NOTES TO THE GROUP CONSOLIDATED FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 31 MARCH 2026
2. Accounting policies continued
2. Accounting policies continued Revenue is recognised in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services, excluding value added tax and other sales-related taxes. Transaction price is allocated to each performance obligation on the basis of the relative standalone selling prices of each distinct good or service promised in the contract. If a standalone selling price is not observable, the Group estimates it. The transaction price may include a discount or a variable amount of consideration that relates to all or part of the contract. The Group reviews the requirements and determines when the variable amount should be allocated to one or more, but not all, performance obligations in the contract. Control of a good or service is obtained when the customer has the ability to direct the use of and obtain substantially all the benefits from the good or service. The Group recognises revenue from product sales at a point in time on shipment, on delivery or when goods are accepted by the customer, depending on the Incoterm used for the sale transaction. Product support and maintenance services are recognised over the period of the service delivery as the customer receives the benefit of the service over time; progress is measured by reference to service periods. When another party is involved in providing goods or services to the customer, the Group determines whether the nature of its promise is a performance obligation to provide the specified goods or services itself (principal) or to arrange for those goods or services to be provided by the other party (agent) and recognises revenue accordingly. Contract balances Receivables Receivables are billed under the terms of the contract for delivered goods and services that are not conditional on anything other than the passage of time. They are recognised initially at the amount of consideration that is unconditional and are subsequently measured at amortised cost using the effective interest method, less loss allowance. These assets are classified as trade receivables. Certain businesses participate in receivables working capital programmes and have the ability to choose whether to receive payment earlier than the normal due date, for specific customers on a non-recourse basis. As at 31 March 2026, eligible receivables under these programmes have been factored and derecognised in line with the derecognition criteria of IFRS 9 Financial Instruments. Contract liabilities Contract liabilities represent the Group’s unsatisfied obligation(s) for the transfer of goods or services to the customer for which consideration has been received from the customer; and/or advance payments received from a customer in consideration of future performance obligations. Segment reporting Operating segments are reported in a manner consistent with internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board. Dividends paid Dividends are recognised when they meet the criteria for recognition as a liability. In relation to final dividends, this is when the dividend is approved by the Shareholders in the Annual General Meeting, and in relation to interim dividends, when paid. Dividend income Dividend income is recognised in the Statement of Profit or Loss on the date on which the Group’s right to receive payment is established. Reserves Share premium: Proceeds received in excess of the nominal value of shares issued, net of any transaction costs. Merger reserves: Relates to historic equity transactions. Currency translation reserve: Gains and losses arising on retranslating net assets of overseas operations into Sterling. Retained earnings: All other net gains and losses and transactions with owners not recognised elsewhere.
For the LTIP, at each reporting date before vesting, the cumulative expense is calculated, representing the extent to which the vesting period has expired and management’s best estimate of the achievement or otherwise of non-market conditions and hence the number of equity instruments that will ultimately vest, also taking into consideration the impact of forfeitures and cancellations during the year. The movement in cumulative expense since the previous reporting date is recognised in the Statement of Profit or Loss, with a corresponding entry in equity. The CSOP awards are subject only to continuing service of the employee. At each reporting date, the cumulative expense, calculated on a straight-line basis over the three-year vesting period, and taking into consideration forfeitures and cancellations during the year, is recognised in the Statement of Profit or Loss, with a corresponding entry in equity. The issuance by the Company to its subsidiaries’ employees of these awards over the Company’s shares represents additional capital contributions by the Company in its subsidiaries. The additional capital contribution is based on the fair value of the award issued, allocated over the underlying award’s vesting period. Taxation Income tax comprises current tax and deferred tax. Current tax represents the expected tax payable or recoverable on the taxable profit or loss for the period, together with any adjustments in respect of prior periods. Current tax assets and liabilities are measured at the amounts expected to be recovered from or paid to the tax authorities, using tax rates and laws that have been enacted or substantively enacted by the reporting date. The Group evaluates uncertain tax positions in accordance with IFRIC 23. Where tax treatments are subject to interpretation, the Group assesses whether it is probable that the tax authority will accept the position. Tax balances are measured using either the most likely amount or the expected value method, depending on which provides the best prediction of the outcome. Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Financial Statements and their respective tax bases, except where: ■ the temporary difference arises on the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit at the time; ■ the temporary difference relates to investments in subsidiaries or associates and the Group can control the timing of the reversal and it is probable that the difference will not reverse in the foreseeable future; and ■ deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available to utilise the deductible temporary differences, tax losses or tax credits. Deferred tax is measured at the tax rates expected to apply when the asset is realised or the liability settled, based on tax rates and laws enacted or substantively enacted at the reporting date. Deferred tax is not discounted. Income tax is recognised in equity or Other Comprehensive Income when it relates to items recognised in those statements; otherwise, it is recognised in the Statement of Profit or Loss. The Group has assessed the potential impact of the OECD Pillar Two rules. As the Group's annual consolidated revenue is below the €750m threshold, no Pillar Two disclosures or top-up tax amounts have been recognised for the period. Foreign currency translation Transactions in foreign currencies are initially recorded in the functional currency at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date and gains or losses on translation are included in the Statement of Profit or Loss. The Group recognises currency gains and losses arising from the retranslation of the opening net assets of foreign operations as a movement on reserves, net of tax. The differences that arise from translating the results of overseas businesses at average rates of exchange, and their assets and liabilities at closing rates, are dealt with in a separate currency translation reserve. All other currency gains and losses are dealt with in the consolidated Statement of Profit or Loss. Revenue recognition The Group realises revenue from its principal activities through the sale of highly differentiated electronic products into five target markets: renewable energy, transportation, medical, industrial & connectivity, and security.
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discoverIE Group plc Innovative Electronics
Annual Report and Accounts for the year ended 31 March 2026
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