REGISTERED NUMBER: 02698261 (England and Wales)

Group Strategic Report, Report of the Director and

Consolidated Financial Statements for the Year Ended 31 December 2024

for

Prestige Leisure UK Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Director

4

Report of the Independent Auditors

5

Consolidated Income Statement

9

Consolidated Other Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

17

DIRECTOR:

M R Jumani

REGISTERED OFFICE:

Suite G1 Hartsbourne House

Delta Gain

Carpenders Park

Watford

WD19 5EF

REGISTERED NUMBER:

02698261 (England and Wales)

AUDITORS:

TC Group

Statutory Auditor

First Floor

Spitalfields House

Stirling Way

Borehamwood

Hertfordshire

WD6 2FX

The director presents his strategic report of the company and the group for the year ended 31 December 2024.

FAIR REVIEW OF BUSINESS

Prestige Leisure UK Limited, incorporated in 1992, specialises in the distribution of blank leisurewear and workwear to printers, embroiderers and resellers across the UK, Ireland and Europe.

The group's goal is to be the leading distributor of blank garments, guided by values of service excellence, transparency, operational efficiency, sustainability and innovation.

PRINCIPAL RISKS AND UNCERTAINTIES

The group continues to operate in a challenging environment shaped by several external and industry specific factors

Economic Environment: In 2024 the UK economy experienced sluggish growth, persistent inflation and high interest rates. While inflation is expected to ease in 2025, consumer confidence remains fragile.

Employment Costs: The rise in employer National Insurance contributions and the reduction in National Insurance thresholds from April 2025 will increase staff related costs.

Global Uncertainties: Geopolitical tensions, rising shipping costs and currency fluctuations add unpredictability.

Competition: Competition from UK and EU distributors requires continued investment in customer service, product range and pricing efficiency.

The group continues to mitigate these pressures through efficiency gains, close supplier relationships and strong financial discipline. The board believes that the group's lean operating structure, focus on operational excellence and ongoing investment in innovation will allow it to respond effectively to these challenges and continue to create long term value for all stakeholders.

DEVELOPMENT AND PERFORMANCE

Performance is measured by reference to turnover and gross margins.

Group turnover for the year was £32.2m (2023: £35.9M), a decrease of £3.7m. Gross profit decreased slightly to £8.9m (2023: £9.1m), though gross margin improved to 27.75% (2023: 25.36%).

Profit before tax decreased to £1.9m (2023: £2.8m), reflecting reduced turnover and higher administrative expenses.

Net assets strengthened to £35.9m (2023: £34.5m), supported by retained profits. Liquidity also improved with Quick Assets rising to 10.65 (2023: 8.22).

KEY PERFORMANCE INDICATORS

The Key Performance indicators are:-

31.12.24

31.12.23

£

£

Turnover

32,186,541

35,877,213

Gross profit

8,931,176

9,099,046

Gross margin

27.75%

25.36%

Profit before tax

1,940,049

2,778,656

Net Assets

35,851,930

34,473,818

Quick Assets

10.65

8.22

Other information and explanations

Overall, despite reduced revenues and given the wider market conditions, the director remains satisfied with the performance and financial stability of the group.

ON BEHALF OF THE BOARD:

M R Jumani - Director

22 September 2025

The director presents his report with the financial statements of the company and the group for the year ended 31 December 2024.

PRINCIPAL ACTIVITY

The principal activity of the company and group continued to be that of wholesale of clothing and footwear.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2024.

DIRECTOR

M R Jumani held office during the whole of the period from 1 January 2024 to the date of this report.

POLITICAL DONATIONS AND EXPENDITURE

During the year the company made charitable donations of £120,000 (2023: £185,000) to a charitable trust in which the director is a trustee.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Group Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to:

-	select suitable accounting policies and then apply them consistently;

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, TC Group, are deemed to be reappointed under section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

M R Jumani - Director

22 September 2025

Opinion

We have audited the financial statements of Prestige Leisure UK Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of 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 of the parent company affairs as at 31 December 2024 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 director's 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 the 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 director 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 the audit:

-	the information given in the Group Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Director.

We have nothing to report in respect of the following matters where 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 director's remuneration specified by law are not made; or

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

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page four, the director is 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 director determines 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 director is responsible for assessing the group's and 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 director either intends to liquidate the group or the parent company or to cease operations, or has no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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 a Report of the Auditors 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. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Extent to which the audit was considered capable of detecting irregularities, including fraud

The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.

Our approach was as follows:

- We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations;

- We considered the legal and regulatory frameworks directly applicable to the financial statements reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK;

- We considered the nature of the industry, the control environment and business performance, including the key drivers for management's remuneration;

- We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit;

- We considered the procedures and controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls.

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Sadikali Premji FCCA (Senior Statutory Auditor)

for and on behalf of TC Group

Statutory Auditor

First Floor

Spitalfields House

Stirling Way

Borehamwood

Hertfordshire

WD6 2FX

22 September 2025

TURNOVER

4

32,186,541

35,877,213

Cost of sales

23,255,365

26,778,167

GROSS PROFIT

8,931,176

9,099,046

Administrative expenses

7,281,786

6,428,265

OPERATING PROFIT

7

1,649,390

2,670,781

Interest receivable and similar income

9

300,421

128,704

1,949,811

2,799,485

Interest payable and similar expenses

10

9,762

20,829

PROFIT BEFORE TAXATION

1,940,049

2,778,656

Tax on profit

11

561,937

(110,202

)

PROFIT FOR THE FINANCIAL YEAR

1,378,112

2,888,858

Profit attributable to:

Owners of the parent

1,378,112

2,888,858

PROFIT FOR THE YEAR

1,378,112

2,888,858

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,378,112

2,888,858

Total comprehensive income attributable to:

Owners of the parent

1,378,112

2,888,858

FIXED ASSETS

Intangible assets

13

175,963

192,656

Tangible assets

14

4,411,120

4,503,629

Investments

15

-

-

4,587,083

4,696,285

CURRENT ASSETS

Stocks

16

18,971,713

19,405,226

Debtors

17

6,456,064

4,449,768

Cash at bank and in hand

7,110,640

7,359,200

32,538,417

31,214,194

CREDITORS

Amounts falling due within one year

18

1,273,570

1,436,661

NET CURRENT ASSETS

31,264,847

29,777,533

TOTAL ASSETS LESS CURRENT LIABILITIES

35,851,930

34,473,818

CAPITAL AND RESERVES

Called up share capital

23

100,000

100,000

Retained earnings

24

35,751,930

34,373,818

SHAREHOLDERS' FUNDS

35,851,930

34,473,818

The financial statements were approved by the director and authorised for issue on 22 September 2025 and were signed by:

M R Jumani - Director

FIXED ASSETS

Intangible assets

13

175,963

192,656

Tangible assets

14

1,495,220

1,520,564

Investments

15

404,506

404,506

2,075,689

2,117,726

CURRENT ASSETS

Stocks

16

18,971,713

19,405,226

Debtors

17

7,076,185

5,331,394

Cash at bank and in hand

6,790,201

6,856,201

32,838,099

31,592,821

CREDITORS

Amounts falling due within one year

18

1,426,532

1,367,344

NET CURRENT ASSETS

31,411,567

30,225,477

TOTAL ASSETS LESS CURRENT LIABILITIES

33,487,256

32,343,203

CAPITAL AND RESERVES

Called up share capital

23

100,000

100,000

Retained earnings

24

33,387,256

32,243,203

SHAREHOLDERS' FUNDS

33,487,256

32,343,203

Company's profit for the financial year

1,144,053

2,642,660

The financial statements were approved by the director and authorised for issue on 22 September 2025 and were signed by:

M R Jumani - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

100,000

31,484,960

31,584,960

Changes in equity

Total comprehensive income

-

2,888,858

2,888,858

Balance at 31 December 2023

100,000

34,373,818

34,473,818

Changes in equity

Total comprehensive income

-

1,378,112

1,378,112

Balance at 31 December 2024

100,000

35,751,930

35,851,930

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

100,000

29,600,543

29,700,543

Changes in equity

Profit for the year

-

2,642,660

2,642,660

Total comprehensive income

-

2,642,660

2,642,660

Balance at 31 December 2023

100,000

32,243,203

32,343,203

Changes in equity

Profit for the year

-

1,144,053

1,144,053

Total comprehensive income

-

1,144,053

1,144,053

Balance at 31 December 2024

100,000

33,387,256

33,487,256

Cash flows from operating activities

Cash generated from operations

1

165,232

9,952,163

Interest paid

(9,762

)

(20,829

)

Tax paid

(631,976

)

(1,066,230

)

Net cash from operating activities

(476,506

)

8,865,104

Cash flows from investing activities

Purchase of intangible fixed assets

(18,500

)

(92,656

)

Purchase of tangible fixed assets

(54,558

)

(54,236

)

Sale of tangible fixed assets

583

-

Interest received

300,421

128,704

Net cash from investing activities

227,946

(18,188

)

(Decrease)/increase in cash and cash equivalents

(248,560

)

8,846,916

Cash and cash equivalents at beginning of year

2

7,359,200

(1,487,716

)

Cash and cash equivalents at end of year

2

7,110,640

7,359,200

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31.12.24

31.12.23

£

£

Profit before taxation

1,940,049

2,778,656

Depreciation charges

181,633

144,435

Loss on disposal of fixed assets

44

-

Finance costs

9,762

20,829

Finance income

(300,421

)

(128,704

)

1,831,067

2,815,216

Decrease in stocks

433,513

3,594,622

(Increase)/decrease in trade and other debtors

(1,976,020

)

3,440,210

(Decrease)/increase in trade and other creditors

(123,328

)

102,115

Cash generated from operations

165,232

9,952,163

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

7,110,640

7,359,200

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

7,359,200

328,131

Bank overdrafts

-

(1,815,847

)

7,359,200

(1,487,716

)

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank and in hand

7,359,200

(248,560

)

7,110,640

7,359,200

(248,560

)

7,110,640

Total

7,359,200

(248,560

)

7,110,640

1.	STATUTORY INFORMATION

Prestige Leisure UK Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going concern

The director has reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. The director regards the foreseeable future as no less than twelve months following the publication of these annual financial statements. The director has considered the company's balance sheet position as at the year end, its working capital forecasts and projections, taking account of possible changes in trading performance and the current state of its operating market, and are satisfied that for the foreseeable future the company's financial position is improving and will enable the company to remain in operational existence.

Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Prestige Leisure UK Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 31 December 2024. 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.

Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided 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.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

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.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Development costs are being amortised evenly over their estimated useful life of nil years.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Development costs

Over 4 years

Assets under construction are not depreciated until they are brought into use.

Tangible fixed assets

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:

Freehold land and buildings

2% on on cost

Plant and equipment

33% on cost and 4% on cost

Furniture and fixtures

20% on reducing balance basis

Motor vehicle

25% on reducing balance basis

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 credited or charged to profit or loss.

Fixed asset investments

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.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

Impairment of fixed assets

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

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.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks 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.

Cash and cash equivalents

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.