Notes to the Financial Statements

1. Summary of Significant Accounting Policies

3. Critical Accounting Estimates and Judgments

1. Summary of Significant Accounting Policies
Statement of Compliance
The consolidated financial statements of DCC plc have been prepared in accordance with International Financial Reporting Standards (IFRS) and their interpretations approved by the International Accounting Standards Board (IASB) as adopted by the European Union (EU) and those parts of the Companies Acts, 1963 to 2006 applicable to companies reporting under IFRS. Both the Parent Company and the Group financial statements have been prepared in accordance with IFRS as adopted by the EU. In presenting the Parent Company financial statements together with the Group financial statements, the Company has availed of the exemption in Section 148(8) of the Companies Act 1963 not to present its individual Income Statement and related notes that form part of the approved Company financial statements. The Company has also availed of the exemption from filing its individual Income Statement with the Registrar of Companies as permitted by Section 7(1A) of the Companies (Amendment) Act 1986.

Basis of Preparation
The consolidated financial statements, which are presented in euro, rounded to the nearest thousand, have been prepared under the historical cost convention, as modified by the measurement at fair value of share options and derivative financial instruments. The carrying values of recognised assets and liabilities that are hedged are adjusted to record changes in the fair values attributable to the risks that are being hedged.

The accounting policies applied in the preparation of the financial statements for the year ended 31 March 2009 are set out below. These policies have been applied consistently by the Group’s subsidiaries, joint ventures and associates for all periods presented in these consolidated financial statements.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. In addition, it requires management to exercise judgment in the process of applying the Company’s accounting policies. The areas involving a high degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are documented in note 3.

Standards, interpretations and amendments to published standards that are not yet effective
The Group has not applied certain new standards, amendments and interpretations to existing standards that have been issued but are not yet effective. These include the following:

•	Improvements to IFRSs (effective date: DCC financial year beginning 1 April 2009). The improvements include changes in presentation, recognition and measurement plus terminology and editorial changes. These improvements are not expected to have a significant impact on the Group’s accounts.
•	IFRS 1 Revised First-time Adoption of International Financial Reporting Standards (effective date: DCC financial year beginning 1 April 2010). This revised standard clarifies the requirements for first-time adoption of new and amended IFRSs. This standard will not have a significant impact on the Group’s accounts.
•	Amendment to IFRS 2 Share-based Payments: Vesting Conditions and Cancellations (effective date: DCC financial year beginning 1 April 2009). This amendment clarifies the accounting treatment of cancellations and vesting conditions. This amendment will have no impact on the Group’s accounts.
•	IFRS 3 Revised Business Combinations (effective date: DCC financial year beginning 1 April 2010). This standard establishes principles for how an acquirer recognises, measures and discloses in its financial statements the goodwill acquired in the business combination and the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree. The impact on the Group’s accounts will be dependent on future acquisitions.
•	IFRS 8 Operating Segments (effective date: DCC financial year beginning 1 April 2009). IFRS 8 replaces IAS 14 and uses a ‘management approach’ under which segment information is presented on the same basis as that used for internal reporting purposes. Whilst the application of IFRS 8 will result in amendments to the segment information note, this amendment will not be of a recognition and measurement nature.
•	Amendment to IAS 1 Presentation of Financial Statements (Revised) (effective date: DCC financial year beginning 1 April 2009). This amendment sets overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content. IAS 1 will have an impact on the presentation of the financial statements of the Group, however, this is not expected to be significant.
•	Amendment to IAS 23 Borrowing Costs (effective date: DCC financial year beginning 1 April 2009). This amendment requires an entity to capitalise borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, as part of the cost of that asset. This amendment will not have any effect on the Group’s financial statements.
•	Amendment to IAS 27 Consolidated and Separate Financial Statements (effective date: DCC financial year beginning 1 April 2010). The objective of this amendment is to enhance the relevance, reliability and comparability of the information that a parent entity provides in its separate financial statements and in its consolidated financial statements for a group of entities under its control. The introduction of this amendment will impact on Group reporting but this is not expected to be significant.
•	Amendment to IAS 32 Puttable Financial Instruments and Obligations Arising on Liquidation (effective date: DCC financial year beginning 1 April 2009). This amendment will have no effect on the Group’s financial statements.
•	Amendment to IAS 39 Eligible Hedged Items (effective date: DCC financial year beginning 1 April 2010). This amendment clarifies how the principles that determine whether a hedged risk (or portions of cash flows) is eligible for designation should be applied. This amendment will not have a significant impact on the Group’s financial statements.
•	IFRIC Interpretation 13 Customer Loyalty Programmes (effective date: DCC financial year beginning 1 April 2009). This interpretation gives guidance on accounting for customer loyalty award credits. This IFRIC will have no effect on the Group’s financial statements.
•	IFRIC Interpretation 15 Agreements for the Construction of Real Estate (effective date: DCC financial year beginning 1 April 2009). This interpretation gives guidance on determining the recognition of revenue among real estate developers. This IFRIC will have no effect on the Group’s financial statements.
•	IFRIC Interpretation 16 Hedges of a Net Investment in a Foreign Operation (effective date: DCC financial year beginning 1 April 2009). This interpretation provides guidance on accounting for the hedge of a net investment in a foreign operation in an entity’s consolidated financial statements. This IFRIC will have no effect on the Group’s financial statements.
•	IFRIC Interpretation 17 Distributions of Non-cash Assets to Owners (effective date: DCC financial year beginning 1 April 2010). This interpretation gives guidance on measuring the distribution of assets, other than cash, when paying a dividend to the owners of the entity. This IFRIC will have no effect on the Group’s financial statements.
•	IFRIC Interpretation 18 Transfers of Assets from Customers (effective date: DCC financial year beginning 1 April 2010). This interpretation gives guidance for utility companies on receipt from customers of property, plant and equipment that must be used to connect those customers to a utilities network. This IFRIC will have no effect on the Group’s financial statements.

Basis of Consolidation
Subsidiaries
Subsidiaries are entities that are controlled by the Group. Control exists where the Group has the power, directly or indirectly, to govern the financial and operating policies of the entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account.

The results of subsidiary undertakings acquired or disposed of during the year are included in the Group Income Statement from the date of their acquisition or up to the date of their disposal. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group.

Joint ventures
In accordance with IAS 31 Interests in Joint Ventures, the Group’s share of results and net assets of joint ventures, which are entities in which the Group holds an interest on a long-term basis and which are jointly controlled by the Group and one or more other venturers under a contractual arrangement, are accounted for on the basis of proportionate consolidation from the date on which the contractual agreements stipulating joint control are finalised and are derecognised when joint control ceases. All of the Group’s joint ventures are jointly controlled entities within the meaning of IAS 31. The Group combines its share of the joint ventures’ individual income and expenses, assets and liabilities and cash flows on a line-by-line basis with similar items in the Group’s financial statements.

Associates
Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The Group’s investment in associates includes goodwill identified on acquisition, net of any accumulated impairment loss. Goodwill attributable to investments in associates is treated in accordance with the accounting policy for goodwill.

The Group’s share of its associates’ post-acquisition profits or losses is recognised in the Group Income Statement, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

The results of associates are included from the effective date on which the Group obtains significant influence and are excluded from the effective date on which the Group ceases to have significant influence.

Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised gains arising from such transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the Group’s interest in the entity. Unrealised losses are eliminated in the same manner as unrealised gains, but only to the extent that there is no evidence of impairment.

Revenue Recognition
Revenue comprises the fair value of the sale of goods and services to external customers net of value added tax, rebates and discounts. Revenue from the sale of goods is recognised when significant risks and rewards of ownership of the goods are transferred to the buyer, which generally arises on delivery, or in accordance with specific terms and conditions agreed with customers. Revenue from the rendering of services is recognised in the period in which the services are rendered.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

Dividend income from investments is recognised when shareholders’ rights to receive payment have been established.

Segment Reporting
A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those other segments. Arising from the Group’s internal organisational structure and its system of internal financial reporting, segmentation by business is regarded as being the predominant source and nature of the risks and returns facing the Group and is thus the primary segment. Geographical segmentation is the secondary segment.

Foreign Currency Translation
Functional and presentation currency
The consolidated financial statements are presented in euro which is the Company’s functional and the Group’s presentation currency. Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates.

Transactions and balances
Transactions in foreign currencies are recorded at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. Currency translation differences on monetary assets and liabilities are taken to the Group Income Statement except when cash flow and net investment hedge accounting is applied.

Group companies
Results and cash flows of subsidiaries, joint ventures and associates which do not have the euro as their functional currency are translated into euro at average exchange rates for the year. Average exchange rates are a reasonable approximation of the cumulative effect of the rates on the transaction dates. The related balance sheets are translated at the rates of exchange ruling at the balance sheet date. Adjustments arising on translation of the results of such subsidiaries, joint ventures and associates at average rates, and on the restatement of the opening net assets at closing rates, are dealt with in a separate translation reserve within equity, net of differences on related currency instruments designated as hedges of such investments.

On disposal of a foreign operation, such cumulative currency translation differences are recognised in the Income Statement as part of the overall gain or loss on disposal. In accordance with IFRS 1, cumulative currency translation differences arising prior to the transition date to IFRS (1 April 2004) have been set to zero for the purposes of ascertaining the gain or loss on disposal of a foreign operation.

Goodwill and fair value adjustments arising on acquisition of a foreign operation are regarded as assets and liabilities of the foreign operation, are expressed in the functional currency of the foreign operation and are recorded at the exchange rate at the date of the transaction and subsequently retranslated at the applicable closing rates.

Exceptional Items
The Group has adopted an Income Statement format which seeks to highlight significant items within the Group results for the year. Such items may include restructuring, profit or loss on disposal or termination of operations, litigation costs and settlements, profit or loss on disposal of investments, profit or loss on disposal of property, plant and equipment, IAS 39 ineffective mark to market movements and impairment of assets. Judgment is used by the Group in assessing the particular items, which by virtue of their scale and nature, should be presented in the Income Statement and disclosed in the related notes as exceptional items.

Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation is provided on a straight-line basis at the rates stated below, which are estimated to reduce each item of property, plant and equipment to its residual value level by the end of its useful life:

	Annual Rate
Freehold and long term leasehold buildings	2%
Plant and machinery	5 - 33⅓%
Cylinders	6⅔%
Motor vehicles	10 - 33⅓%
Fixtures, fittings & office equipment	10 - 33⅓%

Land is not depreciated. The residual values and useful lives of property, plant and equipment are reviewed, and adjusted if appropriate, at each balance sheet date.

In accordance with IAS 36 Impairment of Assets, the carrying amounts of items of property, plant and equipment are reviewed at each balance sheet date to determine whether there is any indication of impairment. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.

Impairment losses are recognised in the Income Statement. Following the recognition of an impairment loss, the depreciation charge applicable to the asset or cash-generating unit is adjusted prospectively in order to systematically allocate the revised carrying amount, net of any residual value, over the remaining useful life.

Subsequent costs are included in an asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the replaced item can be measured reliably. All other repair and maintenance costs are charged to the Income Statement during the financial period in which they are incurred.

Borrowing costs directly attributable to the construction of property, plant and equipment are capitalised as part of the cost of those assets.

Business Combinations
The purchase method of accounting is employed in accounting for the acquisition of subsidiaries by the Group. The Group elected to avail of the exemption under IFRS 1 First-time Adoption of International Financial Reporting Standards, whereby business combinations prior to the transition date of 1 April 2004 are not restated. IFRS 3 Business Combinations was therefore applied with effect from the transition date of 1 April 2004 and goodwill amortisation ceased from that date.

The cost of a business combination is measured as the aggregate of the fair value at the date of exchange of assets given, liabilities incurred or assumed and equity instruments issued in exchange for control together with any directly attributable expenses. Where acquisitions involve further payments which are deferred or contingent on levels of performance achieved in the years following the acquisition, the fair value of the deferred component is determined through discounting the amounts payable to their present value. The discount component is unwound as an interest charge in the Income Statement over the life of the obligation. When the initial accounting for a business combination is determined provisionally, any adjustments to the provisional values allocated to assets and liabilities are made within twelve months of the acquisition date and reflected as a restatement of the acquisition balance sheet.

Minority Interests
The interest of minority shareholders is stated at the minority’s proportion of the fair values of the assets and liabilities recognised. Subsequently, any losses applicable to the minority interest in excess of the minority interest are allocated against interests of the parent.

The Group applies a policy of treating transactions with minority interests as transactions with parties external to the Group. Disposals to minority interests result in gains and losses for the Group that are recorded in the Income Statement. Purchases from minority interests result in goodwill, being the difference between any consideration paid and the relevant share acquired of the carrying value of the net assets of the subsidiary.

Goodwill
Goodwill arising in respect of acquisitions completed prior to 1 April 2004 (being the transition date to IFRS) is included at its carrying amount, which equates to its net book value recorded under previous GAAP. In accordance with IFRS 1, the accounting treatment of business combinations undertaken prior to the transition date (1 April 2004) was not reconsidered and goodwill amortisation ceased with effect from the transition date.

Goodwill on acquisitions is initially measured at cost being the excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Goodwill acquired in a business combination is allocated, from the acquisition date, to the cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose.

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

The carrying amount of goodwill in respect of associates, net of any impairment, is included in investments in associates under the equity method in the Group Balance Sheet.

Goodwill is subject to impairment testing on an annual basis and at any time during the year if an indicator of impairment is considered to exist; the goodwill impairment tests are undertaken at a consistent time in each annual period. Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised. Impairment losses arising in respect of goodwill are not reversed following recognition.

Where a subsidiary is sold, any goodwill arising on acquisition, net of any impairments, is included in determining the profit or loss arising on disposal.

Where goodwill forms part of a cash-generating unit and part of the operations within that unit are disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured on the basis of the relative values of the operation disposed of and the proportion of the cash-generating unit retained.

Intangible Assets (other than Goodwill)
Intangible assets acquired separately are capitalised at cost. Intangible assets acquired in the course of a business combination are capitalised at fair value being their deemed cost as at the date of acquisition.

Following initial recognition, intangible assets which have a finite life are carried at cost less any applicable accumulated amortisation and any accumulated impairment losses. Where amortisation is charged on assets with finite lives this expense is taken to the Income Statement.

The amortisation of intangible assets is calculated to write-off the book value of intangible assets over their useful lives on a straight-line basis on the assumption of zero residual value. In general, finite-lived intangible assets are amortised over periods ranging from two to six years, depending on the nature of the intangible asset.

The carrying amount of finite-lived intangible assets are reviewed for indicators of impairment at each reporting date and are subject to impairment testing when events or changes in circumstances indicate that the carrying values may not be recoverable. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the asset to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are capitalised as assets of the Group at the inception of the lease at the lower of the fair value of the leased asset and the present value of the minimum lease payments. The corresponding liability to the lessor is included in the Balance Sheet as a short, medium or long term lease obligation as appropriate. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in the Income Statement.

Rentals payable under operating leases (net of any incentives received from the lessor) are charged to the Income Statement on a straight line basis over the term of the relevant lease.

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

Cost is determined on a first in first out basis and in the case of raw materials, bought-in goods and expense inventories comprises purchase price plus transport and handling costs less trade discounts and subsidies. Cost, in the case of products manufactured by the Group, consists of direct material and labour costs together with the relevant production overheads based on normal levels of activity. Net realisable value represents the estimated selling price less costs to completion and appropriate selling and distribution costs.

Provision is made, where necessary, for slow moving, obsolete and defective inventories.

Trade Receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method less provision for impairment.

A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default in payments are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows. The amount of the provision is recognised in the Income Statement.

Trade Payables
Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost, which approximates to fair value given the short-dated nature of these liabilities.

Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in hand and short term deposits with an original maturity of three months or less.

For the purpose of the Group Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above net of bank overdrafts.

Derivative Financial Instruments
The Group uses derivative financial instruments (principally interest rate, currency and cross currency interest rate swaps and forward foreign exchange and commodity contracts) to hedge its exposure to interest rate and foreign exchange risks and to changes in the prices of certain commodity products arising from operational, financing and investment activities.

Derivative financial instruments are recognised on inception at fair value, being the present value of estimated future cash flows. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

Hedging
For the purposes of hedge accounting, hedges are designated either as fair value hedges (which entail hedging the exposure to movements in the fair value of a recognised asset or liability or a firm commitment that are attributable to hedged risks) or cash flow hedges (which hedge exposure to fluctuations in future cash flows derived from a particular risk associated with a recognised asset or liability or a highly probable forecast transaction).

The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

The fair values of various derivative instruments used for hedging purposes are disclosed in note 28 and the movements on the hedging reserve in shareholders’ equity are shown in note 38. The full fair value of a hedging derivative is classified as a non-current asset or liability if the remaining maturity of the hedged item is more than twelve months, and as a current asset or liability if the remaining maturity of the hedged item is less than twelve months.

Fair value hedge
In the case of fair value hedges which satisfy the conditions for hedge accounting, any gain or loss arising from the re-measurement of the fair value of the hedging instrument is reported in the Income Statement within ‘Finance Costs’ or ‘Finance Income’.

In addition, any gain or loss on the hedged item which is attributable to the hedged risk is adjusted against the carrying amount of the hedged item and reflected in the Income Statement within ‘Finance Costs’ or ‘Finance Income’.

If a hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of the hedged item is amortised to the Income Statement over the period to maturity.

Cash flow hedge
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability or a highly probable forecasted transaction, the effective part of any gain or loss on the derivative financial instrument is recognised as a separate component of equity with the ineffective portion being reported in the Income Statement. When a forecast transaction results in the recognition of an asset or a liability, the cumulative gain or loss is removed from equity and included in the initial measurement of the asset or liability. Otherwise, the associated gains or losses that had previously been recognised in equity are transferred to the Income Statement in the same reporting period as the hedged transaction.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the Income Statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the Income Statement.

Interest-Bearing Loans and Borrowings
All loans and borrowings are initially recorded at fair value, net of transaction costs incurred. Loans and borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the Income Statement over the period of the borrowings using the effective interest method.

Provisions
A provision is recognised in the Balance Sheet when the Group has a present obligation (either legal or constructive) as a result of a past event, and it is probable that a transfer of economic benefits will be required to settle the obligation. Provisions are measured at the Directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date and are discounted to present value where the effect is material.

A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan and announced its main provisions.

Provisions arising on business combinations are only recognised to the extent that they would have qualified for recognition in the financial statements of the acquiree prior to the acquisition.

A contingent liability is not recognised but is disclosed where the existence of the obligation will only be confirmed by future events or where it is not probable that an outflow of resources will be required to settle the obligation or where the amount of the obligation cannot be measured with reasonable reliability. Contingent assets are not recognised but are disclosed where an inflow of economic benefits is probable.

Environmental Provisions
The Group’s waste management and recycling activities are subject to various laws and regulations governing the protection of the environment. Full provision is made for the net present value of the Group’s estimated costs in relation to restoration liabilities at its landfill sites. The net present value of the estimated costs is capitalised as property, plant and equipment and the unwinding of the discount element on the restoration provision is reflected in the Income Statement.

Finance Costs
Finance costs comprise interest payable on borrowings calculated using the effective interest rate method, gains and losses on hedging instruments that are recognised in the Income Statement and the unwinding of discounts on provisions. The interest expense component of finance lease payments is recognised in the Income Statement using the effective interest rate method. The finance cost on defined benefit pension scheme liabilities is recognised in the Income Statement in accordance with IAS 19.

Finance Income
Interest income is recognised in the Income Statement as it accrues, using the effective interest method. The expected return on defined benefit pension scheme assets is recognised in the Income Statement in accordance with IAS 19.

Income Tax
Current tax
Current tax represents the expected tax payable or recoverable on the taxable profit for the year using tax rates enacted or substantively enacted at the balance sheet date and taking into account any adjustments stemming from prior years.

Deferred tax
Deferred tax is provided using the liability method on all temporary differences at the balance sheet date which is defined as the difference between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets and liabilities are not subject to discounting and are measured at the tax rates that are anticipated to apply in the year in which the asset is realised or the liability is settled.

Deferred tax liabilities are recognised for all taxable temporary differences with the exception of the following:

(i)	where the deferred tax liability arises from the initial recognition of goodwill or the initial recognition of an asset or a liability in a transaction that is not a business combination and affects neither the accounting profit nor the taxable profit or loss at the time of the transaction; and
(ii)	where, in respect of taxable temporary differences associated with investments in subsidiaries, joint ventures and associates, the timing of the reversal of the temporary difference is subject to control by the Group and it is probable that reversal will not occur in the foreseeable future.

Deferred tax assets are recognised in respect of all deductible temporary differences, carry-forward of unused tax credits and unused tax losses to the extent that it is probable that taxable profits will be available against which to offset these items except:

(i)	where the deferred tax asset arises from the initial recognition of an asset or a liability in a transaction that is not a business combination and affects neither the accounting profit nor the taxable profit or loss at the time of the transaction; and
(ii)	where, in respect of deductible temporary differences associated with investment in subsidiaries, joint ventures and associates, a deferred tax asset is recognised only if it is probable that the deductible temporary difference will reverse in the foreseeable future and that sufficient taxable profits will be available against which the temporary difference can be utilised.

The carrying amounts of deferred tax assets are reviewed at each balance sheet date and are reduced to the extent that it is no longer probable that sufficient taxable profit would be available to allow all or part of the deferred tax asset to be utilised.

Pension and Other Post Employment Obligations
The Group operates defined contribution and defined benefit pension schemes.

The costs arising in respect of the Group’s defined contribution schemes are charged to the Income Statement in the period in which they are incurred. The Group has no legal or constructive obligation to pay further contributions after payment of fixed contributions.

The Group operates a number of defined benefit pension schemes which require contributions to be made to separately administered funds. The liabilities and costs associated with the Group’s defined benefit pension schemes are assessed on the basis of the projected unit credit method by professionally qualified actuaries and are arrived at using actuarial assumptions based on market expectations at the balance sheet date. The Group’s net obligation in respect of defined benefit pension schemes is calculated separately for each plan by estimating the amount of future benefits that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value, and the fair value of any plan asset is deducted. Plan assets are measured at bid values.

The discount rate employed in determining the present value of the schemes’ liabilities is determined by reference to market yields at the balance sheet date on high quality corporate bonds of a currency and term consistent with the currency and term of the associated post-employment benefit obligations.

The net surplus or deficit arising in the Group’s defined benefit pension schemes are shown within either non-current assets or liabilities on the face of the Group Balance Sheet. The deferred tax impact of pension scheme surpluses and deficits is disclosed separately within deferred tax liabilities or assets as appropriate. In accordance with IAS 19 Employee Benefits the Group recognises actuarial gains and losses immediately in the Statement of Recognised Income and Expense.

When the benefits of a defined benefit plan are improved, the portion of the increased benefit relating to past service by employees is recognised as an expense in the Income Statement on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in the Income Statement.

Share-Based Payment Transactions
Employees (including Directors) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render service in exchange for shares or rights over shares.

The fair value of share entitlements granted is recognised as an employee expense in the Income Statement with a corresponding increase in equity. The fair value at the grant date is determined using a binomial model for the DCC plc 1998 Employee Share Option Scheme and the Black Scholes option valuation model for the DCC Sharesave Scheme.

Non-market based vesting conditions are not taken into account when estimating the fair value of entitlements as at the grant date. The expense in the Income Statement represents the product of the total number of options anticipated to vest and the fair value of those options. This amount is allocated on a straight-line basis over the vesting period to the Income Statement with a corresponding credit to ‘Other Reserves - Share Options’. The cumulative charge to the Income Statement is only reversed where entitlements do not vest because non-market performance conditions have not been met or where an employee in receipt of share entitlements relinquishes service before the end of the vesting period.

The proceeds received by the Company on the exercise of share entitlements are credited to Share Capital (nominal value) and Share Premium when the share entitlements are exercised. When the share-based payments give rise to the re-issue of shares from treasury shares, the proceeds of issue are credited to shareholders equity.

The measurement requirements of IFRS 2 have been implemented in respect of share options entitlements granted after 7 November 2002. In accordance with the standard, the disclosure requirements of IFRS 2 have been applied to all outstanding share-based payments regardless of their grant date. The Group does not operate any cash-settled share-based payment schemes or share-based payment transactions with cash alternatives as defined in IFRS 2.

Government Grants
Grants are recognised at their fair value when there is a reasonable assurance that the grant will be received and all attaching conditions have been complied with.

Capital grants received and receivable by the Group are credited to government grants and are amortised to the Income Statement on a straight-line basis over the expected useful lives of the assets to which they relate.

Revenue grants are recognised as income over the periods necessary to match the grant on a systematic basis to the costs that it is intended to compensate.

Shareholders’ Equity
Treasury Shares
Where the Company purchases the Company’s equity share capital, the consideration paid is deducted from total shareholders’ equity and classified as treasury shares until they are cancelled. Where such shares are subsequently sold or reissued, any consideration received is included in total shareholders’ equity.

Dividends
Dividends on Ordinary Shares are recognised as a liability in the Group’s financial statements in the period in which they are approved by the shareholders of the Company. Proposed dividends that are approved after the balance sheet date are not recognised as a liability at that balance sheet date, but are disclosed in the dividends note.

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2. Financial Risk Management
Financial Risk Factors
The Group uses derivative financial instruments (principally interest rate, currency and cross currency interest rate swaps and forward foreign exchange and commodity contracts) to hedge certain risk exposures, as detailed below, arising from operational, financing and investment activities. The Group does not trade in financial instruments nor does it enter into any leveraged derivative transactions.

Financial risk management within the Group is governed by policies and guidelines reviewed and approved annually by the Board of Directors. These policies and guidelines primarily cover foreign exchange risk, commodity price risk, credit risk, liquidity risk and interest rate risk. Monitoring of compliance with the policies and guidelines is managed by the Group Risk Management function.

The Group’s financial risks are detailed in note 47.

Fair Value Estimation
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Group is the current bid price.

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. The Group uses a variety of techniques and makes assumptions that are based on market conditions existing at each balance sheet date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The fair value of forward foreign exchange contracts is determined using quoted forward exchange rates at the balance sheet date.

The nominal value less impairment provision of trade receivables and payables approximate to their fair values.

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3. Critical Accounting Estimates and Judgments
The Group’s main accounting policies affecting its results of operations and financial condition are set out on pages 64 to 72. In determining and applying accounting policies, judgment is often required in respect of items where the choice of specific policy, accounting estimate or assumption to be followed could materially affect the reported results or net asset position of the Group should it later be determined that a different choice would be more appropriate. Management considers the accounting estimates and assumptions discussed below to be its critical accounting estimates and judgments:

Goodwill
The Group has capitalised goodwill of €429.3 million at 31 March 2009. Goodwill is required to be tested for impairment at least annually or more frequently if changes in circumstances or the occurrence of events indicating potential impairment exist. The Group uses the present value of future cash flows to determine recoverable amount. In calculating the fair value, management judgment is required in forecasting cash flows of reporting units, in determining terminal growth values and in selecting an appropriate discount rate. Sensitivities to changes in assumptions are detailed in note 20.

Post-Retirement Benefits
The Group operates a number of defined benefit retirement plans. The Group’s total obligation in respect of defined benefit plans is calculated by independent, qualified actuaries, updated at least annually and totals €81.8 million at 31 March 2009. At 31 March 2009 the Group also has plan assets totalling €52.3 million, giving a net pension liability of €29.5 million. The size of the obligation is sensitive to actuarial assumptions. These include demographic assumptions covering mortality and longevity, and economic assumptions covering price inflation, benefit and salary increases together with the discount rate used. The size of the plan assets is also sensitive to asset return levels and the level of contributions from the Group. Sensitivities to changes in assumptions are detailed in note 32.

Taxation
The Group is subject to income taxes in a number of jurisdictions. Provisions for tax liabilities require management to make judgments and estimates in relation to tax issues and exposures. Amounts provided are based on management’s interpretation of country specific tax laws and the likelihood of settlement. Where the final tax outcome is different from the amounts that were initially recorded, such differences will impact the current tax and deferred tax provisions in the period in which such determination is made.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised. The Group estimates the most probable amount of future taxable profits, using assumptions consistent with those employed in impairment calculations, and taking into account applicable tax legislation in the relevant jurisdiction. These calculations require the use of estimates.

Business Combinations
The Group uses the purchase method of accounting for acquisitions which requires that the assets and liabilities assumed are recorded at their respective fair values at the date of acquisition. The application of the purchase method requires certain estimates and assumptions particularly concerning the determination of the fair values of the acquired assets and liabilities assumed at the date of acquisition.

For intangible assets acquired, the Group bases valuations on expected future cash flows. This method employs a discounted cash flow analysis using the present value of the estimated after-tax cash flows expected to be generated from the purchased intangible asset using risk adjusted discount rates and revenue forecasts as appropriate. The period of expected cash flows is based on the expected useful life of the intangible asset acquired.

Provision for Impairment of Trade Receivables
The Group trades with a large and varied number of customers on credit terms. Some debts due will not be paid through the default of a small number of customers. The Group uses estimates based on historical experience and current information in determining the level of debts for which a provision for impairment is required. The level of provision required is reviewed on an ongoing basis.

Useful Lives for Property, Plant and Equipment and Intangible Assets
Long-lived assets comprising primarily of property, plant and equipment and intangible assets represent a significant portion of total assets. The annual depreciation and amortisation charge depends primarily on the estimated lives of each type of asset and, in certain circumstances, estimates of residual values. Management regularly review these useful lives and change them if necessary to reflect current conditions. In determining these useful lives management consider technological change, patterns of consumption, physical condition and expected economic utilisation of the assets. Changes in the useful lives can have a significant impact on the depreciation and amortisation charge for the period.

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4. Segment Information
Analysis by Business Segment and by Geography
The Group is analysed into five main business segments: DCC Energy, DCC SerCom, DCC Healthcare, DCC Food & Beverage and DCC Environmental.

DCC Energy markets and sells liquefied petroleum gas and oil products for commercial/industrial, transport and domestic use in Britain and Ireland. DCC Energy also includes a fuel card services business.

DCC SerCom markets and sells a broad range of IT and consumer electronic products in Britain, Ireland and Continental Europe to computer resellers, high street retailers, computer superstores, on-line retailers and mail order companies. DCC SerCom also includes a supply chain management business.

DCC Healthcare markets and sells medical, surgical, laboratory, intravenous pharmaceutical, rehabilitation and independent living products to the acute care, community care and laboratory sectors in Britain and Ireland. DCC Healthcare is also a leading provider of contract manufacturing services to the health and beauty industry in Europe.

DCC Food & Beverage markets and sells food and beverages in Ireland and wine in Britain. These include healthy foods, snackfoods, fresh coffee and wine to a broad range of catering, convenience store, food service and multiple grocer customers. DCC Food & Beverage is also a leading provider of frozen food distribution in Ireland.

DCC Environmental provides a broad range of waste management and recycling services to the industrial, commercial, construction and public sectors in Britain and Ireland.

Intersegment revenue is not material and thus not subject to separate disclosure.

The segment results for the year ended 31 March 2009 are as follows:

	Year ended 31 March 2009
	DCC Energy €’000	DCC SerCom €’000	DCC Healthcare €’000	DCC Food & Beverage €’000	DCC Environmental €’000	Unallocated €’000	Total €’000

Segment revenue	4,130,842	1,551,316	331,223	304,973	81,772	-	6,400,126

Operating profit*	100,694	40,138	17,300	12,040	10,224	-	180,396
Amortisation of intangible assets	(2,830)	(882)	(704)	(496)	(807)	-	(5,719)
Net operating exceptionals (note 11)	(5,803)	(2,768)	(6,077)	(3,974)	(467)	(750)	(19,839)

Operating profit	92,061	36,488	10,519	7,570	8,950	(750)	154,838
Finance costs							(41,262)
Finance income							24,071
Share of associates’ profit after tax							168
Profit before income tax							137,815
Income tax expense							(20,936)
Profit for the year							116,879

* Operating profit before amortisation of intangible assets and net operating exceptionals

	Year ended 31 March 2008
	DCC Energy €’000	DCC SerCom €’000	DCC Healthcare €’000	DCC Food & Beverage €’000	DCC Environmental €’000	Unallocated €’000	Total €’000

Segment revenue	3,420,026	1,423,357	286,782	310,119	91,678	-	5,531,962

Operating profit*	74,339	40,062	23,440	15,301	14,038	-	167,180
Amortisation of intangible assets	(2,389)	(2,216)	(1,586)	(986)	(751)	-	(7,928)
Net operating exceptionals (note 11)	(4,807)	(1,260)	(665)	3,538	(1,392)	44,191	39,605

Operating profit	67,143	36,586	21,189	17,853	11,895	44,191	198,857
Finance costs							(44,912)
Finance income							27,120
Share of associates’ profit after tax							639
Profit before income tax							181,704
Income tax expense							(16,530)
Profit for the year							165,174

* Operating profit before amortisation of intangible assets and net operating exceptionals

Balance Sheet items

	As at 31 March 2009
	DCC Energy €’000	DCC SerCom €’000	DCC Healthcare €’000	DCC Food & Beverage €’000	DCC Environmental €’000	Total €’000

Segment assets	732,332	466,079	204,628	144,877	96,114	1,644,030

Reconciliation to total assets as reported in the Group Balance Sheet
Investment in associates						2,208
Derivative financial instruments (current and non-current)						128,635
Deferred income tax assets						9,435
Cash and cash equivalents						426,789
Total assets as reported in the Group Balance Sheet						2,211,097

Segment liabilities	370,951	227,801	56,305	72,779	17,019	744,855

Reconciliation to total liabilities as reported in the Group Balance Sheet
Interest-bearing loans and borrowings (current and non-current)						627,062
Derivative financial instruments (current and non-current)						19,032
Income tax liabilities (current and deferred)						70,775
Deferred acquisition consideration (current and non-current)						21,147
Government grants						1,995
Total liabilities as reported in the Group Balance Sheet						1,484,866

	As at 31 March 2008
	DCC Energy €’000	DCC SerCom €’000	DCC Healthcare €’000	DCC Food & Beverage €’000	DCC Environmental €’000	Total €’000

Segment assets	814,025	502,010	213,207	142,596	109,288	1,781,126

Reconciliation to total assets as reported in the Group Balance Sheet
Investment in associates						4,678
Derivative financial instruments (current and non-current)						26,870
Deferred income tax assets						10,199
Cash and cash equivalents						485,840
Total assets as reported in the Group Balance Sheet						2,308,713

Segment liabilities	411,721	260,290	59,302	76,581	24,222	832,116

Reconciliation to total liabilities as reported in the Group Balance Sheet
Interest-bearing loans and borrowings (current and non-current)						575,665
Derivative financial instruments (current and non-current)						60,764
Income tax liabilities (current and deferred)						65,601
Deferred acquisition consideration (current and non-current)						30,191
Government grants						1,941
Total liabilities as reported in the Group Balance Sheet						1,566,278

Net tangible capital employed
The denominator in the Group’s return on tangible capital employed calculations is the average of the Group’s opening and closing net tangible capital employed. The following tables provide an analysis of the net tangible capital employed positions at 31 March 2009 and 31 March 2008.

	As at 31 March 2009
	DCC Energy €’000	DCC SerCom €’000	DCC Healthcare €’000	DCC Food & Beverage €’000	DCC Environmental €’000	Total €’000

Segment assets	732,332	466,079	204,628	144,877	96,114	1,644,030
Intangible assets	(211,436)	(73,178)	(89,018)	(31,128)	(38,428)	(443,188)
Deferred income tax assets	2,144	1,492	3,684	1,930	185	9,435
Assets employed	523,040	394,393	119,294	115,679	57,871	1,210,277

Segment liabilities	370,951	227,801	56,305	72,779	17,019	744,855
Income tax liabilities (current and deferred)	31,407	18,097	9,052	5,573	6,646	70,775
Government grants	-	183	1,385	-	427	1,995
Liabilities employed	402,358	246,081	66,742	78,352	24,092	817,625

Net tangible capital employed	120,682	148,312	52,552	37,327	33,779	392,652

	As at 31 March 2008
	DCC Energy €’000	DCC SerCom €’000	DCC Healthcare €’000	DCC Food & Beverage €’000	DCC Environmental €’000	Total €’000

Segment assets	814,025	502,010	213,207	142,596	109,288	1,781,126
Intangible assets	(183,952)	(68,207)	(90,512)	(32,736)	(41,476)	(416,883)
Deferred income tax assets	3,368	1,140	4,076	1,376	239	10,199
Assets employed	633,441	434,943	126,771	111,236	68,051	1,374,442

Segment liabilities	411,721	260,290	59,302	76,581	24,222	832,116
Income tax liabilities (current and deferred)	26,473	16,218	10,579	4,683	7,648	65,601
Government grants	-	228	1,022	-	691	1,941
Liabilities employed	438,194	276,736	70,903	81,264	32,561	899,658

Net tangible capital employed	195,247	158,207	55,868	29,972	35,490	474,784

Other segment information

	Year ended 31 March 2009
	DCC Energy €’000	DCC SerCom €’000	DCC Healthcare €’000	DCC Food & Beverage €’000	DCC Environmental €’000	Total €’000

Capital expenditure	31,447	3,952	6,737	4,108	9,876	56,120

Depreciation	25,391	3,745	5,071	4,601	6,601	45,409

Intangible assets acquired	54,181	10,586	8,689	2,266	2,085	77,807

Impairment of goodwill	-	-	3,346	2,115	-	5,461

	Year ended 31 March 2008
	DCC Energy €’000	DCC SerCom €’000	DCC Healthcare €’000	DCC Food & Beverage €’000	DCC Environmental €’000	Total €’000

Capital expenditure	38,246	3,182	15,084	17,094	14,010	87,616

Depreciation	25,558	3,457	4,861	4,719	6,850	45,445

Intangible assets acquired	90,124	11,272	18,465	-	1,166	121,027

Impairment of goodwill	-	-	-	-	-	-

Geographical analysis
The following is a geographical analysis of the segment information presented above.

	Year ended 31 March
	Republic of Ireland		UK		Rest of the World		Total
	2009 €’000	2008 €’000	2009 €’000	2008 €’000	2009 €’000	2008 €’000	2009 €’000	2008 €’000

Income Statement items

Revenue	1,004,169	1,112,936	4,819,165	3,982,215	576,792	436,811	6,400,126	5,531,962

Operating profit*	44,277	61,999	121,580	95,521	14,539	9,660	180,396	167,180
Amortisation of intangible assets	(1,741)	(3,009)	(3,887)	(4,646)	(91)	(273)	(5,719)	(7,928)
Net operating exceptionals	(4,867)	45,404	(11,145)	(5,331)	(3,827)	(468)	(19,839)	39,605
Segment result	37,669	104,394	106,548	85,544	10,621	8,919	154,838	198,857

Balance Sheet items

Segment assets	424,271	537,000	1,050,120	1,126,567	169,639	117,559	1,644,030	1,781,126

Segment liabilities	190,961	265,645	456,414	515,793	97,480	50,678	744,855	832,116

Other segment information

Capital expenditure	14,955	33,525	39,476	52,915	1,689	1,176	56,120	87,616

Depreciation	14,986	14,573	29,470	30,152	953	720	45,409	45,445

Intangible assets acquired	7,953	8,935	62,485	110,841	7,369	1,251	77,807	121,027

Impairment of goodwill	115	-	2,318	-	3,028	-	5,461	-

* Operating profit before amortisation of intangible assets and net operating exceptionals

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5. Other Operating Income/Expenses
Other operating income and expenses comprise the following charges/(credits):

	2009 €’000	2008 €’000

Other income
Fair value gains on non-hedge accounted derivative financial instruments
- forward foreign exchange contracts	(1,245)	-
Other operating income	(13,075)	(14,564)
	(14,320)	(14,564)
Other expenses
Expensing of employee share options (note 10)	1,156	1,844
Fair value losses on undesignated derivative financial instruments
- forward foreign exchange contracts	-	495
Other operating expenses	941	1,172
	2,097	3,511

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