REGISTERED NUMBER: 07988362 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

FOR

NORTHWOOD INVESTORS INTERNATIONAL

LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Statement of Comprehensive Income

10

Consolidated Statement of Financial Position

11

Company Statement of Financial Position

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Statement of Cash Flows

15

Notes to the Consolidated Statement of Cash Flows

16

Notes to the Consolidated Financial Statements

17

DIRECTORS:

J Z Kukral

J Reingardt

REGISTERED OFFICE:

90 Long Acre

London

WC2E 9RA

REGISTERED NUMBER:

07988362 (England and Wales)

INDEPENDENT AUDITORS:

Cooper Parry Group Limited

Statutory Auditor

First Floor, Davidson House

Forbury Square

Reading

Berkshire

RG1 3EU

The directors present their strategic report of the Company and the Group for the year ended 31 December 2024.

REVIEW OF BUSINESS

The Group made an operating profit of £1,593,540 (2023: £818,809). The business model is expected to continue throughout 2025 on a consistent basis. Management of additional property portfolios will further add to fee income, with turnover derived from the "cost-plus" income steams being driven by the cost base.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties facing the Group can be broadly categorised as:

Property market

The income of the Group is variable with rental income and investment value of the properties managed. The Group mitigates this by carrying out active asset and property management and has a track record of keeping properties well let with good rent collections and minimal bad debt. The Group manages high quality properties with defensive characteristics and potential to add significant investment value.

Financial risks

The Group does not have any material borrowing and so is not subject to interest rate risk. A significant proportion of the Group's income is formed by related parties and therefore credit risk is considered minimal.

Foreign currency risk

A material proportion of the income of the Group is receivable in Euros, however the associated foreign exchange risk is not considered sufficient to justify the cost of entering into hedging arrangements.

Impact of World Events

The directors have made an assessment of the Group's ability to continue as a going concern. The physical occupation of properties managed by the Group continue to be well let and rent collections remained high. There has been no material impact upon the income or cash resources of the Group.

The directors are satisfied that the Group has adequate resources to continue in operational existence, for a period of at least 12 months from the date that these Financial Statements were approved.

Furthermore, the directors are not aware of any material uncertainties that may cast significant doubt upon the Group’s ability to continue as a going concern. Accordingly, the directors consider that it is appropriate to prepare the Financial Statements on a going concern basis.

KEY PERFORMANCE INDICATORS

Turnover

2024

2023

% change

£'000000

£'000000

Turnover

16,115

16,575

-2.62%

- Property management fee income has increased both in terms of the % basis, and number of properties managed.

- Key income streams within the Group are based upon "cost plus" models, therefore changes in turnover are directly driven by the cost base.

Operating costs

2024

2023

% change

Average staff numbers

57

62

-8.01%

Staff costs (£'000)

11,299

12,048

-8.96%

Total operating costs (£'000)

3,307

3,791

-12.77%

- Staff costs are a material item for the Group with investment in staff being key to supporting its overall performance.

ON BEHALF OF THE BOARD:

J Reingardt - Director

25 September 2025

The directors present their report with the financial statements of the Company and the Group for the year ended 31 December 2024.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2024 will be £Nil (2023: £Nil).

FUTURE DEVELOPMENTS

The directors see no material change in the nature of the Group's activities for the foreseeable future. Aside from general inflationary pressures, underlying costs and headcount upon which the cost plus model is based are expected to remain stable for 2025.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2024 to the date of this report.

J Z Kukral

J Reingardt

FINANCIAL RISK MANAGEMENT

The Group's financial risks are discussed in the Strategic Report on page 2.

GOING CONCERN

The going concern basis of accounting has been applied. This is considered to be appropriate by the directors following an assessment of the Group's ability to continue as a going concern. The directors are satisfied that the Group has adequate resources to continue in operational existence, for the period of at least 12 months from the date that these Financial Statements were approved. Furthermore, the directors are not aware of any material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern. The Group also continues to have the support of its parent company Northwood Investors International Ltd.

QUALIFYING THIRD PARTY INDEMNITY PROVISIONS

Directors' and officers' insurance cover has been established for all directors to provide appropriate cover for their reasonable actions on behalf of the Group. The indemnities, which constitute a qualifying third-party indemnity provision as defined by section 234 of the Companies Act 2006, were in force during the 2024 financial year and remain in force for all current and past directors of the Group.

EMPLOYMENT OF DISABLED PERSONS

The Group is an equal opportunities employer. Employment decisions are based on merit and business needs and not on race, colour, nationality, ethnic origin, gender, sexual orientation, gender reassignment, age, religion or belief, physical or mental disability, marital status, pregnancy or maternity, or any other factor protected by law.

The Group is committed to providing equality for everyone in our workplace and all applicants for employment. This means equality of opportunity for all at every stage of the employment relationship with us.

The Group is also committed to ensuring that the workplace is free from all forms of discrimination and harassment. It is part of its policy to employ and provide a suitable environment for people with disabilities to pursue their careers without difficulty or disadvantage.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 Company and the Group 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;

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

The directors are 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 them to ensure that the financial statements comply with the Companies Act 2006. They are 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 directors are 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 each director 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 audit business of Haines Watts was acquired by Cooper Parry Group Limited on 30th September 2024. Haines Watts has resigned as auditor and Cooper Parry Group Limited has been appointed in its place.

The auditors, Cooper Parry Group Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J Reingardt - Director

25 September 2025

Opinion

We have audited the financial statements of Northwood Investors International Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2024 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, 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 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 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 directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 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 Directors 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 Directors 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 Directors.

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 directors' remuneration specified by law are not made; or

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page five, 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 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 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 directors either intend to liquidate the group or the parent company or to cease operations, or have 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.

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

We obtained an understanding of the legal and regulatory framework applicable to the Group, which includes the Company, and the industry in which it operates. We determined that the following laws and regulations were most significant: FRS102 - the Financial Reporting Standard applicable in the UK & The Republic of Ireland, the Companies Act 2006, the Royal Institution of Chartered Surveyors (RICS) and relevant tax compliance regulations in the UK.

We obtained an understanding of how the Group is complying with those legal and regulatory frameworks by making enquiries of management.

We assessed the susceptibility of the group's financial statements to material misstatement, including how fraud might occur, by meeting with management to understand where management considered there was susceptibility to fraud. Audit procedures performed by the audit team included:

-

Challenging assumptions and judgements made by management in its significant accounting estimates;

-

Identifying and testing journal entries, with a focus on entries made with unusual accounting combinations;

-

Confirming with management whether they have knowledge of any actual, suspected or illegal fraud;

-

Evaluating whether there was evidence of bias by management that represents a risk of material misstatement due to fraud.

These procedures 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 material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). 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. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing 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.

Martin Thomas FCCA (Senior Statutory Auditor)

for and on behalf of Cooper Parry Group Limited

Statutory Auditor

First Floor, Davidson House

Forbury Square

Reading

Berkshire

RG1 3EU

25 September 2025

TURNOVER

4

16,114,779

16,575,153

Cost of sales

12,741,776

15,789,419

GROSS PROFIT

3,373,003

785,734

Administrative expenses

1,871,604

50,458

1,501,399

735,276

Other operating income

5

92,141

83,533

OPERATING PROFIT

8

1,593,540

818,809

Interest receivable and similar income

953

-

1,594,493

818,809

Interest payable and similar expenses

10

3,187

-

PROFIT BEFORE TAXATION

1,591,306

818,809

Tax on profit

11

419,304

238,641

PROFIT FOR THE FINANCIAL YEAR

1,172,002

580,168

OTHER COMPREHENSIVE INCOME

Currency translation differences

(20,609

)

(4,591

)

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(20,609

)

(4,591

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,151,393

575,577

Profit attributable to:

Owners of the parent

1,172,002

580,168

Total comprehensive income attributable to:

Owners of the parent

1,151,393

575,577

FIXED ASSETS

Intangible assets

13

-

-

Tangible assets

14

232,817

308,958

Investments

15

2,614

2,739

235,431

311,697

CURRENT ASSETS

Debtors

16

7,204,572

5,706,486

Cash at bank and in hand

17

19,210,265

14,808,347

26,414,837

20,514,833

CREDITORS

Amounts falling due within one year

18

20,802,596

16,051,479

NET CURRENT ASSETS

5,612,241

4,463,354

TOTAL ASSETS LESS CURRENT LIABILITIES

5,847,672

4,775,051

CREDITORS

Amounts falling due after more than one year

19

-

78,772

NET ASSETS

5,847,672

4,696,279

CAPITAL AND RESERVES

Called up share capital

22

300

300

Retained earnings

23

5,847,372

4,695,979

SHAREHOLDERS' FUNDS

5,847,672

4,696,279

The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on 25 September 2025 and were signed on its behalf by:

J Reingardt - Director

FIXED ASSETS

Intangible assets

13

-

-

Tangible assets

14

224,376

308,292

Investments

15

20,395

20,395

244,771

328,687

CURRENT ASSETS

Debtors

16

5,082,457

5,419,116

Cash at bank and in hand

17

1,387,606

1,754,416

6,470,063

7,173,532

CREDITORS

Amounts falling due within one year

18

1,342,202

2,606,695

NET CURRENT ASSETS

5,127,861

4,566,837

TOTAL ASSETS LESS CURRENT LIABILITIES

5,372,632

4,895,524

CREDITORS

Amounts falling due after more than one year

19

-

78,772

NET ASSETS

5,372,632

4,816,752

CAPITAL AND RESERVES

Called up share capital

22

300

300

Retained earnings

23

5,372,332

4,816,452

SHAREHOLDERS' FUNDS

5,372,632

4,816,752

Company's profit for the financial year

555,880

552,297

The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on 25 September 2025 and were signed on its behalf by:

J Reingardt - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

300

4,120,402

4,120,702

Changes in equity

Total comprehensive income

-

575,577

575,577

Balance at 31 December 2023

300

4,695,979

4,696,279

Changes in equity

Total comprehensive income

-

1,151,393

1,151,393

Balance at 31 December 2024

300

5,847,372

5,847,672

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

300

4,264,155

4,264,455

Changes in equity

Total comprehensive income

-

552,297

552,297

Balance at 31 December 2023

300

4,816,452

4,816,752

Changes in equity

Total comprehensive income

-

555,880

555,880

Balance at 31 December 2024

300

5,372,332

5,372,632

Cash flows from operating activities

Cash generated from operations

1

5,017,569

2,114,948

Interest paid

(3,187

)

-

Tax paid

(591,038

)

(1,824,629

)

Net cash from operating activities

4,423,344

290,319

Cash flows from investing activities

Purchase of tangible fixed assets

(10,100

)

-

Sale of tangible fixed assets

8,205

-

Interest received

953

-

Net cash from investing activities

(942

)

-

Increase in cash and cash equivalents

4,422,402

290,319

Cash and cash equivalents at beginning of year

2

14,808,347

14,522,611

Effect of foreign exchange rate changes

(20,484

)

(4,583

)

Cash and cash equivalents at end of year

2

19,210,265

14,808,347

1.	RECONCILIATION OF PROFIT FOR THE FINANCIAL YEAR TO CASH GENERATED FROM OPERATIONS

2024

2023

£

£

Profit for the financial year

1,172,002

580,168

Depreciation charges

78,036

81,660

Finance costs

3,187

-

Finance income

(953

)

-

Taxation

419,304

238,641

1,671,576

900,469

(Increase)/decrease in trade and other debtors

(1,470,723

)

390,564

Increase in trade and other creditors

4,816,716

823,915

Cash generated from operations

5,017,569

2,114,948

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 December 2024

31/12/24

1/1/24

£

£

Cash and cash equivalents

19,210,265

14,808,347

Year ended 31 December 2023

31/12/23

1/1/23

£

£

Cash and cash equivalents

14,808,347

14,522,611

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

14,808,347

4,401,918

19,210,265

14,808,347

4,401,918

19,210,265

Total

14,808,347

4,401,918

19,210,265

1.	GENERAL INFORMATION

Northwood Investors International Limited (the "Group") is a private company, limited by shares and is registered and incorporated in the United Kingdom. The registered office is 90 Long Acre, London, WC2E 9RA.

The principal activity of the Company during the year was the provision of real estate investment advisory services. The Company also acts as a holding company.

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

The financial statements are rounded to the nearest £.

2.	ACCOUNTING POLICIES

Basis of preparation of 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.

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

The results of the subsidiary undertakings acquired are included from the date of acquisition (being the date control is obtained) using the acquisition method of accounting. A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The following principal accounting policies have been applied consistently throughout the year.

Going concern

The going concern basis of accounting has been applied. This is considered to be appropriate by the directors following an assessment of the Group's ability to continue as a going concern. The directors are satisfied that the Group has adequate resources to continue in operational existence, for the period of at least 12 months from the date that these financial statements were approved. Furthermore, the directors are not aware of any material uncertainties that may cast significant doubt upon the Group's ability to continue as a going concern.

Turnover

Turnover represents amounts receivable from the parent company based on costs incurred by the Company recharged at a mark-up. Turnover from contracts for the provision of advisory services are recognised over the period to which the service relates or when performance conditions are met. Turnover also includes certain cost recharges to fellow group companies. Turnover is stated net of Value Added Tax.

Turnover is measured at the fair value of the consideration received or receivable and represents the amount receivable for services rendered, net of discounts and VAT. It is recognised on certain costs incurred during the year at a marked-up percentage. These costs are recharged to other related entities.

Interest income

Interest income is recognised in profit or loss using the effective interest method.

Intangible assets

Intangible assets are initially recognised at cost. After recognition under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

Tangible assets

Tangible assets are measured at cost, net of accumulated depreciation and any impairment losses.

Tangible assets are stated at cost less accumulated depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:

Depreciation is provided on the following basis:

Fixtures, fittings and equipment - 15% straight line

Computer equipment - 100% in year of acquisition

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 the Consolidated Statement of Comprehensive Income.

Impairment of fixed assets

At each reporting period end date, the Group reviews the carrying amounts of its tangible 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 Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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 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 the Consolidated Statement of Comprehensive Income, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Investments in subsidiaries

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in the Consolidated Statement of Comprehensive Income.

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

Financial instruments

The Group has elected to applying the provisions of Section 11 'Basic Financial Instruments' of FRS 102 to all of its financial instruments.

Financial instruments are recognised when the Group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with 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

Basic financial assets, which include trade and other 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 financial asset is measured at the present value of the future receipts discounted at a market rate of interest.

Basic financial liabilities

Basic financial liabilities, including trade and other creditors and amounts owed to group undertakings are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value fo the future payments discounted at a market rate of interest.

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

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction cost, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Cash and cash equivalents

Cash and cash equivalents are basic financial instruments and include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of three months or less.

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.