The directors present the strategic report for the year ended 31 December 2024.
Fedrigoni U.K. Limited is the United Kingdom subsidiary of the Fedrigoni Group and serves as the principal distribution entity for the Group’s business unit, Fedrigoni Special Papers, within the UK market. The primary customer base of Fedrigoni U.K. Limited includes commercial printers, paper converters, publishers, and paper merchants, with operations tailored to meet the diverse and specialised needs of these sectors.
The year 2024 marked a period of stabilisation for the UK subsidiary, following a particularly challenging 2023. During 2023, the market experienced significant volatility as major clients and UK-based merchants undertook efforts to realign inventory levels that had been elevated throughout 2022.
Despite the persistent uncertainty in the global economic landscape throughout 2024, Fedrigoni U.K. Limited demonstrated resilience. Revenue levels reflected a reassuring trend of steady recovery, signalling a return to more sustainable trading conditions and laying a firm foundation for future growth.
To align with the accounting recognition and measurement principles adopted in the wider group, the company has transitioned from FRS 102 to FRS 101 for all periods presented and the date of transition to FRS 101 was 1 January 2023.
Results for the company show sales of £33,175,103 in 2024, and profit before taxation was £1,263,205, down from £1,740,554 in the previous year (as restated under FRS 101).
Fedrigoni U.K. Limited has a retail shop in central London under the Fabriano Boutique brand, selling high end stationery and leather goods. The store is a non-essential retail outlet and it has now virtually fully recovered to pre Covid levels. Sales were £396k.
From the perspective of the company, the principal risks and uncertainties are integrated with the principal risks of the group and are not managed separately. Accordingly, the principal risks and uncertainties of Fedrigoni U.K. Limited, which include those of the group, are discussed briefly below and in further detail within the group’s annual report which does not form part of this report.
The challenge the business faces for 2025 is managing continued cost increases from materials to energy and employment costs. Fedrigoni’s group structure and transfer pricing policy provides a guaranteed net margin on sales for distribution entities.
We continue our focus on credit management as detailed in this report. This remains an important area of our business to manage.
The directors have considered the financial position of the company at 31 December 2024 and forecasts for a period of 12 months from the date of signing these financial statements. In light of these forecasts, they consider that the company has adequate resources to continue in operational existence for the foreseeable future.
For Fedrigoni UK, the directors have assessed the risks noted and their impact in terms of turnover, profit and cashflow, and ultimately believe the company will be self-sufficient and able to maintain a positive cash reserve for the twelve months following the signing of the audit report. Combined with a close to fully insured debtor book and Fedrigoni UK being an important component of the Group’s strategic distribution network, the directors consider that the preparation of the accounts on a going concern basis remains appropriate.
Financial risk management
The company's operations expose it to a variety of financial risks that include the effects of changes in debt market prices, credit risk, liquidity risk and interest rate risk. In any event, the parent company assures the financial management of Fedrigoni U.K. Limited against those risks outlined. The company has in place a risk management program that seeks to limit the adverse effects on the financial performance of the company by monitoring levels of debt finance and the related finance costs.
Given the size of the company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The board of directors considers that the below policies and procedures established are adequate and appropriate to manage the company's financial risks. Those policies and procedures are implemented by the company's finance department. This sets out specific guidelines to manage price risk, credit risk, liquidity risk, interest rate risk and currency risk, including circumstances where it would be appropriate to use financial instruments to manage these.
Liquidity risk
The company actively maintains a mixture of long-term and short-term debt finance designed to ensure that sufficient funds are available to support ongoing operations and planned expansions. In addition to a debt factoring agreement with a third-party lender, the company benefits from participation in a group-wide cash pooling arrangement coordinated by the intra-group treasury function. This centralised treasury structure enables efficient management of group liquidity, optimises the allocation of surplus funds, and provides flexible access to intra-group financing where required.
Interest rate risk
The company's exposure to risk for the changes in interest rates relates primarily to the company's loan. The company's policy is to manage its interest cost using a variable market rate based on Euribor, which will fluctuate according to levels of working capital required.
Foreign currency risk
The company is exposed to translation and transaction foreign exchange risk. To minimise the risk, the company purchases from Group companies in Pounds Sterling for goods to be sold in the U.K.
Credit risk
The company's principal financial assets are cash and trade debtors. Risks associated with cash are low as the company's banks have high credit ratings assigned by international credit rating agencies.
The principal credit risk lies with trade debtors. In order to manage credit risk the directors set limits for customers based on a combination of payment history and third party credit references. Credit limits are reviewed on a regular basis in conjunction with debt ageing and collection history. The company insures all the major debts and all limits that are not insured are agreed with senior management.
Price risk
The company is exposed to price risk as a result of the industry in which it operates. However, given the size of the company's operations, the costs of managing exposure to commodity price risk exceed any potential benefits. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature.
The directors of Fedrigoni U. K. Limited consider the key performance indicators to be measured by the financial results of the business. Volumes are measured daily, and this is a clear indicator of our success and the performance of the wider market. Our main financial KPI is fixed costs as a % of turnover. This is a group wide KPI that helps us manage our costs in proportion to our revenue.
Uninsured bad debts due to business failures have remained insignificant because of strong credit management.
The key financial reporting figures for the company are:
| 2024 | 2023 |
Turnover | 33,175,103 | 33,023,452 |
Profit before tax | 1,256,309 | 1,740,554 |
Net assets | 10,130,731 | 9,204,502 |
Fixed costs as a percentage of turnover | 4.5% | 4.3% |
2023 is presented as restated under FRS 101.
Fedrigoni U.K. Limited has a vision to be the leading supplier of creative paper products and inspirational services.
Our strategy of working with distributors to manage certain channels has worked well and will continue. The groups strategy is to focus on key market pillars, luxury packaging, luxury publishing, identifying plastic to paper opportunities and reducing the reliance on filler products.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The results show a positive net result achieved. With a focus on improved sales management, customer relationship development and cost control, the directors confirm the next expectations of the company are to continue producing a satisfactory profit in the forthcoming years.
The auditor, MHA, previously traded through the legal entity MacIntyre Hudson LLP. In response to regulatory changes, MacIntyre Hudson LLP ceased to hold an audit registration with the engagement transitioning to MHA Audit Services LLP.
MHA will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
We have audited the financial statements of Fedrigoni U.K. Limited (the 'company') for the year ended 31 December 2024 which comprise the income statement, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
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; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:
Enquiries with management, about any known or suspected instances of non-compliance with laws and regulations and fraud;
Challenging assumptions and judgements made by management in their key accounting estimates;
Reviewing board minutes and legal and professional expenditure to identify any evidence of ongoing litigation or enquiries;
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business; and
Auditing the risk of fraud in revenue by way of cut off testing and through transaction testing on a sample basis, ensuring there is evidence supporting occurrence of revenue and that revenue is recognised in the correct period.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The income statement has been prepared on the basis that all operations are continuing operations.
Fedrigoni U.K. Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1 Bartholomew Lane, London, EC2N 2AX.
The principal place of business of the company is Unit 11, Queens Park Industrial Estate, Studland Road, Northampton, NN2 6NE.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The company meets the definition of a qualifying entity under FRS 101 Reduced Disclosure Framework. These financial statements for the year ended 31 December 2024 are the first financial statements of Fedrigoni U.K. Limited prepared in accordance with FRS 101. The company transitioned from FRS 102 to FRS 101 for all periods presented and the date of transition to FRS 101 was 1 January 2023.
An explanation of how transition to FRS 101 has affected the reported financial position and financial performance is given in note 23.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
inclusion of an explicit and unreserved statement of compliance with IFRS;
presentation of a statement of cash flows and related notes;
disclosure of the objectives, policies and processes for managing capital;
disclosure of key management personnel compensation;
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
the effect of financial instruments on the statement of comprehensive income;
comparative period reconciliations for the carrying amounts of property, plant and equipment;
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;
comparative narrative information; and
related party disclosures for transactions with the parent or wholly owned members of the group.
Where required, equivalent disclosures are given in the group accounts of Fedrigoni S.p.A. The group accounts of Fedrigoni S.p.A are available to the public and can be obtained as set out in note 22.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
When a third party good is dispatched directly from Italy, revenue is not recognised upon dispatch as in UK sales. It will be recognised upon delivery to the customer.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of inventories over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
Impairment of financial assets (continued)
(i) Significant increase in credit risk (continued)
In particular, the following information is taken into account when assessing whether credit risk has increased significantly since initial recognition:
an actual or expected significant deterioration in the financial instrument's external (if available) or internal credit rating;
significant deterioration in external market indicators of credit risk for a particular financial instrument, e.g. a significant increase in the credit spread, the credit default swap prices for the debtor, or the length of time or the extent to which the fair value of a financial asset has been less than its amortised cost;
existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant decrease in the debtor's ability to meet its debt obligations;
an actual or expected significant deterioration in the operating results of the debtor;
significant increases in credit risk on other financial instruments of the same debtor; and
an actual or expected significant adverse change in the regulatory, economic, or technological environment of the debtor that results in a significant decrease in the debtor's ability to meet its debt obligations.
Irrespective of the outcome of the above assessment, the company presumes that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past due, unless the company has reasonable and supportable information that demonstrates otherwise.
Despite the foregoing, the company assumes that the credit risk on a financial instrument has not increased significantly since initial recognition if the financial instrument is determined to have low credit risk at the reporting date. A financial instrument is determined to have low credit risk if:
1. the financial instrument has a low risk of default;
2. the debtor has a strong capacity to meet its contractual cash flow obligations in the near term; and
3. adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfill its contractual cash flow obligations.
The company considers a financial asset to have low credit risk when the asset has external credit rating of 'investment grade' in accordance with the globally understood definition or if an external rating is not available, the asset has an internal rating of 'performing'. Performing means that the counterparty has a strong financial position and there is no past due amounts. The company regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.
(ii) Definition of default
The company considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that financial assets that meet either of the following criteria are generally not recoverable:
when there is a breach of financial covenants by the debtor; or
information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the company, in full (without taking into account any collateral held by the company).
Irrespective of the above analysis, the company considers that default has occurred when a financial asset is more than 90 days past due unless the company has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.
Impairment of financial assets (continued)
(iii) Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data about the following events:
1. significant financial difficulty of the issuer or the borrower;
2. a breach of contract, such as a default or past due event (see (ii) above);
3. the lender(s) of the borrower, (or economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
4. it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
5. the disappearance of an active market for that financial asset because of financial difficulties.
(iv) Write-off policy
The company writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or in the case of trade debtors, when the amounts are over two years past due, whichever occurs sooner. Financial assets written off may still subject to enforcement activities under the company's recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in the profit and loss Account.
(v) Measurement and recognition of expected credit losses
The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information as described above. As for the exposure at default, for financial assets, this is represented by the assets' gross carrying amount at the reporting date.
The company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the company retains substantially all the risks and rewards of ownership· of a transferred financial asset, the company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in the profit and loss account.
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
The company has no financial liabilities at fair value through profit or loss.
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
The tax expense represents the sum of the tax currently payable and deferred tax.
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of property and other assets that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The directors consider there to be no key judgements or estimates in the preparation of the financial statements.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Property, plant and equipment includes right-of-use assets, as follows:
Fedrigoni U.K. Limited factors most sales invoices effectively without recourse, up to the insured credit limit, as per the group facility agreement with Credit Agricole. However as the credit insurance is provided by a third party, the company retains the risk associated with default (under the terms with Credit Agricole), and therefore these balances remain within trade debtors. At the balance sheet, the company had factored trade debtors within insured credit limits totalling £4,838,279 (2023: £6,251,543). These are included within trade debtors above, along with a corresponding balance in other creditors.
As part of the company's review process on transition to FRS 101, management have revisited the assessment of whether the risks and rewards of ownership of the asset (debtors) had been transferred from the company under the factoring arrangements. Previously the company has reported debtors on a net basis, but now they are reported on a gross basis. The comparative trade receivables has been restated from £725,342 to £6,466,416. This is a balance sheet reclassification only and has no impact on net working capital or net assets.
Amounts owed to parent and fellow group undertakings are unsecured, interest free and repayable on demand.
Other payables includes £5,823,857 (2023: £6,251,543) of liabilities under the debt factoring arrangement as detailed in note 12. These amounts are secured on the debtors to which they relate.
As detailed in note 12, the comparative other payables has also been restated from £518,863 to £6,259,939. This is a balance sheet reclassification only and has no impact on net working capital or net assets.
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
The deferred tax liability set out above is not expected to reverse over the next 12 months.
Amounts recognised in profit or loss as an expense during the period in respect of lease arrangements are as follows:
The company has taken advantage of the exemption permitted under FRS 101 from disclosing transactions with other wholly-owned group companies.
On 1 January 2023, the company transitioned from FRS 102 to FRS 101 for consistency of group reporting. Management have reviewed the company's lease arrangements and accounted for them in accordance with IFRS 16. With the exception of short term or low value leases, the company's leases have been recognised as a right of use asset, with corresponding lease liability on the balance sheet. In the profit and loss account, operating lease charges have been replaced with depreciation on the right of use assets and interest charges on the lease liabilities.
The adjustments arising from transition are disclosed above, including a reconciliation of comparative equity and profit previously reported, to equity and profit as restated.