REGISTERED NUMBER: 14772241 (England and Wales)

SOUTHTOWN HOLDINGS LIMITED

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTOR AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Page

Company Information

1

Group Strategic Report

2

Report of the Director

4

Report of the Independent Auditors

6

Consolidated Income Statement

10

Consolidated Other Comprehensive Income

11

Consolidated Balance Sheet

12

Company Balance Sheet

13

Consolidated Statement of Changes in Equity

14

Company Statement of Changes in Equity

15

Consolidated Cash Flow Statement

16

Notes to the Consolidated Cash Flow Statement

17

Notes to the Consolidated Financial Statements

18

DIRECTOR:

S Anthony

REGISTERED OFFICE:

Alphin Brook Road

Marsh Barton Trading Estate

Exeter

Devon

EX2 8RG

REGISTERED NUMBER:

14772241 (England and Wales)

AUDITORS:

WP Audit Services LLP

Chartered Accountant & Statutory Auditor

Chancery House

30 St Johns Road

Woking

Surrey

GU21 7SA

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

REVIEW OF BUSINESS

Bridge Motorcycles has enjoyed another successful year.

The franchises operated in the period included Honda, Kawasaki, Suzuki and Triumph.

Turnover has increased by 7.5% to £11.4m from £10.6m in the prior year.

The core business of motorcycle sales remained strong in the year. In addition to this, the on-site café has given the main trade supplementary income as well as making the site a popular location for the group's target demographic.

The group's gross profit margin has increased, with reported margins of 17% (2024: 13.8%). A strong net profit continues to be generated.

Another key performance indicator for the business is stock turnover days, which have decreased by 30 days to a total of 107 (2024: 137).There was slow moving stock at the end of last year.

The balance sheet continues to reflect the financial strength of the business, with net assets of £5m (2024: £4.4m).

BUSINESS RESTRUCTURE

During the year, the ownership structure of the group changed. On 31st October 2025, Southtown Holdings Limited, previously the ultimate parent undertaking of the group, acquired 100% of the issued share capital of Bridge Motorcycles Limited from the intermediate parent company, Southtown Investment Company Limited, and became its immediate parent undertaking.

The change did not impact the principal activities, strategy or operations of the group.

PRINCIPAL RISKS AND UNCERTAINTIES

Given the nature of the product, demand is heavily influenced by weather conditions, an external risk that is beyond the group’s control. The director has responded to this risk effectively by proactively addressing trends and offering discounts on slower-moving stock. This year the weather has improved performance, due to good weather conditions in the new plate period. This risk needs to continue to be managed each year.

Another key risk facing the business is continued pressure on demand, as industry-wide cost inflation coincides with a reduction in customer disposable income. The group has mitigated this risk by strengthening its market position, building a strong reputation, and ensuring it carries the best selection of bikes in the local area.

The group also maintains strong cash reserves, holds no outstanding debt, and is in a net current asset position, leading the director to assess liquidity risk as low.

The interest charged on the directors loan account is based on base rate however rates tend to be reducing at the moment, and the director is in support of the business and would not make a decision at the detriment of the group and therefore this risk is minimal.

SECTION 172(1) STATEMENT

The director has had regard to the considerations set out in S172 Companies Act 2006 when fulfilling his duty to promote the success of the group, these being;

a) the likely consequences of any decision in the long term;

b) the interests of the group's employees;

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

d) the impact of the group's operations on the community and the environment;

e) the desirability of the group maintaining a reputation for a high standard of business conduct; and

f) the need to act fairly between members of the group.

In the period ended 31 December 2025, the efforts of the key management team have been shown through the increased activity through the business. The director is always seeking ways to improve the returns generated by the group, whilst considering what is best for the employees at all times.

GOING CONCERN

The director has, at the time of preparing the financial statements, a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus, they have continued to adopt the going concern basis of accounting in preparing the financial statements.

The group has maintained strong cash reserves and has adequately addressed principal risks as detailed above. As a result, the director is confident that the group could survive a substantial financial impact and is a going concern for well beyond the next 12 months of trading.

ON BEHALF OF THE BOARD:

S Anthony - Director

7 July 2026

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

PRINCIPAL ACTIVITIES

The principal activities of the group in the year under review were those of sale, maintenance and repair of motorcycles and related parts and accessories.

DIVIDENDS

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

DIRECTOR

S Anthony held office during the whole of the period from 1 January 2025 to the date of this report.

FINANCIAL INSTRUMENTS

The group's principal financial instruments comprise bank balances, trade creditors and directors loans. The main purpose of each of these instruments is to raise funds for ongoing operations.

Due to the nature of the financial instruments used by the group, there is not considered to be significant exposure to price risk. The approach to managing other risks applicable to the financial instruments concerned is explained below:

Liquidity risk is managed by maintaining a healthy reserve of cash and striking a balance between the various elements of working capital.

The director's loan account is interest bearing and interest levels are determined using the Bank of England base rate as a starting point, and adding 6.5%. The director supports the business and would not request repayment of the loan at the detriment of the group as a whole.

DISCLOSURE IN THE STRATEGIC REPORT

Matters regarding the business review, key performance indicators, principal risks and review of going concern are included in the Strategic Report.

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.

ON BEHALF OF THE BOARD:

S Anthony - Director

7 July 2026

Opinion

We have audited the financial statements of Southtown Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 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 December 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:

Objectives

The objectives of our audit in respect of fraud, are;

- to identify and assess the risks of material misstatement of the financial statements due to fraud; - to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and

- to respond appropriately to instances of fraud or suspected fraud identified during the audit.

However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

Audit Approach

Our approach was as follows:

- We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Consumer Rights Act 2015, Companies Act 2006, FRS 102, and UK taxation legislation.

- We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance, as well a review of relevant correspondence and certifications. - We assessed the risk of material misstatement of the financial statements and how it might occur (including the risk of material misstatement due to fraud), by holding discussions with management and those charged with governance. We used our knowledge of the company and the industry in which it operates to determine if management's explanations were consistent with our own conclusions.

- Based on our understanding developed from the above, we designed specific appropriate audit procedures to identify instances of non-compliance with the key laws and regulations which may result in potential fraud. This included making enquiries of management and those charged with governance, investigating unusual or unexpected relationships or movements in figures disclosed in the accounts and remaining alert for any transactions that appeared to be outside the normal course of business.

- Furthermore, as required by auditing standards, and taking into account our overall knowledge of the control environment, we have performed procedures to address the risks of management override of controls and the risk of fraudulent revenue recognition. Procedures such as a review of journal entries and assessing estimates for management bias have enabled us to conclude in this area.

No instances of fraud, non-compliance or suspected non-compliance with laws and regulations were identified from the above procedures.

As part of an audit in accordance with ISAs (UK) we exercise professional judgement 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 environment relevant to the audit, in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company's 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.

- Obtain sufficient appropriate audit evidence regarding the financial information of the company, to express an opinion on the financial statements.

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.

Context of the ability of the audit to detect fraud or breaches of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify

it.

In addition, as with any audit, there remains a risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect noncompliance with all laws and regulations.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Stephanie Williams (Senior Statutory Auditor)

for and on behalf of WP Audit Services LLP

Chartered Accountant & Statutory Auditor

Chancery House

30 St Johns Road

Woking

Surrey

GU21 7SA

14 July 2026

TURNOVER

4

11,388,846

10,630,756

Cost of sales

(9,457,670

)

(9,161,594

)

GROSS PROFIT

1,931,176

1,469,162

Distribution costs

(63,360

)

(64,698

)

Administrative expenses

(1,090,024

)

(1,089,959

)

777,792

314,505

Other operating income

67,327

66,046

OPERATING PROFIT

6

845,119

380,551

Interest receivable and similar income

137,688

139,794

982,807

520,345

Interest payable and similar expenses

8

(251,559

)

(111,193

)

PROFIT BEFORE TAXATION

731,248

409,152

Tax on profit

9

(208,869

)

(119,920

)

PROFIT FOR THE FINANCIAL YEAR

522,379

289,232

Profit attributable to:

Owners of the parent

522,379

289,232

PROFIT FOR THE YEAR

522,379

289,232

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

522,379

289,232

Total comprehensive income attributable to:

Owners of the parent

522,379

289,232

FIXED ASSETS

Intangible assets

11

12,260

13,635

Tangible assets

12

2,352,133

2,392,570

Investments

13

-

-

Investment property

14

350,000

350,000

2,714,393

2,756,205

CURRENT ASSETS

Stocks

15

2,207,796

2,957,532

Debtors

16

2,062,476

2,043,639

Cash at bank and in hand

2,136,543

809,997

6,406,815

5,811,168

CREDITORS

Amounts falling due within one year

17

3,960,771

3,908,754

NET CURRENT ASSETS

2,446,044

1,902,414

TOTAL ASSETS LESS CURRENT LIABILITIES

5,160,437

4,658,619

PROVISIONS FOR LIABILITIES

20

199,652

220,213

NET ASSETS

4,960,785

4,438,406

CAPITAL AND RESERVES

Called up share capital

21

100

100

Share premium

22

999,977

999,977

Capital Redemption Reserve

22

1,500,000

1,500,000

Fair value reserve

22

3,012,298

3,012,298

Retained earnings

22

(551,590

)

(1,073,969

)

SHAREHOLDERS' FUNDS

4,960,785

4,438,406

The financial statements were approved by the director and authorised for issue on 7 July 2026 and were signed by:

S Anthony - Director

FIXED ASSETS

Intangible assets

11

-

-

Tangible assets

12

-

-

Investments

13

5,024,000

5,024,000

Investment property

14

-

-

5,024,000

5,024,000

CURRENT ASSETS

Debtors

16

922,507

1,660,116

CREDITORS

Amounts falling due within one year

17

2,470,818

4,174,573

NET CURRENT LIABILITIES

(1,548,311

)

(2,514,457

)

TOTAL ASSETS LESS CURRENT LIABILITIES

3,475,689

2,509,543

CAPITAL AND RESERVES

Called up share capital

21

100

100

Share premium

22

999,977

999,977

Capital Redemption Reserve

22

1,500,000

1,500,000

Retained earnings

22

975,612

9,466

SHAREHOLDERS' FUNDS

3,475,689

2,509,543

Company's profit for the financial year

966,146

1,481,133

The financial statements were approved by the director and authorised for issue on 7 July 2026 and were signed by:

S Anthony - Director

Called up

share

Retained

Share

capital

earnings

premium

£

£

£

Balance at 1 January 2024

100

136,799

999,977

Changes in equity

Profit for the year

-

289,232

-

Total comprehensive income

-

289,232

-

Preference share redemption

-

(1,500,000

)

-

Balance at 31 December 2024

100

(1,073,969

)

999,977

Changes in equity

Profit for the year

-

522,379

-

Total comprehensive income

-

522,379

-

Balance at 31 December 2025

100

(551,590

)

999,977

Capital

Fair

Redemption

value

Total

Reserve

reserve

equity

£

£

£

Balance at 1 January 2024

-

3,012,298

4,149,174

Changes in equity

Profit for the year

-

-

289,232

Total comprehensive income

-

-

289,232

Preference share redemption

1,500,000

-

-

Balance at 31 December 2024

1,500,000

3,012,298

4,438,406

Changes in equity

Profit for the year

-

-

522,379

Total comprehensive income

-

-

522,379

Balance at 31 December 2025

1,500,000

3,012,298

4,960,785

Called up

Capital

share

Retained

Share

Redemption

Total

capital

earnings

premium

Reserve

equity

£

£

£

£

£

Balance at 1 January 2024

100

28,333

999,977

-

1,028,410

Changes in equity

Preference share redemption

-

(1,500,000

)

-

1,500,000

-

Total comprehensive income

-

1,481,133

-

-

1,481,133

Balance at 31 December 2024

100

9,466

999,977

1,500,000

2,509,543

Changes in equity

Total comprehensive income

-

966,146

-

-

966,146

Balance at 31 December 2025

100

975,612

999,977

1,500,000

3,475,689

Cash flows from operating activities

Cash generated from operations

1

1,486,203

623,106

Tax paid

(120,858

)

(200,820

)

Net cash from operating activities

1,365,345

422,286

Cash flows from investing activities

Purchase of intangible fixed assets

-

(13,750

)

Purchase of tangible fixed assets

(118,533

)

(60,074

)

Sale of tangible fixed assets

355

7,000

Interest received

137,688

139,794

Net cash from investing activities

19,510

72,970

Cash flows from financing activities

Amount withdrawn by directors

(58,309

)

(135,217

)

Net cash from financing activities

(58,309

)

(135,217

)

Increase in cash and cash equivalents

1,326,546

360,039

Cash and cash equivalents at beginning of year

2

809,997

449,958

Cash and cash equivalents at end of year

2

2,136,543

809,997

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

2025

2024

£

£

Profit before taxation

731,248

409,152

Depreciation charges

155,130

102,577

Profit on disposal of fixed assets

(355

)

-

Government grants

(1,881

)

-

Finance costs

251,559

111,193

Finance income

(137,688

)

(139,794

)

998,013

483,128

Decrease in stocks

756,832

204,964

Increase in trade and other debtors

(18,837

)

(87,234

)

(Decrease)/increase in trade and other creditors

(249,805

)

22,248

Cash generated from operations

1,486,203

623,106

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2025

31.12.25

1.1.25

£

£

Cash and cash equivalents

2,136,543

809,997

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

809,997

449,958

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.25

Cash flow

At 31.12.25

£

£

£

Net cash

Cash at bank and in hand

809,997

1,326,546

2,136,543

809,997

1,326,546

2,136,543

Total

809,997

1,326,546

2,136,543

4.	MAJOR NON-CASH TRANSACTIONS

There was interest incurred in the year which was not physically paid, and instead credited to the director's loan account. As a result this transaction has not been shown in the Cash Flow Statement for the year.

1.	STATUTORY INFORMATION

Southtown 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.	STATEMENT OF COMPLIANCE

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.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention as modified by the recognition of certain financial assets and liabilities measured at fair value.

The director believes that the group is experiencing good levels of sales growth and profitability, and that is well placed to manage its business risks successfully. Accordingly he has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus he continues to adopt the going concern basis of accounting in preparing the financial statements.

The preparation of financial statements requires the use of certain accounting estimates. The areas involving a higher degree of judgement or complexity or areas where assumptions and estimates are significant to the financial statements

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries.

Subsidiaries, joint ventures and associates are not consolidated if their influence on the group's asset, financial and earnings position is considered to be immaterial, either individually or in total. Assets and liabilities of subsidiaries are shown in the consolidated accounts at their fair value on the date of acquisition.

The excess of the fair value of assets and liabilities acquired, over the cost of the acquisition has been moved out of goodwill and shown within the Fair Value Reserve on the Balance Sheet in the year of acquisition and subsequent accounting periods.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.