REG - ITV PLC - Annual Report and Accounts 2014 <Origin Href="QuoteRef">ITV.L</Origin> - Part 7
26/03/2015 10:31
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risk of error.
3 Our application of materiality and an overview of the scope of our audit
The materiality for the Group financial statements as a whole was set at £25 million, determined with reference to a
benchmark of Group profit before tax, of which it represents 4.1%.
We report to the Audit Committee any corrected or uncorrected identified misstatements exceeding £1 million, in addition to
other identified misstatements that warranted reporting on qualitative grounds.
The Group's principal operations are in the United Kingdom and represent over 90% of Group revenue, 97% Group profit before
tax and 94% of Group total assets. Only the UK operations are scoped in for Group audit purposes. The Group audit team
performed the audit of the UK operations as if they were a single aggregated set of financial information using materiality
of £23 million.
Although not in scope for Group reporting purposes, in agreement with the Audit Committee, specified audit procedures were
also performed on two entities in the US by component auditors simultaneously with the audit of the Group and UK
operations. Together the above audit and these specified audit procedures covered 96% of total Group revenue, 99% of Group
profit before taxation; and 99% of total Group assets.
4 Our opinion on other matters prescribed by the Companies Act 2006 is unmodified
In our opinion:
· the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the
Companies Act 2006; and
· the information given in the Strategic Report and the Directors' Report for the financial year for which the
financial statements are prepared is consistent with the financial statements.
5 We have nothing to report in respect of the matters on which we are required to report by exception
Under ISAs (UK and Ireland) we are required to report to you if, based on the knowledge we acquired during our audit, we
have identified other information in the Annual Report that contains a material inconsistency with either that knowledge or
the financial statements, a material misstatement of fact, or that is otherwise misleading.
In particular, we are required to report to you if:
· we have identified material inconsistencies between the knowledge we acquired during our audit and the Directors'
statement that they consider that the annual report and financial statements taken as a whole is fair, balanced and
understandable and provides the information necessary for shareholders to assess the Group's performance, business model
and strategy; or
· the Audit Committee Report does not appropriately address matters communicated by us to the Audit Committee.
· Under the Companies Act 2006 we are required to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
· the parent company financial statements and the part of the Directors' Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
· certain disclosures of Directors' remuneration specified by law are not made; or
· we have not received all the information and explanations we require for our audit.
· Under the Listing Rules we are required to review:
· the Directors' statement, set out on page 66, in relation to going concern; and
· the part of the Corporate Governance Statement on pages 68 to 74 relating to the Company's compliance with the ten
provisions of the 2012 UK Corporate Governance Code specified for our review.
We have nothing to report in respect of the above responsibilities.
Scope and responsibilities
As explained more fully in the Directors' Responsibilities Statement set out on page 66, the Directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and
fair view. A description of the scope of an audit of financial statements is provided on the Financial Reporting Council's
website at www.frc.org.uk/auditscopeukprivate. This report is made solely to the Company's members as a body
and is subject to important explanations and disclaimers regarding our responsibilities, published on our website at
www.kpmg.com/uk/auditscopeukco2014a, which are incorporated into this report as if set out in full and should be read to
provide an understanding of the purpose of this report, the work we have undertaken and the basis of our opinions.
Mark Summerfield (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London
E14 5GL
4 March 2015
Introduction
In this section . . .
The financial statements have been presented in a style which attempts to make them less complex and more relevant to
shareholders. We have grouped the note disclosures into five sections: 'Basis of Preparation', 'Results for the Year',
'Operating Assets and Liabilities', 'Capital Structure and Financing Costs' and 'Other Notes'. Each section sets out the
accounting policies applied in producing the relevant notes, along with details of any key judgements and estimates used.
The purpose of this format is to provide readers with a clearer understanding of what drives financial performance of the
Group. The aim of the text in boxes is to provide commentary on each section, or note, in plain English.
Keeping it simple . . .
Notes to the financial statements provide information required by statute, accounting standards or Listing Rules
to explain a particular feature of the financial statements. The notes which follow will also provide explanations
and additional disclosure to assist readers' understanding and interpretation of the Annual Report and the
financial statements.
Consolidated Income Statement
For the year ended 31 December Note 2014£m 2013£m
Revenue 2.1 2,590 2,389
Operating costs (1,939) (1,843)
Operating profit 651 546
Presented as:
Earnings before interest, tax, amortisation (EBITA) before exceptional items 2.1 730 620
Operating exceptional items 2.2 (12) (8)
Amortisation of intangible assets 3.3 (67) (66)
Operating profit 651 546
Financing income 4.4 22 10
Financing costs 4.4 (73) (125)
Net financing costs 4.4 (51) (115)
Share of losses of joint ventures and associated undertakings 2.1 - (2)
Gain on sale of non-current assets (exceptional items) 2.2 4 -
Gain on sale of subsidiaries and investments (exceptional items) 2.2 1 6
Profit before tax 605 435
Taxation 2.3 (132) (105)
Profit for the year 473 330
Profit attributable to:
Owners of the Company 466 326
Non-controlling interests 7 4
Profit for the year 473 330
Earnings per share
Basic earnings per share 2.4 11.6p 8.3p
Diluted earnings per share 2.4 11.5p 8.1p
Consolidated Statement of Comprehensive Income
For the year ended 31 December Note 2014£m 2013£m
Profit for the year 473 330
Other comprehensive income:
Items that are or may be reclassified to profit or loss
Revaluation of available for sale financial assets 4.6.4 3 (3)
Net loss on cash flow hedges 4.3/ 4.6.3 (4) -
Exchange differences on translation of foreign operations 4.6.3 22 (6)
Items that will never be reclassified to profit or loss
Remeasurement gains on defined benefit pension schemes 3.7 24 48
Income tax charge on items that will never be reclassified 2.3 (3) (13)
Other comprehensive income/(cost) for the year, net of income tax 21 26
Total comprehensive income for the year 515 356
Total comprehensive income attributable to:
Owners of the Company 508 352
Non-controlling interests 7 4
Total comprehensive income for the year 515 356
Consolidated Statement of Financial Position
As at 31 December Note 2014£m 2013£m
Non-current assets
Property, plant and equipment 3.2 248 259
Intangible assets 3.3 1,129 954
Investments in joint ventures, associates and equity investments 3.5 14 4
Derivative financial instruments 4.3 16 41
Distribution rights 3.1.1 13 10
Net deferred tax asset 2.3 43 52
1,463 1,320
Current assets
Programme rights and other inventory 3.1.2 367 322
Trade and other receivables due within one year 3.1.4 385 388
Trade and other receivables due after more than one year 3.1.4 24 14
Trade and other receivables 409 402
Derivative financial instruments 4.3 11 32
Cash and cash equivalents 4.1 297 518
1,084 1,274
Current liabilities
Borrowings 4.2 (85) (62)
Derivative financial instruments 4.3 (12) (6)
Trade and other payables due within one year 3.1.5 (699) (702)
Trade payables due after more than one year 3.1.6 (27) (42)
Trade and other payables (726) (744)
Current tax liabilities (72) (36)
Provisions 3.6 (17) (19)
(912) (867)
Net current assets 172 407
Non-current liabilities
Borrowings 4.2 (171) (318)
Derivative financial instruments 4.3 (12) (27)
Defined benefit pension deficit 3.7 (346) (445)
Other payables (38) (40)
Provisions 3.6 (4) (8)
(571) (838)
Net assets 1,064 889
Attributable to equity shareholders of the parent company
Share capital 4.6.1 403 403
Share premium 4.6.1 174 174
Merger and other reserves 4.6.2 228 248
Translation reserve 25 7
Available for sale reserve 7 4
Retained earnings 177 22
Total equity attributable to equity shareholders of the parent company 1,014 858
Non-controlling interests 50 31
Total equity 1,064 889
The accounts were approved by the Board of Directors on 4 March 2015 and were signed on its behalf by:
Ian Griffiths
Group Finance Director
Consolidated Statement of Changes in Equity
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