llustrative consolidated annual financial statements for the year

Good First-time Adopter (International) LimitedIllustrative financial statements of a first-time adopter for the year ended 31 December 2015

Based on International Financial Reporting Standards in issue at 31 August 2015

1 Good First-time Adopter (International) Limited

ContentsAbbreviations and key ................................................................................................................................................. 2

Introduction ................................................................................................................................................................. 3

Independent auditors’ report to the shareholders of Good First-time Adopter (International) Limited ......................... 7

Consolidated statement of profit or loss ...................................................................................................................... 8

Consolidated statement of other comprehensive income ............................................................................................ 10

Consolidated statement of financial position .............................................................................................................. 12

Consolidated statement of changes in equity ............................................................................................................. 14

Consolidated statement of cash flows ........................................................................................................................ 17

Notes to the consolidated financial statements ......................................................................................................... 21

Appendix 1 — Consolidated statement of comprehensive income (example of a single statement) .......................... 141

Appendix 2 — Consolidated statement of profit or loss (example of expenses disclosed by nature) ......................... 144

Appendix 3 — Consolidated statement of cash flows (example illustrating the direct method) .................................. 145

Appendix 4 — Information in other illustrative financial statements ....................................................................... 146

Good First-time Adopter (International) Limited 2

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.BC13 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 IFRS Interpretations Committee (formerly IFRIC) 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.AG71 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/Practice

IASB International Accounting Standards Board

InterpretationsCommittee

IFRS Interpretations Committee (formerly International Financial Reporting Interpretations Committee(IFRIC))

SIC Standing Interpretations Committee


IntroductionThis publication contains an illustrative set of consolidated financial statements for Good First-time Adopter (International)Limited and its subsidiaries (the Group) for the year ended 31 December 2015. These are the Group’s first financialstatements to be prepared in accordance with International Financial Reporting Standards (IFRS) — the Group is a first-timeadopter. Good First-time Adopter (International) Limited is a large fictitious publicly listed manufacturing companyincorporated in a fictitious country within Europe. The presentation currency of the Group is the euro.

ObjectiveThis set of illustrative statements is one of many prepared by EY to assist you in preparing your own financial statements.The illustrative financial statements are intended to reflect transactions, events and circumstances that we consider to bemost common for a broad range of first-time adopters of IFRS, across a wide variety of industries. Certain disclosures areincluded in these financial statements merely for illustrative purposes even though they may be regarded as items ortransactions that are not material for the Group. As a general rule, these illustrative financial statements do not early adoptstandards or amendments before their effective date.

How to use these illustrative financial statements to prepare entity-specific disclosuresUsers of this publication are encouraged to prepare entity-specific disclosures, for which these illustrative financialstatements may serve as a useful reference. Transactions and arrangements other than those applicable to the Groupmay require additional disclosures. It should be noted that the illustrative financial statements of the Group are notdesigned to satisfy any stock market or country-specific regulatory requirements, nor is the publication intended toreflect disclosure requirements that apply mainly to regulated or specialised industries.

Notations shown in the right hand margin of each page are references to IFRS paragraphs that describe the specificdisclosure requirements. Commentaries are provided to explain the basis for the disclosure or to address alternativedisclosures not included in the illustrative financial statements. If questions arise as to the IFRS requirements, it is essentialto refer to the relevant source material and, where necessary, to seek appropriate professional advice. For a morecomprehensive list of disclosure requirements, please refer to EY’s Online International GAAP® Disclosure Checklist. Andfor more guidance on how to improve disclosure effectiveness, please refer to our publication Applying IFRS: ImprovingDisclosure Effectiveness (July 2014).

Other illustrative financial statementsWe provide a number of industry-specific illustrative financial statements and illustrative financial statements addressingspecific circumstances that you may consider. The entire series of illustrative financial statements comprises:

• Good Group (International) Limited

• Good Group (International) Limited – Alternative format

• Good Group (International) Limited - Illustrative interim condensed consolidated financial statements

• Good Investment Fund Limited (Equity)

• Good Investment Fund Limited (Liability)

• Good Real Estate Group (International) Limited

• Good Mining (International) Limited

• Good Petroleum (International) Limited

International Financial Reporting StandardsThe abbreviation IFRS is defined in paragraph 5 of the Preface to International Financial Reporting Standards to include”standards and interpretations approved by the IASB, and International Accounting Standards (IASs) and StandingInterpretations Committee (SIC) interpretations issued under previous Constitutions”. This is also noted in paragraph 7 ofIAS 1 and paragraph 5 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Thus, when financialstatements are described as complying with IFRS, it means that they comply with the entire body of pronouncementssanctioned by the IASB. This includes the IAS, IFRS and the Interpretations originated by the IFRS InterpretationsCommittee, formerly, International Financial Reporting Interpretations Committee, (IFRIC) ( formerly the SIC).


International Accounting Standards Board (IASB)The IASB is the independent standard-setting body of the IFRS Foundation (an independent not-for-profit private sectororganisation working in the public interest). The IASB members (currently 14 full-time members) are responsible for thedevelopment and publication of IFRS, including International Financial Reporting Standard for Small and Medium-sizedEntities (IFRS for SMEs), and for approving Interpretations of IFRS as developed by the IFRIC. In fulfilling its standard-setting duties, the IASB follows a due process, of which the publication of consultative documents, such as discussionpapers and exposure drafts, for public comment is an important component.

The IFRS Interpretations Committee (Interpretations Committee)The Interpretations Committee is appointed by the IFRS Foundation Trustees that assists the IASB in establishing andimproving standards of financial accounting and reporting for the benefit of users, preparers and auditors of financialstatements.

The Interpretations Committee addresses issues of reasonably widespread importance, rather than issues of concern toonly a small set of entities. These include any newly identified financial reporting issues not addressed in IFRS. TheInterpretations Committee also advises the IASB on issues to be considered in the annual improvements to IFRS project.

IFRS as at 31 August 2015The standards applied in these illustrative financial statements are the versions in issue as at 31 August 2015 and effectivefor annual periods beginning on or after 1 January 2015. Standards issued, but not yet effective, as at 31 December 2015have not been early adopted in these illustrative financial statements.

Users of this publication are cautioned to check that there has been no change in requirements of IFRS between31 August 2015 and the date on which their financial statements are authorised for issue. In accordance with paragraph 30of IAS 8, specific disclosure requirements apply for standards and interpretations issued, but not yet effective (see Note 31of these illustrative financial statements). Furthermore, if the financial year of an entity is other than the calendar year,new and revised standards applied in these illustrative financial statements may not be applicable.

Changes in the 2015 edition of Good First-time Adopter (International) Limited AnnualFinancial StatementsThe standards and interpretations listed below have become effective for annual periods since the last edition of Good First-time Adopter and impacted on the financial statements of the Group. For more information on the impact of the standard,please refer to our publication IFRS Update of standards and interpretations .

The standards and interpretations listed below have become effective for annual periods since the last edition of Good First-time Adopter but did not impact on the financial statements of the Group.

Title Issue date Effective date(annual periodsbeginning on or after)

IFRS 10 Consolidated Financial Statements, IAS 27 Separate FinancialStatements

May 2011 1 January 2013

IFRS 11 Joint Arrangements, IAS 28 Investments in Associates and JointVentures


IFRS 12 Disclosure of Interests in Other Entities May 2011 1 January 2013

IFRS 13 Fair Value Measurement May 2011 1 January 2013

IAS 1 Presentation of Items of Other Comprehensive Income –Amendments to IAS 1

June 2011 1 July 2012

IAS 19 Employee Benefits (Revised 2011) June 2011 1 January 2013

Annual Improvements 2009-2011 Cycle May 2012 1 January 2013

Recoverable Amount Disclosures for Non- Financial Assets —Amendments to IAS 36


Defined Benefit Plans: Employee Contributions — Amendments to IAS 19 November 2013 1 July 2014

IFRIC 21 Levies May 2013 1 January 2014

Annual Improvements 2010-2012 Cycle December 2013 1 January 2015

Annual Improvements 2011-2013 Cycle December 2013 1 January 2015

Other changes from the 2012 edition have been made in order to reflect practice developments and to improve the overallquality of the illustrative financial statements.

http://www.ifrs.org/How+we+develop+standards/How+we+develop+standards.htm

http://www.ifrs.org/IFRS+for+SMEs/IFRS+for+SMEs.htm

http://www.ifrs.org/IFRS+for+SMEs/IFRS+for+SMEs.htm

http://www.ifrs.org/Current+Projects/IFRIC+Projects/IFRIC+Projects.htm


Accounting policies in the first IFRS financial statementsIFRS 1 requires an entity to use the same accounting policies in its opening IFRS statement of financial position andthroughout all periods presented in its first IFRS financial statements. Those accounting policies must comply with eachIFRS effective at the end of its first IFRS reporting period, except as specified in IFRS 1 (e.g., when the exceptions in IFRS 1prohibit retrospective application or an entity avails itself of one of IFRS 1’s voluntary exemptions). An entity must notapply different versions of IFRSs that were effective at earlier dates. An entity may apply a new IFRS that is not yetmandatory if that IFRS permits early application.

A first-time adopter of IFRS does not apply the IAS 8 Accounting Policies, Changes in Accounting Estimate and Errorsrequirements to changes in accounting policies that occur when an entity first adopts IFRS. Rather, a first-time adopter ofIFRS must provide an explanation of transition adjustments and reconciliations of equity and comprehensive income. If afirst-time adopter changes its accounting policies or its use of the IFRS 1 exemptions during the period covered by the firstIFRS financial statements, for example, if the entity had published interim financial statements in accordance withIAS 34 Interim Financial Reporting, it must explain how this change affected its previously reported financial position,financial performance and cash flows. The entity must also update the equity and comprehensive income reconciliations asof the transition date and as of and for the comparative period. Note 2.4 of this publication illustrates how a first-timeadopter may provide the explanation of transition adjustments and reconciliations required by IFRS 1.

Allowed alternative treatmentsIn some cases, IFRS permits more than one accounting treatment for a transaction or event. Preparers of financialstatements should select the treatment that is most relevant to their business and the relevant circumstances as theiraccounting policy.

IAS 8 requires an entity to select and apply its accounting policies consistently for similar transactions, events and /orconditions, unless IFRS specifically requires or permits categorisation of items for which different policies may beappropriate. Where an IFRS requires or permits such categorisation, an appropriate accounting policy is selected andapplied consistently to each category. Therefore, once a choice of one of the alternative treatments has been made,it becomes an accounting policy and must be applied consistently. After an entity has presented its first IFRS financialstatements, changes in accounting policy should only be made in subsequent financial statements, if required by a standardor interpretation, or if the change results in the financial statements providing more reliable and relevant information.

In this publication, when a choice is permitted by IFRS, the Group has adopted one of the treatments as appropriate tothe circumstances of the Group. In these cases, the commentary provides details of the policy that has been selected, thereasons for this policy selection, and summarises the difference in the disclosure requirements.

Financial review by managementMany entities present a financial review by management that is outside the financial statements. IFRS does not requirethe presentation of such information, although paragraph 13 of IAS 1 gives a brief outline of what might be included in sucha report. The IASB issued an IFRS Practice Statement Management Commentary in December 2010 which provides a broad,non-binding framework for the presentation of management commentary that relates to financial statements prepared inaccordance with IFRS. If an entity decides to follow the guidance in the Practice Statement, management is encouragedto explain the extent to which the Practice Statement has been followed. A statement of compliance with the PracticeStatement is only permitted if it is followed in its entirety. Further, the content of a financial review by management isoften determined by local market requirements or issues specific to a particular jurisdiction.

No financial review by management has been included for the Group.


Good First-time Adopter(International) Limited

Consolidated Financial Statements

31 December 2015


Independent auditors’ report to the shareholders ofGood First-time Adopter (International) LimitedWe have audited the accompanying consolidated financial statements of Good First-time Adopter (International) Limitedand its subsidiaries (the Group), which comprise the consolidated statement of financial position as at 31 December 2015,and the consolidated statement of profit or loss, consolidated statement of other comprehensive income, consolidatedstatement of changes in equity and consolidated statement of cash flows for the year then ended, and a summary ofsignificant accounting policies and other explanatory information.

Management’s responsibility for the consolidated financial statementsManagement is responsible for the preparation and fair presentation of these consolidated financial statements inaccordance with International Financial Reporting Standards, and for such internal control as management determines isnecessary to enable the preparation of consolidated financial statements that are free from material misstatement, whetherdue to fraud or error.

Auditors’ responsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We conductedour audit in accordance with International Standards on Auditing. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements arefree from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidatedfinancial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risksof material misstatement of the consolidated financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of theconsolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not forthe purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluatingthe appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, aswell as evaluating the overall presentation of the consolidated 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 present fairly, in all material respects, the financial position of theGroup as at 31 December 2015, and its financial performance and cash flows for the year then ended in accordance withInternational Financial Reporting Standards.

Professional Accountants & Co.

28 January 2016

17 Euroville High Street

Euroville

CommentaryThe auditors’ report has been prepared in accordance with ISA 700 Forming an Opinion and Reporting on Financial Statements. Theauditors’ report may differ depending on the requirements specific to a relevant jurisdiction.


Consolidated statement of profit or lossfor the year ended 31 December 2015

IFRS 1.21, IAS 1.10(b)IAS 1.51(b)(c)

2015 2014Notes €000 €000 IAS 1.51(d)(e)

Continuing operationsSale of goods 190,511 172,367 IAS 18.35(b)(i)Rendering of services 17,131 16,537 IAS 18.35(b)(ii)Revenue from redemption of GoodPoints 25 1,875 1,125 IAS 18.35(b)(ii)

Rental income 14 1,404 1,377 IAS 18.35(c)Revenue 210,921 191,406 IAS 1.82(a)

Cost of sales (164,292) (155,621) IAS 1.103Gross profit 46,629 35,785 IAS 1.85, IAS 1.103

Other operating income 9.1 2,435 2,548 IAS 1.103Selling and distribution expenses (14,000) (13,002) IAS 1.103Administrative expenses 9.9 (19,746) (13,542) IAS 1.103

Other operating expenses 9.2 (2,554) (353) IAS 1.103

Operating profit 12,764 11,436 IAS 1.85, IAS 1.BC55-56

Finance costs 9.3 (1,366) (1,223) IAS 1.82(b), IFRS 7.20Finance income 9.4 336 211 IAS 1.82(a)

Share of profit of an associate and a joint venture 7,8 671 638 IAS 1.82(c), IAS 28.38Profit before tax from continuing operations 12,405 11,062 IAS 1.85

Income tax expense 11 (3,893) (3,432) IAS 1.82(d), IAS 12.77

Profit for the year from continuing operations 8,512 7,630 IAS 1.85

Discontinued operations

Profit/(loss) after tax for the year from discontinuedoperations 10 220 (188) IAS 1.82(e), IFRS 5.33(a)

Profit for the year 8,732 7,442

Attributable to:Equity holders of the parent 8,426 7,203 IAS 1.83(a)(ii)

Non-controlling interests 306 239 IAS 1.83(a)(i), IAS 27.27

8,732 7,442

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

equity holders of the parent €0.41 €0.38u Diluted, profit for the year attributable to

ordinary equity holders of the parent €0.40 €0.37

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

attributable to ordinary equity holders of theparent €0.39 €0.39

u Diluted, profit from continuing operationsattributable to ordinary equity holders of theparent €0.39 €0.38


CommentaryParagraph 10 of IAS 1 suggests titles for the primary financial statements, such as ‘statement of profit or loss and othercomprehensive income’ or ‘statement of financial position’. Entities are, however, permitted to use other titles, such as ‘incomestatement’ or ‘balance sheet’. The Group applies the titles suggested in IAS 1.

IAS 1.82(a) requires disclosure of total revenue as a line item on the face of the statement of profit or loss. The Group has electedto present the various types of revenue on the face of the statement of profit or loss. Note that this information could also bepresented in the notes.

IAS 1.99 requires expenses to be analysed either by their nature or by their function within the statement of profit or loss, whicheverprovides information that is reliable and more relevant. If expenses are analysed by function, information about the nature of expensesmust be disclosed in the notes. The Group has presented the analysis of expenses by function. In Appendix 2, the consolidatedstatement of profit or loss is presented with an analysis of expenses by nature.

The Group presents operating profit in the statement of profit or loss; this is not required by IAS 1. The terms ‘operating profit’ or‘operating income’ are not defined in IFRS. IAS 1.BC56 states that the IASB recognises that an entity may elect to disclose the resultsof operating activities, or a similar line item, even though this term is not defined. The entity should ensure the amount disclosed isrepresentative of activities that would normally be considered to be ‘operating’. For instance, “it would be inappropriate to excludeitems clearly related to operations (such as inventory write-downs and restructuring and relocation expenses) because they occurirregularly or infrequently or are unusual in amount. Similarly, it would be inappropriate to exclude items on the grounds that they donot involve cash flows, such as depreciation and amortisation expenses” (IAS 1.BC56). In practice, other titles, such as EBIT, aresometimes used to refer to an operating result.

The Group has presented its share of profit of an associate and joint venture using the equity method under IAS 28 after the line-item‘operating profit’. IAS 1.82(c) requires ‘share of the profit or loss of associates and joint ventures accounted for using the equitymethod’ to be presented in a separate line item on the face of the statement profit or loss. In complying with this requirement, theGroup combines the share of profit or loss from associates and joint ventures in one line item. Regulators or standard-setters in certainjurisdictions recommend or accept share of the profit/loss of equity method investees being presented with reference to whether theoperations of the investees are closely related to that of the reporting entity. This can result in the share of profit/loss of certain equitymethod investees being included in the operating profit, while the share of profit/loss of other equity method investees is excludedfrom operating profit. In other jurisdictions, regulators or standard-setters believe that IAS 1.82(c) requires that share of profit/loss ofequity method investees be presented as one line item (or, alternatively, as two or more adjacent line items, with a separate line for thesub-total). This may cause diversity in practice.

IAS 33.68 requires presentation of basic and diluted earnings per share for discontinued operations either on the face of the statementof profit or loss or in the notes to the financial statements. The Group has elected to show this information with other disclosuresrequired for discontinued operations in Note 10 and to show the earnings per share information for continuing operations on the faceof the statement of profit or loss.


Consolidated statement of other comprehensive incomefor the year ended 31 December 2015

2015 2014IFRS 1.21, IAS1.51(b)(c)

Notes €000 €000 IAS 1.51(d)(e)

Profit for the year 8,732 7,442 IAS 1.81A(a)

Other comprehensive income IAS 1.82AOther comprehensive income to be reclassified to profit or loss insubsequent periods:Net gain on hedge of a net investment 278 - IAS 39.102(a)

Income tax effect (83) - IAS 1.90

195 -

Exchange differences on translation of foreign operations (246) (117) IAS 21.32

Income tax effect - - IAS 21.52(b)

(246) (117)

Net movement on cash flow hedges 9.8 (732) 33 IFRS 7.23(c)

Income tax effect 220 (10) IAS 1.90

(512) 23

Net movement on available-for-sale financial assets 9.8 (60) (22)Income tax effect 18 6 IAS 1.90

(42) (16)

Net other comprehensive income to be reclassified to profit orloss in subsequent periods (605) (110) IAS 1.82A

Other comprehensive income not to be reclassified to profit or lossin subsequent periods:

Re-measurement gains and (losses) on defined benefit plans 26 311 (401)IAS 19.120(c)IAS 19.122

Income tax effect (94) 120 IAS1.90

217 (281)

Revaluation of land and buildings 13 846 - IAS 16.39


592 -

Net other comprehensive income not to be reclassified to profitor loss in subsequent periods 809 (281) IAS 1.82A

Other comprehensive income (loss) for the year, net of tax 204 (391) IAS 1.81A(b)

Total comprehensive income for the year, net of tax 8,936 7,051 IAS 1.81A(c)

Attributable to:Equity holders of the parent 8,630 6,812 IAS 1.81B(b)(ii)

Non-controlling interests 306 239 IAS 1.81B(b)(i)

8,936 7,051


CommentaryThe Group has elected to present two statements, a statement of profit or loss and a statement of other comprehensive income, ratherthan a single statement of comprehensive income combining the two elements. If a two-statement approach is adopted, the statement ofprofit or loss must be followed directly by the statement of comprehensive income. For illustrative purposes, the disclosure of a singlestatement of comprehensive income is presented in Appendix 1.

The different components of comprehensive income are presented on a net basis in the statement above. Therefore, an additional note isrequired to separately present the amount of reclassification adjustments and current year gains or losses (see Note 9.8). Alternatively,the individual components could have been presented within the statement of comprehensive income.

The Group has elected to present the income tax effects gross on an individual basis. Therefore, no additional note disclosure is required.

Re-measurement gains and losses on defined benefit plans are recognised in OCI and transferred immediately to retainedearnings (see IAS 1.96 and IAS 19.122).

IAS 1.82A requires that items that will be reclassified subsequently to profit or loss, when specific conditions are met, must be groupedon the face of the statement of other comprehensive income. Similarly, items that will not be reclassified must also be grouped together.In order to make these disclosures, an entity must analyse whether its OCI items are eligible to be subsequently reclassified to profit orloss under IFRS.

Under the requirement in IAS 1.82A and the Implementation Guidance to IAS 1, entities must present the share of the OCI items ofequity method investees (i.e. associates and joint ventures), in aggregate as single line items within the ’to be reclassified’ and the ‘not tobe reclassified’ groups. The Group’s associate and joint venture do not have OCI items and as such, these disclosures do not apply.


Consolidated statement of financial positionas at 31 December 2015

IFRS1.21, IAS 1.10(a)IAS 1.51(b)(c)

2015 2014As at 1

January 2014Notes €000 €000 €000 IAS 1.51(d)(e)

AssetsNon-current assets IAS 1.60, IAS 1.66

Property, plant and equipment 13 38,411 25,811 20,385 IAS 1.54(a)

Investment properties 14 8,893 7,983 7,091 IAS 1.54(b)

Intangible assets 15 6,019 2,461 2,114 IAS 1.54(c)

Investments in an associate and a joint venture 7,8 3,187 2,516 2,597 IAS 1.54(e), IAS 28.38

Other non-current financial assets 17 6,550 3,616 3,419 IAS 1.54(d), IFRS 7.8

Deferred tax assets 11 383 365 321 IAS 1.54(o), IAS 1.56

63,443 42,752 35,927Current assets IAS 1.60, IAS 1.66

Inventories 18 22,442 23,154 24,649 IAS 1.54(g)

Trade and other receivables 19 27,672 24,290 25,537 IAS 1.54(h), IFRS 7.8(c)

Prepayments 244 165 226 IAS 1.55

Other current financial assets 17 551 153 137 IAS 1.54(d), IFRS 7.8

Cash and short-term deposits 20 17,112 14,916 11,066 IAS 1.54(i)

68,021 62,678 61,615Assets classified as held for distribution 10 13,554 — — IAS 1.54(j), IFRS 5.38

81,575 62,678 61,615Total assets 145,018 105,430 97,542

Equity and liabilitiesEquity IAS 1.54(r)

Issued capital 21 21,888 19,388 19,388 IAS 1.54(r), IAS 1.78(e)

Share premium 21 4,780 80 — IAS 1.54(r), IAS 1.78(e)

Treasury shares 21 (508) (654) (774) IAS 1.54(r), IAS 1.78(e)

Other capital reserves 21 1,171 864 566 IAS 1.54(r), IAS 1.78(e)

Retained earnings 35,061 28,855 23,533 IAS 1.54(r), IAS 1.78(e)

Other components of equity (121) 18 128 IAS 1.54(r), IAS 1.78(e)Reserves of a disposal group classified as held fordistribution 10 46 — — IAS 1.54(p)

Equity attributable to equity holders of the parent 62,317 48,551 42,841Non-controlling interests 2,428 740 208 IAS 1.54(q), IAS 27.27

Total equity 64,745 49,291 43,049Non-current liabilities IAS 1.60, IAS 1.69

Interest-bearing loans and borrowings 17 20,346 21,703 18,931 IAS 1.54(m)

Other non-current financial liabilities 17 806 — — IAS 1.54(m), IFRS 7.8(e)

Provisions 23 1,950 77 60 IAS 1.54(l), IAS 1.78(d)

Government grants 24 3,300 1,400 1,300 IAS 20.24

Deferred revenue 25 2,696 165 174 IAS 1.55

Net employee defined benefit liabilities 26 2,622 2,494 2,074 IAS 1.55, IAS 1.78(d)

Other liabilities 263 232 212 IAS 1.55

Deferred tax liabilities 11 3,072 1,247 1,279 IAS 1.54(o), IAS 1.56

35,055 27,318 24,030Current liabilities IAS 1.60, IAS 1.69

Trade and other payables 28 19,556 21,281 20,600 IAS 1.54(k)

Interest-bearing loans and borrowings 17 2,460 2,775 4,555 IAS 1.54(m), IFRS 7.8(f)

Other current financial liabilities 17 3,040 303 303 IAS 1.54(m), IFRS 7.8(e)

Government grants 24 149 151 150 IAS 1.55, IAS 20.24

Deferred revenue 25 1,720 200 190 IAS 1.55

Non-cash distribution payable to owners 22.1 355 — — IFRIC 17.10, IFRIC 17.11

Income tax payable 3,963 4,013 4,625 IAS 1.54(n)

Provisions 23 850 98 40 IAS 1.54(l)

32,093 28,821 30,463Liabilities directly associated with the assets classifiedas held for distribution 10 13,125 — — IAS 1.54(p), IFRS 5.38

45,218 28,821 30,463Total liabilities 80,273 56,139 54,493

Total equity and liabilities 145,018 105,430 97,542


CommentaryIFRS 1.21 requires an entity’s first IFRS financial statements to present at least three statements of financial position, two statements ofprofit or loss and other comprehensive income, two separate statements of profit or loss (if presented), two statements of cash flows andtwo statements of changes in equity and related notes, including comparative information for all statements presented.

In accordance with IAS 1.60, the Group has presented current and non-current assets, and current and non-current liabilities, asseparate classifications in the statement of financial position. IAS 1 does not require a specific order of the two classifications, the Grouphas elected to present non-current before current. IAS 1 allows entities to present assets and liabilities in order of liquidity when thispresentation is reliable and more relevant.


Consolidated statement of changes in equityfor the year ended 31 December 2015

Attributable to equity holders of the parent

Issuedcapital

(Note 21)

Sharepremium

(Note 21)

Treasuryshares

(Note 21)

Othercapital

reserves(Note 21)

Retainedearnings

Cash flowhedge

reserve(Note 21)

Available-for-salereserve

(Note 21)

Foreigncurrency

translationreserve

(Note 21)

Assetrevaluation

reserve(Note 21)

Discontinuedoperations(Note 10) Total

Non-controlling

interestTotal

equity

IFRS1.21IAS1.10(c)IAS1. 51(b),(c)IAS1.106(d)

€000 €000 €000 €000 €000 €000 €000 €000 €000 €000 €000 €000 €000 IAS 1.51(d)(e)

As at 1 January 2015 19,388 80 (654) 864 28,855 (71) 89 (117) 117 - 48,551 740 49,291

Profit for the period - - - - 8,426 - - - - - 8,426 306 8,732 IAS 1.106(d)(i)

Other comprehensive income - - - - 217 (512) (42) (51) 592 - 204 - 204 IAS 1.106(d)(ii)

Total comprehensive income - - - - 8,643 (512) (42) (51) 592 - 8,630 306 8,936

Depreciation transfer for buildings - - - - 80 - - - (80) - - - - IAS 1.96

Discontinued operation (Note 10) - - - - - - (46) - - 46 - - - IFRS 5.38

Issue of share capital (Note 21) 2,500 4,703 - - - - - - - - 7,203 - 7,203 IAS 1.106(d)(iii)

Exercise of options (Note 21) - 29 146 - - - - - - - 175 - 175 IAS 1.106(d)(iii)

Share-based payment transactions (Note 27) - - - 307 - - - - - - 307 - 307IAS 1.106(d)(iii)IFRS 2.50

Transaction costs (Note 5) - (32) - - - - - - - - (32) - (32) IAS 32.39

Dividends (Note 22) - - - - (1,972) - - - - - (1,972) (30) (2,002) IAS 1.107

Non-cash distributions to equity holders(Note 22.1) - - - - (355) - - - - - (355) - (355) IFRIC 17.10Non-controlling interest arising on a businesscombination (Note 5) - - - - - - - - - - - 1,547 1,547 IAS 1.106(d)(iii)

Acquisition of non-controlling interests (Note 5) - - - - (190) - - - - - (190) (135) (325) IAS 1.106(d)(iii)

At 31 December 2015 21,888 4,780 (508) 1,171 35,061 (583) 1 (168) 629 46 62,317 2,428 64,745


CommentaryFor equity-settled share-based payment transactions, IFRS 2.7 requires entities to recognise an increase in equity when goods or services are received. However, IFRS 2 does not specify where in equitythis should be recognised. The Group has chosen to recognise the credit in other capital reserves. The Group provided treasury shares to employees exercising share options and elected to recognise theexcess of cash received over the acquisition cost of those treasury shares in share premium. In some jurisdictions, it is common to transfer other capital reserves to share premium or retained earningswhen the share options are exercised or expire. However, the transfer to share premium is subject to legal restrictions that are in force in each jurisdiction. The Group has elected to continue to presentother capital reserves separately.

The acquisition of an additional ownership interest in a subsidiary without a change of control is accounted for as an equity transaction in accordance with IFRS 10. Any excess or deficit of considerationpaid over the carrying amount of the non-controlling interest is recognised in equity of the parent in transactions where the non-controlling interest is acquired or sold without loss of control. The Group haselected to recognise this effect in retained earnings. With respect to the subsidiary to which this non-controlling interest relates, there were no accumulated components recognised in other comprehensiveincome (OCI). If there had been such components, those would have been reallocated within equity of the parent (e.g., foreign currency translation reserve, available-for-sale reserve).

IFRS 5.38 requires that items recognised in OCI related to a discontinued operation must be separately disclosed. The Group presents this effect in the statement of changes in equity above. However,presentation of such items within discontinued operations does not change the nature of the reserve. Reclassification to profit or loss will only occur if and when required by IFRS.

The Group recognises re-measurement gains and losses arising on defined benefit pension plans in OCI. As they will never be reclassified into profit or loss, they are immediately recorded in retainedearnings (refer to the statement of comprehensive income). IAS 19 (Revised 2011) does not require separate presentation of those components in the statement of changes in equity but an entity maychoose to present the re-measurement gains and losses in a separate reserve within the statement of changes in equity.


Consolidated statement of changes in equityfor the year ended 31 December 2014

Attributable to owners of the parent

Issuedcapital

(Note 21)

Sharepremium

(Note 21)

Treasuryshares

(Note 21)

Othercapital

reserves(Note 21)

Retainedearnings

Cash flowhedge

reserve(Note 21)

Availablefor-salereserve

(Note 21)

Foreigncurrency

translationreserve

(Note 21)

Assetrevaluation

reserve(Note 21) Total

Non-controlling

interest Total equity

IFRS 1.21IAS 1.10 (c)IAS 1.51(b)(c)IAS 1.106(d)

€000 €000 €000 €000 €000 €000 €000 €000 €000 €000 €000 €000 IAS 1.51(d)(e)

As at 1 January 2014 19,388 - (774) 566 23,533 (94) 105 - 117 42,841 208 43,049

Profit for the period - - - - 7,203 - - - - 7,203 239 7,442 IAS 1.106(a)

Other comprehensive income - - - - (281) 23 (16) (117) - (391) - (391) IAS 1.106(d)(ii)

Total comprehensive income - - - - 6,922 23 (16) (117) - 6,812 239 7,051

Exercise of options (Note 21) - 80 120 - - - - - - 200 - 200 IAS 1.106(d)(iii)

Share-based payment transactions (Note 27) - - - 298 - - - - - 298 - 298IAS 1.106(d)(iii)IFRS 2.50

Dividends (Note 22) - - - - (1,600) - - - - (1,600) (49) (1,649) IAS 1.106(d)(iii)Non-controlling interest arising on a businesscombination (Note 5) - - - - - - - - - - 342 342 IAS 1.106(d)(iii)

At 31 December 2014 19,388 80 (654) 864 28,855 (71) 89 (117) 117 48,551 740 49,291


Consolidated statement of cash flowsfor the year ended 31 December 2015

2015 2014

IFRS 1.21, IAS1.51(b)(c)IAS 1.10(d)

Notes €000 €000 IAS 1.51(d)(e)

Operating activities IAS 7.10, IAS 7.18(b)

Profit before tax from continuing operations 12,405 11,062Profit/(loss) before tax from discontinued operations 10 213 (193)Profit before tax 12,618 10,869Non-cash adjustment to reconcile profit before taxto net cash flows IAS 7.20(b)

Depreciation and impairment of property, plantand equipment 13 4,407 3,383Amortisation and impairment of intangible assets 15 325 174Share-based payment transaction expense 27 412 633Decrease in investment properties 14 306 300Decrease in financial instruments 9.1, 9.2 652 —Gain on disposal of property, plant and equipment 9.1 (532) (2,007)Fair value adjustment of a contingent consideration 5 358 —Amortisation of deferred revenue 13 (500) —Finance income 9.4 (336) (211) IAS 7.20(c)

Finance costs 9.3 1,366 1,223 IAS 7.20(c)

Net foreign exchange differences (40) (17)Share of profit of an associate and a joint venture 7,8 (671) (638)Movements in provisions, pensions andgovernment grants (500) (443)

Working capital adjustments: IAS 7.20(a)

Increase in trade and other receivables and prepayments (7,637) (1,604)Decrease in inventories 4,316 2,611Increase in trade and other payables 4,236 3,591

18,780 17,864Interest received 336 211 IAS 7.31

Interest paid (1,438) (1,242) IAS 7.31

Income tax paid (3,759) (4,379) IAS 7.35

Net cash flows from operating activities 13,919 12,713Investing activities IAS 7.10,21

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 14 (1,216) (1,192) IAS 7.16(a)

Purchase of financial instruments (3,294) (225) IAS 7.16(c)

Proceeds from sale of financial instruments 232 - IAS 7.16(d)

Development expenditures 15 (587) (390) IAS 7.16(a)

Acquisition of a subsidiary, net of cash acquired 5 230 (1,450) IAS 7.39

Receipt of government grants 24 2,951 642Net cash flows used in investing activities (10,046) (8,118)Financing activities IAS 7.10, IAS 7.21

Proceeds from exercise of share options 21 175 200 IAS 7.17(a)

Acquisition of non-controlling interest 5 (325) - IAS 7.42A

Transaction costs on issue of shares 22 (32) - IAS 7.17(a)

Payment of finance lease liabilities (51) (76) IAS 7.17(e)

Proceeds from borrowings 5,299 2,645 IAS 7.17(c)

Repayment of borrowings (1,806) (1,784) IAS 7.17(d)

Dividends paid to equity holders of the parent 22 (1,972) (1,600) IAS 7.31

Dividends paid to non-controlling interests (30) (49) IAS 7.31

Net cash flows from/(used in) financing activities 1,258 (664)Net increase in cash and cash equivalents 5,131 3,931Net foreign exchange difference 43 19 IAS 7.28

Cash and cash equivalents at 1 January 20 12,266 8,316

Cash and cash equivalents at 31 December 20 17,440 12,266 IAS 7.45


S. Seah-TanChairman

T. MakinoDeputy Chairman

Dr. Peter Goodman Lisa Goodright Ola Nordmann Martin GoodBoard Member Board Member Board Member Board Member

CommentaryIAS 7.18 allows entities to report cash flows from operating activities using either the direct method or the indirect method. The Grouppresents its cash flows using the indirect method. A statement of cash flows prepared using the direct method for operating activities ispresented in Appendix 3 for illustrative purposes.

The Group has reconciled profit before tax to net cash flows from operating activities. However, a reconciliation from profit after tax isalso acceptable under IAS 7.

IAS 7.33 permits interest paid to be shown as operating or financing activities and interest received to be shown as operating orinvesting activities, as deemed relevant for the entity. The Group has elected to classify interest paid as cash flows from financingactivities, and interest received as cash flows from operating activities.


Index to notes to the consolidated financial statements

1. Corporate information ................................................................................................................................... 21

2. Significant accounting policies ....................................................................................................................... 21

2.1 Basis of preparation ...................................................................................................................................... 21

2.2 Basis of consolidation .................................................................................................................................... 21

2.3 Summary of significant accounting policies ..................................................................................................... 22

2.4 First-time adoption of IFRS ............................................................................................................................ 45

3. Significant accounting judgements, estimates and assumptions ..................................................................... 56

4. Segment information .................................................................................................................................... 61

5. Business combinations and acquisition of non-controlling interests .................................................................. 65

6. Material partly-owned subsidiaries ................................................................................................................. 69

7. Interest in a joint venture .............................................................................................................................. 71

8. Investment in an associate ........................................................................................................................... 72

9. Other income/expenses and adjustments ...................................................................................................... 73

9.1 Other operating income ............................................................................................................................... 73

9.2 Other operating expenses .............................................................................................................................. 73

9.3 Finance costs .............................................................................................................................................. 74

9.4 Finance income ........................................................................................................................................... 74

9.5 Depreciation, amortisation, foreign exchange differences and costs of inventories includedin the consolidated statement of profit or loss ............................................................................................... 74

9.6 Employee benefits expense............................................................................................................................ 75

9.7 Research and development costs ................................................................................................................... 75

9.8 Components of other comprehensive income .................................................................................................. 75

9.9 Administrative expenses ................................................................................................................................ 76

10. Discontinued operations ................................................................................................................................ 76

11. Income tax.................................................................................................................................................... 78

12. Earnings per share ........................................................................................................................................ 82

13. Property, plant and equipment....................................................................................................................... 83

14. Investment properties ................................................................................................................................... 86

15. Intangible assets ........................................................................................................................................... 89

16. Goodwill and intangible assets with indefinite lives .......................................................................................... 90

17. Financial assets and financial liabilities ........................................................................................................... 93

17.1 Financial assets ............................................................................................................................................ 93

17.2 Financial liabilities ......................................................................................................................................... 94

17.3 Hedging activities and derivatives .................................................................................................................. 97

17.4 Fair values .................................................................................................................................................... 99

17.5 Financial risk management objectives and policies ........................................................................................ 110

18. Inventories ................................................................................................................................................. 117

19. Trade and other receivables (current) .......................................................................................................... 117

20. Cash and short-term deposits ...................................................................................................................... 118

21. Issued capital and reserves ........................................................................................................................ 118


22. Distributions made and proposed ................................................................................................................. 120

23. Provisions .................................................................................................................................................. 121

24. Government grants ..................................................................................................................................... 123

25. Deferred revenue ........................................................................................................................................ 123

26. Pensions and other post-employment benefit plans ....................................................................................... 123

27. Share-based payment plans ......................................................................................................................... 128

28. Trade and other payables (current) ............................................................................................................ 130

29. Commitments and contingencies .................................................................................................................. 131

30. Related party disclosures ............................................................................................................................ 132

31. Standards issued but not yet effective .......................................................................................................... 135

32. Events after the reporting period ................................................................................................................. 140

Notes to the consolidated financial statements


1. Corporate information IAS 1.10(e)IAS 1.51(b)(c)

The consolidated financial statements of Good First-time Adopter (International) Limited and its subsidiaries(collectively, the Group) for the year ended 31 December 2015 were authorised for issue in accordance with aresolution of the directors on 28 January 2016. Good First-time Adopter (International) Limited (the Company)is a limited company incorporated and domiciled in Euroland whose shares are publicly traded. The registeredoffice is located at Homefire House, Ashdown Square in Euroville.

The Group is principally engaged in the provision of fire prevention and electronics equipment and services andthe management of investment property (see Note 14). Information on the Group’s ultimate parent is presentedin Note 30. Information on other related party relationships of the Group is provided in Note 30.

IAS 1.138(a)IAS 10.17

IAS 1.138(b)IAS 1.138(c)

2. Significant accounting policiesCommentaryThe identification of an entity’s significant accounting policies is an important aspect of the financial statements. IAS 1.117requires the significant accounting policies disclosures to summarise the measurement basis (or bases) used in preparingthe financial statements, and the other accounting policies used that are relevant to an understanding of the financialstatements. The significant accounting policies disclosed in this note is to illustrate some of the more commonly applicabledisclosures. However, it is essential that entities consider their specific circumstances when determining which accountingpolicies are significant and relevant to be included.

2.1 Basis of preparationThe 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).

For all periods up to and including the year ended 31 December 2014, the Group prepared its financialstatements in accordance with local generally accepted accounting principles (Local GAAP). These financialstatements for the year ended 31 December 2015 are the first the Group has prepared in accordance with IFRS.Refer to Note 2.4 for information on how the Group adopted IFRS.

IAS 1.16

IFRS 1.23

The consolidated financial statements have been prepared on a historical cost basis, except for investmentproperties, land and buildings classified as property, plant and equipment, derivative financial instruments andavailable-for-sale (AFS) financial assets that have been measured at fair value. The carrying values ofrecognised assets and liabilities that are designated as hedged items in fair value hedges that would otherwisebe carried at amortised cost, are adjusted to record changes in the fair values attributable to the risks that arebeing hedged in effective hedge relationships. The consolidated financial statements are presented in euros andall values are rounded to the nearest thousand (€000), except when otherwise indicated.

IAS 1.112(a)

IAS 1.117(a)

IAS 1.51(d)(e)

CommentaryIFRS 1 requires an entity to explain how an entity transitioned from Local GAAP to IFRS and how its reported financialposition, financial performance and cash flows were affected. The Group provides this transition disclosure in Note 2.4.

Companies in certain jurisdictions may be required to comply with IFRS approved by local regulations, for example, listedcompanies in the European Union (EU) are required to comply with IFRS as endorsed by the EU. These financialstatements only illustrate compliance with IFRS as adopted by the IASB.

2.2 Basis of consolidationThe consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at31 December 2015.

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with theinvestee and has the ability to affect those returns through its power over the investee. Specifically, the Groupcontrols an investee if, and only if, the Group has:

• Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities ofthe investee)

• Exposure, or rights, to variable returns from its involvement with the investee• The ability to use its power over the investee to affect its returnsGenerally, there is a presumption that a majority of voting rights results in control. To support this presumptionand when the Group has less than a majority of the voting or similar rights of an investee, the Group considersall relevant facts and circumstances in assessing whether it has power over an investee, including:• The contractual arrangement(s) with the other vote holders of the investee• Rights arising from other contractual arrangements• The Group’s voting rights and potential voting rights

IFRS 10.7

IAS 27.22IAS 27.23IAS 27.24

IFRS 10.B38

IFRS 10.B80



2.2 Basis of consolidation continuedThe Group re-assesses whether or not it controls an investee if facts and circumstances indicate that thereare changes to one or more of the three elements of control. Consolidation of a subsidiary begins when theGroup obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets,liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in theconsolidated financial statements from the date the Group gains control until the date the Group ceases tocontrol the subsidiary.

IFRS 10.B86IFRS 10.B99


Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders ofthe parent of the Group and to the non-controlling interests, even if this results in the non-controlling interestshaving a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accountingpolicies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income,expenses and cash flows relating to transactions between members of the Group are eliminated in full onconsolidation.

IFRS 10.B86

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equitytransaction. If the Group loses control over a subsidiary, it:


• Derecognises the assets (including goodwill) and liabilities of the subsidiary

• Derecognises the carrying amount of any non-controlling interest

• Derecognises the cumulative translation differences, recorded in equity

• Recognises the fair value of the consideration received

• Recognises the fair value of any investment retained

• Recognises any surplus or deficit in profit or loss

• Reclassifies the parent’s share of components previously recognised in other comprehensive incometo profit or loss or retained earnings, as appropriate, as would be required if the Group had directly disposedof the related assets or liabilities

IFRS 10.B99

2.3 Summary of significant accounting policiesThe following are the significant accounting policies applied by the Group in preparing its consolidated financialstatements:

IFRS 1.7,IAS 1.112IAS 1.117(a)(b)

CommentaryIFRS 1 requires an entity to use the same accounting policies in its opening IFRS statement of financial position andthroughout all periods presented in its first IFRS financial statements (the first annual financial statements in which anentity adopts IFRS by an explicit and unreserved statement of compliance with IFRS). Those accounting policies mustcomply with each IFRS effective at the end of its first IFRS reporting period, except as specified in IFRS 1 (e.g., when theexceptions in IFRS 1 prohibit retrospective application or an entity avails itself of one of IFRS 1’s voluntary exemptions).An entity must not apply different versions of IFRS that were effective at earlier dates. An entity may apply a new IFRSthat is not yet mandatory if that IFRS permits early application.

2.3.1 Business combinations and goodwillBusiness combinations are accounted for using the acquisition method. The cost of an acquisition is measuredas the aggregate of the consideration transferred, which is measured at the acquisition date fair value and theamount of any non-controlling interest in the acquiree. For each business combination, the Group electswhether to measure the non-controlling interest in the acquiree at fair value or at the proportionate share ofthe acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included inadministrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriateclassification and designation in accordance with the contractual terms, economic circumstances and pertinentconditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts bythe acquiree.

IFRS 3.4IFRS 3.18IFRS 3.19

IFRS 3.53

IFRS 3.15IFRS 3.16

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisitiondate. All contingent consideration (except that which is classified as equity) is measured at fair value with thechanges in fair value in profit or loss. Contingent consideration that is classified as equity is not remeasured andsubsequent settlement is accounted for within equity.

IFRS 3.39IFRS 3.58



2.3 Summary of significant accounting policies continuedGoodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and theamount recognised for non-controlling interests) and any previous interest held, over the net identifiable assetsacquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregateconsideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquiredand all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised atthe acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired overthe aggregate consideration transferred, then the gain is recognised in profit or loss.

IFRS 3.32

IFRS 3.36

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purposeof impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated toeach of the Group’s cash-generating units that are expected to benefit from the combination, irrespective ofwhether other assets or liabilities of the acquiree are assigned to those units.

Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit isdisposed of, the goodwill associated with the disposed operation is included in the carrying amount of theoperation when determining the gain or loss on disposal of the operation. Goodwill disposed in thesecircumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.

IFRS 3.54IFRS 3.B63(a)IAS 36.80

IAS 36.86

2.3.2 Investment in an associate and a joint ventureAn associate is an entity over which the Group has significant influence. Significant influence is the power toparticipate in the financial and operating policy decisions of the investee, but is not control or joint control overthose policies.

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangementhave rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control ofan arrangement, which exists only when decisions about the relevant activities require the unanimous consentof the parties sharing control.

The considerations made in determining whether significant influence or joint control are similar to thosenecessary to determine control over subsidiaries.

The Group’s investments in its associate and joint venture are accounted for using the equity method.

Under the equity method, the investment in an associate or joint venture is initially recognised at cost. Thecarrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets of theassociate or joint venture since the acquisition date. Goodwill relating to the associate or joint venture isincluded in the carrying amount of the investment and is not tested for impairment separately.

IAS 28.3

IFRS 11.16IFRS 11.7

IAS 28.10

The statement of profit or loss reflects the Group’s share of the results of operations of the associate or jointventure. Any change in OCI of those investees is presented as part of the Group’s OCI. In addition, when therehas been a change recognised directly in the equity of the associate or joint venture, the Group recognises itsshare of any changes, when applicable, in the statement of changes in equity. Unrealised gains and lossesresulting from transactions between the Group and the associate and joint venture are eliminated to the extentof the interest in the associate or joint venture.

The aggregate of the Group’s share of profit or loss of an associate and a joint venture is shown on the face ofthe statement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate or joint venture.

The financial statements of the associate or joint venture are prepared for the same reporting period as theGroup. When necessary, adjustments are made to bring the accounting policies in line with those of the Group.

IAS 28.26-29

IAS 1.82(c)

After application of the equity method, the Group determines whether it is necessary to recognise animpairment loss on its investment in its associate. The Group determines at each reporting date whether thereis any objective evidence that the investment in the associate or joint venture is impaired. If this is the case, theGroup calculates the amount of impairment as the difference between the recoverable amount of the associateor joint venture and its carrying value and recognises the loss as ‘Share of profit of an associate and a jointventure’ in the statement of profit or loss.

IAS 28.40-43

Upon loss of significant influence over the associate or joint control over the joint venture, the Group measuresand recognises any retained investment at its fair value. Any difference between the carrying amount of theassociate or joint venture upon loss of significant influence or joint control and the fair value of the retaininginvestment and proceeds from disposal is recognised in profit or loss.

IAS 28.22(b)



2.3 Summary of significant accounting policies continuedCommentaryThe Group does not have an interest in any joint operations. If the Group had an interest in a joint operation, as perIFRS 11.20, it would recognise in relation to its interest in a joint operation its:

• Assets, including its share of any assets held jointly

• Liabilities, including its share of any liabilities incurred jointly

• Revenue from the sale of its share of the output arising from the joint operation

• Share of the revenue from the sale of the output by the joint operation

• Expenses, including its share of any expenses incurred jointly

2.3.3 Current versus non-current classificationThe Group presents assets and liabilities in the statement of financial position based on current/non-currentclassification. An asset is current when it is:

• Expected to be realised or intended to sold or consumed in the normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realised within twelve months after the reporting period, or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at leasttwelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in the normal operating cycle

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after thereporting period

The Group classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

IAS 1.60IAS 1.66

2.3.4 Fair value measurementThe Group measures financial instruments, such as derivatives, and non-financial assets such as investmentproperties, at fair value at each balance sheet date. Fair value related disclosures for financial instruments andnon-financial assets that are measured at fair value or where fair values are disclosed, are summarised in thefollowing notes:

Accounting policy disclosures Note 2.3.4

Disclosures for valuation methods, significant estimates and assumptions Notes 3, 5, 13, 14, 17.4 and 22

Contingent consideration Note 5

Quantitative disclosures of fair value measurement hierarchy Note 17

Investment in unquoted equity shares (discontinued operations) Note 10

Property, plant and equipment under revaluation model Note 13

Investment properties Note 14

Financial instruments (including those carried at amortised cost) Note 17.4

Non-cash distribution Note 22IFRS 13.9

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date. The fair value measurement is based on thepresumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability

Or

• In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Group.

IFRS 13.16

IFRS 13.22



2.3 Summary of significant accounting policies continuedThe fair value of an asset or a liability is measured using the assumptions that market participants would usewhen pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generateeconomic benefits from the asset’s highest and best use or by selling it to another market participant that wouldutilise the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data areavailable to measure fair value, maximising the use of relevant observable inputs and minimising the use ofunobservable inputs.

IFRS 13.27

IFRS 13.61

IFRS 13.73

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorisedwithin the fair value hierarchy. This is described, as follows, based on the lowest level input that is significant tothe fair value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair valuemeasurement is directly or indirectly observable

• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair valuemeasurement is unobservable

For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, theGroup determines whether transfers have occurred between levels in the hierarchy by re-assessingcategorisation (based on the lowest level input that is significant to the fair value measurement as a whole) atthe end of each reporting period.

IFRS 13.95

IFRS 13.93(g)

The Group’s Valuation Committee determines the policies and procedures for both recurring fair valuemeasurement, such as investment properties and unquoted available-for-sale financial assets, and for non-recurring measurement, such as assets held for distribution in discontinued operations. The ValuationCommittee is comprised of the head of the investment properties segment, head of the Group’s internalmergers and acquisitions team, the head of the risk management department, chief finance officers and themanagers of each property.

External valuers are involved for valuation of significant assets, such as properties and AFS financial assets, andsignificant liabilities, such as contingent consideration. The involvement of external valuers is decided uponannually by the Valuation Committee after discussion with and approval by the Company’s Audit Committee.Selection criteria include market knowledge, reputation, independence and whether professional standards aremaintained. Valuers are normally rotated every three years. The Valuation Committee decides, afterdiscussions with the Group’s external valuers, which valuation techniques and inputs to use for each case.

At each reporting date, the Valuation Committee analyses the movements in the values of assets and liabilitieswhich are required to be remeasured or re-assessed as per the Group’s accounting policies. For this analysis,the Valuation Committee verifies the major inputs applied in the latest valuation by agreeing the information inthe valuation computation to contracts and other relevant documents.

The Valuation Committee, in conjunction with the Group’s external valuers, also compares the change in the fairvalue of each asset and liability with relevant external sources to determine whether the change is reasonable.

On an interim basis, the Valuation Committee and the Group’s external valuers present the valuation results tothe Audit Committee and the Group’s independent auditors. This includes a discussion of the major assumptionsused in the valuations.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basisof the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, asexplained above.

IFRS 13.94

CommentaryThe Group has not elected to apply the portfolio exception under IFRS 13.48. If an entity makes an accounting policydecision to use the exception, this fact is required be disclosed, as per IFRS 13.96.

Details have been provided in these illustrative disclosures. However, entities should consider tailoring the level of detailbased on their specific facts and circumstances and materiality considerations.



2.3 Summary of significant accounting policies continued2.3.5 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, regardless of when the payment is received. Revenue is measured at thefair value of the consideration received or receivable, taking into account contractually defined terms ofpayment and excluding taxes or duty. The Group assesses its revenue arrangements against specific criteria inorder to determine if it is acting as principal or agent. The Group has concluded that it is acting as a principal inall of its revenue arrangements. The following specific recognition criteria must also be met before revenue isrecognised:

IAS 18.35(a)IAS 18.14IAS 18.20IAS 18.9

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. Revenue from the sale of goods is measuredat the fair value of the consideration received or receivable, net of returns and allowances, trade discounts andvolume rebates. The Group provides normal warranty provisions for general repairs for two years on all itsproducts sold, in line with industry practice. A liability for potential warranty claims is recognised at the time theproduct is sold – see Note 23 for more information. The Group does not provide any extended warranties ormaintenance contracts to its customers.

Within its electronics segment, the Group operates a loyalty points programme, GoodPoints, which allowscustomers to accumulate points when they purchase products in the Group’s 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 by applyinga statistical analysis. The fair value of the points issued is initially deferred and later recognised as revenuewhen the points are redeemed.

IAS 18.14(a)IAS 18.14(b)

CommentaryIAS 18 Revenue does not prescribe an allocation method for multiple component arrangements. IFRIC 13 CustomerLoyalty Programmes mentions two allocation methodologies; allocation based on relative fair value and allocation usingthe residual method. The Group’s revenue recognition policy for sales, which includes the issuance of GoodPoints, is basedon the fair value of the points issued. The Group could have based its revenue recognition policy on the relative fair valuesof the goods sold and the points issued.

IFRIC 13 does not set out any disclosure requirements. The Group has not included extensive disclosures for the loyaltyprogramme as the amounts are not significant. If the deferred revenue and revenue related to the GoodPoints programmeare significant, additional disclosure items might include:

• The number of outstanding points

• The period over which the revenue is expected to be recognised

• The key assumptions used to determine the period over which revenue is recognised

• The effect of any changes 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. When the contractoutcome cannot be measured reliably, revenue is recognised only to the extent that the expenses incurred areeligible to be recovered. This is generally during the early stages of installation where the equipment and fabricsneed to pass through the customer’s quality testing procedures as part of the installation.

IAS 18.20

Interest incomeFor all financial instruments measured at amortised cost and interest bearing financial assets classified asavailable-for-sale, interest income or expense is recorded using the effective interest rate (EIR). The EIR is therate that exactly discounts the estimated future cash receipts through the expected life of the financialinstrument or a shorter period, where appropriate, to the net carrying amount of the financial asset. Interestincome is included in finance income in the statement of profit or loss.

IAS 18.26IAS 18.20(c)

DividendsRevenue is recognised when the Group’s right to receive the payment is established, which is generally whenshareholders approve the dividend.

IAS 18.30(a)



2.3 Summary of significant accounting policies continuedRental incomeRental income arising from operating leases on investment properties is accounted for on a straight-line basisover the lease terms and is included in revenue in the statement of profit or loss due to its operating nature.

IAS 18.30(c)

IAS 17.50

Equipment received from customersThe Group receives transfers of moulds and other tools for its manufacturing process from customers. TheGroup assesses whether the transferred item meets the definition of an asset, and if so, recognises thetransferred asset as property, plant and equipment. At initial recognition, its cost is measured at fair value,and a corresponding amount is recognised as revenue as the Group has no future performance obligations.

IFRIC 18.9IFRIC 18.11IFRIC 18.13

2.3.6 Foreign currenciesThe Group’s consolidated financial statements are presented in euros, which is also the parent company’sfunctional currency. For each entity, the Group determines the functional currency and items included in thefinancial statements of each entity are measured using that functional currency. The Group uses the directmethod of consolidation and on disposal of a foreign operation, the gain or loss that is reclassified to profit orloss reflects the amount that arises from using this method.

IAS 1.51(d)IAS 21.9

Transactions and balancesTransactions in foreign currencies are initially recorded by the Group entities at their respective functionalcurrency spot rate at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currencyspot rate of exchange ruling at the reporting date.

Differences arising on settlement or translation of monetary items are recognised in profit or loss with theexception of monetary items that are designated as part of the hedge of the Group’s net investment of a foreignoperation. These are recognised in OCI until the net investment is disposed of, at which time, the cumulativeamount is classified to profit or loss. Tax charges and credits attributable to exchange differences on thosemonetary items are also recorded in OCI.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated usingthe exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value ina foreign currency are translated using the exchange rates at the date when the fair value is determined. Thegain or loss arising on translation of non-monetary measured at fair value is treated in line with the recognitionof gain or loss on change in fair value in the item (i.e., the translation differences on items whose fair value gainor loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).

IAS 21.21IAS 21.23(a)

IAS 21.28IAS 21.32

IAS 21.23(b)IAS 21.23(c)

IAS 21.30

Any goodwill arising on the acquisition of a foreign operation subsequent to 1 January 2014 and any fair valueadjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets andliabilities of the foreign operation and translated at the spot rate of exchange at the reporting date.

Prior to 1 January 2014, the date of transition to IFRS, the Group treated goodwill and any fair valueadjustments to the carrying amounts of assets and liabilities arising on the acquisition as assets and liabilities ofthe parent. Therefore, those assets and liabilities are non-monetary items already expressed in the functionalcurrency of the parent and no further translation differences occur.

IAS 21.47IFRS 1.C2

Group companiesOn consolidation, the assets and liabilities of foreign operations are translated into euros at the rate ofexchange prevailing at the reporting date and their statement of profit or loss are translated at exchange ratesprevailing at the dates of the transactions. The exchange differences arising on the translation are recognised inOCI. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation isrecognised in the statement of profit or loss.

IAS 21.39(a)IAS 21.39(b)IAS 21.39(c)

IAS 21.48



2.3 Summary of significant accounting policies continued2.3.7 Government grantsGovernment grants are recognised where there is reasonable assurance that the grant will be received andall attached conditions will be complied with. When the grant relates to an expense item, it is recognised asincome on a systematic basis over the periods that the costs, which it is intended to compensate, are expensed.Where the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life ofthe related asset.

When the Group receives non-monetary grants, the asset and the grant are recorded gross at nominal amountsand released to profit or loss over the expected useful life of the asset, based on the pattern of consumption ofthe benefits of the underlying asset by equal annual instalments. When loans or similar assistance are providedby governments or related institutions with an interest rate below the current applicable market rate, the effectof this favourable interest is regarded as a government grant.

IAS 20.7IAS 20.12IAS 20.26

IAS 20.23

CommentaryIAS 20 permits two different ways of presenting a government grant relating to assets. It can, as done by the Group, bepresented in the statement of financial position as deferred income which is recognised as income on a systematic andrational basis over the useful life of the asset. Alternatively, it can reduce the carrying amount of the asset. The grant isthen recognised as income over the useful life of the depreciable asset by way of a reduced depreciation charge.Whichever method is applied, no further disclosures are required.

The Group has chosen to present grants related to an expense item as other operating income in the statement of profitor loss. Alternatively, IAS 20.29 permits grants related to income to be deducted in reporting the related expense.

IAS 20.23 permits grant of a non-monetary asset to be accounted for in two alternative ways. The asset and the grant canbe accounted for using a nominal amount. The Group accounts for grants of non-monetary assets at nominal value.Alternatively, the asset and the grant can be accounted for at the fair value of the non-monetary asset.

2.3.8 TaxesCurrent income taxCurrent income tax assets and liabilities for the current period are measured at the amount expected to berecovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount arethose that are enacted, or substantively enacted at the reporting date in the countries where the Groupoperates and generates taxable income.

Current income tax relating to items recognised directly in equity is recognised in equity and not in thestatement of profit or loss. Management periodically evaluates positions taken in the tax returns with respect tosituations in which applicable tax regulations are subject to interpretation, and it establishes provisions whereappropriate.

IAS 12.46

IAS 12.61AIAS 1.117

Deferred taxDeferred tax is provided using the liability method on temporary differences between the tax bases of assetsand liabilities and their carrying amounts for financial reporting purposes at the reporting date.

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

• When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability ina transaction that is not a business combination and, at the time of the transaction, affects neither theaccounting profit nor taxable profit or loss

• In respect of taxable temporary differences associated with investments in subsidiaries, associates andinterests in joint arrangements, when the timing of the reversal of the temporary differences can becontrolled and it is probable that the temporary differences will not reverse in the foreseeable future

IAS 12.22(c)

IAS 12.39

Deferred tax assets are recognised for: all deductible temporary differences: the carry forward of unused taxcredits and unused tax losses, to the extent that it is probable that taxable profit will be available against whichthe deductible temporary differences. The carry forward of unused tax credits and unused tax losses can beutilised, except:

• When the deferred 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 ofthe transaction, affects neither the accounting profit nor taxable profit or loss

• In respect of deductible temporary differences associated with investments in subsidiaries, associates andinterests in joint arragements, deferred tax assets are recognised only to the extent that it is probable thatthe temporary differences will reverse in the foreseeable future and taxable profit will be available againstwhich the temporary differences can be utilised

IAS 12.34

IAS 12.24

IAS 12.44



2.3 Summary of significant accounting policies continued

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year whenthe asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted orsubstantively enacted at the reporting date.

IAS 12.56IAS 12.37

IAS 12.47

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferredtax items are recognised in correlation to the underlying transaction either in other comprehensive income ordirectly in equity.

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

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognitionat that date, are recognised subsequently if new information about facts and circumstances change. Theadjustment is either be treated as a reduction to goodwill (as long as it does not exceed goodwill) if it is incurredduring the measurement period or recognised in profit or loss.

IAS 12.61A

IAS 12.71

IAS 12.68

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

• 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

• Receivables and payables 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 statement of financial position.

IAS 18.8

2.3.9 Non-current assets held for distribution to owners and discontinued operationsThe Group classifies non-current assets and disposal groups as held for distribution to owners if their carryingamounts will be recovered principally through a distribution rather than through continuing use. Non-currentassets and disposal groups are measured at the lower of their carrying amount and the fair value less costs todistribute. The criteria for held for distribution classification is regarded met only when the distribution is highlyprobable and the asset or disposal group is available for immediate distribution in its present condition. Actionsrequired to complete the distribution should indicate that it is unlikely that significant changes to the distributionwill be made or that the decision to distribute will be withdrawn. Management must be committed to thedistribution expected within one year from the date of classification.

Assets and liabilities classified as held for distribution are presented separately as current items in thestatement of financial position.

Property, plant and equipment and intangible assets once classified as held for distribution to owners are notdepreciated or amortised.

A disposal group qualifies as discontinued operation if it is a component of an entity that either has beendisposed of, or is classified as held for sale, and:

• Represents a separate major line of business or geographical area of operations,

• Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area ofoperations

Or

• Is a subsidiary acquired exclusively with a view to resale

Discontinued operations are excluded from the results of continuing operations and are presented as a singleamount as profit or loss after tax from discontinued operations in the statement of profit or loss.

Additional disclosures are provided in Note 10. All other notes to the financial statements mainly includeamounts for continuing operations, unless otherwise mentioned.

IFRS 5.15/ 15AIFRS 5.6IFRS 5.7IFRS 5.8

IFRS 5.33

IFRS 5.26

IFRS 5.32

IFRS 5.30IFRS 5.33



2.3 Summary of significant accounting policies continued2.3.10 Property, plant and equipmentConstruction in progress, plant and equipment are stated at cost, net of accumulated depreciation and/oraccumulated impairment losses, if any. Such cost includes the cost of replacing parts of the property, plant andequipment and borrowing costs for long-term construction projects if the recognition criteria are met. Whensignificant parts of property, plant and equipment are required to be replaced at intervals, the Group recognisessuch parts as individual assets with specific useful lives and depreciates them accordingly. Likewise, when amajor inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as areplacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in theprofit or loss as incurred. The present value of the expected cost for the decommissioning of the asset after itsuse, is included in the cost of the respective asset if the recognition criteria for a provision are met. Refer toSignificant accounting judgements, estimates and assumptions (Note 3) and Provisions (Note 23) for furtherinformation about the recognised decommissioning provision.

IAS 16.73(a)IAS 16.30IAS 16.15IAS 16.16

Contributions by customers of items of property, plant and equipment (such as moulds) received on or after 1January 2014, which require an obligation to supply goods to the customer in the future, are recognised at thefair value when the group has control of the item. A corresponding credit to deferred revenue is made. Revenueis subsequently recognised over the contractual period, in the absence of which revenue is recognised over theuseful lives of the transferred assets. In the absence of an ongoing obligation to supply goods in future,contributions are recognised as revenue immediately.

Land and buildings are measured at fair value, less accumulated depreciation on buildings, and impairmentlosses are recognised at the date of revaluation. Valuations are performed with sufficient frequency to ensurethat the fair value of a revalued asset does not differ materially from its carrying amount.

A revaluation surplus is recognised in OCI and credited to the asset revaluation reserve in equity. However, tothe extent that it reverses a revaluation deficit of the same asset previously recognised in the statement ofprofit or loss, the increase is recognised in the statement of profit or loss. A revaluation deficit is recognised inprofit or loss, except to the extent that it offsets an existing surplus on the same asset recognised in the assetrevaluation reserve.

IFRS 1.D24IFRIC 18. 9IFRIC 18.11IFRIC 18.13

IAS 16.73(a)IAS 16.31

IAS 16.39IAS 16.40

An annual transfer from the asset revaluation reserve to retained earnings is made for the difference betweendepreciation based on the revalued carrying amount of the assets and depreciation based on the asset’s originalcost. Additionally, accumulated depreciation at the revaluation date is eliminated against the gross carryingamount of the asset and the net amount is restated to the revalued amount of the asset. Upon disposal, anyrevaluation reserve relating to the particular asset being sold is transferred to retained earnings.

IAS 16.41

CommentaryUnder IAS 16 an entity has a policy choice for the measurement of property, plant and equipment after initial recognition.It may choose either the cost model or the revaluation model for entire classes of property, plant and equipment. TheGroup has elected to use the revaluation model for land and buildings, while other classes of property, plant and equipmentare measured using the cost model. The Group has also elected to transfer the revaluation surplus to retained earnings asthe asset is being used. Alternatively, the amount could have been transferred, in full, upon disposal of the asset.

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:

• Plant, machinery and equipment 5 to 15 years

• Building 15 to 20 years

IAS 16.73(b)IAS 16.73(c)

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefitsare expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as thedifference between the net disposal proceeds and the carrying amount of the asset) is included in the statementof profit or loss when the asset is derecognised.

IAS 16.67IAS 16.68IAS 16.71

CommentaryIf an entity's depreciation methods and rates in accordance with previous GAAP are acceptable in accordance withIFRS, it accounts for any change in the estimated useful life or depreciation pattern prospectively from when it makesthat change in estimate. However, in some cases, an entity's depreciation methods and rates in accordance with previousGAAP may differ from those that would be acceptable in accordance with IFRS (for example, if they were adopted solelyfor tax purposes and do not reflect a reasonable estimate of the asset's useful life). If those differences have a materialeffect on the financial statements, the entity adjusts accumulated depreciation in its opening IFRS statement of financialposition retrospectively so that it complies with IFRS. (IFRS 1.IG7)



2.3 Summary of significant accounting policies continuedThe residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed ateach financial year end and adjusted prospectively, if appropriate.

IAS 16.51

2.3.11 LeasesThe determination of whether an arrangement is, or contains, a lease is based on the substance of thearrangement at the inception date. The arrangement is assessed for whether fulfilment of the arrangement isdependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset or assets,even if that right is not explicitly specified in an arrangement.

For arrangements entered into prior to 1 January 2014, the date of inception is deemed to be 1 January 2014in accordance with IFRS 1 First-time Adoption of International Reporting Standards.

IFRIC 4.6IFRIC 4.14

IFRIC 4.17,IFRS 1.D9

CommentaryIFRS 1 allows a first-time adopter to determine whether an arrangement existing at the date of transition to IFRS containsa lease on the basis of facts and circumstances existing at that date.

If a first-time adopter made a determination of whether an arrangement contained a lease in accordance with previous GAAPand the outcome is the same as that required by IFRIC 4 and IAS 17, the first-time adopter may use such determination whenit adopts IFRS even if the date the determination is performed is different from that required by IFRIC 4.

Group as a lesseeFinance leases that transfer to the Group substantially all of the risks and benefits incidental to ownership ofthe leased item, are capitalised at the commencement of the lease at the fair value of the leased property or,if lower, at the present value of the minimum lease payments. Lease payments are apportioned between financecharges and a reduction in the lease liability so as to achieve a constant rate of interest on the remainingbalance of the liability. Finance charges are recognised in finance costs in the statement of profit or loss.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty thatthe Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of theestimated useful life of the asset and the lease term.

An operating lease is a lease other than a finance lease. Operating lease payments are recognised as anoperating expense in the statement of profit or loss on a straight-line basis over the lease term.

IAS 17.8IAS 17.20IAS 17.25

IAS 17.27

IAS 17.33

Group as a lessorLeases in which the Group does not transfer substantially all the risks and benefits of ownership of the asset areclassified as operating leases. Initial direct costs incurred in negotiating and arranging an operating lease areadded to the carrying amount of the leased asset and recognised over the lease term on the same bases asrental income. Contingent rents are recognised as revenue in the period in which they are earned.

IAS 17.8IAS 17.52

2.3.12 Borrowing costsBorrowing costs directly attributable to the acquisition, construction or production of an asset that necessarilytakes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost ofthe respective asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costsconsist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Borrowing costs incurred on or after the date of transition (1 January 2014) for all eligible qualifying assets arecapitalised. The borrowing costs capitalised under Local GAAP on qualifying assets to the date of transition toIFRS are included in the carrying amount of assets at that date.

IAS 23.8

IAS 23.27,IFRS 1.D23

CommentaryIFRS 1 provides an exemption that allows an entity to apply the requirements of IAS 23 Borrowing Costs from the date oftransition or an earlier date as permitted by paragraph 28 of IAS 23. From the date on which an entity applying thisexemption begins applying IAS 23 it:

u Must not restate the borrowing cost component that was capitalised under previous GAAP and included in the carryingamount of assets at that date

u Must account for borrowing costs incurred on or after that date in accordance with IAS 23, including those incurred onqualifying assets that met the criteria for the commencement of capitalisation before the date on which the entityapplies this exemption.



2.3 Summary of significant accounting policies continued

2.3.13 Investment propertiesInvestment properties are measured initially at cost, including transaction costs. Subsequent to initialrecognition, investment properties are stated at fair value, which reflects market conditions at the reportingdate. Gains or losses arising from changes in the fair values of investment properties are included in profit orloss in the period in which they arise, including the corresponding tax effect. Fair values are determined basedon an annual evaluation performed by an accredited external, independent valuer, applying a valuation modelrecommended by the International Valuation Standards Committee.

Investment properties are derecognised either when they have been disposed of or when the investmentproperty is permanently withdrawn from use and no future economic benefit is expected from its disposal.The difference between the net disposal proceeds and the carrying amount of the asset is recognised in thestatement of profit or loss in the period of derecognition.

IAS 40.20

IAS 40.33IAS 40.75(a)IAS 40.35

IAS 40.66IAS 40.69

Transfers are made to (or from) investment property only when there is a change in use. For a transfer frominvestment property to owner-occupied property, the deemed cost for subsequent accounting is the fair valueat the date of change. If owner-occupied property becomes an investment property, the Group accounts for it inaccordance with the policy stated under property, plant and equipment up to the date of change.

IAS 40.57IAS 40.60IAS 40.61

CommentaryThe Group has elected to state land and buildings at revalued amount in accordance with IAS 16 and investmentproperties at fair value in accordance with IAS 40 Investment Property.

As an alternative, both IAS 16 and IAS 40 permit property, plant and equipment and investment properties to be carriedat historical cost less provisions for depreciation and impairment. In these circumstances, disclosures about the cost basisand depreciation rates are required. In addition, IAS 40 requires disclosure of the fair value of any investment propertyrecorded at cost. Therefore, companies would still need to determine the fair value.

2.3.14 Intangible assetsIntangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assetsacquired in a business combination is their fair value as at the date of acquisition. Following initial recognition,intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any.Internally generated intangible assets, excluding capitalised development costs, are not capitalised andexpenditure is recognised in the statement of profit or loss when it is incurred.

IAS 38.24IAS 38.83IAS 38.74IAS 38.57

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortised over their useful economic lives and assessed for impairmentwhenever there is an indication that the intangible asset may be impaired. The amortisation period and theamortisation method for an intangible asset with a finite useful life are reviewed at least at the end of eachreporting period. Changes in the expected useful life or the expected pattern of consumption of future economicbenefits embodied in the asset are accounted for by changing the amortisation period or method, asappropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assetswith finite lives is recognised in the statement of profit or loss in the expense category consistent with thefunction of the intangible assets.

IAS 38.88

IAS 38.97IAS 36.9IAS 38.104

IAS 38.118

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, eitherindividually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually todetermine whether the indefinite life continues to be supportable. If not, the change in useful life from indefiniteto finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between thenet disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or losswhen the asset is derecognised.

IAS 38.107IAS 38.108IAS 38.109

IAS 38.113



2.3 Summary of significant accounting policies continuedResearch and development costsResearch costs are expensed as incurred. Development expenditures on an individual project are recognisedas an intangible asset when the Group can demonstrate:

• The technical feasibility of completing the intangible asset so that it will be available for use or sale

• Its intention to complete and its ability to use or sell the asset

• How the asset will generate future economic benefits

• The availability of resources to complete the asset

• The ability to measure reliably the expenditure during development

Following initial recognition of the development expenditure as an asset, the cost model is applied requiring theasset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisationof the asset begins when development is complete and the asset is available for use. It is amortised over theperiod of expected future benefit. Amortisation is recorded in cost of sales. During the period of development,the asset is tested for impairment annually.

IAS 38.54IAS 38.57

IAS 38.74

IAS 36.10(a)

Patents and licencesThe Group made upfront payments to purchase patents and licences.The patents have been granted for aperiod of 10 years by the relevant government agency with the option of renewal at the end of this period.Licences for the use of intellectual property are granted for periods ranging between five and ten yearsdepending on the specific licences. The licences may be renewed at little or no cost to the Group. As a result,the licences are assessed as having an indefinite useful life.

IAS 38.122(a)

A summary of the policies applied to the Group’s intangible assets is as follows:

Licences Patents Development costs IAS 38.118(a)(b)

Useful lives Indefinite Finite (10 years) Finite (20 years)

Amortisation methodused

No amortisation Amortised on a straight-line basis over the periodof the patent

Amortised on a straight- linebasis over the periodof expected future salesfrom the related project

Internally generatedor acquired

Acquired Acquired Internally generated

2.3.15 Financial instruments — initial recognition and subsequent measurementA financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability orequity instrument of another entity.

IAS 39.9

i) Financial assetsInitial recognition and measurementFinancial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, loansand receivables, held-to-maturity investments, AFS financial assets, or as derivatives designated as hedginginstruments in an effective hedge, as appropriate. The Group determines the classification of its financial assetsat initial recognition.

All financial assets are recognised initially at fair value plus, in the case of assets not at fair value through profitor loss, transaction costs that are attributable to the acquisition of the financial asset.

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

IFRS 7.21IAS 39.9

IAS 39.43

IAS 39.9IAS 39.38



2.3 Summary of significant accounting policies continuedSubsequent measurementThe subsequent measurement of financial assets depends on their classification as described below :

Financial assets at fair value through profit or lossFinancial assets at fair value through profit or loss include financial assets held for trading and financial assetsdesignated upon initial recognition at fair value through profit or loss. Financial assets are classified as held-for-trading if they are acquired for the purpose of selling or repurchasing in the near term. This category includesderivative financial instruments entered into by the Group that are not designated as hedging instruments inhedge relationships as defined by IAS 39. Derivatives, including separated embedded derivatives are alsoclassified as held-for-trading unless they are designated as effective hedging instruments. Financial assets atfair value through profit and loss are carried in the statement of financial position at fair value with net changesin fair value presented as finance income (positive net changes in fair value) or finance costs (negative netchanges in fair value) in the statement of profit or loss.The Group has not designated any financial assets uponinitial recognition as at fair value through profit or loss.

IAS 39.9IAS 39.46

IAS 39.AG14IAS 39.55(a)

Derivatives embedded in host contracts are accounted for as separate derivatives if their economiccharacteristics and risks are not closely related to those of the host contracts and the host contracts are notheld-for-trading or designated at fair value though profit or loss. These embedded derivatives are measured atfair value, with changes in fair value recognised in the statement of profit or loss. Reassessment only occurs ifthere is a change in the terms of the contract that significantly modifies the cash flows that would otherwisebe required or a reclassification of a financial asset out of the fair value through profit or loss.

IAS 39.10IAS 39.11

Loans and receivablesThis category is the most relevant to the Group. Loans and receivables are non-derivative financial assets withfixed or determinable payments that are not quoted in an active market. After initial measurement, suchfinancial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method,less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition andfees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in thestatement of profit or loss. The losses arising from impairment are recognised in the statement of profit or lossin finance costs for loans and in cost of sales or other operating expenses for receivables.

This category generally applies to trade and other receivables. For more information on receivables, refer toNote 19.

IAS 39.9IAS 39.46(a)IAS 39.56

Available-for-sale (AFS) financial investmentsAFS financial investments include equity and debt securities. Equity investments classified as available-for-saleare those neither classified as held-for-trading nor designated at fair value through profit or loss. Debt securitiesin this category are those which are intended to be held for an indefinite period of time and which may be sold inresponse to needs for liquidity or in response to changes in the market conditions.

IAS 39.9IAS 39.46IAS 39.55(b)IAS 39.67

After initial measurement, available-for-sale financial investments are subsequently measured at fair value withunrealised gains or losses recognised as OCI in the AFS reserve until the investment is derecognised, at whichtime, the cumulative gain or loss is recognised in other operating income, or the investment is determined to beimpaired, at which time, the cumulative loss is reclassified to the statement of profit or loss in finance costs andremoved from the AFS reserve. Interest income on available-for-sale debt securities is calculated using theeffective interest method and is recognised in profit or loss.

The Group evaluates its available-for-sale financial assets to determine whether the ability and intention to sellthem in the near term is still appropriate. When the Group is unable to trade these financial assets due to inactivemarkets and management’s intention to do so significantly changes in the foreseeable future, the Group mayelect to reclassify these financial assets in rare circumstances.

For a financial asset reclassified out of the AFS category, the fair value carrying amount at the date ofreclassification becomes its new amortised cost and any previous gain or loss on that asset that has beenrecognised in equity is amortised to profit or loss over the remaining life of the investment using the EIR. Anydifference between the new amortised cost and the maturity amount is also amortised over the remaining life ofthe asset using the EIR. If the asset is subsequently determined to be impaired, then the amount recorded inequity is reclassified to the statement of profit or loss.

IAS 39.50EIAS 39.50F



2.3 Summary of significant accounting policies continuedDerecognitionA financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets)is derecognised when:

• The rights to receive cash flows from the asset have expired, or

• The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation topay the received cash flows in full without material delay to a third party under a ‘pass-through’arrangement, and either (a) the Group has transferred substantially all the risks and rewards of the asset, or(b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, buthas transferred control of the asset.

IFRS 7.21

IAS 39.17(a)IAS 39.18(b)

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-througharrangement, it evaluates if and, to what extent, it has retained the risks and rewards of ownership. When it hasneither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control ofit, the asset is recognised to the extent of its continuing involvement in it. In that case, the Group alsorecognises an associated liability. The transferred asset and the associated liability are measured on a basis thatreflects the rights and obligations that the Group has retained.

IAS 39.20(a)IAS 39.20(c)IAS 39.18(b)

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lowerof the original carrying amount of the asset and the maximum amount of consideration that the Group could berequired to repay.

IAS 39.30(a)

ii) Impairment of financial assetsDisclosures relating to impairment of financial assets are summarised in the following notes:

• Accounting policy disclosures Note 2.3.15

• Disclosures for significant assumptions Note 3

• Financial assets Note 17

• Trade receivables Note 19

The Group assesses, at each reporting date, whether there is any objective evidence that a financial asset or agroup of financial assets is impaired. An impairment exists if one or more events that has occurred since theinitial recognition of the asset (an incurred ‘loss event’), has an impact on the estimated future cash flows of thefinancial asset or the group of financial assets that can be reliably estimated. Evidence of impairment mayinclude indications that the debtors or a group of debtors is experiencing significant financial difficulty, defaultor delinquency in interest or principal payments, the probability that they will enter bankruptcy or otherfinancial reorganisation and where observable data indicate that there is a measurable decrease in theestimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

IAS 39.58IAS 39.59IFRS 7.B5(f)

Financial assets carried at amortised costFor financial assets carried at amortised cost, the Group first assesses whether impairment exists individuallyfor financial assets that are individually significant, or collectively for financial assets that are not individuallysignificant. If the Group determines that no objective evidence of impairment exists for an individually assessedfinancial asset, whether significant or not, it includes the asset in a group of financial assets with similar creditrisk characteristics and collectively assesses them for impairment. Assets that are individually assessed forimpairment and for which an impairment loss is, or continues to be, recognised are not included in a collectiveassessment of impairment.

IAS 39.63IAS 39.64

The amount of any impairment loss identified is measured as the difference between the asset’s carryingamount and the present value of estimated future cash flows (excluding future expected credit losses that havenot yet been incurred). The present value of the estimated future cash flows is discounted at the financialasset’s original effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance account and the amount of theloss is recognised in the statement of profit or loss. Interest income continues to be accrued on the reducedcarrying amount using the rate of interest used to discount the future cash flows for the purpose of measuringthe impairment loss. The interest income is recorded as part of finance income in the statement of profit or loss.Loans, together with the associated allowance are written off when there is no realistic prospect of futurerecovery and all collateral has been realised or has been transferred to the Group. If, in a subsequent year, theamount of the estimated impairment loss increases or decreases because of an event occurring after theimpairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting theallowance account. If a write-off is later recovered, the recovery is credited to finance costs in profit or loss.

IAS 39.AG84IFRS 7.16IFRS 7.B5(d)(i)IFRS 7.B5(d)(ii)IAS 39.65IAS 39.AG93



2.3 Summary of significant accounting policies continuedAvailable-for-sale financial investmentsFor AFS financial investments, the Group assesses at each reporting date whether there is objective evidencethat an investment or a group of investments is impaired.

In the case of equity investments classified as AFS, objective evidence would include a significantor prolonged decline in the fair value of the investment below its cost. ‘Significant’ is evaluated against theoriginal cost of the investment and ‘prolonged’ against the period in which the fair value has been below itsoriginal cost. Where there is evidence of impairment, the cumulative loss — measured as the difference betweenthe acquisition cost and the current fair value, less any impairment loss on that investment previouslyrecognised in the statement of profit or loss — is removed from other comprehensive income and recognised inprofit or loss. Impairment losses on equity investments are not reversed through profit or loss; increases intheir fair value after impairments are recognised in other comprehensive income.

The determination of what is ‘significant’ or ‘prolonged’ requires judgement. In making this judgement, theGroup evaluates, among other factors, the duration or extent to which the fair value of an investment is lessthan its cost.

IAS 39.67IAS 39.68IAS 39.69

In the case of debt instruments classified as AFS, impairment is assessed based on the same criteria as financialassets carried at amortised cost. However, the amount recorded for impairment is the cumulative lossmeasured as the difference between the amortised cost and the current fair value, less any impairment loss onthat investment previously recognised in the statement of profit or loss.

IFRS 7.16IAS 39.AG93

Future interest income continues to be accrued based on the reduced carrying amount of the asset, using therate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Theinterest income is recorded as part of finance income. If, in a subsequent year, the fair value of a debtinstrument increases and the increase can be objectively related to an event occurring after the impairment losswas recognised in the statement of profit or loss, the impairment loss is reversed through the statement ofprofit or loss.

IAS 39.70

iii) Financial liabilitiesInitial recognition and measurementFinancial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, asappropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables,net of directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables, loans and borrowings including bankoverdrafts, financial guarantee contracts, and derivative financial instruments.

IFRS 7.21IAS 39.43IAS 39.56

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

Financial liabilities at fair value through profit or lossFinancial liabilities at fair value through profit or loss include 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 nearterm. This category includes derivative financial instruments entered into by the Group that are not designatedas hedging instruments in hedge relationships as defined by IAS 39. Separated embedded derivatives are alsoclassified as held-for-trading unless they are designated as effective hedging instruments.

IAS 39.9IAS 39.47(a)

Gains or losses on liabilities held-for-trading are recognised in the statement of profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at theinitial date of recognition, and only if the criteria in IAS 39 are satisfied. The Group has not designated anyfinancial liabilities as at fair value through profit or loss.

IAS 39.55 (a)

IAS 39.56



2.3 Summary of significant accounting policies continuedLoans and borrowingsThis is the category most relevant to the Group. After initial recognition, interest bearing loans and borrowingsare subsequently measured at amortised cost using the effective interest rate method. Gains and losses arerecognised in the statement of profit or loss when the liabilities are derecognised as well as through theeffective interest rate method (EIR) amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or coststhat are an integral part of the EIR. The EIR amortisation is included in finance costs in the statement of profitor loss.

This category generally applies to interest-bearing loans and borrowings.

IAS 39.47IAS 39.55(a)

IAS 39.9

Financial guarantee contractsFinancial guarantee contracts issued by the Group are those contracts that require a payment to be made toreimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due inaccordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as aliability at fair value, adjusted for transaction costs that are directly attributable to the issuance of theguarantee. Subsequently, the liability is measured at the higher of the best estimate of the expenditure requiredto settle the present obligation at the reporting date and the amount recognised less cumulative amortisation.

IAS 39.47(c)IAS 39.9IAS 39.14

DerecognitionA financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.When an existing financial liability is replaced by another from the same lender on substantially different terms,or the terms of an existing liability are substantially modified, such an exchange or modification is treated as aderecognition of the original liability and the recognition of a new liability. The difference in the respectivecarrying amounts is recognised in the statement of profit or loss.

IAS 39.39IAS 39.41IAS 39.40

iv) Offsetting of financial instrumentsFinancial assets and financial liabilities are offset with the net amount reported in the consolidated statement offinancial position only if there is a current enforceable legal right to offset the recognised amounts and an intentto settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

IAS 32.42

2.3.16 Derivative financial instruments and hedge accountingInitial recognition and subsequent measurementThe Group uses derivative financial instruments such as forward currency contracts, interest rate swaps andforward commodity contracts to hedge its foreign currency risks, interest rate risks and commodity price risks,respectively. Such derivative financial instruments are initially recognised at fair value on the date on which aderivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried asfinancial assets when the fair value is positive and as financial liabilities when the fair value is negative.

The fair value of commodity contracts that meet the definition of a derivative as defined by IAS 39 arerecognised in the statement of profit or loss as cost of sales. Commodity contracts that are entered into andcontinue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with theGroup’s expected purchase, sale or usage requirements are held at cost.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to the statement ofprofit or loss, except for the effective portion of cash flow hedges, which is recognised in OCI and laterreclassified to profit or loss when the hedged item affects profit or loss.

IAS 39.43IFRS 7.21

For the purpose of hedge accounting, hedges are classified as:

• Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liabilityor an unrecognised firm commitment (except for foreign currency risk)

• Cash flow hedges when hedging exposure to variability in cash flows that is either attributable to a particularrisk associated with a recognised asset or liability or a highly probable forecast transaction or the foreigncurrency risk in an unrecognised firm commitment

• Hedges of a net investment in a foreign operation

IAS 39.86(a)

IAS 36.86(b)

IAS 39.86(c)



2.3 Summary of significant accounting policies continuedAt the inception of a hedge relationship, the Group formally designates and documents the hedge relationshipto which the Group wishes to apply hedge accounting and the risk management objective and strategy forundertaking the hedge. The documentation includes identification of the hedging instrument, the hedged itemor transaction, the nature of the risk being hedged and how the entity will assess the effectiveness of changes inthe hedging instrument’s fair value in offsetting the exposure to changes in the hedged item’s fair value or cashflows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsettingchanges in fair value or cash flows and are assessed on an ongoing basis to determine that they actually havebeen highly effective throughout the financial reporting periods for which they were designated.

Hedges which meet the strict criteria for hedge accounting are accounted for as described below:

IAS 39.55(a)IAS 39.88

Fair value hedgesThe change in the fair value of an interest rate hedging derivative is recognised in the statement of profit or lossin finance costs. The change in the fair value of the hedged item attributable to the risk hedged is recorded aspart of the carrying value of the hedged item and is also recognised in the statement of profit or loss in financecosts.

For fair value hedges relating to items carried at amortised cost, the adjustment to carrying value is amortisedthrough the statement of profit or loss over the remaining term of the hedge using the EIR method. Effectiveinterest rate amortisation may begin as soon as an adjustment exists and no later than when the hedged itemceases to be adjusted for changes in its fair value attributable to the risk being hedged.

If the hedge item is derecognised, the unamortised fair value is recognised immediately in the statement ofprofit or loss.

IAS 39.89

IAS 39.92

When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change inthe fair value of the firm commitment attributable to the hedged risk is recognised as an asset or liability witha corresponding gain or loss recognised in the statement of profit or loss.

The Group has an interest rate swap that is used to hedge the exposure of changes in the fair value of its 8.25%fixed rate secured loan. See Note 17 for more details.

IAS 39.93

Cash flow hedgesThe effective portion of the gain or loss on the hedging instrument is recognised in OCI in the cash flow hedgereserve, while any ineffective portion is recognised immediately in the statement of profit or loss as otheroperating expenses.

IAS 39.95

The Group uses forward currency contracts as hedges of its exposure to foreign currency risk in forecasttransactions and firm commitments, as well as forward commodity contracts for its exposure to volatility in thecommodity prices. The ineffective portion relating to foreign currency contracts is recognised in finance costsand the ineffective portion relating to commodity contracts is recognised in other operating income or expenses.Refer to Note 17 for more details.

Amounts recognised as OCI are transferred to profit or loss when the hedged transaction affects profit or loss,such as when the hedged financial income or financial expense is recognised or when a forecast sale occurs.When the hedged item is the cost of a non-financial asset or non-financial liability, the amounts recognised asother comprehensive income are transferred to the initial carrying amount of the non-financial asset or liability.

IAS 39.97IAS 39.100IAS 39.98

If the forecast transaction or firm commitment is no longer expected to occur, the cumulative gain or losspreviously recognised in equity is transferred to profit or loss. If the hedging instrument expires or is sold,terminated or exercised without replacement or rollover (as part of the hedging strategy), or if its designationas a hedge is revoked, or when the hedge no longer meets the criteria for hedge accounting , any cumulativegain or loss previously recognised in other comprehensive income remains separately in equity until theforecast transaction occurs or the foreign currency firm commitment affects profit or loss.

IAS 39.101



2.3 Summary of significant accounting policies continuedHedges of a net investmentHedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted foras part of the net investment, are accounted similar to cash flow hedges. Gains or losses on the hedginginstrument relating to the effective portion of the hedge are recognised as other comprehensive income whileany gains or losses relating to the ineffective portion are recognised in the statement of profit or loss. Ondisposal of the foreign operation, the cumulative value of any such gains or losses recorded in equity istransferred to the statement of profit or loss.

The Group uses a loan to hedge its exposure to foreign exchange risk on its investments in foreign subsidiaries.Refer to Note 17 for more details.

IAS 39.102

2.3.17 InventoriesInventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition are accounted for, as follows:

IAS 2.36(a)IAS 2.9IAS 2.10

Raw materials:• Purchase cost on a first-in, first-out basis

Finished goods and work in progress:• Cost of direct materials and labour and a proportion of manufacturing overheads based on normal

operating capacity but excluding borrowing costs

IAS 2.25

IAS 2.12IAS 2.13

Initial cost of raw materials includes the transfer of gains and losses on qualifying cash flow hedges, recognisedin other comprehensive income.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs ofcompletion and the estimated costs to sell.

IAS 39.98(b)

IAS 2.6

2.3.18 Impairment of non-financial assetsDisclosures relating to impairment of non-financial assets are summarised in the following notes:

• Accounting policy disclosures Note 2.3.18

• Disclosures for significant assumptions Note 3

• Property, plant and equipment Note 13

• Intangible assets Note 15

• Goodwill and intangible assets with indefinite lives Note 16

IAS 36.6IAS 36.9IAS 36.66

IAS 36.59IAS 36.30IAS 36.55IAS 36.25IAS 36.33

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If anyindication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’srecoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs ofdisposal and its value in use. It is determined for an individual asset, unless the asset does not generate cashinflows that are largely independent of those from other assets or groups of assets. Where the carrying amountof an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to itsrecoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-taxdiscount rate that reflects current market assessments of the time value of money and the risks specific to theasset. In determining fair value less costs of disposal, recent market transactions are taken into account. If nosuch transactions can be identified, an appropriate valuation model is used. These calculations are corroboratedby valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair valueindicators.

The Group bases its impairment calculation on detailed budgets and forecasts which are prepared separately foreach of the Group’s CGU to which the individual assets are allocated. These budgets and forecast calculationsare generally covering a period of five years. A long-term growth rate is calculated and applied to project futurecash flows after the fifth year.

Impairment losses of continuing operations are recognised in the statement of profit or loss in those expensecategories consistent with the function of the impaired asset, except for a property previously revalued wherethe revaluation was taken to OCI. In this case, the impairment is also recognised in OCI up to the amount of anyprevious revaluation.

IAS 36.60

IAS 36.110IAS 36.114IAS 36.117IAS 36.119



2.3 Summary of significant accounting policies continuedFor assets excluding goodwill, an assessment is made at each reporting date as to whether there is anyindication that previously recognised impairment losses may no longer exist or may have decreased. If suchindication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognisedimpairment loss is reversed only if there has been a change in the assumptions used to determine the asset’srecoverable amount since the last impairment loss was recognised. The reversal is limited so that the carryingamount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would havebeen determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Suchreversal is recognised in the statement of profit or loss unless the asset is carried at a revalued amount, inwhich case the reversal is treated as a revaluation increase.

The following criteria are also applied in assessing impairment of specific assets:

GoodwillGoodwill is tested for impairment annually as at 31 December and when circumstances indicate that thecarrying value may be impaired.

Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) towhich the goodwill relates. Where the recoverable amount of the cash-generating unit is less than their carryingamount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in futureperiods.

IAS 36.10(b)

IAS 36.104

IAS 36.124

Intangible assetsIntangible assets with indefinite useful lives are tested for impairment annually as at 31 December eitherindividually or at the CGU level, as appropriate and when circumstances indicate that the carrying value may beimpaired.

IAS 36.10(a)

CommentaryIAS 36.96 permits the annual impairment test for a CGU to which goodwill has been allocated to be performed at any timeduring the year, provided it is at the same time each year. Different goodwill and intangible assets may be tested atdifferent times.

There are no IFRS 1 exemptions from evaluating property, plant and equipment or definite or indefinite lived intangibleassets for impairment. Consequently, a first-time adopter is required to determine if impairment indicators or reversal ofany prior impairment indicators exist for these assets. If impairment indicators or reversal indicators exist, then theIAS 36, impairment test should be performed and recoverable amount determined and impairment or impairmentreversals recorded.

When a first-time adopter uses the exemption in IFRS 1 from having to apply IFRS 3 retrospectively, it is required to testgoodwill for impairment in accordance with IAS 36 at the date of transition to IFRS (IFRS 1.C4(g)(ii)). The goodwillimpairment test and the recognition of any additional impairment must be based on conditions existing at the date oftransition to IFRS. However, it is important to note that IFRS 1.C4(h) does not allow any further adjustments to thecarrying amount of goodwill at the date of transition to IFRS, except for the adjustments in IFRS 1.C4(g) related to thegoodwill impairment test or certain reclassifications of intangible assets. Accordingly, a first-time adopter is precludedfrom reversing any previous GAAP goodwill impairment.

Under a previous GAAP, an intangible asset was amortised, now under IFRS it needs to be reversed. Then this adjustedcarrying amount needs to be tested for impairment.

IFRS 1 requires disclosure that IAS 36 would have required if the entity had recognised impairment losses or reversals inthe period beginning with the date of transition to IFRS when an entity recognised or reversed any impairment losses forthe first-time in preparing its opening IFRS statement of financial position.

2.3.19 Cash and short-term depositsCash and short-term deposits in the statement of financial position comprise cash at banks and on hand andshort-term deposits with a maturity of three months or less, which are subject to an insignificant risk of changesin value.

For the purpose of the consolidated statement cash flows, cash and cash equivalents consist of cash andshort-term deposits as defined above, net of outstanding bank overdrafts as they are considered an integralpart of the Group’s cash management.

IAS 7.6IAS 7.7

IAS 7.46



2.3 Summary of significant accounting policies continued2.3.20 Convertible preference sharesConvertible preference shares are separated into liability and equity components based on the terms ofthe contract.

On issuance of the convertible preference shares, the fair value of the liability component is determined using amarket rate for an equivalent non-convertible bond. This amount is classified as a financial liability measured atamortised cost (net of transaction costs) until it is extinguished on conversion or redemption.

The remainder of the proceeds is allocated to the conversion option that is recognised and included in equity.Transaction costs are deducted from equity, net of associated income tax. The carrying amount of theconversion option is not remeasured in subsequent years.

Transaction costs are apportioned between the liability and equity components of the convertible preferenceshares, based on the allocation of proceeds to the liability and equity components when the instruments areinitially recognised.

IFRS 7.21IAS 32.18IAS 32.28

IAS 32.35IAS 32.AG31(a)

IAS 32.38

2.3.21 Treasury sharesOwn equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity.No gain or loss is recognised in the profit or loss on the purchase, sale, issue or cancellation of the Group’s ownequity instruments. Any difference between the carrying amount and the consideration, if reissued, isrecognised in the share premium. Voting rights related to treasury shares are nullified for the Group and nodividends are allocated to them. Share options exercised during the reporting period are satisfied with treasuryshares.

IAS 32.33

2.3.22 Cash dividend and non-cash distribution to owners of equityThe Group recognises a liability to make cash or non-cash distributions to owners of equity when the distributionis authorised and the distribution is no longer at the discretion of the Group. As per the corporate laws ofEuroland, a distribution is authorised when it is approved by the shareholders. A corresponding amount isrecognised directly in equity.

Non-cash distributions are measured at the fair value of the assets to be distributed with fair valuere-measurement recognised directly in equity.

Upon settlement of the distribution of non-cash assets, any difference between the carrying amount of theliability and the carrying amount of the assets distributed is recognised in profit or loss.

IFRIC 17.10

IFRIC 17. 11IFRIC 17.13

IFRIC 17.14IFRIC 17.15

2.3.23 ProvisionsGeneralProvisions are recognised when the Group has a present obligation (legal or constructive) as a result of a pastevent, it is probable that an outflow of resources embodying economic benefits will be required to settle theobligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects someor all of a provision to be reimbursed, for example under an insurance contract, the reimbursement isrecognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to aprovision is presented in the statement of profit or loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate thatreflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in theprovision due to the passage of time is recognised as a finance cost.

IAS 37.14

IAS 37.53IAS 37.54

IAS 37.45

Warranty provisionsProvisions for warranty-related costs are recognised when the product is sold or service provided to thecustomer. Initial recognition is based on historical experience. The initial estimate of warranty-related costs isrevised annually.

Restructuring provisionsRestructuring provisions are recognised only when the Group has a constructive obligation, which is when adetailed formal plan identifies the business or part of the business concerned, the location and number ofemployees affected, a detailed estimate of the associated costs, and an appropriate timeline, and theemployees affected have been notified of the plan’s main features.

IAS 37.71IAS 37.72



2.3 Summary of significant accounting policies continuedDecommissioning liabilityThe Group records a provision for decommissioning costs of a manufacturing facility for the production of fireretardant materials. Decommissioning costs are provided for at the present value of expected costs to settle theobligation using estimated cash flows and are recognised as part of the cost of the relevant asset. The cashflows are discounted at the current pre-tax rate that reflects the risks specific to the decommissioning liability.The unwinding of the discount is expensed in the statement of profit or loss as a finance cost. The estimatedfuture costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in the estimatedfuture costs, or in the discount rate applied, are added to or deducted from the cost of the asset.

IAS 16.16(c)IAS 37.45IAS 37.47IFRIC 1.8IAS 37.59IFRIC 1.5

Greenhouse gas emissionsThe Group receives free emission rights in certain European countries as a result of the European EmissionTrading Schemes. The rights are received on an annual basis and in return the Group is required to remitrights equal to its actual emissions. The Group has adopted the net liability approach to the emission rightsgranted. Therefore, a provision is recognised only when actual emissions exceed the emission rights grantedand still held. The emission costs are recognised as other operating costs. Where emission rights are purchasedfrom other parties, they are recorded at cost, and treated as a reimbursement right, whereby they are matchedto the emission liabilities and remeasured to fair value. The changes in fair value are recognised in profit or loss.

IAS 8.10

CommentaryIAS 37 Provisions, Contingent Liabilities and Contingent Assets provides a choice of presenting expenditures to settle aprovision either net of any reimbursement or on a gross basis. The Group has elected to present the expenses net ofreimbursements.

IFRIC 3 Emission Rights was withdrawn in June. In the absence of a specific standard, management must develop anaccounting policy that is relevant and reliable.

The Group has applied the net liability approach based on IAS 20.23. However, emission rights received could also berecognised as intangible assets at their fair value with all the disclosures required by IAS 38 Intangible Assets.

Waste Electrical and Electronic Equipment (WEEE)The Group is a provider of electrical equipment that falls under the EU Directive on Waste Electrical andElectronic Equipment. The directive distinguishes between waste management of equipment sold to privatehouseholds prior to a date as determined by each Member State (historical waste), and waste managementof equipment sold to private households after that date (new waste). A provision for the expected costsof management of historical waste is recognised when the Group participates in the market during themeasurement period, as determined by each Member State, and the costs can be reliably measured. Thesecosts are recognised as other operating expense in the statement of profit or loss.

IFRIC 6

With respect to new waste, a provision for the expected costs is recognised when products that fall withinthe directive are sold and the disposal costs can be reliably measured. Derecognition takes place when theobligation expires, is settled or is transferred. These costs are recognised as part of costs of sales.

With respect to equipment sold to entities other than private households, a provision is recognised when theGroup becomes responsible for the costs of this waste management, with the costs recognised as otheroperating costs or cost of sales, as appropriate.

Contingent liabilities recognised in a business combinationA contingent liability recognised in a business combination is initially measured at its fair value. Subsequently,it is measured at the higher of the amount that would be recognised in accordance with the general guidance forprovisions above (IAS 37) or the amount initially recognised less (when appropriate) cumulative amortisationrecognised in accordance with the guidance for revenue recognition.




2.3 Summary of significant accounting policies continued2.3.24 Pensions and other post-employment benefitsThe Group operates two defined benefit pension plans, both of which require contributions to be made toseparately administered funds. The Group has also agreed to provide certain additional post employmenthealthcare benefits to senior employees in the United States. These benefits are unfunded.

The cost of providing benefits under the defined benefit plans is determined separately for each plan using theprojected unit credit method.

Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling (excluding amountsincluded in net interest on the net defined benefit liability) and the return on plan assets (excluding amountsincluded in net interest on the net defined benefit liability), are recognised immediately in the statement offinancial position with a corresponding debit or credit to retained earnings through OCI in the period in whichthey occur. Re-measurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognised in profit or loss on the earlier of:

• The date of the plan amendment or curtailment

And

• The date on which the Group recognises related restructuring costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Grouprecognises the following changes in the net defined benefit obligation under ‘cost of sales’, ‘administrationexpenses’ and ‘selling and distribution expenses’ in the consolidated statement of profit or loss (by function):

• Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements

• Net interest expense or income

IAS 19.135

IAS 19.67

IAS 19.120(c),IAS 19.127IAS 19.122

IAS 19.102IAS 19.103

IAS 19.123IAS 19.134

CommentaryEntities are required to state their policy for termination benefits, employee benefit reimbursements and benefit risksharing. Since these are not applicable to the Group, the disclosures related to such benefits have not been made. Entitiesneed to assess the nature of their employee benefits and make the relevant disclosures.

IAS 19 (Revised 2014) does not specify where in the statement of profit or loss service costs or net interest should bepresented. IAS 1 allows, but does not require, disaggregation of the employee benefits cost components in profit or loss.The net interest cost component is different from the unwinding of interest component and return on asset component inthe previous version of IAS 19. Entities must apply the requirement in IAS 8.10 while developing a presentation policy fornet interest cost.

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

IFRS 2.44

Equity-settled transactionsThe cost of equity-settled transactions is recognised in employee benefits expense (Note 9.6), together with acorresponding increase in equity (other capital reserves) over the period in which the service and, whereapplicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognised forequity-settled transactions at each reporting date until the vesting date reflects the extent to which the vestingperiod has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest.The expense or credit in the statement of profit or loss for a period represents the movement in cumulativeexpense recognised as at the beginning and end of that period.

IFRS 2.7IFRS 2.19IFRS 2.20IFRS 2.21



2.3 Summary of significant accounting policies continuedService and non-market performance conditions are not taken into account when determining the grant datefair value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s bestestimate of the number of equity instruments that will ultimately vest. Market performance conditions arereflected within the grant date fair value. Any other conditions attached to an award, but without an associatedservice requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in thefair value of an award and lead to an immediate expensing of an award unless there are also service and/orperformance conditions.

No expense is recognised for awards that do not ultimately vest because non-market performance conditionand/or service conditions have not been met. Where awards include a market or non-vesting condition, thetransactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied,provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity-settled transaction award are modified, the minimum expense recognised is thegrant date fair value of the unmodified award, provided the original terms of the award are met. An additionalexpense, measured as at the date of modification, is recognised for any modification that increases the total fairvalue of the share-based payment transaction, or is otherwise beneficial to the employee. Where an award iscancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensedimmediately through profit or loss.

IFRS 2.27IFRS 2.27AIFRS 2.21

IFRS 2.28IFRS 2.B42-B44

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).

IAS 33.45IFRS 2.7

Cash-settled transactionsA liability is recognised for the fair value of cash-settled transactions. The fair value is measured initially and ateach reporting date up to and including the settlement date, with changes in fair value recognised in employeebenefits expense (see Note 9.6). The fair value is expensed over the period until the vesting date withrecognition of a corresponding liability. The fair value is determined using a binomial model.




2.4 First-time adoption of IFRSCommentaryThis note to the financial statements illustrates one way in which a company might choose to set out an explanation ofits transition to IFRS. The format illustrated is based on IG Example 11 accompanying IFRS 1. However, in providing asuggested format for disclosure, this example is not intended to, and does not, illustrate every potential first-time adoptionadjustment that entities may have to disclose.

These financial statements, for the year ended 31 December 2015, are the first the Group has prepared inaccordance with IFRS. For periods up to and including the year ended 31 December 2014, the Group preparedits financial statements in accordance with local generally accepted accounting principle (Local GAAP).

Accordingly, the Group has prepared financial statements that comply with IFRS applicable as at 31 December2015, together with the comparative period data for the year ended 31 December 2014, as described in thesummary of significant accounting policies. In preparing the financial statements, the Group’s openingstatement of financial position was prepared as at 1 January 2014, the Group’s date of transition to IFRS. Thisnote explains the principal adjustments made by the Group in restating its Local GAAP financial statements,including the statement of financial position as at 1 January 2014 and the financial statements for the yearended 31 December 2014.

IAS 1.23

Exemptions appliedIFRS 1 allows first-time adopters certain exemptions from the retrospective application of certain requirementsunder IFRS.

The Group has applied the following exemptions:

• IFRS 3 Business Combinations has not been applied to either acquisitions of subsidiaries that are consideredbusinesses under IFRS, or acquisitions of interests in associates and joint ventures that occurred before 1January 2014. Use of this exemption means that the Local GAAP carrying amounts of assets and liabilities,that are required to be recognised under IFRS, is their deemed cost at the date of the acquisition. After thedate of the acquisition, measurement is in accordance with IFRS. Assets and liabilities that do not qualify forrecognition under IFRS are excluded from the opening IFRS statement of financial position. The Group didnot recognise or exclude any previously recognised amounts as a result of IFRS recognition requirements.

IFRS 1 also requires that the Local GAAP carrying amount of goodwill must be used in the opening IFRSstatement of financial position (apart from adjustments for goodwill impairment and recognition orderecognition of intangible assets). In accordance with IFRS 1, the Group has tested goodwill for impairmentat the date of transition to IFRS. No goodwill impairment was deemed necessary at 1 January 2014.

IFRS 1.C1IFRS 1.C4(b)-(f)

IFRS 1 C4(g)-(h)

CommentaryBusiness combinations (IFRS 1 Appendix C)IFRS 1 allows a first-time adopter to elect not to apply IFRS 3 retrospectively to past business combinations that occurredbefore the date of transition to IFRS. However, this does not automatically ‘grandfather’ all amounts related to thebusiness combination and certain adjustments to assets and liabilities recognised under previous GAAP may still benecessary. For example, IFRS 1 details what adjustments to goodwill may be required when the exemption is used(including impairment of goodwill).

If a first-time adopter does not use the exemption and restates any business combination to comply with IFRS 3, it mustrestate all later business combinations and must also apply IFRS 10 from that same date.

IFRS 3 provides a very specific definition of a business combination. Therefore, it is possible that under some previousGAAPs, transactions that are not business combinations (e.g., asset acquisitions) may have been accounted for as if theywere business combinations. A first-time adopter will need to restate any transactions that it accounted for as a businesscombination under its previous GAAP, but which are not business combinations under IFRS.

The business combinations exemption is also available to past acquisitions of investments in associates and interests injoint ventures. However, if a first-time adopter elects to restate business combinations retrospectively, it must alsorestate all acquisitions of investments in associates and of interests in joint ventures that occurred from suchretrospective date

• The Group has not applied IAS 21 retrospectively to fair value adjustments and goodwill from businesscombinations that occurred before the date of transition to IFRS. Such fair value adjustments and goodwillare treated as assets and liabilities of the parent rather than as assets and liabilities of the acquiree.Therefore, those assets and liabilities are already expressed in the functional currency of the parent or arenon-monetary foreign currency items and no further translation differences occur.

IFRS 1.C2



2.4 First-time adoption of IFRS continuedCommentaryBusiness combinations — foreign exchange on fair value adjustments and goodwill (IFRS 1.C2)IFRS 1 provides an exemption from having to apply IAS 21 retrospectively to fair value adjustments and goodwill arising inbusiness combinations that occurred before the date of transition to IFRS. If the entity does not apply IAS 21 retrospectivelyto those fair value adjustments and goodwill, it treats them as assets and liabilities of the entity rather than as assets andliabilities of the acquiree. Therefore, those goodwill and fair value adjustments either are already expressed in the entity'sfunctional currency or are non-monetary foreign currency items, which are reported using the exchange rate applied inaccordance with Local GAAP. This exemption allows the first-time adopter to avail itself of similar transition electionsavailable to current IFRS users the first time they applied this amendment to IAS 21.

• Freehold land and buildings, other than investment property, were carried in the statement of financialposition prepared in accordance with Local GAAP on the basis of valuations performed on 31 December2012. The Group has elected to regard those values as deemed cost at the date of the revaluation since theywere broadly comparable to fair value.

IFRS 1.D6

CommentaryDeemed cost — Previous GAAP revaluation (IFRS 1.D6 and D7)A previous GAAP revaluation for the following assets may be used as deemed cost, provided that at the date ofrevaluation, the revaluation was broadly comparable to fair value, or cost or depreciated cost in accordance with IFRS,adjusted to reflect, for example, changes in a general or specific price index:

� An item of property, plant and equipment

� Investment property held at cost

� Intangible assets that meet (i) IAS 38’s recognition criteria; and (ii) IAS 38’s criteria for revaluation

• Certain items of property, plant and equipment have been measured at fair value at the date of transitionto IFRS.

CommentaryDeemed cost — Fair value of property, plant and equipment (IFRS 1.D5)A first-time adopter may elect to measure an item of property, plant and equipment at the date of transition at its fairvalue. It is important to note that this exemption does not take classes or categories of assets as its unit of measurement,but refers to an item of property, plant and equipment. IAS 16 does not prescribe the unit of measurement forrecognition, i.e., what constitutes an item of property, plant and equipment. Thus, judgement is required in applying therecognition criteria to an entity's specific circumstances. A first-time adopter may therefore apply the deemed costexemption to some or all of its assets.

IFRS 1.D5

• Cumulative currency translation differences for all foreign operations are deemed to be zero as at 1 January2014.

IFRS 1.D13

CommentaryCumulative translation differences (IFRS 1.D13)A first-time adopter need not comply with the requirements in IAS 21 to recognise cumulative translation differences onforeign operations (i.e., cumulative translation differences that existed at the date of transition to IFRS). If a first-timeadopter uses this exemption:

(a) The cumulative translation differences for all foreign operations are deemed to be zero at the date of transition toIFRS

(b) The gain or loss on a subsequent disposal of any foreign operation must exclude translation differences that arosebefore the date of transition to IFRS and shall include later translation differences.

The exemption applies to all cumulative translation differences arising from the translation of foreign operations,including related gains or losses on related hedges. Accordingly, we believe it is entirely appropriate for this exemption tobe applied to net investment hedges as well as to the underlying gains and losses.

• IFRS 2 Share-based Payment has not been applied to equity instruments in share-based paymenttransactions that were granted on or before 7 November 2002, nor has it been applied to equityinstruments granted after 7 November 2002 that vested before 1 January 2014. For cash-settled share-based payment transactions, the Group has not applied IFRS 2 to liabilities that were settled before1 January 2014.

IFRS 1.D2



2.4 First-time adoption of IFRS continuedCommentaryShare-based payment transactions exemption (IFRS 1.D2)A first-time adopter is encouraged, but not required, to apply IFRS 2 Share-based Payment to equity instruments thatwere granted on or before 7 November 2002 and to equity instruments that were granted after 7 November 2002 andvested before the later of (a) the date of transition to IFRS and (b) 1 January 2005. However, if a first-time adopter electsto apply IFRS 2 to such equity instruments, it may do so only if the entity has disclosed publicly the fair value of thoseequity instruments determined at the measurement date as defined in IFRS 2. For all grants of equity instruments that arestill outstanding at the date of transition to IFRS, and to which IFRS 2 has not been applied, a first-time adopter mustdisclose information that enables users of the financial statements to understand the nature and extent of share-basedpayment arrangements that existed (paragraphs 44 and 45 of IFRS 2).

If a first-time adopter modifies the terms or conditions of a grant of equity instruments to which IFRS 2 has not beenapplied, the entity is also not required to apply IFRS 2’s requirements for modifications of awards if the modificationoccurred before the date of transition to IFRS.

• The Group has applied the transitional provision in IFRIC 4 Determining whether an Arrangement Contains aLease and has assessed all arrangements based upon the conditions in place as at the date of transition.

IFRS 1.D9

CommentaryLeases (IFRS 1D9-D9A)IFRS 1 allows a first-time adopter to determine whether an arrangement existing at the date of transition to IFRS containsa lease on the basis of facts and circumstances existing at that date.

If a first-time adopter made a determination of whether an arrangement contained a lease in accordance with previousGAAP and that determination’s outcome is the same as that required by IFRIC 4 and IAS 17 Leases, the first-time adoptermay use such determination when it adopts IFRS even if the date the determination is performed is different from thatrequired by IFRIC 4.

• The Group has applied the transitional provisions in IAS 23 Borrowing Costs and capitalises borrowing costsrelating to all qualifying assets after the date of transition. Similarly, the Group has not restated forborrowing costs capitalised under Local GAAP on qualifying assets prior to the date of transition to IFRS.

IFRS 1.D23

CommentaryBorrowing costs (IFRS 1.D23)IFRS 1 provides an exemption that allows an entity to apply the requirements of IAS 23 Borrowing Costs from the date oftransition or an earlier date as permitted by paragraph 28 of IAS 23. From the date on which an entity applying thisexemption begins applying IAS 23, it:

• Must not restate the borrowing cost component that was capitalised under previous GAAP and included in the carryingamount of assets at that date

• Must account for borrowing costs incurred on or after that date in accordance with IAS 23, including those incurredon qualifying assets that met the criteria for the commencement of capitalisation before the date on which the entityapplies this exemption.

In May 2012, the IASB issued Annual Improvements to IFRSs 2009-2011 Cycle that amended IFRS 1. This amendmentclarified that, upon adoption of IFRS, an entity can elect to apply the requirements of IAS 23 from the date of transitionor at an earlier date. Also, borrowing costs capitalised under previous GAAP prior to the date the entity chooses to applyIAS 23 must be included in the carrying amount of the asset at that date.

• The Group has designated unquoted equity instruments held at 1 January 2014 as AFS financial assets. IAS 1.D19(a)

CommentaryDesignation of previously recognised financial instruments (IFRS 1.D19)IFRS 1 provides an exemption that permits a first-time adopter to designate financial assets and liabilities as at fair valuethrough profit or loss or as AFS at the date of transition to IFRS. The Group designated unquoted equity instruments asavailable-for sale. Once the designation has been made, IAS 39’s measurement provisions apply retrospectively.Retrospective designation of financial instruments as AFS financial assets requires a first-time adopter to recognise thecumulative fair value changes in a separate component of equity in the opening IFRS statement of financial position, andtransfer those fair value changes to profit or loss on subsequent disposal or impairment of the asset.

• The Group has applied the requirements of IFRIC 18 – Transfer of Assets from Customers prospectively toassets transferred from customers that were received from the date of transition to IFRS- 1 January 2014.

IFRS 1.D24



2.4 First-time adoption of IFRS continuedCommentaryTransfers of assets from customers (IFRS 1.D24)IFRS 1 provides an exemption that permits a first-time adopter to apply IFRIC 18 Transfers of Assets from Customersprospectively to assets transferred from customers from the later of 1 July 2009 or the date of transition to IFRS. It alsoallows the Group to choose an earlier date from which to apply the interpretation. The Group has elected to apply therequirements of IFRIC 18 prospectively to assets transferred from customers that were received from the date oftransition to IFRS.

IFRS 1 also contains the following exemptions that have not been utilised by the Group, which are discussed fully in ourIFRS Core Tools publication International GAAP® 2015:

Insurance contracts (IFRS 1.D4)A first-time adopter may apply the transitional provisions in IFRS 4. That standard limits an insurer to changing itsaccounting policies for insurance contracts if, and only if, the change makes the financial statements more relevant to theeconomic decision-making needs of users and no less reliable, or more reliable and no less relevant to those needs. Aninsurer should judge relevance and reliability by the criteria in IAS 8. IFRS 4 also provides certain relief from fullretrospective disclosure, for example, claims development.

Deemed cost — event-driven (IFRS 1.D8)Event-driven fair values, such as a privatisation or initial public offering, may be used as deemed cost for assets andliabilities at the date of the event, provided that the event occurred on or prior to the end of the entity’s first IFRSreporting period. Subsequent to the date of the event, IFRS is used to measure the assets and liabilities.

Deemed cost — oil and gas assets (IFRS 1.D8A)First-time adopters that accounted under their previous GAAP for exploration and development costs for oil and gasproperties in the development or production phases in cost centres that include all properties in a large geographical area,may elect to measure oil and gas assets at the date of transition to IFRS on the following basis:

(a) Exploration and evaluation assets at the amount determined under the entity's previous GAAP

(b) Assets in the development or production phases at the amount determined for the cost centre under the entity'sprevious GAAP. The entity must allocate this amount to the cost centre's underlying assets pro rata using reservevolumes or reserve values as of that date

A first-time adopter that uses the exemption under (b) above should disclose that fact and the basis on which carryingamounts determined under previous GAAP were allocated.

To avoid the use of deemed costs resulting in an oil and gas asset being measured at more than its recoverable amount,oil and gas assets that were valued using this exemption should be tested for impairment at the date of transition to IFRS.

Deemed cost — assets used in operations subject to rate regulation (IFRS 1.D8B)A first-time adopter with operations subject to rate regulations may elect to use the previous GAAP carrying amount ofitems of property, plant and equipment or intangible assets that include rate regulation adjustments at the date oftransition to IFRS as deemed cost. At the date of transition to IFRS, a first-time adopter must test for impairment inaccordance with IAS 36 each item for which this exemption is used.

Investments in subsidiaries, joint ventures and associates (IFRS 1.D14-15)In separate financial statements, a first-time adopter that subsequently measures an investment in a subsidiary, jointventures or associate at cost, may measure such investment at cost (determined in accordance with IAS 27) or deemedcost (fair value or previous GAAP carrying amount) in its separate opening IFRS statement of financial position.

Assets and liabilities of subsidiaries, associates and joint ventures (IFRS 1.D16-17)If a subsidiary becomes a first-time adopter later than its parent, the subsidiary should measure its assets and liabilitiesin its financial statements at either the amount included in the parent’s consolidated financial statements (excludingconsolidation adjustments and the effects of the business combination in which the entity acquired the subsidiary), or atamounts determined by IFRS 1. A similar election is available to an associate or joint venture that becomes a first-timeadopter later than an entity that has significant influence or joint control over it.

If a parent becomes a first-time adopter later than its subsidiary (or associate or joint venture), in the parent’sconsolidated financial statements, the assets and liabilities of the subsidiary (or associate or joint venture) must bemeasured at the same amounts as in the subsidiary’s (or associate’s or joint venture’s) financial statements (afteradjusting for consolidation and equity accounting adjustments and for the effects of the business combination in whichthe entity acquired the subsidiary).

Compound financial instruments (IFRS 1.D18)When the liability component of a compound financial instrument is no longer outstanding at the date of transition toIFRS, a first-time adopter may elect not to apply IAS 32 retrospectively to split the liability and equity components ofthe instrument.



2.4 First-time adoption of IFRS continuedCommentaryFair value measurement of financial assets or financial liabilities (IFRS 1.D20)First-time adopters may apply IAS 39 (or IFRS 9) the day one gain or loss provisions prospectively to transactionsoccurring on or after the date of transition to IFRS. Therefore, unless a first-time adopter elects to apply IAS 39 (or IFRS 9)retrospectively to day one gain or loss transactions, transactions that occurred prior to the date of transition to IFRS donot need to be retrospectively restated.

Decommissioning liabilities included in the cost of property, plant and equipment (IFRS 1.D21-D21A)Under IAS 16 Property, Plant and Equipment, the cost of an item of property, plant and equipment includes the initialestimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation forwhich an entity incurs either when the item is acquired or as a consequence of having used the item during a particularperiod for purposes other than to produce inventories during that period.

An entity accounts for changes in decommissioning liability in accordance with IFRIC 1, which requires specified changesin a decommissioning, restoration or similar liability to be added or deducted from the cost of the asset to which it relates.

IFRS 1 provides an exemption for changes that occurred before the date of transition to IFRS and prescribes analternative treatment if the exemption is used.

A decommissioning liability is measured in accordance with IAS 37 at the date of transition to IFRS, and an estimate of theamount to include in the cost of the asset when the liability first arose is made at the date of transition to IFRS.

When a first-time adopter has also elected deemed cost for oil and gas assets in the production or development stages(IFRS 1D8A(b)) a further exemption is provided. A decommissioning liability is measured at the date of transition to IFRS,and any difference between this amount and the previous GAAP carrying amount is recognised in retained earnings.

Financial assets or intangible assets accounted for in accordance with IFRIC 12 (IFRS 1.D22)When it is impracticable to apply IFRIC 12 retrospectively, a first-time adopter may apply IFRIC 12 the transitionalprovisions of which allow the previous carrying amounts of financial and intangible assets, tested for impairment, to beused as their carrying amounts at the date of transition to IFRS.

Extinguishing financial liabilities with equity instruments (IFRS 1.D25)When a debtor and creditor renegotiate the terms of a financial liability, resulting in the debtor extinguishing the liabilityfully or partially by issuing equity instruments to the creditor, IFRIC 19 Extinguishing Financial Liabilities with EquityInstruments requires retrospective application only from the beginning of the earliest comparative period presented. Afirst-time adopter is provided with similar transition relief, effectively requiring application of IFRIC 19 as of the date oftransition to IFRS.

Severe hyperinflation (IFRS 1.D26)Entities that have been unable to present IFRS financial statements due to ‘severe hyperinflation’ are treated the same asfirst-time adopters and can elect fair value as the deemed cost for assets and liabilities affected by severe hyperinflationin their first IFRS financial statements.

Joint arrangements (IFRS 1.D31)First-time adopters have the option to apply the transition provisions in IFRS 11, subject to the following exceptions:• A first-time adopter must apply these transition provisions at the date of transition to IFRS• When changing from proportionate consolidation to the equity method, a first-time adopter must test the investment

for impairment, in accordance with IAS 36 as at the date of transition to IFRS, regardless of whether there is anyindication that it may be impaired. Any resulting impairment must be recognised as an adjustment to retainedearnings at the date of transition to IFRS

Stripping costs in the production phase of a surface mine (IFRS 1.D32)First-time adopters may apply the transition provisions in IFRIC 20, in which the reference to effective date is interpretedas 1 January 2013 or the beginning of the first IFRS reporting period, whichever is later.

Revenue from contracts with customers (IFRS 1.D35)First-time adopters are able to early adopt IFRS 15 on transition to IFRS, on a retrospective basis, with the option ofapplying the following expedients:

• For completed contracts, an entity need not restate contracts that begin and end within the same annual reporting period

• For completed contracts with variable consideration, transaction price at the date the contract was completed can beused, rather than estimating variable consideration amounts in the comparative reporting periods

• For all reporting periods presented before the beginning of the first IFRS reporting period, an entity need not disclosethe amount of the transaction price allocated to the remaining performance obligations and an explanation of when theentity expects to recognise that amount as revenue

This standard is effective for annual periods beginning on or after 1 January 2017 with early application permitted.

Investment entities (IFRS 1.E6)First-time adopters that are parents should assess whether it is an investment entity, as defined in IFRS 10, on the basisof the facts and circumstances that exist at the date of transition to IFRSs.



2.4 First-time adoption of IFRS continuedCommentaryRegulatory deferral account balances (IFRS 14)First-time adopters that are rate-regulated entities have the option to continue with the recognition of rate-regulatedassets and liabilities under previous GAAP on transition to IFRS under IFRS 14. This standard is effective for annualperiods beginning on or after 1 January 2016 with early application permitted.

IFRS 1 also contains the following exceptions to retrospective application of other IFRS, which are discussed fully in ourIFRS Core Tools publication International GAAP® 2015:

Derecognition of financial assets and financial liabilities (IFRS 1.B2-3)A first-time adopter should apply the derecognition requirements in IAS 39 prospectively to transactions occurring on orafter the date of transition. Therefore, if a first-time adopter derecognised non-derivative financial assets or non-derivative financial liabilities under its previous GAAP as a result of a transaction that occurred before the date oftransition, it should not recognise those financial assets and liabilities under IFRS (unless they qualify for recognition as aresult of a later transaction or event). A first-time adopter that wants to apply the derecognition requirements in IAS 39retrospectively from a date of the entity's choosing may only do so, provided that the information needed to apply IAS 39to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initiallyaccounting for those transactions.

Hedge accounting (IFRS 1.B4-6)An entity cannot recognise a hedge relationship that does not qualify for hedge accounting under IAS 39. However, anentity that designated a net position as a hedged item in accordance with previous GAAP, may designate an individualitem within that net position as a hedged item no later than the date of transition to IFRS. Transactions entered intobefore the date of transition to IFRS must not be retrospectively designated as hedges.

Non-controlling interests (IFRS 1.B7)The following requirements of IFRS 10 are applied prospectively from the date of transition to IFRS (provided thatIFRS 3 is not applied retrospectively to past business combinations):

• To attribute total comprehensive income to non-controlling interests irrespective of whether this results in a deficitbalance

• To treat changes in a parents ownership interest as equity transactions

• To apply IFRS 10 to loss of control of a subsidiary

Government loans (IFRS 1.B10 and B11)A first-time adopter is required to apply the requirements in IFRS 9 (or IAS 39, as applicable) and IAS 20 prospectivelyto government loans existing at the date of transition to IFRS. However, a first-time adopter may choose to apply therequirements of IFRS 9 (or IAS 39, as applicable) and IAS 20 to government loans retrospectively, if the informationneeded to do so had been obtained at the time of initially accounting for that loan.

Repeated application (IFRS 1.4A-4B)In May 2012, the IASB issued Annual Improvements to IFRSs 2009-2011 Cycle that amended IFRS 1. This amendmentclarified that an entity that has applied IFRS in a previous reporting period, but whose most recent previous annualfinancial statements did not contain an explicit and unreserved statement of compliance with IFRS, must either apply IFRSor else apply IFRS retrospectively in accordance with IAS 8 as if the entity had never stopped applying IFRS. The entitymust apply the disclosure requirements in paragraphs 23A–23B of IFRS 1 and in IAS 8.

EstimatesThe estimates at 1 January 2014 and at 31 December, 2014 are consistent with those made for the same datesin accordance with Local GAAP (after adjustments to reflect any differences in accounting policies) apart fromthe following items where application of Local GAAP did not require estimation:

• Pensions and other postemployment benefits

• Share-based payment transactions

• AFS financial assets – unquoted equity shares

The estimates used by the Group to present these amounts in accordance with IFRS reflect conditions at1 January 2014, the date of transition to IFRS and as at 31 December 2014.

IFRS 1.14

IFRS 1.16

CommentaryApplication of IFRS, like other GAAPs, requires the use of estimation. IFRS 1 provides that an entity may need to makeestimates in accordance with IFRS at the date of transition to IFRS that were not required at that date under previousGAAP. To achieve consistency with IAS 10 Events after the Reporting Period, those estimates in accordance with IFRSmust reflect conditions that existed at the date of transition to IFRS. In particular, estimates at the date of transition toIFRS of market prices, interest rates or foreign exchange rates will reflect market conditions at that date. Care should betaken to identify previous GAAP estimates that are also required under IFRS and adjust only for policy differences ratherthan adjusting the previous GAAP estimates.

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2.4 First-time adoption of IFRS continuedGroup reconciliation of equity as at 1 January 2014 (date of transition to IFRS)

Local GAAP RemeasurementsIFRS as at

1 January 2014IFRS 1.23,24(a)(i), 25

Notes €000 €000 €000AssetsNon-current assetsProperty, plant and equipment L, M, N 19,475 910 20,385 IFRS 1.D6Investment properties 7,091 — 7,091Start-up expenses A 300 (300) — IFRS 1.10(b)

Intangible assets F 2,114 — 2,114IFRS 1.10(b),IFRS 1.C4(c)

Investment in an associate and a joint venture 2,597 — 2,597Other non-current financial assets B 3,269 150 3,419 IFRS 1.D19(a)

Deferred tax assets 321 — 321 IFRS 1.10(a)

35,167 760 35,927Current assetsInventories 24,649 — 24,649Trade and other receivables C 24,399 1,138 25,537 IFRS 1.10(d)Prepayments 226 — 226Other current financial assets D — 137 137Cash and short-term deposits O 11,066 — 11,066

60,340 1,275 61,615Assets classified as held for distribution — — —

60,340 1,275 61,615Total assets 95,507 2,035 97,542

Equity and liabilitiesEquityIssued capital 19,388 — 19,388Share premium — — —Treasury shares (774) — (774)Other capital reserves J 228 338 566 IFRS 1.D2Retained earnings 25,112 (1,579) 23,533 IFRS 1.11Other components of equity B, D, K (160) 288 128 IFRS 1.D13(a)Reserves of a disposal group classifiedas held for distribution — — —Equity attributable to equity holders of theparent 43,794 (953) 42,841Non-controlling interests 198 10 208Total equity 43,992 (943) 43,049Non-current liabilitiesInterest-bearing loans and borrowings 18,931 — 18,931Other non-current financial liabilities — — —Provisions H 185 (125) 60 IFRS 1.10(b)Government grants 1,300 — 1,300Deferred revenue 174 — 174Net employee defined benefit liabilities G — 2,074 2,074 IFRS 1.10(a)Other liabilities 212 — 212Deferred tax liabilities I (228) 1,507 1,279 IFRS 1.10(a)

20,574 3,456 24,030Current liabilitiesTrade and other payables E 21,349 (749) 20,600 IFRS 1.10(b)Interest-bearing loans and borrowings 4,555 — 4,555Other current financial liabilities D 32 271 303Government grants 150 — 150Deferred revenue 190 — 190Income tax payable 4,625 — 4,625Provisions 40 — 40

30,941 (478) 30,463Liabilities directly associated with the assetsclassified as held for distribution — — —

30,941 (478) 30,463Total liabilities 51,515 2,978 54,493Total equity and liabilities 95,507 2,035 97,542



2.4 First-time adoption of IFRS continuedGroup reconciliation of equity as at 31 December 2014

Local GAAP RemeasurementsIFRS as at 31

December 2014IFRS 1.23,24(a)(ii), 25

Notes €000 €000 €000AssetsNon-current assetsProperty, plant and equipment L, M, N 24,992 819 25,811 IFRS 1.D6Investment properties 7,983 — 7,983Start-up expenses A 200 (200) — IFRS 1.10(b)Intangible assets F 2,461 — 2,461Investment in an associate and a joint venture 2,516 — 2,516Other non-current financial assets B 3,491 125 3,616 IFRS 1.10(d)

Deferred tax assets 365 — 365 IFRS 1.10(a)42,008 744 42,752

Current assetsInventories 23,154 — 23,154Trade and other receivables C 23,212 1,078 24,290 IFRS 1.10(d)Prepayments 165 — 165 IFRS 1.10(a),Other current financial assets D — 153 153 IFRS 1.B4

Cash and short-term deposits O 14,916 — 14,91661,447 1,231 62,67861,447 1,231 62,678

Total assets 103,455 1,975 105,430

Equity and liabilitiesEquityIssued capital 19,388 — 19,388Share premium 80 — 80Treasury shares (654) — (654)Other capital reserves J 294 570 864 IFRS 1.D2Retained earnings 30,574 (1,719) 28,855 IFRS 1.11

Other components of equity B, D, K (275) 293 18IFRS 1.10(a),(d),IFRS 1.B4

Reserves of a disposal group classified asheld for distribution — — —Equity attributable to equity holders of the

parent 49,407 (856) 48,551Non-controlling interests 728 12 740Total equity 50,135 (844) 49,291Non-current liabilitiesInterest-bearing loans and borrowings 21,703 — 21,703Other non-current financial liabilities — — —Provisions H 202 (125) 77 IFRS 1.10(b)Government grants 1,400 — 1,400Deferred revenue 165 — 165Net employee defined benefit liabilities G — 2,494 2,494 IFRS 1.10(a)Other liabilities 232 — 232Deferred tax liabilities I (31) 1,278 1,247 IFRS 1.10(a)

23,671 3,647 27,318Current liabilitiesTrade and other payables E 22,363 (1,082) 21,281 IFRS 1.10(b)Interest-bearing loans and borrowings 2,775 — 2,775Other current financial liabilities D 49 254 303Government grants 151 — 151Deferred revenue 200 — 200Income tax payable 4,013 — 4,013Provisions 98 — 98

29,649 (828) 28,82129,649 (828) 28,821

Total liabilities 53,320 2,819 56,139Total equity and liabilities 103,455 1,975 105,430



2.4 First-time adoption of IFRS continuedGroup reconciliation of total comprehensive income for the year ended 31 December 2014

Local GAAP Remeasurements

IFRS for theyear ended

31 December 2014IFRS 1.23, 24(b),25

Notes €000 €000 €000Continuing operationsSale of goods 172,367 — 172,367Rendering of services 16,537 — 16,537Revenue from redemption of GoodPoints 1,125 — 1,125Rental income 1,377 — 1,377Revenue 191,406 — 191,406

Cost of sales L, M, N (155,530) (91) (155,621)Gross profit 35,876 (91) 35,785

Other operating income 2,548 — 2,548Selling and distribution costs C,G (12,923) (79) (13,002) IFRS 1.10(d)Administrative expenses J (13,310) (232) (13,542)Other operating expenses A (453) 100 (353) IFRS 1.10(b)Operating profit 11,738 (362) 11,436Finance costs (1,223) — (1,223)Finance income 211 — 211Share of profit of an associate and a jointventure 638 — 638Profit before tax from continuingoperations 11,364 (302) 11,062

Income tax expense I (3,544) 112 (3,432) IFRS 1.10(a)Profit for the year from continuingoperations 7,820 (190) 7,630

Profit/(loss) after tax for the year fromdiscontinued operations (188) — (188)Profit for the year 7,632 (190) 7,442

Other comprehensive income

Other comprehensive income to bereclassified to profit or loss in subsequentperiods:Exchange differences on translation offoreign operations (117) — (117)

Net movement on cash flow hedges D — 33 33IFRS 1.10(a),IFRS 1.B4

Income tax effect I — (10) (10) IFRS 1.10(a)— 23 23

Net movement on available-for-salefinancial assets B 3 (25) (22) IFRS 1.10(d)

Income tax effect I (1) 7 6 IFRS 1.10(a)2 (18) (16)

Net other comprehensive income/(loss)to be reclassified to profit or loss insubsequent periods (115) 5 (110)Other comprehensive income/(loss) not tobe reclassified to profit or loss insubsequent periods:Re-measurement gains and losses ondefined benefit plans G — (401) (401) IFRS 1.10(a),

Income tax effect I — 120 120 IFRS 1.10(a)

— (281) (281)Net other comprehensive income/(loss)not to be reclassified to profit or loss insubsequent periods — (281) (281)Other comprehensive income forthe year, net of tax (115) (276) (391)Total comprehensive income forthe year, net of tax 7,517 (466) 7,051



2.4 First-time adoption of IFRS continuedCommentaryIn an entity’s first IFRS financial statements, it would not be acceptable to merely refer to an earlier announcement of thetransition date statement of financial position and related notes, that was published by the entity as IFRS 1 requires thedisclosures to appear within the first IFRS financial statements. However, for interim reporting, entities should be awarethat they are not required to repeat all of the incremental IFRS information for each interim period during that first yearof reporting under IFRS (IFRS 1.32-33). The opening statement of financial position and accompanying reconciliations ofequity and total comprehensive income at the date of transition to IFRS is a requirement for only the first interim andannual financial reports; they are not required in the second and third interim financial reports, which only requirereconciliations of equity and total comprehensive income for the respective quarter.

A first-time adopter will also have to ensure that its interim financial reports in the year of adoption of IFRS containsufficient information about events or transactions that are material to an understanding of the current interim period.Since a first-time adopter has not previously issued a complete set of annual IFRS financial statements, this means thatsignificantly more information may be required in these IFRS interim reports than would normally be included in aninterim report prepared in accordance with IAS 34.

Notes to the reconciliation of equity as at 1 January 2014 and 31 December 2014 and totalcomprehensive income for the year ended 31 December 2014

IFRS 1.23 - 25

A Start-up expensesUnder Local GAAP, the Group capitalised the cost of incorporation of a new subsidiary and depreciated this on astraight-line basis over five years. As such, cost does not qualify for recognition as an asset under IFRS thisasset is derecognised against retained earnings.

IFRS 1.10(b)

B Available-for-sale financial assetsUnder Local GAAP, the Group accounted for investments in unquoted equity shares as financial instrumentsmeasured at cost. Under IFRS, the Group has designated such investments as AFS financial assets. IFRSrequires AFS financial assets to be measured at fair value. At the date of transition to IFRS, the fair value ofthese assets is €1,040,000 and their previous Local GAAP carrying amount was €890,000. The €150,000difference between the instruments’ fair value and Local GAAP carrying amount has been recognised as aseparate component of equity, in the AFS reserve, net of related deferred taxes.

IFRS 1.10(d)IFRS 1.D19(a),IFRS 1.29

C Trade and other receivablesUnder Local GAAP, the provision for impairment of receivables consists of both a specific amount for incurredlosses and general amount for expected future losses. IFRS does not permit recognition of impairment forexpected future losses and this amount has been eliminated against retained earnings at 1 January 2014. Theeffect on earnings for the year ended 31 December 2014 is also recognised in profit for the year under IFRS.

IFRS 1.10(d)

D Other financial assets and liabilitiesThe fair value of forward foreign exchange contracts is recognised under IFRS, and was not recognised underLocal GAAP. The contracts, which were designated as hedging instruments under Local GAAP, have beendesignated as at the date of transition to IFRS as hedging instruments in cash flow hedges of either expectedfuture sales, for which the group has firm commitments, or expected purchases from suppliers that are highlyprobable. The corresponding adjustment has been recognised as a separate component of equity, in the cashflow hedge reserve.

IFRS 1.10(a),IFRS 1.B4

E Trade and other payablesUnder Local GAAP, proposed dividends are recognised as a liability in the period to which they relate,irrespective of when they are declared. Under IFRS, a proposed dividend is recognised as a liability in the periodin which it is declared by the company (usually when approved by shareholders in a general meeting) or paid.In the case of the Group, the declaration of dividend occurs after period end. Therefore, the liability recordedfor this dividend has been derecognised against retained earnings.

IFRS 1.10(b)

F Intangible assetsUnder Local GAAP, the Group recognised indefinite lived intangible assets amounting to €57,000 on a businesscombination that do not qualify for recognition under IFRS. These intangible assets have been reclassified aspart of goodwill on transition to IFRS. Goodwill has been presented within Intangible assets on the Statement ofFinancial Position.

IFRS 1.10(b),IFRS 1.C4(c)

G Defined benefit obligationUnder Local GAAP, the Group recognised costs related to its pension plan on a cash basis. Under IFRS, pensionliabilities are recognised on an actuarial basis. The pension liability has been recognised in full against retainedearnings.

IFRS 1.10(a)



2.4 First-time adoption of IFRS continuedH ProvisionsUnder Local GAAP, a restructuring provision has been recorded relating to downsizing head office activities.This amount does not qualify for recognition as a liability according to IAS 37, and has been derecognisedagainst retained earnings.

IFRS 1.10(b)

I Deferred taxThe various transitional adjustments lead to different temporary differences. According to the accountingpolicies in Note 2.3, the Group has to account for such differences. Deferred tax adjustments are recognised incorrelation to the underlying transaction either in retained earnings or a separate component of equity.

IFRS 1.10(a)

J Share-based paymentsUnder Local GAAP, the Group recognised only the cost for the long-term incentive plan as an expense. IFRSrequires the fair value of the share options to be determined using an appropriate pricing model recognised overthe vesting period. An additional expense of €232,000 has been recognised in profit or loss for the year ended31 December 2014. Share options totalling €338,000, which were granted before and still vesting at 1 January2014, have been recognised as a separate component of equity against retained earnings at 1 January 2014.

IFRS 1.10(a)

K Foreign currency translationUnder Local GAAP, the Group recognised translation differences on foreign operations in a separate componentof equity. Cumulative currency translation differences for all foreign operations are deemed to be zero as at1 January 2014 The resulting adjustment was recognised against retained earnings.

IFRS 1.D13(a)

L Property, plant and equipmentThe group has elected to measure certain items of property, plant and equipment at fair value at the date oftransition to IFRS. At the date of transition to IFRS, an increase of €540,000 (31 December 2014: €486,000)was recognised in property, plant and equipment. This amount has been recognised against retained earnings.

IFRS 1.D5

M Depreciation of property, plant and equipmentIAS 16 requires significant component parts of an item of property, plant and equipment to be depreciatedseparately. As explained in note 2.3.9, the cost of major inspections is capitalised and depreciated separatelyover the period to the next major inspection. At the date of transition to IFRS, an increase of €620,000(31 December 2014: €558,000) was recognised in property, plant and equipment net of accumulateddepreciation due to separate depreciation of significant components of property, plant and equipment. Thisamount has been recognised against retained earnings.

IFRS 1.10(d),IAS 16.43

N Impairment of property, plant and equipmentUnder Local GAAP, long-lived assets were reviewed for impairment when events or changes in circumstancesindicated that their carrying value may exceed the sum of the undiscounted future cash flows expected fromuse and eventual disposal. For the purposes of assessing impairment, assets were grouped at the lowest levelfor which identifiable cash flows were largely independent of the cash flows of other assets. If the estimatedundiscounted cash flows for the asset group were less than the asset group’s carrying amount, the impairmentloss was measured as the excess of the carrying value over fair value. Under IFRS, as explained in note 2.3.17,impairment of assets that do not generate cash inflows that are largely independent of those from other assetsor groups of assets, is assessed at the CGU level based on the CGU’s recoverable amount.

At the date of transition to IFRS, as a result of the changes in methodology, the Group determined that therecoverable amount of its manufacturing plant, which is considered a CGU and is part of the Group’s FirePrevention Equipment reportable segment, was less than its carrying amount. The recoverable amount was€6,013,450, based on the CGU’s value in use using a pre-tax discount rate of 8%. This resulted in an impairmentloss of €250,000 being recognised as at 1 January 2014. This amount has been recognised against retainedearnings. Additionally, depreciation for the year ended December 31, 2014 was reduced by €25,000.

O Statement of cash flowsThe transition from Local GAAP to IFRS has not had a material impact on the statement of cash flows.

CommentaryIf errors made under previous GAAP are discovered during the transition to IFRS, any adjustments to equity orcomprehensive income for these amounts must be identified as error corrections in the reconciliation rather than as IFRStransition adjustments.



3. Significant accounting judgements, estimates and assumptionsThe preparation of the Group’s consolidated financial statements requires management to make judgements,estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, andthe accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptionsand estimates could result in outcomes that require a material adjustment to the carrying amount of asset orliability affected in future periods.

JudgementsIn the process of applying the Group’s accounting policies, management has made the following judgements,which have the most significant effect on the amounts recognised in the consolidated financial statements:

IAS 1.122

Operating lease commitments — group as lessorThe Group has entered into commercial property leases on its investment property portfolio. The Group hasdetermined, based on an evaluation of the terms and conditions of the arrangements, such as the lease termnot constituting a substantial portion of the economic life of the commercial property and the present value ofthe minimum lease payments not amounting to substantially all of the fair value of the commercial property,that it retains all the significant risks and rewards of ownership of these properties and accounts for thecontracts as operating leases.

Assets held for distribution and non-cash distributionOn 1 September 2015, the Board of Directors announced its decision to discontinue he rubber segmentconsisting of Hose Limited, a wholly owned subsidiary, The shares of Hose Limited will be distributed to theshareholders of the Company. Therefore, the operations of Hose Limited are classified as a disposal group heldfor distribution. The Group assessed that the subsidiary met the criteria to be classified as held for distributionunder IFRS 5 at 1 September 2015 for the following reasons:

• Hose Limited is available for immediate distribution and can be distributed to shareholders in its currentcondition

• The actions to complete the distribution were initiated and expected to be completed within one year fromthat date

• The shareholders of the Group approved the decision on 15 December 2015

• As at 31 December 2015, the Board is in the process of complying with the legal procedures to give effectto the distributions and expects the distribution to be completed by 2 February 2016.

For more details refer Note 10 and Note 22.

IFRS 5.12AIFRS 5.7IFRS 5.8IFRIC 17.10

Consolidation of a structured entityIn February 2015, the Group and a third-party partner formed an entity, Fire Equipment Test Lab Limited, toacquire land and construct and operate a fire equipment safety facility. The Group holds 20% of the votingshares in this entity. The third-party partner contributed approximately €2,700,000 in 2015, representing 80%of the voting shares, for the acquisition and construction of the fire safety test facility. The third-party partneris committed to provide approximately €1,000,000 in each of the following two years to complete the project.The construction is expected to be completed in 2019 at a total cost of approximately €4,700,000. The partneris entitled to a 22% return on the outstanding capital upon the commencement of operations. Under thecontractual arrangement with the third party partner, the Group has majority representation on the entity’sboard of directors and the Group’s approval is required for all major operational decisions. At the end of thefourth annual period, the partner is entitled to a 100% capital return. The effective interest rate is 11% and theinterest accumulated on the contributed amount totalled €303,000 at 31 December 2015. The Group iseffectively guaranteeing the returns to the third-party partner. On completion of the construction, theoperations will be solely carried out by the Group.

Based on the contractual terms, the Group assessed that the voting rights in Fire Equipment Test Lab Limitedare not the dominant factor in deciding who controls the entity. Also, it is assessed that there is insufficientequity financing (€200,000) to allow the entity to finance its activities without the non-equity financial supportof the Group. Therefore, the Group concluded Fire Equipment Test Lab Limited is a structured entity underIFRS 10 and that it controls it with no non-controlling interests. The voting shares of the third-party partner areaccounted for as a financial liability. Therefore, Fire Equipment Test Lab Limited is consolidated in the Group’sconsolidated financial statements. The shares of the third-party partner are recorded as a long-term loan andthe return on investment is recorded as interest expense.

IFRS 12.7(a)IFRS 12.9IFRS 12.17IFRS 12.8IFRS12.9IFRS 12.14



3. Significant accounting judgements, estimates and assumptions continuedCommentaryIAS 1 requires an entity to disclose the judgements that management has made in the process of applying the entity'saccounting policies and that have the most significant effect on the amounts recognised in the financial statements.IFRS 12 adds to those general requirements by specifically requiring an entity to disclose all significant judgements andestimates made in determining the nature of its interest in another entity or arrangement, and in determining the type ofjoint arrangement in which it has an interest.

IFRS 12.7 requires that an entity disclose information about significant judgements and assumptions it has made (andchanges to those judgements and assumptions) in determining:

• That it has control of another entity

• That is has joint control of an arrangement or significant influence over another entity

• The type of joint arrangement (i.e. joint operation or joint venture) when the arrangement has been structuredthrough a separate vehicle

An entity must disclose, for example, significant judgements and assumptions made in determining that

• It does not control another entity even though it holds more than half of the voting rights of the other entity

• It controls another entity even though it holds less than half of the voting rights of the other entity

• It is an agent or principal as defined by IFRS 10

• It does not have significant influence even though it holds 20 per cent or more of the voting rights of another entity

• It has significant influence even though it holds less than 20 per cent of the voting rights of another entity

The Group does not have any interest in unconsolidated structured entities. Interests in such entities require thedisclosures under IFRS 12.24-31. These disclosures have been illustrated in our publication, Applying IFRS: IFRS 12Example disclosures for interests in unconsolidated structured entities, (March 2013) available at ey.com\ifrs.

Consolidation of entities in which the Group holds less than a majority of voting rights (de facto control)The Group considers that it controls Electronics Limited even though it owns less than 50% of the voting rights.This is because the Group is the single largest shareholder of Electronics Limited with a 48% equity interest. Theremaining 52% of the equity shares in Electronics Limited are widely held by many other shareholders, none ofwhich individually holds more than 1% of the equity shares (as recorded in the company’s shareholders’ registerfrom 1 October 2009 to 31 December 2015). Since 1 October 2009, which is the date of acquisition ofElectronics Limited, there is no history of the other shareholders collaborating to exercise their votescollectively or to outvote the Group.

IFRS 10.B41,B42IFRS 12.7(a)IFRS 12.8IFRS12.9

CommentaryThe Group assessed that it controls Electronics Limited, despite having less than a majority of the voting rights, based onthe guidance under IFRS 10.B42.

Estimates and assumptionsThe key assumptions concerning the future and other key sources of estimation uncertainty at the reportingdate, that have a significant risk of causing a material adjustment to the carrying amounts of assets andliabilities within the next financial year, are described below. The Group based its assumptions and estimates onparameters available when the consolidated financial statements were prepared. Existing circumstances andassumptions about future developments, however, may change due to market changes or circumstances arisingbeyond the control of the Group. Such changes are reflected in the assumptions when they occur.

IAS 1.125

CommentaryAn entity's estimates in accordance with IFRS at the date of transition to IFRS shall be consistent with estimates made forthe same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies),unless there is objective evidence that those estimates were in error.

An entity may receive information after the date of transition to IFRS about estimates that it had made under previousGAAP. In accordance with paragraph 15 of IFRS 1, an entity shall treat the receipt of that information in the same way asnon-adjusting events after the reporting period in accordance with IAS 10 Events after the Reporting Period.



3. Significant accounting judgements, estimates and assumptions continuedRevaluation of property, plant and equipment and investment propertiesThe Group carries its investment properties at fair value, with changes in fair value being recognised inthe statement of profit or loss. In addition, it measures land and buildings at revalued amounts with changes infair value being recognised in OCI. The Group engaged an independent valuation specialist to assess fair valueas at 31 December 2015. For investment properties, a valuation methodology based on a DCF model was usedas there is a lack of comparable market data because of the nature of the properties. Land and buildings werevalued by reference to market-based evidence, using comparable prices adjusted for specific market factorssuch as nature, location and condition of the property.

The key assumptions used to determine the fair value of the property, plant and equipment and the investmentproperties are further explained in Note 13 and 14.

Impairment of non-financial assetsAn impairment exists when the carrying value of an asset or CGU exceeds its recoverable amount, which is thehigher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculationis based on available data from binding sales transactions, conducted at arm’s length for similar assets orobservable market prices less incremental costs for disposing of the asset. The value in use calculation is basedon a DCF model. The cash flows are derived from the budget for the next five years and do not includerestructuring activities that the Group is not yet committed to or significant future investments that willenhance the asset’s performance of the CGU being tested. The recoverable amount is most sensitive to thediscount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used forextrapolation purposes. The key assumptions used to determine the recoverable amount for the different CGUs,including a sensitivity analysis, are disclosed and further explained in Note 16.

Share-based paymentsEstimating fair value for share-based payment transactions requires determination of the most appropriatevaluation model, which depends on the terms and conditions of the grant. This estimate also requiresdetermination of the most appropriate inputs to the valuation model including the expected life of the shareoption or appreciation right, volatility and dividend yield and making assumptions about them. The Groupinitially measures the cost of cash-settled transactions with employees using a binomial model to determine thefair value of the liability incurred. For cash-settled share-based payment transactions, the liability needs to beremeasured at the end of each reporting period up to the date of settlement, with any changes in fair valuerecognised in the profit or loss. This requires a reassessment of the estimates used at the end of each reportingperiod. For the measurement of the fair value of equity-settled transactions with employees at the grant date,the Group uses a binomial model for Senior Executive Plan (SEP) and a Monte-Carlo simulation model forGeneral Employee Share Option Plan (GESP). The assumptions and models used for estimating fair value forshare-based payment transactions are disclosed in Note 27.

TaxesDeferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit willbe available against which the losses can be utilised. Significant management judgement is required todetermine the amount of deferred tax assets that can be recognised, based upon the likely timing and the levelof future taxable profits, together with future tax planning strategies.

IAS 12.88IAS 1.125

The Group has €427,000 (2014: €1,198,000, 1 January 2014: €1,494,000) of tax losses carried forward.These losses relate to subsidiaries that have a history of losses, do not expire, and may not be used to offsettaxable income elsewhere in the Group. The subsidiaries have no taxable temporary differences or any taxplanning opportunities available that could partly support the recognition of these losses as deferred tax assets.On this basis, the Group has determined that it cannot recognise deferred tax assets on the tax losses carriedforward.

If the Group was able to recognise all unrecognised deferred tax assets, profit and equity would have increasedby €128,000. Further details on taxes are disclosed in Note 11.



3. Significant accounting judgements, estimates and assumptions continuedDefined benefit plans (pension benefits)The cost of defined benefit pension plans and other post-employment medical benefits and the present value ofthe pension obligation are determined using actuarial valuations. An actuarial valuation involves making variousassumptions which may differ from actual developments in the future. These include the determination of thediscount rate, future salary increases, mortality rates and future pension increases. Due to the complexity ofthe valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is highlysensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate,management considers the interest rates of corporate bonds in currencies consistent with the currencies of thepost-employment benefit obligation with at least an ‘AA’ rating or above, as set by an internationallyacknowledged rating agency, and extrapolated as needed along the yield curve to correspond with the expectedterm of the defined benefit obligation. The underlying bonds are further reviewed for quality. Those havingexcessive credit spreads are removed from the analysis of bonds on which the discount rate is based, on thebasis that they do not represent high quality bonds.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortalitytables tend to change only at intervals in response to demographic changes. Future salary increases andpension increases are based on expected future inflation rates for the respective countries.

Further details about pension obligations are provided in Note 26.

Fair value measurement of financial instrumentsWhen the fair value of financial assets and financial liabilities recorded in the statement of financial positioncannot be measured based on quoted prices in active markets, their fair value is determined using valuationtechniques including the DCF model. The inputs to these models are taken from observable markets wherepossible, but where this is not feasible, a degree of judgement is required in establishing fair values. Thejudgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes inassumptions relating to these factors could affect the reported fair value of financial instruments. See Note17.4 for further discussion.

Contingent consideration, resulting from business combinations, is initially measured at fair value at theacquisition date as part of the business combination. When the contingent consideration meets the definition ofa financial liability (or financial asset), it is subsequently remeasured to fair value at each reporting date. Thedetermination of the fair value is based on discounted cash flows. The key assumptions take into considerationthe probability of meeting each performance target and the discount factor.

As part of the accounting for its acquisition of Extinguishers Limited, contingent consideration with anestimated fair value of €714,000 was recognised at the acquisition date and remeasured to €1,071,500 asat the reporting date. Future developments may require further revisions to the estimate. The maximumconsideration to be paid is €1,125,000. The contingent consideration is classified as other financial liability(see Notes 5 and 17).

Development costsDevelopment costs are capitalised in accordance with the accounting policy. Initial capitalisation of costs isbased on management’s judgement that technological and economic feasibility is confirmed, usually when aproduct development project has reached a defined milestone according to an established project managementmodel. In determining the amounts to be capitalised, management makes assumptions regarding the expectedfuture cash generation of the project, discount rates to be applied and the expected period of benefits.At 31 December 2015, the carrying amount of capitalised development costs was €2,178,000(2014: €1,686,000, 1 January 2014: €1,420,000).

This amount includes significant investment in the development of an innovative fire prevention system.Prior to being marketed, it will need to obtain a safety certificate issued by the relevant regulatory authorities.The innovative nature of the product gives rise to some uncertainty as to whether the certificate will beobtained.



3. Significant accounting judgements, estimates and assumptions continuedProvision for decommissioningAs part of the purchase price allocation for the acquisition of Extinguishers Limited in 2015, the Group hasrecognised a provision for decommissioning obligations associated with a factory owned by ExtinguishersLimited. In determining the fair value of the provision, assumptions and estimates are made in relation todiscount rates, the expected cost to dismantle and remove the plant from the site and the expected timing ofthose costs. The carrying amount of the provision as at 31 December 2015 was €1,221,000 (2014: €Nil). TheGroup estimates that the costs would be realised in 15 years’ time upon the expiration of the lease andcalculates the provision using the DCF method based on the following assumptions:

• Estimated range of cost per sqm - €10 - €25 (€20)

• Discount rate – 14%

If the estimated pre-tax discount rate used in the calculation had been 1% higher than management’s estimate,the carrying amount of the provision would have been €94,000 lower.

Revenue recognition — GoodPoints for loyalty programmeThe Group estimates the fair value of points awarded under the GoodPoints programme by applying statisticaltechniques. Inputs to the models include assumptions about expected redemption rates, the mix of productsthat will be available for redemption in the future and customer preferences. As points issued under theprogramme do not expire, such estimates are subject to significant uncertainty. As at 31 December 2015, theestimated liability for unredeemed points was approximately €416,000 (2014: €365,000, 1 January 2014:€364,000).

CommentaryIAS 1.125 requires an entity to disclose significant judgements applied in preparing the financial statements andsignificant estimates that involve a high degree of estimation uncertainty. The disclosure requirements go beyond therequirements that already exist in some other IFRS such as IAS 37.

These disclosures represent a very important source of information in the financial statements because they highlightareas in the financial statements that are most prone to change in the foreseeable future. Therefore, any informationgiven should be sufficiently detailed to help readers of the financial statements understand the impact of possiblesignificant changes.

For illustrative purposes, the Group has included disclosures about significant judgements and estimates beyond what isnormally required, and potentially also beyond what is decision useful. That is, it is only those judgements that have themost significant effect on the amounts recognised in the financial statements and those estimates that have a significantrisk of resulting in material adjustments in respect of assets and liabilities within the next financial year that should beaddressed in this section. It is important that entities carefully assess which judgements and estimates are mostsignificant in this context, and make the disclosures accordingly, to allow the users of the financial statements toappreciate the impact of the judgements and uncertainties. Disclosure of uncertainties that do not have a significant riskof resulting in material adjustments may clutter the financial statements in a way that reduces the users’ ability to identifythe major uncertainties.



4. Segment informationFor management purposes, the Group is organised into business units based on their products and services andhas three reportable segments, as follows:

• The fire prevention equipment segment, which produces and installs extinguishers, fire preventionequipment and fire retardant fabrics

• The electronics segment, which is a supplier of electronic equipment for defence, aviation, electrical safetymarkets and consumer electronic equipment for home use. It offers products and services in the areas ofelectronics, safety, thermal and electrical architecture

• The investment property segment, which leases offices and manufacturing sites owned by the Group whichare surplus to the Group’s requirements which are surplus to the Group’s requirements

No operating segments have been aggregated to form the above reportable operating segments.

IAS 1.138IFRS 8.22(a)IFRS 8.22(b)

CommentaryIFRS 8.22(a) requires entities to disclose factors used to identify the entity’s reportable segments, including the basis oforganisation, such as factors considered in determining aggregation of operating segments. Operating segments often exhibitsimilar long-term financial performance if they have similar economic characteristics. For example, similar long-term averagegross margins for two operating segments would be expected if their economic characteristics were similar. Two or moreoperating segments may be aggregated into a single operating segment if the segments have similar economic characteristics,and the segments are similar in each of the following respects:

(a) the nature of the products and services;(b) the nature of the production processes;(c) the type or class of customer for their products and services;(d) the methods used to distribute their products or provide their services; and(e) if applicable, the nature of the regulatory environment, for example, banking, insurance or public utilities.

This analysis requires significant judgement as to the circumstances of the entity. The Group does not have anyoperating segments that are aggregated, but, if it had, disclosures about the basis for aggregation must bemade.

The Executive Management committee monitors the operating results of its business units separately for thepurpose of making decisions about resource allocation and performance assessment. Segment performance isevaluated based on profit or loss and is measured consistently with profit or loss in the consolidated financialstatements. However, the performance of Showers Limited, the Group’s joint venture is evaluated usingproportionate consolidation. Also, financing (including finance costs and finance income) and income taxes aremanaged on a group basis and are not allocated to operating segments.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactionswith third parties.

IFRS 8.28(b)

IFRS 8.27(a)

Year ended31 December 2015

Firepreventionequipment Electronics

Investmentproperty

Totalsegments

Adjustmentsand

eliminations Consolidated€000 €000 €000 €000 €000 €000

RevenueExternal customers 169,801 69,763 1,404 240,968 (30,047) 210,921 IFRS 8.23(a)

Inter-segment - 7,465 - 7,465 (7,465) - IFRS 8.23(b)

Total revenue 169,801 77,228 1,404 217,974 (37,512) 210,921

Income/(expenses)Depreciation and amortisation (4,033) (389) - (4,422) - (4,422) IFRS 8.23(e)

Goodwill impairment (Note 16) - (200) - (200) - (200) IFRS 8.23(e)

Impairment on AFS financialassets (Note 9.3) (111) - - (111) - (111)Share of profit of anassociate and a joint venture(Note 7,8) 671 - - 671 - 671 IFRS 8.23(g)

Segment profit 10,475 3,468 321 14,264 (1,859) 12,405 IFRS 8.23

Total assets 62,686 44,814 18,592 126,092 18,926 145,018 IFRS 8.23

Total liabilities 22,664 7,252 4,704 34,620 45,653 80,273 IFRS 8.23



4. Segment information continuedOther disclosuresInvestment in an associateand a joint venture 3,187 - - 3,187 - 3,187 IFRS 8.24(a)

Capital expenditure 18,849 2,842 1,216 22,907 - 22,907 IFRS 8.24(b)

Inter-segment revenues are eliminated upon consolidation and reflected in the ‘adjustments and eliminations’column. All other adjustments and eliminations are part of detailed reconciliations presented further below.

Year ended31 December 2014


Investmentproperty

Rubberequipment

(disc.operation)

Totalsegments

Adjustmentsand

eliminations Consolidated€000 €000 €000 €000 €000 €000 €000

RevenueExternal customers 152,846 66,621 1,377 45,206 266,050 (74,644) 191,406 IFRS 8.23(a)

Inter-segment - 7,319 - - 7,319 (7,319) - IFRS 8.23(b)

Total revenue 152,846 73,940 1,377 45,206 273,369 (81,963) 191,406

Income/(expenses)Depreciation andamortisation (2,784) (472) - (324) (3,580) 324 (3,256) IFRS 8.23(e)

Impairment onproperty, plant andequipment (Note 13) (301) - - - (301) - (301)

IFRS 8.23(i)IAS 36.129

Share of profit ofan associate and a jointventure (Note 7,8) 638 - - - 638 - 638 IFRS 8.23(g)

Segment profit 6,449 5,396 314 (193) 11,966 (904) 11,062 IFRS 8.23

Total assets 41,211 40,409 9,887 11,712 103,219 2,211 105,430 IFRS 8.23

Total liabilities 8,015 4,066 1,688 12,378 26,147 29,992 56,139 IFRS 8.23

Other disclosuresInvestment in anassociate and a jointventure 2,516 - - - 2,516 - 2,516 IFRS 8.24(a)

Capital expenditure 5,260 4,363 1,192 - 10,815 - 10,815 IFRS 8.24(b)

As at 1 January 2014


Investmentproperty

Rubberequipment

(disc.operation)

Totalsegments

Adjustmentsand

eliminations Consolidated€000 €000 €000 €000 €000 €000 €000

Total assets 38,784 36,341 9,152 11,140 95,417 2,125 97,542 IFRS 8.23

Total liabilities 6,994 3,965 1,520 12,353 24,832 29,661 54,493 IFRS 8.23

Other disclosuresInvestment in anassociate and a jointventure 2,597 - - - 2,597 - 2,597 IFRS 8.24(a)

CommentaryAdditional disclosure may be required if the chief operating decision maker (CODM), which is the Executive ManagementCommittee of the Group in the case of Good First-time Adopter (International) Limited, regularly reviews certain otheritems recorded in the statement of profit or loss and other comprehensive income, i.e., depreciation and amortisation,impairments and the share of profit in associates.

While there is no explicit requirement in IFRS 8 Operating Segments to disclose to the CODM, the Group has done so, as itviews such information as relevant to users of its financial statements.



4. Segment information continuedAdjustments and eliminationsFinance income and costs, and fair value gains and losses on financial assets are not allocated to individualsegments as the underlying instruments are managed on a group basis.

Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to those segments asthey are also managed on a group basis.

Capital expenditure consists of additions of property, plant and equipment, intangible assets and investmentproperties including assets from the acquisition of subsidiaries.

Inter-segment revenues are eliminated on consolidation.

IFRS 8.28

Reconciliation of profit 2015 2014€000 €000

Segment profit 14,264 11,966Finance income 336 211Fair value gain on financial assets at fair value through profit or loss 850 -Fair value loss on financial assets at fair value through profit or loss (1,502) -Finance costs (1,366) (1,223)Inter-segment sales (elimination) (177) (85)

Loss from discontinued operations - 193

Group profit 12,405 11,062

Reconciliation of assets 2015 2014As at

1 January 2014€000 €000 €000

Segment operating assets 126,092 103,219 95,417Deferred tax assets 383 365 321Loans to an associate 200 - -Loans to directors 13 8 8Loan notes 3,674 1,685 1,659Derivatives 1,102 153 137Assets classified as held for distribution 13,554 - -

Total assets 145,018 105,430 97,542

Reconciliation of liabilities 2015 2014As at

1 January 2014€000 €000 €000

Segment operating liabilities 34,620 26,147 24,832Deferred tax liabilities 3,072 1,247 1,279Current tax payable 3,963 4,013 4,625Interest-bearing loans and borrowings 22,806 24,478 23,486Derivatives 2,687 254 271Liabilities classified as held for distribution 13,125 - -

Total liabilities 80,273 56,139 54,493



4. Segment information continuedGeographic informationRevenues from external customers

IFRS 8.33(a)

2015 2014€000 €000

Euroland 158,697 141,525United States 52,224 49,881Total revenue per consolidated statement of profit or loss 210,921 191,406

The revenue information above is based on the location of the customers. IFRS 8.33(a)

Revenue from one customer amounted to €25,521,000 (2014: €21,263,000), arising from sales by thefire prevention equipment segment.

IFRS 8.34

Non-current operating assets

2015 2014As at

1 January 2014 IFRS 8.33(b)

€000 €000 €000Euroland 44,023 29,004 24,350United States 9,300 7,251 5,240

Total 53,323 36,255 29,590

Non-current assets for this purpose consist of property, plant and equipment, investment properties andintangible assets.

CommentaryInterest revenue and interest expense have not been disclosed by segment as these items are managed on a group basis,and are not provided to the CODM at the operating segment level. Disclosure of operating segment assets and liabilities isonly required when such measures are provided to the CODM. The Group provides information to the CODM aboutoperating assets and liabilities. The remaining operations (e.g., treasury) which are reflected in ‘adjustments andeliminations’, do not constitute an individual operating segment.

The Group’s internal reporting is set up to report in accordance with IFRS. The segment disclosures could be significantlymore extensive if internal reports had been prepared on a basis other than IFRS. In this case, a reconciliation between theinternally reported items and the externally communicated items needs to be prepared.

IFRS 8 does not provide specific disclosure requirements for an operating segment classified as a discontinued operation.An entity is not, therefore, required to provide such segment information as long as the classification criteria for held fordistribution are met. It is, however, allowed to continue to present segment information as long as the definition of anoperating segment is met. The Group has elected to continue to present segment information for the prior year includingoperations classified as discontinued in the current year.

The Group’s CODM regularly reviews the segment information related to the joint venture based on its proportionateshare of revenue, profits, assets and liabilities to make decisions about resources to be allocated to the segment andassess its performance. However, as required by IFRS 11, the Group’s interest in the joint venture is accounted for inconsolidated financial statements using the equity method. The eliminations arising on account of differences betweenproportionate consolidation and equity method are included under ‘Adjustments and eliminations’.



5. Business combinations and acquisition of non-controlling interestsAcquisitions in 2015Acquisition of Extinguishers LimitedOn 1 May 2015, the Group acquired 80% of the voting shares of Extinguishers Limited, an unlisted companybased in Euroland and specialising in the manufacture of fire retardant fabrics. The Group acquiredExtinguishers Limited because it significantly enlarges the range of products in the fire prevention equipmentsegment that can be offered to its clients.

The Group has elected to measure the non-controlling interest in the acquiree at fair value.

IFRS 3.59IFRS 3.B64(a)IFRS 3.B64(b)IFRS 3.B64(d)IFRS 3.B64(c)

Assets acquired and liabilities assumedThe fair values of the identifiable assets and liabilities of Extinguishers Limited as at the date of acquisition were:

Fair value recognisedon acquisition

IFRS 3.B64(i)IAS 7.40(d)

€000AssetsProperty, plant and equipment (Note 13) 7,042Cash and cash equivalents 230 IAS 7.40(c)

Trade receivables 1,736Inventories 3,578Patents and licences (Note 15) 1,200

13,786LiabilitiesTrade payables (2,562)Contingent liability (Note 23) (380)Provision for onerous operating lease costs (Note 23) (400)Provision for restructuring (Note 23) (500)Provision for decommissioning costs (Note 23) (1,200)Deferred tax liability (1,511)

(6,553)Total identifiable net assets at fair value 7,233

Non-controlling interest measured at fair value (1,547) IFRS 3.B64(o)(i)

Goodwill arising on acquisition (Note 16) 2,231Purchase consideration transferred 7,917

The fair value of the trade receivables amounts to €1,736,000. The gross amount of trade receivables is€1,754,000. However, none of the trade receivables have been impaired and it is expected that the contractualamounts can be collected.

IFRS 3.B64(h)

Prior to the acquisition, Extinguishers Limited decided to eliminate certain product lines (further details aregiven in Note 23). The restructuring provision recognised above was a present obligation of ExtinguishersLimited immediately prior to the business combination. The execution of the plan was not conditional upon itbeing acquired by the Group.

The deferred tax liability mainly comprises the tax effect of the accelerated depreciation for tax purposes oftangible and intangible assets.

The goodwill of €2,231,000 comprises the value of expected synergies arising from the acquisition and acustomer list, which is not separately recognised. Goodwill is allocated entirely to the fire prevention segment.Due to the contractual terms imposed on acquisition, the customer list is not separable and therefore does notmeet the criteria for recognition as an intangible asset under IAS 38. None of the goodwill recognised isexpected to be deductible for income tax purposes.

IFRS 3.B64(e)

IFRS 3.B64(k)



5. Business combinations and acquisition of non-controlling interests continuedA contingent liability at a fair value of €380,000 has been determined at the acquisition date resulting from aclaim of a supplier whose shipment has been rejected and payment has been refused by the Group due todeviations from the defined technical specifications of the goods. The claim is subject to legal arbitration and isonly expected to be finalised in late 2016. As at the reporting date, the contingent liability has been reassessedand is determined to be €400,000, which is based on the expected probable outcome (see Note 23). The chargehas been recognised in the statement of profit or loss.

IFRS 3.B64(j)IFRS 3.56(a)

The fair value of the non-controlling interest in Extinguishers Limited has been estimated by applying adiscounted earnings approach. Extinguishers Limited is an unlisted company and as such no market informationis available. The fair value estimate is based on:

• An assumed discount rate of 14%

• A terminal value, calculated based on long-term sustainable growth rates for the industry ranging from 2%to 4% which has been used to determine income for the future years

• A reinvestment ratio of 60% of earnings

IFRS 3.B64(o)(ii)

From the date of acquisition, Extinguishers Limited has contributed €17,857,000 of revenue and €750,000 tothe profit before tax from continuing operations of the Group. If the combination had taken place at thebeginning of the year, revenue from continuing operations would have been €222,582,000 and the profit fromcontinuing operations for the Group would have been €12,285,000.

IFRS 3.B64 (q)(i)IFRS 3.B64(q)(ii)

Purchase consideration €000

Shares issued, at fair value 7,203IFRS 3.B64(f)(iv)

Contingent consideration liability 714IFRS 3.B64(f)(iii)

Total consideration 7,917 IAS 7.40(a)

Analysis of cash flows on acquisition: €000Transaction costs of the acquisition (included in cash flows from operating activities) (600)Net cash acquired with the subsidiary (included in cash flows from investing activities) 230 IAS 7.40(c)

Transaction costs attributable to issuance of shares(included in cash flows from financing activities, net of tax) (32)Net cash flow on acquisition (402)

The Group issued 2,500,000 ordinary shares as consideration for the 80% interest in Extinguishers Limited. Thefair value of the shares is the quoted price of the shares of the Group at the acquisition date, which was €2.88each. The fair value of the consideration given is therefore €7,203,000.

IFRS 3.B64(f)(iv)

Transaction costs of €600,000 have been expensed and are included in administrative expenses. Theattributable costs of the issuance of the equity instruments of €32,000 have been charged directly to equityas negative share premium.

IFRS 3.B64(f)(iv)IFRS 3.B64(m)

Contingent considerationAs part of the purchase agreement with the previous owner of Extinguishers Limited, a contingentconsideration has been agreed. There will be additional cash payments to the previous owner of ExtinguishersLimited of:

a) €675,000, if the entity generates €1,000,000 of profit before tax in a 12-month period after theacquisition dateOr

b) €1,125,000, if the entity generates €1,500,000 of profit before tax in a 12-month period after theacquisition date

As at the acquisition date, the fair value of the contingent consideration was estimated at €714,000. The fairvalue is determined using DCF method.

IFRS 3.B64(g)(iii)IFRS3.B64 (b)(i)IFRS 13.93(d)



5. Business combinations and acquisition of non-controlling interests continuedSignificant unobservable valuation inputs are provided below:

Assumed probability-adjusted profit before tax of Extinguishers Limited €1,000,000 - €1,500,000

Discount rate 14%

Discount for own non-performance risk 0.05%

Significant increase (decrease) in the profit after tax of Extinguishers Limited would result in higher (lower) fairvalue of the contingent consideration liability, while significant increase (decrease) in the discount rate and ownnon-performance risk would result in lower (higher) fair value of the liability.

As at 31 December 2015, the key performance indicators of Extinguishers Limited show clearly that it isprobable that the target will be achieved due to a significant expansion of the business and the synergiesimplemented. Accordingly, the fair value of the contingent consideration has been adjusted to reflect thisdevelopment and a charge has been recognised through profit or loss. A reconciliation of fair valuemeasurement of the contingent consideration liability is provided below:

IFRS 13.93(h)(i)

€000As at 1 January 2015 - IFRS 13.93(e)

Liability arising on business combination 714Unrealised fair value changes recognised in profit or loss 358 IFRS 13.93(f)

As at 31 December 2015 1,072

The fair value of the contingent consideration liability increased due to a significantly improved performance ofExtinguishers Limited compared with the budget. The contingent consideration liability is due for finalmeasurement and payment to the former shareholders on 30 September 2016.

CommentaryThe classification of contingent consideration requires an analysis of the individual facts and circumstances. It may beclassified as follows: equity or a financial liability in accordance with IAS 32 and IAS 39; a provision in accordance with IAS37; or in accordance with other standards, each resulting in different initial recognition and subsequent measurement.

The Group has assessed the nature of the contingent consideration and as the Group incurred a contractual obligation todeliver cash to the seller determined it as a financial liability (IAS 32.11). Consequently, the Group is required toremeasure that liability at fair value at each reporting date (IFRS 3.58(b)(i)).

As part of the business combination, contingent payments to employees or selling shareholders are a common method ofretention of key people for the combined entity. The nature of such contingent payments, however, needs to be evaluatedin each individual circumstance as not all such payments qualify as contingent consideration, but are accounted for as aseparate transaction. For example, contingent payments that are unrelated to the future service of the employee aredeemed contingent consideration, whereas contingent payments that are forfeited when the employment is terminated,are deemed remuneration. Paragraphs B54 – B55 of IFRS 3 provide further guidance.

When first-time adopters elect the IFRS 1 business combinations exemption from full retrospective application of IFRS 3,they are reminded that they are still required to recognise the fair value of any contingent consideration relating to pastbusiness combinations at the date of transition if they had not done so under previous GAAP. This is because the businesscombinations exemption in IFRS 1 does not specifically override the requirements of IAS 32, IAS 37 and IAS 39 and anentity accounts for contingent consideration under one or more of those standards.

Under IFRS 13.93(h)(ii), for recurring fair value measurement of financial assets and financial liabilities at Level 3 of thehierarchy, if changing one or more of the unobservable inputs to reflect reasonably possible alternative assumptionswould change the fair value significantly, an entity is required to state that fact and disclose the effect of changes. Theentity is also required to state how the effect of a change to reflect a reasonably possible alternative assumption wascalculated. For this purpose, significance shall be judged with respect to profit or loss, and total assets or total liabilities,or, when changes in fair value are recognised in OCI, total equity. In the case of the contingent consideration liabilityrecognised by the Group, the changes in unobservable inputs other than those disclosed in the note above, were assessedto be insignificant.

Acquisition of additional interest in Lightbulbs LimitedOn 1 October 2015, the Group acquired an additional 7.4% interest in the voting shares of Lightbulbs Limited,increasing its ownership interest to 87.4%. Cash consideration of €325,000 was paid to the non-controllingshareholders. The carrying value of the net assets of Lightbulbs Limited (excluding goodwill on the originalacquisition) at the acquisition date was €1,824,000, and the carrying value of the additional interest acquiredwas €135,000. The difference of €190,000 between the consideration and the carrying value of the interestacquired has been recognised in retained earnings within equity.

IAS27.30IAS27.41(e)



5. Business combinations and acquisition of non-controlling interests continuedAcquisitions in 2014On 1 December 2014, the Group acquired 80% of the voting shares of Lightbulbs Limited, a company based inEuroland, specialising in the production and distribution of lightbulbs. The Group acquired this business toenlarge the range of products in the electronics segment.

The Group elected to measure the non-controlling interest in the acquiree at the proportionate share of itsinterest in the acquiree’s identifiable net assets.

IFRS 3.59IFRS3.B64(a)IFRS3.B64(b)IFRS3.B64(d)IFRS3.B64(c)

The fair value of the identifiable assets and liabilities of Lightbulbs Limited as at the date of acquisition were:

Fair value recognisedon acquisition

IFRS 3.B64(i)IAS 7.40(d)

€000AssetsLand and buildings (Note 13) 1,280Cash and cash equivalents 50 IAS 7.40(c)

Trade receivables 853Inventories 765

2,948

LiabilitiesTrade payables (807)Deferred tax liability (380)Provision for maintenance warranties (50)

(1,237)Total identifiable net assets at fair value 1,711Non-controlling interest measured at the proportionate share of the acquiree’sidentifiable net assets (20%) (342)Net assets acquired 1,369Goodwill arising on acquisition (Note 16) 131Purchase consideration transferred 1,500

Cash flow on acquisition

Net cash acquired with the subsidiary 50IFRS 3.B64(f)(i),IAS 7.40(c)

Cash paid (1,500)IFRS 3.B64(f)(i),IAS 7.40(a), (b)

Net cash outflow (1,450)

The fair value of the trade receivables amounts to €853,000, which approximates their gross carrying amount.None of the trade receivables were impaired and the full contractual amounts were expected to be collected.

IFRS 3.B64(h)

The goodwill of €131,000 comprises the value of expected synergies arising from the acquisition. Goodwill isallocated entirely to the electronics segment. None of the goodwill recognised is deductible for income taxpurposes.

IFRS 3.B64(e)

IFRS 3.B64(k)

Lightbulbs Limited contributed €450,000 of revenue and €20,000 to the net profit before tax from the date ofacquisition (1 December 2014) to 31 December 2014 to the profit for the year from continuing operations ofthe Group. If the combination had taken place at the beginning of that year, revenue from continuing operationswould have been €198,078,000 and the profit for the year from continuing operations for the Group for 2014would have been €7,850,000.

IFRS 3.B64 (q)(i)IFRS 3.B64(q)(ii)

CommentaryIFRS 1 includes an optional exemption from restating business combinations that occurred prior to the date of transitionto IFRS. However, this exemption does not extend to business combinations that occurred after the date of transition toIFRS but within the comparative period. Accordingly, business combinations in the comparative period have been restatedto comply with IFRS 3.



6. Material partly-owned subsidiariesFinancial information of subsidiaries that have material non-controlling interests is provided below: IFRS12.10(ii)

IFRS12.12

Proportion of equity interest held by non-controlling interests:

NameCountry of incorporation

and operation 31 Dec 2015 31 Dec 2014 1 Jan 2014Electronics Limited Euroland 52% 52% 52%Extinguishers Limited Euroland 20% - - Lightbulbs Limited Euroland 12.6% 20% -

31 Dec 2015 31 Dec 2014 1 Jan 2014€000 €000 €000 IFRS 12.12(f)

Accumulated balances of material non-controlling interest: IFRS12.B10

Electronics Limited 490 277 134Extinguishers Limited 1,696 - - Lightbulbs Limited 263 344 -

Profit allocated to material non-controlling interest:Electronics Limited 243 192 - Extinguishers Limited 149 - - Lightbulbs Limited 54 2 -

The summarised financial information of these subsidiaries is provided below. This information is based onamounts before inter-company eliminations.

Summarised statement of profit or loss for 2015:Electronics

LimitedExtinguishers

LimitedLightbulbs

Limited

IFRS 12.B11IFRS 12.12(g)IFRS 12.B10

€000 €000 €000Revenue 2,546 17,857 5,748Cost of sales (1,450) (15,678) (4,090)Administrative expenses (354) (1,364) (1,020)Finance costs (250) (65) (132)Profit before tax 492 750 506Income tax (25) (6) (80)Profit for the year from continuing operations 467 744 426Total comprehensive income 467 744 426

Attributable to non-controlling interests 243 149 54Dividends paid to non-controlling interests 30 - -

Summarised statement of profit or loss for 2014:Electronics

LimitedLightbulbs

Limited

IFRS 12.B11IFRS 12.12(g)IFRS 12.B10

€000 €000

Revenue 2,100 476Cost of Sales (1,250) (360)Administrative expenses (150) (85)Finance costs (350) (11)

Profit before tax 350 20Income tax 20 (8)

Profit for the year from continuing operations 370 12Total comprehensive income 370 12Attributable to non-controlling interests 192 2Dividends paid to non-controlling interests 49 -



6. Material partly-owned subsidiaries continuedSummarised statement of financial position as at 31 December 2015:

ElectronicsLimited

ExtinguishersLimited

LightbulbsLimited

€000 €000 €000Inventories and cash and bank balances (current) 971 7,043 2,348Property, plant and equipment and other non-current assets(non-current) 1,408 10,273 1,409Trade and other payables (current) (417) (5,822) (1,182)Interest-bearing loans and borrowing and deferred taxliabilities (non-current) (1,019) (3,016) (485)Total equity 943 8,478 2,090

Attributable to:Equity holders of parent 453 6,782 1,827Non-controlling interest 490 1,696 263

Summarised statement of financial position as at 31 December 2014:Electronics

LimitedLightbulbs

Limited

€000 €000Inventories and cash and bank balances (current) 698 1,668Property, plant and equipment and other non-current assets(non-current) 1,280 1,359Trade and other payables (current) (350) (822)Interest-bearing loans and borrowing and deferred taxliabilities (non-current) (1,095) (485)Total equity 533 1,720

Attributable to:

Equity holders of parent 256 1,376Non-controlling interest 277 344

Summarised statement of financial position as at 1 January 2014:Electronics

Limited

€000

Inventories and cash and bank balances (current) 849

Property, plant and equipment and other non-currentfinancial assets (non-current) 1,350

Trade and other payables (current) (1042)

Interest-bearing loans and borrowing and deferred taxliabilities (non-current) (900)

Total equity 257

Attributable to:

Equity holders of parent 123

Non-controlling interest 134



6. Material partly-owned subsidiaries continuedSummarised cash flow information for year ended 31 December 2015:

ElectronicsLimited

ExtinguishersLimited

LightbulbsLimited

€000 €000 €000Operating 507 809 558Investing (15) (280) 6Financing (250) (65) (132)Net increase/(decrease) in cash and cash equivalents 242 464 432Summarised cash flow information for year ended 31 December 2014:

ElectronicsLimited

LightbulbsLimited

€000 €000Operating 460 23Investing (10) (20)Financing (350) (11)Net increase/(decrease) in cash and cash equivalents 100 (8)

CommentaryIFRS 12.12 requires the above information only in respect of subsidiaries that have non-controlling interests that arematerial to the reporting entity (i.e., the Group). A subsidiary may have significant non-controlling interest per se butdisclosure is not required if that interest is not material at the Group level. Similarly, these disclosures do not apply to thenon-controlling interests that are material in aggregate but not individually. Also, it should be noted that the aboveinformation should be provided separately for each individual subsidiary with a material non-controlling interest. The Grouphas concluded that Extinguishers Limited, Lightbulb Limited and Electronics Limited are the only subsidiaries with non-controlling interests that are material to the Group.

When there is a change in the ownership of a subsidiary, IFRS 12.18 requires disclosure of a schedule that shows theeffects on equity of any changes in its ownership interest in the subsidiary that did not result in a loss of control. Whenthere are significant restrictions on the Group’s or its subsidiaries' ability to access or use the assets and settle the liabilitiesof the Group, IFRS 12.13 requires disclosure of the nature and extent of significant restrictions. The Group did not have anysuch restrictions.

IFRS 12.10 (b) (iv) requires disclosure of information to enable the users to evaluate the consequences of losingcontrol of a subsidiary during the period. The Group did not lose control over a subsidiary during the period.

7. Interest in a joint ventureThe Group has a 50% interest in Showers Limited, a joint venture involved in the manufacture of some of theGroup’s main product lines in fire prevention equipment in Euroland.

The Group’s interest in Showers Limited is accounted for using the equity method in the consolidated financialstatements. Summarised financial information of the joint venture, based on its IFRS financial statements, andreconciliation with the carrying amount of the investment in the consolidated financial statements are set outbelow:

2015 2014As at

1 January 2014Summarised statement of financial position ofShowers Limited: €000 €000 €000Current assets, including cash and cash equivalents €613,000(2014: €404,000) and prepayments €200,000 (2014: NIL) 3,226 2,808 3,014


Non-current assets 2,864 2,964 2,890Current liabilities, including tax payable €42,000(2014: €88,000) (224) (1,102) (900)Non-current liabilities, including deferred tax liabilities€128,000 (2014: €165,000) and long-term borrowing€325,000 (2014: €268,000) (1,020) (1,000) (1,010)

Equity 4,846 3,670 3,994



7. Interest in a joint venture continued

Proportion of the Group’s ownership 50% 50% 50%Carrying amount of the investment 2,423 1,835 1,997 IFRS 12.B14(b)

Summarised statement of profit or loss of Showers Limited:Revenue 60,094 58,876Cost of sales (54,488) (53,420)Administrative expenses, including depreciation €1,236,000(2015: €1,235,000) (2,638) (2,586) IFRS 12.B13

Finance costs, including interest expense €204,000 (2015:€500,000) (204) (200) IFRS 12.B13

Profit before tax 2,764 2,670Income tax expense (1,588) (1,556) IFRS 12.B13

Profit for the year (continuing operations) 1,176 1,114Total comprehensive income for the year (continuingoperations) 1,176 1,114 IFRS 12.B12(b)

Group’s share of profit for the year 588 557

The Group had no contingent liabilities or capital commitments relating to its interest in Showers Limited as at31 December 2015 and 2014 and 1 January 2014. The joint venture had no contingent liabilities or capitalcommitments as at 31 December 2015 and 2014 and 1 January 2014. Showers Limited cannot distribute itsprofits until it obtains the consent from the two venture partners.

IFRS 12.22(a)IFRS 12.23(a)IFRS 12.B18-B19

CommentaryIFRS 12.B14 indicates that the summarised financial information of the joint venture or associate required underIFRS 12.B12-B13 include adjustments made by the entity when using the equity method, such as fair value adjustments (e.g.,goodwill) made at the time of acquisition and adjustments for differences in accounting policies. Therefore, the Group haspresented the above disclosures on this basis. IFRS 12.21(a) requires the separate disclosure of information for jointoperations, if material, as it relates to all types of joint arrangements. Disclosures of summarised financial information underIFRS 12.B12-B13 are not required for interests in joint operations. The Group does not have any joint operations.

The Group has presented the summarised financial information of the joint venture based on its IFRS financial statements.IFRS 12.B15 allows this information to be provided using alternative bases, if the entity measures its interest in the jointventure or associate at fair value, and if the joint venture or associate does not prepare IFRS financial statements andpreparation on that basis would be impracticable or cause undue cost. Applying both the impracticable and undue costthresholds involve significant judgement and must be carefully considered in the context of the specific facts andcircumstances. In either case, the entity is required to disclose the basis on which the information is provided.

IFRS 12.22(b) requires additional disclosures when the financial statements of the joint venture or associate used inapplying equity method are as of a different date or for a different period from that of the entity. This is not applicable tothe Group. IFRS 12.22(c) requires disclosure of unrecognised share of losses of a joint venture and associate. This is notapplicable to the Group.

8. Investment in an associateThe Group has a 25% interest in Power Works Limited, which is involved in the manufacture of fire preventionequipment for power stations in Euroland. Power Works Limited is a private entity that is not listed on anypublic exchange. The following table illustrates summarised financial information of the Group’s investment inPower Works Limited:

IFRS 12.20IFRS 12.21(a)

2015 2014As at

1 January 2014€000 €000 €000

IFRS 12.B12

Current assets 6,524 6,324 6,000Non-current assets 13,664 12,828 12,504Current liabilities (4,488) (3,904) (3,680)Non-current liabilities (12,644) (12,524) (12,424)Equity 3,056 2,724 2,400Proportion of the Group’s ownership 25% 25% 25%Carrying amount of the investment 764 681 600



8. Investment in an associate continued

Revenue 33,292 32,640Cost of sales (27,299) (26,765)Administrative expenses (1,665) (1,632)Finance costs (2,996) (2,938)Profit before tax 1,332 1,305Income tax expense (1,000) (981)Profit for the year (continuing operations) 332 324Total comprehensive income for the year (continuingoperations) 332 324 IFRS 12.B12(b)

Group’s share of profit for the year 83 81

The Group has an agreement with its associate that the profits of the associate will not be distributed until itobtains the consent of the parent. The parent does not foresee giving such consent at the reporting date.

IFRS12.22(a)

The associate had no contingent liabilities or capital commitments as at 31 December 2015 and 2014 and 1January 2014, except as disclosed in Note 29. The parent has no contingent liabilities relating to its interests inthe associate.

IFRS 12.23

CommentaryIFRS 12.21(c) and IFRS 12.B16 require disclosure of the aggregated information of associates and joint ventures that arenot individually material. The Group did not have any immaterial associates or joint ventures.

The Group has presented the summarised financial information of the associate based on its IFRS financial statements.IFRS 12.B15 allows this information to be provided using alternative bases.

9. Other income/expenses and adjustments

9.1 Other operating income

2015 2014€000 €000

Government grants (Note 24) 1,053 541 IAS 20.39(b)

Net gain on disposal of property, plant and equipment 532 2,007 IAS 1.97

Fair value gain on financial instruments at fair value through profit or loss 850 - IFRS 7.20(a)(i)

Total other operating income 2,435 2,548 IAS 1.98

Government grants have been received for the purchase of certain items of property, plant and equipment.There are no unfulfilled conditions or contingencies attached to these grants.

IAS 20.39(c)

Fair value gain on financial instruments at fair value through profit or loss relates to foreign exchange forwardcontracts that did not qualify for hedge accounting and embedded derivatives which have been separated.

No ineffectiveness has been recognised on foreign exchange and interest rate hedges.

9.2 Other operating expenses

2015 2014€000 €000

Bid defence costs (579) (31) IAS 1.97

Cost of WEEE (Note 23) (102) (22) IAS 1.97

Change in fair value of investment properties (Note 14) (306) (300) IAS 1.97

Fair value loss on financial instruments at fair value through profit or loss (1,502) - IFRS 7.20(a)

Ineffectiveness on forward commodity contracts designated ascash flow hedges (Note 17) (65) - IFRS 7.24(b)

Total other operating expenses (2,554) (353)



9.2 Other operating expenses continuedBid defence costs were incurred in respect of obtaining advice in defending a hostile takeover bid by acompetitor. The competitor did not proceed with the bid.

Fair value loss on financial instruments at fair value through profit or loss relates to foreign exchange forwardcontracts that did not qualify for hedge accounting and embedded derivatives which have been separated.

Ineffectiveness resulting from cash flow hedges on the commodity forward contracts was incurred in theelectronics segment. Ineffectiveness on forward commodity contracts due to the change in forward points was€23,000.

Commentary

IAS 1 does not require an entity to disclose the results of operating activities as a line item in the income statement. If an entityelects to do so, it must ensure that the disclosed amount is representative of activities that would normally be regarded as’operating’ (IAS 1.BC56). As IAS 1 does not provide any further guidance on operating profits, an entity needs to applyjudgement in developing its own accounting policy under IAS 8.10.

The Group has taken the view that presenting the gains and losses on foreign exchange forward contracts and embeddedderivatives in operating income and expenses reflects the economic substance of those transactions as they are entered into tohedge forecast sales and purchases and are, therefore, clearly associated with transactions which are part of the operatingincome and expenses (IAS 8.10(b)(ii)). Other entities may take alternative views and, hence, there is diversity in practice.

9.3 Finance costs2015 2014€000 €000

Interest on debts and borrowings (1,172) (1,182)Finance charges payable under finance leases and hire purchase contracts (40) (40)Total interest expense (1,212) (1,222) IFRS 7.20(b)

Impairment loss on quoted available-for-sale debt and equity investments(Note 17.1) (111) - IFRS 7.20(e)

-

Unwinding of discount on provisions (Note 23) (43) (1) IAS 37.60

Total finance costs (1,366) (1,223)

9.4 Finance income

2015 2014€000 €000

Interest income on a loan to an associate (Note 30) 20 -Interest income from available-for-sale investments 316 211

- - IAS 1.85

Total finance income 336 211 IFRS 7.20(b)

CommentaryFinance income and finance cost are not defined terms in IFRS. Some regulators limit the inclusion of certain income andexpense within those items (e.g., restricted to interest income and expense), while other jurisdictions allow additionalitems to be included.

9.5 Depreciation, amortisation, foreign exchange differences and costs of inventories includedin the consolidated statement of profit or loss

2015 2014 IAS 1.104

€000 €000Included in cost of sales:

Depreciation 4,020 2,800Impairment of property, plant and equipment (Note 13) — 301 IAS 36.126(a)

Amortisation and impairment of intangible assets (Note 15) 325 174Net foreign exchange differences (65) (40) IAS 21.52(a)

Warranty provision (Note 23) 106 52Costs of inventories recognised as an expense 150,283 131,140 IAS 2.36(d)



9. Other income/expenses and adjustmentsIncluded in administrative expenses:

Depreciation 277 282Minimum lease payments recognised as an operating lease expense 250 175 IAS 17.35(c)

Increase of contingent consideration of the business combination (Note 5) 358 —

9.6 Employee benefits expense

2015 2014 IAS 1.104

€000 €000Included in cost of sales:

Wages and salaries 6,551 6,513Social security costs 664 659Pension costs (Note 26) 350 305Post-employment benefits other than pensions (Note 26) 38 28Share-based payment expense (Note 27) 103 123 IFRS 2.51 (a)

Included in selling and distribution expenses:Wages and salaries 10,882 17,542Social security costs 1,102 1,948Pension costs (Note 26) 560 496Post-employment benefits other than pensions (Note 26) 61 77Share-based payment expense (Note 27) 165 338

Included in administrative expenses:Wages and salaries 13,372 9,668Social security costs 1,349 1,343Pension costs (Note 26) 488 478Post-employment benefits other than pensions (Note 26) 54 40Share-based payment expense (Note 27) 144 172

Total employee benefits expense 35,883 39,730

9.7 Research and development costs IAS 38.126

The Group’s electronics business research and development concentrates on the development of internet-enabled safety equipment. Research and development costs that are not eligible for capitalisation have beenexpensed in the period incurred (2015: €2,234,000 (2014: €1,034,000)) and they are recognised inadministrative expenses.

9.8 Components of other comprehensive income

2015 2014 IAS 1.97

€000 €000Cash flow hedges:Gains/(losses) arising during the year

Currency forward contracts*Reclassification for gains included in profit or loss 401 412 IFRS 7.23(d)

Net gain/(loss) during the year (except not-yet matured contracts) (300) (278)Net gain/(loss) during the year of the not-yet matured contracts 82 (101)

Commodity forward contractsLoss of the not-yet matured commodity forward contracts (915) -

Total (732) 33

Available-for-sale financial assets:

Gains/(losses) arising during the year (60) (22)IAS 1.92

IFRS 7.20(a)(ii)

Total (60) (22)

*This includes amounts removed from OCI during the year and included in the carrying amount of the hedged item as a basis adjustment.



9.8 Components of other comprehensive income continued

CommentaryThis analysis does not include the remaining items of OCI, as they are either never reclassified to profit or loss orreclassification adjustments did not occur.

The total comprehensive balance of the cash flow hedge (net of tax) is provided for illustrative purposes in Note 21, wherethe split among the different equity reserves is shown. In addition, the balance of the available-for-sale financial assets(net of tax) cannot be obtained directly or indirectly from the notes to these financial statements because IFRS does notrequire the disclosure of the movements. Note 17.4 includes the movements of the AFS financial assets classified as level3 in the fair value hierarchy, which are mandatory disclosures.

9.9 Administrative expenses2015 2014 IAS 1.104

€000 €000Acquisition-related transaction costs 600 —Research and development costs 2,234 1,034Depreciation 277 282Impairment of goodwill (Note 16) 200 —Minimum lease payments recognised as an operating lease expense 250 175Remeasurement of contingent consideration (Note 5) 358 —Wages and salaries 13,372 9,668Social security costs 1,349 1,343Pension costs 488 478Post-employment benefits other than pensions 54 40Share-based payment expense 144 172Other administrative expenses 420 350

Total administrative expenses 19,746 13,542

10. Discontinued operationsOn 1 September 2015, the Group publicly announced the Board of Directors’ decision to distribute the shares ofHose Limited, a wholly owned subsidiary, to shareholders of the Good First-time Adopter (International)Limited. On 15 December 2015, the shareholders approved the distribution and, as at this date, the Grouprecognised a liability to distribute the business at the estimated fair value of €350,000 with a correspondingcharge directly to equity. The distribution of Hose Limited is expected to be completed on 2 February 2015 and,as at 31 December 2015, legal secretarial procedures to give effect to the distribution were in progress. As at31 December 2015, Hose Limited was classified as a disposal group held for distribution and as a discontinuedoperation. As at 31 December 2015, the fair value of the dividend payable is estimated to be € 355,000.Theresults of Hose Limited for the year are presented below:

IFRS 5.30IFRS 5.41IFRIC 17.11

2015 2014 IFRS 5.33(b)(i)

€000 €000 IFRS 5.34

Revenue 42,809 45,206Expenses (41,961) (44,880)Gross profit 848 326Finance costs (525) (519)Impairment loss recognised on the remeasurement to fair valueless costs to distribute (110) — IFRS 5.33 (b)(iii)

Profit/(loss) before tax from a discontinued operation 213 (193)Tax income:

Related to current pre-tax profit/(loss) 5 5 IAS 12.81(h)(ii)

Related to measurement to fair value less costs to distribute (deferred tax) 2 — IAS 12.81(h)(i)

Profit/(loss) for the year from a discontinued operation 220 (188)

The major classes of assets and liabilities of Hose Limited classified as held for distribution as at 31 December2015 are as follows:

IFRS 5.38



10. Discontinued operations continued2015 IFRS 5.38

€000 IFRS 5.40

AssetsIntangible assets (Note 15) 135Property, plant and equipment (Note 13) 4,637Debtors 6,980Equity shares — unquoted 508Cash and short-term deposits (Note 20) 1,294Assets classified as held for distribution 13,554

LiabilitiesCreditors (7,242)Deferred tax liability (74)Interest-bearing liabilities (Note 17) (5,809)Liabilities directly associated with assets classified as held for distribution (13,125)Net assets directly associated with disposal group 429Included in accumulated other comprehensive income:Available-for-sale reserve 66 IFRS 5.38

Deferred tax on available-for-sale reserve (20)Reserve of disposal group classified as held for sale 46

The net cash flows incurred by Hose Limited are as follows: IFRS 5.33(c)

2015 2014€000 €000

Operating (1,999) 3,293Investing — —Financing (436) (436)Net cash (outflow)/inflow (2,435) 2,857

Earnings per share: IAS 33.68

Basic, profit/(loss) for the year, from discontinued operation €0.01 (€0.01)Diluted, profit/(loss) for the year, from discontinued operation €0.01 (€0.01)

Interest-bearing liabilities comprise a fixed rate bank loan of €5,809,000 having an effective interest rate of7.5% that is repayable in full on 1 January 2020.

CommentaryIFRS 5 specifies certain disclosures required in respect of discontinued operations and non-current assets held for sale/distribution. IFRS 5.5B states that disclosures required in other IFRS do not apply to non-current assets held forsale/distribution and discontinued operations, except where other IFRSs explicitly refer to non-current assets held forsale/distribution and discontinued operations.

In IFRS 12.B17, the standard further clarified that disclosures specified in IFRS 12.B10-B16 are not required when anentity’s interest in a subsidiary, joint venture or associate (or a portion of its interest in a joint venture or an associate) isclassified as held for sale in accordance with IFRS 5. However, it remains silent as to the other disclosures beyondIFRS12.B10-B16. The Group has taken the view that, in light of IFRS 5.5B, in this particular case, the disclosures made inaccordance with IFRS 5 provide users with the relevant information.

The Group has elected to present the earnings per share from discontinued operations in the notes. Alternatively, it couldhave presented those amounts on the face of the statement of comprehensive income (see IAS 33.68A).

Impairment of property, plant and equipment IAS 36.130

Immediately before the classification of Hose Limited as a discontinued operation, the recoverable amount wasestimated for certain items of property, plant and equipment and no impairment loss was identified. Followingthe classification, an impairment loss of €110,000 (net of tax €77,000) was recognised on 1 October 2015 toreduce the carrying amount of the assets in the disposal group to the fair value less costs to distribute. This wasrecognised in the statement of profit or loss in the line item, ‘Profit for the year from a discontinued operation’.An independent valuation was obtained to determine the fair value of property, plant and equipment, which wasbased on recent transactions for similar assets within the same industry.

IFRS 5.33 (a)(iii)



10. Discontinued operations continuedAs at 31 December 2015, there was no further write-down as the carrying amount of the disposal group did notfall below its fair value less costs to distribute.

The discontinued operation includes unquoted equity shares (Level 3 in the fair value hierarchy) of Test Ltd.with a carrying amount of €508,000. The collaboration with Test Ltd is closely related with the discontinuedoperation of Hose Limited and is therefore reclassified as part of the discontinued operations. This investmentis classified as available-for-sale and carried at fair value through OCI. The Group did not pledge the financialasset nor receive any collateral for it. As at the reporting date, the carrying amount equals the fair value of theinstrument. For details on the recognition, measurement valuation techniques and inputs used for thisinvestment, refer Note 17.4.

IFRS 7.8(h)IFRS 7.14IFRS 7.15IFRS 7.25

Reconciliation of fair value measurements of Level 3 financial instrumentsThe following reconciliation illustrates the movements in the unquoted equity instrument from the day of itsreclassification to the end of the reporting period. The instrument is classified as Level 3 within the fair valuehierarchy (see Note 17).

IFRS 7.25

IFRS7.27B(c)

€000Opening balance as at 1 January 2014 502Sales —Purchases —Total gains and losses recognised in OCI 6Opening balance as at 1 January 2015 and 1 September 2015 508Sales —Purchases — IFRS 7.27B(d)

Total gains and losses recognised in OCI —Closing balance as at 31 December 2015 508

The Group did not incur gains or losses recorded in profit or loss with respect to Level 3 financial instruments.Furthermore, the Group did not recognise any gain or loss in OCI, as the valuation of the equity instrument as of31 December 2015 did not differ significantly from last year’s valuation.

Refer to Note 17.5 with regard to the nature and extent of risks arising from financial instruments.

CommentaryIFRS 5.5B clarifies that disclosure requirements in other IFRSs do not apply to non-current assets held for sale (or disposalgroups) unless those IFRSs explicitly refer to these assets and disposal groups. However, IFRS 5.5B(b) states thatdisclosure requirements continue to apply for assets and liabilities that are not within the scope of the measurementrequirements of IFRS 5, but within the disposal group. The illustration above reflects this circumstance, as the unquotedAFS equity instrument is a financial instrument as defined in IAS 39 and is, therefore, scoped out of the measurementrequirements of IFRS 5.

Whilst, the assets of discontinuing operations are non-recurring under IFRS 13.93(a), AFS financial assets of thediscontinuing operations are recurring since they are required to be measured at fair value at the end of each reportingperiod.

11. Income taxThe major components of income tax expense for the years ended 31 December 2015 and 2014 are: IAS 12.79

Consolidated statement of profit or loss2015 2014€000 €000

Current income tax:Current income tax charge 3,732 3,901 IAS 12.80(a)

Adjustments in respect of current income tax of previous year (18) (129) IAS 12.80(b)

Deferred tax:Relating to origination and reversal of temporary differences 179 (340) IAS 12.80(c)

Income tax expense reported in the statement of profit or loss 3,893 3,432



11. Income tax continued

Consolidated statement of other comprehensive income IAS 12.81(a)

Deferred tax related to items recognised in other comprehensive incomeduring the year:Net (gain)/loss on revaluation of cash flow hedges 220 (10)Unrealised (gain)/loss on available-for-sale financial assets 18 6Net gain on revaluation of land and buildings (254) —Net gain on hedge of net investment (83) —Net loss/(gain) on re-measurement gains and losses on defined benefit plans (94) 120Income tax recognised in other comprehensive income (193) 116

CommentaryDeferred taxes related to the revaluation of land and buildings have been calculated on the basis of recovery by sale at thetax rate of the jurisdiction in which they are sited (30% of the total revaluation of 846,000, see Note 13).

The tax effect of cash flow hedge instruments reflects the change in balances from 2014 to 2015 only for the effectiveportion (ineffectiveness has been accounted for directly in profit or loss). The reconciliation of these changes to the notesis difficult to directly observe. For illustrative purposes, a reconciliation is provided below (please note that the net changeis also included in the statement of profit or loss and other comprehensive income):

Assets Liabilities2015 2014 2015 2014€000 €000 €000 €000

Foreign exchange forward contract assets (Note 17.1) 252 153 — —Foreign exchange forward contract liabilities (Note 17.2) — — 170 254Commodity forward contract (Note 17.2) — — 980 —Ineffectiveness of commodity contract (Note 9.2) — — (65) —Total balances 252 153 1,085 254

Net variation in OCI 99 831

Net increase of cash flow hedge balances during 2015(net liability and net loss) 732

Tax rate 30%Tax gain 220

A reconciliation between tax expense and the product of accounting profit multiplied by Euroland’s domestic taxrate for the years ended 31 December 2015 and 2014 is as follows:

IAS 12.81 (c)(i)

2015 2014€000 €000

Accounting profit before tax from continuing operations 12,405 11,062Profit/(loss) before tax from a discontinued operation 213 (193)Accounting profit before income tax 12,618 10,869At Euroland’s statutory income tax rate of 30% (2014: 30%) 3,785 3,261Adjustments in respect to current income tax of previous years (68) (129)Government grants exempt from tax (316) (162)Utilisation of previously unrecognised tax losses (231) (89)Non-deductible expenses for tax purposes

Impairment of goodwill 60 —Change in contingent consideration on acquisition of Extinguishers Limited 107 —Other non-deductible expenses 71 230

Effect of higher tax rates in the US 478 316

At the effective income tax rate of 31% (2014: 32%) 3,886 3,427Income tax expense reported in the consolidated statement of profit or loss 3,893 3,432Income tax attributable to a discontinued operation (7) (5)

3,886 3,427



11. Income tax continuedCommentaryThe tax effects above can be reconciled using a 30% tax rate applied to the amounts in the following notes:

• Government grants (Note 24) upon recognition in the statement of profit or loss

• Unrecognised tax losses using the change in the amount mentioned in Note 3 under the section headed Taxes

• Impairment of goodwill in Note 16 and contingent consideration expense in Note 5

Deferred taxDeferred tax relates to the following:

Consolidated statementof financial position

Consolidatedstatement

of profit or loss IAS 12.81(g)(i)

2015 2014As at 1

January 2014 2015 2014 IAS 12.81(g)(ii)

€000 €000 €000 €000 €000Accelerated depreciation for tax purposes (2,359) (634) (411) 491 (157)Revaluations of investment propertiesto fair value (1,330) (1,422) (1,512) (92) (90)Revaluations of land and buildings to fair value (304) (50) (50) — —Revaluations of available-for-sale investmentsto fair value (21) (39) (45) — —Revaluation of a hedged loan to fair value (11) — — 11 —Net gain on hedge of a net investment (83) — — — —Post-employment medical benefits 102 59 26 (43) (33)Pension 685 689 596 (90) 27Revaluation of an interest rate swap(fair value hedge) to fair value 11 — — (11) —Revaluation of cash flow hedges (25) 30 40 — —Impairment on available-for-sale unquoteddebt instruments 27 — — (27) —Deferred revenue on customer loyaltyprogrammes 71 65 54 (6) (11)Convertible preference shares 91 55 23 (36) (32)Losses available for offsetting against futuretaxable income 383 365 321 (18) (44)

Deferred tax expense/(income) 179 (340)

Net deferred tax assets/(liabilities) (2,763) (882) (958)Reflected in the statement of financialposition as follows:Deferred tax assets 383 365 321Deferred tax liabilities — continuing operations (3,072) (1,247) (1,279)Deferred tax liabilities — discontinuedoperations (74) — —Deferred tax liabilities net (2,763) (882) (958)

Reconciliation of deferred tax liabilities net2015 2014€000 €000

Opening balance as of 1 January (882) (958)Tax income/(expense) during the period recognised in profit or loss (179) 340Tax income/(expense) during the period recognised in other comprehensive income (193) 116Discontinued operation 2 —Deferred taxes acquired in business combinations (1,511) (380)

Closing balance as at 31 December (2,763) (882)



11. Income tax continued

CommentaryAlthough not specifically required by IAS 1 or IAS 12, the reconciliation of the net deferred tax liability may be helpful. Asin some other disclosures included in this note, the cross reference with the amounts from which they are derived is notdirect. Nevertheless, the reasonableness of each balance may be obtained from the respective notes by applying a 30%tax rate. The exception being the accelerated depreciation for tax purposes whose change during the year is mainlyexplained by the acquisition of Extinguishers Limited (see Note 5).

The Group offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current taxassets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxeslevied by the same tax authority.

IAS 12.73

The Group has tax losses that arose in Euroland of €427,000 (2014: €1,198,000, 1 January 2014:€1,494,000) and are available indefinitely for offset against future taxable profits of the companies in whichthe losses arose. Deferred tax assets have not been recognised in respect of these losses as they may not beused to offset taxable profits elsewhere in the Group, they have arisen in subsidiaries that have been loss-making for some time, and there are no other tax planning opportunities or other evidence of recoverability inthe near future. If the Group were able to recognise all unrecognised deferred tax assets, profit would increaseby €128,000.

IAS 12.81(e)

IAS 12.87

IAS 12.67

IAS 12.81(f)

The temporary differences associated with investments in the Group’s subsidiaries, associate and joint venture,for which a deferred tax liability has not been recognised in the periods presented, aggregate to €1,745,000(2014: €1,458,000, 1 January 2014: €1,325,000). The Group has determined that the undistributed profits ofits subsidiaries, joint venture or associate will not be distributed in the foreseeable future, as:

• The Group has an agreement with its associate that the profits of the associate will not be distributed untilit obtains the consent of the parent. The parent company does not foresee giving such consent at thereporting date.

• The joint venture of the Group cannot distribute its profits until it obtains the consent of all venturepartners.

There are no income tax consequences attached to the payment of dividends in either 2015 or 2014 bythe Group to its shareholders. IAS 12.82A

CommentaryIAS 1.61 requires an entity to separately disclose the line items that are included in the amount expected to be recoveredor settled both within 12 months and more than 12 months after the reporting date for each line item that combines suchamounts. Deferred tax assets and liabilities may be considered one example for items combining such amounts. However,IAS 1.56, in contrast, does not permit to present deferred tax items as current.

Deferred tax assets and liabilities arising from investment properties at fair value are measured based on the taxconsequence of the presumption that the carrying amount of the investment properties will be recovered through sale. Inthe Group’s jurisdiction, Euroland, where the properties are located, the tax rates applicable for sale of properties are thesame as those applicable to business income.



12. Earnings per shareBasic earnings per share (EPS) is calculated by dividing the profit for the year attributable to ordinary equityholders of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted EPS is calculated by dividing the net profit attributable to ordinary equity holders of the parent (afteradjusting for interest on the convertible preference shares) by the weighted average number of ordinary sharesoutstanding during the year plus the weighted average number of ordinary shares that would be issued onconversion of all the dilutive potential ordinary shares into ordinary shares.

The following table reflects the income and share data used in the basic and diluted EPS computations:

2015 2014€000 €000

Profit attributable to ordinary equity holdersof the parent from continuing operations 8,206 7,391Profit/(loss) attributable to ordinary equity holdersof the parent from discontinued operations 220 (188)

Profit attributable to ordinary equity holdersof the parent for basic earnings 8,426 7,203 IAS 33.70(a)

Interest on convertible preference shares 247 238

Profit attributable to ordinary equity holdersof the parent adjusted for the effect of dilution 8,673 7,441 IAS 33.70(a)

2015 2014Thousands Thousands IAS 33.70(b)

Weighted average number of ordinary shares for basic EPS * 20,797 19,064

Effect of dilution:Share options 112 177Convertible preference shares 833 833Weighted average number of ordinary shares adjustedfor the effect of dilution * 21,742 20,074

* The weighted average number of shares takes into account the weighted average effect of changes in treasury sharestransactions during the year.

IAS 33.70(d)

There have been no other transactions involving ordinary shares or potential ordinary shares between thereporting date and the date of authorisation of these financial statements.

To calculate the EPS amounts for discontinued operation (see Note 10), the weighted average number ofordinary shares for both the basic and diluted amounts is as per the table above. The following table providesthe profit/(loss) amount used:

2015 2014€000 €000

Profit/(loss) attributable to ordinary equity holders of the parent from adiscontinued operation for basic and diluted earnings per share calculations 220 (188)

CommentaryAlthough not a requirement of IFRS, first-time adopters may wish to provide an explanation or reconciliation of thechanges to EPS on transition to IFRS as supplementary information to help stakeholders understand the changes.IFRS 1 requires that any previous GAAP information is prominently labelled as not being prepared in accordance withIFRS, in addition to the main adjustments that would make it comply with IFRS.



13. Property, plant and equipment

Freehold landand buildings

Constructionin progress

Plant andequipment Total

IAS 1.78(a)IAS 16.73(e)

€000 €000 €000 €000 IAS 16.73(d)

Cost or valuationAt 1 January 2014 7,727 — 24,602 32,329Additions 1,587 — 6,235 7,822Acquisition of a subsidiary (Note 5) 1,280 — — 1,280Disposals (347) — (49) (396)Exchange differences 10 — 26 36At 31 December 2014 10,257 — 30,814 41,071Additions 1,612 4,500 4,543 10,655Acquisition of a subsidiary (Note 5) 2,897 — 4,145 7,042Contributions from customers — — 4,500 4,500Disposals — — (4,908) (4,908)Discontinued operations (Note 10) (3,044) — (3,980) (7,024)Revaluations 846 — — 846Transfer* (102) — — (102) IAS 16.35

Exchange differences 30 — 79 109At 31 December 2015 12,496 4,500 34,833 51,829

Depreciation and impairmentAt 1 January 2014 — — 11,944 11,944Depreciation charge for the year 354 — 2,728 3,082Impairment (Note 9.5) — — 301 301Disposals (35) — (49) (84)Exchange differences 5 — 12 17At 31 December 2014 324 — 14,936 15,260Depreciation charge for the year** 500 — 3,797 4,297Disposals — — (3,450) (3,450)Discontinued operations (Note 10) (183) — (2,094) (2,277)Transfer* (102) — — (102)Exchange differences 20 — 30 50At 31 December 2015 559 — 13,219 13,778

Net book valueAt 31 December 2015 11,937 4,500 21,974 38,411At 31 December 2014 9,933 — 15,878 25,811At 1 January 2014 7,727 — 12,658 20,385

* This transfer relates to the accumulated depreciation as at the revaluation date that was eliminated against the grosscarrying amount of the revalued asset.

** Depreciation for the year excludes an impairment loss of €110,000 (see Note 10).



13. Property, plant and equipment continuedIn 2014, the impairment loss of €301,000 represented the write-down of certain property, plant and equipmentin the fire prevention segment to the recoverable amount as a result of technological obsolescence. This hasbeen recognised in the statement of profit or loss in the line item, Cost of sales. The recoverable amount€5,679,000 as at 31 December 2014 was based on value in use and was determined at the level of the CGU. TheCGU consisted of the Euroland based assets of Sprinklers Limited, a subsidiary of the Group. In determining valuein use for the CGU, the cash flows were discounted at a rate of 12.4% on a pre-tax basis.

IAS 36.126(a)

Plant and equipment contributed by customersThe Group recognises as plant and equipment any contribution made by its customers to be utilised in theproduction process and that meets the definition of an asset. The initial gross amount is estimated at fair valueby reference to the market price of these assets on the date on which control is obtained.

During 2015, the Group recognised equipment contributed by a customer aggregating to €4,500,000 andrevenue of €500,000 (2014: €NIL). The carrying amount of these assets as at 31 December 2015 is€4,000,000 (2014: €NIL).

Capitalised borrowing costsThe Group started the construction of a new fire safety facility in February 2015. This project is expected tobe completed in February 2016. The carrying amount of the fire safety facility at 31 December 2015 was€3,000,000 (2014: €Nil, 1 January 2014: €Nil). The fire safety facility is financed by a third party in a commonarrangement.

The amount of borrowing costs capitalised during the year ended 31 December 2015 was €303,000 (2014: €Nil,1 January 2014: €Nil). The rate used to determine the amount of borrowing costs eligible for capitalisation was11%, which is the effective interest rate of the specific borrowing.

IFRIC 18.11IAS 16.73 (a)

IAS 23.26(a)IAS 23.26(b)

Finance leasesThe carrying value of plant and equipment held under finance leases and hire purchase contracts at31 December 2015 was €1,178,000 (2014: €1,486,000, 1 January 2014: €1,432,000). Additions duringthe year include €45,000 (2014: €54,000) of plant and equipment under finance leases and hire purchasecontracts. Leased assets and assets under hire purchase contracts are pledged as security for the related financelease and hire purchase liabilities.

Land and buildingsLand and buildings with a carrying amount of €7,400,000 (2014: €5,000,000, 1 January 2014: €4,500,000)are subject to a first charge to secure two of the Group’s bank loans (Note 17).

Assets under constructionIncluded in plant and equipment at 31 December 2015 was, in addition to the new fire safety facility, anamount of €1,500,000 (2014: €Nil, 1 January 2014: €Nil) relating to expenditure for a plant in the course ofconstruction. Both facilities under construction will be recognised in ‘freehold land and buildings’ aftercompletion.

IAS 17.31(a)IAS 7.43

IAS 16.74(a)

IAS 16.74(a)

IAS 16.74(b)

Revaluation of land and buildingsThe Group uses the revaluation model of measurement of land and buildings. The revalued land and buildingsconsist of office properties in Euroland. Management determined that these constitute one class of asset underIFRS 13 Fair Value Measurement, based on the nature, characteristics and risks of the property.

Fair value is determined using market comparable method. Valuations performed by the valuer are based onactive market prices, significantly adjusted for any difference in the nature, location or condition of the specificproperty. The date of the most recent revaluation was 31 January 2015. As at the date of revaluation on 31January 2015, the properties’ fair values are based on valuations performed by Chartered Surveyors & Co., anaccredited independent valuer who has valuation experience for similar office properties in Euroland since 2009.

IAS 16.77(a),(e)IFRS 13.94

IFRS 13.93(d)



13. Property, plant and equipment continuedThe following table provides the fair value hierarchy disclosures for revalued land and buildings:

Date of valuation Total

Quotedprices in

activemarkets(Level 1)

Significantobservable

inputs(Level 2)

Significantunobservable

inputs(Level 3)

€000 €000 €000 €000Property, plant and equipment:

Office properties in Euroland 31 January 2015 8,681 — — 8,681

Significant unobservablevaluation input: Range

Price per square metre €325- €350 IFRS 13.93(h)(i)

Significant increases (decreases) in estimated price per square metre in isolation would result in a significantlyhigher (lower) fair value.

Reconciliation of fair value:€000

Opening balance as at 1 January 2014 7,727Re-measurement recognised in reserves — IFRS 13.93(e)(i)

Purchases — IFRS 13.93(e)(iii)

Balance as at 31 December 2014 7,727Re-measurement recognised in reserves 592Purchases 362Closing balance as at 31 December 2015 8,681

If land and buildings were measured using the cost model, the carrying amounts would be, as follows:

2015 2014As at 1

January 2014 IAS 16.77(e)

€000 €000 €000Cost 11,650 10,257 7,727Accumulated depreciation and impairment (520) (324) —Net carrying amount 11,130 9,933 7,727



14. Investment properties

2015 2014 IAS 40.76

€000 €000Opening balance at 1 January 7,983 7,091Additions (subsequent expenditure) 1,216 1,192Net loss on fair value adjustment (306) (300)Closing balance at 31 December 8,893 7,983

The Group’s investment properties consist of two commercial properties in Euroland. Management determinedthat the investment properties consist of two classes of assets − office and retail − based on the nature,characteristics and risks of each property.

As at 31 December 2015 and 2014, respectively, the fair values of the properties are based on valuationsperformed by Chartered Surveyors & Co., an accredited independent valuer. Chartered Surveyors & Co. is aspecialist in valuing these types of investment properties. A valuation model in accordance with thatrecommended by the International Valuation Standards Committee has been applied.

IAS 40.75(e)

Reconciliation of net profit on investment properties 2015 2014 IAS 40.75(f)

€000 €000Rental income derived from investment properties 1,404 1,377Direct operating expenses (including repair and maintenance) generating rentalincome (included in cost of sales) (101) (353)Direct operating expenses (including repair and maintenance) that did notgenerate rental income (included in cost of sales) (37) (127)

Profit arising from investment properties carried at fair value 1,266 897

The Group has no restrictions on the realisability of its investment properties and no contractual obligations toeither purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

IAS 40.75(g)IAS 40.75(h)

The following table provides the fair value hierarchy disclosures for the Group’s investment:

Quantitative disclosures fair value measurement hierarchy as at 31 December 2015, 31 December 2014and 1 January 2014

Fair value measurement using


Quotedprices in



inputs(Level 2)


inputs(Level 3)

€000 €000 €000 €000Assets measured at fair value:Investment properties:

Office properties 31 December 2015 4,260 — — 4,260Retail properties 31 December 2015 4,633 — — 4,633

Investment properties:Office properties 31 December 2014 3,824 — — 3,824Retail properties 31 December 2014 4,159 — — 4,159

Investment properties:Office properties 1 January 2014 3,397 — — 3,397Retail properties 1 January 2014 3,694 — — 3,694



14. Investment properties continued

Reconciliation of fair value:Investment properties

Officeproperties

Retailproperties

IAS 40.75(d)

€000 €000Opening balance as at 1 January 2014 3,397 3,694Re-measurement recognised in profit or loss (144) (156) IFRS 13.93(e)(i)

Purchases 571 621 IFRS 13.93(e)(iii)

Opening balance as at 1 January 2015 3,824 4,159Re-measurement recognised in profit or loss (147) (159)Purchases 583 633Closing balance as at 31 December 2015 4,260 4,633

Unrealised gains/(losses) for the period included in profit or loss(recognised in other operating expenses) (147) (159) IFRS 13.93(f)

Description of valuation techniques used and key inputs to valuation of investment properties:

Valuation technique Significant observable inputs Range (weighted average) IFRS 13.93(d)

2015 2014Office properties DCF method

(refer below)Estimated rental value persqm per month

€10 - €25 (€20) €9 - €23 (€16)

Rent growth p.a. 1.75% 1.76%Long-term vacancy rate 3% - 10% (5%) 3% - 9% (4%)Discount rate 6.5% 6.3%

Retail properties DCF method(refer below)

Estimated rental value persqm per month

€15 - €35 (€22) €14 - €33 (€21)

Rent growth p.a. 1% 1.2%Long-term vacancy rate 4% - 12% (7%) 4% - 13% (8.5%)Discount rate 6.5% 6.3%

Under the DCF method, fair value is estimated using assumptions regarding the benefits and liabilities ofownership over the asset’s life including an exit or terminal value. This method involves the projection of aseries of cash flows on a real property interest. To this projected cash flow series, a market-derived discountrate is applied to establish the present value of the income stream associated with the asset. The exit yield isnormally separately determined and differs from the discount rate.

The duration of the cash flows and the specific timing of inflows and outflows are determined by events such asrent reviews, lease renewal and related re-letting, redevelopment, or refurbishment. The appropriate durationis typically driven by market behaviour that is a characteristic of the class of real property. Periodic cash flow istypically estimated as gross income less vacancy, non-recoverable expenses, collection losses, lease incentives,maintenance cost, agent and commission costs and other operating and management expenses. The series ofperiodic net operating income, along with an estimate of the terminal value anticipated at the end of theprojection period, is then discounted.

Significant increases (decreases) in estimated rental value and rent growth per annum in isolation would resultin a significantly higher (lower) fair value of the properties. Significant increases (decreases) in long-termvacancy rate and discount rate (and exit yield) in isolation would result in a significantly lower (higher) fairvalue.

Generally, a change in the assumption made for the estimated rental value is accompanied by a directionallysimilar change in the rent growth per annum and discount rate (and exit yield),and an opposite change in thelong term vacancy rate.

IFRS13.93(h)(i)



14. Investment properties continuedCommentaryThe Group has elected to value investment properties at fair value in accordance with IAS 40.

If, for recurring and non-recurring fair value measurements, the highest and best use of a non-financial asset differs fromits current use, an entity must disclose that fact and the reason why the asset is being used in a manner that differs fromits highest and best use (IFRS 13.93(i)). The Group has assessed that the highest and best use of its properties does notdiffer from their current use. An example of what might be disclosed if the highest and best use is determined to be otherthan its current use is, as follows:

The Group has determined that the highest and best use of the property used for office space is its current use. Thehighest and best use of the retail property at the measurement date would be to convert the property for residential use.For strategic reasons, the property is not being used in this manner.

In addition to the disclosure requirements in IFRS 13, IAS 1 requires disclosure of the significant judgementsmanagement has made about the future and sources of estimation uncertainty. IAS 1.129(b) includes, as an exampleof such a disclosure, the sensitivity of carrying amounts to the methods, assumptions and estimates underlying theircalculation, including the reasons for the sensitivity. As such, information beyond that required by IFRS 13.93(h) maybe needed in some circumstances.

IAS 40 Investment Property permits investment properties to be carried at historical cost less provision for depreciationand impairment. If the Group accounted for investment properties at cost, information about the cost basis anddepreciation rates (similar to the requirement under IAS 16 for property, plant and equipment) would be required.IAS 40.79(e) requires disclosure of the fair value of the properties. For the purpose of this disclosure, the fair value isrequired to be determined in accordance with IFRS 13. Also, in addition to the disclosures under IAS 40, IFRS 13.97requires disclosure of:

• The level at which fair value measurement is categorised i.e. Levels 1, Level 2 or Level 3

• A description of valuation technique and inputs, for Level 2 or Level 3 fair value measurement

• If the highest and best use differs from the current use of the asset, the fact and the reason for the same

IFRS 13.99 requires an entity to present the quantitative disclosures of IFRS 13 in a tabular format, unless anotherformat is more appropriate. The Group included the quantitative disclosures in tabular format above.



15. Intangible assets

Developmentcosts

Patentsand

licenceswith

definiteuseful life

Licenceswith

indefiniteuseful life

Goodwill Total IAS 38.118(c)

€000 €000 €000 €000 €000 IAS 38.118(e)

CostAt 1 January 2014 1,585 395 240 119 2,339Additions — internal development 390 — — — 390Acquisition of a subsidiary (Note 5) — — — 131 131At 31 December 2014 1,975 395 240 250 2,860Additions — internal development 587 — — — 587Acquisition of a subsidiary (Note 5) — 30 1,170 2,231 3,431Discontinued operations (Note 10) — (138) — — (138)At 31 December 2015 2,562 287 1,410 2,481 6,740

Amortisation and impairmentAt 1 January 2014 165 60 — — 225Amortisation 124 50 — — 174At 31 December 2014 289 110 — — 399Amortisation 95 30 — — 125Impairment (Note 16) — — — 200 200Discontinued operations (Note 10) — (3) — — (3)

At 31 December 2015 384 137 — 200 721

Net book valueAt 31 December 2015 2,178 150 1,410 2,281 6,019At 31 December 2014 1,686 285 240 250 2,461At 1 January 2014 1,420 335 240 119 2,114

There are two fire prevention research and development projects: one to improve fire detection and sprinklersystems and the other in respect of fire retardant fabrics for motor vehicles and aircraft. The Group’s electronicsbusiness research and development concentrates on the development of internet-enabled safety equipment.Research and development costs that are not eligible for capitalisation have been expensed in the periodincurred and are recognised in administrative expenses (Note 9.7).

Acquisition during the yearPatents and licences include intangible assets acquired through business combinations. These patents have beengranted for a minimum of 10 years by the relevant government agency, while licences have been acquired withthe option to renew at the end of the period at little or no cost to the Group. Previous licences acquired havebeen renewed and have allowed the Group to determine that these assets have indefinite useful lives. As at31 December 2015, these assets were tested for impairment (Note 16).



16. Goodwill and intangible assets with indefinite livesGoodwill acquired through business combinations and licences with indefinite lives are allocated to two CGUs,which are also operating and reportable segments, for impairment testing, as follows:

• Electronics CGU

• Fire prevention equipment CGU

Carrying amount of goodwill and licences allocated to each of the CGUs:Electronics unit Fire prevention equipment unit Total

2015 20141 Jan2014 2015 2014

1 Jan2014 2015 2014

1 Jan2014

€000 €000 €000 €000 €000 €000 €000 €000 €000Goodwill 50 250 119 2,231 — — 2,281 250 119 IAS 36.134(a)Licences withindefinite useful lives 360 — — 1,050 240 240 1,410 240 240 IAS 36.134(b)

The Group performed its annual impairment test as at 31 December 2015 and 2014. The Group considers therelationship between its market capitalisation and its book value, among other factors, when reviewing forindicators of impairment. As at 31 December 2015, the market capitalisation of the Group was below the bookvalue of its equity, indicating a potential impairment of goodwill and impairment of the assets of the operatingsegment. In addition, the overall decline in construction and development activities around the world, as well asthe ongoing economic uncertainty, have led to a decreased demand in both the Fire Prevention Equipment andElectronics CGUs.

IAS 36.130(a)

Electronics CGUThe recoverable amount of the Electronics CGU, €37,562,000 as at 31 December 2015, has been determinedbased on a value in use calculation using cash flow projections from financial budgets approved by seniormanagement covering a five-year period. The projected cash flows have been updated to reflect the decreaseddemand for products and services. The pre-tax discount rate applied to cash flow projections is 15.5% (2014:12.1%) and cash flows beyond the five-year period are extrapolated using a 3.0% growth rate (2014: 5.0%) thatis the same as the long-term average growth rate for the electronics industry. It was concluded that the fairvalue less cost to sell did not exceed the value in use. As a result of this analysis, management has recognised animpairment charge of €200,000 against goodwill previously carried at €250,000, which is recorded withinadministrative expenses in the statement of profit or loss.

IAS 36.130(e)IAS 36.134(d)(iii)IAS 36.134(d)(iv)IAS 36.134(d)(v)IAS 36.126(a)

Fire prevention equipment CGUThe recoverable amount of the Fire Prevention Equipment CGU, €40,213,000 as at 31 December 2015 is alsodetermined based on a value in use calculation using cash flow projections from financial budgets approved bysenior management covering a five-year period. The projected cash flows have been updated to reflect thedecreased demand for products and services. The pre-tax discount rate applied to the cash flow projections is14.4% (2014: 12.8%). The growth rate used to extrapolate the cash flows of the fire prevention equipment unitbeyond the five-year period is 2.9% (2014: 3.8%). This growth rate exceeds the average growth rate for theindustry in which the Fire Prevention Equipment unit operates by three quarters of a percentage point.Management of the Fire Prevention Equipment unit believes this growth rate is justified based on the acquisitionof Extinguishers Limited that has resulted in the control of an industry patent, preventing other entities frommanufacturing a specialised product for a period of 10 years, with the option for renewal after the 10 yearshave expired. As a result of the updated analysis, there is a headroom of €5,674,000 and management did notidentify an impairment for this CGU to which goodwill of €2,231,000 is allocated.

IAS 36.134(c)IAS 36.134(d)(iii)IAS 36.134(d)(iv)IAS 36.134(d)(v)

Key assumptions used in value in use calculationsThe calculation of value in use for both electronics and fire prevention equipment units are most sensitive to thefollowing assumptions:

• Gross margin

• Discount rates

• Raw material price inflation

• Market share during the budget period

• Growth rate used to extrapolate cash flows beyond the budget period

IAS 36.134(d)(i)IAS 36.134(d)(ii)



16. Goodwill and intangible assets with indefinite lives continuedGross margins — Gross margins are based on average values achieved in the three years preceding the startof the budget period. These are increased over the budget period for anticipated efficiency improvements.An increase of 1.5% per annum was applied for the Electronics unit and 2% per annum for the Fire PreventionEquipment unit.

Discount rates — Discount rates represent the current market assessment of the risks specific to each cash-generating unit, regarding the time value of money and individual risks of the underlying assets which havenot been incorporated in the cash flow estimates. The discount rate calculation is based on the specificcircumstances of the Group and its operating segments and derived from its weighted average cost of capital(WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expectedreturn on investment by the Group’s investors. The cost of debt is based on the interest-bearing borrowings theGroup is obliged to service. Segment-specific risk is incorporated by applying individual beta factors. The betafactors are evaluated annually based on publicly-available marked data.

Raw materials price inflation — Estimates are obtained from published indices for the countries from whichmaterials are sourced, as well as data relating to specific commodities. Forecast figures are used if data ispublicly available (principally for Euroland and the United States), otherwise past actual raw material pricemovements have been used as an indicator of future price movements.

Market share assumptions — These assumptions are important because, as well as using industry data for growthrates (as noted below), management assesses how the unit’s position, relative to its competitors, might changeover the budget period. Management expects the Group’s share of the electronics market to be stable over thebudget period, whereas, for the reasons explained above, the Board of Directors expects the Group’s position,relative to its competitors, to strengthen following the acquisition of Extinguishers Limited.

Growth rate estimates — Rates are based on published industry research. For the reasons explained above, thelong-term rate used to extrapolate the budget for the fire prevention equipment unit has been adjusted by anadditional element because of the acquisition of a significant industry patent.

Sensitivity to changes in assumptionsThe implications of the key assumptions for the recoverable amount are discussed below:

• Raw materials price inflation - Management has considered the possibility of greater-than-forecast increasesin raw material price inflation. This may occur if anticipated regulatory changes result in an increase indemand that cannot be met by suppliers. Forecast price inflation lies within a range of 1.9% to 2.6% forElectronics unit and 2.1% to 4.5% for Fire prevention equipment unit, depending on the country from whichmaterials are purchased. If prices of raw materials increase greater than the forecast price inflation and theGroup is unable to pass on or absorb these increases through efficiency improvements, then the Group willhave a further impairment.

• Growth rate assumptions - Management recognises that the speed of technological change and the possibilityof new entrants can have a significant impact on growth rate assumptions. The effect of new entrants is notexpected to have an adverse impact on the forecasts, but could yield a reasonably possible alternative to theestimated long-term growth rate of 5.2% for Electronics unit and 8.4% for Fire prevention equipment unit. Areduction to 0.8% in the long-term growth rate in Electronics unit would result in a further impairment. Forthe Fire prevention equipment unit, a reduction to 0.3% in the long-term growth rate would result inimpairment.

• Gross margins - Decreased demand can lead to a decline in gross margin. A decrease in the gross margin to1.0% would result in a further impairment in the Electronics unit. A decrease in the gross margin to 5.0%would result in impairment in the Fire prevention equipment unit.

• Discount rates A rise in the pre-tax discount rate to 16.0% (i.e., +0.5%) in the Electronics unit would result ina further impairment. A rise in the pre-tax discount rate to 20.0% in the Fire prevention equipment unit wouldresult in impairment.

• Market share during the forecast period Although management expects the Group’s market share of theelectronics market to be stable over the forecast period, a decline in the market share by 8% would result in afurther impairment in the Electronics unit. Similarly, a decline in market share in thefire preventionequipment market by 20% would result in an impairment in the Fire prevention equipment unit.

IAS 36.134(f)

IAS 36.134(f)(i)IAS 36.134(f)(ii)IAS 36.134(f)(iii)



16. Goodwill and intangible assets with indefinite lives continued

CommentaryThe Group has determined recoverable amounts of its CGUs based on value in use under IAS 36. If the recoverableamounts are determined using fair value less costs of disposal, IAS 36.134(e) requires disclosure of the valuationtechnique(s) and other information including: the key assumptions used; a description of management’s approach toeach key assumption; the level of fair value hierarchy and the reason(s) for changing valuation techniques, if there is anychange, to be provided in the financial statements. Furthermore, if fair value less cost of disposal is determined usingDCF projections, additional information such as period of cash flow projections, growth rate used to extrapolate cash flowprojections and the discount rate(s) applied to the cash flow projections are required to be disclosed. While an entity is notrequired to provide disclosures required under IFRS 13, these disclosures under IAS 36.134(e) are similar to those underIFRS 13, illustrated elsewhere in the these financial statements.

IAS 36.134(d)(i) requires disclosure of key assumptions made for each CGU for which the carrying amount of goodwill orintangible assets with indefinite useful lives allocated is significant in comparison with the entity’s total carrying amount ofgoodwill or intangible assets with indefinite useful lives. While the disclosures above have been provided for illustrativepurposes, companies need to evaluate the significance of each assumption used for the purpose of this disclosure.

IAS 36.134(f) requires disclosures of sensitivity analysis for each CGU for which carrying amount of goodwill or intangibleassets with indefinite lives allocated to that CGU is significant in comparison with the entity’s total carrying amount ofgoodwill or intangible assets with indefinite lives. These disclosures are made if a reasonably possible change in a keyassumption used to determine the CGU’s recoverable amount would cause its carrying amount to exceed its recoverableamount. The Group has made these disclosures for all the key assumptions for Electronics unit, since there is animpairment charge during the year and the carrying amount equals recoverable amount, and for Fire preventionequipment unit, as it is believed that a reasonably possible change in the key assumptions may cause impairment.Entities need to also take into account the consequential effect of a change in one assumption on other assumptions, aspart of the sensitivity analyses when determining the point at which the recoverable amount equals the carrying amount(IAS 36.134(f)(iii)). The Group has considered this in the disclosures herein.



17. Financial assets and financial liabilities17.1 Financial assets

2015 2014As at

1 January 2014IFRS 7.6IFRS 7.8

€000 €000 €000Derivatives designated as hedging instruments:

Foreign exchange forward contracts 252 153 137

Derivatives not designated as hedging instruments:Foreign exchange forward contracts 640 — —Embedded derivatives 210 — —

AFS financial assets at fair value through OCI:Unquoted equity shares 1,163 1,023 1,040Quoted equity shares 337 300 334Quoted debt securities 612 600 378

Total financial instruments at fair value 3,214 2,076 1,889

Financial assets at amortised cost:Trade and other receivables (Note 19) 27,672 24,290 25,537Loan notes 3,674 1,685 1,659Loan to an associate 200 — —Loan to directors 13 8 8

Total financial assets 34,773 28,059 29,093

Total current 28,223 24,443 25,674Total non-current 6,550 3,616 3,419

Derivatives designated as hedging instruments reflect the positive change in fair value of foreign exchangeforward contracts, designated as cash flow hedges to hedge highly probable forecast sales in US dollars (USD)and purchases in GB pounds sterling (GBP).

Derivatives not designated as hedging instruments reflect the positive change in fair value of those foreignexchange forward contracts that are not designated in hedge relationships, but are nevertheless intended toreduce the level of foreign currency risk for expected sales and purchases.

Loans and receivables are non-derivatives financial assets carried at amortised cost which generate a fixed orvariable interest income for the Group. The carrying value may be affected by changes in the credit risk of thecounterparties.

IFRS7.32A

AFS financial assets — unquoted equity sharesA significant portion of the AFS financial assets consist of an investment in equity shares of a non-listedcompany, which are valued based on non-market observable information. Changes in underlying assumptionscan lead to adjustments in the fair value of the investment (see sensitivity risk analysis in Note 17.5).

The Group also holds non-controlling interests (between 2% and 9%) in non-listed entities. The Group considersthese investments to be strategic in nature and has entered into research collaboration in the power andelectronics sectors.

IFRS 7.27IAS 39.AG74-79(c)

AFS financial assets — quoted debt securities and equity sharesThe Group has investments in listed equity and debt securities. The fair value of the quoted debt securitiesand equity shares is determined by reference to published price quotations in an active market.

IFRS 7.27B(e)

IFRS 7.27



17. Financial assets and financial liabilities continuedImpairment on AFS financial assetsFor AFS financial investments, the Group assesses at each reporting date whether there is objective evidencethat an investment or a group of investments is impaired. In the case of equity investments classified as AFS,objective evidence would include a significant or prolonged decline in the fair value of the investment below itscost. The determination of what is ‘significant’ or ‘prolonged’ requires judgement. In making this judgement, theGroup evaluates, among other factors, historical share price movements and the duration or extent to which thefair value of an investment is less than its cost.

Based on this assessment, the Company identified an impairment of €88,000 on AFS quoted debt securities andan impairment of €23,000 on AFS quoted equity securities, both of which are recognised within finance costs inthe statement of profit or loss (Note 9.3).

IAS 39.58IAS 39.61IAS 39.67IAS 39.68IAS 39.69

17.2 Financial liabilitiesOther financial liabilities

2015 2014As at 1

January 2014IFRS 7.6IFRS 7.8

€000 €000 €000Derivatives not designated as hedging instruments:

Foreign exchange forward contracts 720 — —Embedded derivatives 782 — —

Derivatives designated as hedging instruments:Fair value hedges

Interest rate swaps 35 — —Cash flow hedges

Foreign exchange forward contracts 170 254 271Commodity forward contracts 980 — —

Financial liabilities at fair value through profit or lossContingent consideration (Note 5) 1,072 — —Total financial liabilities at fair value 3,759 254 271

Other financial liabilities at amortised cost, other thaninterest-bearing loans and borrowingsTrade and other payables (Note 28) 19,556 21,281 20,600Financial guarantee contracts 87 49 32

Total other financial liabilities 23,402 21,584 20,903Total current 22,596 21,584 20,903Total non-current 806 — —

Derivative designated as hedging instruments reflect the change in fair value of foreign exchange forwardcontracts, designated as cash flow hedges to hedge highly probable future purchases in GBP.

Derivative designated as hedging instruments also include the change in fair value of commodity forward contractsentered into during 2015. The Group is exposed to changes in the price of copper on its forecast copper purchases.The forward contracts do not result in physical delivery of copper, but are designated as cash flow hedges to offsetthe effect of price changes in copper. The Group hedges approximately 45% of its expected copper purchases in thenext reporting period. The remaining volume of copper purchases is exposed to price volatility.

Financial liabilities through profit or loss include the negative change in fair value of those derivatives that arenot designated in hedge relationships, but are nevertheless intended to reduce the level of foreign currency riskfor expected sales and purchases.

Contingent considerationAs part of the purchase agreement with the previous owner of Extinguishers Limited, a contingent considerationhas been agreed. This consideration is dependent on the profit before tax of Extinguishers Limited during a12-month period. The fair value of the contingent consideration at the acquisition date was €714,000.The fair value increased to €1,071,500 as at 31 December 2015 due to a significantly enhanced performancecompared to budget. The consideration is due for final measurement and payment to the former shareholderson 30 April 2016.

IFRS 7.32A

IFRS 7.32A

IFRS 3.B64(g)



17. Financial assets and financial liabilities continuedInterest-bearing loans and borrowings

Interest rate Maturity 2015 2014

As at1 January

2014 IFRS 7.7

% €000 €000 €000Current interest-bearing loansand borrowingsObligations under finance leases andhire purchase contracts (Note 29) 7.8 2016 83 51 47Bank overdrafts (Note 20) EURIBOR + 1.0 On demand 966 2,650 2,750

€1,500,000 bank loan(2014: €1,400,000) EURIBOR + 0.5 1 Nov 2016 1,411 — —€2,200,000 bank loan EURIBOR + 0.5 31 Mar 2015 — 74 1,758Total current interest-bearingloans and borrowings 2,460 2,775 4,555

Non-current interest-bearingloans and borrowingsObligations under finance leases andhire purchase contracts (Note 29) 7.8 2017-2018 905 943 9388% debentures 8.2 2017-2023 3,374 3,154 3,1548.25% secured loan of US$3,600,000 *LIBOR + 0.2 31 May 2021 2,246 — —Secured bank loan LIBOR + 2.0 31 Jul 2021 3,479 3,489 3,489Other non-current loans€1,500,000 bank loan(2014: €1,400,000) EURIBOR + 0.5 1 Nov 2016 — 1,357 1,357€2,750,000 bank loan(2014: €2,500,000) EURIBOR + 1.1 2018-2020 2,486 2,229 2,229€2,200,000 bank loan EURIBOR + 0.5 31 Mar 2019 2,078 2,078 2,078€5,809,000 bank loan 7.5 1 Jan 2020 — 5,809 3,164Loan from a partner in aStructured Entity 11.00 2018 3,000 — —

17,568 19,059 16,409

Convertible preference sharesConvertible preference shares 11.65 2017-2021 2,778 2,644 2,522

Total non-current interest-bearingloans and borrowings 20,346 21,703 18,931Total interest-bearing loansand borrowings 22,806 24,478 23,486

* includes the effects of related interest rate swap.

CommentaryIFRS 7.7 requires disclosure of information that enables users of the financial statements to evaluate the significance offinancial instruments for its financial position and performance. As the Group has a significant amount of interest bearingloans and borrowings on its statement of financial position, it has decided to provide detailed information to the users ofthe financial statements about the effective interest rate as well as the maturity of the loans.



17. Financial assets and financial liabilities continuedBank overdraftsThe bank overdrafts are secured by a portion of the Group’s short-term deposits.

€1,500,000 bank loanThis loan is unsecured and is repayable in full on 1 November 2016.

8% debenturesThe 8% debentures are repayable in equal annual instalments of €350,000 commencing on 1 January 2017.

IFRS 7.7

8.25% secured loanThe loan is secured by a first charge over certain of the Group’s land and buildings with a carrying value of€2,400,000 (2014: €Nil, 1 January 2014: €Nil).

Secured bank loanThis loan has been drawn down under a six-year multi-option facility (MOF). The loan is repayable within12 months after the reporting date, but has been classified as long term because the Group expects, and hasthe discretion, to exercise its rights under the MOF to refinance this funding. Such immediate replacementfunding is available until 31 July 2021. The total amount repayable on maturity is €3,500,000. The facility issecured by a first charge over certain of the Group’s land and buildings, with a carrying value of €5,000,000(2014: €5,000,000, 1 January 2014: €4,500,000).

IAS 1.73

€2,750,000 bank loanThe Group increased its borrowings under this loan contract by €250,000 during the reporting period.This loan is repayable in two instalments of €1,250,000 due on 31 December 2018 and €1,500,000 dueon 31 December 2020.

€2,200,000 bank loanThis loan is unsecured and is repayable in full on 31 March 2019. As of 31 December 2014, €74,000 wasrepayable on 31 March 2015.

€5,809,000 bank loanThis loan has been transferred to the net balance of the liabilities held for distribution.

Loan from a partner in a Structured EntityIn February 2015, the Group and a third-party partner formed an entity to acquire, construct and operate a fireequipment safety facility. The partner contributed approximately €2.7 million in 2015 for the acquisition andconstruction of the fire safety test facility and is committed to provide approximately €1 million in each of thefollowing two years to complete the project. The construction is expected to be completed in 2017 at a total costof approximately €5 million. The partner is entitled to a 22% return on the outstanding capital upon thecommencement of operations. At the end of the fourth annual period, the partner is entitled to a 100% capitalreturn. The effective interest rate is 11% and the interest accumulated on the contributed amount totalled€303,000 at 31 December 2015.

Convertible preference sharesAt 31 December 2015 and 2014 and 1 January 2014, there were 2,500,000 convertible preference shares inissue. Each share has a par value of €1 and is convertible at the option of the shareholders into ordinary sharesof the parent of the Group on 1 January 2018 on the basis of one ordinary share for every three preferenceshares held. Any preference shares not converted will be redeemed on 31 December 2020 at a price of €1.20per share. The preference shares carry a dividend of 7% per annum, payable half-yearly in arrears on 30 Juneand 31 December. The dividend rights are non-cumulative. The preference shares rank ahead of the ordinaryshares in the event of a liquidation. The presentation of the equity portion of these shares is explained in Note 25below.

IAS 1.79(a)(v)

CommentaryIFRS 7 requires an entity to disclose information about rights to set off financial instruments and relatedarrangements (e.g., collateral agreements) and will provide users with information that is useful in evaluating theeffect of netting arrangements on an entity’s financial position.

The Group is not setting off financial instruments in accordance with IAS 32 and does not have relevant offsettingarrangements. But if an entity has recognised financial instruments that are set off in accordance with IAS 32 or aresubject to an enforceable master netting arrangement or similar agreement, even if the financial instruments are not setoff in accordance with IAS 32, then the disclosures in IFRS 7.13A-13E will be required.



17. Financial assets and financial liabilities continued17.3 Hedging activities and derivativesDerivatives not designated as hedging instrumentsThe Group uses foreign currency denominated borrowings and foreign exchange forward contracts to managesome of its transaction exposures. These contracts are not designated as cash flow, fair value or net investmenthedges and are entered into for periods consistent with foreign currency exposure of the underlyingtransactions, generally from one to 24 months.

IFRS 7.22

Cash flow hedgesForeign currency riskForeign exchange forward contracts measured at fair value through OCI are designated as hedging instrumentsin cash flow hedges of forecast sales in USD and forecast purchases in GBP. These forecast transactions arehighly probable, and they comprise about 25% of the Group’s total expected sales in USD and about 65% of itstotal expected purchases in GBP.

While the Group also enters into other foreign exchange forward contracts with the intention to reduce theforeign exchange risk of expected sales and purchases, these other contracts are not designated in hedgerelationships and are measured at fair value through profit or loss.

The foreign exchange forward contract balances vary with the level of expected foreign currency sales andpurchases and changes in foreign exchange forward rates.

IFRS 7.23(a)

2015 2014 As at 1 January 2014Assets Liabilities Assets Liabilities Assets Liabilities

€000 €000 €000 €000 €000 €000Foreign currency forward contractsdesignated as hedging instrumentsFair value 252 (170) 153 (254) 137 (271)

The terms of the foreign currency forward contracts match the terms of the expected highly probable forecasttransactions. As a result, there is no hedge ineffectiveness to be recognised in the statement of profit or loss.Notional amounts are as provided in Note 17.5.

The cash flow hedges of the expected future sales in 2016 were assessed to be highly effective and a netunrealised gain of €252,000, with a deferred tax liability of €76,000 relating to the hedging instruments,is included in OCI. Comparatively, the cash flow hedges of the expected future sales in 2015 were assessed to behighly effective and an unrealised gain of €153,000 with a deferred tax liability of €46,000 was included in OCIin respect of the contracts.

IFRS 7.24(b)

IFRS 7.23(c)

The cash flow hedges of the expected future purchases in 2016 were assessed to be highly effective, and as at31 December 2015, a net unrealised loss of €170,000, with a related deferred tax asset of €51,000 wasincluded in OCI in respect of the contracts. Comparatively, The cash flow hedges of the expected futurepurchases in 2015 were also assessed to be highly effective and an unrealised loss of €254,000, with a deferredtax asset of €76,000 was included in OCI in respect of the contracts.

IFRS 7.23(c)

IFRS 7.23(c)

At 1 January 2014, the cash flow hedges of the expected future sales in the first quarter of 2014 wereassessed to be highly effective and an unrealised gain of €137,000 with a deferred tax liability of €41,000 wasincluded in other comprehensive income in respect of these contracts. The cash flow hedges of the expectedfuture purchases in the first quarter of 2014 were also assessed to be highly effective and an unrealised loss of€271,000, with a deferred tax asset of €81,000 was included in OCI in respect of the contracts.

The amount removed from OCI during the year and included in the carrying amount of the hedging items as abasis adjustment for 2015 is detailed in Note 9.8, totalling €183,000 (2014: €33,000). The amounts retainedin OCI at 31 December 2015 are expected to mature and affect the statement of profit or loss in 2016.Reclassifications of gains and losses to profit or loss during the year included in OCI are shown in Note 9.8.

IFRS 7.23(c)

IFRS 7.23(d)IFRS 7.23(e)IFRS 7.23(a)



17. Financial assets and financial liabilities continuedCommodity price riskThe Group purchases copper on an ongoing basis as its operating activities in the electronic division require acontinuous supply of copper for the production of its electronic devices. The increased volatility in copper priceover the past 12 months has led to the decision to enter into commodity forward contracts.

These contracts, which commenced on 1 July 2015, are expected to reduce the volatility attributable to pricefluctuations of copper. Hedging the price volatility of forecast copper purchases is in accordance with the riskmanagement strategy outlined by the Board of Directors. The hedging relationships are for a period between 3and 12 months, based on existing purchase agreements. The Group designated only the spot-to-spot movementof the entire commodity purchase price as the hedged risk. The forward points of the commodity forwardcontracts are, therefore, excluded from the hedge designation. Changes in fair value of the forward pointsrecognised in the statement of profit or loss in finance costs were immaterial during the year.

As at 31 December 2015, the fair value of outstanding commodity forward contracts amounted to a liabilityof €980,000. The ineffectiveness recognised in other operating expenses in the statement of profit or loss forthe current year was €65,000 (see Note 9.2). The cumulative effective portion of €915,000 is reflected inother comprehensive income and will affect profit or loss in the first six months of 2016.

Fair value hedgeAt 31 December 2015, the Group had an interest rate swap agreement in place with a notional amount ofUS$3,600,000 (€2,246,000) (2014: €Nil, 1 January 2014: €Nil) whereby the Group receives a fixed rateof interest of 8.25% and pays a variable rate equal to LIBOR+0.2% on the notional amount. The swap is beingused to hedge the exposure to changes in the fair value of its fixed rate 8.25% secured loan.

The decrease in fair value of the interest rate swap of €35,000 (2014: €Nil) has been recognised in financecosts and offset with a similar gain on the bank borrowings. The ineffectiveness recognised in 2015 wasimmaterial.

IFRS 7.22IFRS 7.24(a)

Hedge of net investments in foreign operationsIncluded in loans at 31 December 2015 was a borrowing of US$3,600,000, which has been designated as ahedge of the net investment in the subsidiaries in the United States, Wireworks Inc. and Sprinklers Inc. and isbeing used to hedge the Group’s exposure to the USD foreign exchange risk on these investments. Gains orlosses on the retranslation of this borrowing are transferred to OCI to offset any gains or losses on translationof the net investments in the subsidiaries. There is no ineffectiveness in the years ending 31 December 2015and 2014.

IFRS 7.22

IFRS 7.24(c)

Embedded derivativesIn 2015, the Group entered into long-term sale contracts with customers in Canada. The functional currency ofthe customer is USD. The selling prices in these contracts are fixed and set in Canadian dollars. These contractsrequire physical delivery and will be held for the purpose of the delivery of the commodity in accordance withthe buyers’ expected sale requirements. These contracts have embedded foreign exchange derivatives that arerequired to be separated.

The Group also entered into various purchase contracts for brass and chrome (for which there is an activemarket) with a number of suppliers in South Africa and Russia. The purchase prices in these contracts are linkedto the price of electricity. These contracts have embedded commodity swaps that require bifurcation.

These embedded foreign currency and commodity derivatives have been separated and carried at fair valuethrough profit or loss. The carrying value of the embedded derivatives at 31 December 2015 amounted to€210,000 (other financial assets) and €782,000 (other financial liabilities) (2014: both €Nil, 1 January 2014:both €Nil). The effect of profit or loss is reflected in operating income and operating costs, respectively.

IAS 39.AG33(d)

IAS 39.AG33(e)



17. Financial assets and financial liabilities continued17.4 Fair valuesSet out below is a comparison by class of the carrying amounts and fair values of the Group’s financialinstruments, other than those with carrying amounts that are reasonable approximations of fair values:

IFRS 7.25IFRS 7.26

Carrying amount Fair value

2015 2014

As at 1January

2014 2015 2014

As at 1January

2014€000 €000 €000 €000 €000 €000

Financial assetsLoans and other receivables 3,887 1,693 1,667 3,741 1,654 1,632Available-for-sale investments 2,112 1,923 1,752 2,112 1,923 1,752Foreign exchange forward contracts 640 - - 640 - -Embedded derivatives 210 - - 210 - -Foreign exchange forward contractsin cash flow hedges 252 153 137 252 153 137

Total 7,101 3,769 3,556 6,955 3,730 3,521

Financial liabilitiesInterest-bearing loans and borrowings

Obligations under finance leasesand hire purchase contracts (988) (994) (985) (1,063) (1,216) (1,217)Floating rate borrowings* (11,700) (9,227) (10,911) (11,700) (9,227) (10,911)Fixed rate borrowings (6,374) (8,963) (6,318) (6,321) (8,944) (6,306)Convertible preference shares (2,778) (2,644) (2,522) (2,766) (2,621) (2,510)

Financial guarantee contracts (87) (49) (32) (83) (45) (30)Contingent consideration (1,072) - - (1,072) - -Derivative not designated as hedges

Foreign exchange forward contracts (720) - - (720) - -Embedded derivatives (782) - - (782) - -

Derivatives in effective hedges (1,185) (254) (271) (1,185) (254) (271)Total (25,686) (22,131) (21,039) (25,692) (22,307) (21,245)

* Includes an 8.25% secured loan carried at amortised cost adjusted to fair value movement due to the hedged interest rate risk.

The management assessed that cash and short-term deposits, trade receivables, trade payables, bankoverdrafts and other current liabilities approximate their carrying amounts largely due to the short-termmaturities of these instruments.

The fair values of the financial assets and liabilities are included at the amount at which the instrument could beexchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Thefollowing methods and assumptions were used to estimate the fair values:

• Long-term fixed-rate and variable-rate receivables/borrowings are evaluated by the Group based onparameters such as interest rates, specific country risk factors, individual creditworthiness of the customerand the risk characteristics of the financed project. Based on this evaluation, allowances are taken toaccount for the expected losses of these receivables.

IFRS 13.93(d)IFRS 13.97IFRS 7.27



17. Financial assets and financial liabilities continued• The fair values of the quoted notes and bonds are based on price quotations at the reporting date. The fair

value of unquoted instruments, loans from banks and other financial liabilities, obligations under financeleases, as well as other non-current financial liabilities is estimated by discounting future cash flows usingrates currently available for debt on similar terms, credit risk and remaining maturities. In addition to beingsensitive to a reasonably possible change in the forecast cash flows or the discount rate, the fair value of theequity instruments is also sensitive to a reasonably possible change in the growth rates. The valuationrequires management to use unobservable inputs in the model, of which the significant unobservable inputsare disclosed in the tables below. Management regularly assesses a range of reasonably possiblealternatives for those significant unobservable inputs and determines their impact on the total fair value.

• The fair values of the unquoted ordinary shares have been estimated using a DCF model. The valuationrequires management to make certain assumptions about the model inputs, including forecast cash flows,the discount rate, credit risk and volatility. The probabilities of the various estimates within the range can bereasonably assessed and are used in management’s estimate of fair value for these unquoted equityinvestments.

• The fair values of the remaining AFS financial assets are derived from quoted market prices in activemarkets.

• The Group enters into derivative financial instruments with various counterparties, principally financialinstitutions with investment grade credit ratings. Interest rate swaps, foreign exchange forward contractsand commodity forward contracts are valued using valuation techniques, which employ the use of marketobservable inputs. The most frequently applied valuation techniques include forward pricing and swapmodels, using present value calculations. The models incorporate various inputs including the credit qualityof counterparties, foreign exchange spot and forward rates, yield curves of the respective currencies,currency basis spreads between the respective currencies, interest rate curves and forward rate curves ofthe underlying commodity. All derivative contracts are fully cash collateralised, thereby eliminating bothcounterparty risk and the Group’s own non-performance risk. As at 31 December 2015, the marked-to-market value of derivative asset positions is net of a credit valuation adjustment attributable to derivativecounterparty default risk. The changes in counterparty credit risk had no material effect on the hedgeeffectiveness assessment for derivatives designated in hedge relationships and other financial instrumentsrecognised at fair value.

• Embedded foreign currency and commodity derivatives are measured similarly to the foreign currencyforward contracts and commodity derivatives. The embedded derivatives are commodity and foreigncurrency forward contracts which are separated from long-term sales contracts where the transactioncurrency differs from the functional currencies of the involved parties. However, as these contracts are notcollateralised, the Group also takes into account the counterparties’ credit risks (for the embeddedderivative assets) or the Group’s own non-performance risk (for the embedded derivative liabilities) andincludes a credit valuation adjustment or debit value adjustment, as appropriate, by assessing the maximumcredit exposure and taking into account market-based inputs concerning probabilities of default and lossgiven default.

• The fair values of the Group’s interest-bearing borrowings and loans are determined by using DCF methodusing discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. The ownnon-performance risk as at 31 December 2015 was assessed to be insignificant.



17. Financial assets and financial liabilities continuedDescription of significant unobservable inputs to valuation:The significant unobservable inputs used in the fair value measurements categorised within Level 3 of thefair value hierarchy, together with a quantitative sensitivity analysis as at 31 December 2015 and 2014 and1 January 2014 are, as shown below:

Valuationtechnique

Significantunobservableinputs

Range(weighted average)

Sensitivity of theinput to fair value

AFS financialassets inunquotedequity sharespower sector

DCFmethod

Long-term growthrate for cash flowsfor subsequentyears

2015: 3.1% - 5.2% (4.2%)

2014: 3.1% - 5.1% (4%)

5% (2014: 5%) increase(decrease) in the growthrate would result inincrease (decrease) infair value by €17,000(2014: €15,000)

Long-term operatingmargin

2015: 5.0% - 12.1% (8.3%)

2014: 5.2% - 12.3% (8.5%)

15% (2014: 12%) increase(decrease) in the marginwould result in increase(decrease) in fair valueby €21,000(2014: €19,000)

WACC 2015: 11.2% - 14.3% (12.6%)

2014: 11.5% - 14.1% (12.3%)

1% (2014: 2%) increase(decrease) in the WACCwould result in decrease(increase) in fair valueby €10,000(2014: €15,000)

Discount for lack ofmarketability

2015: 5.1% - 15.6% (12.1%)

2014: 5.4% - 15.7% (12.3%)

Increase (decrease) in thediscount would decrease(increase) the fair value.

AFS assets inunquotedequity shares- electronicssector

DCFmethod

Long-term growthrate for cash flowsfor subsequentyears

2015: 4.4% - 6.1% (5.3%)

2014: 4.6% - 6.7% (5.5%)

3% (2014: 3%) increase(decrease) in the growthrate would result inincrease (decrease) infair value by €23,000(2014: €25,000)

Long-term operatingmargin

2015: 10.0% - 16.1% (14.3%)

2014: 10.5% - 16.4% (14.5%)

5% (2014: 4%) increase(decrease) in the marginwould result in increase(decrease) in fair valueby €12,000(2014: €13,000)

WACC 2015: 12.1% - 16.7% (13.2%)

2014: 12.3% - 16.8% (13.1%)

1% (2014: 2%) increase(decrease) in the WACCwould result in decrease(increase) in fair valueby €21,000(2014: €22,000)

Discount for lack ofmarketability

2015: 5.1% - 20.2% (16.3%)

2014: 5.3% - 20.4% (16.4%)

Increase (decrease) in thediscount would decrease(increase) the fair value.



17. Financial assets and financial liabilities continued

Valuationtechnique

Significantunobservableinputs

Range(weighted average)

Sensitivity of theinput to fair value

Embeddedderivativeassets

Forwardpricingmodel

Discount forcounterpartycredit risk

2015: 0.02% - 0.05% (0.04%)

2014: 0.01% - 0.04% (0.03%)

0.5% (2014: 0.4%)increase (decrease)would result in increase(decrease) in fair valueby €23,000(2014: €25,000)

Embeddedderivativeliabilities

Forwardpricingmodel

Discount for non-performance risk

2015: 0.01% - 0.05% (0.03%)

2014: 0.01% - 0.04% (0.02%)


Loans to anassociate anddirector

DCFmethod

Constantprepayment rate

2015: 1.5% - 2.5% (2%)

2014: 1.6% - 2.7% (2.2%)

1% (2014: 2%) increase(decrease) would resultin increase (decrease) infair value by €25,000(2014: €21,000)

Discount for non-performance risk

2015: 0.08%

2014: 0.09%


Financialguaranteeobligations

DCFmethod

Discount forcounterparty non-performance risk

2015: 3.0%

2014: 3.2%


Own non-performance risk

2015: 0.05%

2014: 0.07%


The discount for lack of marketability represents the amounts that the Group has determined that marketparticipants would take into account when pricing the investments.

In the case of AFS equity assets, the impairment charge in the profit or loss would depend on whether thedecline is significant or prolonged. An increase in the fair value would only impact equity (through OCI) and,would not have an effect on profit or loss.



17. Financial assets and financial liabilities continuedFair value measurementThe following table provides the fair value measurement hierarchy of the Group’s financial assets and liabilities:

Quantitative disclosures fair value measurement hierarchy for assets as at 31 December 2015:

IFRS 13.91(a)

Fair value measurement using IFRS 13.93(a)


Quotedprices in



inputs(Level 2)


inputs(Level 3)

IFRS 13.93(b)IFRS 13.97

€000 €000 €000 €000Financial assets measured atfair value:

Derivative financial assets:Foreign exchange forwardcontracts - US dollar 31 December 2015 640 — 640 —Foreign exchange forwardcontracts - GB pound sterling 31 December 2015 252 — 252 —Embedded foreign exchangederivatives - Canadian dollar 31 December 2015 210 — — 210

Available-for-sale financialinvestments:Quoted equity shares

Power sector 31 December 2015 219 219 — —Telecommunications sector 31 December 2015 118 118 — —

Unquoted equity sharesPower sector 31 December 2015 675 — — 675Electronics sector 31 December 2015 488 — — 488

Quoted debt securitiesEuroland government bonds 31 December 2015 368 368 — —Corporate bonds - consumerproducts sector 31 December 2015 92 92 — —Corporate bonds - technologysector 31 December 2015 152 152 — —

Financial assets for which fairvalues are disclosed:Loan and receivables

Loan notes (Euroland) 31 December 2015 1,528 — 1,528 —Loan notes (US) 31 December 2015 2,000 — 2,000 —Loan to an associate 31 December 2015 200 — — 200Loan to an directors 31 December 2015 13 — — 13

There were no transfers between Level 1 and Level 2 during 2015.




Fair value measurement continuedQuantitative disclosures fair value measurement hierarchy for liabilities as at 31 December 2015:



Quotedprices in



inputs(Level 2)


inputs(Level 3)

€000 €000 €000 €000Financial liabilities measured atfair value:

Derivative financial liabilities:Interest rate swaps 31 December 2015 35 — 35 —Foreign exchange forwardcontracts (GB pound sterling) 31 December 2015 800 — 800 —Embedded commodityderivatives (brass) 31 December 2015 600 — — 600Embedded commodityderivatives (chrome) 31 December 2015 182 — — 182Foreign exchange forwardcontracts – US dollar 31 December 2015 90 — 90 —Commodity derivative (copper) 31 December 2015 980 — 980 —

Contingent consideration liability(Note 5) 31 December 2015 1,072 — — 1,072Non-cash distribution liability(Note 22) 31 December 2015 355 — — 355

Financial liabilities for which fairvalues are disclosed:

Interest-bearing loans andborrowings:

Obligations under finance leaseand hire purchase contracts(Euroland) 31 December 2015 800 — 800 —Obligations under finance leaseand hire purchase contracts (US) 31 December 2015 263 — 263 —Floating rate borrowings(Euroland) 31 December 2015 9,910 — 9,910 —Floating rate borrowings (US) 31 December 2015 1,790 — 1,790 —Convertible preference shares 31 December 2015 2,766 — 2,766 — IFRS 13.91(a)

Fixed rate borrowing 31 December 2015 6,321 — 6,321 — IFRS 13.93(b)

Financial guarantees 31 December 2015 83 — — 83 IFRS 13.97





Fair value measurement continuedQuantitative disclosures fair value measurement hierarchy for financial assets as at 31 December 2014:



Quotedprices in



inputs(Level 2)


inputs(Level 3)

€000 €000 €000 €000Financial assets measured at fairvalue:

Derivative financial assets:Foreign exchange forwardcontracts - US dollar 31 December 2014 100 — 100 —Foreign exchange forwardcontracts - GB pound sterling 31 December 2014 53 — 53 —


Power sector 31 December 2014 200 200 — —Telecommunications sector 31 December 2014 100 100 — —

Unquoted equity sharesPower sector 31 December 2014 515 — — 515Electronics sector 31 December 2014 508 — — 508

Quoted debt securitiesEuroland government bonds 31 December 2014 200 200 — —Corporate bonds - consumerproducts sector 31 December 2014 400 400 — —

Assets for which fair values aredisclosed:

Loan and receivablesLoan notes (Euroland) 31 December 2014 1,646 — 1,646 —Loan to an directors 31 December 2014 8 — — 8





Fair value measurement continuedQuantitative disclosures fair value measurement hierarchy for liabilities as at 31 December 2014:



Quotedprices in



inputs(Level 2)


inputs(Level 3)

€000 €000 €000 €000Financial liabilities at fair valueDerivative financial liabilities

Foreign exchange forwardcontracts – US dollars 31 December 2014 254 — 254 —

Financial liabilities for which fairvalues are disclosed:

Interest-bearing loans andborrowings

Obligations under finance leaseand hire purchase contracts(Euroland) 31 December 2014 915 — 915 —Obligations under finance leaseand hire purchase contracts (US) 31 December 2014 301 — 301 —Floating rate borrowings(Euroland) 31 December 2014 6,993 — 6,993 —Floating rate borrowings (US) 31 December 2014 2,234 — 2,234 —Convertible preference shares 31 December 2014 2,621 — 2,621 —Fixed rate borrowing 31 December 2014 8,944 — 8,944 —

Financial guarantees 31 December 2014 45 — — 45





Fair value measurement continuedQuantitative disclosures fair value measurement hierarchy for financial assets as at 1 January 2014:



Quotedprices in



inputs(Level 2)


inputs(Level 3)

€000 €000 €000 €000Financial assets measured at fairvalue:

Derivative financial assets:Foreign exchange forwardcontracts - US dollar 1 January 2014 100 — 100 —Foreign exchange forwardcontracts - GB pound sterling 1 January 2014 37 — 37 —


Power sector 1 January 2014 224 224 — —Telecommunications sector 1 January 2014 110 110 — —

Unquoted equity shares 1 January 2014Power sector 1 January 2014 512 — — 512Electronics sector 1 January 2014 528 — — 528

Quoted debt securities 1 January 2014Euroland government bonds 1 January 2014 128 128 —Corporate bonds - consumerproducts sector 1 January 2014 250 250 —

Assets for which fair values aredisclosed:

Loans and receivablesLoan notes (Euroland) 1 January 2014 1,624 — 1,624 —Loan to an directors 1 January 2014 8 — — 8




Fair value measurement continuedQuantitative disclosures fair value measurement hierarchy for liabilities as at 1 January 2014:



Quotedprices in



inputs(Level 2)


inputs(Level 3)

€000 €000 €000 €000Financial liabilities for which fairvalues are disclosed:

Interest-bearing loans andborrowings:

Obligations under finance leaseand hire purchase contracts(Euroland) 1 January 2014 916 — 916 —Obligations under finance leaseand hire purchase contracts (US) 1 January 2014 301 — 301 —Floating rate borrowings(Euroland) 1 January 2014 7,077 — 7,077 —Floating rate borrowings (US) 1 January 2014 3,834 — 3,834 —Convertible preference shares 1 January 2014 2,510 — 2,510 —Fixed rate borrowing 1 January 2014 6,306 — 6,306 —

Financial guarantees 1 January 2014 30 — — 30

Reconciliation of fair value measurements of unquoted equity shares classified as AFS assets:

Power Electronics Total€000 €000 €000

As at 1 January 2014 512 528 1,040 IFRS 13.93(e)(ii)

Remeasurement recognised in OCI 5 (27) (22) IFRS 13.93(e)(iii)

Purchases — 7 7

Sales (2) — (2)

As at 1 January 2015 515 508 1,023Remeasurement recognised in OCI (122) 62 (60)Purchases 196 593 729Reclassified in assets held for distribution — (508) (508)Sales 18 (99) (148)

As at 31 December 2015 607 556 1,163

Reconciliation of fair value measurement of embedded derivative assets and liabilities:

Embedded foreignexchange derivative asset

Embedded commodityderivative liability

Canadian dollar Brass Chrome€000 €000 €000

As at 1 January 2014 and 2015 — — —Re-measurement recognised in profit or loss duringthe period (363) (209) (80)Purchases 573 809 262Sales — — —

As at 31 December 2015 210 600 182




CommentaryAn entity should provide additional information that will help users of its financial statements to evaluate the quantitativeinformation disclosed. An entity might disclose some or all the following to comply with IFRS 13.92:

• The nature of the item being measured at fair value, including the characteristics of the item being measured that aretaken into account in the determination of relevant inputs. For example, if the Group had residential mortgage-backedsecurities, it might disclose the following:

• The types of underlying loans (e.g., prime loans or sub-prime loans)• Collateral• Guarantees or other credit enhancements• Seniority level of the tranches of securities• The year of issue• The weighted-average coupon rate of the underlying loans and the securities• The weighted-average maturity of the underlying loans and the securities• The geographical concentration of the underlying loans• Information about the credit ratings of the securities

• How third-party information such as broker quotes, pricing services, net asset values and relevant market data wastaken into account when measuring fair value

The Group does not have any liabilities measured at fair value and issued with an inseparable third-party creditenhancement. But if it had such liabilities, IFRS 13.98 requires disclosure of the existence of credit-enhancement andwhether it is reflected in the fair value measurement of the liability.

IFRS 13.99 requires an entity to present the quantitative disclosures of IFRS 13 in a tabular format, unless anotherformat is more appropriate. The Group included the quantitative disclosures in tabular format, above.

IFRS 13.93(h)(ii) requires a quantitative sensitivity analysis for financial assets and financial liabilities that are measuredat fair value on a recurring basis. For all other recurring fair value measurements that are categorised within Level 3 ofthe fair value hierarchy, an entity is required to provide:

• A narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs if a changein those inputs to a different amount might result in a significantly higher or lower fair value measurement

• If there are inter-relationships between the inputs and other unobservable inputs used in the fair value measurement,a description of the inter-relationships and of how they might magnify or mitigate the effect of changes in theunobservable inputs on the fair value measurement

For this purpose, significance must be judged with respect to profit or loss, and total assets or total liabilities, or, whenchanges in fair value are recognised in OCI, total equity. The Group included the quantitative sensitivity analyses in tabularformat, above.

IFRS 13.94 requires appropriate determination of classes of assets and liabilities on the basis of:

u The nature, characteristics and risks of the asset or liability; and

u The level of the fair value hierarchy within which the fair value measurement in categorised

The Group has applied the factors and disclosed the quantitative information under IFRS 13 based on the classesof assets and liabilities determined as per IFRS 13.94. As judgement is required to determine the classes ofproperties, other criteria and aggregation levels for classes of assets may also be appropriate, provided they arebased on the risk profile of the assets (e.g., the risk profile of properties in an emerging market may differ fromthat of properties in a mature market).

Inputs used in a valuation technique may fall into different levels of the fair value hierarchy. However, for disclosurepurposes, the fair value measurement must be categorised in its entirety (i.e., depending on the unit of account) withinthe hierarchy. That categorisation may not be so obvious when there are multiple inputs used. IFRS 13.73 clarifies thatthe hierarchy categorisation of a fair value measurement, in its entirety, is determined based on the lowest level inputthat is significant to the entire measurement. Assessing the significance of a particular input to the entire measurementrequires judgement and consideration of factors specific to the asset or liability (or group of assets and/or liabilities) beingmeasured and any adjustments made to the significant inputs in arriving at the fair value. These considerations have afollow-on impact to the disclosures of valuation techniques, processes and significant inputs and entities should tailortheir disclosures to the specific facts and circumstances.

For assets and liabilities held at the end of the reporting period measured at fair value on a recurring basis, IFRS 13.93(c)requires disclosure of amounts of transfers between Level 1 and Level 2 of the hierarchy, the reasons for those transfersand the entity’s policy for determining when the transfers are deemed to have occurred. Transfers into each level must bedisclosed and discussed separately from transfers out of each level.

The Group has also provided IFRS 13 disclosures on obligations under finance lease and hire purchase contracts wherefair values are required to be disclosed under IFRS 7.25 as the Group took the view that IFRS 13 applies to the disclosureof fair value required under IFRS 7 Financial Instruments: Disclosures, including finance lease obligations.

http://gaait-aa.ey.net/Document.aspx?PersistentBookId=0&GotoString=IFRS%2013,%20para.92&ProductId=210#IFRS%2013,%20para.92



17.5 Financial instruments risk management objectives and policies

The Group’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and otherpayables, and financial guarantee contracts. The main purpose of these financial liabilities is to finance theGroup’s operations and to provide guarantees to support its operations. The Group’s principal financial assetsinclude loan and other receivables, trade and other receivables, and cash and short-term deposits that arrivedirectly from its operations. The Group also holds AFS financial assets and enters into derivative transactions.

The Group is exposed to market risk, credit risk and liquidity risk. The Group’s senior management oversees themanagement of these risks. The Group’s senior management is supported by a financial risk committee thatadvises on financial risks and the appropriate financial risk governance framework for the Group. The financialrisk committee provides assurance to the Group’s senior management that the Group’s financial risk activitiesare governed by appropriate policies and procedures and that financial risks are identified, measured andmanaged in accordance with group policies and group risk appetite. All derivative activities for risk managementpurposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It isthe Group’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board ofDirectors reviews and agrees policies for managing each of these risks, which are summarised below.

IFRS 7.33

Market riskMarket risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate becauseof changes in market prices. Market prices comprise three types of risk: interest rate risk, currency risk andother price risk such as equity price risk and commodity price risk. Financial instruments affected by marketrisk include: loans and borrowings, deposits, AFS financial assets and derivative financial instruments.

The sensitivity analyses in the following sections relate to the position as at 31 December in 2015 and 2014.

The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed-to-floating interest rates of the debt and derivatives and the proportion of financial instruments in foreigncurrencies are all constant and on the basis of the hedge designations in place at 31 December 2015.

IFRS 7.33

IFRS 7.40

The analyses exclude the impact of movements in market variables on the carrying value of pension and otherpost-retirement obligations, provisions and the non-financial assets and liabilities of foreign operations.

The following assumptions have been made in calculating the sensitivity analyses:

• The sensitivity of the relevant statement of profit or loss item is the effect of the assumed changes inrespective market risks. This is based on the financial assets and financial liabilities held at 31 December2015 and 2014 including the effect of hedge accounting.

• The sensitivity of equity is calculated by considering the effect of any associated cash flow hedges andhedges of a net investment in a foreign subsidiary at 31 December 2015 for the effects of the assumedchanges of the underlying risk.

Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuatebecause of changes in market interest rates. The Group’s exposure to the risk of changes in market interestrates relates primarily to the Group’s long-term debt obligations with floating interest rates.

The Group manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans andborrowings. The Group’s policy is to keep between 40% and 60% of its borrowings at fixed rates of interest,excluding borrowings that relate to discontinued operations. To manage this, the Group enters into interest rateswaps, in which it agrees to exchange, at specified intervals, the difference between fixed and variable rateinterest amounts calculated by reference to an agreed-upon notional principal amount. At 31 December 2015,after taking into account the effect of interest rate swaps, approximately 43% of the Group’s borrowings are at afixed rate of interest (2014: 50%, 1 January 2014: 41%).



17. Financial assets and financial liabilities continuedInterest rate sensitivityThe following table demonstrates the sensitivity to a reasonably possible change in interest rates on thatportion of loans and borrowings, after the impact of hedge accounting. With all other variables held constant,the Group’s profit before tax is affected through the impact on floating rate borrowings, as follows:

Increase/ decreasein basis points

Effect on profitbefore tax IFRS 7.40(a)

€0002015Euro +45 (48)US dollar +60 (13)

Euro -45 33US dollar -60 12

2014Euro +10 (19)US dollar +15 —

Euro -10 12US dollar -15 —

The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observablemarket environment, showing a significantly higher volatility than in prior years.

Foreign currency riskForeign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuatebecause of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchangerates relates primarily to the Group’s operating activities (when revenue or expense is denominated in adifferent currency from the Group’s functional currency) and the Group’s net investments in foreignsubsidiaries.

IFRS 7.33IFRS 7.40(b)

The Group manages its foreign currency risk by hedging transactions that are expected to occur within amaximum 12-month period for hedges of forecasted sales and purchases and 24-month period for netinvestment hedges.

When a derivative is entered into for the purpose of being a hedge, the Group negotiates the terms of thederivative to match the terms of the hedged exposure. For hedges of forecast transactions, the derivativecovers the period of exposure from the point the cash flows of the transactions are forecasted up to the point ofsettlement of the resulting receivable or payable that is denominated in the foreign currency.

The Group hedges its exposure to fluctuations on the translation into euro of its foreign operations by holdingnet borrowings in foreign currencies and by using foreign currency swaps and forwards.

At 31 December 2015 the Group hedged 75% (2014: 70%, 1 January 2014: 70%) of its expected foreigncurrency sales. Those hedged sales were highly probable at the reporting date. This foreign currency risk ishedged by using foreign currency forward contracts.



17. Financial assets and financial liabilities continuedCommentaryFor hedges of forecast transactions, useful information to help users understand the nature and extent of such risks mayinclude:

u Time bands in which the highly probable forecast transactions are grouped for risk management purposes

u The entity’s policies and processes for managing the risk (for example, how the cash flows of the hedging instruments andthe hedged items may be aligned, such as using foreign currency bank accounts to address differences in cash flow dates)

Entities should tailor these disclosures to the specific facts and circumstances of the transactions.

Foreign currency sensitivityThe following table demonstrates the sensitivity to a reasonably possible change in the US dollar exchange rate,with all other variables held constant, of the Group’s profit before tax (due to changes in the fair value ofmonetary assets and liabilities including non-designated foreign currency derivatives and embedded derivatives)and the Group’s pre-tax equity (due to changes in the fair value of forward exchange contracts designated ascash flow hedges and net investment hedges). The Group’s exposure to foreign currency changes for all othercurrencies is not material.

Change inUS$ rate

Effect on profitbefore tax

Effecton pre-tax

equity€000 €000 IFRS 7.40(a)

2015 +9% (30) (154)-9% 20 172

2014 +8% (40) (146)–8% 40 158

Change inGBP rate


Effect onpre-taxequity

€000 €0002015 +5% 26 102

-5% (15) (113)

2014 +4% 31 92–4% (28) (96)

The movement on the post-tax effect is a result of a change in the fair value of derivative financial instrumentsnot designated in a hedging relationship and monetary assets and liabilities denominated in US dollars, wherethe functional currency of the entity is a currency other than US dollars. Although the derivatives have not beendesignated in a hedge relationship, they act as a commercial hedge and will offset the underlying transactionswhen they occur.

The movement in pre-tax equity arises from changes in US dollar borrowings (net of cash and cash equivalents)in the hedge of net investments in US operations and cash flow hedges. These movements will offset thetranslation of the US operations’ net assets into euros.

Commodity price riskThe Group is affected by the volatility of certain commodities. Its operating activities involve the ongoingpurchase and manufacturing of electronic parts and therefore require a continuous supply of copper. Due to thesignificantly increased volatility of the price of the copper, the Group also entered into various purchasecontracts for brass and chrome (for which there is an active market). The Group’s Board of Directors hasdeveloped and enacted a risk management strategy dealing with commodity price risk and its mitigation.

Based on a 12-month forecast of the required copper supply, the Group hedges the purchase price usingforward commodity purchase contracts. The forecast is deemed to be highly probable.

Forward contracts with a physical delivery which qualify for normal purchase, sale or usage and that aretherefore not recognised as derivatives are disclosed in Note 17.3.



17. Financial assets and financial liabilities continuedCommodity price sensitivityThe following table shows the effect of price changes for copper after the impact of hedge accounting:

Change inyear-end price


Effect onequity IFRS 7.40(a)

2015 €000 €000Copper +15% (220) (585)

-15% 220 585Brass +4% (8) (8)

-4% 8 8Chrome +2% (10) (10)

-2% 10 10

Equity price riskThe Group’s listed and unlisted equity securities are susceptible to market-price risk arising from uncertaintiesabout future values of the investment securities. The Group manages the equity price risk throughdiversification and placing limits on individual and total equity instruments. Reports on the equity portfolio aresubmitted to the Group’s senior management on a regular basis. The Group’s Board of Directors reviews andapproves all equity investment decisions.

IFRS 7.33(b)

At the reporting date, the exposure to unlisted equity securities at fair value was €1,163,000. Sensitivityanalyses of these investments have been provided in Note 17.4.

At the reporting date, the exposure to listed equity securities at fair value was €337,000. A decrease of 10% onthe NYSE market index could have an impact of approximately €55,000 on the income or equity attributable tothe Group, depending on whether or not the decline is significant or prolonged. An increase of 10% in the valueof the listed securities would only impact equity, but would not have an effect on profit or loss.

IFRS 7.33(a)

IFRS 7.40

Credit riskCredit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customercontract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarilyfor trade receivables) and from its financing activities, including deposits with banks and financial institutions,foreign exchange transactions and other financial instruments.

IAS 7.33

Trade receivablesCustomer credit risk is managed by each business unit subject to the Group’s established policy, procedures andcontrol relating to customer credit risk management. Credit quality of the customer is assessed based on anextensive credit rating scorecard and individual credit limits are defined in accordance with this assessment.Outstanding customer receivables are regularly monitored and any shipments to major customers are generallycovered by letters of credit or other forms of credit insurance. At 31 December 2015, the Group had 55customers (2014: 65 customers, 1 January 2014: 60 customers) that owed it more than €250,000 each andaccounted for approximately 71% (2014: 76%, 1 January 2014: 72%) of all receivables owing. There were fivecustomers (2014: seven customers, 1 January 2014: three customers) with balances greater than €1 millionaccounting for just over 17% (2014: 19%, 1 January 2014: 13%) of the total amounts receivable.

The requirement for an impairment is analysed at each reporting date on an individual basis for major clients.Additionally, a large number of minor receivables are grouped into homogenous groups and assessed forimpairment collectively. The calculation is based on actual incurred historical data. The maximum exposure tocredit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 17.1. TheGroup does not hold collateral as security. The Group evaluates the concentration of risk with respect to tradereceivables as low, as its customers are located in several jurisdictions and industries and operate in largelyindependent markets.

IAS 7.34(c)IFRS 7. 36(c)IFRS 7.B8



17. Financial assets and financial liabilities continuedFinancial instruments and cash depositsCredit risk from balances with banks and financial institutions is managed by the Group’s treasury department inaccordance with the Group’s policy. Investments of surplus funds are made only with approved counterpartiesand within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Group’sBoard of Directors on an annual basis, and may be updated throughout the year subject to approval of theGroup’s Finance Committee. The limits are set to minimise the concentration of risks and therefore mitigatefinancial loss through potential counterparty’s failure to make payments. The Group’s maximum exposure tocredit risk for the components of the statement of financial position is the carrying amounts as illustrated inNote 17.1 except for financial guarantees and derivative financial instruments. The Group’s maximum exposurefor financial guarantees and financial derivative instruments are noted in Note 29 and in the liquidity tablebelow, respectively.

IFRS 7.33IFRS 7.36

Liquidity riskThe Group monitors its risk to a shortage of funds using a liquidity planning tool.

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use ofbank overdrafts, bank loans, debentures, preference shares, finance leases and hire purchase contracts. TheGroup’s policy is that not more than 35% of borrowings should mature in the next 12-month period. 10.6% ofthe Group’s debt will mature in less than one year at 31 December 2015 (2014: 11.1%, 1 January 2014: 19.0%)based on the carrying value of borrowings reflected in the financial statements. The Group assessed theconcentration of risk with respect to refinancing its debt and concluded it to be low. Access to sources offunding is sufficiently available and debt maturing within 12 months can be rolled over with existing lenders.

IFRS 7.33IFRS 7.39(c)

IFRS 7.B8

Excessive risk concentrationConcentrations arise when a number of counterparties are engaged in similar business activities, or activities inthe same geographical region, or have economic features that would cause their ability to meet contractualobligations to be similarly affected by changes in economic, political or other conditions. Concentrationsindicate the relative sensitivity of the Group’s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Group’s policies and procedures include specificguidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks arecontrolled and managed accordingly. Selective hedging is used within the Group to manage risk concentrationsat both the relationship and industry levels.

The table below summarises the maturity profile of the Group’s financial liabilities based on contractualundiscounted payments:

Year ended 31 December 2015On

demandLess than3 months

3 to 12months

1 to 5years > 5 years Total IFRS 7.39(a),(b)

€000 €000 €000 €000 €000 €000Interest-bearing loans andborrowings (other than convertiblepreference shares) 966 21 1,562 10,554 8,000 21,103Convertible preference shares — — — 676 2,324 3,000Contingent consideration — — 1,125 — — 1,125Other liabilities — — — 150 — 150Trade and other payables 3,620 14,766 1,170 — — 19,556Financial guarantee contracts* 105 — — — — 105Derivatives and embeddedderivatives 1,970 2,740 391 1,191 1,329 7,621

6,661 17,527 3,123 12,571 11,653 52,660




Year ended 31 December 2014On


3 to 12months

1 to 5years > 5 years Total

€000 €000 €000 €000 €000 €000Interest-bearing loans andborrowings (other than convertiblepreference shares) 2,650 18 1,433 7,572 11,600 23,273Convertible preference shares — — — 624 2,376 3,000Other liabilities — — — 202 — 202Trade and other payables 4,321 14,904 2,056 — — 21,281Financial guarantee contracts* 68 — — — — 68Derivatives and embeddedderivatives 549 1,255 — — — 1,804

7,588 16,177 3,489 8,398 13,976 49,628

As at 1 January 2014On


3 to 12months


€000 €000 €000 €000 €000 €000Interest-bearing loans andborrowings (other than convertiblepreference shares) 2,750 23 1,523 7,235 8,127 19,658Convertible preference shares — — — 598 2,402 3,000Other liabilities — — — 180 — 180Trade and other payables 4,707 13,894 1,998 — — 20,599Financial guarantee contracts* 44 — — — — 44Derivatives and embeddedderivatives 532 1,270 — — — 1,802

8,033 15,187 3,521 8,013 10,529 45,283

* Based on the maximum amount that can be called for under the financial guarantee contract.

The disclosed financial derivative instruments in the above table are the gross undiscounted cash flows.However, those amounts may be settled gross or net. The following table shows the correspondingreconciliation of those amounts to their carrying amounts:

As at 31 December 2015On


3 to 12months

1 to 5years > 5 years Total IFRS 7.39(a), (b)

€000 €000 €000 €000 €000 €000

Inflows 1,250 1,714 250 720 985 4,919Outflows (1,970) (2,740) (391) (1,191) (1,329) (7,621)

Net (720) (1,026) (141) (471) (344) (2,702)Discounted at the applicableinterbank rates (720) (1,022) (139) (463) (343) (2,687)

As at 31 December 2014On


3 to 12months


€000 €000 €000 €000 €000 €000

Inflows 500 1,050 — — — 1,550Outflows (549) (1,255) — — — (1,804)

Net (49) (205) — — — (254)Discounted at the applicableinterbank rates (49) (205) — — — (254)




As at 1 January 2014On


3 to 12months


€000 €000 €000 €000 €000 €000

Inflows 500 1,033 — — — 1,533Outflows (532) (1,272) — — — (1,804)

Net (32) (239) — — — (271)Discounted at the applicableinterbank rates (32) (239) — — — (271)

Capital managementCapital includes convertible preference shares and equity attributable to the equity holders of the parent.

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit ratingand healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it in light of changes in economic conditionsand the requirements of the financial covenants. To maintain or adjust the capital structure, the Group mayadjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.The Group’s policy is to keep the gearing ratio between 20% and 40%. The Group includes within net debt,interest bearing loans and borrowings, trade and other payables, less cash and cash deposits, excludingdiscontinued operations.

IAS 1.134IAS 1.135

2015 2014As at 1

January 2014 IAS 1.134

€000 €000 €000Interest-bearing loans and borrowings other than convertiblepreference shares (Note 17.2)

20,028 21,834 20,964

Trade and other payables (Note 28) 19,556 21,281 20,600Less: cash and short-term deposits (Note 20) (17,112) (14,916) (11,066)Net debt 22,472 28,199 30,498

Convertible preference shares (Note 17.2) 2,778 2,644 2,522Equity 62,317 48,551 42,841Total capital 65,095 51,195 45,363Capital and net debt 87,567 79,394 75,861Gearing ratio 26% 36% 40%

In order to achieve this overall objective, the Group’s capital management, amongst other things, aims toensure that it meets financial covenants attached to the interest-bearing loans and borrowings that definecapital structure requirements. Breaches in meeting the financial covenants would permit the bank toimmediately call loans and borrowings. There have been no breaches of the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended31 December 2015 and 2014.

CommentaryIAS 1.134 and IAS 1.135 require entities to make qualitative and quantitative disclosures regarding their objectives,policies and processes for managing capital. The Group has disclosed a gearing ratio as this is the measure it uses tomonitor capital. The Group considers both capital and net debt as relevant components of funding and, hence, part of itscapital management. However, other measures or a different type of gearing ratio may be more suitable for otherentities.

IFRS 7.18-19 requires disclosures in the event of a default or breaches as at the end of a reporting period and during theyear. Although there are no explicit requirements addressing the opposite situation, the Group has disclosed the restriction oncapital represented by financial covenants as it considers it relevant information to the users of the financial statements.




CollateralThe Group has pledged part of its short-term deposits in order to fulfil the collateral requirements for thederivative contracts. At 31 December 2015 and 2014 and 1 January 2014, the fair value of the short-termdeposit pledged was €5,000,000 (2014: €2,000,000, 1 January 2014: €2,000,000). The counterparties havean obligation to return the securities to the Group. There are no other significant terms and conditionsassociated with the use of collateral.

The Group did not hold collateral at 31 December 2015 (2014 €Nil, 1 January 2014 €Nil).

IAS 7.48IFRS 7.14IFRS 7.38

IFRS 7.15IFRS 7. 36(b)

18. Inventories

2015 2014As at 1

January 2014 IAS 2.36(b)

€000 €000 €000 IAS 1.78(c)

Raw materials (at cost) 6,046 7,793 8,250Work in progress (at cost) 11,466 8,889 10,449Finished goods (at cost or net realisable value) 4,930 6,472 5,950Total inventories at the lower of cost and net realisable value 22,442 23,154 24,649

During 2015, €286,000 (2014: €242,000) was recognised as an expense for inventories carried at netrealisable value. This is recognised in cost of sales.

IAS 2.36(e)

19. Trade and other receivables

2015 2014As at 1

January 2014IAS 1.78(b)

€000 €000 €000 IFRS 7.6

Trade receivables 26,501 23,158 24,490Receivables from an associate (Note 30) 551 582 602Receivables from other related parties (Note 30) 620 550 445

27,672 24,290 25,537

For terms and conditions relating to related party receivables, refer to Note 30.

Trade receivables are non-interest bearing and are generally on terms of 30-90 days.

IFRS 7.34(a)

As at 31 December 2015, trade receivables with an initial carrying value of €108,000 (2014: €97,000, 1January 2014: €95,000) were impaired and fully provided for. See below for the movements in the provision forimpairment of receivables:

IFRS 7.37

Individuallyimpaired

Collectivelyimpaired Total

€000 €000 €000 IFRS 7.16

At 1 January 2014 29 66 95Charge for the year 4 8 12Utilised (4) (7) (11)Unused amounts reversed — — —Discount rate adjustment — 1 1At 31 December 2014 29 68 97Charge for the year 10 16 26Utilised (3) (5) (8)Unused amounts reversed (2) (6) (8)Discount rate adjustment — 1 1

At 31 December 2015 34 74 108



19. Trade and other receivables continuedAs at 31 December, the ageing analysis of trade receivables is, as follows: IFRS 7.37

Total

Neither pastdue nor

impaired

Past due but not impaired

< 30days

30–60days

61–90days

91–120days

> 120days

€000 €000 €000 €000 €000 €000 €0002015 26,501 17,596 4,791 2,592 1,070 360 922014 23,158 16,455 3,440 1,840 945 370 108As at 1January 2014 24,490 18,367 2,693 1,989 862 421 158

See Note 17.5 on credit risk of trade receivables, which discusses how the Group manages and measures creditquality of trade receivables that are neither past due nor impaired.

IFRS 7.36(c)

20. Cash and short-term deposits

2015 2014As at 1

January 2014€000 €000 €000

Cash at banks and on hand 11,316 11,125 6,816Short-term deposits 5,796 3,791 4,250

17,112 14,916 11,066

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are madefor varying periods of between one day and three months, depending on the immediate cash requirements of theGroup, and earn interest at the respective short-term deposit rates.

At 31 December 2015, the Group had available €5,740,000 (2014: €1,230,000, 1 January 2014: €1,200,000)of undrawn committed borrowing facilities.

IAS 7.50(a)

The Group has pledged a part of its short-term deposits to fulfil collateral requirements. Refer to Note 17.5 forfurther details.

IAS 7.48

For the purpose of the statement of cash flows, cash and cash equivalents comprise the followingat 31 December:

IAS 7.45

2015 2014As at 1

January 2014€000 €000 €000

Cash at banks and on hand 11,316 11,125 6,816Short-term deposits 5,796 3,791 4,250Cash at banks and short-term deposits attributable to discontinuedoperation 1,294 — —

18,406 14,916 11,066Bank overdrafts (966) (2,650) (2,750)

Cash and cash equivalents 17,440 12,266 8,316

21. Issued capital and reserves

2015 2014As at 1

January 2014 IAS 1.78(e)

Authorised shares Thousands Thousands Thousands IAS 1.79(a)(i)

Ordinary shares of €1 each 22,588 20,088 20,088 IAS 1.79(a)(iii)

7% convertible preference shares of €1 each 2,500 2,500 2,500

25,088 22,588 22,588



21. Issued capital and reserves continued

Ordinary shares issued and fully paid Thousands €000 IAS 1.79(a)(iv)

At 1 January 2014 19,388 19,388At 31 December 2014 19,388 19,388Issued on 1 May 2015 in exchange for issued share capital ofExtinguishers Limited (Note 5) 2,500 2,500

At 31 December 2015 21,888 21,888

During the year, the authorised share capital was increased by €2,500,000 by the issue of 2,500,000 ordinaryshares of €1 each.

Share premium €000 IAS 1.78(e)

At 1 January 2014 —Increase on 1 November 2014 for cash on exercise of share options in excessof cost of treasury shares 80At 31 December 2014 80Increase on 1 May 2015 because of issuance of share capital for the acquisitionof Extinguishers Limited (Note 5) 4,703Increase on 1 November 2015 for cash on exercise of share options in excessof cost of treasury shares 29Decrease due to transaction costs for issued share capital (32)At 31 December 2015 4,780

Treasury shares Thousands €000 IAS 1.79(a)(vi)

At 1 January 2014 335 774Issued on 1 November 2014 for cash on exercise of share options (Note 27) (65) (120)At 31 December 2014 270 654Issued on 1 November 2015 for cash on exercise of share options (Note 27) (75) (146)

At 31 December 2015 195 508

Share options exercised in each respective year have been settled using the treasury shares of the Group.The reduction in the treasury share equity component is equal to the cost incurred to acquire the shares, on aweighted average basis. Any excess between the cash received from employees and reduction in treasury sharesis recorded in share premium.

Share option schemesThe Group has two share option schemes under which options to subscribe for the Group’s shares have beengranted to certain executives and senior employees (Note 27).

Other capital reservesShare-based payment

transactionsConvertible

preference shares Total€000 €000 €000

As at 1 January 2014 338 228 566Share-based payment transactions (Note 27) 298 — 298At 31 December 2014 636 228 864Share-based payment transactions (Note 27) 307 — 307

At 31 December 2015 943 228 1,171

Nature and purpose of reserves IAS 1.79(b)

Other capital reservesShare-based payment transactionsThe share-based payments transaction reserve is used to recognise the value of equity-settled share-basedpayment transactions provided to employees, including key management personnel, as part of theirremuneration. Refer to Note 27 for further details of these plans.



21. Issued capital and reserves continued

Convertible preference sharesThe convertible preference share reserve contains the equity component of the issued convertible shares. Theliability component is reflected in financial liabilities.

All other reserves as stated in the consolidated statement of changes in equity.Other comprehensive income, net of taxThe disaggregation of changes in OCI by each type of reserve in equity is shown below:

IAS 1.106A

As at 31 December 2015Cash flow

hedgereserve


Foreigncurrency

translationreserve

Assetrevaluation

reserveRetainedearnings Total

€000 €000 €000 €000 €000 €000Net investment hedging — — 195 — — 195Foreign-exchangetranslation differences — — (246) — — (246)Currency forward contracts (640) — — — — (640)Commodity forwardcontracts (153) — — — — (153)Reclassification tostatement of profit or loss 281 — — — — 281Gain/loss on available forsale financial assets — (42) — — — (42)Re-measurement ondefined benefit plans — — — — 217 217Revaluation of land andbuildings — — — 592 — 592

(512) (42) (51) 592 217 204

As at 31 December 2014Cash flow

hedgereserve


Foreigncurrency

translationreserve

Retainedearnings Total

€000 €000 €000 €000 €000Foreign-exchange translation differences — — (117) — (117)Currency forward contracts (266) — — — (265)Reclassification to statement of profitor loss 289 — — — 289Gain/loss on available for sale financialassets — (16) — — (16)Re-measurement on defined benefit plans — — — (281) (281)

23 (16) (117) (281) (391)

22. Distributions made and proposed2015 2014€000 €000

Declared and paid during the year: IAS 1.107

Cash dividends on ordinary shares:Final dividend for 2014: 5.66 cents per share (2013: 3.93 cents per share) 1,082 749Interim dividend for 2015: 4.66 cents per share (2014: 4.47 cents per share) 890 851

1,972 1,600

Proposed for approval at the annual general meeting (not recognised asa liability as at 31 December): IAS 1.137(a)

Dividends on ordinary shares:Final dividend for 2015: 5.01 cents per share (2014: 5.66 cents per share) 1,087 1,082



22.1 Non-Cash distributions to owners

On 15 December 2015, the shareholders of the Company approved distribution of shares of Hose Limited to theowners of the Company. For further details refer to Note 10. Non-cash distributions are measured at the fairvalue of the assets to be distributed. The details of the non-cash dividend payable are, as follows:

2015 2014 IFRIC 17.16

€000 €000Assets distributedAs at 1 January — —Liability arising on approval of the distribution 350 —Re-measurement recognised directly in equity 5 —

As at 31 December 355 —

The fair value is determined using DCF method with reference to the fair value of the disposal group which is tobe distributed to the equity holders of the parent. The expected duration of the cash flows and the specifictiming of inflows and outflows are determined by events such as operating profits, raw material costs and costof borrowing. The series of periodic net cash flows, along with an estimate of the terminal value anticipated atthe end of the projection period, is then discounted.

IFRS 13.93(e)(ii)IFRS 13.93(d)IFRS 13.93(h)(i)

Significant unobservable valuation inputs: Range (weighted average)WACC 10%Long-term revenue growth rate 2%-5%(4.2%)Long-term gross margin 3%-20% (10.3%)Discount for own non-performance risk 0.05%

Discount for own non-performance risk represents the adjustment that market participants would make to reflectthe risk that the Group not being able to fulfil the obligation. This includes the effect of credit risk, as well asother factors that may influence the likelihood of not making the distribution.

Significant increases (decreases) in estimated long-term revenue growth and long-term gross margin wouldresult in a significantly higher (lower) fair value. Significant increases (decreases) in WACC and discount on ownnon-performance risk in isolation would result in a significantly lower (higher) fair value.

IFRS 13.93(h)(i)

23. Provisions

Maintenancewarranties

Social securitycontributions on

share options

Waste electricaland electronic

equipment Total€000 €000 €000 €000

At 1 January 2014 66 3 31 100 IAS 37.84(a)

Arising during the year 52 1 22 75 IAS 37.84(b)

At 31 December 2014 118 4 53 175 IAS 37.84(c)

At 1 January 2014 66 3 31 100Current 22 — 18 40Non-current 44 3 13 60

At 31 December 2014 118 4 53 175Current 60 — 38 98Non-current 58 4 15 77

CommentaryThe above table shows the voluntary disclosure of provisions for the comparative period, as IAS 37.84 does not requiresuch disclosure.



23. Provisions continued

Maintenancewarranties

Social securitycontributions

on shareoptions

Wasteelectrical and

electronicequipment Restructuring Decommissioning

Onerousoperating

leaseContingent

liability TotalAt 1 January2015 118 4 53 — — — — 175 IAS 37.84(a)Acquisition of asubsidiary (Note 5) — — — 500 1,200 400 380 2,480Arising duringthe year 112 26 102 — — — 20 260 IAS 37.84(b)Utilised (60) (19) (8) (39) — (20) — (146) IAS 37.84(c)Unused amountsreversed (6) — — (6) — — — (12) IAS 37.84(d)Discount rateadjustment andimputed interest 2 1 2 11 21 6 — 43 IAS 37.84(e)At 31 December2015 166 12 149 466 1,221 386 400 2,800 IAS 37.84(c)

Current 114 3 28 100 — 205 400 850 IAS 1.60

Non-current 52 9 121 366 1,221 181 — 1,950166 12 149 466 1,221 386 400 2,800

Maintenance warrantiesA provision is recognised for expected warranty claims on products sold during the last two years, based onpast experience of the level of repairs and returns. It is expected that most of these costs will be incurred inthe next financial year and all will have been incurred within two years after the reporting date. Assumptionsused to calculate the provision for warranties were based on current sales levels and current informationavailable about returns based on the two-year warranty period for all products sold.

IAS 37.85

RestructuringExtinguishers Ltd recorded a restructuring provision prior to being acquired by the Group. The provision relatesprincipally to the elimination of certain of its product lines. The restructuring plan was drawn up and announcedto the employees of Extinguishers Limited in 2015 when the provision was recognised in its financial statements.The restructuring is expected to be completed by 2017.

DecommissioningA provision has been recognised for decommissioning costs associated with a factory owned by ExtinguishersLimited. The Group is committed to decommissioning the site as a result of the construction of themanufacturing facility for the production of fire retardant fabrics.

Onerous operating leaseOn acquisition of Extinguishers Limited, a provision was recognised for the fact that the lease premiumson the operating lease were significantly higher than the market rate at acquisition. The provision has beencalculated based on the difference between the market rate and the rate paid.

Social security contributions on share optionsThe provision for social security contributions on share options is calculated based on the number of optionsoutstanding at the reporting date that are expected to be exercised. The provision is based on market price ofthe shares at the reporting date as the best estimate of the market price at the date of exercise. It is expectedthat the costs will be incurred during the exercise period of 1 January 2016 to 31 December 2018.

Waste electrical and electronic equipmentThe provision for waste electrical and electronic equipment is calculated based on sales in the current year(new waste) and expected disposals of old waste (sales before August 2012).

Contingent liabilityA contingent liability at a fair value of €380,000 was initially recognised at the acquisition date of ExtinguishersLimited. The claim is subject to legal arbitration and only expected to be finalised in late 2016. At the reportingdate, the provision was reassessed and increased to €400,000 (see Note 5).

IFRS 3.56(a)



24. Government grants

2015 2014 IAS 20.39(b)

€000 €000At 1 January 1,551 1,450Received during the year 2,951 642Released to the statement of profit or loss (1,053) (541)At 31 December 3,449 1,551

2015 2014As at 1

January 2014€000 €000 €000

Current 149 151 150Non-current 3,300 1,400 1,300

3,449 1,551 1,450

Government grants have been received for the purchase of certain items of property, plant and equipment.There are no unfulfilled conditions or contingencies attached to these grants.

IAS 20.39(c)

25. Deferred revenue2015 2014€000 €000

At 1 January 365 364Deferred during the year 5,926 1,126Released to the statement of profit or loss (1,875) (1,125)

At 31 December 4,416 365

2015 2014As at 1

January 2014€000 €000 €000

Current 1,720 200 190Non-current 2,696 165 174

4,416 365 364

The deferred revenue refers to the accrual and release of GoodPoints transactions and obligations resultingfrom equipment transferred to the Group by a customer. As at 31 December 2015, the estimated liability forunredeemed GoodPoints amounted to approximately €416,000 (2014: €365,000, 1 January 2014: €364,000).

26. Pensions and other post-employment benefit plans

2015 2014As at 1

January 2014€000 €000 €000

US post-employment healthcare benefit plan 371 229 88Euroland pension plan 2,251 2,265 1,986

2,622 2,494 2,074

The Group has one defined benefit pension plan (funded), which is a final salary plan in Euroland andrequire contributions to be made to separately administered funds. Also, in the US, the Group providescertain post-employment healthcare benefits to employees (unfunded).

The defined benefit pension plan in Euroland is governed by the employment laws of Euroland, which requirefinal salary payments to be adjusted for the consumer price index upon payment during retirement. The level ofbenefits provided depends on the member’s length of service and salary at retirement age. The fund has thelegal form of a foundation and it is governed by the Board of Trustees, which consists of an equal number ofemployer and employee representatives. The Board of Trustees is responsible for the administration of the planassets and for the definition of the investment strategy.

IAS 19.135IAS 19.136IAS 19.138



26. Pensions and other post-employment benefit plans continued

Each year, the Board of Trustees reviews the level of funding in the Euroland pension plan as required byEuroland’s employment legislation. Such a review includes the asset-liability matching strategy and investmentrisk management policy. This includes the use of annuities and longevity swaps to manage the risks. The Board ofTrustees decides its contribution based on the results of this annual review. Generally, it aims to have a portfoliomix of a combined 40% in equity and property and 60% in debt instruments. Euroland’s employment legislationrequires the Group to clear any plan deficit (based on a valuation performed in accordance with the regulations inEuroland) over a period of no more than 5 years after the period in which the deficit arises. The Board ofTrustees aims to keep annual contributions relatively stable at a level such that no plan deficits (based onvaluation performed in accordance with the regulations in Euroland) will arise.

Since the pension liability is adjusted to the consumer price index, the pension plan is exposed to Euroland’sinflation, interest rate risks and changes in the life expectancy for pensioners. As the plan assets includesignificant investments in quoted equity shares of entities in manufacturing and consumer products sector, theGroup is also exposed to equity market risk arising in the manufacturing and consumer products sector.

IAS 19.139

IAS 19.146IAS 19.147(a)

The following tables summarise the components of net benefit expense recognised in the statement of profitor loss and the funded status and amounts recognised in the statement of financial position for the respectiveplans:

US Post-employment healthcare benefit plan

Net benefit expense 2015 (recognised in profit or loss) 2015 2014€000 €000

Current service cost (141) (140)

Interest cost on benefit obligation (12) (5)

Net benefit expense (153) (145)

Changes in the present value of the defined benefit obligation are, as follows:

€000 IAS19.141

Defined benefit obligation at 1 January 2014 88Interest cost 5Current service cost 140Benefits paid —

Exchange differences (4)

Defined benefit obligation at 31 December 2014 229Interest cost 12Current service cost 141Benefits paid —

Exchange differences (11)

Defined benefit obligation at 31 December 2015 371


125 Good First-Time Adopter (International) Limited

26. Pensions and other post-employment benefit plans continuedEuroland Plan2015 changes in the defined benefit obligation and fair value of plan assets

Pension cost charged to profit or loss Remeasurement gains/(losses) in other comprehensive income

1 January2015

Servicecost

Netinterestexpense

Sub-totalincluded in

profit or loss(Note 9.6)

Benefitspaid

Return on planassets (excludingamounts included

in net interestexpense)

Actuarial changesarising from

changes indemographicassumptions

Actuarialchanges arising

from changesin financial

assumptionsExperience

adjustments


OCIContributions

by employer31 December

2015

IAS 19.140IAS 19.141

€000 €000 €000 €000 €000 €000 €000 €000 €000 €000 €000 €000Defined benefitobligation (5,171) (1,272) (284) (1,556) 868 - 211 (80) (20) 111 - (5,748)

Fair value of plan assets 2,906 - 158 158 (868) 200 - - - 200 1,101 3,497

Benefit liability (2,265) (1,398) - 200 211 (80) (20) 311 1,101 (2,251)

2014 changes in the defined benefit obligation and fair value of plan assets

Pension cost charged to profit or loss Remeasurement gains/(losses) in other comprehensive income

1 January2014

Servicecost

Netinterestexpense


profit or loss(Note 9.6)

Benefitspaid

Return on planassets (excludingamounts included

in net interestexpense)

Actuarial changesarising from

changes indemographicassumptions

Actuarialchanges arising

from changesin financial

assumptionsExperience

adjustments


OCIContributions

by employer31 December

2014€000 €000 €000 €000 €000 €000 €000 €000 €000 €000 €000 €000

Defined benefitobligation (4,796) (1,171) (269) (1,440) 1,166 - (201) 70 30 (101) - (5,171)

Fair value of plan assets 2,810 - 161 161 (1,166) (300) - - - (300) 1,401 2,906

Benefit liability (1,986) (1,279) - (300) (201) (70) (30) (401) 1,401 (2,265)

CommentaryAn entity must assess whether all or some disclosures should be disaggregated to distinguish plans or groups of plans with materially different risks under the requirements of IAS 19.138. Forexample, an entity may disaggregate disclosure about plans showing one or more of the following features: different geographical locations: characteristics such as flat salary pension plans:final salary pension plans or post-employment medical plans: regulatory environments: reporting segments and/or funding arrangements (e.g., wholly unfunded, wholly or partly funded).

Entities must exercise judgement and assess the grouping criteria according to their specific facts and circumstances. In this case, the Group has only one defined benefit pension plan inEuroland, hence there is no further disaggregation shown.

Additional disclosures may also be provided to meet the objectives in IAS 19.135. For example, an entity may present an analysis of the present value of the defined benefit obligation thatdistinguishes the nature, characteristics and risks of the obligation. Such a disclosure could distinguish between:

(a) Amounts owing to active members, deferred members, and pensioners

(b) Vested benefits and accrued, but not vested, benefits

(c) Conditional benefits, amounts attributable to future salary increases and other benefits



26. Pensions and other post-employment benefit plans continued

The acquisitions of Extinguishers Limited in 2015 and Lightbulbs Limited in 2014 did not affect plan assets orthe defined benefit obligation, as neither company has defined benefit plans.

The major categories of plan assets at the fair value are, as follows: IAS 19.142

Euroland plan 2015 2014 1 January 2014€000 €000 €000

Investments quoted in active markets:Quoted equity investments

Manufacturing and consumer products sector 884 731 735Telecom sector 45 33 27

Bonds issued by Euroland Government 1,670 1,615 1,590

Cash and cash equivalents 400 250 200

Unquoted investments:Debt instruments issued by Good Bank International Limited 428 222 208Property 70 55 50Total 3,497 2,906 2,810

The plan assets include a property occupied by the Group with a fair value of €50,000 (2014: €40,000,1 January 2014: €30,000).

IAS 19.143

CommentaryThe fair value of the plan assets is provided in this disclosure. Even though the fair value is determined using IFRS 13, thefair value disclosures required by IFRS 13 do not apply to employee benefits within the scope of IAS 19. However, if therewas an impact on the plan assets from the measurement using IFRS 13, it would need to be disclosed.

Under IAS 19.142, the Group has separated the plan assets within different classes. The Group has a class ‘property’,which has not been further classified into categories. The amount is not determined to be material to the consolidatedfinancial statements.

The significant assumptions used in determining pension and post-employment healthcare benefit obligations forthe Group’s plans are shown below:

IAS 19.144

2015 2014 1 January 2014% % %

Discount rate:Euroland pension plan 4.9 5.5 5.6Post-employment healthcare plan 5.7 5.9 5.9

Future consumer price index increases:Euroland pension plan 2.1 2.1 2.1

Future salary increases:Euroland pension plan 3.5 4.0 4.1

Healthcare cost increase rate 7.2 7.4 7.4

Life expectation for pensioners at the age of 65: Years Years YearsEuroland pension plan

Male 20.0 20.0 20.0Female 23.0 23.0 23.0

Post-employment healthcare planMale 19.0 19.0 19.0Female 22.0 22.0 22.0



26. Pensions and other post-employment benefit plans continuedA quantitative sensitivity analysis for significant assumption on the defined benefit obligation as at 31December 2015 and 2014 is, as shown below:

Euroland pension plan:

AssumptionsFuture pensioncost increase Discount rate Future salary increases IAS 19.145(a)

Sensitivity Level1%

increase1%

decrease0.5%

increase0.5%

decrease0.5%

increase0.5%

decrease€000 €000 €000 €000 €000 €000

2015 300 (240) (180) 164 120 (110)

2014 267 (213) (162) 147 107 (100)

Assumptions Life expectancy of male pensioners Life expectancy of female pensionersSensitivity Level Increase by 1 year Decrease by 1 year Increase by 1 year Decrease by 1 year2015 110 (120) 70 (60)

2014 99 (110) 62 (55)


2014 99 (110) 62 (55)

US post-employment healthcare benefit plan:

Assumptions Estimated healthcare cost increase rate Discount rateSensitivity Level 1% increase 1% increase 0.5% increase 0.5% increase2015 15 (14) (13) 14

2014 9 (8) (8) 8


2014 11 (12) 10 (0)

The sensitivity analyses above have been determined based on a method that extrapolates the impact on thedefined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of thereporting period. The sensitivity analysis are based on a change in a significant assumption, keeping all otherassumptions constant. The sensitivity analysis may not be representative of an actual change in the definedbenefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another.

The same method has been applied for the sensitivity analysis as when calculating the recognised pensionliability.

IAS 19.145(b)



26. Pensions and other post-employment benefit plans continuedThe following payments are expected contributions to the defined benefit plan in future years:

2015 2014€000 €000

Within the next 12 months (next annual reporting period) 1,500 1,350IAS 19.147(b)IAS 19.147(c)

Between 2 and 5 years 2,150 2,050Between 5 and 10 years 2,160 2,340Beyond 10 years 3,000 2,600

Total expected payments 8,810 8,340

The average duration of the defined benefit plan obligation at the end of the reporting period is 26.5 years(2014: 25.3 years).

CommentaryIAS 19.145(c) also requires disclosure of changes from the previous period in the methods and assumptions used inpreparing the sensitivity analyses, and the reasons for such changes. The Group did not have such changes.

IAS 19.145(a) requires disclosure of sensitivity analyses showing how the defined benefit obligation would be affected byreasonably possible changes in actuarial assumptions. The purpose of this publication is to illustrate the disclosuresrequired and therefore the changes in the assumptions provided in the sensitivity analyses above are not necessarilyreflective of those in the current markets.

The standard includes some overriding disclosure objectives and considerations that provide a framework to identify theoverall tone and extent of disclosures that should be included in the financial statement notes. For example, IAS 19.136indicates that entities should consider the following when providing defined benefit plan disclosures:

• The level of detail necessary to satisfy the disclosure requirements

• How much emphasis to place on each of the various requirements

• How much aggregation or disaggregation to undertake

• Whether users of financial statements need additional information to evaluate the quantitative information disclosed

These considerations were meant to assist entities in reconciling the overriding disclosure objective along with the factthat an extensive list of required disclosures still remains in the standard. In the Basis for Conclusions accompanyingIAS 19 (Revised 2011), the IASB emphasise that information that is immaterial is not required to be disclosed as set outin IAS 1.31.

The addition of clear disclosure objectives provides entities with an opportunity to take a fresh look at their definedbenefit plan disclosures. Eliminating immaterial disclosures would enhance the financial statement users’ ability to focuson those transactions and details that truly matter.

27. Share-based payment plansSenior Executive PlanUnder the Senior Executive Plan (SEP), share options of the parent are granted to senior executives of theparent with more than 12 months’ service. The exercise price of the share options is equal to the market priceof the underlying shares on the date of grant. The share options vest if and when the Group’s earnings per shareincrease by 10% within three years from the date of grant and the senior executive remains employed on suchdate. The share options granted will not vest if the earnings per share performance is not met. The fair value ofthe share options is estimated at the grant date using a binomial option pricing model, taking into account theterms and conditions upon which the share options were granted. However, the above performance condition isonly considered in determining the number of instruments that will ultimately vest.

The share options can be exercised up to two years after the three-year vesting period and therefore, thecontractual term of each option granted is five years. There are no cash settlement alternatives. The Groupdoes not have a past practice of cash settlement for these share options.

IFRS 2.45(a)

IFRS 2.46

IFRS 2.45(a)



27. Share-based payment plans continued

General Employee Share Option PlanUnder the General Employee Share Option Plan (GESP), the Group, at its discretion, may grant share options ofthe parent to employees other than senior executives, once the employee has completed two years of service.Vesting of the share options is dependent on the Group’s total shareholder return (TSR) as compared to a groupof principal competitors. Employees must remain in service for a period of three years from the date of grant.The fair value of share options granted is estimated at the date of grant using a Monte-Carlo simulation model,taking into account the terms and conditions on which the share options were granted. The model simulates theTSR and compares it against the group of principal competitors. It takes into account historical and expecteddividends, and the share price volatility of the Group relative to that of its competitors so as to predict the shareperformance.

IFRS 2.47(a)(iii)

The exercise price of the share options is equal to the market price of the underlying shares on the date of grant.The contractual term of the share options is five years and there are no cash settlement alternatives for theemployees. The Group does not have a past practice of cash settlement for these awards.

IFRS 2.46

Share Appreciation RightsEmployees in the business development group are granted share appreciation rights (SARs), which can onlybe settled in cash. These SARs vest when a specified target number of new sales contracts are closed withinthree years from the date of grant and the employee is employed at the vesting date. The share options can beexercised up to three years after the three-year vesting period and therefore, the contractual term of the SARsis six years. The fair value of the SARs is measured at each reporting date using a binomial option pricing modeltaking into account the terms and conditions on which the instruments were granted and the current likelihoodof achieving the specified target.

IFRS 2.45(a)IFRS 2.46

The carrying amount of the liability relating to the SARs at 31 December 2015 is €187,000 (2014: €82,000,1 January 2014: €nil). No SARs had vested, granted or forfeited at 31 December 2015 and 31 December 2014.

IFRS 2.51(b)

The expense recognised for employee services received during the year is shown in the following table:

2015 2014€000 €000

Expense arising from equity-settled share-based payment transactions 307 298Expense arising from cash-settled share-based payment transactions 105 335Total expense arising from share-based payment transactions 412 633 IFRS 2.51(a)

There have been no cancellations or modifications to any of the plans during 2015 or 2014.

Movements during the yearThe following table illustrates the number (No.) and weighted average exercise prices (WAEP) of, andmovements in, share options during the year (excluding SARs):

2015No.

2015WAEP

2014No.

2014WAEP

Outstanding at 1 January 575,000 €2.85 525,000 €2.75Granted during the year 250,000 €3.85 155,000 €3.03Forfeited during the year — — (25,000) €2.33Exercised during the year (75,000)2 €2.33 (65,000)1 €3.08 IFRS 2.45(c)

Expired during the year (25,000) €3.02 (15,000) €2.13

Outstanding at 31 December 725,000 €3.24 575,000 €2.85

Exercisable at 31 December 110,000 100,000 IFRS 2.45(d)

1 The weighted average share price at the date of exercise of these options was €4.09.2 The weighted average share price at the date of exercise of these options was €3.13.

IFRS 2.45(c)

The weighted average remaining contractual life for the share options outstanding as at 31 December 2015is 2.94 years (2014: 2.60 years).

The weighted average fair value of options granted during the year was €1.32 (2014: €1.18).

The range of exercise prices for options outstanding at the end of the year was €2.33 to €3.85(2014: €2.13 to €3.03).

IFRS 2.45(d)

IFRS 2.47(a)

IFRS 2.45(d)



27. Share-based payment plans continuedThe following tables list the inputs to the models used for the three plans for the years ended 31 December2015 and 31 December 2014:

IFRS 2.47(a)(i)

2015SEP

2015GESP

2015SAR

Weighted average fair values at the measurementdate (€)

3.45 3.10 2.80

Dividend yield (%) 3.13 3.13 3.13Expected volatility (%) 15.00 16.00 18.00Risk–free interest rate (%) 5.10 5.10 5.10Expected life of share options/SARs (years) 3.00 4.25 6.00Weighted average share price (€) 3.10 3.10 3.12Model used Binomial Monte Carlo Binomial

2014SEP

2014GESP

2014SAR

Weighted average fair values at the measurementdate (€)

3.30 3.00 2.60

Dividend yield (%) 3.01 3.01 3.01Expected volatility (%) 16.30 17.50 18.10Risk–free interest rate (%) 5.00 5.00 5.00Expected life of options/SARs (years) 3.00 4.25 6.00Weighted average share price (€) 2.86 2.86 2.88Model used Binomial Monte Carlo Binomial

The expected life of the share options and SARs is based on historical data and current expectations and is notnecessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption thatthe historical volatility over a period similar to the life of the options is indicative of future trends, which maynot necessarily be the actual outcome either.

IFRS 2.47(a)(ii)

28. Trade and other payables (current)

2015 2014As at

1 January 2014€000 €000 €000

Trade payables 17,640 19,496 18,725Other payables 1,833 1,495 1,565Interest payable 43 269 289Joint venture (Note 30) 30 12 9Other related parties (Note 30) 10 9 12

19,556 21,281 20,600

Terms and conditions of the above financial liabilities:

• Trade payables are non-interest bearing and are normally settled on 60-day terms

• Other payables are non-interest bearing and have an average term of six months

• Interest payable is normally settled quarterly throughout the financial year

• For terms and conditions relating to joint ventures and other related parties, refer to Note 30

For explanations on the Group’s liquidity risk management processes, refer to Note 17.5.

IFRS 7.39

IFRS 7.39(b)



29. Commitments and contingencies IAS 17.35(d)

Operating lease commitments — Group as lesseeThe Group has entered into commercial leases on certain motor vehicles and items of machinery. The leaseterms are between three and five years. The Group has the option, under some of its leases, to lease the assetsfor additional terms of three to five years.

Future minimum rentals payable under non-cancellable operating leases are, as follows: IAS 17.35(a)

2015 2014As at

1 January 2014€000 €000 €000

Within one year 255 250 165After one year but not more than five years 612 600 400More than five years 408 400 300

1,275 1,250 865

Operating lease commitments — Group as lessorThe Group has entered into commercial property leases on its investment property portfolio, consisting of theGroup’s surplus office and manufacturing buildings. These non-cancellable leases have remaining termsof between 5 and 20 years. All leases include a clause to enable upward revision of the rental charge on anannual basis according to prevailing market conditions. The total contingent rents recognised as income duringthe year is €13,900 (2014: €12,007).

IAS 17.56(c)

Future minimum rentals receivable under non-cancellable operating leases are, as follows:

2015 2014As at

1 January 2014 IAS 17.56(a)

€000 €000 €000Within one year 709 695 650After one year but not more than five years 2,815 2,760 2,100More than five years 5,901 5,864 3,500

9,425 9,319 6,250

Finance lease and hire purchase commitmentsThe Group has finance leases and hire purchase contracts for various items of plant and machinery. The Group’sobligations under finance leases are secured by the lessor’s title to the leased assets. Future minimum leasepayments under finance leases and hire purchase contracts, together with the present value of the net minimumlease payments are, as follows:

IAS 17.31(e)

2015 2014 As at 1 January 2014

Minimumpayments

Presentvalue of

payments(Note 17.2)

Minimumpayments

Presentvalue of

payments(Note 17.2)

Minimumpayments

Presentvalue of

payments(Note 17.2)

€000 €000 €000 €000 €000 €000Within one year 85 83 56 51 50 47After one year but notmore than five years 944 905 1,014 943 985 938More than five years — — — — — —Total minimum leasepayments 1,029 988 1,070 994 1,035 985 IAS 17.31(b)

Less amounts representingfinance charges (41) — (76) — (50) —Present value of minimumlease payments 988 988 994 994 985 985



29. Commitments and contingencies continued

CommentaryIAS 17 requires additional disclosures for material leasing arrangements, such as, the basis on which contingent rentpayable is determined; the existence and terms of renewal or purchase options and escalation clauses; and restrictionsimposed by the lease arrangements, such as dividends, additional debt and further leasing. Where these disclosures areabsent in the Group’s financial statements, it is because they are not applicable to the Group’s lease arrangements.

CommitmentsAt 31 December 2015, the Group had commitments of €2,310,000 (2014: €4,500,000, 1 January 2014: €Nil)relating to the completion of the fire equipment safety facility including €2,000,000 (2014: €Nil, 1 January2014: €Nil) and €310,000, (2014: €516,000, 1 January 2014: €Nil) relating to trade purchase commitmentsby the Group’s interest in the joint venture.

IAS 16.74(c)IFRS 12.23(a)IFRS 12.B18-B19

Legal claim contingencyAn overseas customer has commenced an action against the Group in respect of equipment claimed to bedefective. The claim is estimated to be €850,000 should the action be successful. A trial date has not yet beenset and. Therefore, it is not practicable to state the timing of the payment, if any.

The Group has been advised by its legal counsel that it is only possible, but not probable, that the actionwill succeed. Accordingly, no provision for any liability has been made in these financial statements.

IAS 37.86

GuaranteesThe Group has provided the following guarantees at 31 December 2015:

• Guarantee of 25% of the bank overdraft of the associate to a maximum amount of €500,000(2014: €500,000, 1 January 2014: €500,000), which is incurred jointly with other investors of theassociate (carrying amounts of the related financial guarantee contracts were €67,000 and €34,000 at31 December 2015 and 2014, respectively (1 January 2014: €32,000), see Note 17.2)

• Guarantee to an unrelated party for the performance in a contract by the joint venture.No liability is expected to arise

• Guarantee of its share of €20,000 (2014: €15,000, 1 January 2014: €Nil) of the associate’s contingentliabilities, which have been incurred jointly with other investors

IAS 24.21(h)IAS 24.19(d)IAS 24.19(e)

IAS 37.86

IFRS 12.23(b)

Contingent liabilitiesThe Group recognised a contingent liability of €400,000 in the course of the acquisition of ExtinguishersLimited. Refer to Note 5 for additional information.

30. Related party disclosures IAS 24.12

The financial statements include the financial statements of the Group and the subsidiaries listed in thefollowing table:

% equity interestNamePrincipal activities

Country ofincorporation 2015 2014

As at 1January 2014

Extinguishers LimitedFire preventionequipment Euroland 80.0 — —

IAS 24.13IFRS 12.10(a)

Bright Sparks LimitedFire preventionequipment Euroland 95.0 95.0 95.0

IFRS 12.12(a)

Wireworks Inc.Fire preventionequipment United States 98.0 98.0 98.0

IFRS 12.12(b)

Sprinklers Inc.Fire preventionequipment United States 100.0 100.0 100.0

Lightbulbs Limited Electronics Euroland 87.4 80.0 —Hose Limited Rubber

equipment Euroland 100.0 100.0 100.0Fire Equipment Test Lab Limited Fire prevention

equipment Euroland 100.0* — —Electronics Limited Electronics Euroland 48.0** 48.0 48.0



30. Related party disclosures continued IAS 24.12

The holding companyThe next senior and the ultimate holding company of the Good First-time Adopter (International) Limited is S.J.Limited which is based and listed in Euroland.

Entity with significant influence over the GroupInternational Fires P.L.C. owns 31.48% of the ordinary shares in Good First-time Adopter (International) Limited(2014: 31.48%, 1 January 2014: 31.48%).

AssociateThe Group has a 25% interest in Power Works Limited (2014: 25%, 1 January 2014: 25%).

Joint arrangement in which the Group is a joint venturerThe Group has a 50% interest in Showers Limited (2014: 50%, 1 January 2014: 50%).

* The Group holds 20% of the equity in Fire Equipment Test Lab Limited, but consolidates 100% of this entity.See Note 3 for details on interest held in Fire Equipment Test Lab Limited.

** The Group consolidates this entity based on de facto control. See Note 3 for more details.

CommentaryIFRS 12.10(a) requires entities to disclose information about the composition of the group. The list above disclosesinformation about the Group’s subsidiaries. Companies need to note that this disclosure is required for materialsubsidiaries only, rather than a full list of every subsidiary. The above illustrates one example as to how the requirementsset out in IFRS 12 can be met. However, local legislation or listing requirements may require disclosure of a full list of allsubsidiaries, whether material or not.

The following table provides the total amount of transactions that have been entered into with related partiesfor the relevant financial year:

IAS 24.17IAS 24.22

Sales torelatedparties

Purchasesfrom

relatedparties

Amountsowed byrelated

parties*

Amounts owed to relatedparties* IAS 24.17

€000 €000 €000 €000Entity with significant influenceover the Group:International Fires P.L.C. 2015 7,115 — 620 —

2014 5,975 — 550 —As at 1 January 2014 — — 445 —

Associate:Power Works Limited 2015 2,900 — 551 —

2014 2,100 — 582 —As at 1 January 2014 — — 602 —

Joint venture in which the Groupis a venturer:Showers Limited 2015 — 590 — 30

2014 — 430 — 12As at 1 January 2014 — — — 9

Key management personnel ofthe Group:Other directors’ interests 2015 225 510 — 10

2014 135 490 — 9As at 1 January 2014 — — — 12

* The amounts are classified as trade receivables and trade payables, respectively (see Notes 19 and 28).



30. Related party disclosures continued

Loans from/to related parties Interest receivedAmounts owed by

related parties IAS 24.17

Associate:Power Works Limited (Note 17.1) 2015 20 200

2014 — —As at 1 January 2014 — —

Key management personnel of the Group:Director’s loan (Note 17.1) 2015 1 13

2014 — 8As at 1 January 2014 — 8

Terms and conditions of transactions with related partiesThe sales to and purchases from related parties are made at terms equivalent to those that prevail in arm’slength transactions. Outstanding balances at the year-end are unsecured, interest free and settled in cash.There have been no guarantees provided or received for any related party receivables or payables. For the yearended 31 December 2015, the Group has not recorded any impairment of receivables relating to amounts owedby related parties (2014: €Nil, 1 January 2014: €Nil). This assessment is undertaken each financial year byexamining the financial position of the related party and the market in which the related party operates.

IAS 24.21IAS 24.18(b)

CommentaryThe disclosure that transactions with related parties are made on terms equivalent to an arm’s length transaction is onlyrequired if an entity can substantiate such terms, i.e., IAS 24.21 does not require such disclosure. The Group was able tosubstantiate the terms and therefore provide the disclosure.

Commitments with related partiesOn 1 July 2015, Bright Sparks Limited entered into a two-year agreement ending 30 June 2017 with WireworksInc. to purchase specific electrical and optical cables that Bright Sparks Limited uses in its production cycle.Bright Sparks Limited expects the potential purchase volume to be €750,000 in 2016 and €250,000 in the firstsix months of 2017 The purchase price is based on Wireworks Inc.’s actual cost plus a 5% margin and will besettled in cash within 30 days after receiving the inventories.

The Group has provided a contractual commitment to Bright Sparks Limited, whereby if the assets held ascollateral by Bright Sparks Limited for its borrowing fall below a credit rating of ‘AA’, the parent will substituteassets of an equivalent of ‘AA’ rating. The maximum fair value of the assets to be replaced is €200,000 as at31 December 2015 (2014 €210,000).The Group will not suffer a loss on any transaction arising from thiscommitment, but will receive assets with a lower credit rating from those substituted.

Loan to an associateThe loan granted to Power Works Limited is intended to finance an acquisition of new machines for themanufacturing of fire prevention equipment. The loan is unsecured and repayable in full on 1 June 2015.Interest is charged at 10%.

IAS 24.18(b)

IFRS 12.14-15

Transactions with key management personnelDirector’s loanThe Group offers to senior management a facility to borrow up to €20,000, repayable within five years from thedate of disbursement. Such loans are unsecured and the interest rate is the average rate incurred on long-termloans (currently EURIBOR + 0.8). Any loans granted are included in financial instruments on the face of thestatement of financial position.

IAS 24.13

IAS 24.17(b)

Other directors’ interestsDuring both 2015 and 2014, purchases at normal market prices were made by group companies from GnomeIndustries Limited. The spouse of one of the directors of the Group is a director and controlling shareholder ofthis company.

One director has a 25% (2014: 25%, 1 January 2014: 25%) equity interest in Home Fires Limited. The Group hasa contract for the supply of fire extinguishers to this company. During 2015 and 2014, the Group supplied fireextinguishers to Home Fires Limited at normal market prices.



30. Related party disclosures continued

Compensation of key management personnel of the Group

2015 2014€000 €000

Short-term employee benefits 435 424 IAS 24.16(a)

Post-employment pension and medical benefits 110 80 IAS 24.16(b)

Termination benefits 40 — IAS 24.16(d)

Share-based payment transactions 18 12 IAS 24.16(e)

Total compensation paid to key management personnel 603 516

The amounts disclosed in the table are the amounts recognised as an expense during the reporting periodrelated to key management personnel.

Generally, the non-executive directors do not receive pension entitlements from the Group. During 2015, anamount of €40,000 was paid to a director who retired from an executive director’s position in 2014.

Directors’ interests in the Senior Executive PlanShare options held by executive members of the Board of Directors under the senior executive plan to purchaseordinary shares have the following expiry dates and exercise prices:

Date of grant Expiry date Exercise price 2015 20141 January

2014 IAS 24.16(e)

Number of shares outstanding2014 2019 €2.33 10,000 10,000 —2014 2019 €3.13 83,000 83,000 —2015 2020 €3.85 27,000 — —

Total 120,000 93,000 —

No share options have been granted to the non-executive members of the Board of Directors under this scheme.Refer to Note 27 for further details on the scheme.

CommentaryCertain jurisdictions might require additional and more extensive disclosures, e.g., on remuneration and benefits of keymanagement personnel and members of the Board of Directors.

31. Standards issued but not yet effectiveThe standards and interpretations that are issued, but not yet effective up to the date of issuance of the Group’sfinancial statements are disclosed below. The Group intends to adopt these standards, if applicable, when theybecome effective.

IAS 8.30IAS 8.31(d)

IFRS 9 Financial InstrumentsIn July 2014, the IASB issued the final version of IFRS 9 Financial Instruments that replaces IAS 39 FinancialInstruments: Recognition and Measurement and all previous versions of IFRS 9. IFRS 9 brings together all threeaspects of the accounting for financial instruments project: classification and measurement, impairment andhedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with earlyapplication permitted. Except for hedge accounting, retrospective application is required but providingcomparative information is not compulsory. For hedge accounting, the requirements are generally appliedprospectively, with some limited exceptions.



31. Standards issued but not yet effective continuedThe Group plans to adopt the new standard on the required effective date. During 2015, the Group hasperformed a high-level impact assessment of all three aspects of IFRS 9. This preliminary assessment is basedon currently available information and may be subject to changes arising from further detailed analyses oradditional reasonable and supportable information being made available to the Group in the future. Overall, theGroup expects no significant impact on its balance sheet and equity except for the effect of applying theimpairment requirements of IFRS 9. The Group expects a higher loss allowance resulting in a negative impact onequity and will perform a detailed assessment in the future to determine the extent.

(a) Classification and measurement

The Group does not expect a significant impact on its balance sheet or equity on applying the classification andmeasurement requirements of IFRS 9. It expects to continue measuring at fair value all financial assetscurrently held at fair value. Quoted equity shares currently held as available-for-sale with gains and lossesrecorded in OCI will be measured at fair value through profit or loss instead, which will increase volatility inrecorded profit or loss. The AFS reserve currently in accumulated OCI will be reclassified to opening retainedearnings. Debt securities are expected to be measured at fair value through OCI under IFRS 9 as the Groupexpects not only to hold the assets to collect contractual cash flows but also to sell a significant amount on arelatively frequent basis.

The equity shares in non-listed companies are intended to be held for the foreseeable future. The Group expectsto apply the option to present fair value changes in OCI, and, therefore, in which case it believes the applicationof IFRS 9 would not have a significant impact. If the Group were not to apply that option, the shares would beheld at fair value through profit or loss, which would increase the volatility of recorded profit or loss.

Loans as well as trade receivables are held to collect contractual cash flows and are expected to give rise tocash flows representing solely payments of principal and interest. Thus, the Group expects that these willcontinue to be measured at amortised cost under IFRS 9. However, the Group will analyse the contractual cashflow characteristics of those instruments in more detail before concluding whether all those instruments meetthe criteria for amortised cost measurement under IFRS 9.

(b) Impairment

IFRS 9 requires the Group to record expected credit losses on all of its debt securities, loans and tradereceivables, either on a 12-month or lifetime basis. The Group expects to apply the simplified approach andrecord lifetime expected losses on all trade receivables, meaning that it would record lifetime expected lossesfor all trade receivables. The Group expects a significant impact on its equity due to unsecured nature of itsloans and receivables, but it will need to perform a more detailed analysis which considers all reasonable andsupportable information, including forward-looking elements to determine the extent of the impact.

(c) Hedge accounting

The Group believes that all existing hedge relationships that are currently designated in effective hedgingrelationships will still qualify for hedge accounting under IFRS 9. As IFRS 9 does not change the generalprinciples of how an entity accounts for effective hedges, the Group does not expect a significant impact as aresult of applying IFRS 9. The Group will assess possible changes related to the accounting for the time value ofoptions, forward points or the currency basis spread in more detail in the future.

IFRS 14 Regulatory Deferral AccountsIFRS 14 is an optional standard that allows an entity, whose activities are subject to rate-regulation, to continueapplying most of its existing accounting policies for regulatory deferral account balances upon its first-timeadoption of IFRS. Entities that adopt IFRS 14 must present the regulatory deferral accounts as separate lineitems on the statement of financial position and present movements in these account balances as separate lineitems in the statement of profit or loss and OCI. The standard requires disclosure of the nature of, and risksassociated with, the entity’s rate-regulation and the effects of that rate-regulation on its financial statements.IFRS 14 is effective for annual periods beginning on or after 1 January 2016. However, since the Group hasadopted IFRS on 1 January 2015, this standard would not apply.



31. Standards issued but not yet effective continuedIFRS 15 Revenue from Contracts with CustomersIFRS 15 was issued in May 2014 and establishes a five-step model to account for revenue arising from contractswith customers. Under IFRS 15 revenue is recognised at an amount that reflects the consideration to which anentity expects to be entitled in exchange for transferring goods or services to a customer.

The new revenue standard will supersede all current revenue recognition requirements under IFRS. Either a so-called full retrospective application or a modified retrospective application is required for annual periodsbeginning on or after 1 January 2018, when the IASB finalises their amendments to defer the effective date ofIFRS 15 by one year. Early adoption permitted. The Group plans to adopt the new standard on the requiredeffective date using the full retrospective method. During 2015, the Group performed a preliminary assessmentof IFRS 15, which is subject to changes arising from a more detailed ongoing analysis. Furthermore, the Groupis considering the clarifications issued by the IASB in an exposure draft in July 2015 and will monitor anyfurther developments.

The Group is in the business of providing fire prevention and electronics equipment and services. The equipmentand services are sold both on its own in separate identified contracts with customers and together as a bundledpackage of goods and/or services.

(a) Sale of goods

Contracts with customers in which equipment sale is the only performance obligation are not expected to haveany impact on the Group. The Group expects the revenue recognition to occur at a point in time when control ofthe asset is transferred to the customer, generally on delivery of the goods.

In applying IFRS 15, the Group considered the following:

(i) Variable consideration

Some contracts with customers provide a right of return, trade discounts or volume rebates. Currently, theGroup recognises revenue from the sale of goods measured at the fair value of the consideration received orreceivable, net of returns and allowances, trade discounts and volume rebates. If revenue cannot be reliablymeasured, the Group defers revenue recognition until the uncertainty is resolved. Such provisions give rise tovariable consideration under IFRS 15, and will be required to be estimated at contact inception.

IFRS 15 requires the estimated variable consideration to be constrained to prevent over-recognition of revenue.The Group continues to assess individual contracts to determine the estimated variable consideration andrelated constraint. The Group expects that application of the constraint may result in more revenue beingdeferred than is under current IFRS.

(ii) Warranty obligations

The Group provides warranties for general repairs and does not provide extended warranties or maintenanceservices in its contracts with customers. As such, the Group determines that such warranties are assurance-type warranties which will continue to be accounted for under IAS 37 Provisions, Contingent Liabilities andContingent Assets consistent with its current practice.

(iii) Loyalty points programme (GoodPoints)

The Group determines that the loyalty programme offered within its electronic segment gives rise to a separateperformance obligation because it provides a material right to the customer. Thus, it will need to allocate aportion of the transaction price to the loyalty programme based on relative stand-alone selling price instead ofthe allocation methodologies allowed under IFRIC 13 Customer Loyalty Programmes. As a result, the Groupexpects a change in the allocation of the consideration received and consequently the timing of the amount ofrevenue recognised in relation to the loyalty programme may be impacted. Consistent with currentrequirements in IFRIC 13, the Group expects that the revenue will still be recognised when the loyalty points areredeemed or expire. The Group is still analysing contracts with customers that have such elements and will needto perform further assessments in the future to quantify the financial impact to its financial statements.

(b) Rendering of servicesThe Group provides installation services within the fire prevention segment. These services are sold either ontheir own in contracts with the customers while others may be bundled together with the sale of equipment to acustomer. The Group has preliminarily assessed that the services are satisfied over time given that thecustomer simultaneously receives and consumes the benefits provided by the Group. Consequently, the Groupdoes not expect any significant impact to arise from these service contracts.



31. Standards issued but not yet effective continued

(c) Equipment received from customers

When an entity receives, or expects to receive, non-cash consideration, IFRS 15 requires that the fair value ofthe non-cash consideration is included in the transaction price. An entity would have to measure the fair valueof the non-cash consideration in accordance with IFRS 13 Fair Value Measurement.

The Group receives transfers of moulds and other tools for its manufacturing process from customers, whichare recognised at fair value as property, plant and equipment under IFRIC 18 Transfers of Assets fromCustomers, This is consistent with the requirements of IFRS 15 and the Group does not expect equipmentreceived from customers to have any resultant significant impact.

Amendments to IFRS 10, IFRS 12 and IAS 28 - Investment Entities: Applying the Consolidation ExceptionThe amendments address issues that have arisen in applying the investment entities exception under IFRS 10.The amendments to IFRS 10 clarify that the exemption (in IFRS 10.4) from presenting consolidated financialstatements applies to a parent entity that is a subsidiary of an investment entity, when the investment entitymeasures all of its subsidiaries at fair value. Furthermore, the amendments to IFRS 10 clarify that only asubsidiary of an investment entity that is not an investment entity itself and that provides support services tothe investment entity is consolidated. All other subsidiaries of an investment entity are measured at fair value.

The amendments to IAS 28 allow the investor, when applying the equity method, to retain the fair valuemeasurement applied by the investment entity associate or joint venture to its interests in subsidiaries. Theseamendments are effective for annual periods beginning on or after 1 January 2016. This amendment is notexpected to have any impact on the Group.

Amendments to IFRS 10 and IAS 28 - Sale or Contribution of Assets between an Investor and its Associateor Joint VentureThe amendments address the conflict between IFRS 10 and IAS 28 in dealing with the loss of control of asubsidiary that is sold or contributed to an associate or joint venture. The amendments clarify that the gain orloss resulting from the sale or contribution of assets that constitute a business, as defined in IFRS 3 BusinessCombinations, between an investor and its associate or joint venture, is recognised in full. Any gain or lossresulting from the sale or contribution of assets that do not constitute a business, however, is recognised only tothe extent of unrelated investors’ interests in the associate or joint venture. The amendments are effective forannual periods beginning on or after 1 January 2016. These amendments are not expected to have any impacton the Group.

Amendments to IFRS 11 Joint Arrangements: Accounting for Acquisitions of Interests in Joint OperationsThe amendments to IFRS 11 require that a joint operator accounting for the acquisition of an interest in a jointoperation, in which the activity of the joint operation constitutes a business must apply the relevant IFRS 3principles for business combinations accounting. The amendments also clarify that a previously held interest ina joint operation is not remeasured on the acquisition of an additional interest in the same joint operation whilejoint control is retained. In addition, a scope exclusion has been added to IFRS 11 to specify that theamendments do not apply when the parties sharing joint control, including the reporting entity, are undercommon control of the same ultimate controlling party.

The amendments apply to both the acquisition of the initial interest in a joint operation and the acquisition ofany additional interests in the same joint operation and are prospectively effective for annual periods beginningon or after 1 January 2016, with early adoption permitted. This amendment is not expected to have any impacton the Group.

Amendments to IAS 1 - Disclosure InitiativeThe amendments to IAS 1 Presentation of Financial Statements clarify, rather than significantly change, existingIAS 1 requirements.

The amendments clarify

• The materiality requirements in IAS 1

• That specific line items in the statement(s) of profit or loss and OCI and the statement of financial positionmay be disaggregated

• That entities have flexibility as to the order in which they present the notes to financial statements

• That the share of OCI of associates and joint ventures accounted for using the equity method must bepresented in aggregate as a single line item, and classified between those items that will or will not besubsequently reclassified to profit or loss




Furthermore, the amendments clarify the requirements that apply when additional subtotals are presentedin the statement of financial position and the statement(s) of profit or loss and other comprehensive income.The amendments are effective for annual periods beginning on or after 1 January 2016. The amendments arenot expected to have a significant impact on the Group.

Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and AmortisationThe amendments clarify the principle in IAS 16 and IAS 38 that revenue reflects a pattern of economic benefitsthat are generated from operating a business (of which the asset is part) rather than the economic benefits thatare consumed through use of the asset. As a result, a revenue-based method cannot be used to depreciateproperty, plant and equipment and may only be used in very limited circumstances to amortise intangibleassets. The amendments are effective prospectively for annual periods beginning on or after 1 January 2016,with early adoption permitted. These amendments are not expected to have any impact on the Group given thatit has not used a revenue-based method to depreciate its non-current assets.

Amendments to IAS 27 - Equity Method in Separate Financial StatementsThe amendments will allow entities to use the equity method to account for investments in subsidiaries, jointventures and associates in their separate financial statements. Entities already applying IFRS and electing tochange to the equity method in its separate financial statements will have to apply that change retrospectively.For first-time adopters of IFRS electing to use the equity method in its separate financial statements, they willbe required to apply this method from the date of transition to IFRS. The amendments are effective for annualperiods beginning on or after 1 January 2016, with early adoption permitted. These amendments will not haveany impact on the Group’s consolidated financial statements.

Annual Improvements 2012-2014 cycleThese improvements are effective for annual periods beginning on or after 1 January 2016. They include:

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

Assets (or disposal groups) are generally disposed of either through sale or distribution to owners. Theamendment clarifies that changing from one of these disposal methods to the other would not be considered anew plan of disposal, rather it is a continuation of the original plan. There is, therefore, no interruption of theapplication of the requirements in IFRS 5. This amendment must be applied prospectively.

IFRS 7 Financial Instruments: Disclosures

(i) Servicing contracts

The amendment clarifies that a servicing contract that includes a fee can constitute continuing involvement in afinancial asset. An entity must assess the nature of the fee and the arrangement against the guidance forcontinuing involvement in IFRS 7 in order to assess whether the disclosures are required. The assessment ofwhich servicing contracts constitute continuing involvement must be done retrospectively. However, therequired disclosures would not need to be provided for any period beginning before the annual period in whichthe entity first applies the amendments.

(ii) Applicability of the amendments to IFRS 7 to condensed interim financial statements

The amendment clarifies that the offsetting disclosure requirements do not apply to condensed interim financialstatements, unless such disclosures provide a significant update to the information reported in the most recentannual report. This amendment must be applied retrospectively.

IAS 19 Employee Benefits

The amendment clarifies that market depth of high quality corporate bonds is assessed based on the currency inwhich the obligation is denominated, rather than the country where the obligation is located. When there is nodeep market for high quality corporate bonds in that currency, government bond rates must be used. Thisamendment must be applied prospectively.

IAS 34 Interim Financial Reporting

The amendment clarifies that the required interim disclosures must either be in the interim financial statementsor incorporated by cross-reference between the interim financial statements and wherever they are includedwithin the interim financial report (e.g., in the management commentary or risk report). The other informationwithin the interim financial report must be available to users on the same terms as the interim financialstatements and at the same time. This amendment must be applied retrospectively. These amendments are notexpected to have any impact on the Group.




Amendments to IAS 16 and IAS 41 Agriculture: Bearer PlantsThe amendments change the accounting requirements for biological assets that meet the definition of bearerplants. Under the amendments, biological assets that meet the definition of bearer plants will no longer bewithin the scope of IAS 41. Instead, IAS 16 will apply. After initial recognition, bearer plants will be measuredunder IAS 16 at accumulated cost (before maturity) and using either the cost model or revaluation model (aftermaturity). The amendments also require that produce that grows on bearer plants will remain in the scope ofIAS 41 measured at fair value less costs to sell. For government grants related to bearer plants, IAS 20 willapply. The amendments are retrospectively effective for annual periods beginning on or after 1 January 2016,with early adoption permitted. These amendments are not expected to have any impact to the Group as theGroup does not have any bearer plants.

CommentaryIAS 8.30 requires disclosure of standards that have been issued but are not yet effective. These disclosures are requiredto provide known or reasonably estimable information to enable users to assess the possible impact of the application ofsuch IFRSs on an entity’s financial statements. The Group has listed all standards and interpretations that are not yeteffective, primarily for the illustrative purpose of these financial statements. An alternative that entities may considerwould be to only list and address the ones expected to have an impact on the Group’s financial position, performance,and/or disclosures.

Refer to our publications in our IFRS Core Tools package, Good Group (International) Limited 2015 — Illustrative financialstatements for the year ended 31 December 2015 and IFRS Update of standards and interpretations in issue at 30September 2015 for more information.

A first-time adopter is permitted to adopt a standard issued, but not yet effective, in its first IFRS annual financialstatements provided that the standard permits early adoption. Entities may wish to take this approach to reduce thenumber of accounting standard changes in the years immediately following transition to IFRS.

NOTE: The list above includes standards and interpretations in issue at 31 August 2015. Entities will need to determine ifany standards and/or interpretations were issued after this date.

32. Events after the reporting periodOn 14 January 2016, a building with a net book value of €1,695,000 was severely damaged by flooding andinventories with a net book value of €857,000 were destroyed. It is expected that insurance proceeds will fallshort of the costs of rebuilding and loss of inventories by €750,000.

IAS 10.21IAS 10.10


IAS 1.10(b),IAS 1.51(b,)(c)

2015 2014Notes €000 €000 IAS 1.51(d),(e)

Continuing operationsSale of goods 190,511 172,367 IAS 18.35(b)(i)

Rendering of services 17,131 16,537 IAS 18.35(b)(ii)

Revenue from redemption of GoodPoints 25 1,875 1,125 IAS 18.35(b)(ii)

Rental income 14 1,404 1,377 IAS 18.35(c)

Revenue 210,921 191,406 IAS 1.82(a)

Cost of sales (164,292) (155,621) IAS 1.103

Gross profit 46,629 35,785IAS 1.85,IAS 1.103

Other operating income 9.1 2,435 2,548 IAS 1.103

Selling and distribution costs (14,000) (13,002) IAS 1.103

Administrative expenses 9.9 (19,746) (13,542) IAS 1.103

Other operating expenses 9.2 (2,554) (353) IAS 1.103

Operating profit 12,764 11,436 IAS 1.82(a)

Finance costs 9.3 (1,366) (1,223)IAS 1.82(b),IFRS 7.20

Finance income 9.4 336 211 IAS 1.82(a)

Share of profit of an associate and a joint venture 7,8 671 638IAS 1.82(c),IAS 28.38

Profit before tax from continuing operations 12,405 11,062 IAS 1.85

Income tax expense 11 (3,893) (3,432)IAS 1.82(d),

IAS 12.77



Profit/(loss) after tax for the year from discontinued operations 10 220 (188)IAS 1.82(e),IFRS 5.33(a)

Profit for the year 8,732 7,442 IAS 1.82 (f)

Appendix 1 – Consolidated statement of comprehensiveincome (example of a single statement)

for the year ended 31 December 2015 IAS 1.10(b)IAS 1.51(b),(c)

CommentaryThe Group presents the statement of profit or loss in two separate statements. For illustrative purposes, the statementof profit or loss is presented as a single statement of comprehensive income in this appendix.



for the year ended 31 December 2015 continued IAS 1.10(b)IAS 1.51(b),(c)

2015 2014Notes €000 €000 IAS 1.51(d),(e)

Other comprehensive income IAS 1.82A

Other comprehensive income to be reclassified to profit or loss insubsequent periods:Net gain on hedge of a net investment 278 - IAS 39.102(a)


195 -

Exchange differences on translation of foreign operations (246) (117) IAS 21.32

Income tax effect - - IAS 21.52(b)

(246) (117)

Net movement on cash flow hedges 9.8 (732) 33 IFRS 7.23(c)

Income tax effect 220 (10) IAS 1.90

(512) 23

Net movement on available-for-sale financial assets 9.8 (60) (22)Income tax effect 18 6 IAS 1.90

(42) (16)

Net other comprehensive income to be reclassified to profit or lossin subsequent periods (605) (110) IAS 1.82A

Other comprehensive income not to be reclassified to profit or loss insubsequent periods:

Re-measurement gains and (losses) on defined benefit plans 26 311 (401)IAS 19.120(c)IAS 19.122

Income tax effect (94) 120 IAS 1.90

217 (281)

Revaluation of land and buildings 13 846 - IAS 16.39


592 -

Net other comprehensive income not to be reclassified to profit orloss in subsequent periods 809 (281) IAS 1.82A

Other comprehensive income (loss) for the year, net of tax 204 (391) IAS 1.81A(b)

Total comprehensive income for the year, net of tax 8,436 7,051 IAS 1.81A(c)

Attributable to:Equity holders of the parent 8,148 6,812 IAS 1.81B(b)(ii)

Non-controlling interests 288 239 IAS 1.81B(b)(i)

8,436 7,051


2015 2014€000 €000

Profit attributable to:Equity holders of the parent 8,426 7,203 IAS 1.83(a)(ii)

Non-controlling interests 306 239IAS 1.83(a)(i),IAS 27.27

8,732 7,442

Total comprehensive income attributable to:Equity holders of the parent 8,630 6,812 IAS 1.83(b)(ii)

Non-controlling interests 306 239IAS 1.83(b)(i),IAS 27.27

8,936 7,051

Earnings per share 12 IAS 33.66

• Basic, profit for the year attributable to ordinary equityholders of the parent €0.41 €0.38

• Diluted, profit for the year attributable to ordinary equityholders of the parent €0.40 €0.37

Earnings per share for continuing operations• Basic, profit from continuing operations attributable to

ordinary equity holders of the parent €0.39 €0.39• Diluted, profit from continuing operations attributable to

ordinary equity holders of the parent €0.39 €0.38

CommentaryThe Group presents, for illustrative purposes, the disclosure of a single statement of comprehensive income in thisAppendix.

The different components of comprehensive income are presented on a net basis in the statement above. Therefore, anadditional note is required to present the amount of reclassification adjustments and current year gains or losses.Alternatively, the individual components could have been presented within the statement of comprehensive income.


IAS 1.10(b)IAS 1.51(b)

for the year ended 31 December 2015 IAS 1.51(c)


Appendix 2 – Consolidated statement of profit or loss(example of expenses disclosed by nature)

IAS 1.10(b)

for the year ended 31 December 2015 IAS 1.51(b)(c)

CommentaryThe Group presents the statement of profit or loss disclosing expenses by function. For illustrative purposes, thestatement of profit or loss disclosing expenses by nature is presented in this appendix.

2015 2014Notes €000 €000 IAS 1.51(d)(e)

Continuing operationsSale of goods 190,511 172,367 IAS 18.35(b)(i)

Rendering of services 17,131 16,537 IAS 18.35(b)(ii)

Revenue from redemption of GoodPoints 1,875 1,125Rental income 1,404 1,377 IAS 18.35(c)

Revenue 210,921 191,406 IAS 1.82(a)

Other operating income 9.1 2,435 2,548 IAS 1.102

Changes in inventories of finished goods and work in progress (1,133) (3,791) IAS 1.102

Raw materials and consumables used (156,403) (131,438) IAS 1.102

Employee benefits expense 9.6 (35,883) (39,730) IAS 1.102

Depreciation and amortisation 13,15 (4,422) (3,256) IAS 1.102

Impairment of non-current assets 13,16 (200) (301)Other operating expenses 9.2 (2,554) (353) IAS 1.102

Finance costs 9.3 (1,366) (1,223) IAS 1.82(b)

Finance income 9.4 336 211 IAS 1.82(a)

Share of profit of an associate and a joint venture 7,8 671 638 IAS 1.82(c)

Profit before tax from continuing operations 12,405 11,062 IAS 1.85

Income tax expense 11 (3,893) (3,432)IAS 1.82(d)IAS 12.77



Profit/(loss) after tax for the year from discontinued operations 10 220 (188)IAS 1.82(ea)IFRS 5.33(a)

Profit for the year 8,732 7,442 IAS 1.81A(a)

Attributable to:Equity holders of the parent 8,426 7,203 IAS 1.81B(a)(ii)

Non-controlling interests 306 239 IAS 1.81B(a)(i)

8,732 7,442

Earnings per share 12 IAS 33.66

• Basic profit for the year attributable to ordinary equity holders ofthe parent €0.41 €0.38

• Diluted profit for the year attributable to ordinary equity holders ofthe parent €0.40 €0.37

Earnings per share for continuing operations• Basic profit from continuing operations attributable to ordinary

equity holders of the parent €0.39 €0.39• Diluted profit from continuing operations attributable to ordinary

equity holders of the parent €0.39 €0.38


Appendix 3 – Consolidated statement of cash flows – directmethod

for the year ended 31 December 2015

CommentaryIAS 7.18 allows entities to report cash flows from operating activities using either the direct method or the indirect method.The Group presents cash flows using the indirect method. However, the statement of cash flows prepared using the directmethod for operating activities is presented in this appendix for illustrative purposes.

2015 2014

IAS 1.10(d)IAS 1.51(b)(c)IAS 7.10

Notes €000 €000 IAS 1.51(d)(e)

Operating activities IAS 7.18(a)

Receipts from customers 227,965 236,037Payments to suppliers (165,231) (173,966)Payments to employees (43,954) (43,948)Interest received 336 211 IAS 7.31

Interest paid (1,438) (1,242) IAS 7.31

Income tax paid (3,759) (4,379) IAS 7.35

Net cash flows from operating activities 13,919 12,713

Investing activities 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 14 (1,216) (1,192) IAS 7.16(a)

Purchase of financial instruments (3,294) (225) IAS 7.16(c)

Proceeds from available-for-sale investments 232 — IAS 7.16(d)

Purchase of intangible assets 15 (587) (390) IAS 7.16(a)

Acquisition of a subsidiary 5 230 (1,450) IAS 7.39

Receipt of government grants 24 2,951 642Net cash flows used in investing activities (10,046) (8,118)

Financing activities IAS 7.21

Proceeds from exercise of share options 21 175 200 IAS 7.17(a)

Acquisition of non-controlling interest 5 (325) — IAS 7.42A

Transaction costs of issue of shares 21 (32) — IAS 7.17(a)

Payment of finance lease liabilities (51) (76) IAS 7.17(e)

Proceeds from borrowings 5,299 2,645 IAS 7.17(c)

Repayment of borrowings (1,806) (1,784) IAS 7.17(d)

Dividends paid to owners of the parent 22 (1,972) (1,600) IAS 7.31

Dividends paid to non-controlling interests (30) (49) IFRS 12.B10(a)

Net cash flows from/(used in) financing activities 1,258 (664)

Net increase in cash and cash equivalents 5,131 3,931Net foreign exchange difference 43 19 IAS 7.28

Cash and cash equivalents at 1 January 20 12,266 8,316

Cash and cash equivalents at 31 December 20 17,440 12,266 IAS 7.45

CommentaryIAS 7.33 permits interest paid to be shown as operating or financing activities and interest received to be shown asoperating or investing activities, as deemed relevant for the entity. The Group has decided to classify interest receivedas cash flows from operating activities and interest paid as cash flows from financing activities.


Appendix 4 – Information in other illustrative financialstatements availableIFRS are illustrated across our various illustrative financial statements, as follows:

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International Financial Reporting Standards (IFRS)

IFRS 1 First-time Adoption of International Financial Reporting Standards ü ü

IFRS 2 Share-based Payment ü ü ü ü ü

IFRS 3 Business Combinations ü ü ü ü ü ü ü

IFRS 4 Insurance Contracts

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

IFRS 6 Exploration for and Evaluation of Mineral Resources ü ü

IFRS 7 Financial Instruments: Disclosures ü ü ü ü ü ü ü ü

IFRS 8 Operating Segments ü ü ü ü ü ü ü ü

IFRS 9 Financial Instruments

IFRS 10 Consolidated Financial Statements ü ü ü ü

IFRS 11 Joint Arrangements ü ü ü ü ü

IFRS 12 Disclosure of Interests in Other Entities ü ü ü ü ü

IFRS 13 Fair Value Measurement ü ü ü ü ü

IFRS 14 Regulatory Deferral Accounts

IFRS 15 Revenue from Contracts with Customers

International Accounting Standards (IAS)

IAS 1 Presentation of Financial Statements ü ü ü ü ü ü ü ü

IAS 2 Inventories ü ü ü ü ü ü ü

IAS 7 Statement of Cash Flows ü ü ü ü ü ü ü ü

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors ü ü ü ü ü ü ü ü

IAS 10 Events after the Reporting Period ü ü ü ü ü ü ü ü

IAS 11 Construction Contracts ü

IAS 12 Income Taxes ü ü ü ü ü ü ü ü

IAS 16 Property, Plant and Equipment ü ü ü ü ü ü

IAS 17 Leases ü ü ü ü ü ü ü

IAS 18 Revenue ü ü ü ü ü ü ü ü

IAS 19 Employee Benefits ü ü ü ü ü ü

IAS 20 Accounting for Government Grants and Disclosure of GovernmentAssistance ü ü ü ü

IAS 21 The Effects of Changes in Foreign Exchange Rates ü ü ü ü ü ü ü ü

IAS 23 Borrowing Costs ü ü ü ü ü ü ü

IAS 24 Related Party Disclosures ü ü ü ü ü ü ü ü

IAS 26 Accounting and Reporting by Retirement Benefit Plans

IAS 27 Separate Financial Statements

IAS 28 Investments in Associates and Joint Ventures ü ü ü ü ü ü

IAS 29 Financial Reporting in Hyperinflationary Economies


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International Accounting Standards (IAS) continued

IAS 32 Financial Instruments: Presentation ü ü ü ü ü ü ü ü

IAS 33 Earnings per Share ü ü ü ü ü ü ü ü

IAS 34 Interim Financial Reporting ü

IAS 36 Impairment of Assets ü ü ü ü ü ü ü

IAS 37 Provisions, Contingent Liabilities and Contingent Assets ü ü ü ü ü ü ü ü

IAS 38 Intangible Assets ü ü ü ü ü ü ü

IAS 39 Financial Instruments: Recognition and Measurement ü ü ü ü ü ü ü ü

IAS 40 Investment Property ü ü ü ü ü

IAS 41 Agriculture

Interpretations

IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities ü ü ü ü ü ü

IFRIC 2 Members’ Shares in Co—operative Entities and Similar Instruments

IFRIC 4 Determining whether an Arrangement contains a Lease ü ü ü ü ü ü

IFRIC 5 Rights to Interests arising from Decommissioning, Restoration andEnvironmental Rehabilitation Funds ü ü ü

IFRIC 6 Liabilities arising from Participating in a Specific Market — WasteElectrical and Electronic Equipment ü ü ü ü

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

IFRIC 9 Reassessment of Embedded Derivatives ü ü ü

IFRIC 10 Interim Financial Reporting and Impairment ü ü ü

IFRIC 12 Service Concession Arrangements

IFRIC 13 Customer Loyalty Programmes ü ü ü ü

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

IFRIC 15 Agreements for the Construction of Real Estate ü

IFRIC 16 Hedges of a Net Investment in a Foreign Operation ü ü ü ü

IFRIC 17 Distributions of Non-cash Assets to Owners ü ü ü ü

IFRIC 18 Transfers of Assets from Customers ü ü ü ü

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments ü

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine ü

IFRIC 21 Levies ü ü ü

SIC 7 Introduction of the Euro

SIC 10 Government Assistance — No Specific Relation to Operating Activities

SIC 15 Operating Leases — Incentives ü ü ü ü ü

SIC 25 Income Taxes — Changes in the Tax Status of an Entity or its Shareholders ü SIC 27 Evaluating the Substance of Transactions Involving the Legal Form of a

Lease ü ü ü ü SIC 29 Service Concession Arrangements: Disclosures

SIC 31 Revenue — Barter Transactions Involving Advertising Services

SIC 32 Intangible Assets — Web Site Costs

ü This standard or interpretation is incorporated into these illustrative financial statements.

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This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.

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