REGISTERED NUMBER: 11701509 (England and Wales)

Group Strategic Report,

Report of the Director and

Audited

Consolidated Financial Statements

for the Year Ended 31 March 2025

for

XLM Holdings Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Director

4

Report of the Independent Auditors

6

Consolidated Statement of 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:

R Ally

REGISTERED OFFICE:

304 Bedworth Road

Coventry

West Midlands

CV6 6LA

REGISTERED NUMBER:

11701509 (England and Wales)

AUDITORS:

Leigh Christou Ltd

Chartered Certified Accountants and

Statutory Auditor

Leofric House

Binley Road

Coventry

CV3 1JN

The director presents his strategic report of the company and the group for the year ended 31 March 2025.

REVIEW OF BUSINESS

The principal activities of the Group during the year continued to be that of maintenance and repair of motor vehicles. The subsidiary; XL Motors Ltd continued to support damage reconstruction and refinish to a number of key manufacturer programmes. Other supporting programmes include accident management companies, insurance companies, and dealer/retailer outlets. XL Motors Ltd is recognised as one of the key vehicle manufacturers approved retailers in the UK. XL Motors Ltd has the ability to repair electric vehicles, structural aluminium, composite materials, all steel types, and all new technology introduced to the market. This accounts for 85% of sales volume, whilst the remaining 15% consists of vehicle servicing, maintenance, and recovery.

For the year ended 31 March 2025 the consolidated group performance is reported using the following key performance indicators:

2025

2024

£

£

Turnover

9,958,095

8,562,873

Gross profit

5,335,606

4,521,382

Gross profit

53.58%

52.80%

Profit/(loss) before taxation

598,499

621,681

Profit/(loss) before taxation

6.01%

7.26%

Net assets

5,417,401

4,999,488

All work is carried out in four sites within the Coventry and Warwickshire area. Multiple sites enable greater flexibility to control volume fluctuation, customer demand, reduce cycle times, increase efficiency, and support work providers KPI's.

The Director's outlook is to focus on the Group's high level of service that is provided to work providers and individual customers. The Group's brand reputation is paramount with a proactive presence on social media and brand awareness within our marketing programmes.

PRINCIPAL RISKS AND UNCERTAINTIES

We see a number of risks for the year ahead which are disclosed below. We are constantly monitoring and reviewing to minimise the potential impact.

Operational risk

Loss of employees:

- Staff appraisals are conducted to improve communication, review salaries and working conditions to keep ahead of market competition.

Competition:

- Growing need for complex manufacturer's vehicle repairs keeps us ahead of our competition and enables us to be the first option for repair.

Cybercrime:

- The Group has an important proactive stance to combat against the increasing threat of Cybercrime. The Group's IT infrastructure is reviewed, managed, and maintained by an outside company, ensuring full protection against cybercrime is always maintained.

Financial risk

Economic climate:

- Throughout our years in business there have been many periods of economic downturn. We manage the times with tight controls and measures to limit our exposure. All work providers are regularly financially checked and reviewed to minimise risk.

Foreign currency risk:

- The group conducts a limited number of transactions in foreign currency, and as such the financial risks are considered to be small, and as a result, the group does not use foreign exchange forward contracts, or derivatives to hedge these exposures.

Credit risk:

- The group's principal financial assets are bank balances and other trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.

Liquidity risk:

- The group manages its cash and borrowing requirement to ensure the group has sufficient liquid resources to meet the operating needs of the business.

ON BEHALF OF THE BOARD:

R Ally - Director

27 November 2025

The director presents his report with the financial statements of the company and the group for the year ended 31 March 2025.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of a vehicle bodyshop and MOT service centre.

DIVIDENDS

The total distribution of dividends during the year ended 31 March 2025 was £Nil (2024: £Nil).

DIRECTOR

R Ally held office during the whole of the period from 1 April 2024 to the date of this report.

GOING CONCERN

The financial statements have been prepared on a going concern basis, which assumes that the group will continue in operational existence for the foreseeable future being at least 12 months from the approval of the financial statements.

At the year-end the group achieved a profit before tax for the year of £598,499 (2024: £621,681), had net current assets of £1,794,558 (2024: £1,488,516) and cash balances of £1,790,802 (2024: £1,399,881) and has traded profitably in the period after the reporting date. After reviewing the group's latest management information, forecasts of revenues and costs to 31 March 2026 and making enquiries, the director has a reasonable expectation that the group has adequate resources to continue in operation for the foreseeable future, meeting it's liabilities as they fall due.

For the reasons set out above, the director has prepared the financial statements on a going concern basis and has concluded that no material uncertainties exist related to going concern.

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, Leigh Christou Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

R Ally - Director

27 November 2025

Opinion

We have audited the financial statements of XLM Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2025 which comprise the Consolidated Statement of 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 March 2025 and of the group's profit for the year then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 director is responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Director, 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 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.

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

As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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.

C A Christou FCCA MAE (Senior Statutory Auditor)

for and on behalf of Leigh Christou Ltd

Chartered Certified Accountants and

Statutory Auditor

Leofric House

Binley Road

Coventry

CV3 1JN

27 November 2025

TURNOVER

3

9,958,095

8,562,873

Cost of sales

4,622,489

4,041,491

GROSS PROFIT

5,335,606

4,521,382

Administrative expenses

5,038,914

4,886,780

296,692

(365,398

)

Other operating income

4

305,770

1,008,464

OPERATING PROFIT

6

602,462

643,066

Interest receivable and similar income

7

38,633

24,187

641,095

667,253

Interest payable and similar expenses

8

42,596

45,572

PROFIT BEFORE TAXATION

598,499

621,681

Tax on profit

9

180,586

158,347

PROFIT FOR THE FINANCIAL YEAR

417,913

463,334

OTHER COMPREHENSIVE INCOME

Freehold property revaluation

Income tax relating to other comprehensive income

-

277,527

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

-

277,527

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

417,913

740,861

Profit attributable to:

Owners of the parent

417,913

463,334

Total comprehensive income attributable to:

Owners of the parent

417,913

740,861

FIXED ASSETS

Intangible assets

11

3,875

-

Tangible assets

12

723,146

673,418

Investments

13

42,330

45,758

Investment property

14

3,630,741

3,593,684

4,400,092

4,312,860

CURRENT ASSETS

Stocks

15

279,454

332,954

Debtors

16

2,084,597

1,635,960

Cash at bank

1,790,802

1,399,881

4,154,853

3,368,795

CREDITORS

Amounts falling due within one year

17

2,360,295

1,880,279

NET CURRENT ASSETS

1,794,558

1,488,516

TOTAL ASSETS LESS CURRENT LIABILITIES

6,194,650

5,801,376

CREDITORS

Amounts falling due after more than one year

18

(458,698

)

(514,608

)

PROVISIONS FOR LIABILITIES

22

(318,551

)

(287,280

)

NET ASSETS

5,417,401

4,999,488

CAPITAL AND RESERVES

Called up share capital

23

100

100

Non-distributable reserves

24

591,133

563,341

Retained earnings

24

4,826,168

4,436,047

SHAREHOLDERS' FUNDS

5,417,401

4,999,488

The financial statements were approved by the director and authorised for issue on 27 November 2025 and were signed by:

R Ally - Director

FIXED ASSETS

Intangible assets

11

-

-

Tangible assets

12

3,267

4,277

Investments

13

100

100

Investment property

14

3,630,741

3,593,684

3,634,108

3,598,061

CURRENT ASSETS

Debtors

16

321,535

245,476

Cash at bank

1,357,793

514,990

1,679,328

760,466

CREDITORS

Amounts falling due within one year

17

1,619,407

1,063,913

NET CURRENT ASSETS/(LIABILITIES)

59,921

(303,447

)

TOTAL ASSETS LESS CURRENT LIABILITIES

3,694,029

3,294,614

CREDITORS

Amounts falling due after more than one year

18

(395,432

)

(436,046

)

PROVISIONS FOR LIABILITIES

22

(197,303

)

(187,781

)

NET ASSETS

3,101,294

2,670,787

CAPITAL AND RESERVES

Called up share capital

23

100

100

Non-distributable reserves

24

591,133

563,341

Retained earnings

24

2,510,061

2,107,346

SHAREHOLDERS' FUNDS

3,101,294

2,670,787

Company's profit for the financial year

430,507

2,670,687

The financial statements were approved by the director and authorised for issue on 27 November 2025 and were signed by:

R Ally - Director

Called up

share

Retained

Revaluation

Non-distributable

Total

capital

earnings

reserve

reserves

equity

£

£

£

£

£

Balance at 1 April 2023

100

3,425,948

832,579

-

4,258,627

Changes in equity

Total comprehensive income

-

1,010,099

(832,579

)

563,341

740,861

Balance at 31 March 2024

100

4,436,047

-

563,341

4,999,488

Changes in equity

Total comprehensive income

-

390,121

-

27,792

417,913

Balance at 31 March 2025

100

4,826,168

-

591,133

5,417,401

Called up

share

Retained

Non-distributable

Total

capital

earnings

reserves

equity

£

£

£

£

Balance at 1 April 2023

100

-

-

100

Changes in equity

Total comprehensive income

-

2,107,346

563,341

2,670,687

Balance at 31 March 2024

100

2,107,346

563,341

2,670,787

Changes in equity

Total comprehensive income

-

402,715

27,792

430,507

Balance at 31 March 2025

100

2,510,061

591,133

3,101,294

Cash flows from operating activities

Cash generated from operations

1

737,869

662,852

Interest paid

(36,502

)

(39,478

)

Interest element of hire purchase payments paid

(6,094

)

(6,094

)

Tax paid

(16,255

)

(31,039

)

Net cash from operating activities

679,018

586,241

Cash flows from investing activities

Purchase of intangible fixed assets

(4,500

)

-

Purchase of tangible fixed assets

(202,405

)

(59,598

)

Purchase of investment property

-

(2,842,562

)

Sale of tangible fixed assets

5,000

2,166,826

Sale of fixed asset investments

3,000

-

Sale of investment property

1,030

-

Interest received

38,632

24,187

Net cash from investing activities

(159,243

)

(711,147

)

Cash flows from financing activities

New loans in year

-

506,000

Loan repayments in year

(37,571

)

(341,879

)

Capital repayments in year

(14,025

)

(14,025

)

Amount introduced by directors

270,024

858,387

Amount withdrawn by directors

(347,282

)

(537,413

)

Net cash from financing activities

(128,854

)

471,070

Increase in cash and cash equivalents

390,921

346,164

Cash and cash equivalents at beginning of year

2

1,399,881

1,053,717

Cash and cash equivalents at end of year

2

1,790,802

1,399,881

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

31.3.25

31.3.24

£

£

Profit before taxation

598,499

621,681

Depreciation charges

151,860

193,208

Profit on disposal of fixed assets

(3,129

)

(9,003

)

Gain on revaluation of fixed assets

(38,086

)

(751,122

)

Finance costs

42,596

45,572

Finance income

(38,633

)

(24,187

)

713,107

76,149

Decrease/(increase) in stocks

53,500

(56,040

)

(Increase)/decrease in trade and other debtors

(371,379

)

176,339

Increase in trade and other creditors

342,641

466,404

Cash generated from operations

737,869

662,852

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 March 2025

31.3.25

1.4.24

£

£

Cash and cash equivalents

1,790,802

1,399,881

Year ended 31 March 2024

31.3.24

1.4.23

£

£

Cash and cash equivalents

1,399,881

1,053,717

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.4.24

Cash flow

At 31.3.25

£

£

£

Net cash

Cash at bank

1,399,881

390,921

1,790,802

1,399,881

390,921

1,790,802

Debt

Finance leases

(88,823

)

14,025

(74,798

)

Debts falling due within 1 year

(38,198

)

(3,044

)

(41,242

)

Debts falling due after 1 year

(436,046

)

40,614

(395,432

)

(563,067

)

51,595

(511,472

)

Total

836,814

442,516

1,279,330

1.	STATUTORY INFORMATION

XLM Holdings 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 as modified by the revaluation of certain assets.

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.

Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of turnover 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.

Turnover arising from the provision of car body repair 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, turnover is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

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.

Computer software is being amortised evenly over its estimated useful life of three years.

Tangible fixed assets

Tangible fixed assets (except for freehold land and buildings) are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Freehold land and buildings are measured at fair value, with valuations carried out with sufficient regularity to ensure that the carrying amount does not materially differ from that which would be determined using fair value at the end of the reporting period.

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:

Short leasehold

20% straight line

Long leasehold

20% straight line

Plant and machinery

15% reducing balance

Fixtures, fittings & equipment

20% straight line

Motor vehicles

25% reducing balance

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.

Revaluation gains and losses

Revaluation gains/increases are recognised in the revaluation reserve, except where, and to the extent that, they reverse a revaluation decrease/impairment that has previously been recognised in operating expenditure, in which case they are credited to expenditure to the extent of the decrease previously charged there. Revaluation losses/decreases that do not result from a loss of economic value or service potential are charged to the revaluation reserve to the extent that there is an available balance for the assets concerned, and thereafter are charged to expenditure. Gains and losses recognised in the revaluation reserve and reported in the Statement of Income and retained earnings as an item of 'other comprehensive income'.

Impairment of fixed assets

At each reporting period end date, the company 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.

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.

Investment property

Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit or loss.