REGISTERED NUMBER: 14398715 (England and Wales)

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements for the Year Ended 31 January 2026

for

OpenAsset Enterprises Ltd

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Consolidated Income Statement

8

Consolidated Other Comprehensive Income

9

Consolidated Statement of Financial Position

10

Company Statement of Financial Position

11

Consolidated Statement of Changes in Equity

12

Company Statement of Changes in Equity

13

Consolidated Statement of Cash Flows

14

Notes to the Consolidated Statement of Cash Flows

15

Notes to the Consolidated Financial Statements

16

DIRECTORS:

D Emmerson

P G Walsham

J Janicki

C D Clasper

REGISTERED OFFICE:

2nd Floor

4 Tabernacle Street

London

EC2A 4LU

REGISTERED NUMBER:

14398715 (England and Wales)

AUDITORS:

Gravita Audit II Limited

Aldgate Tower

2 Leman Street

London

E1 8FA

The directors present their strategic report of the company and the group for the year ended 31 January 2026.

REVIEW OF BUSINESS

Group revenue for the 12-month period to 31 January 2026 is $22.9m. This is primarily driven by new customer acquisition and upselling to our existing customer base. In FY 2026 the Group continued to invest in product development and commercial efforts in its core markets, which resulted in an increase in licence revenue in the year.

During the year, OpenAsset has continued to invest in its core technology, infrastructure and people. The organisation has hired in key areas in the business, including in senior leadership roles, in order to support growth.

Total Group headcount as at 31 January 2026 was 126.

At 31 January 2026, the Group's gross assets were $15.9m with a loss for the financial year of $6.4m.

PRINCIPAL RISKS AND UNCERTAINTIES

Macroeconomic Conditions: The business could be affected by wider economic trends in the markets in which it operates, including factors like significant recessions, inflationary pressures, reductions in business investment and political instability.

Market Competition and Customer Retention: The Group faces competitive pressures from other providers and potential new entrants to the market. OpenAsset is a product-first company, operating in a very competitive landscape, making the need for product development and speed of innovation essential. The Group needs to continue to enhance its product range and value proposition, in order to retain its market share and ensure customer loyalty in FY 2027.

Data Protection Regulations: Due to the global nature of our business we face a number of different regulations relating to the processing and storage of data. Failure to comply with these regulations could harm our reputation and finances.

Data Privacy & Cyber Security: Privacy and security concerns relating to OpenAsset's products, services or internal controls could negatively impact the business's reputation, customer retention and operating results.

Dependency on Key Personnel: The Group's operations and speed of innovation could be affected if it becomes overly reliant on key personnel, particularly in product development, sales, and leadership. The loss of key talent could affect workflows, particularly in a competitive recruitment market.

KEY PERFORMANCE INDICATORS

The Group monitors performance using the following financial metrics:

- Revenue: $22.9m

- Operating Loss: $6.5m

- Cash at bank: $8.7m

The financial and non-financial key performance indicators are monitored by management on a regular basis.

FUTURE DEVELOPMENTS

OpenAsset's plans for 2027 and future periods include:

- Continued investment in its core technology and infrastructure

- Continued investment in product development, supported by headcount growth

- Investment in customer acquisition through commercial expansion

- Execution of its long-term business plan

ON BEHALF OF THE BOARD:

J Janicki - Director

21 July 2026

The directors present their report with the financial statements of the company and the group for the year ended 31 January 2026.

DIVIDENDS

No dividends will be distributed for the year ended 31 January 2026.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 February 2025 to the date of this report.

D Emmerson

P G Walsham

J Janicki

C D Clasper

DIRECTORS' RESPONSIBILITIES STATEMENT

The directors are responsible for keeping adequate accounting records, which are sufficient to show and explain the company's transactions and true financial position at any given time. They are also responsible for ensuring that the financial statements comply with the Companies Act 2006. The directors are accountable for safeguarding the assets of the company and hence for taking reasonable steps in preventing and detecting fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Gravita Audit II Limited, will be proposed for re-appointment at the forthcoming General Meeting.

ON BEHALF OF THE BOARD:

J Janicki - Director

21 July 2026

Opinion

We have audited the financial statements of OpenAsset Enterprises Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 January 2026 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, 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's affairs as at 31st January 2026 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 Directors' Responsibilities Statement 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 to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

- we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of software/SaaS businesses;

- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, and employment;

- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management; and

- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

- performed analytical procedures to identify any unusual or unexpected relationships;

- tested journal entries to identify unusual transactions;

- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and

- investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

- agreeing financial statement disclosures to underlying supporting documentation;

- enquiring of management as to actual and potential litigation and claims.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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.

Paul Woosey (Senior Statutory Auditor)

for and on behalf of Gravita Audit II Limited

Aldgate Tower

2 Leman Street

London

E1 8FA

22 July 2026

TURNOVER

3

22,892,211

18,423,190

Cost of sales

(2,154,868

)

(3,320,641

)

GROSS PROFIT

20,737,343

15,102,549

Administrative expenses

(27,318,058

)

(15,610,883

)

OPERATING LOSS

5

(6,580,715

)

(508,334

)

Interest receivable and similar income

40,682

40,652

(6,540,033

)

(467,682

)

Interest payable and similar expenses

6

(11,812

)

-

LOSS BEFORE TAXATION

(6,551,845

)

(467,682

)

Tax on loss

7

176,949

-

LOSS FOR THE FINANCIAL YEAR

(6,374,896

)

(467,682

)

Loss attributable to:

Owners of the parent

(6,374,896

)

(467,682

)

LOSS FOR THE YEAR

(6,374,896

)

(467,682

)

OTHER COMPREHENSIVE INCOME

Currency translation differences

(223,168

)

56,394

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(223,168

)

56,394

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(6,598,064

)

(411,288

)

Total comprehensive income attributable to:

Owners of the parent

(6,598,064

)

(411,288

)

FIXED ASSETS

Intangible assets

9

41,054

49,349

Tangible assets

10

117,841

82,621

Investments

11

-

-

158,895

131,970

CURRENT ASSETS

Debtors

12

7,089,738

3,061,285

Cash at bank

8,695,083

6,232,923

15,784,821

9,294,208

CREDITORS

Amounts falling due within one year

13

(19,505,754

)

(12,106,621

)

NET CURRENT LIABILITIES

(3,720,933

)

(2,812,413

)

TOTAL ASSETS LESS CURRENT LIABILITIES

(3,562,038

)

(2,680,443

)

CREDITORS

Amounts falling due after more than one year

14

(5,706,881

)

-

NET LIABILITIES

(9,268,919

)

(2,680,443

)

CAPITAL AND RESERVES

Called up share capital

18

13

13

Share premium

19

71,529

61,941

Retained earnings

19

(9,340,461

)

(2,742,397

)

SHAREHOLDERS' FUNDS

(9,268,919

)

(2,680,443

)

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

J Janicki - Director

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

-

-

Investments

11

1,059

1,059

1,059

1,059

CURRENT ASSETS

Debtors

12

32,980

-

Cash at bank

5,943,614

63,523

5,976,594

63,523

CREDITORS

Amounts falling due within one year

13

(255,686

)

(1,725

)

NET CURRENT ASSETS

5,720,908

61,798

TOTAL ASSETS LESS CURRENT LIABILITIES

5,721,967

62,857

CREDITORS

Amounts falling due after more than one year

14

(5,706,881

)

-

NET ASSETS

15,086

62,857

CAPITAL AND RESERVES

Called up share capital

18

13

13

Share premium

19

71,529

61,941

Retained earnings

19

(56,456

)

903

SHAREHOLDERS' FUNDS

15,086

62,857

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

(63,893

)

2,309

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

J Janicki - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

$

$

$

$

Balance at 1 February 2024

13

(1,788,937

)

55,985

(1,732,939

)

Prior year adjustment

-

(542,172

)

-

(542,172

)

As restated

13

(2,331,109

)

55,985

(2,275,111

)

Changes in equity

Issue of share capital

-

-

5,956

5,956

Total comprehensive income

-

(411,288

)

-

(411,288

)

Balance at 31 January 2025

13

(2,742,397

)

61,941

(2,680,443

)

Changes in equity

Issue of share capital

-

-

9,588

9,588

Total comprehensive income

-

(6,598,064

)

-

(6,598,064

)

Balance at 31 January 2026

13

(9,340,461

)

71,529

(9,268,919

)

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

$

$

$

$

Balance at 1 February 2024

13

(418

)

55,985

55,580

Changes in equity

Issue of share capital

-

-

5,956

5,956

Total comprehensive income

-

1,321

-

1,321

Balance at 31 January 2025

13

903

61,941

62,857

Changes in equity

Issue of share capital

-

-

9,588

9,588

Total comprehensive income

-

(57,359

)

-

(57,359

)

Balance at 31 January 2026

13

(56,456

)

71,529

15,086

Cash flows from operating activities

Cash generated from operations

1

(3,358,836

)

1,300,741

Interest paid

(11,812

)

-

R&D tax credit

237,876

-

Tax paid

(60,927

)

-

Net cash from operating activities

(3,193,699

)

1,300,741

Cash flows from investing activities

Purchase of intangible fixed assets

(5,615

)

(27,194

)

Purchase of tangible fixed assets

(95,410

)

(41,941

)

Interest received

40,682

40,652

Net cash from investing activities

(60,343

)

(28,483

)

Cash flows from financing activities

New loans in year

5,706,881

-

Share issue

9,321

5,956

Net cash from financing activities

5,716,202

5,956

Increase in cash and cash equivalents

2,462,160

1,278,214

Cash and cash equivalents at beginning of year

2

6,232,923

4,954,709

Cash and cash equivalents at end of year

2

8,695,083

6,232,923

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

2026

2025

$

$

Loss before taxation

(6,551,845

)

(467,682

)

Depreciation and amortisation

74,367

80,920

Foreign exchange differences

(223,168

)

56,394

Finance costs

11,812

-

Finance income

(40,682

)

(40,652

)

(6,729,516

)

(371,020

)

(Increase)/decrease in trade and other debtors

(4,028,453

)

318,471

Increase in trade and other creditors

7,399,133

1,353,290

Cash generated from operations

(3,358,836

)

1,300,741

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 January 2026

31/1/26

1/2/25

$

$

Cash and cash equivalents

8,695,083

6,232,923

Year ended 31 January 2025

31/1/25

1/2/24

$

$

Cash and cash equivalents

6,232,923

4,954,709

3.	ANALYSIS OF CHANGES IN NET FUNDS/(DEBT)

At 1/2/25

Cash flow

At 31/1/26

$

$

$

Net cash

Cash at bank

6,232,923

2,462,160

8,695,083

6,232,923

2,462,160

8,695,083

Debt

Debts falling due after 1 year

-

(5,706,881

)

(5,706,881

)

-

(5,706,881

)

(5,706,881

)

Total

6,232,923

(3,244,721

)

2,988,202

1.	STATUTORY INFORMATION

OpenAsset Enterprises Ltd 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

The 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.

Basis of consolidation

The consolidated financial statements incorporate those of OpenAsset Enterprises Ltd and all of its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits).

All financial statements are made up to 31 January 2026. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

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 of the asset transferred.

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.

Turnover

Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Turnover is recognised over the term of the contract agreement to the extent that the company obtains the right to consideration exchanged for its performance. The following criteria must also be met before revenue is recognised:

- the service has been delivered

- once the contract term has been agreed, turnover can be recognised in equal instalments over the duration of the contract for licence-related revenue.

- for non-licence turnover, the service delivery milestones are known and the turnover can be recognised once each project stage has been completed.

Accrued income recognition is based on usage revenue, which has occurred but has not been invoiced yet. Invoices are raised and billed quarterly in arrears. The measurement of accrued income is based on each customer's live usage data. Therefore, there is no subjective estimate, when calculating usage revenue.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Development costs are being amortised evenly over their estimated useful life of four years.

Tangible fixed assets

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

Computer equipment

-

33% on cost

Financial and equity 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 when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and the net amounts are 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 assets and settle the liability simultaneously.

Equity instruments

Equity instruments issued by the group are recorded at the fair value of 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 statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Foreign currencies

Transactions in currencies other than the functional currency (foreign currency) are initially recorded at the exchange rate prevailing on the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date, non-monetary assets and liabilities denominated in foreign currencies are translated at the rate ruling at the date of transaction, or, if the asset or liability is measured at fair value, the rate when that fair value was determined.

All translation differences are taken to profit or loss, except to the extent that they relate to gains or losses on non-monetary items recognised in other comprehensive income, when the related translation gain or loss is also recognised in other comprehensive income.

Leasing commitments

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Pension costs and other post-retirement benefits

For defined contribution schemes the amount charged to profit or loss is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments.

Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group and company have adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Financial assets and liabilities

Basic financial assets, which include trade and other debtors, cash and bank balances, and accrued income, 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 financial asset is measured at the present value of the future receipts discounted at a market rate of interest.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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 group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including trade and other creditors, and accruals, are initially recognised at transaction price unless the arrangement constitutes a financing transaction.

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the group's contractual obligations are discharged, cancelled, or they expire.

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.