REGISTERED NUMBER: 08104785 (England and Wales)

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements for the Year Ended 31 March 2025

for

Bio Collectors Holdings Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Consolidated Income Statement

9

Consolidated Other Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

17

DIRECTORS:

S J Matthews

S J A Blackburn

REGISTERED OFFICE:

10 Osier Way

Mitcham

Surrey

CR4 4NF

REGISTERED NUMBER:

08104785 (England and Wales)

AUDITORS:

Hardcastle Burton LLP

Lake House

Market Hill

Royston

Hertfordshire

SG8 9JN

The directors present their strategic report of the company and the group for the year ended 31 March 2025.

REVIEW OF BUSINESS

The results for the year and financial position of the group are as shown in the annexed financial statements.

The key financial highlights are as follows:

Year Ended

Period 1.10.22 to

31.3.25

31.3.24

£'000000

£'000000

Turnover

10,441

18,167

Gross profit/(loss)

(1,984

)

1,586

Gross assets

10,992

11,791

Net assets

1,180

3,344

The group experienced a challenging financial year, with performance below the directors’ expectations. This was primarily driven by a combination of operational inefficiencies, cost inflation, and volatility in energy markets.

Despite these challenges, the group continued to benefit from the strategic alignment between its two operating segments, particularly through internal feedstock supply and reduced external costs. Management has taken steps during and subsequent to the year-end to address operational issues and improve overall efficiency.

The asset base remains strong, supported by the group’s investment in infrastructure. The directors are committed to improving returns on these assets through enhanced operational performance.

PRINCIPAL RISKS AND UNCERTAINTIES

The group continues to face a number of key risks, which the directors continually look out for and implement measures to mitigate these risks.

Operational performance risk

Reduced plant efficiency and fleet reliability can significantly impact results. The directors have taken steps after the year-end to enhance operational performance for the group.

Liquidity risk

The group has loans from its shareholders to support the cash flow requirements of the group. The group is expected to have sufficient cash resources to repay its creditors as they fall due, however the shareholders have indicated that financial support will be provided if required.

Regulatory risk

Changes in environmental or renewable energy policy may impact operations and profitability. Currently there are no known material risks that would impact the group's operations.

ON BEHALF OF THE BOARD:

S J Matthews - Director

21 May 2026

The directors present their report with the financial statements of the company and the group for the year ended 31 March 2025.

PRINCIPAL ACTIVITIES

The principal activities of the group in the year under review were those of waste management and production of renewable energy.

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2025.

DIRECTORS

The directors who have held office during the period from 1 April 2024 to the date of this report are as follows:

S J Matthews - appointed 20 July 2024

C Holmes - resigned 19 July 2024

S J A Blackburn was appointed as a director after 31 March 2025 but prior to the date of this report.

J B Williams and S Trivellato ceased to be directors after 31 March 2025 but prior to the date of this report.

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 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 group's auditors are aware of that information.

AUDITORS

The auditors, Hardcastle Burton LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

S J Matthews - Director

21 May 2026

Opinion

We have audited the financial statements of Bio Collectors Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2025 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 March 2025 and of the group's 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 group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

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

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

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

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

Matters on which we are required to report by exception

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

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

Our approach was as follows:-

We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and determined that the most significant frameworks which are directly relevant to specific assertions in the financial statements are those that related to the reporting framework (FRS 102 and Companies Act 2006) and the relevant tax compliance regulations in the jurisdictions that the company operates.

In addition, we concluded that there are certain significant laws and regulations which may have an effect on the determination of the amounts and disclosures in the financial statements being those relating to the environment and occupational health and safety.

We obtained an understanding to how the group is complying with those frameworks by making enquiries of management and those responsible for legal and compliance procedures. We corroborated our enquiries through our review of Board minutes and any correspondence received from regulatory bodies.

We assessed the susceptivity of the group's financial statements to material misstatement, including how fraud might occur by meeting with management from various parts of the business to understand the systems and controls of the group.

In assessing the risks of irregularities due to fraud, we considered the areas in which such risks were most likely to arise. We identified management override of controls as a presumed fraud risk and the valuation of tangible assets as the area most susceptible to material misstatement due to its inherent estimation uncertainty and the level of judgement involved.

Our audit procedures in response included:

- evaluating the methodologies, key assumptions and inputs used by management in the valuation of the tangible assets;

- assessing the reasonableness of significant estimates;

- considering indicators of management bias in the formulation of these estimates; and

- performing targeted journal entry testing.

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.

Other matters

The consolidated comparative financial information presented for the period ended 31 March 2024 was derived from financial information of the group’s subsidiaries, the financial statements of which were audited individually in that period; however, consolidated financial statements were not prepared or audited. Accordingly, the comparative consolidated information presented in these financial statements does not constitute audited financial statements of the group.

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.

Kristi Johnson ACA CTA (Senior Statutory Auditor)

for and on behalf of Hardcastle Burton LLP

Lake House

Market Hill

Royston

Hertfordshire

SG8 9JN

22 May 2026

TURNOVER

3

10,441,250

18,167,426

Cost of sales

12,425,654

16,581,183

GROSS (LOSS)/PROFIT

(1,984,404

)

1,586,243

Administrative expenses

495,740

513,121

(2,480,144

)

1,073,122

Other operating income

485

17,220

OPERATING (LOSS)/PROFIT

5

(2,479,659

)

1,090,342

Interest receivable and similar income

1,815

14,524

(2,477,844

)

1,104,866

Interest payable and similar expenses

6

403,940

599,375

(LOSS)/PROFIT BEFORE TAXATION

(2,881,784

)

505,491

Tax on (loss)/profit

7

(717,647

)

146,333

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(2,164,137

)

359,158

(Loss)/profit attributable to:

Owners of the parent

(2,164,137

)

359,158

(LOSS)/PROFIT FOR THE YEAR

(2,164,137

)

359,158

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(2,164,137

)

359,158

Total comprehensive income attributable to:

Owners of the parent

(2,164,137

)

359,158

FIXED ASSETS

Tangible assets

10

7,381,168

7,347,958

Investments

11

-

-

7,381,168

7,347,958

CURRENT ASSETS

Stocks

12

78,711

79,271

Debtors

13

2,741,484

3,944,145

Cash at bank

790,910

419,483

3,611,105

4,442,899

CREDITORS

Amounts falling due within one year

14

3,062,131

2,703,135

NET CURRENT ASSETS

548,974

1,739,764

TOTAL ASSETS LESS CURRENT LIABILITIES

7,930,142

9,087,722

CREDITORS

Amounts falling due after more than one year

15

(5,498,811

)

(3,859,902

)

PROVISIONS FOR LIABILITIES

18

(1,251,476

)

(1,883,828

)

NET ASSETS

1,179,855

3,343,992

CAPITAL AND RESERVES

Called up share capital

19

45,102

45,102

Retained earnings

20

1,134,753

3,298,890

SHAREHOLDERS' FUNDS

1,179,855

3,343,992

The financial statements were approved by the Board of Directors and authorised for issue on 21 May 2026 and were signed on its behalf by:

S J Matthews - Director

FIXED ASSETS

Tangible assets

10

-

-

Investments

11

45,200

45,200

45,200

45,200

CURRENT ASSETS

Debtors

13

3,639,116

3,593,841

CREDITORS

Amounts falling due within one year

14

375,355

410,570

NET CURRENT ASSETS

3,263,761

3,183,271

TOTAL ASSETS LESS CURRENT LIABILITIES

3,308,961

3,228,471

CREDITORS

Amounts falling due after more than one year

15

3,287,609

3,183,369

NET ASSETS

21,352

45,102

CAPITAL AND RESERVES

Called up share capital

19

45,102

45,102

Retained earnings

20

(23,750

)

-

SHAREHOLDERS' FUNDS

21,352

45,102

Company's (loss)/profit for the financial year

(23,750

)

400,000

The financial statements were approved by the Board of Directors and authorised for issue on 21 May 2026 and were signed on its behalf by:

S J Matthews - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 October 2022

45,102

3,339,732

3,384,834

Changes in equity

Dividends

-

(400,000

)

(400,000

)

Total comprehensive income

-

359,158

359,158

Balance at 31 March 2024

45,102

3,298,890

3,343,992

Changes in equity

Total comprehensive income

-

(2,164,137

)

(2,164,137

)

Balance at 31 March 2025

45,102

1,134,753

1,179,855

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 October 2022

45,102

-

45,102

Changes in equity

Dividends

-

(400,000

)

(400,000

)

Total comprehensive income

-

400,000

400,000

Balance at 31 March 2024

45,102

-

45,102

Changes in equity

Total comprehensive income

-

(23,750

)

(23,750

)

Balance at 31 March 2025

45,102

(23,750

)

21,352

Cash flows from operating activities

Cash generated from operations

1

1,142,606

1,880,164

Interest paid

(309,789

)

(477,605

)

Interest element of hire purchase payments paid

(67,750

)

(86,786

)

Tax paid

100

30,774

Net cash from operating activities

765,167

1,346,547

Cash flows from investing activities

Purchase of tangible fixed assets

(729,659

)

(1,286,179

)

Sale of tangible fixed assets

-

3,001

Interest received

1,815

14,524

Net cash from investing activities

(727,844

)

(1,268,654

)

Cash flows from financing activities

New loans in year

248,950

-

New HP contracts in year

509,540

847,315

Capital repayments on HP contracts

(424,386

)

(329,059

)

Equity dividends paid

-

(400,000

)

Net cash from financing activities

334,104

118,256

Increase in cash and cash equivalents

371,427

196,149

Cash and cash equivalents at beginning of year

2

419,483

223,334

Cash and cash equivalents at end of year

2

790,910

419,483

1.	RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

Period

1.10.22

Year Ended

to

31.3.25

31.3.24

£

£

(Loss)/profit before taxation

(2,881,784

)

505,491

Depreciation charges

789,589

975,864

Loss on disposal of fixed assets

-

18,382

Finance costs

403,940

599,375

Finance income

(1,815

)

(14,524

)

(1,690,070

)

2,084,588

Decrease in stocks

560

106,681

Decrease/(increase) in trade and other debtors

1,168,315

(834,954

)

Increase in trade and other creditors

1,663,801

523,849

Cash generated from operations

1,142,606

1,880,164

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

790,910

419,483

Period ended 31 March 2024

31.3.24

1.10.22

£

£

Cash and cash equivalents

419,483

223,334

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.4.24

Cash flow

At 31.3.25

£

£

£

Net cash

Cash at bank

419,483

371,427

790,910

419,483

371,427

790,910

Debt

Finance leases

(972,723

)

(85,154

)

(1,057,877

)

Debts falling due within 1 year

-

(248,950

)

(248,950

)

(972,723

)

(334,104

)

(1,306,827

)

Total

(553,240

)

37,323

(515,917

)

1.	STATUTORY INFORMATION

Bio Collectors 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.

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.

The financial statements are prepared in sterling, which is the functional currency of the group.

The directors have prepared forecast profits and cash flows for the foreseeable future which show the group has sufficient financial headroom to continue to meet its liabilities as they fall due. The financial statements have therefore been prepared on a going concern basis.

Basis of consolidation

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment or the asset transferred.

Where necessary, adjustments are made to the financial statements to bring the accounting policies used into line with those used by other members of the group.

When control over a subsidiary is lost, its assets, liabilities are derecognised from the consolidated balance sheet. The fair value of the consideration received is recognised, and any retained interest in the former subsidiary is remeasured to its fair value. This retained interest is then classified appropriately as a financial asset, associate, or joint venture depending on the circumstances. A gain or loss on disposal is recognised in the profit or loss statement. This is calculated as the aggregate of the fair value of the consideration received and the fair value of any retained interest, less the carrying amount of the subsidiary’s net assets and any associated goodwill.

Significant judgements and estimates

In the application of the group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Tangible fixed assets

Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors Residual value assessments consider issues such as the remaining life of the asset and projected disposal values.

Stock provisions

Spare parts equipment is carried as stock and recognised in the profit and loss as consumed where these arc not categorised as major spare parts. Where spare parts are considered to be major and expected to be used during more than one financial period they are accounted for as tangible fixed assets.

Decommissioning provision

As part of the measurement and recognition of assets and liabilities in the period, the group has recognised a provision for the decommissioning obligations associated with the anaerobic digestion plant. In determining the present value of the provision, assumptions and estimates are made in relation to the discount rates, the expected cost to dismantle and remove the plant from the site and the expected timing of these costs, and this data is compared to industry available data. The discount rate applied was 5.13%.

Turnover

Turnover represents the amount derived from the provision of services and the sale of goods which fall within the group's principal activities, carried out entirely within the United Kingdom. Turnover is stated net of value added tax and after deducting trade discounts and any other sales incentives. The fair value of the consideration received or receivable takes into account any trade discounts, settlement discounts and volume-related rebates where applicable.

Income from food waste collection services is recognised either when the food waste is collected from the customer or when the waste container is exchanged, depending on the contractual terms in place and the point at which control of the waste passes to the group. Income from the sale of collected food waste is recognised when legal title and control of the waste is transferred by the group to the anaerobic digestion plant, which is typically upon delivery and acceptance of the food waste by the AD operator. Where food waste is collected from a customer and transferred by the group to a third-party treatment or processing facility, revenue is recognised when control of the waste passes from the group to that third party in accordance with the relevant contractual arrangements.

Government schemes including the Non-Domestic Renewable Heat Incentive and Feed-in Tariff are received as part of the group's trade. This is recognised as turnover when there is reasonable assurance that the conditions have been met and the income will be received.

Tangible fixed assets

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

Assets under construction

- not depreciated

Plant and machinery

- 15% on reducing balance, straight line over 5 - 20 years

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.

Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

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

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Financial instruments

The group has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset. with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies 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.

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

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

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.