ACCOUNTING POLICIES

The financial statements have been prepared on the historical cost basis and incorporate the following principal accounting policies, which have been consistently applied in all material respects, except where noted below.

Basis of Consolidation
The group’s annual financial statements incorporate the financial position of the company and its subsidiaries from the effective dates of acquisition.  Fixed properties owned by subsidiaries are stated at the value attributed to them on acquisition by the group.  The excess of the cost of shares in other subsidiary companies over the tangible net asset value at the date of acquisition is attributed to liquor licences, trade marks and goodwill.

Liquor licences, trade marks and goodwill are written off in the year the transaction takes place, firstly against share premium, and secondly, directly to retained income.  This policy is not consistent with that adopted in the prior year.  The effect of the change in accounting policy has been included in the current year’s results, in line with the capital reduction arising from the write off of intangible assets against the share premium account.  No adjustment has been made to the comparative amounts and there is no effect on earnings.

Material inter-group transactions are eliminated on consolidation.

Turnover
Turnover, which excludes value added tax, comprises the net amounts invoiced to customers, before discounts for goods supplied and services rendered.

Revenue Recognition
Revenue from the sale of merchandise and finished goods is brought to account when the risk in the goods passes to the customer.  Revenue from service-based activities is recognised when the service is completed.  Interest earned is accrued on a time proportion basis.  Dividends are recognised when the right to receive payment is established.

Property, Plant and Equipment
Furniture, fittings, plant and equipment, improvements to leasehold premises and motor vehicles are stated at cost less depreciation calculated on a straight line basis at rates considered appropriate to write off the cost over the estimated useful lives of the assets.  The rates used are:

Liquor licences and trade marks are stated at cost and are written down only where there is a permanent diminution in value.  On consolidation liquor licences and trade marks are written off as indicated above.

Land and buildings, which are regarded as investment properties, are not depreciated.

Inventories
Inventories are valued at the lower of cost and net realisable value.  Cost is determined on a first-in, first-out basis.  The cost of finished goods includes direct expenditure and production overheads.

Foreign Currency Transactions
Foreign currency transactions are recorded at the exchange rate ruling on the transaction dates.  Assets and liabilities designated in foreign currencies are translated at rates of exchange ruling at the balance sheet date, or forward cover rates where applicable.  Exchange differences are taken to income in the year in which they arise.

Deferred Taxation
Deferred taxation is provided for on the liability method using the comprehensive basis.

Bank
Bank balances are stated in accordance with the bank statement balances.

Leased Assets
Fixed assets acquired under financial leases are capitalised at their cash cost equivalent and are depreciated as indicated above.  Finance costs are expensed using the effective interest rate method.  All other leases are treated as operating leases and are charged against income as incurred.

Associated Companies
Associates are those companies in which the group has a long term interest and over which it exercises significant influence, but not control.  The group’s share of post acquisition results of associates are included in the consolidated financial statements using the equity method where material.

Investments
Investments, other than in associated companies, are stated at cost and are written down only when there is a permanent diminution in value.

Retirement Benefits
The group provides for retirement benefits for the majority of employees by payments to independently administered pension and provident funds.  Current contributions are charged against income as incurred.  The cost of providing for any deficit is charged against income when determined.

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