Financial Statements

International Financial Reporting Interpretations Committee (IFRIC) 4 ‘Determining whether an arrangement contains a lease’ provides guidance on determining whether arrangements which convey the right to use an asset in return for a series of payments should be accounted for in accordance with IAS 17 ‘Leases’.

IFRIC 5 ‘Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds’ addresses the issues of how a contributor to such a fund should account for its interest in the fund and how obligations to make additional contributions should be accounted for.

IFRIC 6 ‘Liabilities arising from participating in a specific market - Waste electrical and electronic equipment’ relates to the European Union's Directive on waste electrical and electronic equipment, which deals with the responsibility of producers for the backlog of waste for goods sold to private households.

IFRIC 7 ‘Applying the restatement approach under IAS 29, Financial reporting in hyperinflationary economies’ deals with what is meant by the phrase ‘measuring unit, current at the balance sheet date’ and also with how an entity accounts for opening deferred tax items in its restated financial statements.

Amendment to IAS 39 ‘Financial Instruments: Recognition and Measurement: The Fair Value Option’ restricts the ability of entities to designate financial assets and liabilities at fair value through profit or loss to those financial instruments that meet certain specified conditions.

Amendment to IAS 39 ‘Financial Instruments: Recognition and Measurement’, and IFRS 4 ‘Insurance Contracts: Financial Guarantee Contracts’ define a financial guarantee contract and specify which accounting standard will apply to such contracts. Generally, financial guarantee contracts are within the scope of IAS 39. However, where the issuer of a financial guarantee contract has previously asserted that it regards such contracts as insurance contracts, then they may elect to apply either IAS 39 or IFRS 4 to those contracts. The Company accounts for such contracts as insurance contracts.

Amendment to IAS 21 ‘The Effects of Changes in Foreign Exchange Rates’ clarifies the requirements of IAS 21 regarding an entity's investment in foreign operations and, in particular, the treatment of monetary items entered into as net investment hedges.

IFRIC 8 ‘Scope of IFRS 2’ addresses the issue of whether IFRS 2 ‘Share-Based Payment’ applies to transactions in which the entity cannot identify specifically some or all of the goods or services received.

IFRIC 9 ‘Reassessment of Embedded Derivatives’ prohibits reassessment of the treatment of embedded derivatives subsequent to initial recognition unless there is a change in the terms of the contract that significantly modifies the cash flows that otherwise would be required under the contract, in which case reassessment is required.

IFRIC 10 ‘Interim financial reporting and impairment’ states that any impairment losses on goodwill and certain financial assets recognised in an interim financial statement may not be reversed in subsequent interim or annual financial statements.

IFRIC 11 ‘IFRS 2 - Group and treasury share transactions’ provides guidance on whether share-based transactions involving treasury shares or involving subsidiary undertakings (for instance, options over a parent's shares) should be accounted for as equity-settled or cash-settled share-based payment transactions.

IFRS 8 ‘Operating segments’ sets out the requirements for the disclosure of information about an entity's operating segments and about the entity's products and services, the geographical areas in which it operates and its major customers. IFRS 8 achieves convergence with the US accounting standard, SFAS 131 ‘Disclosures about Segments of an Enterprise and Related Information’ with minor differences. If this standard had been implemented in the year ended 31 March 2007, it is not expected that it would have had a material impact on consolidated results or the presentation of those results.

Amendment to IAS 23 ‘Borrowing costs’ removes the option of immediately recognising as an expense borrowing costs that relate to assets that take a substantial period of time to get ready for use or sale. Implementation of this amendment is not expected to have any impact on consolidated results or consolidated assets and liabilities as the Company's accounting policy is to capitalise borrowing costs.

IFRIC 12, ‘Service concession arrangements’ applies to contractual arrangements whereby a private sector operator participates in the development, financing, operation and maintenance of infrastructure for public sector services, for example, under private finance initiative (PFI) contracts. The impact of this interpretation on consolidated results or consolidated assets and liabilities has not yet been assessed.

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