As required by European Union (EU) law, the Group’s financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, which comprise standards and interpretations approved by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC), applicable Irish law and the Listing Rules of the Irish and London Stock Exchanges. Details of the basis of preparation and the significant accounting policies are outlined on pages 67 to 77.
FINANCE COSTS, INCOME TAX AND SHAREHOLDER RETURNS
Net finance costs reduced to €5.1million
(2011: €9.4 million) reflecting a reduction
in average drawn debt levels and the
associated reduction in issue cost
amortisation charges, the benefit of
which was partially offset by an increase
in effective interest rates. The average
interest rate paid was 3.4% (2011: 2.5%)
reflecting the increased weighting of debt
subject to an ‘out of money’ fixed rate swap
contract. On a time weighted basis average
drawn debt reduced from €305 million
during FY 2011 to €92 million in FY 2012.
Net finance costs are also inclusive of an
unwind of discount on provisions charge of
€1.0 million (2011: €1.0 million).
The Group posted to operating profits
a net income of €3.1 million before tax
in relation to a number of items which
due to their nature and materiality
were classified as exceptional items
for reporting purposes; a presentation
which in the opinion of the Board
provides a more helpful analysis of the
underlying performance of the Group.
BALANCE SHEET STRENGTH, DEBT MANAGEMENT AND CASHFLOW GENERATION
A key strength of the Group, and one
which leaves the Group ideally placed
to invest in its brands, business and
customer base, and, to access growth
potential in what is a challenging
economic and financial climate, is the
strength of its balance sheet.
The prior year’s free cash flow
conversion rate benefited from a oneoff
positive working capital benefit
arising from the timing of cashflows
transferring to the Group from AB
Inbev under the transitional services
RETIREMENT BENEFIT OBLIGATIONS
In compliance with IFRS, the net assets
and actuarial liabilities of the various
defined benefit pension schemes
operated by the Group companies,
computed in accordance with IAS 19
Employee Benefits, are included on
the face of the Group balance sheet as
retirement benefit obligations.
All other significant assumptions applied in the measurement of the Group’s pension obligations at 29 February 2012 are consistent with those as applied at 28 February 2011.
FINANCIAL RISK MANAGEMENT
The most significant financial market
risks that the Group is exposed to
include foreign currency exchange rate
risk, commodity price fluctuations,
interest rate risk and creditworthiness
risk in relation to its counterparties.
UNGEARED BALANCE SHEET
CHIEF FINANCIAL OFFICER'S REVIEW