifying cash ow hedges of currency purchase costs.
10

D Property, plant and equipment (continued)
16p37 1p74(b)
16p39
Increases in the carrying amount arising on revaluation of buildings are credited to fair value and other reserves in shareholders equity. Decreases that offset previous increases of the same asset are charged against fair value and other reserves; all other decreases are charged to the income statement. Each year the difference between depreciation based on the revalued carrying amount of the asset (the depreciation charged to the income statement) and depreciation based on the assets original cost is transferred from fair value and other reserves to retained earnings. Depreciation is calculated on the straight-line method to write off the cost or revalued amount of each asset to their residual values over their estimated useful lives as follows: Buildings Plant and machinery Equipment and motor vehicles Land is not depreciated 2540 years 1015 years 38 years
16p60(b) 1p99(e) 16p60(c)
36p58 16p56 16p39
Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in operating prot. When revalued assets are sold, the amounts included in fair value and other reserves are transferred to retained earnings. Interest costs on borrowings to nance the construction of property, plant and equipment are capitalised, during the period of time that is required to complete and prepare the asset for its intended use. Other borrowing costs are expensed. Repairs and maintenance are charged to the income statement during the nancial period in which they are incurred. The cost of major renovations is included in the carrying amount of the asset when it is probable that future economic benets in excess of the originally assessed standard of performance of the existing asset will ow to the Group. Major renovations are depreciated over the remaining useful life of the related asset.
23p29(a) 1p99(f) 16p25 16p23
E Investment property
1p99(h) 40p66(ab)
Investment property, principally comprising ofce buildings, is held for long-term rental yields and is not occupied by the Group. Investment property is treated as a longterm investment and is carried at fair value, representing open market value determined annually by external valuers. Changes in fair values are recorded in the income statement in accordance with IAS 40 and are included in other operating income.
11

F Intangible assets
(1) Goodwill 1p99(c) Goodwill represents the excess of the cost of an acquisition over the fair value of the Groups share of the net assets of the acquired subsidiary/associate at the date of acquisition. Goodwill on acquisitions of subsidiaries occurring on or after 1 January 1995 is included in intangible assets. Goodwill on acquisitions of associates occurring on or after 1 January 1995 is included in investments in associates. Goodwill is amortised using the straight-line method over its estimated useful life. Goodwill on acquisitions that occurred prior to 1 January 1995 has been charged in full to retained earnings in shareholders equity; such goodwill has not been retroactively capitalised and amortised Goodwill is amortised using the straight-line method over its estimated useful life. Management determines the estimated useful life of goodwill based on its evaluation of the respective companies at the time of the acquisition, considering factors such as existing market share, potential growth and other factors inherent in the acquired companies. Goodwill arising on major strategic acquisitions of the Group to expand its product or geographical market coverage is amortised over a maximum period of 15 years. For all other acquisitions goodwill is generally amortised over 5 years. [Where goodwill is amortised over a period exceeding 20 years, the Group should disclose the specic reasons including describing the factor(s) that played a signicant role in determining the useful life of the goodwill.] 36p80 At each balance sheet date the Group assesses whether there is any indication of impairment. If such indications exist an analysis is performed to assess whether the carrying amount of goodwill is fully recoverable. A write down is made if the carrying amount exceeds the recoverable amount. The gain or loss on disposal of an entity includes the carrying amount of goodwill relating to the entity sold or, for pre 1 January 1995 acquisitions, the goodwill charged to equity. (2) Research and development
1p99(k) 38p107(a) 38p107(b)
1p99(e)
22p88(a) 22p88(b)
Research expenditure is recognised as an expense as incurred. Costs incurred on development projects (relating to the design and testing of new or improved products) are recognised as intangible assets when it is probable that the project will be a success considering its commercial and technological feasibility, and only if the cost can be measured reliably. Other development expenditures are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Development costs that have been capitalised are amortised from the commencement of the commercial production of the product on a straight-line basis over the period of its expected benet, not exceeding ve years. (3) Computer software Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred. Costs that are directly associated with identiable and unique software products controlled by the Group and will probably generate economic benets exceeding costs beyond one year, are recognised as intangible assets. Direct costs include staff costs of the software development team and an appropriate portion of relevant overheads. Expenditure which enhances or extends the performance of computer software programmes beyond their original specications is recognised as a capital improvement and added to the original cost of the software. Computer software development costs recognised as assets are amortised using the straight-line method over their useful lives, not exceeding a period of 3 years.
1p99(e) SIC6p4
38p107(a) 38p107(b)
12

F Intangible assets (continued)
(4) Other intangible assets
1p99(e) 38p107(a) 38p107(b) 38p111(a)
Expenditure to acquire patents, trademarks and licenses is capitalised and amortised using the straight-line method over their useful lives, but not exceeding 20 years. Intangible assets are not revalued. [Where intangible assets are amortised over a period exceeding 20 years, the Group should disclose the specic reasons including describing the factor(s) that played a signicant role in determining the useful lives of the intangible assets.]
G Impairment of long lived assets

36p58
Property, plant and equipment and other non-current assets, including goodwill and intangible assets are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount which is the higher of an assets net selling price and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identiable cash ows.
H Investments
39p68
1p59
The Group classied its investments in debt and equity securities into the following categories: trading, held-to-maturity and available-for-sale. The classication is dependent on the purpose for which the investments were acquired. Management determines the classication of its investments at the time of the purchase and re-evaluates such designation on a regular basis. Investments that are acquired principally for the purpose of generating a prot from short-term uctuations in price are classied as trading investments and included in current assets; for the purpose of these nancial statements short term is dened as 3 months. Investments with a xed maturity that management has the intent and ability to hold to maturity are classied as held-tomaturity and are included in non-current assets, except for maturities within 12 months from the balance sheet date which are classied as current assets; during the period the Group did not hold any investments in this category. Investments intended to be held for an indenite period of time, which may be sold in response to needs for liquidity or changes in interest rates, are classied as available-for-sale; and are included in non-current assets unless management has the express intention of holding the investment for less than 12 months from the balance sheet date or unless they will need to be sold to raise operating capital, in which case they are included in current assets. Purchases and sales of investments are recognised on the trade date, which is the date that the Group commits to purchase or sell the asset. Cost of purchase includes transaction costs. Trading and available-for-sale investments are subsequently carried at fair value. Held-to-maturity investments are carried at amortised cost using the effective yield method. Realised and unrealised gains and losses arising from changes in the fair value of trading investments are included in the income statement in the period in which they arise. Unrealised gain and losses arising from changes in the fair value of securities classied as available-for-sale are recognised in equity. The fair value of investments are based on quoted bid prices or amounts derived from cash ow models. Fair values for unlisted equity securities are estimated using applicable price/earnings or price/cash ow ratios rened to reect the specic circumstances of the issuer. Equity securities for which fair values cannot be measured reliably are recognised at cost less impairment. When securities classied as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains and losses from investment securities.
39p30, 167(c) 39p68 39p69 39p167(b) 39p43
13

I
1p99(j) 32p47(b) 17p12
Leases
(1) A Group company is the lessee Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classied as nance leases. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased property or the present value of the minimum lease payments. Each lease payment is allocated between the liability and nance charges so as to achieve a constant rate on the nance balance outstanding. The corresponding rental obligations, net of nance charges, are included in other long-term payables. The interest element of the nance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under nance leases is depreciated over the shorter of the useful life of the asset or the lease term. Leases where a signicant portion of the risks and rewards of ownership are retained by the lessor are classied as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease. (2) A Group company is the lessor
17p19
17p25 SIC15p5
1p99(j) 32p47(b)
When assets are leased out under a nance lease, the present value of the lease payments is recognised as a receivable. The difference between the gross receivable and the present value of the receivable is recognised as unearned nance income. Lease income is recognised over the term of the lease using the net investment method, which reects a constant periodic rate of return. Assets leased out under operating leases are included in property, plant and equipment in the balance sheet. They are depreciated over their expected useful lives on a basis consistent with similar owned property, plant and equipment. Rental income (net of any incentives given to lessees) is recognised on a straight-line basis over the lease term.
1p99(j) 32p47(b) SIC15p4
J
2p34(a) 1p99(l) 23p6,7 39p160
Inventories
Inventories are stated at the lower of cost or net realisable value. Cost is determined using the rst-in, rst-out (FIFO) method. The cost of nished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity) but excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses. Costs of inventories includes the transfer from equity of gains/losses on qualifying cash ow hedges relating to inventory purchases.
K Construction contracts
11p3
A construction contract is a contract specically negotiated for the construction of an asset or a combination of assets that are closely interelated or interdependent in terms of their design, technology and functions or their ultimate purpose or use. When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable those costs will be recoverable. Contract costs are recognised when incurred.
11p32
14

K Construction contracts (continued)
1p99(g) 11p22 11p39(bc) 11p36 11p31
When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised by using the stage of completion method. The stage of completion is measured by reference to the relationship contract costs incurred for work performed to date bear to the estimated total costs for the contract. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. Costs incurred in the year in connection with future activity on a contract are excluded and shown as contract work in progress. The aggregate of the costs incurred and the prot/loss recognised on each contract is compared against the progress billings up to the year end Where costs incurred and recognised prots (less recognised losses) exceed progress billings, the balance is shown as due from customers on construction contracts, under receivables and prepayments. Where progress billings exceed costs incurred plus recognised prots (less recognised losses), the balance is shown as due to customers on construction contracts, under trade and other payables.
11p43
11p44
L Trade receivables
39p73 1p99(i) 32p47(b) 39p109
Trade receivables are carried at original invoice amount less provision made for impairment of these receivables. A provision for impairment of trade receivables is established when there is an objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the carrying amount and the recoverable amount, being the present value of expected cash ows, discounted at the market rate of interest for similar borrowers.
M Cash and cash equivalents

7p45 Cash and cash equivalents are carried in the balance sheet at cost. For the purposes of the cash ow statement, cash and cash equivalents comprise cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are included within borrowings in current liabilities on the balance sheet.
N Share capital
32p47(b)
(1) Ordinary shares and non-redeemable preferred shares with discretionary dividends are classied as equity. Other shares including mandatorily redeemable preferred shares are classied as liabilities (see accounting policy O Borrowings). The portion of a convertible bond representing the value of the conversion option at the time of issue is included in equity (see accounting policy O Borrowings). (2) Incremental external costs directly attributable to the issue of new shares, other than in connection with business combination, are shown in equity as a deduction, net of tax, from the proceeds. Share issue costs incurred directly in connection with a business combination are included in the cost of acquisition. (3) Where the Company or its subsidiaries purchases the Companys equity share capital, the consideration paid including any attributable incremental external costs net of income taxes is deducted from total shareholders equity as treasury shares until they are cancelled. Where such shares are subsequently sold or reissued, any consideration received is included in shareholders equity.
SIC17p6 22p21,25
SIC16p4 SIC17p5
15

O Borrowings
32p47(b) 39p66,93 32p47(b) 32p50 32p47(b) 32p50
Borrowings are recognised initially at the proceeds received, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost using the effective yield method; any difference between proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings. Preferred shares, which are redeemable on a specic date or at the option of the shareholder or which carry non-discretionary dividend obligations, are classied as long-term liabilities. The dividends on these preferred shares are recognised in the income statement as interest expense. When convertible bonds are issued, the fair value of the liability portion is determined using a market interest rate for an equivalent non-convertible bond; this amount is recorded as a non-current liability on the amortised cost basis until extinguished on conversion or maturity of the bonds. The remainder of the proceeds is allocated to the conversion option which is recognised and included in shareholders equity; the value of the conversion option is not changed in subsequent periods.
P Deferred income taxes

1p99(m) 12p46
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the nancial statements. Currently enacted tax rates are used in the determination of deferred income tax. Deferred tax assets are recognised to the extent that it is probable that future taxable prot will be available against which the temporary differences can be utilised. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, associates and joint ventures, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
12p24, 34 12p39, 44
Q Employee benets
(1) Pension obligations
1p99(o)
Group companies have various pension schemes in accordance with the local conditions and practices in the countries in which they operate. The schemes are generally funded through payments to insurance companies or trustee-administered funds as determined by periodic actuarial calculations. A dened benet plan is a pension plan that denes an amount of pension benet to be provided, usually as a function of one or more factors such as age, years of service or compensation. A dened contribution plan is a pension plan under which the Group pays xed contributions into a separate entity (a fund) and will have no legal or constructive obligations to pay further contributions if the fund does not hold sufcient assets to pay all employees benets relating to employee service in the current and prior periods. The liability in respect of dened benet pension plans is the present value of the dened benet obligation at the balance sheet date minus the fair value of plan assets, together with adjustments for actuarial gains/losses and past service cost. The dened benet obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the dened benet obligation is determined by the estimated future cash outows using interest rates of government securities which have terms to maturity approximating the terms of the related liability.
19p120(ab)
16

Q Employee benets (continued)
19p93
Actuarial gains and losses arising from experience adjustments, changes in actuarial assumptions and amendments to pension plans are charged or credited to income over the average remaining service lives of the related employees. For dened contribution plans, the company pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. Once the contributions have been paid, the company has no further payment obligations. The regular contributions constitute net periodic costs for the year in which they are due and as such are included in staff costs. (2) Other post-retirement obligations
1p99(o)
1p99(o)
Some Group companies provide post-retirement healthcare benets to their retirees. The entitlement to these benets is usually based on the employee remaining in service up to retirement age and the completion of a minimum service period. The expected costs of these benets are accrued over the period of employment, using an accounting methodology similar to that for dened benet pension plans. These obligations are valued annually by independent qualied actuaries. (3) Equity compensation benets
19p147(b)
Share options are granted to management and key employees with more than three years of service. Options are granted at the market price of the shares on the date of the grant and are exercisable at that price. Options are exercisable beginning one year from the date of grant and have a contractual option term of ve years. When the options are exercised, the proceeds received net of any transaction costs are credited to share capital (nominal value) and share premium. The Group does not make a charge to staff costs in connection with share options. (4) Termination benets
19p133 19p134 19p139
Termination benets are payable whenever an employees employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benets. The Group recognises termination benets when it is demonstrably committed to either terminate the employment of current employees according to a detailed formal plan without possibility of withdrawal or to provide termination benets as a result of an offer made to encourage voluntary redundancy. Benets falling due more than 12 months after balance sheet date are discounted to present value. (5) Prot sharing and bonus plans
19p17
A liability for employee benets in the form of prot sharing and bonus plans is recognised in other provisions when there is no realistic alternative but to settle the liability and at least one of the following conditions is met: there is a formal plan and the amounts to be paid are determined before the time of issuing the nancial statements; or past practice has created a valid expectation by employees that they will receive a bonus/prot sharing and the amount can be determined before the time of issuing the nancial statements. Liabilities for prot sharing and bonus plans are expected to be settled within 12 months and are measured at the amounts expected to be paid when they are settled.
17

R Government grants relating to purchase of property, plant and equipment
20p39(a) 1p99(t) 20p12 20p23
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions. Government grants relating to costs are deferred and recognised in the income statement over the period necessary to match them with the costs they are intended to compensate. Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as other liabilities and are credited to the income statement on a straight line basis over the expected lives of the related assets.
S Provisions
1p99(n)
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Group expects a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The Group recognises a provision for onerous contracts when the expected benets to be derived from a contract are less than the unavoidable costs of meeting the obligations under the contract. Restructuring provisions comprise lease termination penalties and employee termination payments, and are recognised in the period in which the Group becomes legally or constructively committed to payment. Costs related to the ongoing activities of the Group are not provided in advance.
37p10,66
1p99(n)
T Revenue recognition
18p35(a) 1p99(a)
Revenue comprises the invoiced value for the sale of goods and services net of valueadded tax, rebates and discounts, and after eliminating sales within the Group. Revenue from the sale of goods is recognised when signicant risks and rewards of ownership of the goods are transferred to the buyer. Revenue from rendering of services is based on the stage of completion determined by reference to services performed to date as a percentage of total services to be performed. Revenue arising from royalties is recognised on an accrual basis in accordance with the substance of the relevant agreements. Interest income is recognised on a time proportion basis, taking account of the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the Group. Dividends are recognised when the right to receive payment is established.
18p30
U Dividends
10p11, 32p30
Dividends are recorded in the Groups nancial statements in the period in which they are approved by the Groups shareholders.
V Segment reporting [listed companies]

1p99(q)
Business segments provide products or services that are subject to risks and returns that are different from those of other business segments. Geographical segments provide products or services within a particular economic environment that is subject to risks and returns that are different from those of components operating in other economic environments.
W Comparatives
1p40
Where necessary, comparative gures have been adjusted to conform with changes in presentation in the current year.
18
Financial risk management

32p43A 39p169(a)
(1) Financial risk factors The Groups activities expose it to a variety of nancial risks, including the effects of changes in debt and equity market prices, foreign currency exchange rates and interest rates. The Groups overall risk management programme focuses on the unpredictability of nancial markets and seeks to minimise potential adverse effects on the nancial performance of the Group. The Group uses derivative nancial instruments such as foreign exchange contracts and interest rate swaps to hedge certain exposures Risk management is carried out by a central treasury department (Group Treasury) under policies approved by the Board of Directors. Group Treasury identies, evaluates and hedges nancial risks in close co-operation with the Groups operating units. The Board provides written principles for overall risk management, as well as written policies covering specic areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative nancial instruments and investing excess liquidity.
32p47(a)
(i) Foreign exchange risk The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with respect to [names of currencies]. Entities in the Group use forward contracts, transacted with Group Treasury, to hedge their exposure to foreign currency risk in connection with the measurement currency. Group Treasury is responsible for hedging the net position in each currency by using currency borrowings and external forward currency contracts. For nancial reporting purposes, each subsidiary designates contracts with Group Treasury as fair value hedges or cash ow hedges, as appropriate. External foreign exchange contracts are designated at Group level as hedges of foreign exchange risk on specic assets, liabilities or future transactions.
32p47(a)
The Group hedges between [ ] % and [ ] % of anticipated export sales in each major currency for the following 12 months. Approximately [ ] % (2001: [ ]%) of projected sales in each major currency qualied as highly probable for which hedge accounting was used in 2002. The Group also hedges the foreign currency exposure of its contract commitments to purchase certain production parts mainly from [names of countries]. The forward contracts used in its programme mature in 18 months or less, consistent with the related purchase commitments. The Group generally hedges between [ ] % and [ ] % of its forward purchase contracts. The Company has a number of investments in foreign subsidiaries, whose net assets are exposed to currency translation risk. Currency exposure to the net assets of the Groups subsidiaries in [names of countries] is managed primarily through borrowings denominated in the relevant foreign currencies. The Group also enters into forward exchange contracts to hedge the foreign currency exposure of its subsidiaries in [names of countries]. These agreements are in place for each subsidiary and have contract terms of nine months to one year.
39p169(a)
32p47(a)
19
Financial risk management (continued)

(1) Financial risk factors (continued) (ii) Interest rate risk The Groups income and operating cash ows are substantially independent of changes in market interest rates. The Group has no signicant interest-bearing assets. The Group policy is to maintain approximately [ ] % of its borrowings in xed rate instruments. At the year end [ ] % was at xed rates. The Group sometimes borrows at variable rates and uses interest rate swaps as cash ow hedges of future interest payments, which have the economic effect of converting borrowings from oating rates to xed rates. The interest rate swaps allow the Group to raise long-term borrowings at oating rates and swap them into xed rates that are lower than those available if the Group borrowed at xed rates directly. Under the interest rate swaps, the Group agrees with other parties to exchange, at specied intervals (mainly quarterly), the difference between xed contract rates and oating rate interest amounts calculated by reference to the agreed notional principal amounts. (iii) Credit risk
32p66(ab)
32p47(a)
The Group has no signicant concentrations of credit risk. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. Derivative counterparties and cash transactions are limited to high credit quality nancial institutions. The Group has policies that limit the amount of credit exposure to any one nancial institution. (iv) Liquidity risk Prudent liquidity risk management implies maintaining sufcient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, Group Treasury aims at maintaining exibility in funding by keeping committed credit lines available. (2) Accounting for derivative nancial instruments and hedging activities
39p167(a) 39p142
Derivative nancial instruments are initially recognised in the balance sheet at cost and subsequently are remeasured at their fair value. The method of recognising the resulting gain or loss is dependent on the nature of the item being hedged. The Group designates certain derivatives as either (1) a hedge of the fair value of a recognised asset or liability (fair value hedge), or (2) a hedge of a forecasted transaction or of a rm commitment (cash ow hedge), or (3) a hedge of a net investment in a foreign entity on the date a derivative contract is entered into. Changes in the fair value of derivatives that are designated and qualify as fair value hedges and that are highly effective, are recorded in the income statement, along with any changes in the fair value of the hedged asset or liability that is attributable to the hedged risk. Changes in the fair value of derivatives that are designated and qualify as cash ow hedges and that are highly effective, are recognised in equity. Where the forecasted transaction or rm commitment results in the recognition of an asset (for example, property, plant and equipment) or of a liability, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability. Otherwise, amounts deferred in equity are transferred to the income statement and classied as revenue or expense in the same periods during which the hedged rm commitment or forecasted transaction affects the income statement (for example, when the forecasted sale takes place). Certain derivative transactions, while providing effective economic hedges under the Groups risk management policies, do not qualify for hedge accounting under the specic rules in IAS 39. Changes in the fair value of any derivative instruments that do not qualify for hedge accounting under IAS 39 are recognised immediately in the income statement.
39p153
39p158 39p160
39p162
39p165
20
Financial risk management (continued)

(2) Accounting for derivative nancial instruments and hedging activities (continued)
39p163
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting under IAS 39, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the committed or forecasted transaction ultimately is recognised in the income statement. When a committed or forecasted transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement. Hedges of net investments in foreign entities are accounted for similarly to cash ow hedges. Where the hedging instrument is a derivative, any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in equity; the gain or loss relating to the ineffective portion is recognised immediately in the income statement. However, where the hedging instrument is not a derivative (for example, a foreign currency borrowing), all foreign exchange gains and losses arising on the translation of a borrowing that hedges such an investment (including any ineffective portion of the hedge) are recognised in equity. The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives designated as hedges to specic assets and liabilities or to specic rm commitments or forecast transactions. The Group also documents its assessment, both at the hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash ows of hedged items. The fair values of various derivative instruments used for hedging purposes are disclosed in Note 28 on page 46. Movements on the hedging reserve in shareholders equity are shown in Note 33 on page 50. (3) Fair value estimation
39p164(ab) 21p19
39p169(a) 39p142
39p167(a) 32p54
The fair value of publicly traded derivatives and trading and available-for-sale securities is based on quoted market prices at the balance sheet date. The fair value of interest rate swaps is calculated as the present value of the estimated future cash ows. The fair value of forward foreign exchange contracts is determined using forward exchange market rates at the balance sheet date. In assessing the fair value of non-traded derivatives and other nancial instruments, the Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Quoted market prices or dealer quotes for the specic or similar instruments are used for long-term debt. Other techniques, such as option pricing models and estimated discounted value of future cash ows, are used to determine fair value for the remaining nancial instruments. The face values less any estimated credit adjustments for nancial assets and liabilities with a maturity of less than one year are assumed to approximate their fair values. The fair value of nancial liabilities for disclosure purposes is estimated by discounting the future contractual cash ows at the current market interest rate available to the Group for similar nancial instruments.
32p54
32p54
21
Notes to the consolidated nancial statements

Index to the notes to the consolidated nancial statements 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 Segment information Prot from operations Discontinuing operation Finance costs net Staff costs Income tax expense Extraordinary item Earnings per share Dividend per share Property, plant and equipment Investment property Intangible assets Investments in associates Available-for-sale investments Non-current receivables Inventories and assets held for sale Construction contract work in progress Receivables and prepayments Trading investments Cash and cash equivalents Trade and other payables Borrowings Convertible bond Redeemable preferred shares Deferred income taxes Pensions and other post-retirement obligations Provisions Financial instruments Contingencies Commitments Ordinary shares, share premium, treasury shares and share options Minority interests Fair value reserves and other reserves Cash generated from operations Acquisition Related party transactions Principal subsidiaries Interest in joint venture Post balance sheet event Page 23 26 27 28 28 28 29 29 30 30 32 32 33 33 34 35 35 36 36 37 37 38 40 41 41 43 45 46 47 47 48 49 50 51 52 53 55 56 56
22
Notes to the consolidated nancial statements

1p46(d,e) (In the notes all amounts are shown in [name of currency] thousands unless otherwise stated)
1 Segment information
Segment information is only required for enterprises whose equity or debt securities are publicly traded and for enterprises that are in the process of issuing equity or debt securities in public securities markets. In these nancial statements, the primary reporting format comprises the business segments, whilst the secondary reporting format comprises the geographical segments. 14p50 Primary reporting format business segments Year ended 31 December 2002 14p51,67 14p52 Sales Segment result Loss on segment sold Unallocated costs 14p67 14p64 Prot from operations Finance costs net Share of results of associates before tax Prot before tax Income tax expense Prot from ordinary activities after tax Extraordinary item Group prot before minority interest Minority interest 14p67 14p55 14p66 14p67 14p56 14p67 Net prot Segment assets Associates Unallocated assets Total assets Segment liabilities
Unallocated liabilities
Paints Construction
Vehicle rental 44,709 2,762
Glass
Other
Group
63,640 22,868
71,929 18,944
12,200 (1,788)
18,556 5,838
211,034 48,624 (959) (2,906) 44,759 (863)
(145)
(115)
(260) 43,636 (14,706) 28,930 (1,228) 27,702 (2,548) 25,154
71,884 7,554
43,236
79,178
18,647 5,430
212,945 12,984 44,398 270,327
(9,055)
(8,379) (15,406)
(676)
(33,516)
(101,636)
Total liabilities Other segment items
(135,152)
14p57 14p58 14p58 36p116(a) 14p61 DV,14p59
Capital expenditure Depreciation Amortisation Impairment charge Other non-cash expenses Restructuring costs
21,914 3,951 1,097 4,935 74 1,986
9,762 2,539 1,371 21
78,835 21,402 2,194 30
1,374 548 300 24
3,849 488 274
114,360 29,754 5,484 5,235 149 1,986
23
1 Segment information (continued)

Primary reporting format business segments (continued) Year ended Paints Construction Vehicle 31 December 2001 rental 14p51,67 14p52 14p67 14p64 Sales Segment result Unallocated costs Prot from operations Finance costs net Share of results of associates before tax Prot before tax Income tax expense Prot from ordinary activities after tax Extraordinary item Group prot before minority interest Minority interest Net prot Segment assets Associates Unallocated assets Total assets Segment liabilities Unallocated liabilities Total liabilities Other segment items Capital expenditure Depreciation Amortisation Impairment charge Restructuring costs Other noncash expenses 39,326 18,697 44,944 11,989 Glass Other Group
20,225 4,869
7,865 3,793
112,360 39,348 (4,395) 34,953 (7,540) 216 27,629 (8,936) 18,693 18,693 (856) 17,837
230
(14)
14p67 14p55 14p66 14p67 14p56 14p67
52,270 7,699
38,919
46,494
17,993 5,545
155,676 13,244 65,188 234,108 (49,232) (83,983) (133,215)
(9,460)
(7,787)
(31,428)
(557)
14p57 14p58 14p58 36p116(a) 14p61 DV,14p59 14p81 1p99(q)
7,820 3,065 2,161 54
4,887 1,916 1,351 24
5,865 2,299 1,621 40
977 382 269
19,549 7,662 5,402 118
At 31 December 2002, the Group is organised on a worldwide basis into three main business segments: Paints manufacture of a range of decorative and automotive paints. Construction the construction of buildings and equipment. Vehicle rental (acquired during current year) operation of vehicle rental agencies On 30 June 2002 the glass manufacture segment was sold (Note 3). Other operations of the Group mainly comprise of holding of investment property and selling of carpets and providing upholstery services, neither of which are of a sufcient size to be reported separately.
14p51
14p57
There are no sales or other transactions between the business segments. Unallocated costs represent corporate expenses. Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, receivables and operating cash, and mainly exclude investments. Segment liabilities comprise operating liabilities and exclude items such as taxation and certain corporate borrowings. Capital expenditure comprises additions to property, plant and equipment (Note 10) and intangible assets (Note 12), including additions resulting from acquisitions through business combinations (Notes 10, 12 and 35).
24
1 Segment information (continued)

Secondary reporting format geographical segments 14p81 1p99(q) Although the Groups three business segments are managed on a worldwide basis, they operate in ve main geographical areas. [Name of country] is the home country of the parent company which is also the main operating company. The areas of operation are principally the construction activities. [Name of the individual countries in Europe which are over the 10% reporting threshold in IAS 14] mainly vehicle rental and construction activities. Other European countries [it has been assumed that the countries in this category are individually less than the 10% threshold for a separately reportable segment] paints and vehicle rental agencies. Canada and the United States of America paints. Australasia and South East Asia construction and paints. In South East Asia the main countries where the Group operates are Japan and China.
14p69
2002
Sales 2001
Total assets 2002 2001
Capital expenditure 2002 2003
[Home country] [Other individual countries in Europe over 10% threshold] Other European countries Canada and USA Australasia South East Asia
Other countries
54,437 78,489 37,762 16,820 6,283 4,188

13,055
35,708 26,180 27,483 11,779 7,852 2,314

1,044
54,638 63,638 45,983 21,639 10,819 9,467

6,761
29,871 40,517 36,153 25,737 16,378 4,679

2,341
16,354 50,167 34,321 2,633 1,417 4,015

5,453
6,256 4,496 4,692 2,150 1,368 391

196
211,034 Associates Unallocated assets Total assets 14p69
112,360
212,945 12,984 44,398 270,327
155,676 13,244 65,188 234,108
114,360
19,549
With the exception of [home country] and [other individual countries over 10% reporting threshold] no other individual country contributed more than 10% of consolidated sales or assets. Sales are based on the country in which the customer is located. There are no sales between the segments. Total assets and capital expenditure are where the assets are located.
18p35(b)
Analysis of sales by category Sales of goods Revenue from services
2002 74,008 18,067 71,929 2,363 43,296 1,371 211,034
2001 56,635 7,538 44,944 2,223 1,020 112,360
11p39(a)
Construction contracts Royalty income Operating leases rental income
40p66(d)(i)
Investment property rental income
25
2 Prot from operations

The following items have been included in arriving at prot from operations: 2002 1p83 17p48(a)(i) Depreciation on property, plant and equipment (Note 10, 34) owned assets owned assets (vehicles) leased out under operating leases leased assets under nance leases 36p113(a) Impairment of property, plant and equipment (Note 10, 16, 34) continuing operations (included in Other operating expenses) discontinuing operations (included in Other operating expenses; Note 3) 8p16 8p16 1p83 22p88(d) 38p107(d) 38p107(d) 36p113(a) 36p113(a) (Prot) / loss on disposal of property, plant and equipment (Note 34) Repairs and maintenance expenditure on property, plant and equipment Amortisation of intangible assets (Note 12, 34) goodwill (included in Other operating expenses) development costs (included in Administrative expenses) other intangible assets (included in Administrative expenses) 2,860 1,024 1,600 3,260 200 1,942 2,000 895 961 232 775 300 (1,688) 4,302 8 2,029 7,444 19,876 2,434 5,182 2,480 2001
Impairment of goodwill (included in Other operating expenses; Note 12, 34) 2,800 Impairment of development costs (included in Administrative expenses; Note 12, 34) Research and development expenditure Operating lease rentals payable plant and machinery property 1,360 4,736 1,172 1,432 1,116 (610)
38p115 17p27(c)
39p170(c) DV39p170(c)(ii)
Trading investments (Note 19)
fair value losses prot on sale
Inventory 2p37(a) 2p34(d) costs of inventories recognised as expense (included in Cost of Sales) reversal of part of inventory writedown made in 2000 (Note 16) Investment property 40p66(d)(ii) 40p67(d) 39p170(f) 20p39(b) 1p83 8p16 operating expenses (included in Other operating expenses) fair value gains (included in Other operating income) (Note 11, 34) Trade receivables impairment charge for bad and doubtful debts Amortisation of government grants received (Note 34) Staff costs (Note 5) Restructuring costs (Note 27) 640 (1,670) 74 (810) 40,090 1,986 550 (1,043) 61 (400) 15,500 43,302 32,903 (603)
26
3 Discontinuing operation
35p27(ad) 35p38 27p32(b)(iv) 7p40(d) On 31 January 2002 the Group publicly announced its intention to sell the glass segment (Note 1). The subsidiary comprising this segment was sold on 30 June 2002 and is reported in these nancial statements as a discontinuing operation. The sales, results, cash ows and net assets of the glass segment were as follows: 6 months to 30 June 2002 35p27(f) 35p27(f) 35p27(f) 35p27(f) 35p27(f) 35p27(f) 12p81(h)(ii) Sales Operating costs Impairment of assets (Note 2 and Note 10) (Loss)/prot from operations Finance cost (Loss)/prot before tax Tax (Loss)/prot after tax 35p27(g) 35p27(g) 35p27(g) Operating cash ows Investing cash ows Financing cash ows Total cash ows 12,200 (13,688) (300) (1,788) (585) (2,373) 783 (1,590) (765) 1,832 (1,639) (572) At 30 June 2002 Property, plant and equipment (Note 10) Current assets 35p27(e) 35p27(e) Total assets Total liabilities Net assets The loss on disposal was determined as follows: Net assets sold Reclassications from shareholders equity 21p37 35p31(b) 35p31(a) 12p81(h)(i) currency translation differences (Note 33) goodwill previously written off to equity Proceeds from sale Loss on disposal (Note 34) Tax thereon
After-tax loss on disposal
12 months to 31 Dec 2001 20,225 (15,356) 4,869 (1,258) 3,611 (1,192) 2,419 5,670 (3,514) 1,338 3,494 At 31 Dec 2001 39,119 7,375 46,494 (31,428) 15,066
35,637 1,020 36,657 (24,351) 12,306
35p31(b)
12,306 354 1,245 (12,946) 959

959
The net cash inow on sale is determined as follows: 7p40(a),(b) 7p40(c)

Proceeds from sale 12,946
Less: cash and cash equivalents in subsidiary sold

Net cash inow on sale
(497)
12,449
27
4 Finance costs net

39p170(c)(i) Interest expense: bank borrowings nance leases dividend on redeemable preferred shares (Note 24) convertible bond (Note 23) 39p170(c)(i) 18p35(b)(v) 21p42(a) 39p169(c)(ii) 39p170(c) 39p170(c) Interest income Dividend income Net foreign exchange transaction gains/(losses) Fair value gains on nancial instruments: interest rate swaps: cash ow hedges, transfer from equity forward contracts: fair value hedges forward contracts: transactions not qualifying as hedges
2002 (1,412) (700) (1,650) (3,600) (7,362) 698 4,730 1,045 14 9 3 (863)
2001 (4,828) (714) (1,650) (7,192) 362 1,400 (2,155) 25 14 6 (7,540)
5 Staff costs
2002 Wages and salaries 19p142 19p46 19p120(f) 19p131 Termination benets Social security costs Pension costs dened contribution plans Pension costs dened benet plans (Note 26) Other post retirement benets (Note 26) 27,453 1,600 9,369 756 762 150 40,090 1p102(d) 2001 10,863 3,802 232 496 107 15,500
The average number of employees in 2002 was 1,756 (2001:683), of whom 369 (2001:173) were part-time.
6 Income tax expense
2002 14,413 379

(86)
2001 6,230 2,635

71
12p79 12p79 28p28
Current tax Deferred tax (Note 25)

Share of tax of associates (Note 13)
14,706 12p81(c)
8,936
The tax on the Groups prot before tax differs from the theoretical amount that would arise using the tax rate of the home country of the Company as follows: 2002 Prot before tax Tax calculated at a tax rate of 33% (2001 : 33%) Effect of different tax rates in other countries Income not subject to tax Expenses not deductible for tax purposes Utilisation of previously unrecognised tax losses Tax charge 43,636 14,400 2,497 (1,254) 480 (1,417) 14,706 2001 27,629 9,117 798 (97) 124 (1,006) 8,936
28
7 Extraordinary item
2002 8p11 12p81(b) Expropriation of investment property (Note 11) Tax effect Net loss after tax on extraordinary item 8p11 1,832 (604) 1,228 2001
In September 2002 [name of country] experienced a military coup. As a result of the coup, one of the Groups investment properties was expropriated, without compensation, by the new government. The Group does not expect to recover the investment property.
8 Earnings per share

Earnings per share information is only required for enterprises whose ordinary shares or potential ordinary shares are publicly traded and for enterprises that are in the process of issuing ordinary shares or potential ordinary shares in public securities markets. Basic earnings per share is calculated by dividing the net prot attributable to shareholders by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the Company and held as treasury shares (see Note 31). 2002 33p49(a) 33p49(b) Net prot attributable to shareholders (LC 000) Weighted average number of ordinary shares in issue (thousands) Basic earnings per share (LC per share) 25,154 24,296 1.03 2001 17,837 20,500 0.87
The diluted earnings per share is calculated adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has two categories of dilutive potential ordinary shares: convertible debt and share options. The convertible debt is assumed to have been converted into ordinary shares and the net prot is adjusted to eliminate the interest expense less the tax effect. For the share options a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Companys shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options. The difference is added to the denominator as an issue of ordinary shares for no consideration. No adjustment is made to earnings (numerator). 2002
Net prot attributable to shareholders (LC 000) Interest expense on convertible debt (net of tax) (LC 000) 25,154 2,412
2001
17,837
33p49(a)
Net prot used to determine diluted earnings per share (LC 000)
Weighted average number of ordinary shares in issue (thousands) Adjustments for assumed conversion of convertible debt (thousands) share options (thousands)
27,566
24,296 3,300 1,059
17,837
20,500 920
33p49(b)
Weighted average number of ordinary shares for diluted earnings per share (thousands) Diluted earnings per share (LC per share)
28,655 0.96
21,420 0.83
29
9 Dividend per share

1p85 1p74(c) 10p11 At the Annual General Meeting on [date] 2003, a dividend in respect of 2002 of LC 0.53 per share amounting to a total dividend of LC 12,945 is to be proposed. These nancial statements do not reect this dividend payable, which will be accounted for in shareholders equity as an appropriation of retained earnings in the year ending 31 December 2002. The dividends declared in respect of 2001 and 2000 were, respectively, LC 10,102 and LC 15,736.
10 Property, plant and equipment

1p73(a) 16p60(e) Year ended 31 December 2001 Opening net book amount Exchange differences Revaluation surplus (Note 33) Additions Disposals (Note 34) Transfers to assets held for sale (Note 16) Depreciation charge (Note 2, 34) Closing net book amount 16p60(d) At 31 December 2001 Cost or valuation Accumulated depreciation Net book amount 16p60(e) Year ended 31 December 2002 Opening net book amount Exchange differences Acquisition of subsidiary (Note 35) Additions Subsidiary sold (Note 3) Disposals (Note 34) Impairment charge (Note 2) Transfers to assets held for sale (Note 16) Depreciation charge (Note 2, 34) Closing net book amount 16p60(d) At 31 December 2002 Cost or valuation Accumulated depreciation Net book amount 16p60(e) 7p43 44,754 (1,064) 43,690 35,511 (15,486) 20,025 78,604 (26,502) 52,102 158,869 (43,052) 115,817 29,354 853 19,072 677 (3,566) (1,810) (890) 43,690 43,900 1,280 5,513 6,668 (26,538) (3,729) (1,075) (1,226) (4,768) 20,025 11,726 342 43,199 35,702 (5,533) (8,608) (630) (24,096) 52,102 84,980 2,475 67,784 43,047 (35,637) (12,337) (1,075) (3,666) (29,754) 115,817 29,600 (246) 29,354 61,003 (17,103) 43,900 19,576 (7,850) 11,726 110,179 (25,199) 84,980 23,949 (985) 1,133 8,895 (3,002) (636) 29,354 52,326 (3,103) 6,470 (9,607) (2,186) 43,900 16,335 (873) 1,484 (380) (4,840) 11,726 92,610 (4,961) 1,133 16,849 (9,987) (3,002) (7,662) 84,980 Land & Plant & Vehicles & buildings machinery equipment Total
The comparative information is not required for the movements on PPE. Additions include LC 850 (2001 : LC 500) assets leased under nance leases (where the Group is the lessee). Disposals include LC 2,260 (2001 : LC 1,435) assets sold under nance leases (where the Group is the lessor) In 2001 the cost of additions includes LC 12 of fair value gains and losses transferred from the hedging reserve in shareholders equity relating to qualifying currency cash ow hedges (Note 33) on the purchase of plant.
39p170(c)(iii)
30
10 Property, plant and equipment (continued)

36p117(ab) 36p117(df) The impairment charge of LC 1,075 in 2002 for plant and machinery comprises LC 300 relating to the glass segment (Note 3) and LC 775 relating to the paints segment (Note 16). The recoverable amount (the higher of the value in use or net selling price) was determined at the cash-generating unit level (the segment) and represents the net selling price, determined by reference to market prices for equivalent assets. In respect of the paints segment, certain property, plant and equipment will be disposed of because they are no longer required for the purpose for which they were originally acquired; the carrying amounts have been transferred to assets held for sale (Note 16). Leased assets included in the table on page 30, where the Group is a lessee under a nance lease, comprise plant and machinery: 2002 Cost capitalised nance leases Accumulated depreciation 17p23(a) Net book amount 13,996 (5,150) 8,846 2001 14,074 (3,926) 10,148
16p59
Leased assets included in the table on page 30, where the Group is a lessor, comprise vehicles leased to third parties under operating leases: 17p48A Cost Accumulated depreciation Net book amount 16p64(ad) 2002 70,234 (19,876) 50,358 2001
The Groups land and buildings were last revalued during 2001 by independent valuers. Valuations were made on the basis of open market value. The revaluation surplus net of applicable deferred income taxes was credited to fair value and other reserves in shareholders equity (Note 33). If land and buildings were stated on the historical cost basis, the amounts would be as follows: 2002 Cost Accumulated depreciation 45,289 (8,618) 36,671 2001 35,255 (7,748) 27,507
16p64(e) 16p61(a) 23p29(b) 23p29(c)
Net book amount
Bank borrowings are secured on properties to the value of LC 3,150 (2001 : LC 3,150) (Note 22). Borrowing costs of LC 31 (2001 : LC 49), arising on nancing specically entered into for the construction of a new factory, were capitalised during the year and are included in Additions in the table on page 30. A capitalisation rate of 7.0% (2001 : 7.2%) was used, representing the borrowing cost of the loan used to nance the project.
31
11 Investment property
2002 40p67 At beginning of year Exchange differences Fair value gains (Note 2) Expropriation of an investment property (Note 7) At end of year 40p66(c) 15,690 748 1,670 (1,832) 16,276 2001 16,043 (1,396) 1,043 15,690
The investment properties are valued annually on 31 December at fair value comprising open market value by an independent professionally qualied valuer. Prior to 2001 the Group has recorded fair value changes, net of deferred taxes in the fair value and other reserves in shareholders equity. The amounts included in that reserve at the date of adoption of IAS 40 have been transferred to retained earnings.
40p67
The comparative information is not required for the reconciliation.
12 Intangible assets
Goodwill Year ended 31 December 2001 Opening net book amount Exchange differences Development costs recognised as an asset Amortisation charge (Note 2, 34) Closing net book amount 38p107(c) 22p88(e) At 31 December 2001 Cost Accumulated amortisation Net book amount 38p107(e) 22p88(e) Year ended 31 December 2002 Opening net book amount Exchange differences Additions Acquisition of subsidiary (Note 35) Transferred to patents Impairment charge (Note 2) Amortisation charge (Note 2, 34) Closing net book amount 38p107(c) 22p88(e) At 31 December 2002 Cost Accumulated amortisation Net book amount 38p107 22p88 36p117(ac,e) 38p107 31,300 (23,760) 7,540 4,120 (1,424) 2,696 11,220 (7,400) 3,820 46,640 (32,584) 14,056 11,700 341 1,159 (2,800) (2,860) 7,540 3,300 96 2,004 (320) (1,360) (1,024) 2,696 4,600 134 366 320 (1,600) 3,820 19,600 571 2,370 1,159 (4,160) (5,484) 14,056 32,600 (20,900) 11,700 3,700 (400) 3,300 10,400 (5,800) 4,600 46,700 (27,100) 19,600 15,806 (846) (3,260) 11,700 845 (45) 2,700 (200) 3,300 6,913 (371) (1,942) 4,600 23,564 (1,262) 2,700 (5,402) 19,600 Development costs Other Total
The comparative information is not required for the reconciliation of movements on intangible assets including goodwill. The impairment charge arose as part of the restructuring of the paints segment (see Note 27). Development costs principally comprises internally generated expenditure on major development projects where it is probable that the costs will be recovered through future commercial activity. Other intangible assets comprise acquired patents and trademarks.
32
13 Investments in associates
2002 13,244 (260) 86 (174) (74) (12) 12,984
2001 13,008 216 (71) 145 105 (14) 13,244
At the beginning of year Share of results before tax Share of tax (Note 6) Share of results after tax Exchange differences Other movements 28p28 22p88(d) 22p88(e) At end of year
The share of results before tax includes LC 60 (2001 : LC 60) representing the amortisation charge of goodwill in respect of acquisition of associates. Investments in associates at 31 December 2002 include goodwill of LC 960, net of accumulated amortisation of LC 360 (2001 : LC 1,020, net of accumulated amortisation of LC 300). The principal associates, both of which are unlisted, are: Country of incorporation [ Name ] [ Name ] [Name of country] [Name of country] % interest held 25 30
28p27(a)
There were no changes in the interests held in the associates in 2001 or 2002.
14 Available-for-sale investments
2002 At beginning of year Exchange differences Acquisition of subsidiary (Note 35) Additions Revaluation surplus transfer to equity (Note 33) At end of year 1p57 1p57 Non-current Current 14,910 2,946 473 981 60 19,370 17,420 1,950 19,370 39p167(a) 39p99 39p100 2001 15,096 (4,935) 4,626 123 14,910 14,910 14,910
Available-for-sale investments, comprising principally marketable equity securities, are fair valued annually at the close of business on 31 December. For investments traded in active markets, fair value is determined by reference to Stock Exchange quoted bid prices. For other investments, fair value is estimated by reference to the current market value of similar instruments or by reference to the discounted cash ows of the underlying net assets. There were no disposals nor provisions for impairment on available-for-sale investments in 2002 or 2001. Available-for-sale investments are classied as non-current assets, unless they are expected to be realised within twelve months of the balance sheet date or unless they will need to be sold to raise operating capital. Available-for-sale investments include LC 210 (2001 : LC Nil) of listed debentures with a xed interest rate of 6.5% and a maturity date of 27 August 2004 and LC 78 (2001 : LC Nil) of nonredeemable, non-cumulative 9.0% preference shares.
1p59
32p56
33
15 Non-current receivables
1p73(b) Finance leases gross receivables Unearned nance income Originated loans and receivables Loans to associates (Note 36) Loans to directors (Note 36) 39p169(b)(ii) Interest rate swaps (Note 28) Other non-current receivables 590 144 91 2,523 4,936 The current receivables relating to the above items are shown in Note 18. All non-current receivables are due within 5 years from the balance sheet date. Fair Values 2002 Loans to associates Loans to directors (Note 36) Other receivables 644 490 3,414 2001 670 196 3,098 660 160 60 2,018 3,430 2002 1,810 (222) 1,588 2001 630 (98) 532
The fair values are based on discounted cash ows using a discount rate based upon the borrowing rate which the directors expect would be available to borrowers at the balance sheet date. 32p56(b)
The effective interest rates on receivables (current and non current) were as follows:
2002
Lease receivables Loans to associates Loans to directors (Note 36) 7.1% 6.6% 7.7%
2001
6.8% 6.3% 7.5%
Other non-current receivables

Finance lease receivables (where a group company is a lessor):
6.5%
6.2%
2002 17p39(a)
Gross receivables from nance leases: Not later than 1 year (Note 18) Later than 1 year and not later than 5 years Later than 5 years 1,336 1,810 3,146 (522)
2001
316 630 946 (196)
17p39(b)
Unearned future nance income on nance leases
Net investment in nance leases 17p39(a) 32p56(a)

Not later than 1 year (Note 18) Later than 1 year and not later than 5 years Later than 5 years The net investment in nance leases may be analysed as follows:
2,624 2002
1,036 1,588
750 2001
218 532
2,624
750
34
16 Inventories and assets held for sale

2002 2p34(b) 1p73(c) Raw materials (at cost) Work in progress (at cost) Finished goods (at cost) 2p34(c) Finished goods (at net realisable value) 7,622 1,810 9,888 402 19,722 2p34(f) 2p34(de) Inventories of LC 109 (2001 : LC 223) have been pledged as security for borrowings. In July 2001 the Group reversed LC 603 (Note 2) being part of an inventory write down made in December 2000 that was subsequently not required. Property, plant and equipment held for sale Land and buildings (Note 10) Plant and machinery (Note 10) Computer equipment (Note 10) 2002 1,810 1,226 630 3,666 16p59 2001 3,002 3,002 7,612 1,796 7,920 412 17,740 Inventories 2001
As a consequence of the restructuring of the paints segment (Note 27), certain items of property, plant and equipment are no longer required for the purposes for which they were originally purchased. These assets have been written down by LC 775 (Note 2) to their estimated recoverable amounts.
17 Construction contract work in progress

2002 At beginning of year Contract costs incurred in the period Contract expenses recognised in the period At end of year 11p40(a) 11p40(b) Contract costs incurred and recognised prots (less losses) to date Advances received on construction contracts 1,050 42,950 (42,688) 1,312 56,470 541 2001 975 28,419 (28,344) 1,050 39,212 262
Amounts due from customers for construction contracts are shown in Note 18.
35
18 Receivables and prepayments

1p73(b) Current receivables and prepayments: Finance leases gross receivables (Note 15) Unearned nance income 1,336 (300) 1,036 Trade receivables 39p170(f) 11p42(a) 1p72 1p72 39p169(b)(ii) 39p169(b)(ii) Less: Provision for impairment of receivables Trade receivables net Due from customers on construction contracts (Note 17) Prepayments Receivables from associates (Note 36) Loans to directors (Note 36) Interest rate swaps (Note 28) Forward foreign exchange contracts (Note 28) Other receivables 15,005 (109) 14,896 984 316 54 346 26 66 891 18,615 32p66(ab) 316 (98) 218 10,636 (70) 10,566 788 358 46 36 26 50 1,080 13,168 2002 2001
Concentrations of credit risk with respect to trade receivables are limited due to the Groups large number of customers, who are internationally dispersed, cover the spectrum of manufacturing and distribution and have a variety of end markets in which they sell. Due to these factors, management believes that no additional credit risk beyond amounts provided for collection losses is inherent in the Groups trade receivables. During the year ended 31 December 2002, subsidiaries of the group in France, Germany, Switzerland and Japan transferred receivables balances amounting to LC 1,014 to a bank in exchange for cash. These receivables were derecognised from the balance sheet. The Group retains a portion of the credit risk in these receivables through guarantees see Note 21.
39p170(d)
19 Trading investments
39p167(a) 39p99 1p59 7p15 The trading investments are traded in active markets and are valued at market value at the close of business on 31 December by reference to Stock Exchange quoted bid prices. Trading investments are classied as current assets because they are expected to be realised within twelve months of the balance sheet date. In the cash ow statement, trading investments are presented within the section on operating activities as part of changes in working capital (Note 34). In the income statement, changes in fair values of trading investments are recorded in other operating income (Note 2). 2002 US listed equity securities UK listed equity securities Other listed equity securities 5,850 4,250 1,720 11,820 2001 3,540 3,560 872 7,972
36
20 Cash and cash equivalents

2002 Cash at bank and in hand Short term bank deposits 12,698 13,660 26,358 32p56 7p45 2001 30,798 5,414 36,212
The effective interest rate on short term bank deposits was 5.9% (2001 : 5.6%) and these deposits have an average maturity of 20 days. For the purposes of the cash ow statement, the cash and cash equivalents comprise the following: 2002 Cash and bank balances 26,358 (2,650) 23,708 2001 36,212 (6,464) 29,748
7p8
Bank overdrafts (Note 22)
21 Trade and other payables

2002 Trade payables 1p72 Amounts due to associates (Note 36) Social security and other taxes Accrued expenses 39p169(b)(ii) 39p169(b)(ii) Interest rate swaps (Note 28) Forward foreign exchange contracts (Note 28) Government grants Other payables 7,604 2,202 2,002 1,983 8 18 675 1,230 15,722 39p170(d) 2001 6,584 1,195 960 1,328 6 15 425 1,852 12,365
During the year ended 31 December 2002, subsidiaries of the group in France, Germany, Switzerland and Japan transferred receivables amounting to LC 1,014 to a bank in exchange for cash. These receivables were derecognised from the balance sheet. The Group retains a portion of the credit risk in these receivables through guarantees. The guarantees are recognised as nancial liabilities, measured at their fair values based on the present value of expected credit losses covered by the guarantees. The carrying amount of such guarantees on the Group balance sheet totals LC 24 and is included in other payables above. Of these, LC 5 relate to receivables transferred in the previous year and not yet realised in full. 2002 Non-current liabilities in the balance sheet include: 2001 115
39p169(b)(ii)
Interest rate swaps (Note 28)
157
37
22 Borrowings
Current Bank overdrafts (Note 20) Bank borrowings Debentures Finance lease liabilities
2002 2,650 3,368 300 2,192 8,510
2001 6,464 4,598 2,020 2,588 15,670
Non-current Bank borrowings Loan from Ultimate Parent Ltd (Note 36) Convertible bond (Note 23) Debentures and other loans Redeemable preferred shares (Note 24) Finance lease liabilities 5,870 40,100 3,300 30,000 6,806 86,076 Total borrowings 94,586 29,934 2,300 18,092 30,000 8,010 88,336 104,006
The borrowings include secured liabilities (leases and bank borrowings) in a total amount of LC 12,366 (2001 : LC 15,196). The bank borrowings are secured over certain of the land and buildings of the Group and over certain of the inventories (Note 10 and Note 16). Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default. 32p60 The exposure of the borrowings of the Group to interest rate changes and the periods in which the borrowings reprice are as follows: 6 months 612 or less months 124 124 216 216 15 years Over 5 years Total
32p56(a)
At 31 December 2002 Total borrowings Effect of interest rate swaps (Note 28) 20,685 (7,324) 13,361 At 31 December 2001 Total borrowings Effect of interest rate swaps (Note 28) 16,528 (12,839) 3,689 59,784 59,784 27,478 12,839 40,317 104,006 104,006 2001 10,659 351 11,010 63,118 6,973 70,091 94,586 94,586
2002 32p56(b) The effective interest rates at the balance sheet date were as follows: Bank overdrafts Bank borrowings Loan from Ultimate Parent Ltd (Note 36) Convertible bond (Note 23) Debentures and other loans Redeemable preferred shares (Note 24) Finance lease liabilities
7.6% 7.0% 0.0% 9.0% 7.2% 5.5% 7.4%
7.3% 6.8% 6.5% 7.0% 5.5% 7.0%
38
22 Borrowings (continued)
10p20, 21(c) On 1 April 2003 the Group issued LC 10,000 6.5% US dollar bonds to nance the purchase of new equipment in the construction segment. The bonds are repayable on 1 April 2005. The carrying amounts and fair values of certain non-current borrowings are as follows: 32p77 Carrying amounts 2002 2001 Non-current bank borrowings Redeemable preferred shares (Note 24) Loan from Ultimate Parent Ltd (Note 36) Debentures and other loans 32p54 32p77 5,870 30,000 3,300 29,934 30,000 2,300 18,092 Fair values 2002 2001 5,811 28,450 3,240 28,935 28,850 2,150 17,730
The fair values are based on discounted cash ows using a discount rate based upon the borrowing rate which the directors expect would be available to the Group at the balance sheet date. The carrying amounts of short-term borrowings, lease obligations and the convertible bond approximate their fair value. Maturity of non-current borrowings (excluding nance lease liabilities): 2002 Between 1 and 2 years Between 2 and 5 years Over 5 years 5,870 3,300 70,100 79,270 2001 10,065 40,261 30,000 80,326
32p56(a)
In 2002 the Group renanced its borrowings that fell due, by issuing a convertible bond (Note 23). 17p23(b) Finance lease liabilities minimum lease payments: Not later than 1 year Later than 1 year and not later than 5 years Later than 5 years 2002 2,749 6,292 2,063 11,104 Future nance charges on nance leases Present value of nance lease liabilities 32p56(a) 17p23(b) The present value of nance lease liabilities is as follows: 2002 Not later than 1 year Later than 1 year and not later than 5 years Later than 5 years 2,192 4,900 1,906 8,998 2001 2,588 5,287 2,723 10,598 (2,106) 8,998 2001 3,203 7,160 2,891 13,254 (2,656) 10,598
39
22 Borrowings (continued)
Borrowing facilities DV,7p50(a) The Group has the following undrawn committed borrowing facilities: 2002 Floating rate expiring within one year expiring beyond one year Fixed rate expiring within one year 18,750 37,500 12,500 25,000 6,150 12,600 4,100 8,400 2001
The facilities expiring within one year are annual facilities subject to review at various dates during 2003. The other facilities have been arranged to help nance the proposed expansion of the Groups activities in Europe.
23 Convertible bond
32p56(b) 32p56(a) On 2 January 2002 the Company issued 500,000 7.0% convertible bonds at a nominal value of LC 50 million. The bonds mature 25 years from the issue date at their nominal value of LC 50 million unless converted into the Companys ordinary shares at the holders option at the rate of 33 shares per LC 500. The fair values of the liability component and the equity conversion component were determined on the issue of the bond. The fair value of the liability component, included in long term borrowings, was calculated using a market interest rate for an equivalent non convertible bond. The residual amount, representing the value of the equity conversion component, is included in shareholders equity in fair value and other reserves (Note 33), net of deferred income taxes. In subsequent periods the liability component continues to be presented on the amortised cost basis, until extinguished on conversion or maturity of the bonds. The equity conversion component is determined on the issue of the bonds and is not changed in subsequent periods. The convertible bond is recognised in the balance sheet as follows: 2002 Face value of convertible bond issued on 2 January 2002 Equity conversion component, net of deferred tax liability (Note 33) 12ApxAp9 Deferred tax liability (Note 25) Liability component on initial recognition at 2 January 2002 Interest expense (Note 4) Interest paid Liability component at 31 December 2002 (Note 22) 32p77 32p56(b) 50,000 (6,700) (3,300) 40,000 3,600 (3,500) 40,100 2001
DV,32p50 32p23 32p28(a)
The carrying amount of the liability componen at 31 December 2002 of the convertible bond approximated its fair value. Interest expense on the bond is calculated on the effective yield basis by applying the effective interest rate (9.0%) for an equivalent non convertible bond to the liability component of the convertible bond.
40
24 Redeemable preferred shares

32p18 32p22 32p56(ab) On 4 January 2001 the Company issued 30 million cumulative redeemable preferred shares with a par value of LC 1 per share. The shares are redeemable at their par value on 4 January 2012 or by the Company at any time before that date. The shares pay dividends at 5.5%.
25 Deferred income taxes

Deferred income taxes are calculated in full on temporary differences under the liability method using a principal tax rate of 33% (2001 : 33%). The movement on the deferred income tax account is as follows: 2002 At beginning of year Exchange differences Acquisition of subsidiary (Note 35) Disposal of subsidiary Income statement charge (Note 6) Tax charged to equity At end of year 12p81(a) 5,428 (123) (3,047) (105) 379 3,336 5,868 2001 2,563 (181) 2,635 411 5,428
The deferred tax charged/(credited) to equity during the year is as follows: 2002 Fair value reserves in shareholders equity land and buildings (Note 33) hedging reserve (Note 33) available-for-sale investments (Note 33) Convertible bond equity conversion component (Note 23) 17 20 3,300 (1) 3, 336 374 (4) 41 411 2001
SIC17p9
Transaction costs for issue of ordinary shares (Note 31)
Deferred tax of LC 49 (2001 : LC 43) was transferred within shareholders equity from fair value reserves and other reserves (Note 33) to retained earnings. This represents deferred tax on the difference between the actual depreciation on buildings and the equivalent depreciation based on the historical cost of buildings. 12p81(e) Deferred income tax assets are recognised for tax loss carry forwards to the extent that realisation of the related tax benet through the future taxable prots is probable. The Group has unrecognised tax losses of LC 1,433 (2001 : LC 5,727) to carry forward against future taxable income; these tax losses will expire in 2007. In addition, the Group has an unrecognised tax loss arising from the loss on sale of LC 959 relating to the discontinuing operation (Note 3); this tax loss can only be offset against future capital prots and has not been recognised in these nancial statements. This tax loss has no expiry date.
41
25 Deferred income taxes (continued)

12p81(f) Deferred income tax liabilities of LC 3,141 (2001 : LC 2,016) have not been established for the withholding and other taxes that would be payable on the unremitted earnings of certain subsidiaries, as such amounts are permanently reinvested; such unremitted earnings totalled LC 30,671 at 31 December 2002 (2001 : LC 23,294). The movement in deferred tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction) during the period is as follows:
Deferred tax liabilities Accelerated tax depreciation Fair value gains Deferred Convertible development costs bond Total
12p81(g)(i) 12p81(g)(ii) 12p81(a)
At 1 January 2002 Charged / (credited) to net prot Charged to equity Acquisition of subsidiary Disposal of subsidiary Exchange differences At 31 December 2002
Deferred tax assets
8,646 1,875 1,200 (200) 372 11,893

Provisions
1,670 1,304 37 3,011

Impairment of assets
1,222 138 1,360

Tax losses
(33) 3,300 3,267

Other
11,538 3,284 3,337 1,200 (200) 372 19,531

Total
At 1 January 2002 Credited to net prot Credited to equity Acquisition of subsidiary Disposal of subsidiary Exchange differences At 31 December 2002 12p74
(1,552) (538) (250) 65 (35) (2,310)
(1,728) (1,728)
(4,230) (508) (3,997) 30 (460) (9,165)
(328) (131) (1) (460)
(6,110) (2,905) (1) (4,247) 95 (495) (13,663)
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same scal authority. The following amounts, determined after appropriate offsetting, are shown in the consolidated balance sheet: 2002 Deferred tax assets
Deferred tax liabilities
2001 (3,110)
8,538
(5,395)
11,263
5,868 The amounts shown in the balance sheet include the following: 1p54 1p54 Deferred tax assets to be recovered after more than 12 months Deferred tax liabilities to be settled after more than 12 months (5,201) 10,743
5,428
(3,064) 8,016
42
26 Pensions and other post-retirement obligations

Pension benets 19p120(c) The amounts recognised in the balance sheet are determined as follows: 2002 Present value of funded obligations Fair value of plan assets Present value of unfunded obligations Unrecognised actuarial gains (losses) Unrecognised prior service cost Liability in the balance sheet 19p120(d) 6,155 (5,991) 164 3,206 (87) (145) 3,138 2001 2,943 (2,797) 146 1,549 (94) (163) 1,438
The pension plan assets include the Companys ordinary shares with a fair value of LC 136 (2001 : LC 126) and a building occupied by the Company with a fair value of LC 612 (2001 : LC 609). The amounts recognised in the income statement are as follows: 2002 Current service cost Interest cost Expected return on plan assets Net actuarial losses recognised in year Past service cost Losses on curtailment Total, included in staff costs (Note 5) 751 431 (510) 7 18 65 762 2001 498 214 (240) 8 16 496
19p120(f)
19p120(f)
Of the total charge, LC 521 (2001 : LC 324) and LC 241 (2001 : LC 172) were included, respectively, in cost of sales and administrative expenses. The actual return on plan assets was LC 495 (2001 : LC 235). Movement in the liability recognised in the balance sheet: 2002 At beginning of year Exchange differences Liabilities acquired in business combination (Note 35) Subsidiary sold Total expense as shown above
Contributions paid
19p120(g) 19p120(e)
2001 1,434 (81) 496

(411)
1,438 42 1,914 (110) 762

(908)
At end of year 19p120(h) The principal actuarial assumptions used were as follows: Discount rate Expected return on plan assets Future salary increases Future pension increases
3,138
1,438
2002 7.0% 8.5% 5.0% 3.0%
2001 6.8% 8.3% 4.5% 2.5%
43
26 Pensions and other post-retirement obligations (continued)

19p122(b) Post-employment medical benets The Group operates a number of post-employment medical benet schemes, principally in the USA. The method of accounting and the frequency of valuations are similar to those used for dened benet pension schemes. 19p120(h) 19p120(c) In addition to the assumptions used for the pension schemes, the main actuarial assumption is a long term increase in health costs of 8.0% per year (2001 : 8.0%). The amounts recognised in the balance sheet were determined as follows: 2002 Present value of funded obligations Fair value of plan assets Present value of unfunded obligations Unrecognised actuarial losses Liability in the balance sheet 19p120(f) The amounts recognised in the income statement were as follows: 2002 Current service cost Interest cost Expected return on plan assets Net actuarial losses recognised in year Total, included in staff costs (Note 5) 19p120(f) 19p120(g) 19p120(e) 153 49 (53) 1 150 2001 107 25 (25) 107 705 (620) 85 1,325 (8) 1,402 2001 340 (302) 38 663 (9) 692
Of the total charge, LC 102 (2001 : LC 71) and LC 48 (2001 : LC 36) were included, respectively, in cost of sales and administrative expenses. The actual return on plan assets was LC 51 (2001 : LC 24). Movement in the liability recognised in the balance sheet: 2002 At beginning of year Exchange differences Liabilities acquired in business combination (Note 35) Total expense as shown above Contributions paid At end of year Other long-term employee benets 692 20 725 150 (185) 1,402 2001 697 (39) 107 (73) 692
19p128 19p136
[If they exist, long term employee benets, other than pension benets and medical benets, would also be measured at present value using the projected unit method].
44
27 Provisions
1p73(d) Warranty Restructuring Legal claims 37p84(a) 37p84(b) 37p84(d) At 1 January 2002 Additional provisions Unused amounts reversed Charged to income statement Exchange differences 37p84(c) 37p84(a) Utilised during year At 31 December 2002 Analysis of total provisions: 1p60 1p60 Non-current (warranty provision) Current 746 357 (12) 345 (7) (233) 851 2,087 (101) 1,986 (886) 1,100 1,828 532 (25) 507 (68) (1,676) 591 2002 320 2,222 2,542 Warranty 37p85(a) The company gives two year warranties on certain products and undertakes to repair or replace items that fail to perform satisfactorily. A provision of LC 851 (2001 : LC 746) has been recognised at the year-end for expected warranty claims based on past experience of the level of repairs and returns. It is expected that LC 531 will be used during 2003, and LC 320 during 2004. Restructuring 37p85(a) The restructuring of part of the paints segment will result in the loss of 110 jobs in total at two factories. An agreement has been reached with the local union representatives that species the number of staff involved and quanties the amounts payable to those made redundant. The full amount of these costs estimated to be incurred has been recognised in the current period. Other restructuring expenses chiey comprise penalties on the early termination of leases on vacated property. The provision charged of LC 1,986 is an update of the amount of LC 1,700 shown in the Groups interim nancial report for the six months ended 30 June 2002, following the nalisation of certain of the restructuring costs in the second half of 2002. The provision of LC 1,100 at 31 December 2002 is expected to be fully utilised during the rst half of 2003. In conjunction with the restructuring, goodwill on the original acquisition in March 1995 and deferred development costs have been fully written off (Note 12), and certain items of property, plant and equipment have been written down (Note 16). Legal claims 37p85(a) The amounts shown comprise gross provisions in respect of certain legal claims brought against the Group by customers of the paints segment. The balance at 31 December 2002 is expected to be utilised in the rst half of 2003. In the opinion of the directors, after taking appropriate legal advice, the outcome of these legal claims will not give rise to any signicant loss beyond the amounts provided at 31 December 2002. 2,574 2,976 (138) 2,838 (75) (2,795) 2,542 2001 274 2,300 2,574 Total
34p26
36p117(a)
45
28 Financial instruments
Derivative nancial instruments Assets At 31 December 2002
Interest rate swaps Forward foreign exchange contracts cash ow hedges Forward foreign exchange contracts fair value hedges 117 33 33 165 8 10
Liabilities
183 At 31 December 2001

Interest rate swaps Forward foreign exchange contracts cash ow hedges Forward foreign exchange contracts fair value hedges 86 25 25
183
121 6 9
136 Net fair values of derivative nancial instruments 39p169(b)(ii)
136
The net fair values of derivative nancial instruments at the balance sheet date and designated for cash ow hedges were: 2002
Contracts with positive fair values: Interest rate swaps (Note 15 and Note 18) Forward foreign exchange contracts (Note 18) Contracts with negative fair values: Interest rate swap contracts (Note 21) Forward foreign exchange contracts (Note 21) (165) (8) (121) (6) 117 33 86 25
2001
39p169(b)(iv) 39p162 39p169(b)(ii)
The net fair value gains at 31 December 2001 on open forward foreign exchange contracts which hedge anticipated future foreign currency sales will be transferred from the hedging reserve to the income statement when the forecasted sales occur, at various dates between 6 months to 1 year from the balance sheet date. The net fair values of derivative nancial instruments at the balance sheet date and designated for fair value hedges were: 2002
Forward foreign exchange contracts: with positive fair values (Note 18) 33 25
2001
with negative fair values (Note 21) Interest rate swaps 32p56(a) 32p56(b)
(10)
(9)
The notional principal amounts of the outstanding interest rate swap contracts at 31 December were LC 7,324 (2001 LC 12,839). At 31 December 2002 the xed interest rates vary from 6.9% to 7.4% (2001 : 6.7% to 7.2%) and the oating rates are [percentage amount(s) and name(s) of local inter bank offer rates].
Hedge of net investment in foreign entity 39p169(b) The Groups [name of currency] denominated borrowing is designated as a hedge of the net investment in its foreign subsidiary in [name of country]. The fair value of the borrowing at 31 December 2002 was LC 840 (2001 : LC 760). The foreign exchange loss of LC 45 (2000 : gain of LC 40) on translation of the borrowing to [name of Groups reporting currency] at the balance sheet date was recognised in shareholders equity.
46
29 Contingencies
Contingent liabilities 37p86 37p86(a) At 31 December 2002 the Group had contingent liabilities in respect of bank and other guarantees and other matters arising in the ordinary course of business from which it is anticipated that no material liabilities will arise. In the ordinary course of business the Group has given guarantees amounting to LC 8,624 (2001 : LC 9,629) to third parties. As discussed in Note 21, the Group retains through guarantees a portion of the credit risk on certain receivables transferred to a bank. In respect of the acquisition of [name of company] on 1 March 2002 (see note 35), additional consideration of up to LC 1,500 may be payable in cash in the event that certain predetermined sales are achieved by [name of company]. At the date of these nancial statements no additional payments are anticipated. Should additional consideration be payable, it will be accounted for as a component of the goodwill arising on this acquisition. Contingent assets 37p89 In connection with the disposal on 30 June 2002 of [name of company] (see Note 3), the Group has entered into an earn out agreement. Additional consideration will be payable to the Group provided the future performance of [name of company] reaches a certain level. The additional consideration is to be satised in cash. No contingent gain has been recognised in these nancial statements as the amount of the earn out is dependent on the aggregate result of [name of company] for the 18 month period ending 31 December 2004 and so cannot be quantied with any certainty at this stage.
37p86 37p86(a) 37p86(b)
30 Commitments
Capital commitments Capital expenditure contracted for at the balance sheet date but not recognised in the nancial statements is as follows: 2002 16p61(d) 40p66(f) 38p111(e) Property, plant and equipment Investment property Intangible assets 3,593 460 4,053 Operating lease commitments where a group company is the lessee 17p27(a) The future aggregate minimum lease payments under non cancellable operating leases are as follows: 2002 Not later than 1 year Later than 1 year and not later than 5 years Later than 5 years 2,750 9,770 710 13,230 2001 2,400 8,890 560 11,850 2001 3,667 474 4,141
47
30 Commitments (continued)
Operating lease commitments where a group company is the lessor 17p48(b) The future minimum lease payments receivable under non-cancellable operating leases are as follows (relates to vehicle rental business acquired in 2002 see Note 35): 2002 Not later than 1 year Later than 1 year and not later than 5 years Later than 5 years 12,920 41,800 840 55,560 17p48(c) [Where they exist, disclose total contingent rents recognised in income.] 2001
Investment property repairs and maintenance 2002 40p66(f) Contractual obligations for future repairs and maintenance 140 2001 130
31 Ordinary shares, share premium, treasury shares and share options

1p74(a) Number of Ordinary Share Treasury shares shares premium shares (thousands) LC 000 LC 000 LC 000 At 1 January 2001 Issue of shares share option scheme At 31 December 2001 Issue of shares share option scheme acquisition (Note 35) Treasury shares purchased At 31 December 2002 1p74(a) 1p74(a) 20,000 1,000 21,000 750 3,550 (875) 24,425 20,000 1,000 21,000 750 3,550 25,300 10,424 892 11,316 890 6,450 18,656 (2,564) (2,564) Total LC 000 30,424 1,892 32,316 1,640 10,000 (2,564) 41,392
The total authorised number of ordinary shares is 45 million shares (2001 : 35 million shares) with a par value of LC 1 per share (2001 : LC 1 per share). All issued shares are fully paid. On 21 December 2002, the Company acquired 875,000 of its own shares through purchases on the [name of] Stock Exchange. The total amount paid to acquire the shares was LC 2,564 and has been deducted from shareholders equity. These shares have not been cancelled and are held as treasury shares. As such the Company has the right to reissue these shares at a later date. On 1 April 2003 the Company sold 500,000 treasury shares on the [name of] Stock Exchange. The total amount received for the shares was LC 1,500.
33p45(e) 10p20, 21(f)
48
31 Ordinary shares, share premium, treasury shares and share options (continued)
19p147(a) Share options are granted to directors and to employees. Movements in the number of share options outstanding are as follows (in thousands): 2002 19p147(d) 19p147(e) 19p147(f) 19p147(g) 19p147(d) 19p147(e) 19p147(f) SIC17p9 At 1 January Granted Exercised Lapsed At 31 December 4,750 1,250 (750) (400) 4,850 2001 4,150 1,750 (1,000) (150) 4,750
Share options were granted on 1 January 2002 at the market share price on that date of LC 2.93 per share (1 January 2001 : LC 2.80 per share) and expire on 1 July 2006 (prior year share options expire on 1 July 2005). Options exercised on 30 June 2002 (30 June 2001) resulted in 750,000 shares (2001 : 1,000,000 shares) being issued at LC 2.19 each (2001 : LC 1.892 each), yielding the following proceeds, after transaction costs (net of deferred income taxes) of LC 2.5 (2001 : LC Nil): 2002 LC 000 Ordinary share capital at par Share premium Proceeds 750 890 1,640 2,250 2001 LC 000 1,000 892 1,892 2,860
19p147(e)
19p148(b) 19p147(d)
Fair value, at exercise date, of shares issued
Share options outstanding (in thousands) at the end of the year have the following terms: Expiry Date 1 July 2002 2002 2003 2004 2005 2006 Exercise price 2.19 2.30 2.50 2.65 2.80 2.93 2002 300 600 950 1,750 1,250 4,850 2001 1,150 300 600 950 1,750 4,750
33p45(e) 10p20, 21(f)
On 1 January 2003, 1,200,000 share options were granted to directors and employees at the market share price on that date of LC 3.10 per share (expiry date 1 July 2007).
32 Minority interests
2002 1,806 6,050 2,548 (1,920) 8,484
2001 1,500 856 (550) 1,806
At 1 January Acquisition (Note 35) Share of net prot of subsidiaries Dividend paid At 31 December
49
33 Fair value reserves and other reserves

Convertible bond Investment property Land and buildings Hedging reserve Available for sale investments Translation reserve Total
Balance at 1 January 2001 16p37 12p81(a) 16p39 16p39 1p86(b)

Revaluationgross (Note 10, 14) Revaluation tax (Note 25) Depreciation transfer gross Depreciation transfer tax (Note 25) Cash ow hedges: Tax on fair value gains
1,152 1,133 (374) (130) 43 (50) 1,774
62 42 (14) (36) 12 (12) 4 (6) 2 54
123 (41) 82
5,150 440 5,590
6,364 1,256 (415) (130) 43 42 (14) (36) 12 (12) 4 (6) 2 390 7,500
39p169(c)(i) Fair value gains in period 39p169(c)(ii) Transfers to net prot

(Notes 2 and 4) Tax on transfers to net prot
39p169(c)(iii) Transfers to PPE (Note 10)

Tax on transfers to PPE
39p169(c)(iii) Transfers to inventory

Tax on transfers to inventory
21p30(c)
Currency translation differences Balance at 31 December 2001/ 1 January 2002
16p37 12p81(a) 16p39 16p39 1p86(b)
Revaluationgross (Note 10, 14) Revaluation tax (Note 25) Depreciation transfer gross Depreciation transfer tax (Note 25) Cash ow hedges: Tax on fair value gains
10,000 (3,300) 6,700
(149) 49 15 (1,238) 451
52 (17) 89
60 (20) 122
60 (20) (149) 49 52 (17)
39p169(c)(i) Fair value gains in period 1p86(b) 21p30(c) 21p37

Currency translation differences: amount arising in year to net prot on sale of subsidiary (Note 3) Subsidiary sold in year: fair value gains on PPE Convertible bond equity component
(4,913) (4,898) 354 (1,238) 10,000 (3,300) 1,031 8,393 354
16p39
12p81(a)
Tax on equity component Balance at 31 December 2002
50
34 Cash generated from operations

2002 7p18(b) 7p20 Adjustments for: Minority interest (Note 32) Extraordinary item (Note 7) Tax (Note 6) Depreciation (Note 2, 10) Amortisation (Note 2, 12) Impairment charge (Note 2) (Prot)/loss on sale of property, plant and equipment (Note 2) Loss on disposal of discontinuing operation (Note 3) Fair value gains on investment property (Note 2, 11) Fair value losses on trading investments (Note 2) Fair value gains on other nancial instruments (Note 4) Prot on sale of trading investments (Note 2) Interest income (Note 4) Dividend income (Note 4) Interest expense (Note 4) Amortisation of government grants received (Note 2) Share of results of associates before tax (Note 13) Changes in working capital (excluding the effects of acquisition and disposal of subsidiaries): Inventories Construction contract work in progress Trade and other receivables Trading investments Payables Provisions Pensions and other retirement benets Cash generated from operations In the cash ow statement, proceeds from sale of property, plant and equipment comprise: 2002 Net book amount (Note 10) Less: disposals of leased assets
Prot / (loss) on sale of property, plant and equipment
2001 17,837
Net prot
25,154
2,548 1,228 14,706 29,754 5,484 5,235 (1,688) 959 (1,670) 1,116 (26) (610) (698) (4,730) 7,362 (810) 260
856 8,936 7,662 5,402 8 (1,043) 232 (45) (362) (1,400) 7,192 (400) (216)
1,122 (262) (1,447) (4,122) (8,433) 32 (229) 70,235
(895) (108) (2,966) 1,516 565 457 18 43,246
2001 9,987 (1,435) 8,552

(8)
12,337 (2,260) 10,077

1,688
Proceeds from sale of property, plant and equipment Non cash transactions 7p43
11,765
8,544
The principal non cash transactions are the issue of shares as consideration for the purchase of a subsidiary (Note 35) and the acquisition of property, plant and equipment using nance leases (Note 10).
51
35 Acquisition
22p86 22p87(a) 27p32(b)(iv) On 1 March 2002 the Group acquired 70% of the share capital of [name of company] a vehicle rental company. The acquired business contributed revenues of LC 44,709 and operating prot of LC 2,762 to the Group for the period from 1 March 2002 to 31 December 2002, and its assets and liabilities at 31 December 2002 were respectively LC 79,178 and LC 15,406. Details of net assets acquired and goodwill are as follows: 22p87(b) 7p40(b) 7p40(a)
Purchase consideration: Cash paid Fair value of shares issued (Note 31) Total purchase consideration Fair value of net assets acquired Goodwill (Note 12) 4,250 10,000 14,250 (13,091) 1,159
22p92 7p40(d)
Other than for land and buildings, the fair value of the net assets approximated to the book value of the net assets acquired, and no plant closure provisions or other restructuring provisions were established.
The assets and liabilities arising from the acquisition are as follows: Cash and cash equivalents Property, plant and equipment (Note 10) Available-for-sale investments (Note 14) Inventories Receivables Payables Pensions (Note 26) Other post-retirement obligations (Note 26) Borrowings Net deferred tax assets (Note 25) Minority interests (Note 32) Fair value of net assets acquired Goodwill (Note 12) Total purchase consideration Less: 300 67,784 473 1,122 3,585 (13,461) (1,914) (725) (41,070) 3,047 (6,050) 13,091 1,159 14,250
7p40(c)
Discharged by shares issued (Note 31) Cash and cash equivalents in subsidiary acquired Cash outow on acquisition There were no acquisitions in the year ended 31 December 2001. Information about an acquisition that took place on 1 March 2003 is shown in Note 57.
(10,000) (300) 3,950
52
36 Related party transactions

1p102(c) 24p20 24p22, 24 24p23(a) The Company is controlled by Parent Ltd (incorporated in [name of country]) which owns 51% of the Companys shares. The remaining 49% of the shares are widely held. The ultimate parent of the Group is Ultimate Parent Ltd (incorporated in [name of country]). The following transactions were carried out with related parties: i) Sales of goods and services 2002 Sales of goods: [Name(s) of joint venture(s)] [Name(s) of associate(s)] Household Paints Ltd 618 168 337 1,123 Sales of services: Parent Ltd (legal services) Ultimate Parent Ltd (consultation services) [Name(s) of associate(s)] 67 84 16 167 24p23(c) 127 69 35 231 557 93 279 929 2001
Sales to the joint ventures were carried out on commercial terms and conditions and at market prices. Sales to Household Paints Ltd are based on a long term agreement which enables Household Paints Ltd to purchase certain goods slightly under the normal sales price. Household Paints Ltd is a rm belonging to the wife of E Choo, a director of the Company. As an average the goods were sold at 5% under the normal sales price in 2002 (4% under the normal sales price in 2001). Sales to the associated undertakings and to Parent Ltd and Ultimate Parent Ltd were carried out at cost. ii) Purchases of goods and services 2002 Purchases of goods: Sister Ltd [Name(s) of associate(s)] 83 54 137 Purchases of services: Parent Ltd (management services) Haven Ltd (consultation services) 89 206 295 94 174 268 70 58 128 2001
24p23(a)
24p23(c)
Sister Ltd is a fellow subsidiary of Parent Ltd. Haven Ltd is owned by P Wallace, the Managing Director of Ultimate Parent Ltd. The above transactions were carried out on commercial terms and conditions except for the goods and services purchased from the associated undertaking and from Parent Ltd which were at cost. There were no purchases from the joint ventures.
53
36 Related party transactions (continued)

24p23(b) 1p72 2002 Receivables from related parties: [Name(s) of joint venture(s)] [Name(s) of associate(s)] Household Paints Ltd Parent Ltd 26 54 14 14 108 Payables to related parties: [Name(s) of associate(s)] 24p23 1p72 iv) Loans from related parties 2002 Loan from Ultimate Parent Ltd: At beginning of year Repaid during year At end of year (Note 22) 2,300 (2,300) 2,495 (195) 2,300 2001 2,202 1,195 23 46 11 17 97 2001 iii) Year-end balances arising from sales/purchases of goods/services
The loan from Ultimate Parent Ltd was provided interest free, and there was no specied repayment date.
24p23 1p72
v) Loans to directors 2002 Loans to the directors of the Company (and their families): At beginning of year Loans advanced during year Loan repayments received At end of year (Note 15, 18) 196 343 (49) 490 168 62 (34) 196 2001
24p23
In 2002 loans were advanced to B van der Hoek (LC 173; repayable monthly over two years; interest rate 7.7%) and to J Kelly (LC 170; repayable monthly over two years; interest rate 7.7%). In 2001 loans were advanced to T Ferreira (LC 42; repayable in 2003; interest rate 7.5%) and to Y Sovgyra (LC 20; repayable in 2002; interest rate 7.6%). The loans were given on commercial terms and conditions. The related interest income in 2002 was LC 30 (2001 : LC 16). No provision has been required in 2002 and 2001 for the loans made to directors. Certain loans advanced to directors during the year amounting to LC 50 (2001 : LC 30) are secured by shares in listed companies, which are held as collateral for these loans, and are repayable in monthly instalments over four year terms. The fair value of these shares was LC 65 at the balance sheet date (2001 : LC 39).
24p22 19p23 19p143
vi) Directors remuneration In 2002 the total remuneration of the directors was LC 2.2 million (2001 : LC 1.3 million). The amount for 2002 included termination benets of LC 0.4 million and LC 0.2 million paid, respectively, to two directors, A Tardos and J Laakso, who left the Group during the year (2001 : LC Nil).
54
36 Related party transactions (continued)

24p23 1p72 vii) Loans to associates
2002 2001
At beginning of year Loans advanced during year Loan repayments received At end of year (Note 15)
660 (70) 590
674 50 (64) 660
The loans to associates were given on commercial terms and conditions. The related interest income was LC 36 (2001 : LC 38). The loans are due on 1 January 2004 and carry interest at 7.0%. No provision has been required in 2002 and 2001 for the loans made to associated undertakings. 24p23 19p151 viii)Share options granted to directors The aggregate number of share options granted to the directors of the Company during 2002 was 125 (2001 : 175). The share options were given on the same terms and conditions as those offered to other employees of the Company (Note 31). The outstanding number of share options granted to the directors of the Company at the end of the year was 480 (450 at the end of 2001). 24p23 37p86 ix) Commitments and contingencies The Company has guaranteed a loan made by a bank to V Ribollet, a director of the Company, in a total amount of LC 17 (2001 : LC 17). The loan is repayable in 2003.
37 Principal subsidiaries
27p32(a) Europe Name (70%) Name Name Name Name Name Name Name (75%) Name Name Name Name Name Name Name Country of incorporation Germany UK France Switzerland Netherlands Spain Italy Hungary Sweden Malta Denmark Belgium Czech Republic Cyprus Estonia Rest of the World Name (70%) Name Name Name Name Name (95%) Name Name Name Name Brazil Venezuela South Africa Australia China Korea Japan Bahrain Singapore India North America Name Name Name Country of incorporation USA Canada Mexico
All subsidiaries are wholly owned unless otherwise stated. All holdings are in the ordinary share capital of the entity concerned and are unchanged from 2001, except for the acquisition of [name of company] (Note 35) and the disposal of [name of company] (Note 3).
55
38 Interest in joint venture

31p47 The Group has a 50% interest in a joint venture, [name of joint venture], which provides products and services in the paints industry. The following amounts represent the Groups 50% share of the assets and liabilities and sales and results of the joint venture and are included in the consolidated balance sheet and income statement: 2002 Property, plant and equipment Current assets 2,730 803 3,533 Long term borrowings Provisions for liabilities and charges Current liabilities (1,081) (33) (355) (1,469) Net assets Sales Prot before tax Income taxes Prot after tax 31p46 31p45 Proportionate interest in joint ventures commitments 2,064 5,276 2,271 (749) 1,522 90 2001 2,124 717 2,841 (1,073) (31) (375) (1,479) 1,362 5,618 2,402 (793) 1,609 92
31p47
There are no contingent liabilities relating to the Groups interest in the joint venture. The average number of employees in the joint venture in 2002 was 34 (2001 : 26).
39 Post balance sheet event

10p20 22p96 22p8687 22p88(a) On 1 March 2003 the Group acquired a 100% interest in [name of company] which manufactures paints and is incorporated in [name of country]. The consideration of LC 7,950 was settled in cash. The fair value of the net identiable assets of the company at the date of acquisition was LC 5,145. Goodwill arising on this acquisition of LC 2,805 will be amortised on a straight-line basis over 10 years. [Name of company] will be consolidated with effect from 1 March 2003.
56
Report of the auditors

To the Members of ABC Holdings We have audited the accompanying balance sheet of ABC Holdings (the Company) and its subsidiaries (the Group) as of 31 December 2002 and the related income and cash ow statements for the year then ended. These nancial statements set out on pages 4 to 56 are the responsibility of the Companys management. Our responsibility is to express an opinion on these nancial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signicant estimates made by management, as well as evaluating the overall nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion the nancial statements give a true and fair view of [or present fairly in all material respects] the nancial position of the Group as of 31 December 2002 and of the results of its operations and its cash ows for the year then ended in accordance with International Financial Reporting Standards.
Date
Address
[The format of the audit report will need to be tailored to reect the legal framework of particular countries. In certain countries the audit report covers both the current year and the comparative year.]
57
Index of International Financial Reporting Standards disclosure requirements

This Index identies the nancial statement, or note to the nancial statements, in which the disclosure requirements of a particular International Financial Reporting Standard and Interpretation have been demonstrated in this publication. IAS 15, IAS 26, IAS 29, IAS 30 and IAS 34 are not applicable to these nancial statements. IAS 25 is withdrawn on the adoption of IAS 39 and IAS 40.
Key
G IS
= =
General Information Income Statement Balance Sheet Statement of Changes in Shareholders Equity
Refer Para Refer
CF = AP = 7 = NA =
Cash Flow Statement Accounting Policies Note 7 to the Financial Statements Not applicable to these nancial statements
BS = SE =
FRM = Financial Risk Management

Para Refer Para Refer Para Refer
Para IAS 1
Presentation of Financial Statements
7 ................... G 11 ................AP 13 ...............NA 19 ...............NA 23 ...............NA 38 .................G 40 ............... AP

IAS 2 Inventories
44,46 .............G 49 ............... NA 53 ................ BS 54 .......15,18,22 63 ................NA 6667 .......... BS 72 ....... 18,21,36
73(a) ............ 10 73(b) ....... 15,18 73(c) ............ 16 73(d) ....... 26,27 73(e) ........ SE,BS 74(a) ..............31 74(b) ......... 33
74(c) .............. 9 74(d) ........... NA 75,77 ............ IS 80,82 ............ IS 83 .................. 2 85 .................. 9 86 ........ SE,33
97,99 .......... AP 101.............. AP 102(ab).........G 102(c)............36 102(d).............5
34(a) ............AP 34(bc) .........16

IAS 7
34(d) .............. 2 34(ef) ..........16
36 ............... NA 37(a) ............... 2
37(b) ............NA
Cash Flow Statements
10 ................CF 18(a) ........... NA 18(b) ...... CF,34

IAS 8
21 ................ CF 29 ............... NA 31,35 ........... CF
39 ................ CF 40 ............. 3,35
43 ............10,34 45 .................20
46 ................AP 48 ...............NA
Net Prot or Loss for the Period, Fundamental Errors, Changes in Accounting Policies
10 ................. IS 11 .................. 7
IAS 10
16 .................. 2 30 ............... NA
34,37 ...........NA 38,40 ...........NA
46 ................AP 49,53 .......AP,SE
54,57...........NA
Events Occurring After the Balance Sheet Date
16 ................ BS
IAS 11
20 ....... 22,31,39
Construction Contracts
39(a) ...............1 39(bc) ........ AP

IAS 12 Income Taxes
40(ab) ......... 17
40(c) ............NA
42(a) .............18
42(b)............NA
69 ................ BS 77 ................. IS
79 .................. 6 81(a) .......... 25,3
81(b) .............. 7 81(c) .............. 6
81(d) ............NA 81(eg) ..........25 81(h) ...............3
82.........NA 82A......NA
IAS 14
Segment Reporting
5052 .............1 5558 .............1

IAS 16
61 ................... 1 64 ................... 1
6667 ..............1 69....................1
7072 ..........NA 7476 ..........NA
81....................1
Property, Plant and Equipment
60(ac) ........ AP 60(de) .........10
61(a) ................1 61(bc) ........NA
61(d) .............30 64(ae) ..........10
64(f) ..........SE,33
58
Para
IAS 17 Leases
Refer
Para
Refer
Para
Refer
Para
Refer
Para
Refer
23(a)..............10 23(b) .........22 23(ce) ....NA

IAS 19 Employee Benets
27(a) ............ 30 27(b) ...........NA 27(c) .............. 2
27(d) ...........NA 39(ab) .........15 39(cf) .....NA
48(a) ......... 2,10 48(b) ........... 30 48(c) ... NA
48(d)....NA 56 ...............NA
23 ..36 46 .................. 5 120(a) ......... AP 120(be) .......26

IAS 20
120(f) ........ 5,26 120(gh) ...... 26 122 .............. 26 125 .............NA
131 ................ 5 141 ............ NA 142 ................ 5 143 ... 36
147(a) ....31 147(b) ...... AP 147(c) ......5 147(dg) ....... 31
147(h) .........NA 148(a) .........NA 148(b) ... 31 151 ............. 36
Accounting for Government Grants and Disclosure of Government Assistance
39(a) ........... AP
IAS 21
39(b) .............. 2
39(c) ........... NA
The Effects of Change in Foreign Exchange Rates
42(a) ................4 42(b) ............ 33

IAS 22
42(c) ............ NA 43 ........... NA
44 ................ NA
45 ................ AP
47 ..............FRM
Business Combinations
86,87 ...... 35,39 88(a) ...... AP,39 88(b) ....... AP

IAS 23 Borrowing Costs
88(c) ........... NA 88(d) .............. 2 88(e) ............ 12
91 ............... NA 92 ................ 35
9394 ......... NA 96 ................ 39
9 ................. AP
IAS 24
29(a) ............AP
29(bc) ........ 10
Related Party Disclosures
20 ................ 36
IAS 27
2224 .......... 36
Consolidated Financial Statements and Accounting for Investments in Subsidiaries
8,21 ............NA 26 ............ IS,BS

IAS 28
32(a) ............ 37
32(b)(iiii) ... NA
32(b)(iv) .... 3,35
32(c) ...........NA
Accounting for Investments in Associates
27(a)..............13
IAS 31
27(b).............AP
28......IS,BS,6,13
Financial Reporting of Interests in Joint Ventures
4547 ...........38
IAS 32
48 ...............NA
Financial Instruments: Disclosure and Presentation
18 ................ 24 23 .................23 43A . AP,FRM 47(a) ...AP, FRM
47(b) ........... AP 52 ................AP 54 .......... AP,14, 19,22,28
56(a) ...... 15,22, 23,24,28 56(b) ...... 15,22, 23,24,28
60 ....... 22, FRM 66 ............ FRM 77 .......... 14,19, 22,23,28
88 ...............NA
59
Para
IAS 33
Refer
Para
Refer
Para
Refer
Para
Refer
Para
Refer
Earnings Per Share
43 ............... NA
IAS 35
45 ...... 31
47 ..................IS
49 .................8
51 ................ IS
Discontinuing Operations
27 .................. 3 29 .............. NA
IAS 36 Impairment of Assets
31 ................... 3 33 ............... NA
3536 ......... NA 38 ...................3
39 .............. IS,3 40.............IS,CF
113(a) ............ 2 113(bd) .... NA 116(a) .............1

IAS 37
116(b) ......... NA 117(ab) ... 10,12 117(c) ............12
117(d) .......... 10 117(e) ...... 10,12
117(f) ........... 10 117(g) .........NA
118 ............ NA 122 ............ NA
Provisions, Contingent Liabilities and Contingent Assets
84(ad) ........ 27 84(e) ........... NA 85(a) ............ 27

IAS 38 Intangible Assets
85(b,c) ........ NA 86(a,b) .......... 29
86(c) ........... NA 89 ................ 29
9193..........NA 95................NA
107(ab) ...... AP 107(c) .......... 12

IAS 39
107(d) .............2 107(e) ............12
111(ad) .. NA 111(e) .......... 30
113 .............NA 115 .................2
121 ............ NA 122(a) ........ NA
Financial Instruments; Recognition and Measurement
167(a) .. 14,19 167(ac)... AP
169(ab) AP,FRM 169(b)(ii) .......... 15,18,21,FRM
169(c) ...SE,33 170(ab) ..14, 33
170(c) ....2, 4,14 170(d) ..18,21
170(e) . NA 170 (fh). NA
IAS 40
Investment Property
66(ab) .... AP 66(c) ......11

SIC
66(d)(i) ..... 1 66(d)(ii) ....2
66(d)(iii) ...NA 66(e) .... NA
66(f) ..... 30 67 .. 11
6869 .NA
Interpretations of the Standing Interpretations Committee
SIC 6(5) ... NA SIC 8(7,8) ..... NA
SIC 14(5) ..... NA SIC 16(6) ...... ............ BS,SE, 31
SIC 16(7) ......NA SIC 17(9) ....... ................ .SE,25
SIC 20(10)....NA SIC 22(8) .....NA
Note: the remaining SICs are not shown as they do not contain any disclosure requirements.
International Financial Reporting Standards Illustrative Corporate Financial Statements 2002 is designed for the information of readers. While every effort has been made to ensure accuracy, information contained in this publication may not be comprehensive or may have been omitted which may be relevant to a particular reader. In particular, this publication is not intended as a study of all aspects of International Financial Reporting Standards, or as a substitute for reading the actual Standards and Interpretations when dealing with specic issues. No responsibility for loss to any person acting or refraining from acting as a result of any material in this publication can be accepted by PricewaterhouseCoopers. Recipients should not act on the basis of this publication without seeking professional advice.
60
Page Accounting policies Acquisitions Amortisation Assets held for sale Associates Borrowing costs Balance sheet Borrowings Cash and cash equivalents Cash ow hedges Cash ow statement Changes in accounting policies Commitments Consolidation Construction contracts Contingencies Convertible bonds Current tax Deferred income taxes Depreciation Derivatives Diluted earnings per share Directors remuneration Discontinuing operations Disposals Dividends Earnings per share Employee costs Extraordinary item Fair value hedges Finance costs Finance leases lessee Finance leases lessor Financial instruments Foreign currency translation Forward FX contracts FX gains and losses Goodwill Government grants Hedges Historical cost convention Impairment 918 9, 10, 52 12, 13, 26, 32 35 9, 33 11, 31 5 3840 7, 15, 37 1921, 46 7 6, 32, 50 4748 9 14, 15, 35 47 40 28 16, 28, 4142 11, 26, 3031 18-21, 46 4, 29 54 27 27 30 4, 29 28 29 1821, 46 28 14, 3031, 3839 14, 34, 36 1821, 46 10 1821, 46 28 12, 32, 52 18, 26 1821, 46 9 13, 26, 3031, 32 Income statement Income taxes Intangible assets Interest income/expense Interest rate swaps Inventories Investment property Investments Joint ventures Long term receivables Marketable securities Minority interests Operating costs Operating leases lessee
Operating leases lessor
Page 4 28 1213, 32 28, 51 1821, 46 4, 14, 35 11, 32 13, 18-21, 33 10, 56 34 13, 33 49 26 14, 26, 47
14, 31, 48
Pensions Post balance sheet events Post retirement benets Preferred shares Property, plant & equipment Provisions Redeemable preferred shares Related party transactions Research and development costs Reserves Restructuring costs Revaluation reserves Revenue recognition Sales Segment information Share capital Shareholders equity Share option schemes Share premium Software development Staff costs Subsequent events Subsidiary undertakings Total recognised gains and losses Trade payables Trade receivables Translation differences Treasury shares
1617, 4344 56 1617, 4344 41 10-11, 3031 18, 45 41 5355 12, 26, 32 6, 50 18, 45 50 18 18, 2325 19, 2325 5, 6, 4849 5-6 6, 17, 4849 4849 12, 26, 32 28 56 9, 55 6 37 15, 36 10, 50 5-6, 4849
61
IFRS products and services

PricewaterhouseCoopers has a range of tools and publications to help companies make the change to IFRS and apply the standards (see also the inside front cover)
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TransitionIAS is PricewaterhouseCoopers proven methodology for conversion to IFRS that addresses all issues a company needs to consider in making the change to IFRS. It is suitable for any size of company, in every country and industry. Designed to guide you through the operational, process, organisational and reporting issues associated with transition, the service brings you the expertise of our technical, training and communication specialists as well as our project management resources. For further information please contact your usual PricewaterhouseCoopers representative or your local ofce.
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Copies are available free on the website www.pwcglobal.com/ifrs. For further information, please email the editor Joanna Malvern ([email protected]).
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International Financial Reporting Standards

Illustrative Corporate Financial Statements 2002

Guiding disclosure through IFRS

Format of IFRS Illustrative Corporate Financial Statements

Operating and nancial review

Operating and nancial review (continued)

Consolidated income statement

Consolidated balance sheet

As at 31 December 2002 2001

25,300 18,656 (2,564) 8,393 76,906 126,691 8,484

21,000 11,316 7,500 59,271 99,087 1,806

Consolidated statement of changes in shareholders equity

1p86(c) 1p86(b) 16p64(f) 39p170(a) 1p86(b) 39p169(c )(i) 39p169(c )(ii)

6,364 759 82 28 (36) (12) (6) 18 (87)

93,871 759 82 28 (36) (12) (6) 18

59,271 100 1,245

99,087 40 35 (4,898) 354 1,245

(3,224) 25,154 10,000 1,640 (2,564)

Balance at 31 December 2002

Consolidated cash ow statement

Index to accounting policies

G Impairment of long lived assets H Investments I J K Leases Inventories Construction contracts

U Dividends V Segmental reporting

Accounting policies (continued)

Accounting policies (continued)

C Foreign currency translation

D Property, plant and equipment

Accounting policies (continued)

16p60(b) 1p99(e) 16p60(c)

36p58 16p56 16p39

23p29(a) 1p99(f) 16p25 16p23

Accounting policies (continued)

Accounting policies (continued)

G Impairment of long lived assets

39p30, 167(c) 39p68 39p69 39p167(b) 39p43

Accounting policies (continued)

1p99(j) 32p47(b) SIC15p4

Accounting policies (continued)

M Cash and cash equivalents

Accounting policies (continued)

P Deferred income taxes

Accounting policies (continued)

19p133 19p134 19p139

Accounting policies (continued)

V Segment reporting [listed companies]

Financial risk management

Financial risk management (continued)

Financial risk management (continued)

Notes to the consolidated nancial statements

Notes to the consolidated nancial statements

Vehicle rental 44,709 2,762

211,034 48,624 (959) (2,906) 44,759 (863)

(260) 43,636 (14,706) 28,930 (1,228) 27,702 (2,548) 25,154

212,945 12,984 44,398 270,327

Total liabilities Other segment items

14p57 14p58 14p58 36p116(a) 14p61 DV,14p59

21,914 3,951 1,097 4,935 74 1,986

9,762 2,539 1,371 21

78,835 21,402 2,194 30