REGISTERED NUMBER: 11621867 (England and Wales)

Group Strategic Report, Report of the Directors and

Audited Consolidated Financial Statements for the Year Ended 31 December 2024

for

Dorot Capital Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

7

Consolidated Income Statement

11

Consolidated Other Comprehensive Income

12

Consolidated Balance Sheet

13

Company Balance Sheet

14

Consolidated Statement of Changes in Equity

15

Company Statement of Changes in Equity

16

Consolidated Cash Flow Statement

17

Notes to the Consolidated Cash Flow Statement

18

Notes to the Consolidated Financial Statements

20

DIRECTORS:

M J Eman

A Eman

REGISTERED OFFICE:

5th Floor, 10 Brook Street

Mayfair

London

W1S 1BG

REGISTERED NUMBER:

11621867 (England and Wales)

SENIOR STATUTORY AUDITOR:

Gordon Levy BA, FCA

AUDITORS:

Gordon Levy Limited

Statutory Auditors

Suite 5, 4th floor

3 Universal Square

Devonshire Street North

Manchester

M12 6JH

Dorot Capital LTD is a holding company owning:

- 100% of Gold Grain Capital Ltd (GGC UK), UK based and registered with the UK Financial Conduct Authority (FCA) under number 734736. GGC UK was an appointed representative of Sapia Partners LLP, an AR principal authorised and registered with the UK Financial Conduct Authority (FCA) under number 550103. On 11 April 2025 GGC UK voluntarily deregistered with the FCA and and ceased to be a representative of Sapia Partners LLP as these regulations were no longer required.

- 100% of GGC Securities LTD (GGCS UK), UK based and registered with the UK Financial Conduct Authority (FCA) under number 728645.

- 100% of Gold Grain Capital BV (GGC BV), based in the Netherlands and registered with The Dutch Authority for the Financial Markets (AFM) under number 14006280. GGC BV has a branch registered in Italy (Codice Fiscale: 13263080965).

REVIEW OF BUSINESS

GGC UK, GGCS UK and GGC BV specialise in arranging and distributing fully customisable third-party instruments, with an emphasis on structured financial products. The appeal of structured financial products increases when there is a degree of market volatility and change, as opposed to a stagnant, sideways market.

PRINCIPAL RISKS AND UNCERTAINTIES

Macro-economic environment

The Group operates within a complex and fiercely competitive market, which is notably responsive to external market forces. The Group's revenues remain sensitive to global macroeconomic conditions. Prolonged inflationary pressures, rising interest rates, and geopolitical conflicts (Ukraine, Middle East tensions) may negatively affect investor sentiment, product demand, and liquidity across markets. A downturn in equity or credit markets can materially impact structured product issuance and distribution volumes.

Regulatory and Compliance Risk

Regulatory and compliance risk is a significant concern for financial services firms operating under the jurisdiction of the FCA in the United Kingdom and the AFM in the Netherlands. The FCA and AFM are known for their stringent regulations and oversight of the financial industry, and firms under their purview must adhere to a wide range of rules and requirements. They have a comprehensive rulebook that covers various aspects of financial services, including conduct, prudential requirements, reporting, and market integrity. The Group must ensure to remain compliant with the rules and to keep monitoring the updates and changes as they are published. To mitigate regulatory and compliance risk, the Group established and keeps revising comprehensive compliance programs, conducts regular internal audits, provides ongoing training to staff, and stays informed about changes in regulations. The Group is exposed to potential litigation and regulatory matters, which could have an impact on its operations and financial position.

FUTURE DEVELOPMENTS STRATEGY GOING FORWARD.

GGCS UK received the permission from the FCA to execute trades on a matched principal basis in July 2025. This will allow expanding its service offering. We expect to grow the UK based team due to the new licence.

Section 172(1) Statement

In discharging their duty to promote the interests of the company, and therefore that of the group headed by the company, the directors act individually and collectively in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:

(a) the likely consequences of any decision in the long term,

(b) the interests of the company's employees,

(c) the need to foster the company's business relationships with suppliers, customers and others,

(d) the impact of the company's operations on the community and the environment,

(e) the desirability of the company maintaining a reputation for high standards of business conduct, and

(f) the need to act fairly as between members of the company.

Being a holding company of the group, the key decisions which affect the group, this company and the wider stakeholders are principally made by the board of this company.

- Stakeholders

The board understands the importance of engagement with all of its stakeholders and gives appropriate weighting to the outcome of its decisions for the relevant stakeholder in weighing up how best to promote the success of the group.

The board regularly discusses issues concerning employees, customers, suppliers, community and environment, regulators and its shareholders, which it considers in its discussions and in its decision-making process. In addition to this, the board seeks to understand the interests and views of the group's stakeholders by engaging with them directly when required. The following page summarises the key stakeholders and how the group engages with each.

Stakeholders Engagement

- Employees

Our employees contribute to a positive working culture and safe working environment. Employees are key to the success of our business. In addition to aiming to be a responsible employer in our approach to pay and benefits, we continue to engage with our team to ascertain which training and development opportunities should be made available to improve our team's productivity and our individual employees' potential within the business.

We continually invest in employee development and well-being to create and encourage an inclusive culture within the organisation. Our employee appraisal programme encourages employee feedback and facilitates the opportunity for both employees and managers to set performance goals on an annual basis.

Our culture invites different perspectives, new ideas and opportunities for growth. We work hard to ensure employees feel welcome and are valued and recognised for their hard work. All employees receive regular updates on the performance of the business.

- Customers

Customers are at the centre of our business. Our business development team, allied with our customer service teams, builds lasting relationships with current and potential customers to understand their objectives and requirements. We are in regular contact with customers in order to meet their defined service and reporting requirements. We take a consultative approach with customers focused on building long-term relationships.

- Suppliers

We remain committed to being fair and transparent in our dealings with all our suppliers. The group has procedures requiring due diligence of suppliers as to their internal governance, including for example, their anti-bribery and corruption practices, data protection policies and modem slavery matters. The group has systems and processes in place to ensure suppliers' goods and services are provided in line with terms and conditions which are acceptable to the company, in addition to ensuring suppliers are paid in timely manner.

- Community and Environment

The board's approach to social responsibility, diversity & the community is of high importance. And corporate social responsibility principles are part of our culture and decision-making process. We take a consultative approach focused on building long-term relationships and solving business problems. Diversity and inclusion is a key pillar of our business. Our HR resource is responsible for diversity & inclusion and aims to connect with affiliates and networks, updating the board regularly.

The board continues to commit and broaden the group's work and associations with local charitable organisations.

- Shareholders

The board also seeks to behave in a responsible manner towards our shareholders. The board communicates information relevant to the shareholders on a regular basis to cover such items as financial performance, forecasting, annual budgeting, etc.

ON BEHALF OF THE BOARD:

M J Eman - Director

30 September 2025

The directors present their 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 group in the year under review was that of a financial intermediary company.

DIVIDENDS

Dividends were distributed of £3,803,986 in the year (2023: £4,732,570). These were intercompany distributions and therefore were eliminated from the consolidated accounts.

DIRECTORS

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

M J Eman

A Eman

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 auditors, Gordon Levy Limited, are deemed to be reappointed under section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

M J Eman - Director

30 September 2025

Opinion

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 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 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.

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.

Based on our understanding of the group and parent company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation, anti-money laundering regulation.

To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:

- Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;

- Inspecting correspondence, if any, with relevant licensing or regulatory authorities;

- Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and

- Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.

We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation, the Companies Act 2006. In addition, we evaluated the directors' and management's incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, revenue recognition (which we pinpointed to the cut-off assertion), and significant one-off or unusual transactions.

Our audit procedures in relation to fraud included but were not limited to:

- Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;

- Gaining an understanding of the internal controls established to mitigate risks related to fraud;

- Discussing amongst the engagement team the risks of fraud; and

- Addressing the risks of fraud through management override of controls by performing journal entry testing. There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud tests with management.

As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

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.

Gordon Levy BA, FCA (Senior Statutory Auditor)

for and on behalf of Gordon Levy Limited

Statutory Auditors

Suite 5, 4th floor

3 Universal Square

Devonshire Street North

Manchester

M12 6JH

30 September 2025

TURNOVER

3

76,047,138

60,738,100

Cost of sales

(60,533,674

)

(49,208,144

)

GROSS PROFIT

15,513,464

11,529,956

Administrative expenses

(9,416,244

)

(3,772,607

)

6,097,220

7,757,349

Other operating income

8,094

8,090

OPERATING PROFIT

5

6,105,314

7,765,439

Interest receivable and similar income

779,417

258,870

6,884,731

8,024,309

Gain/loss on revaluation of investments

(53,011

)

277,233

6,831,720

8,301,542

Interest payable and similar expenses

6

(44

)

(2,043

)

PROFIT BEFORE TAXATION

6,831,676

8,299,499

Tax on profit

7

(1,692,624

)

(1,908,238

)

PROFIT FOR THE FINANCIAL YEAR

5,139,052

6,391,261

Profit attributable to:

Owners of the parent

5,139,052

6,391,261

PROFIT FOR THE YEAR

5,139,052

6,391,261

OTHER COMPREHENSIVE INCOME

Exchange rate differences

44,847

(27,405

)

Acquisition of subsidiary

-

43,712

Income tax relating to components of other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

44,847

16,307

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

5,183,899

6,407,568

Total comprehensive income attributable to:

Owners of the parent

5,183,899

6,407,568

FIXED ASSETS

Intangible assets

10

11,110

11,110

Tangible assets

11

113,954

58,854

Investments

12

574,139

355,399

699,203

425,363

CURRENT ASSETS

Debtors

13

3,078,489

3,801,529

Investments

14

14,717,662

7,748,485

Cash at bank

9,225,391

8,713,972

27,021,542

20,263,986

CREDITORS

Amounts falling due within one year

15

6,246,822

4,399,325

NET CURRENT ASSETS

20,774,720

15,864,661

TOTAL ASSETS LESS CURRENT LIABILITIES

21,473,923

16,290,024

CAPITAL AND RESERVES

Called up share capital

18

10,000

10,000

Revaluation reserve

19

11,638

(33,209

)

Retained earnings

19

21,452,285

16,313,233

SHAREHOLDERS' FUNDS

21,473,923

16,290,024

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

M J Eman - Director

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

-

-

Investments

12

1,265,784

627,044

1,265,784

627,044

CURRENT ASSETS

Debtors

13

199,427

2,480,729

Investments

14

14,717,662

7,748,485

Cash at bank

1,648,812

2,266,108

16,565,901

12,495,322

CREDITORS

Amounts falling due within one year

15

1,061,623

612,545

NET CURRENT ASSETS

15,504,278

11,882,777

TOTAL ASSETS LESS CURRENT LIABILITIES

16,770,062

12,509,821

CAPITAL AND RESERVES

Called up share capital

18

10,000

10,000

Revaluation reserve

19

44,859

-

Retained earnings

19

16,715,203

12,499,821

SHAREHOLDERS' FUNDS

16,770,062

12,509,821

Company's profit for the financial year

4,215,382

5,133,057

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

M J Eman - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2023

10,000

9,878,260

(5,804

)

9,882,456

Changes in equity

Total comprehensive income

-

6,434,973

(27,405

)

6,407,568

Balance at 31 December 2023

10,000

16,313,233

(33,209

)

16,290,024

Changes in equity

Total comprehensive income

-

5,139,052

44,847

5,183,899

Balance at 31 December 2024

10,000

21,452,285

11,638

21,473,923

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2023

10,000

7,366,764

-

7,376,764

Changes in equity

Total comprehensive income

-

5,133,057

-

5,133,057

Balance at 31 December 2023

10,000

12,499,821

-

12,509,821

Changes in equity

Total comprehensive income

-

4,215,382

44,859

4,260,241

Balance at 31 December 2024

10,000

16,715,203

44,859

16,770,062

Cash flows from operating activities

Cash generated from operations

1

(87,364

)

3,902,380

Interest paid

(44

)

(2,043

)

Tax paid

(1,312,292

)

(1,620,668

)

Net cash from operating activities

(1,399,700

)

2,279,669

Cash flows from investing activities

Purchase of intangible fixed assets

-

(11,110

)

Purchase of tangible fixed assets

(128,887

)

(29,896

)

Purchase of fixed asset investments

(218,740

)

(70,083

)

Sale of tangible fixed assets

3,999

-

Acquisition of subsidiary

-

43,712

Revaluation of assets

-

277,233

Exchange rate differences

-

(24,211

)

Interest received

779,417

258,870

Net cash from investing activities

435,789

444,515

Cash flows from financing activities

Amount introduced by directors

343

344

Amount withdrawn by directors

1,999,998

(2,003,368

)

Net cash from financing activities

2,000,341

(2,003,024

)

Increase in cash and cash equivalents

1,036,430

721,160

Cash and cash equivalents at beginning of year

2

8,188,961

7,467,801

Cash and cash equivalents at end of year

2

9,225,391

8,188,961

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

31.12.24

31.12.23

£

£

Profit before taxation

6,831,676

8,299,499

Depreciation charges

62,872

53,686

Loss on disposal of fixed assets

6,916

-

Loss/(gain) on revaluation of fixed assets

53,011

(277,233

)

Other reconciliation adjustments

(8,507

)

-

Finance costs

44

2,043

Finance income

(779,417

)

(258,870

)

6,166,595

7,819,125

Increase in trade and other debtors

(7,719,821

)

(5,865,101

)

Increase in trade and other creditors

1,465,862

1,948,356

Cash generated from operations

(87,364

)

3,902,380

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

9,225,391

8,713,972

Bank overdrafts

-

(525,011

)

9,225,391

8,188,961

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

8,713,972

7,467,846

Bank overdrafts

(525,011

)

(45

)

8,188,961

7,467,801

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank

8,713,972

511,419

9,225,391

Bank overdrafts

(525,011

)

525,011

-

8,188,961

1,036,430

9,225,391

Liquid resources

Current asset investments

7,748,485

6,969,177

14,717,662

7,748,485

6,969,177

14,717,662

Total

15,937,446

8,005,607

23,943,053

1.	STATUTORY INFORMATION

Dorot Capital 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.

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 (January 2022) and the Companies Act 2006. The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies.

Significant judgements and estimates

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors including expectations of future events that are believed to be reasonable under the circumstances.

Investments are measured at fair value. Where fair value cannot be measured reliably, the group estimate the value at cost less impairment.

Turnover

Turnover is measured at the fair consideration received or receivable, excluding discounts, rebates, value added tax and other sales tax.

Going concern

The accounts are prepared on a going concern basis, which assumes that the group will continue operations for the foreseeable future. The group's ability to meet future working capital requirement and therefore continue as a going concern is dependent on it being able to maintain its cash flow. Given that the group is profit making and that projections prepared by the directors demonstrate future revenue growth the business is well placed to operate within its existing cash resources.The company is therefore in a strong position to continue trading for the foreseeable future.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2023, is not being amortised.

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.

Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciated and accumulated impairment losses.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Long leasehold - 10% straight line

Fixtures and fittings - 33% straight line

Computer equipment - 33% straight line

Financial instruments

Classification. All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a finance transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt 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.

Recognition and measurement. Debt instruments which meet the following conditions are subsequently measured at amortised cost using the effective interest method:

(a) The contractual return to the holder is (i) a fixed amount; (ii) a positive fixed rate or a positive variable rate; or (iii) a combination of a positive or a negative fixed rate and a positive variable rate.

(b) The contract may provide for repayments of the principal or the return to the holder (but not both) to be linked to a single relevant observable index of general price inflation of the currency in which the debt instrument is denominated, provided such links are not leveraged.

(c) The contract may provide for a determinable variation of the return to the holder during the life of the instrument, provided that (i) the new rate satisfies condition (a) and the variation is not contingent on future events other than (1) a change of a contractual variable rate; (2) to protect the holder against credit deterioration of the issuer; (3) changes in levies applied by a central bank or arising from changes in relevant taxation or law; or (ii) the new rate is a market rate of interest and satisfies condition (a).

(d) There is no contractual provision that could, by its terms, result in the holder losing the principal amount or any interest attributable to the current period or prior periods.

(e) Contractual provisions that permit the issuer to prepay a debt instrument or permit the holder to put it back to the issuer before maturity are not contingent on future events, other than to protect the holder against the credit deterioration of the issuer or a change in control of the issuer, or to protect the holder or issuer against changes in levies applied by a central bank or arising from changes in relevant taxation or law

(f) Contractual provisions may permit the extension of the term of the debt instrument, provided that the return to the holder and any other contractual provisions applicable during the extended term satisfy the conditions of paragraphs (a) to (c).

Debt instruments that are classified as payable or receivable within one year on initial recognition and which meet the above conditions are measured at the undiscounted amount of the cash or other consideration expected to be paid or received, net of impairment. With the exception of some hedging instruments, other debt instruments not meeting these conditions are measured at fair value through profit or loss.

Commitments to make and receive loans which meet the conditions mentioned above are

measured at cost (which may be nil) less impairment.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, 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 balance sheet date.

Foreign currencies

The financial statements are presented in GBP as that is the functional currency of the entities.

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the contracted rate or the rate of exchange ruling at the balance sheet date and the gains or losses on translation are included in the profit and loss account.

On consolidation, the assets and liabilities of overseas subsidiary undertakings are translated at the closing exchange rates. Profit and loss accounts of such undertakings are consolidated at the average rates of exchange during the year. Gains and losses arising on these translations are taken directly to a separate component of equity.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

Debtors

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