sample ifrs stmt

8/14/2019 Sample IFRS Stmt

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Good Group

(International) LimitedInternational GAAP

Illustrative nancial statements forthe year ended 31 December 2008

Based on International Financial ReportingStandards in issue at 30 September 2008


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Good Group (International) Limited 1

Contents

Abbreviations and key............................................................................................................................................3

Introduction .......................................................................................................................................................... 4

Independent auditors' report to the shareholders of Good Group (International) Limited ........................................ 10

Consolidated income statement............................................................................................................................11

Consolidated balance sheet ..................................................................................................................................13Consolidated statement of changes in equity ........................................................................................................15

Consolidated cash flow statement ........................................................................................................................17

Notes to the consolidated financial statements ..................................................................................................... 19

1. Corporate information ............................................................................................................................19

2.1 Basis of preparation ...............................................................................................................................19

2.2 Changes in accounting policy and disclosures ...........................................................................................20

2.3 Summary of significant accounting policies ..............................................................................................23

3. Significant accounting judgements, estimates and assumptions..................................................................41

4. Standards issued but not yet effective......................................................................................................43

5. Business combinations and acquisition of minority interests ......................................................................45

6. Interest in a joint venture........................................................................................................................48

7. Investment in an associate ......................................................................................................................48

8. Segment information..............................................................................................................................49

9. Other income/expenses and adjustments .................................................................................................51

9.1 Other operating income ..........................................................................................................................51

9.2 Other operating expense.........................................................................................................................51

9.3 Finance costs.........................................................................................................................................52

9.4 Finance income......................................................................................................................................52

9.5 Depreciation, amortisation, foreign exchange differences and costs of inventories included in theconsolidated income statement ...............................................................................................................52

9.6 Employee benefits expense .....................................................................................................................52

9.7 Research and development costs.............................................................................................................52

9.8 Share-based payment plans.....................................................................................................................53

10. Income tax.............................................................................................................................................55

11. Discontinued operation...........................................................................................................................5712. Earnings per share .................................................................................................................................59

13. Property, plant and equipment ................................................................................................................60

14. Investment properties ............................................................................................................................62

15. Intangible assets ....................................................................................................................................62

16. Other financial assets and financial liabilities ............................................................................................63

17. Impairment testing of goodwill and intangibles with indefinite lives.............................................................68

18. Inventories ............................................................................................................................................70

19. Trade and other receivables (current).....................................................................................................71

20. Cash and short-term deposits ..................................................................................................................71

21. Issued capital and reserves .....................................................................................................................72

22. Dividends paid and proposed ...................................................................................................................74


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2 Good Group (International) Limited

23. Provisions .............................................................................................................................................74

24. Government grants ................................................................................................................................75

25. Deferred revenue ...................................................................................................................................76

26. Pensions and other post-employment benefit plans ...................................................................................80

27. Trade and other payables (current) ........................................................................................................80

28. Related party disclosures ........................................................................................................................81

29. Commitments and contingencies .............................................................................................................83

30. Financial risk management, objectives and policies....................................................................................85

31. Events after the balance sheet date .........................................................................................................89

Appendix 1 Consolidated income statement (example of expenses disclosed by nature) ...................................... 90

Appendix 2 - Consolidated cash flow statement - direct method.............................................................................91

Appendix 3 - Segment reporting under IAS 14 Segment Reporting .........................................................................92

Appendix 4 - Business combination accounted for in accordance with IFRS 3 (revised January 2008) ...................96

Appendix 5 - Presentation in accordance with IAS 1 (revised September 2007) ....................................................98

Appendix 6 - Illustrative disclosures for a first-time adopter of IFRS ...................................................................103

Appendix 7 - XBRL: The exchange of interactive financial reporting data.............................................................108

Index ................................................................................................................................................................. 111


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Abbreviations and keyThe following styles of abbreviation are used in this set of International GAAP Illustrative Financial Statements:

IAS 33.41 International Accounting Standard No. 33, paragraph 41

IAS 1.BC.13 International Accounting Standard No. 1, Basis for Conclusions, paragraph 13

IFRS 2.44 International Financial Reporting Standard No. 2, paragraph 44

SIC 29.6 Standing Interpretations Committee Interpretation No. 29, paragraph 6

IFRIC 4.6 International Financial Reporting Interpretations Committee Interpretation No. 4, paragraph 6

IAS 39.IG.G.2 IAS 39 Financial Instruments: Recognition and Measurement Guidance on Implementing IAS 39Section G: Other, paragraph G.2

IAS 39.AG.71 IAS 39 Financial Instruments: Recognition and Measurement Appendix A Application Guidance,paragraph AG71

ISA 700.25 International Standard on Auditing No. 700, paragraph 25

Commentary The commentary explains how the requirements of IFRS have been implemented in arriving at theillustrative disclosure.

GAAP Generally Accepted Accounting Principles/PracticeIASB International Accounting Standards Board

IFRIC International Financial Reporting Interpretations Committee

SIC Standing Interpretations Committee


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Introduction This publication contains an illustrative set of consolidated financial statements of Good Group (International) Limitedand subsidiaries (the Group) for the year ended 31 December 2008. These illustrative financial statements have beenprepared in accordance with International Financial Reporting Standards (IFRS). The Group is a large publicly listedmanufacturing company incorporated in a fictitious country within Europe, whose currency is euros. The functionalcurrency of the parent and the presentation currency of the Group is euros.

This set of illustrative statements is one of many prepared by Ernst & Young to assist you in preparing your own financialstatements. Other model accounts currently available are:

u Good Banku Good Petroleumu Good Insurance

Look for other industry specific illustrative accounts to be added in the future.

Please note that these illustrative financial statements are not designed to satisfy any country or stock market regulatoryrequirements and do not illustrate all possible IFRS accounting or disclosure requirements.

Notations shown on the right hand side of each page are IFRS paragraphs that describe the specific disclosurerequirements. In case of doubt as to the IFRS requirements, it is essential to refer to the relevant sources and, where

necessary, to seek appropriate professional advice.International Financial Reporting StandardsThe abbreviation IFRS is defined in paragraph 5 of the Preface to International Financial Reporting Standards to includestandards and interpretations approved by the IASB, and International Accounting Standards (IASs) and SICinterpretations issued under previous Constitutions. It is also noted in IAS 1.11 and IAS 8.5. Thus, when financialstatements are described as complying with IFRS, it means that they comply with the entire hierarchy of pronouncementssanctioned by the IASB including International Accounting Standards, International Financial Reporting Standards andInterpretations originated by the International Financial Reporting Interpretations Committee or the former StandingInterpretations Committee.

The International Financial Reporting Interpretations CommitteeThe International Financial Reporting Interpretations Committee (IFRIC) is a committee appointed by the IASCFoundation Trustees that assists the IASB in establishing and improving standards of financial accounting and reportingfor the benefit of users, preparers and auditors of financial statements.

The IFRIC addresses issues of reasonably widespread importance, rather than issues of concern to only a small set ofentities. Its interpretations cover both:

u newly identified financial reporting issues not specifically addressed in IFRS; andu issues where unsatisfactory or conflicting interpretations have developed, or seem likely to develop in the absence of

authoritative guidance, with a view to reaching a consensus on the appropriate treatment.


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IFRS as at 30 September 2008The standards applied in these illustrative financial statements are the versions that were in issue as at30 September 2008.

The following Standards and Interpretations have been illustrated in these financial statements:

International Financial Reporting Standards (IFRS)

IFRS 2* Share-based Payment (with amendments issued in January 2008)

IFRS 3 Business Combinations

IFRS 3R Business Combinations (Revised (issued in January 2008) illustrated in Appendix 4)

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations

IFRS 7 Financial Instruments: Disclosures

IFRS 8* Operating Segments

International Accounting Standards (IAS)

IAS 1 Presentation of Financial Statements

IAS 1R Presentation of Financial Statements (Revised (issued in September 2007) illustrated in Appendix 5)

IAS 2 Inventories

IAS 7 Statement of Cash Flows

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

IAS 10 Events after the Reporting Period

IAS 12 Income Taxes

IAS 14 Segment Reporting (illustrated in Appendix 3)

IAS 16 Property, Plant and Equipment

IAS 17 Leases

IAS 18 Revenue

IAS 19 Employee Benefits

IAS 20 Accounting for Government Grants and Disclosure of Government Assistance

IAS 21 The Effects of Changes in Foreign Exchange Rates

IAS 23* Borrowing Costs (with amendments issued in April 2007)

IAS 24 Related Party Disclosures

IAS 27 Consolidated and Separate Financial Statements

IAS 28 Investments in Associates

IAS 31 Interests in Joint Ventures

IAS 32 Financial Instruments: PresentationIAS 33 Earnings per Share

IAS 36 Impairment of Assets

IAS 37 Provisions, Contingent Liabilities and Contingent Assets

IAS 38 Intangible Assets

IAS 39 Financial Instruments: Recognition and Measurement

IAS 40 Investment Property

Interpretations

IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabili ties

IFRIC 4 Determining Whether an Arrangement Contains a Lease

IFRIC 5 Rights to Interests arising from Decommissioning, Restoration and EnvironmentalRehabilitation Funds


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IFRIC 6 Liabilities arising from Participating in a Specific Market Waste Electrical and Electronic Equipment

IFRIC 8 Scope of IFRS 2

IFRIC 9 Reassessment of Embedded Derivatives

IFRIC 10 Interim Financial Reporting and Impairment

IFRIC 11 IFRS 2 Group and Treasury Share Transactions

IFRIC 13* Customer Loyalty Programmes

IFRIC 14 IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

IFRIC 16 Hedges of a Net Investment in a Foreign Operation

SIC 12 Consolidation Special Purpose Entities

SIC 13 Jointly Controlled Entities Non-Monetary Contributions by Venturers

SIC 15 Operating Leases Incentives

SIC 21 Income Taxes Recovery of Revalued Non-Depreciable Assets

SIC 27 Evaluating the Substance of Transactions In the Legal Form of a Lease

SIC 32 Intangible Assets Web Site Costs

The following Standards and Interpretations have no t been illustrated in these financial statements:IFRS 1 First-time Adoption of International Financial Reporting Standards (illustrated in Appendix 7)

IFRS 4 Insurance Contracts

IFRS 6 Exploration for and Evaluation of Mineral Resources

IAS 11 Construction Contracts

IAS 26 Accounting and Reporting by Retirement Benefit Plans

IAS 29 Financial Reporting in Hyperinflationary Economies

IAS 34 Interim Financial Reporting

IAS 41 Agriculture

IFRIC 2 Members Shares in Co-operative Entities and Similar Instruments

IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies

IFRIC 12 Service Concession Arrangements

IFRIC 15 Agreements for the Construction of Real Estate

SIC 7 Introduction of the Euro

SIC 10 Government Assistance No Specific Relation to Operating Activi ties

SIC 25 Income Taxes Changes in the Tax Status of an Entity or i ts Shareholders

SIC 29 Service Concession Arrangements: Disclosures

SIC 31 Revenue Barter Transactions Involving Advertising Services

Asterisk (*) indicates early adoption of the standard (or amendments) by the Group in 2008.

It is important to note that the IASB may issue further new and revised standards and interpretations subsequent to30 September 2008. Therefore, users of this publication are advised to verify that there has been no change in the IFRSrequirements between 30 September 2008 and their reporting date.


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Changes contained in 2008 edition of Good Group (International) Limited AnnualFinancial StatementsThese illustrative financial statements have changed since the 2007 edition due to new standards and interpretationsissued since 31 August 2007. We have also added significantly more complex transactions that are commonly enteredinto in order to reflect the disclosures.

IFRS 2 Share-Based Payment (Amendments) The IASB issued an amendment to IFRS 2 in January 2008 that clarifies the definition of a vesting condition and

prescribes the treatment for an award that is cancelled. This amendment will be effective for financial years beginning onor after 1 January 2009. Good Group (International) Limited illustrates early adoption of the amendment(See Note 2.2).

IFRS 3 Business Combinations Revised The IASB issued the revised Business Combinations standard in January 2008 which will be effective for financial yearsbeginning on or after 1 July 2009. The standard introduces changes in the accounting for business combinations thatwill impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and futurereported results. The revised standard has not been early adopted by Good Group (International) Limited. The Groupillustrates the disclosure of standards that have been issued but are not yet effective in Note 2.5. Appendix 4 illustratesthe required disclosures if IFRS 3 revised had applied.

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations

IFRS 5 specifies certain disclosures required in respect of discontinued operations and non-current assets held for sale.However, some other standards such as IFRS 7 Financial Instruments: Disclosure do not exclude these from its scope.In previous editions of Good Group, we illustrated these disclosures, but it is clear that dfferent views prevailed in themarketplace. During 2007, the IFRIC and the IASB discussed this issue and concluded that it was intended that IFRSs onlyapply to disclosures (and have subsequently issued an amendment as part of the ED Improvements to IFRS to reflect thisclarification). This edition of Good Group (International) Ltd reflects this clarification.

IFRS 8 Operating Segments The IASB issued IFRS 8 in November 2006 which will be effective for financial years beginning on or after 1 January2009. IFRS 8 will replace IAS 14 Segment Reporting . Good Group (International) Limited illustrates early adoption ofthe standard (see Note 5). Entities that do not early adopt IFRS 8 will continue to apply IAS 14 . Disclosures requiredunder IAS 14 are illustrated in Appendix 3.

IAS 1 Presentation of Financial Statements (Revised)The IASB issued revised IAS 1 Presentation of Financial Statements in September 2007 which will be effective forfinancial years beginning on or after 1 January 2009. The Standard separates owner and non-owner changes in equity.Therefore, the statement of changes in equity will include only details of transactions with owners, with all non-ownerchanges in equity presented as a single line. In addition, the Standard introduces a statement of comprehensive income:presenting all items of income and expense recognised in the income statement, together with all other items ofrecognised income and expense, either in one single statement, or in two linked statements. This revised standard hasnot been early adopted, and therefore Good Group (International) Limited illustrates the disclosure of standards thathave been issued but are not yet effective in Note 2.5. Appendix 5 to the financial statements illustrates the disclosuresunder the revised standard.

IAS 23 Amendment - Borrowing Costs (Revised) The IASB issued an amendment to IAS 23 in April 2007. The revised IAS 23 requires capitalisation of borrowing costs

that are directly attributable to the acquisition, construction or production of a qualifying asset. The revised IAS 23 willbe effective for financial years beginning on or after 1 January 2009. Good Group (International) Limited has earlyadopted the revised IAS 23 in this edition (see Note 2.4 and Note 11).

Improvements to IFRSsIn May 2008 the Board issued its first omnibus of amendments to its standards, primarily with a view to removeinconsistencies and clarifying wording. There are separate transitional provisions for each standard. Good Group(International) Limited illustrates early adoption of the revised standards which have an impact on its financialstatement. (See Note 2.2 and Note 2.5).

IFRIC 11 IFRS 2 Group and Treasury Share TransactionThe 2007 publication of Good Group (International) Limited illustrated early adoption of this interpretation that becameeffective for financial years beginning on or after 1 January 2008. This interpretation has been reflected in this

publication as if it was adopted for the first time in 2008.


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Good Group(International) Limited

Consolidated Financial Statements

31 December 2008


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Independent auditors report to the shareholders ofGood Group (International) LimitedWe have audited the accompanying financial statements of Good Group (International) Limited and its subsidiaries(the Group), which comprise the consolidated balance sheet as at 31 December 2008 and the consolidated incomestatement, consolidated statement of changes in equity and consolidated cash flow statement for the year then ended,and a summary of significant accounting policies and other explanatory notes.

Managements responsibility for the financial statementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance withInternational Financial Reporting Standards. This responsibility includes: designing, implementing and maintaininginternal control relevant to the preparation and fair presentation of financial statements that are free from materialmisstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and makingaccounting estimates that are reasonable in the circumstances.

Auditors responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our auditin accordance with International Standards on Auditing. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are

free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditors judgment, including the assessment of the risks of materialmisstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the entity's preparation and fair presentation of the financial statements in order todesign audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion onthe effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of accounting estimates made by management, as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as of31 December 2008, and of its financial performance and its cash flows for the year then ended in accordance withInternational Financial Reporting Standards.

Professional Accountants & Co.

28 January 2009

17 Euroville High Street

Euroville

CommentaryThe audit report has been prepared in accordance with ISA 700 The Independent Auditors Report on a Complete Set of GeneralPurpose Financial Statements . The audit report may differ depending on the requirements of different jurisdictions.


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Consolidated income statement

for the year ended 31 December 2008IAS 1.8(b)

IAS 1.46(a) ,(b), (c)

2008 2007Restated* IAS 8.28

Notes 000 000 IAS 1.46(d), (e)Continuing operationsSale of goods 190,599 172,864 IAS 18.35(b)(i)Rendering of services 17,131 16,537 IAS 18.35(b)(ii)Revenue from redemption of GoodPoints 1,375 1,125 IAS 18.35(b)(ii)Rental income 1,404 1,377 IAS 18.35(c)Revenue 210,509 191,903 IAS 1.81(a)

Cost of sales (163,691) (155,268) IAS 1.88, IAS 1.92Gross profit 46,818 36,635 IAS 1.83, IAS 1.92

Other income 9.1 1,585 2,548 IAS 1.92Selling and distribution costs (14,000) (13,002) IAS 1.92Administrative expenses (18,665) (13,657) IAS 1.92Other operating expenses 9.2 (1,088) (706) IAS 1.92Operating profit 14,650 11,818 IAS 1.83Finance costs 9.3 (3,152) (1,561) IAS 1.81(b), IFRS 7.20Finance income 9.4 1,635 724 IAS 1.81(a)Share of profit of an associate 7 83 81 IAS 1.81(c), IAS 28.38Profit before tax 13,216 11,062 IAS 1.83

Income tax expense 10 (4,120) (3,432) IAS 1.81(d), IAS 12.77Profit for the year from continuing operations 9,096 7,630 IAS 1.83

Discontinued operations

Profit/(loss) after tax for the year fromdiscontinued operations 11 220 (188) IAS 1.81(e), IFRS 5.33(a)Profit for the year 9,316 7,442 IAS 1.81(f)

Attributable to:Equity holders of the parent 9,028 7,203 IAS 1.82(b)Minority interests 288 239 IAS 1.82(a), IAS 27.33

9,316 7,442

Earnings per share 12 IAS 33.66u basic, profit for the year attributable to

ordinary equity holders of the parent 0.43 0.38u diluted, profit for the year attributable to

ordinary equity holders of the parent 0.43 0.37

Earnings per share for continuing operationsu basic, profit from continuing operations

attributable to ordinary equity holders ofthe parent 0.42 0.39

u diluted, profit from continuing operationsattributable to ordinary equity holders ofthe parent 0.42 0.38

* Certain numbers shown here do not correspond to the 2007 financial statements and reflect adjustments made as detailed in Note 2.2.


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CommentaryIAS 1.81(a) requires disclosure of total revenue as a line item on the face of the income statement. In addition to this, Good Group(International) Limited has presented the various types of revenues on the face of the income statement. Please note that thisinformation could also be given in the notes (per IAS 1.86).

IAS 1.88 requires expenses to be analysed by nature of expense or by their function within the entity, whichever provides informationthat is reliable and more relevant. Good Group (International) Limited has presented the analysis of expenses by function. Appendix 1illustrates the income statement if the analysis by nature is used.

There is no specific requirement to identify on the face of the financial statements whether there have been adjustments made to

the amounts disclosed in the prior period financial statements. IAS 8 requires details to be given only in the notes. Good Group(International) Limited illustrates how an entity may supplement the requirements of the standard so that it is clearer to the readerthat the numbers have been adjusted.

IAS 33.68 requires presentation of basic and diluted amounts per share for discontinued operations either on the face of the incomestatement or in the notes to the financial statements. Good Group (International) Limited has elected to show this information withother disclosures required for discontinued operations in Note 8, and shows the information for continuing operations on the face ofthe income statement.


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Consolidated balance sheet

as at 31 December 2008IAS 1.8(a)IAS 1.46(a), (b), (c)

2008 2007Restated* IAS 8.28

Notes 000 000 IAS 1.46(d), (e)AssetsNon-current assets IAS 1.51Property, plant and equipment 13 34,411 25,811 IAS 1.68(a)Investment properties 14 8,893 7,983 IAS 1.68(b)Intangible assets 15 6,195 2,461 IAS 1.68(c)Investment in an associate 7 764 681 IAS 1.68(e), IAS 28.38Other non-current financial assets 16 7,085 3,491 IAS 1.68(d), IFRS 7.8Deferred tax asset 10 383 365 IAS 1.68(n), IAS 1.70

57,731 40,792Current assets IAS 1.51Inventories 18 24,875 25,489 IAS 1.68(g)Trade and other receivables 19 27,672 24,290 IAS 1.68(h), IFRS 7.8(c)Prepayments 244 165 IAS 1.69Other current financial assets 16 1,129 153 IAS 1.68(d), IFRS 7.8Cash and short-term deposits 20 16,460 14,916 IAS 1.68(i)

70,380 65,013Assets of disposal group classified as held for sale 11 13,554 IAS 1.68A(a), IFRS 5.38

83,934 65,013Total assets 141,665 105,805

Equity and liabilitiesEquity attributable to equity holders of the parent IAS 1.68(p)Issued capital 21 22,028 19,453 IAS 1.68(p), IAS 1.75(e)Share premium 21 4,906 135 IAS 1.68(p), IAS 1.75(e)Treasury shares 21 (774) (774) IAS 1.68(p), IAS 1.75(e)Other capital reserves 21 228 228 IAS 1.68(p), IAS 1.75(e)Retained earnings 37,856 30,720 IAS 1.68(p), IAS 1.75(e)Other reserves 21 762 (37) IAS 1.68(p), IAS 1.75(e)Reserves of disposal group classified as held for sale 11 46

65,052 49,725Minority interests 2,310 740 IAS 1.68(o), IAS 27.33Total equity 67,362 50,465Non-current liabilities IAS 1.51Interest-bearing loans and borrowings 16 20,856 22,203 IAS 1.68(l)Other non-current financial liabilities 16 1,011 IAS 1.68(l), IFRS 7.8(e)Provisions 23 1,950 77 IAS 1.68(k)Government grants 24 3,300 1,400 IAS 20.24Deferred revenue 25 196 165 IAS 1.69Employee benefit liability 26 1,094 655 IAS 1.68(k), IAS 1.75(d)Other liabilities 263 232 IAS 1.69Deferred tax liability 10 3,565 1,787 IAS 1.68(n), IAS 1.70

32,235 26,519Current liabilities IAS 1.51Trade and other payables 27 20,242 21,281 IAS 1.68(j)Interest-bearing loans and borrowings 16 2,460 2,775 IAS 1.68(l), IFRS 7.8(f)Other current financial liabilities 16 1,281 303 IAS 1.68(l), IFRS 7.8(e)Government grants 24 149 151 IAS 20.24Deferred revenue 25 220 200 IAS 1.69Income tax payable 4,141 4,013 IAS 1.68(m)Provisions 23 450 98 IAS 1.68(k)

28,943 28,821Liabilities directly associated with the assetsclassified as held for sale 11 13,125 IAS 1.68A(b), IFRS 5.38

42,068 28,821Total liabilities 74,303 55,340Total equity and liabilities 141,665 105,805* Certain numbers shown here do not correspond to the 2007 financial statements and reflect adjustments made as detailed in Note 2.2 and Note 5.


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Commentary There is no specific requirement to identify on the face of the financial statements whether there have been adjustments made tothe amounts disclosed in the prior period financial statements. IAS 8 requires details to be given only in the notes. Good Group(International) Limited illustrates how an entity may supplement the requirements of the standard so that it is clearer to the readerthat the numbers have been adjusted.

In accordance with IAS 1.51, Good Group (International) Limited has classified its balance sheet into current and non-current assets,and current and non-current liabilities. IAS 1 requires that entities should present assets and liabilities broadly in order of their liquiditywhen this presentation is reliable and more relevant.


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Consolidated statement of changes in equity

for the year ended 31 December 2008IAS 1.8(c)(i)IAS 1.46(a),(b), (c)

Attributable to equity holders of the parent

Issuedcapital

(Note 21)

Sharepremium

(Note 21)

Treasuryshares

(Note 21)

Other

capitalreserves

(Note 21)Retainedearnings

Otherreserves

(Note 21)Discontinued

operations TotalMinority

interestsTotal

equity000 000 000 000 000 000 000 000 000 000 IAS 1.46(d),(e)

At 1 January2008 19,453 135 (774) 228 30,720 (37) 49,725 740 50,465

IAS 1.97(b),(c)

Revaluation ofland and buildings 592 592 - 592

IAS 1.96(b)IAS 16.77(f)

Net depreciationtransfer for landand buildings 80 (80)

IAS 1.96(b)IAS 16.41

Net loss onavailable-for-salefinancial assets (42) (42) (42)

IAS 1.96(b)IFRS7.20(a)(ii)

Net gains on cashflow hedges 128 128 128

IAS 1.96(b)IFRS 7.23(c)

Foreign currencytranslation (246) (246) (246)

IAS 1.96(b)IAS 21.52(b)

Net gains onhedge of netinvestment 186 186 186

IAS 1.96(b)IAS 39.102(a)

Net income andexpense for theyear recogniseddirectly in equity 80 538 618 618 IAS 1.96(b)

Profit for the year 9,028 9,028 288 9,316 IAS 1.96(a)Total incomeand expense for

the year 9,108 538 9,646 288 9,934 IAS 1.96(c)Discontinuedoperation(Note 11) (46) 46 IFRS 5.38Issue of sharecapital (Note 21) 2,500 4,703 7,203 7,203 IAS 1.97(c)

Transaction costs (32) (32) (32)IAS 32.39

Exercise of options(Note 21) 75 100 175 175IAS 1.97(c)

Share-basedpayment(Note 9.8) 307 307 307

IAS 1.97(c)IFRS 2.50

Dividends(Note 22) (1,972) (1,972) (30) (2,002)

IAS 1.95IAS 1.97(a)

Minority interestarising on businesscombination(Note 5) 1,447 1,447

Acquisition ofminority interests(Note 5) (135) (135)

At 31 December2008

22,028 4,906 (774) 228 37,856 762 46 65,052 2,310 67,362

CommentaryIAS 1 Presentation of Financial Statements does not specify how a transfer between two categories within equity is to be presented.Good Group (International) Limited has elected to present the transfer of net depreciation for land and buildings from other reservesto retained earnings as part of total income and expense for the year recognised directly in equity. However, this transfer could also

be presented as part of other changes in equity.


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Consolidated statements of changes in equity

for the year ended 31 December 2007 RestatedIAS 1.8(c)(i)IAS 1.46 (b),(c)

Attributable to equity holders of the parent IAS 8.28

Issuedcapital

(Note 21)Share

premium

Treasuryshares

(Note 21)

Other

capitalreserves

(Note 21)Retainedearnings

Otherreserves

(Note 21) TotalMinority

interestsTotal

equity000 000 000 000 000 000 000 000 000 IAS 1.46(d), (e)

At 1 January 2007(restated)* 19,388 - (774) 228 25,117 (244) 43,715 208 43,923

IAS 1.97(b),(c)

Net gains onavailable-for-salefinancial assets 2 2 2

IAS 1.96(b)IFRS7.20(a)(ii)

Net gains on cashflow hedges 24 24 24

IAS 1.96(b)IFRS 7.23(c)

Foreign currencytranslation (117) (117) (117)

IAS 1.96(b)IAS 21.52(b)

Net income andexpense for theyear recogniseddirectly in equity (91) (91) (91) IAS 1.96(b)

Profit for the year 7,203 7,203 239 7,442 IAS 1.96(a)

Total income andexpense for theyear 7,203 (91) 7,112 239 7,351 IAS 1.96(c)

Exercise of options(Note 21) 65 135 200 200 IAS 1.97(c)

Share-basedpayment(Note 9.8) 298 298 298

IAS 1.97(c)IFRS 2.50

Equity dividends(Note 22) (1,600) (1,600) (49) (1,649)

IAS 1.95IAS 1.97(a)

Minority interestarising on businesscombination(Note 5) 342 342At 31 December2007

19,453 135 (774) 228 30,720 (37) 49,725 740 50,465

* Certain numbers shown here do not correspond to the 2007 financial statements and reflect adjustments made as detailed in Note 2.2.

CommentaryIAS 1.96 requires entities to present a statement of changes in equity or a statement of recognised income and expense. Good Group(International) Limited has elected to present a statement of changes in equity.

If entities apply the policy in IAS 19 to recognise all actuarial gains and losses in the period in which they occur outside of the incomestatement, then IAS 19.93B requires entities to present a statement of recognised income and expense.

Good Group (International) Limited has elected to present all the information required for the statement of changes in equity on theface of the statement. Transactions with equity holders acting in their capacity as equity holders and the reconciliations of retainedearnings, contributed equity and other reserves could alternatively be presented in the notes to the financial statements.

IFRS 2.7 requires entities to recognise an increase in equity when goods or services are received in an equity-settled share-basedpayment transaction. However, IFRS 2 does not specify where in equity this should be recognised. The Group has chosen to recognisethe credit in other reserves.


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Consolidated cash flow statement

for the year ended 31 December 2008

2008 2007IAS 1.8(d)

IAS 1.46 (b), (c)

Restated* IAS 8.28Notes 000 000 IAS 1.46(d), (e)

Operating activities IAS 7.10, IAS 7.18(b)Profit before tax from continuing operations 13,216 11,062Profit/(Loss) before tax from discontinued operations 11 213 (193) Profit before tax 13, 429 10, 869 Adjustment to reconcile profit before tax to net cash flowsNon-cash: IAS 7.20(b)

Depreciation and impairment of property, plantand equipment 13 3,907 3,383Amortisation and impairment of intangible assets 15 125 174Share-based payments expense 9.8 412 492Decrease in investment properties 14 306 300Decrease in financial instruments 725 Gain on disposal of property, plant and equipment 9.1 (532) (2,007)

Finance income 9.4 (786) (724) IAS 7.20(c)Finance cost 9.3 2,036 1,561 IAS 7.20(c)Share of net profit of associate 7 (83) (81) Movements in provisions, pensions andgovernment grants (438) 107

Working capital adjustments: IAS 7.20(a)Increase in trade and other receivables and prepayments (8,877) (2,161) Decrease in inventories 4,091 2,185Increase in trade and other payables 3,599 2,523Income tax paid (3,831) (3,311) IAS 7.35Net cash flows from operating activities 14,083 13,310

Investing activities IAS 7.10, IAS 7.21

Proceeds from sale of property, plant and equipment 1,990 2,319 IAS 7.16(b)Purchase of property, plant and equipment 13 (10,352) (7,822) IAS 7.16(a)Purchase of investment properties 11 (1,216) (1,192) IAS 7.16(a)Purchase of financial instruments (3,969) (225) IAS 7.16(c)Proceeds from sale of financial instruments 232 - IAS 7.16(d)Purchase of intangible assets 15 (587) (390) IAS 7.16(a)Acquisition of a subsidiary, net of cash acquired 5 (370) (1,450) IAS 7.39Receipt of government grant 24 2,951 642Acquisition of minority interest 5 (325) - Interest received 336 724 IAS 7.31Net cash flows used in investing activities (11,310) (7,394)

Financing activities IAS 7.10, IAS 7.21Proceeds from exercise of options 21 175 200 IAS 7.17(a)Transaction costs of issue of shares 21 (32) - Payment of finance lease liabilities (51) (76) IAS 7.17(e)Proceeds from borrowings 5,253 2,645 IAS 7.17(c)Repayment of borrowings (135) (1,784) IAS 7.17(d)Interest paid (1,502) (1,321) IAS 7.31Dividends paid to equity holders of the parent 22 (1,972) (1,600) IAS 7.31Dividends paid to minority interests (30) (49) IAS 7.31Net cash flows used in financing activities 1,706 (1,985)

Net increase in cash and cash equivalents 4,479 3,931Net foreign exchange difference 43 19 IAS 7.28Cash and cash equivalents at 1 January 20 12,266 8,316Cash and cash equivalents at 31 December 20 16,788 12,266

* Certain numbers shown here do not correspond to the 2007 financial statements and reflect adjustments made as detailed in Note 2.2, Note 5 and Note 13.


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CommentaryIAS 7.18 allows entities to report cash flows from operating activities using either the direct method or the indirect method.Good Group (International) Limited presents its cash flows using the indirect method. The cash flow statement prepared using thedirect method for operating activities is presented in Appendix 2 for illustrative purposes.

Good Group (International) Limited has reconciled profit before tax to net cash flows from operating activities. However, areconciliation from profit after tax is also acceptable under IAS 7.

IAS 7 permits interest paid to be shown as operating or financing activities and interest received to be shown as operating or investingactivities, as deemed relevant for the entity. Good Group (International) Limited classifies interest received as an investing activity as

it relates primarily to investments. Interest paid is classified as a financing activity as it relates to the cost of obtainingfinancial resources.


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Notes to the consolidated financial statements


1. Corporate information IAS 1.8(e)IAS 1.46(b), (c)The consolidated financial statements of Good Group (International) Limited (the Group) for the yearended 31 December 2008 were authorised for issue in accordance with a resolution of the directors on 28January 2009. The Group is a limited company incorporated and domiciled in Euroland whose shares are

publicly traded. The registered office located at Homefire House, Ashdown Square in Euroville.The principal activities of the Group are described in Note 8.

IAS 1.126(a)

IAS 10.17

IAS 1.126(b)

2.1 Basis of preparationThe consolidated financial statements have been prepared on a historical cost basis, except for investmentproperties, land and buildings, derivative financial instruments and available-for-sale financial assets thathave been measured at fair value. The carrying values of recognised assets and liabilities that are hedgeditems in fair value hedges that would otherwise be carried at cost, are adjusted to record changes in the fairvalues attributable to the risks that are being hedged. The consolidated financial statements are presented ineuros and all values are rounded to the nearest thousand (000) except when otherwise indicated.

IAS 1.103(a)

IAS 1.108(a)

IAS 1.46(d), (e)

Statement of complianceThe consolidated financial statements of the Group have been prepared in accordance with InternationalFinancial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

IAS 1.14

Basis of consolidationThe consolidated financial statements comprise the financial statements of Good Group (International)Limited and its subsidiaries as at 31 December 2008.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtainscontrol, and continue to be consolidated until the date that such control ceases.

The financial statements of the subsidiaries are prepared for the same reporting period as the parentcompany, using consistent accounting policies.

IAS 27.12

IAS 27.30

IAS 27.26IAS 27 28

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-grouptransactions are eliminated in full.IAS 27.24

Minority interests represent the portion of profit or loss and net assets that is not held by the Group and arepresented separately in the consolidated income statement and within equity in the consolidated balancesheet, separately from parent shareholders' equity. Acquisitions of minority interests are accounted for usingthe parent entity extension method, whereby, the difference between the consideration and the book value ofthe share of the net assets acquired is recognised in goodwill.

IAS 27.33

CommentaryThe acquisition of minority interests is not a business combination under IFRS 3 and there is no specific accounting prescribed for thistype of transaction in other IFRS. Per IAS 8.10, management must apply judgment to determine a suitable accounting policy fortransactions where there is no standard or interpretation that specifically applies. Several approaches may be acceptable but the

approach chosen must be consistently applied.Good Group (International) Limited illustrates the use of the parent entity extension method but other methods may be acceptable.The revisions to IAS 27 becoming effective in financial years beginning on or after 1 July 2009 specifically address this, as explainedin Note 4.


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2.2 Changes in accounting policy and disclosures IAS 8.14

The accounting policies adopted are consistent with those of the previous financial year except as follows:

The Group has adopted the following new and amended IFRS and IFRIC interpretations as of 1 January 2008.

u IFRIC 11 IFRS 2 Group and Treasury Share Transactions u IFRIC 12 Service Concession Arrangements u IFRIC 14 IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and

their Interaction

The Group has also early adopted the following IFRS and IFRIC interpretations as of 1 January 2008.u IFRS 2 Share-based Payment (Revised) effective 1 January 2009 u IFRS 8 Operating Segments effective 1 January 2009 u IAS 23 Borrowing Costs (Revised) effective 1 January 2009 u IFRIC 13 Customer Loyalty Programmes effective 1 July 2008

Adoption of these standards and interpretations did not have any effect on the financial performance orposition of the Group except for IAS 23 and IFRIC 13. They did however give rise to additional disclosures,including, in some cases, revisions to accounting policies.

IAS 8.28(f)

The principal effects of these changes are as follows: IAS 8.28

IFRS 2 Share-based Payment (Revised)The IASB issued an amendment to IFRS 2 in January 2008 that clarifies the definition of a vesting conditionand prescribes the treatment for an award that is effectively cancelled. The Group early adopted thisamendment as of 1 January 2008. It did not have an impact on the financial position or performance of theGroup as no events occurred that this interpretation relates to.

IFRS 8 Operating SegmentsThe IASB issued IFRS 8 in November 2006. IFRS 8 replaces IAS 14 Segment Reporting (IAS 14) upon itseffective date. The Group early adopted this amendment as of 1 January 2008. The Group concluded thatthe operating segments determined in accordance with IFRS 8 are the same as the business segments

previously identified under IAS 14. IFRS 8 disclosures are shown in Note 8, including the related revisedcomparative information.

CommentaryGood Group (International) Limited has a non-complex structure of different business activities. Therefore, the operating segmentsdetermined in accordance with IFRS 8 are the same as the business segments previously identified under IAS 14. The more complexthe group structure, the more likely it is that the segments identified will not be the same as those identified when applying IAS 14.

Please refer to our publication IFRS 8 Operating Segments: Implementation Guidance for further information. The publication isavailable for download on www.ey.com/ifrs.

IAS 23 Borrowing Costs (Revised)The IASB issued an amendment to IAS 23 in April 2007. The revised IAS 23 requires capitalisation of

borrowing costs that are directly attributable to the acquisition, construction or production of a qualifyingasset. The Groups previous policy was to expense borrowing costs as they were incurred. In accordance withthe transitional provisions of the amended IAS 23, the Group has adopted the standard on a prospectivebasis. Therefore, borrowing costs are capitalised on qualifying assets with a commencement date on or after1 January 2008. During the 12 months to 31 December 2008, 303,000 of borrowing costs have beencapitalised on long-term construction in progress.


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2.2 Changes in accounting policy and disclosures continued Improvements to IFRSsIn May 2008 the Board issued its first omnibus of amendments to its standards, primarily with a view toremoving inconsistencies and clarifying wording. There are separate transitional provisions for each standard.Good Group (International) Limited has early adopted the following amendments to standards:

u IAS 1 Presentation of Financial Statements : Assets and liabilities classified as held for trading inaccordance with IAS 39 Financial Instruments: Recognition and Measurement are not automaticallyclassified as current in the balance sheet. The Group amended its accounting policy accordingly andanalysed whether Managements expectation of the period of realisation of financial assets and liabilitiesdiffered from the classification of the instrument. This did not result in any re-classification of financialinstruments between current and non-current in the balance sheet.

u IAS 16 Property, Plant and Equipment : Replace the term net selling price with fair value less costs tosell. The Group amended its accounting policy accordingly, which did not result in any change in thefinancial position.

u IAS 23 Borrowing Costs: The definition of borrowing costs is revised to consolidate the two types of itemsthat are considered components of borrowing costs into one the interest expense calculated using theeffective interest rate method calculated in accordance with IAS 39. The Group has amended its

accounting policy accordingly which did not result in any change in its financial position.u IAS 28 Investment in Associates: If an associate is accounted for at fair value in accordance with IAS 39,

only the requirement of IAS 28 to disclose the nature and extent of any significant restrictions on theability of the associate to transfer funds to the entity in the form of cash or repayment of loans applies.This amendment has no impact on the Group as it does not account for its associates at fair value inaccordance with IAS 39.An investment in an associate is a single asset for the purpose of conducting the impairment test.Therefore, any impairment test is not separately allocated to the goodwill included in the investmentbalance. This amendment has no impact on the Group because this policy was already applied.

u IAS 31 Interest in Joint ventures: If a joint venture is accounted for at fair value, in accordance with IAS39, only the requirements of IAS 31 to disclose the commitments of the venturer and the joint venture, aswell as summary financial information about the assets, liabilities, income and expense will apply. This

amendment has no impact on the Group because it does not account for its joint ventures at fair value inaccordance with IAS 39.u IAS 36 Impairment of Assets: When discounted cash flows are used to estimate fair value less cost to sell

additional disclosure is required about the discount rate, consistent with disclosures required when thediscounted cash flows are used to estimate value in use. This amendment has no immediate impact onthe consolidated financial statements of the Group because the recoverable amount of its cash generatingunits is currently estimated using value in use.

u IAS 38 Intangible Assets : Expenditure on advertising and promotional activities is recognised as anexpense when the Group either has the right to access the goods or has received the service. Thisamendment has no impact on the Group because it does not enter into such promotional activities.

The reference to there being rarely, if ever, persuasive evidence to support an amortisation method ofintangible assets other than a straight-line method has been removed. The Group reassessed the useful

lives of its intangible assets and concluded that the straight-line method was still appropriate.IFRIC 11 IFRS 2 Group and Treasury Share TransactionsThe Group has adopted IFRIC Interpretation 11 insofar as it applies to consolidated financial statements.This interpretation requires arrangements whereby an employee is granted rights to an entitys equityinstruments to be accounted for as an equity-settled scheme, even if the entity buys the instruments fromanother party, or the shareholders provide the equity instruments needed. The Group amended its accountingpolicy accordingly. The Group has not issued instruments caught by this interpretation.

IFRIC 12 Service Concession Arrangements The IFRIC issued IFRIC 12 in November 2006. This interpretation applies to service concession operatorsand explains how to account for the obligations undertaken and rights received in service concessionarrangements. No member of the Group is an operator and, therefore, this interpretation has no impact onthe Group.


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2.2 Changes in accounting policy and disclosures continued IFRIC 13 Customer Loyalty ProgrammesThe IFRIC issued IFRIC 13 in June 2007. This interpretation requires customer loyalty credits to be accountedfor as a separate component of the sales transaction in which they are granted. A portion of the fair value ofthe consideration received is allocated to the award credits and deferred. This is then recognised as revenueover the period that the award credits are redeemed. The Group maintains a loyalty points programme,GoodPoints , within its electronics segment and has historically recorded a liability at the time of sale based onthe costs expected to be incurred to supply products in the future. IFRIC 13 has no specific provisions ontransition. Therefore, the Group has followed IAS 8 Accounting Policies, Changes in Accounting Estimatesand Errors, applying the changes retrospectively. The prior year financial information has thereforebeen restated.

As a result of the adoption of IFRIC 13, the following adjustments were made to the 2007financial information:

As of 1 January 2007:

Net increase in deferred tax asset: 54,000

Net increase in liabilities: 180,000Net decrease in opening retained earnings: 126,000

As of 31 December 2007:

Net increase in deferred tax asset: 65,000

Net increase in liabilities: 215,000

Net decrease in revenues: 175,000

Net decrease in cost of sales: 140,000

Net decrease in tax expense: 11,000

Decrease in profit after tax: 24,000

The effect on earnings per share related to the restatement in 2007 was less than 0.01.

The amended revenue recognition policy is in Note 3.

IAS 8.28(g)

IAS 8.28(f)

IAS 8.28(f)(ii)

IFRIC 14 IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their InteractionIFRIC Interpretation 14 provides guidance on how to assess the limit on the amount of surplus in a definedbenefit scheme that can be recognised as an asset under IAS 1 Employee Benefits. The Group amended itsaccounting policy accordingly. The Groups defined benefit schemes have been in deficit, therefore theadoption of this interpretation had no impact on the financial position or performance of the Group.


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2.3 Summary of significant accounting policies IAS 1.103(b)IAS 1.108(a),(b)

Business combinations and goodwillBusiness combinations are accounted for using the purchase method. The cost of an acquisition is measuredas the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the dateof exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities andcontingent liabilities assumed in a business combination are measured initially at fair values at the date ofacquisition, irrespective of the extent of any minority interest.

Goodwill is initially measured at cost being the excess of the cost of the business combination over theGroups share in the net fair value of the acquirees identifiable assets, liabilities and contingent liabilities.If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the differenceis recognised directly in the income statement.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For thepurpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date,allocated to each of the Groups cash generating units that are expected to benefit from the synergies of thecombination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of,the goodwill associated with the operation disposed of is included in the carrying amount of the operationwhen determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance ismeasured based on the relative values of the operation disposed of and the portion of the cash-generatingunit retained.

When the Group acquires a business, embedded derivatives separated from the host contract by the acquireeare not reassessed on acquisition unless the business combination results in a change in the terms of thecontract that significantly modifies the cash flows that would otherwise be required under the contract.

IFRS 3.14

IFRS 3.24IFRS 3.36

IFRs 3.37

IFRS 3.51(b)

IFRS 3.54IFRS 3.55IAS 36.80

IAS 36.86

CommentaryIFRS 3 Business Combinations does not address whether contracts needed to be reassessed, at the date of acquisition, to identify if anembedded derivative needs to be separated. Moreover, IFRIC 9 Reassessment of Embedded Derivatives makes it clear that it does not

address this issue. Consequently an entity has a choice of two accounting policies for such contracts. Whichever policy is adoptedshould be applied consistently.

Good Group (International) Limited has elected to use the assessment made when the acquired entity became a party to the contractand, therefore, not to reassess contracts at the date of acquisition.

Investment in an associateThe Groups investment in its associate is accounted for using the equity method of accounting. An associateis an entity in which the Group has significant influence.

Under the equity method, the investment in the associate is carried in the balance sheet at cost plus postacquisition changes in the Groups share of net assets of the associate. Goodwill relating to the associate isincluded in the carrying amount of the investment and is not amortised or separately tested for impairment.The income statement reflects the share of the results of operations of the associate. Where there has been achange recognised directly in the equity of the associate, the Group recognises its share of any changes anddiscloses this, when applicable, in the statement of changes in equity. Unrealised gains and losses resultingfrom transactions between the Group and the associate are eliminated to the extent of the interest inthe associate.

The share of profit of associates is shown on the face of the income statement. This is the profit attributableto equity holders of the associate and therefore is profit after tax and minority interests in the subsidiaries ofthe associates.

The financial statements of the associate are prepared for the same reporting period as the parent company.Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

IAS 28.13

IAS 28.11IAS 28.23IAS 28.22IAS 28.39

IAS 28.26

IAS 28.37(e)IAS 28.26

After application of the equity method, the Group determines whether it is necessary to recognise anadditional impairment loss on the Groups investment in its associates. The Group determines at each balancesheet date whether there is any objective evidence that the investment in the associate is impaired. If this isthe case the Group calculates the amount of impairment as the difference between the recoverable amount ofthe associate and its carrying value and recognises the amount in the income statement.

IAS 28.31

IAS 28.33


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2.3 Summary of significant accounting policies continued Interest in a joint ventureThe Group has an interest in a joint venture which is a jointly controlled entity, whereby the venturers have acontractual arrangement that establishes joint control over the economic activities of the entity. The Grouprecognises its interest in the joint venture using proportionate consolidation. The Group combines its share ofeach of the assets, liabilities, income and expenses of the joint venture with similar items, line by line, in itsconsolidated financial statements. The financial statements of the joint venture are prepared for the samereporting period as the parent company. Adjustments are made where necessary to bring the accountingpolicies in line with those of the Group.

Adjustments are made in the Group's consolidated financial statements to eliminate the Group's share ofintragroup balances, income and expenses and unrealised gains and losses on transactions between the Groupand its jointly controlled entity. Losses on transactions are recognised immediately if the loss providesevidence of a reduction in the net realisable value of current assets or an impairment loss. The joint venture isproportionately consolidated until the date on which the Group ceases to have joint control over the

joint venture.

IAS 31.3IAS 31.30IAS 31.34

IAS 31.48IAS 31.36

CommentaryGood Group (International) Limited accounts for its interest in the jointly controlled entity using proportionate consolidation.However, IAS 31.38 also permits jointly controlled entities to be recognised using the equity method.

If an entity chooses to recognise jointly controlled entities using the equity method it is required to present its aggregate share of theprofit or loss of associates and joint ventures on the face of its income statement. Also, the investment need to be presented as non-current assets on the face of the balance sheet.

Non-current assets held for sale and discontinued operationsNon-current assets and disposal groups classi ed as held for sale are measured at the lower of carryingamount and fair value less costs to sell. Non-current assets and disposal groups are classi ed as held for saleif their carrying amounts will be recovered through a sale transaction rather than through continuing use. Thiscondition is regarded as met only when the sale is highly probable and the asset or disposal group is availablefor immediate sale in its present condition. Management must be committed to the sale, which should beexpected to qualify for recognition as a completed sale within one year from the date of classi cation.

In the consolidated income statement of the reporting period, and of the comparable period of the previousyear, income and expenses from discontinued operations are reported separate from normal income andexpenses down to the level of profit after taxes, even when the Group retains a non-controlling interest inthe subsidiary after the sale. The resulting profit or loss (after taxes) is reported separately in theincome statement.

Property, plant and equipment and intangible assets once classi ed as held for sale are notdepreciated/amortised.

IFRS 5.15IFRS 5.6IFRS 5.7IFRS 5.8

IFRS 5.33

IFRS 5.25

Foreign currency translationThe Groups consolidated financial statements are presented in euros, which is the Group's functional

currency. That is the currency of the primary economic environment in which Good Group (Limited)operates. Each entity in the Group determines its own functional currency and items included in the financialstatements of each entity are measured using that functional currency. Transactions in foreign currencies areinitially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assetsand liabilities denominated in foreign currencies are retranslated at the functional currency spot rate ofexchange ruling at the balance sheet date. All differences are taken to the income statement with theexception of differences on foreign currency borrowings accounted for as a hedge of a net investment in aforeign operation. These are taken directly to equity until the disposal of the net investment, at which timethey are recognised in the income statement. Tax charges and credits attributable to exchange differences onthose borrowings are also dealt with in equity. Non-monetary items that are measured in terms of historicalcost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates atthe date when the fair value is determined.

Prior to 1 January 2005 the Group treated goodwill and any fair value adjustments to the carrying amountsof assets and liabilities arising on the acquisition, as assets and liabilities of the parent. Therefore, thoseassets and liabilities are already expressed in the reporting currency or are non-monetary items and hence nofurther translation differences occur.

IAS 1.46(d)IAS 1.108(b)

IAS 21.21

IAS 21.23(a)IAS 21.28IAS 21.32

IAS 21.23(b)

IAS 21.23(c)

IAS 21.59


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2.3 Summary of significant accounting policies continued The assets and liabilities of foreign operations are translated into euros at the rate of exchange prevailing atthe balance sheet date and their income statements are translated at exchange rates prevailing at the date ofthe transactions. The exchange differences arising on the translation are taken directly to a separatecomponent of equity. On disposal of a foreign operation, the deferred cumulative amount recognised in

equity relating to that particular foreign operation is recognised in the income statement.Any goodwill arising on the acquisition of a foreign operation subsequent to 1 January 2005 and any fairvalue adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated asassets and liabilities of the foreign operation and translated at the closing rate.

IAS 21.39(a),(b)

IAS 21.39(c)

IAS 21.48

IAS 21.47

Revenue recognitionRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Group andthe revenue can be reliably measured. Revenue is measured at the fair value of the consideration received,excluding discounts, rebates, and sales taxes or duty. The following specific recognition criteria must also bemet before revenue is recognised:

Sale of goodsRevenue from the sale of goods is recognised when the significant risks and rewards of ownership of thegoods have passed to the buyer, usually on delivery of the goods.

Within its electronics segment, the Group operates a loyalty points programme, GoodPoints , which allowscustomers to accumulate points when they purchase products in the Groups retail stores. The points can thenbe redeemed for free products, subject to a minimum number of points being obtained.

Consideration received is allocated between the electronic products sold and the points issued, with theconsideration allocated to the points equal to their fair value. Fair value of the points is determined byapplying statistical analysis. The fair value of the points issued is deferred and recognised as revenue whenthe points are redeemed.

IAS 18.35(a)IAS 18.14IAS 18.20IAS 18.9

IAS 18.14

IAS 18.14(a),(b)

IFRIC 13.5

IFRIC 13.7

CommentaryIAS 18 and IFRIC 13 do not prescribe an allocation method for multiple component sales. The Groups revenue recognition policy for

sales which involve the issuance of GoodPoints is based on the fair value of the points issued. The Group could have based its revenuerecognition policy based on the relative fair values of the goods sold and the points issued.

IFRIC 13 does not set out any disclosure requirements. The Group has not included extensive disclosure regarding the loyaltyprogramme as the amounts are not very significant. If the deferred revenue and revenue related to the GoodPoints programme wasmore significant, additional disclosure items may include the number of outstanding points, the period over which the revenue isexpected to be recognised, the key assumptions used to determine the period over which revenue is recognised, and the effect of anychanges in redemption rates.

Rendering of servicesRevenue from the installation of fire extinguishers, fire prevention equipment and fire retardant fabrics isrecognised by reference to the stage of completion. Stage of completion is measured by reference to labourhours incurred to date as a percentage of total estimated labour hours for each contract. Where the contract

outcome cannot be measured reliably, revenue is recognised only to the extent that the expenses incurred areeligible to be recovered.

IAS 18.20

IAS 18.26IAS 18.20(c)

Interest incomeRevenue is recognised as interest accrues (using the effective interest method). Interest income is includedin finance revenue in the income statement.

DividendsRevenue is recognised when the Groups right to receive the payment is established.

Rental incomeRental income arising from operating leases on investment properties is accounted for on a straight line basisover the lease terms.

IAS 18.30(a)IAS 18.30(c)

IAS 17.50


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2.3 Summary of significant accounting policies continued TaxesCurrent income taxCurrent income tax assets and liabilities for the current and prior periods are measured at the amountexpected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to computethe amount are those that are enacted or substantively enacted by the balance sheet date.

Current income tax relating to items recognised directly in equity is recognised in equity and not in theincome statement.

IAS 12.46

IAS 12.61A

Deferred income taxDeferred income tax is provided using the liability method on temporary differences at the balance sheet datebetween the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences, except:

u where the deferred income tax liability arises from the initial recognition of goodwill or of an asset orliability in a transaction that is not a business combination and, at the time of the transaction, affectsneither the accounting profit nor taxable profit or loss; and

u in respect of taxable temporary differences associated with investments in subsidiaries, associates andinterests in joint ventures, where the timing of the reversal of the temporary differences can be controlledand it is probable that the temporary differences will not reverse in the foreseeable future.

IAS 12.22(c)

IAS 12.39

Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unusedtax credits and unused tax losses, to the extent that it is probable that taxable profit will be available againstwhich the deductible temporary differences, and the carry forward of unused tax credits and unused tax lossescan be utilised except:

u where the deferred income tax asset relating to the deductible temporary difference arises from the initialrecognition of an asset or liability in a transaction that is not a business combination and, at the time of thetransaction, affects neither the accounting profit nor taxable profit or loss; and

u in respect of deductible temporary differences associated with investments in subsidiaries, associates andinterests in joint ventures, deferred income tax assets are recognised only to the extent that it is probablethat the temporary differences will reverse in the foreseeable future and taxable profit will be availableagainst which the temporary differences can be utilised.

IAS 12.34

IAS 12.24

IAS 12.44

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to theextent that it is no longer probable that sufficient taxable profit will be available to allow all or part of thedeferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at eachbalance sheet date and are recognised to the extent that it has become probable that future taxable profit willallow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the yearwhen the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enactedor substantively enacted at the balance sheet date.

Deferred income tax relating to items recognised directly in equity is recognised in equity and not in theincome statement.

Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists toset off current tax assets against current income tax liabilities and the deferred income taxes relate to thesame taxable entity and the same taxation authority.

IAS 12.56IAS 12.37

IAS 12.47

IAS 12.61A

IAS 12.71

Sales taxRevenues, expenses and assets are recognised net of the amount of sales tax except:

u where the sales tax incurred on a purchase of assets or services is not recoverable from the taxationauthority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as partof the expense item as applicable; and

u receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part ofreceivables or payables in the balance sheet.

IAS 18.8


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2.3 Summary of significant accounting policies continued

Share-based payment transactionsEmployees (including senior executives) of the Group receive remuneration in the form of share-basedpayment transactions, whereby employees render services as consideration for equity instruments (equity-settled transactions). Employees working in the business development group are granted share appreciationrights, which can only be settled in cash (cash-settled transactions).

In situations where equity instruments are issued and some or all of the goods or services received by theentity as consideration cannot be specifically identified, the unidentified goods or services received (or to bereceived) are measured as the difference between the fair value of the share-based payment and the fairvalue of any identifiable goods or services received at the grant date. This is then capitalised or expensedas appropriate.

Equity-settled transactionsThe cost of equity-settled transactions with employees for awards granted after 7 November 2002, ismeasured by reference to the fair value at the date on which they are granted. The fair value is determined byan external valuer using an appropriate pricing model, further details of which are given in Note 9.8.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity,over the period in which the performance and/or service conditions are fulfilled, ending on the date on whichthe relevant employees become fully entitled to the award (the vesting date). The cumulative expenserecognised for equity-settled transactions at each reporting date until the vesting date reflects the extent towhich the vesting period has expired and the Groups best estimate of the number of equity instruments thatwill ultimately vest. The income statement expense or credit for a period represents the movement incumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting isconditional upon a market condition, which are treated as vesting irrespective of whether or not the marketcondition is satisfied, provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity-settled award are modified, the minimum expense recognised is the expense asif the terms had not been modified. An additional expense is recognised for any modification, which increasesthe total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee asmeasured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and anyexpense not yet recognised for the award is recognised immediately. This includes any award where non-vesting conditions within the control of either the entity or the counterparty are not met. However, if a newaward is substituted for the cancelled award, and designated as a replacement award on the date that it isgranted, the cancelled and new awards are treated as if they were a modification of the original award, asdescribed in the previous paragraph.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of dilutedearnings per share (further details are given in Note 12).

IFRS 2.44

IFRIC 8.11

IFRS 2.10

IFRS 2.7

IFRS 2.19, 20,21

IFRS 2.27

IFRS 2.21

IFRS 2.28

IAS 33.45

Cash-settled transactionsThe cost of cash-settled transactions is measured initially at fair value at the grant date using a binomialmodel, further details of which are given in Note 9.8. This fair value is expensed over the period until thevesting date with recognition of a corresponding liability. The liability is remeasured to fair value at eachbalance sheet date up to and including the settlement date with changes in fair value recognised in theincome statement.

IFRS 2.7

IFRS 2.30, 32,33


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2.3 Summary of significant accounting policies continued Financial assetsInitial recognitionFinancial assets within the scope of IAS 39 are classified as financial assets at fair value through profit orloss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivativesdesignated as hedging instruments in an effective hedge, as appropriate. The Group determines theclassification of its financial assets at initial recognition.

Financial assets are recognised initially at fair value plus, in the case of investments not at fair value throughprofit or loss, directly attributable transaction costs.

Purchases or sales of financial assets that require delivery of assets within a time frame established byregulation or convention in the marketplace (regular way purchases) are recognised on the trade date, i.e.,the date that the Group commits to purchase or sell the asset.

The Groups financial assets include cash and short-term deposits, trade and other receivables, loan and otherreceivables, quoted and unquoted financial instruments, and derivative financial instruments.

Subsequent measurementThe subsequent measurement of financial assets depends on their classification as follows:

IFRS 7.21

IAS 39.9

IAS 39.43

IAS 39.9

IAS 39.38

Financial assets at fair value through profit or lossFinancial assets at fair value through profit or loss includes financial assets held for trading and financialassets designated upon initial recognition at fair value through profit or loss. Financial assets are classifiedas held for trading if they are acquired for the purpose of selling in the near term. This category includesderivative financial instruments entered into by the Group that do not meet the hedge accounting criteriaas defined by IAS 39. Derivatives, including separated embedded derivatives are also classified as held fortrading unless they are designated as effective hedging instruments. Financial assets at fair value throughprofit and loss are carried in the balance sheet at fair value with gains or losses recognised in theincome statement.

The Group has not designated any financial assets as at fair value through profit or loss.

Derivatives embedded in host contracts are accounted for as separate derivatives when their risks andcharacteristics are not closely related to those of the host contracts and the host contracts are not carried atfair value. These embedded derivatives are measured at fair value with gains or losses arising from changes infair value recognised in the income statement. Reassessment only occurs if there is a change in the terms ofthe contract that significantly modifies the cash flows that would otherwise be required.

IAS 39.9IAS 39.46

IAS 39.AG14IAS 39.55(a)

IAS 39.10IAS 39.11

Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are notquoted in an active market. Such financial assets are carried at amortised cost using the effective interest ratemethod. Gains and losses are recognised in the consolidated income statement when the loans and receivablesare derecognised or impaired, as well as through the amortisation process.

IAS 39.9IAS 39.46(a)IAS 39.56

Held-to-maturity investmentsNon-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-to-maturity when the Group has the positive intention and ability to hold it to maturity. After initialmeasurement held-to-maturity investments are measured at amortised cost using the effective interestmethod. This method uses an effective interest rate that exactly discounts estimated future cash receiptsthrough the expected life of the financial asset to the net carrying amount of the financial asset. Gains andlosses are recognised in the consolidated income statement when the investments are derecognised orimpaired, as well as through the amortisation process. The Group did not have any held-to-maturityinvestments during the years ended 31 December 2008 and 2007.

IAS 39.9

IAS 39.56

IAS 39.46(b)

Available-for-sale financial assetsAvailable-for-sale financial assets are non-derivative financial assets that are designated as available-for-saleor are not classified in any of the three preceding categories. After initial measurement, available-for-sale

financial assets are measured at fair value with unrealised gains or losses recognised directly in equity untilthe investment is derecognised, at which time the cumulative gain or loss recorded in equity is recognised inthe income statement, or determined to be impaired, at which time the cumulative loss recorded in equity isrecognised in the income statement.

IAS 39.9IAS 39.46

IAS 39.55(b)IAS 39.67


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2.3 Summary of significant accounting policies continued Financial liabilitiesInitial recognitionFinancial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profitor loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge,as appropriate. The Group determines the classification of its financial liabilities at initial recognition.

Financial liabilities are recognised initially at fair value and in the case of loans and borrowings, directlyattributable transaction costs.

The Groups financial liabilities include trade and other payables, bank overdraft, loans and borrowings,financial guarantee contracts, and derivative financial instruments.

Subsequent measurementThe measurement of financial liabilities depends on their classification as follows:

IFRS 7.21IAS 39.43

IAS 39.56

Financial liabilities at fair value through profit or lossFinancial liabilities at fair value through profit or loss includes financial liabilities held for trading and financialliabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the nearter

sample ifrs stmt

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