The directors present the strategic report for the year ended 31 March 2025.

The results for the year under review and the financial position at the year end were considered satisfactory by the directors. The group's objective is to achieve sustainable rates of growth and returns through a combination of organic growth and acquisition of new outlets.

As shown in the group's profit and loss account set out on page 13, the group made a profit after tax of £3,679,438 (2024: £27,566).

The group's balance sheet on page 15 shows that its financial position remains strong with net assets valued at £80,190,211 (2024: £77,020,123).

The development strategy is to continue the implementation of several operational initiatives to drive like for like sales and enhance margins. The key areas of continued operational focus include the achievement of high standards of customer service and investment in the training and development of our outlet managers and staff.

The board monitors progress on the overall group strategy and the individual strategic elements by reference to a number of Key Performance indicators.

The key financial performance indicators of the group are gross profit margins and turnover. The gross profit of the group for the period under review was £59,530,380 (2024: £58,171,200), producing a satisfactory gross profit margin of 66% (2024: 62%) on a turnover of £90,103,272 (2024: £93,936,963).

The key non-financial performance indicators are adherence to a high quality of operational standards set by the franchisors. For the hotel, the key non-financial performance indicators used by management are average room rates, occupancy and customer satisfaction.

The management of the business and the execution of the group's strategy are subject to a number of risks. Risks are reviewed by the directors and appropriate processes are put in place to monitor and mitigate them. The key business risks affecting the group are set out below:-

(a) Competition

The group operates in a highly competitive market particularly around service offering, price and product quality. In order to mitigate this risk, the marketing teams from the franchisor monitor market offerings and pricing on an ongoing basis and the group, through the franchisor, undertakes regular 'mystery guest' visits to all our restaurants to ensure menu offering and customer service are maintained to a high standard.

(b) Employees

The group's performance depends largely on its managers and staff, at the restaurant, hotel and head office level. The resignation of key individuals and the inability to recruit people with the right experience and skills could adversely impact the group's results. To mitigate these issues the group have invested in a training programme for all staff to maintain high service levels and have a number of schemes linked to the group's results that are designed to reward and retain key individuals.

(c) Supply chain

Failure of key suppliers to deliver products. The Group closely monitors against supplier service level agreement and purchase food supplies from accredited suppliers.

(d) Brand damage

There is a risk of being associated with failures in food safety. To mitigate this, there is regular health and safety visits to ensure the risk of brand damage incidents are minimised. The Group focuses on quality and safety at restaurant level and seeks to comply with the law at all times.

Financial risk management

The main financial risks inherent from the group's operations are:

(a) Credit risk

The Group has no significant concentrations of credit risk. The nature of its operations results in a large customer base and a significant level of cash sales.

(b) Interest rate risk

The Group's interest rate risk arises from long-term borrowings. The directors monitor the net debt, banking facilities and cash flows on a regular basis and adequate working capital facilities are in place.

(c) Liquidity risk.

The Group manages its exposure to liquidity risk through a naturally low level of debtors, maintaining a diversity of funding sources.

Financial instruments

The group's policy is to finance its operations on a medium term basis from retained profits, inter-company borrowings and bank facilities. Additional uncommitted borrowing and overdraft facilities are utilised for short term financing requirements.

The financial instruments utilised by the group are borrowings, short-term cash deposits and items such as trade creditors which arise directly from operations. Borrowing and deposit facilities are on a floating rate basis. The group's policy is not to trade in financial instruments.

Future developments

The directors aim to continue with the management policies which has resulted in the group's steady growth in recent years.

The outlook for 2026 is reasonably encouraging with the directors being optimistic that the current performance can be maintained.

This statement sets out how the directors have approached and met their responsibilities under section 172 Companies Act 2006. The Group's values are consistent with the requirements under section 172 of the Companies Act. The directors will consider all relevant factors when taking any decision. The examples below illustrate some of the key items under section 172 that were considered by the directors during the year.

Likely consequence of any decision in the long term

There have been no major changes in the Group in the financial year. However, the long-term impacts of any decisions are discussed in detail by the directors, especially when considering the Group's strategy.

Interest of the Company's employees

The directors engage with their employees frequently. We conduct an annual conference where managers from each restaurant come together for a workshop to share their thoughts, feedback and feelings about working for SME Group PLC. This is attended by members of the leadership team. There are also individual quarterly reviews with all Regional Operations Managers to talk through their restaurants and their people - this is facilitated and attended by members of the leadership team. Furthermore, the leadership team regularly visit the restaurants across the group to engage with all teams.

The People function of the business is accountable for optimising everything we do for our employees and all members of the Group, managing policies and procedures, all with a view of promoting and maintaining fairness and consistency across the whole business.

Foster business relationships with suppliers, customers and others

The Group has always been steadfast about the quality of the food we use in our restaurants. To make this possible we have developed strong supplier partnerships with our franchisors to ensure we can maintain these high standards and deliver a unique product experience. These partnerships help us better understand our product, as well as the challenges our suppliers face. Working collaboratively gives us stability both in terms of product consistency and our input costs.

Impact of the Group's operations on the community and environment

The Group is committed to reducing the environmental impact of our operation. We are working closely with suppliers to minimise product movement. In restaurants we have expanded our recycling both front and back of house with further rollout planned in the next financial year.

We ensure that all of our used oil is collected, recycled and used as Biofuel. We have also focused on reducing single use plastics, with plans to replace items such as straws and children's toys with environmentally friendly alternatives. We continue to work on ensuring we keep up to speed with the latest development on packaging and applying best practice.

The desirability of the Group maintaining a reputation for high standards of business conduct

As with fostering relationships with suppliers, customers and others, the maintenance of high standards of ethical conduct are very important in order to run a sustainable business.

The need to act fairly between members of the Group

Communications with shareholders are given high priority, Advisory board meetings take place at regular intervals. These are attended by members of the board and the shareholders. The monthly and year to date performance of the Group are presented and discussed, as well as the Group's strategy and long-term impact of any decision.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 March 2025.

The principal activity of the company was that of a holding company and the principal activity of the group companies were that of restaurateurs, operating hotels and property investments.

The results for the year are set out on page 13.

Ordinary dividends were paid amounting to £509,350. The directors do not recommend payment of a further dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The Group's policy is to settle terms of payment with suppliers when agreeing the terms of each transaction, ensuring that suppliers are made aware of the terms of payment, and to abide by the terms of payment.

Trade creditors of the Group at the end of the period were equivalent to 100 days purchases (2024: 100 days), based on the average daily amount invoiced by suppliers during the period.

The recipients, amounts and purpose of the charitable donations are as follows:

lsmaili Trust (UK) - £12,000 (2024: £12,000) purpose - involved in the support of philanthropic and social development endeavours benefiting disadvantaged populations in the developing world. They work for the common good of all citizens, regardless of origin, gender or religion.

SME Charitable Trust - £8,156 (2024: £6,079) purpose - involved in promoting education and learning opportunities of young people.

The group companies made a total contribution of £39,603 (2024: £43,208) to KFC Foundation. KFC Foundation supports local charities who are passionate about developing and nurturing young people by offering them safe spaces to socialise, the chance to find a job and people to speak to through mentoring programmes.

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The group's policy is to consult and discuss with employees, through meetings on matters likely to affect employees' interests.

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.

The auditor, Lawrence Grant LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

SME Group Plc is obligated to comply with Streamlined Energy and Carbon Reporting (SECR) as it qualifies as a "large undertaking" as defined by the scheme legislation.

SME Group Plc owns a number of subsidiaries and has decided not to include information related to any subsidiaries voluntarily at this stage as it has been confirmed that none of the subsidiary companies qualify as a "large undertaking" in their own right as defined by the scheme legislation.

The Company has gathered it's data regarding the carbon emissions for the financial year ended 31 March 2024 and this is detailed in the table.

SME Group Plc total energy consumption for the reporting period 1 April 2024 to 31 March 2025 was 1,059,543 kWh (2024: 1,322,136 kWh).

Consumption in kWh for the reporting period was as follows:

SME Group Plc total emissions using location-based reporting for the reporting period 1 April 2024 to 31 March 2025 was 232 tonnes C02e (2024: 299 tonnes C02e).

The chosen intensity measurement ratio is 17 (2024: 22) i.e. total gross emissions in metric tonnes C02e per £7m turnover.

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

In determining whether the Group and the Company's financial statements can be prepared on a going concern basis, the directors have considered all the factors likely to affect its future development, performance and financial position. The directors have approved the forecast for 2026 for the Group and the Company in light of current business prospects.

The banking covenants are tested quarterly and monitored on a regular basis. The Group remained compliant with its banking facility covenants throughout the year and up to the date of approval of these financial statements.

The brands operate with consistent, high quality products with excellent customer service. The Group has successfully continued to trade throughout the year and demonstrated resilience in trading driven by operational efficiencies.

The directors have prepared detailed cash flow projections for the year ending 31 March 2026, based on key assumptions, which the directors consider to be severe but plausible in the current uncertain economic environment. The directors have considered the assumptions made and consider the forecasts reasonable and realistic considering market and economic uncertainty. Based on these projections and current trading prospects, the directors consider the Group and Company will continue to operate within its resources for a period of at least 12 months from the date of approval of these financial statements and hence that the use of the going concern basis is appropriate.

We have audited the financial statements of SME Group Plc (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2025 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows 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 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the group's and the parent company's affairs as at 31 March 2025 and of the group's profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 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 group's and parent 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 group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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 extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with law and regulations, was as follows:

• The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

• We identified the laws and regulations applicable to the group through discussion with directors and other management, and from our commercial knowledge and experience of the relevant sector;

• The specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group, are as follows;

• Companies Act 2006

• FRS102

• Tax legislation

• Employment Legislation

• Health and Safety at Work

• We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and reviewing board minutes;

• Laws and regulations were communicated within the audit team at the planning meeting, and during the audit as any further laws and regulation were identified. The audit team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the group's financial statements to material misstatement, including obtaining an understanding of how fraud might occur by:

• Making enquires of management as to where they consider there was susceptibility to fraud and their knowledge of actual suspected and alleged fraud;

• Considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations;

• Reviewing the financial statements and testing the disclosures against supporting documentation;

• Performing analytical procedures to identify any unusual or unexpected trends or anomalies;

• Inspecting and testing journal entries to identify unusual or unexpected transactions;

• Assessing whether judgement and assumptions made in determining significant accounting estimates were indicative of management bias; and

• Investigating the rationale behind significant transactions, or transactions that are unusual or outside the company’s usual course of business.

The areas that we identified as being susceptible to misstatement through fraud were:

• Management bias in the estimates and judgements made;

• Management override of controls; and

• Posting of unusual journals or transactions.

We did not identify any matters relating to non-compliance with laws and regulation or relating to fraud.

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.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £811,406 (2024 - £420,614 loss).

SME Group Plc (“the company”) is a public limited company domiciled and incorporated in England and Wales. The registered office is Runway House, The Runway, South Ruislip, Middlesex, England, HA4 6SE.

The group consists of SME Group Plc and all of its subsidiaries.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

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 financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated group financial statements consist of the financial statements of the parent company SME Group Plc together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in associates.

All financial statements are made up to 31 March 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

Entities other than subsidiary undertakings, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

The group recognises any non-controlling interest on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of the acquiree's identifiable net assets. The non-controlling interest's proportionate share in total comprehensive income for the financial year is recognised in equity.

In determining whether the Group and the Company's financial statements can be prepared on a going concern basis, the directors have considered all the factors likely to affect its future development, performance and financial position. The directors have approved the forecast for 2026 for the Group and the Company in light of current business prospects.

The banking covenants are tested quarterly and monitored on a regular basis. The Group remained compliant with its banking facility covenants throughout the year and up to the date of approval of these financial statements.

The brands operate with consistent, high quality products with excellent customer service. The Group has successfully continued to trade throughout the year and demonstrated resilience in trading driven by operational efficiencies.

The directors have prepared detailed cash flow projections for the year ending 31 March 2026, based on key assumptions, which the directors consider to be severe but plausible in the current uncertain economic environment. The directors have considered the assumptions made and consider the forecasts reasonable and realistic considering market and economic uncertainty. Based on these projections and current trading prospects, the directors consider the Group and Company will continue to operate within its resources for a period of at least 12 months from the date of approval of these financial statements and hence that the use of the going concern basis is appropriate.

Turnover is recognised at the fair value of the consideration received or receivable for food and beverages provided to customers in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates. Turnover from restaurants is recognised when payment is tendered by the customer at the point of sale.

Turnover from hotels represents income receivable from rooms, food and beverage, net of VAT. Revenue is recognised at the point at which the accommodation and related services are provided.

The cost of a business combination is the fair value of the consideration given, liabilities incurred or assumed and of equity instruments issued plus the costs directly attributable to the business combination.

On acquisition of a business, fair values are attributed to the identifiable assets, liabilities and contingent liabilities unless the fair value cannot be measured reliably, in which case the value is incorporated in goodwill. Goodwill represents the difference between the fair value of the purchase consideration and the fair value of the separable net assets acquired. Goodwill on the acquisition of a business is capitalised and amortised over its useful economic life.

Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated, using the straight-line method, to allocate the depreciable amount of the assets to the residual values of their estimated useful lives for acquired goodwill.

Acquired goodwill is written off in equal annual instalments over its estimated useful economic life of between 10 and 20 years which is charged to administrative expenses in the profit and loss account.

Intangible assets are assessed for impairment when there are indicators of impairment and any impairment is charged to the income statement. Reversals of impairment are recognised when the reasons for the impairment no longer apply.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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 profit and loss account.

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. 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.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

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

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Rental income is accounted for in the profit and loss account on a receivable basis.

In the application of the group’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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.

Investment properties are valued annually at fair value. Fair value is ascertained through review of a number of factors and information flows, including market knowledge, recent market movements, recent sales of similar properties, historical experience and rent levels and flows of cash for the respective investment property. There is an inevitable degree of judgement involved and value can be only reliably tested ultimately in the market itself. Given the property market knowledge and expertise of the directors and within the group, valuations are carried out by a mixture of external independent valuers and by internal property management team.

The audit fees for the Company's subsidiaries have been borne by the parent Company.

The average monthly number of persons (including directors) employed by the group and company during the year was:

Their aggregate remuneration comprised:

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:

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.

More information on impairment movements in the year is given in note 13.

In the opinion of the directors, the market value of the investment properties at the balance sheet date are not materially different than what is stated in the financial statements.

In the opinion of the director the aggregate value of the company's investment in subsidiary undertakings is not less than the amount included in the balance sheet.

The group's share of the associated undertakings net assets as at 31 March 2025 is as shown below and comprised:

£

Share of fixed assets                                5,402,365

Share of current assets                             1,020,720

Share of current liabilities                                (631,933)

Share of liabilities due after one year                        (318,142)

Share of net assets representing the net book value of investment in associated

undertakings                                    5,473,011

The group's share of the associated undertakings results for the year ended 31 March 2025 as follows:

£

Share of turnover                                   396,649

Share of operating profits                                 253,641

Share of interest receivable                             26,112

Share of fair value loss                                 -

Share of taxation                                 (69,941)

Share of profits for the year                         209,814

The group's investments in associated companies at 31 March 2025 were as follows:

Associated

Companies

£

Shares

Cost at 1 April 2024                             100

Cost at 31 March 2025                         100

Share of retained profit

At 1 April 2024                                     3,064,375

Net share of profit for the year                             209,814

At 31 March 2025                          3,274,189

Share of revaluations of associated companies' properties

At 1 April 2024                                     2,198,722

Share of surplus on revaluations of associated companies' properties in year              -

At March 2025                                     2,198,722

Net book value

At 31 March 2025                                 5,473,011

At 31 March 2024                                 5,263,197

Details of the company's subsidiaries at 31 March 2025 are as follows:

* These companies are wholly owned subsidiaries of SME Holdings Ltd.

** These companies are subsidiaries of SME Investments Ltd.

*** This company is subsidiary of SME Group Plc.

Details of associates at 31 March 2025 are as follows:

S&M (Stonebridge Park) Limited is a wholly owned subsidiary of Aldwych Leisure Limited.

Other than fixed asset investments and current asset investments, all financial assets and liabilities are measured at amortised cost.

Amounts owed by group undertakings are unsecured, interest free and repayable on demand.

Amounts due to group undertakings are unsecured, interest free and repayable on demand.

The bank loans and overdraft are secured by a fixed charge over the freehold properties and by a debenture over the assets of the subsidiary companies. The loans are subject to commercial rates of interest. The repayment terms of the bank loans range from monthly and quarterly payments of interest and/or capital and interest.

Finance lease payments represent rentals payable by the company for a motor vehicle. Leases include purchase options at the end of the lease period. The lease term is 3 years and is on a fixed repayment basis.

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

The remuneration of key management personnel is as follows.

Group and Company

Other than the transactions disclosed below, the company's other related party transactions were with subsidiaries and so have not been disclosed.

At the balance sheet date, the balance payable to a shareholder of SME Group Plc amounted to £8,574 (2024: £136,849). The balance is interest-free, unsecured and repayable on demand.

At the balance sheet date, the balance payable to a shareholder of an associated company amounted to £266,600 (2024: £266,600).

Included in amounts due from group undertakings is an amount of £Nil (2024: £159,850) due from S&M (Stonebridge Park) Limited, an associated undertaking.

Included in amounts due to group undertakings is an amount of £Nil (2024: £255,216) due to Aldwych Leisure Limited.

The ultimate controlling party is Mrs S Esmail.