annington annual rep 2019-web - Page 50



Financial statements | Consolidated cash flow statement
Notes to the financial statements
CONSOLIDATED CASH FLOW STATEMENT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2019
Net cash from operating activities
FOR THE YEAR ENDED 31 MARCH 2019
Note
2019
£’000
2018
£’000
26
173,425
157,518
(3,892)
(152)
169,533
157,366
14,310
37,487
Tax paid
Net cash inflow from operating activities
1. CORPORATE INFORMATION
Fair value measurement
Annington Limited (“the Company”) is a company incorporated
in the United Kingdom under the Companies Act 2006.
Certain of the Group’s accounting policies and disclosures
require the measurement of fair values. Fair values are
categorised into three different levels in a fair value hierarchy,
in accordance with IFRS 13 Fair Value Measurement, and
is based on the inputs used in the valuation techniques as
follows:
The Company is a private company limited by shares and is
registered in England and Wales. The address of its registered
office is 1 James Street, London W1U 1DR. Information on the
Group’s ultimate parent is presented in Note 33.
Investing activities
Proceeds from sale of investment properties
Purchase of investment properties
10
(86,539)
(39,438)
Purchase of plant and equipment
11
(156)
(106)
5, 12
12,777
28,978
12
3,925
7,775
638
844
(55,045)
35,540
Issue of shares
-
164,000
Proceeds from borrowings
-
3,401,260
Debt issuance costs
-
(25,071)
Repayment of borrowings
-
(3,512,364)
Purchase of offsetting swaps
-
(24,578)
(108,312)
(170,967)
Net cash outflow from financing activities
(108,312)
(167,720)
Net increase in cash and cash equivalents
6,176
25,186
156,607
131,421
162,783
156,607
Receipts from joint ventures
Loan repayments from joint ventures
Interest received
Net cash (outflow)/inflow from investing activities
Financing activities
Finance charges
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year

15
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The financial statements have been prepared in accordance
with International Financial Reporting Standards (“IFRS”) and
interpretations as adopted by the European Union. They have
also been prepared in accordance with the Companies Act
2006.
These financial statements are presented in pound sterling,
which is the functional currency of the parent company and the
Group. All values are rounded to the nearest thousand (£’000),
except where otherwise indicated. They have been prepared
on the historical cost basis, except for property revaluation
gains and losses, investment in subsidiary companies and
derivative financial instruments that are measured at revalued
amounts or fair values at the end of each reporting period, as
explained in the accounting policies below. Historical cost is
generally based on the fair value of the consideration given in
exchange for goods and services.
Level 1: Quoted prices (unadjusted) in active markets for
identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level
1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from
prices).
Level 3: Inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
Further information regarding the assumptions made in
measuring fair values is included in Note 10 and Note 20.
Critical accounting judgements and key sources of
estimation uncertainty
The preparation of the financial statements requires
management to make judgements, estimates and assumptions
that may affect the application of accounting policies and the
reported amounts of assets, liabilities, income and expenses.
The estimates and associated assumptions are based on
historical experience and other factors that are considered
relevant. Actual results may differ from these estimates.
Basis of consolidation
Valuation of investment properties
Subsidiaries are those entities controlled by the Group.
Control is assumed when the Group has the power to govern
the financial and operating policies of an entity, to benefit
from its activities. Consolidation of a subsidiary begins when
the Group obtains control over the subsidiary and ceases
when the Group loses control of the subsidiary. All intragroup
transactions, balances, income and expenses are eliminated on
consolidation.
The property portfolio is carried in the balance sheet at
fair value adjusted for related provisions that are disclosed
separately on the balance sheet. The fair value is determined
annually by professionally qualified external valuers. The
valuation of the investment properties portfolio is inherently
subjective as it utilises, among other factors, comparable
sales data and the expected future rental revenues. The valuer
exercises professional judgement when determining what
market observations are used in the assessment of fair value. If
any assumptions made in the valuation prove to be inaccurate,
this may mean that the value of the investment properties
portfolio differs from the valuation, which could have a material
effect on the financial position of the Group. Investment
property valuations are a key source of estimation uncertainty
for the Group.
Going concern
The financial statements are prepared on a going concern
basis as explained in the Going Concern section of the
Strategic Report.
Information about the valuation techniques and inputs used in
determining the fair value of investment properties is disclosed
in Note 10.
50 | Annington Limited Annual Report & Accounts 2019
Annington Limited Annual Report & Accounts 2019 | 51

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