Notes to the Interim Report & Accounts
(unaudited)
1 Basis of preparation
The condensed interim financial information covers the six month period ended 2 February 2008 and has been prepared under International Financial Reporting Standards (IFRS) as adopted by the European Union, in accordance with International Accounting Standard 34 ‘Interim Financial Reporting’ and the Disclosure and Transparency Rules of the Financial Services Authority. It is unaudited but has been reviewed by the auditors and their report is attached to this document.
The interim financial information does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. It should be read in conjunction with the statutory accounts for the period ended 31 July 2007, which were prepared in accordance with IFRS as adopted by the European Union and have been filed with the Registrar of Companies. The auditors’ report on these statutory accounts was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985.
Accounting policies
The condensed interim financial information has been prepared on the basis of the accounting policies applicable for the year ending 31 July 2008. These accounting policies are consistent with those applied in the preparation of the financial statements for the period ended 31 July 2007, except for the adoption of IFRS 7: ‘Financial Instruments: Disclosures’.
The adoption of this standard has no impact on the consolidated financial results or position of the Group for the six months ended 2 February 2008.
Recent accounting developments
The following standards, amendments and interpretations have been issued by the International Accounting Standards Board or by the IFRIC, but have not yet been adopted. Subject to endorsement by the European Union, these will be adopted in future periods. IFRS 8 has been endorsed, and the other standards, amendments and interpretations are being considered for endorsement.
- IFRS 8 'Operating segments'
- IAS 23 'Borrowing costs' (revised)
- IFRIC 12 'Service concession arrangements'
- IFRIC 13 'Customer loyalty programmes'
- IFRIC 14 'The limit of a defined benefit asset, minimum funding requirements and their interaction'
- IAS 27 'Consolidated and separate financial statements' (revised)
- IFRS 3 'Business combinations' (revised)
The adoption of IFRS 3 (revised) will significantly change the recognition of goodwill, acquisition costs and contingent consideration relating to acquisitions. However, it applies only to acquisitions made after it has been adopted, which will minimise any restatements required. IAS 27 (revised) requires different accounting treatment for minority interests but it is not expected to affect the Group’s financial results or position materially. Smiths will determine an appropriate implementation date after these standards have been adopted by the European Union.
For the other standards and interpretations, there has been no change to the expected impact on future annual reports and accounts from those disclosed in the Annual Report and Accounts for the period ended 31 July 2007.
Date of approval
The interim financial statements were approved by the directors on 19 March 2008.