REGISTERED NUMBER: 00045611 (England and Wales)

Strategic Report,

Report of the Directors and

Financial Statements

for the Year Ended 30 June 2025

for

Lincoln City Football Club Company

Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

7

Statement of Comprehensive Income

10

Balance Sheet

11

Statement of Changes in Equity

12

Cash Flow Statement

13

Notes to the Cash Flow Statement

14

Notes to the Financial Statements

15

DIRECTORS:

H Jabara

D Lowes

S A Melnick

C H Nates

G C Rossini

L J Scully

A J Slater

J S Wright

Lincoln City Supporters' Society Ltd

A P Fowler

R L Fowler

SECRETARY:

T W Hall

REGISTERED OFFICE:

LNER Stadium

Sincil Bank

Lincoln

Lincolnshire

LN5 8LD

REGISTERED NUMBER:

00045611 (England and Wales)

SENIOR STATUTORY AUDITOR:

James Sewell BA (Hons) FCA CTA

AUDITORS:

Wright Vigar Limited

Statutory Auditors

Chartered Accountants & Business Advisers

15 Newland

Lincoln

Lincolnshire

LN1 1XG

BANKERS:

National Westminster Bank

Market Place

Louth

Lincolnshire

LN11 9NX

The directors present their strategic report for the year ended 30 June 2025.

BUSINESS REVIEW

The key financial and performance indicators for the current and three previous financial years are shown below:

2025

2024

2023

2022

£ 000

£ 000

£ 000

£ 000

Turnover

8,478

6,977

6,527

5,567

Staff Costs

7,526

6,938

5,931

6,236

Profit/(loss)

(2,881)

(2,981)

(2,636)

(2,052)

Final position (League 1)

11th

7th

11th

17th

Average League Attendance

9,004

8,424

8,486

8,773

Seasons review

The club completed its 6th successive season back in League 1 with another top-half finish albeit four places below last season. A good start to the season positioned the club in the play-off places by mid-November but a subsequent run of one win in ten hampered any play-off aspirations.

A respectable league position was achieved given the explosion in player remuneration in League 1 which saw an increase of more than 50% in these costs. Although player-related spending in League 1 is governed by the EFL's Salary Cost Management Protocol (SCMP), there is ultimately no limit on what an individual club may spend on player costs. Unlike the Premier League or EFL Championship there is also no limit on the extent of losses a club may incur in League 1. Despite our player costs increasing by more than 20% compared to last season, we slipped from the 12th largest budget to 19th and 17th after the summer and winter transfer windows respectively.

We reached the third round of the FA Cup before losing narrowly to League 1 title winners Birmingham City and lost by the same scoreline to Bolton Wanderers in the last 16 of the EFL Trophy. The biggest disappointment was a first round exit to League 2 Harrogate Town in the Carabao Cup.

Turnover

Turnover is analysed into its main components as follows:

2025

2024

£ 000

£ 000

Matchday

2,852

2,353

Central distribution and grants

2,275

1,768

Commercial, hospitality and retail

1,910

1,750

Academy grants and fundraising

776

680

Football fortune and miscellaneous income

665

426

8,478

6,977

Overall turnover was significantly higher, up nearly 22% and surpassing £8million for the first time.

Although Matchday revenue shows a significant increase this was largely due to the decision to bring bar and catering operations in-house from the start of the season. Excluding this impact, Matchday revenue was marginally up due to higher season ticket sales and slightly better cup revenue offset by a decline in EFL digital sales following the new broadcast deal.

Central distributions increased by nearly £0.5 million, almost solely on the back of the new EFL domestic broadcast deal with Sky Sports. After offsetting the loss in domestic digital sales, the net benefit from the new deal amounted to £0.35 million. Solidarity income from the Premier league increased by just under 3%.

Commercial income again increased by a double-digit percentage while retail and hospitality income were marginally higher.

Football fortune and miscellaneous income increased by more than £200k largely due to more prize money from greater progress in the FA Cup and EFL trophy. Player loan fees received were also higher.

Player Trading

Included in other operating income were player trading profits exceeding £0.5million. This primarily comprised the guaranteed fee and a contingent appearance fee from Millwall from the sale of goalkeeper Lukas Jensen in July 2024. Further net receipts were derived from the sale of Dylan Duffy to Chesterfield, 14-year-old academy player Jaxon Tomak to Nottingham Forest and a contingent appearance fee from the sale of Lasse Sorensen.

Netted off against the receipts were costs arising from the mutual cancellation of Jaden Brown's contract and a contingent appearance fee due to Tottenham Hotspur on the ending of TJ Eyoma's contract with the club.

Operating loss

The loss for the financial year was marginally lower than the corresponding year at £2.9 million and in line with projections. Despite the sharply higher turnover, administrative expenses increased by 13%.

As mentioned previously, the decision to bring bar and catering operations in-house inflated turnover as well as increasing costs by £0.45 million. Aside from higher player related expenditure, general business costs continued to increase at well above the rate of inflation.

Balance sheet

The cost of additional player and management registrations during the financial year amounted to £0.55 million comprising fees for the signing of Rob Street, JJ McKiernan, George Wickens, Dom Jefferies and Erik Ring as well as some minor contingents for players signed previously.

Capital expenditure during the financial year amounted to £0.8million including £0.5 million at the LNER stadium and just over £0.2 million at the Elite Performance Centre.

Cash balances at year-end increased to £1.6 million from £1.3 million.

Long term creditors increased further to £2.6 million, attributable to the receipt of further capital grants for the Stacey West Community Hub project. Actual long-term debt which relates to bonds issued to fans for capital projects amounted to £537k at year-end with a further £79k included in current liabilities.

Net assets increased to £4.5 million from £3.8 million.

All additional funding required by the club was provided by shareholders through the issue of an additional 9.9 million shares for £3.6 million.

POST BALANCE SHEET AND FUTURE DEVELOPMENTS

We were pleased to record our first seven figure player sale with the transfer of academy graduate Jovon Makama to Norwich City in August. Midfielders Ethan Erhahon and Ethan Hamilton were also sold during the summer transfer window.

These player sales will enable a significant reduction in the forecast loss for the 2025/26 year to approximately £2 million. Cash flow requirements will however remain close to previously anticipated levels with significant reinvestment into the squad. Ukrainian U21 international midfielder Ivan Varfolomeev was signed from Slovan Liberec in the Czech Republic for the biggest outlay during the summer window, and Ryley Towler and Oscar Thorn were also acquired, from Portsmouth and Colchester United respectively, for low six figure fees.

On 11 December, the board approved a proposal from Ron Fowler which would result in his company Liquid Investments, Inc. increasing its shareholding in Lincoln City Holdings, the controlling shareholder of the football club, above 25% and assume responsibility for the funding of the club for the immediate future. Acquiring 25% or more of the share capital is regarded by the EFL as acquiring Control and consequently Liquid Investments, Inc. will need to demonstrate they are eligible to acquire Control and are able to and will provide the necessary funding to ensure the club can continue to operate post-acquisition. Upon approval from the EFL, Liquid Investments, Inc. will acquire additional shares for cash and increase it's holding above 25%. The additional funding to be provided by Liquid Investments, Inc. in the current season is earmarked for various projects at the LNER Stadium which will aim to maximise our major assets and amplify our core focus on growing fan engagement, commercial revenue and innovation. Ron Fowler will assume the role of Chairman of both Lincoln City Holdings and the football club with Clive Nates and Jay Wright being the co-Vice Chairman.

ON BEHALF OF THE BOARD:

C H Nates - Director

11 December 2025

The directors present their report with the financial statements of the company for the year ended 30 June 2025.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of running a professional football club together with related and ancillary operations.

DIVIDENDS

No dividends will be distributed for the year ended 30 June 2025.

DIRECTORS

The directors set out below have held office during the whole of the period from 1 July 2024 to the date of this report unless otherwise stated.

R G Bates - resigned 11 August 2025

Lincoln City Supporters' Society Ltd

S L Tointon - resigned 11 August 2025

C H Nates

J S Wright

G D Levine - resigned 11 August 2025

H F F Kok - resigned 11 August 2025

D Lowes

S A Melnick

A J Slater

C J Travers - resigned 11 August 2025

S Hindocha - resigned 11 August 2025

H Jabara

G C Rossini

L J Scully

H N Ragland IV - resigned 11 August 2025

A P Fowler - appointed 11 August 2025

R L Fowler - appointed 11 August 2025

The beneficial interests of the directors holding office during the year to 30 June 2025 in the shares of the company, according to the register of directors interests were as follows:

30/06/25

30/06/24

R G Bates - resigned 11 August 2025

200

200

The Red Imps Community Trust

359,798

351,548

S L Tointon - resigned 11 August 2025

6,500

6,500

C H Nates

40,000

20,000

J S Wright

200

200

G D Levine - resigned 11 August 2025

200

200

H F F Kok - resigned 11 August 2025

200

200

D Lowes

200

200

S A Melnick

200

200

A J Slater

2,332

2,332

S Hindocha - resigned 11 August 2025

200

200

H Jabara

200

200

G C Rossini

4,000

4,000

P C Webster - resigned 2 October 2024

-

200

L J Scully

200

200

These directors did not hold any non-beneficial interests in the shares of the company.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the 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 of the profit or loss of the company 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 transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company 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 company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Wright Vigar Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

C H Nates - Director

11 December 2025

Opinion

We have audited the financial statements of Lincoln City Football Club Company Limited (the 'company') for the year ended 30 June 2025 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the 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 company's affairs as at 30 June 2025 and of its loss 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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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 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.

The financial statements of Lincoln City Football Club Limited as of 30 June 2024 were audited by other auditors whose report dated 19 December 2024 expressed an unmodified opinion on those statements.

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 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 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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, or returns adequate for our audit have not been received from branches not visited by us; or

-	the 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 six, 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 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 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:

Our work is performed to include an assessment of the susceptibility of the entity's financial statements to material misstatement, including the risk of fraud. 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).

In identifying and assessing risk of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

-

We plan our work to gain an understanding of the significant laws and regulations that are of significance to the entity and the sector in which they operate. We perform our work to ensure that the entity is complying with its legal and regulatory framework.

-

We obtained an understanding of how the company is complying with those legal and regulatory frameworks by making inquiries to the management and people charged with governance.

We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:

-

Substantive procedures performed in accordance with the ISAs (UK).

-

Challenging assumptions and judgments made by management in its significant accounting estimates.

-

Identifying and testing journal entries, in particular material journal entries and an assessment of year end journals.

-

Assessing the extent of compliance with the relevant 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.

James Sewell BA (Hons) FCA CTA (Senior Statutory Auditor)

for and on behalf of Wright Vigar Limited

Statutory Auditors

Chartered Accountants & Business Advisers

15 Newland

Lincoln

Lincolnshire

LN1 1XG

11 December 2025

TURNOVER

3

8,478,308

6,976,968

Cost of sales

604,423

344,899

GROSS PROFIT

7,873,885

6,632,069

Administrative expenses

11,436,136

10,076,649

(3,562,251

)

(3,444,580

)

Other operating income

694,240

478,011

OPERATING LOSS

5

(2,868,011

)

(2,966,569

)

Interest payable and similar expenses

6

12,991

14,510

LOSS BEFORE TAXATION

(2,881,002

)

(2,981,079

)

Tax on loss

7

-

-

LOSS FOR THE FINANCIAL YEAR

(2,881,002

)

(2,981,079

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(2,881,002

)

(2,981,079

)

FIXED ASSETS

Intangible assets

8

581,678

412,052

Tangible assets

9

7,529,719

6,818,836

Investments

10

3

3

8,111,400

7,230,891

CURRENT ASSETS

Stocks

11

7,766

2,250

Debtors

12

1,495,909

1,169,533

Cash at bank and in hand

1,610,285

1,309,605

3,113,960

2,481,388

CREDITORS

Amounts falling due within one year

13

4,126,233

3,627,712

NET CURRENT LIABILITIES

(1,012,273

)

(1,146,324

)

TOTAL ASSETS LESS CURRENT LIABILITIES

7,099,127

6,084,567

CREDITORS

Amounts falling due after more than one year

14

2,624,480

2,318,810

NET ASSETS

4,474,647

3,765,757

CAPITAL AND RESERVES

Called up share capital

16

21,760,757

18,170,865

Revaluation reserve

17

830,200

830,200

Retained earnings

17

(18,116,310

)

(15,235,308

)

SHAREHOLDERS' FUNDS

4,474,647

3,765,757

The financial statements were approved by the Board of Directors and authorised for issue on 11 December 2025 and were signed on its behalf by:

C H Nates - Director

Called up

share

Retained

Revaluation

Interest

Total

capital

earnings

reserve

reserve

equity

£

£

£

£

£

Balance at 1 July 2023

14,274,076

(12,254,229

)

830,200

4,661

2,854,708

Changes in equity

Issue of share capital

3,896,789

-

-

-

3,896,789

Total comprehensive income

-

(2,981,079

)

-

(4,661

)

(2,985,740

)

Balance at 30 June 2024

18,170,865

(15,235,308

)

830,200

-

3,765,757

Changes in equity

Issue of share capital

3,589,892

-

-

-

3,589,892

Total comprehensive income

-

(2,881,002

)

-

-

(2,881,002

)

Balance at 30 June 2025

21,760,757

(18,116,310

)

830,200

-

4,474,647

Cash flows from operating activities

Cash generated from operations

1

(2,427,448

)

(1,919,639

)

Finance costs paid

(12,991

)

(14,510

)

Net cash from operating activities

(2,440,439

)

(1,934,149

)

Cash flows from investing activities

Purchase of intangible fixed assets

(550,430

)

(331,988

)

Purchase of tangible fixed assets

(834,902

)

(2,320,082

)

Sale of intangible fixed assets

536,559

370,250

Sale of tangible fixed assets

-

2,650

Net cash from investing activities

(848,773

)

(2,279,170

)

Cash flows from financing activities

Capital repayments in year

-

(61,200

)

Share issue

3,589,892

3,896,789

Net cash from financing activities

3,589,892

3,835,589

Increase/(decrease) in cash and cash equivalents

300,680

(377,730

)

Cash and cash equivalents at beginning of year

2

1,309,605

1,687,335

Cash and cash equivalents at end of year

2

1,610,285

1,309,605

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

2025

2024

£

£

Loss before taxation

(2,881,002

)

(2,981,079

)

Depreciation charges

123,307

103,516

Profit on disposal of fixed assets

(526,978

)

(370,757

)

Amortisation

371,223

297,397

Finance costs

12,991

14,510

(2,900,459

)

(2,936,413

)

(Increase)/decrease in stocks

(5,516

)

18,224

Increase in trade and other debtors

(326,376

)

(140,098

)

Increase in trade and other creditors

804,903

1,138,648

Cash generated from operations

(2,427,448

)

(1,919,639

)

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 30 June 2025

30.6.25

1.7.24

£

£

Cash and cash equivalents

1,610,285

1,309,605

Year ended 30 June 2024

30.6.24

1.7.23

£

£

Cash and cash equivalents

1,309,605

1,687,335

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.7.24

Cash flow

At 30.6.25

£

£

£

Net cash

Cash at bank and in hand

1,309,605

300,680

1,610,285

1,309,605

300,680

1,610,285

Total

1,309,605

300,680

1,610,285

1.	STATUTORY INFORMATION

Lincoln City Football Club Company 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 Company 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.

Critical accounting judgements and key sources of estimation uncertainty

The financial statements are prepared to generally accepted accounting principles which requires management to make estimates and assumptions that affect assets and liabilities. Actual results could be different due to these estimates. The effect of any differences are reported at the time the information becomes available. Potential assets and liabilities can only be realised once they become due, because of the uncertain nature of football. These include add-on fees relating to but are not limited to sell on clauses, appearances, goals, clean sheets and promotions.

Turnover

Turnover represents gate monies, league levy and cup pool, advertising and sponsorship income, bar and catering, retail shop and all weather pitch income, excluding Value Added Tax.

Income from commercial contracts and season ticket sales received prior to the year end but for the following season is classed as deferred income.

Tangible fixed assets

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

Property

-

Varying rates between 0% and 20% on Cost

Equipment

-

20% on Cost

Motor vehicles

-

20% on Cost

Due to the repairs and maintenance carried out in the year certain property assets have not been depreciated. In these circumstances the directors undertake an annual impairment review of these assets.

Government grants

Government grants received are treated as deferred creditors and credited to the profit and loss account over the estimated useful life of the relevant fixed assets.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Financial instruments

Only basic financial instruments as defined in FRS102 are held. Financial assets and financial liabilities are recognised in the accounts only when the entity becomes party to the contractual provision of the instrument and their measurement basis is as follows:

Financial assets - trade and other debtors are basic financial instruments and are debt instruments measured at amortised cost. Prepayments are not financial instruments.

Cash at bank is classified as a basic financial instrument and is measured at transaction price.

Deferred income is not deemed to be a financial liability, as the cash settlement has already taken place and there is an obligation to deliver services rather than cash or another financial instrument.

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

Taxation

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

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Research and development

Expenditure on research and development is written off in the year in which it is incurred that does not meet the criteria for capitalisation.

Pension costs and other post-retirement benefits

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

Pensions are paid to some employees' personal pension plans. These costs are charged to the profit and loss account as they occur.

Deferred income

Deferred income comprises amounts received from sponsorship, season tickets and other income which is released to the profit and loss on a straight line basis over the period to which it relates.