REGISTERED NUMBER: 12773322 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTOR AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

FOR

AMATHUS CAPITAL LTD

Page

Company Information

1

Group Strategic Report

2

Report of the Director

3

Report of the Independent Auditors

4

Consolidated Statement of Profit or Loss

7

Consolidated Statement of Profit or Loss and Other Comprehensive Income

8

Consolidated Statement of Financial Position

9

Company Statement of Financial Position

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Statement of Cash Flows

13

Notes to the Consolidated Statement of Cash Flows

14

Notes to the Consolidated Financial Statements

15

DIRECTOR:

H Pantelides

REGISTERED OFFICE:

62 Chase Side

London

N14 5PA

REGISTERED NUMBER:

12773322 (England and Wales)

AUDITORS:

Xeinadin Audit Limited

46 Hamilton Square

Birkenhead

Merseyside

CH41 5AR

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

REVIEW OF BUSINESS

The Board monitors key financial performance indicators based on information received from AmCap Management Limited.

The indicators are appropriate to the circumstances of the business.

Since Q2 2022 we have been experiencing an increasingly volatile market. The volatile environment has had some impact on the UK Real Estate market as well, especially the development side, with costs increasing, and profit margins contracting significantly. The rental market space has also been affected by the changing market conditions, with rental yields experiencing some growth, but with property values slightly contracting.

During the year, the Group's assets held for sale decreased from £38.54m to £21.17m representing a 45% decrease in the portfolio's gross value, as investment properties were disposed of during the year. There has also been a reduction in loan balances from £6m to £Nil representing a 100% decrease in the total loan value. The Investments Committee will take a prudent approach in decision-making to sell properties during the current market conditions of elevated interest rate and cost of living.

The new market conditions have led us, after consultation with our Advisory Committee, to the following about the investment strategy of the AmCap AIF V.C.I.C. PLC - 1A:

1. Stop accepting new subscriptions.

2. Stop entering any new development projects.

3. Stop purchasing any further properties.

4. Orderly sale of properties and reduce the Fund's overall loan balance.

The investment strategy set out above will be reviewed at regular intervals, always in collaboration with the Advisory Committee.

PRINCIPAL RISKS AND UNCERTAINTIES

The Group's portfolio is exclusively invested in the UK and therefore is exposed to the risks and uncertainties of the UK economy.

The directors consider that the principal risk for the Group is in respect of the valuation of the Group's investment properties. The properties are subject to fluctuating market conditions, affected by consumer confidence, the performance of the UK economy, and the liquidity in the market as well as fluctuating interest rates. These risks will also affect the Group's ability to acquire properties in the future. The directors mitigate these risks by investing only in properties with good covenants and good prospects for alternative use at the end of the current lease. The Group is exposed to interest rate risk. The continuous increase in UK interest rates has affected the group strategy and future decision. The AIFM mitigated this risk by maintaining a sufficiently liquid position, staying in close contact with the Group’s lenders, and by maintaining an LTV well within the limits set by the lenders. Future returns on acquisitions are evaluated projecting higher than current rates.

There is a risk that the Group will be unable to finance future acquisitions and thus inhibit growth. This is mitigated by establishing facilities with preferred lenders which are familiar with and supportive of the Group's strategy and achievements. All borrowing is undertaken at cautious assessments of, for example, loan-to-value and interest cover. Covenants have been comfortably met to date and this prudent policy will continue.

FUTURE DEVELOPMENTS

The AIFM constantly monitors opportunities to sell properties where this offers a profit to the Group and is in line with strategic objectives. As at 31 December 2025 there were properties marked for sale. Regardless of category, sale opportunities are assessed on merit; a number of transactions are currently being considered and will be announced at the appropriate time.

ON BEHALF OF THE BOARD:

H Pantelides - Director

20 August 2026

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

DIVIDENDS

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

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTOR

H Pantelides held office during the whole of the period from 1 January 2025 to the date of this 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 UK-adopted international accounting standards. Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

AUDITORS

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

ON BEHALF OF THE BOARD:

H Pantelides - Director

20 August 2026

Opinion

We have audited the financial statements of Amathus Capital Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the Consolidated Statement of Profit or Loss, the Consolidated Statement of Profit or Loss and Other Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity, the 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 International Financial Reporting Standards (IFRSs) as adopted by the UK.

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 31 December 2025 and of the group's loss for the year then ended;

-	the group financial statements have been properly prepared in accordance with IFRSs as adopted by the UK;

-	the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the UK and as applied in accordance with the provisions of the Companies Act 2006; and

-	the financial statements 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 three, 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:

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 recognize 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 the industry;

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

- reading the minutes of meetings of those charged with governance;

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

- reviewing correspondence with HMRC, relevant regulators, and the company's legal advisors.

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.

Anthony Cowan FCA, BSc

for and on behalf of Xeinadin Audit Limited

46 Hamilton Square

Birkenhead

Merseyside

CH41 5AR

20 August 2026

CONTINUING OPERATIONS

Revenue

4

789,259

1,698,339

Cost of sales

(379,050

)

(456,704

)

GROSS PROFIT

410,209

1,241,635

Other operating income

5

88,578

30,700

Gain/(loss) on revaluation of investment property

(1,097,498

)

(543,000

)

Administrative expenses

(1,087,734

)

(1,610,709

)

OPERATING LOSS

(1,686,445

)

(881,374

)

Finance costs

7

(84,639

)

(1,467,921

)

LOSS BEFORE CORPORATE TAX

8

(1,771,084

)

(2,349,295

)

Corporate tax

10

74,919

58,514

LOSS FOR THE YEAR

(1,696,165

)

(2,290,781

)

Loss attributable to:

Owners of the parent

(1,696,165

)

(2,290,781

)

LOSS FOR THE YEAR

(1,696,165

)

(2,290,781

)

OTHER COMPREHENSIVE

OTHER COMPREHENSIVE FOR THE YEAR, NET OF INCOME TAX

-

-

TOTAL COMPREHENSIVE LOSS FOR THE YEAR

(1,696,165

)

(2,290,781

)

Total comprehensive loss attributable to:

Owners of the parent

(1,696,165

)

(2,290,781

)

ASSETS

NON-CURRENT ASSETS

Goodwill

12

-

51,653

Investments

13

-

-

Loans and other financial assets

14

-

-

-

51,653

CURRENT ASSETS

Assets held for sale

15

21,168,000

38,535,498

Trade and other receivables

17

16,534,164

7,023,444

Cash and cash equivalents

18

846,928

762,762

38,549,092

46,321,704

TOTAL ASSETS

38,549,092

46,373,357

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital

19

43,292,500

43,292,500

Share premium

20

52,925

52,925

Retained earnings

20

(5,385,310

)

(3,689,145

)

TOTAL EQUITY

37,960,115

39,656,280

LIABILITIES

NON-CURRENT LIABILITIES

Financial liabilities - borrowings

Interest bearing loans and borrowings

22

-

5,276,250

CURRENT LIABILITIES

Trade and other payables

21

588,977

717,077

Financial liabilities - borrowings

Interest bearing loans and borrowings

22

-

723,750

588,977

1,440,827

TOTAL LIABILITIES

588,977

6,717,077

TOTAL EQUITY AND LIABILITIES

38,549,092

46,373,357

The financial statements were approved by the director and authorised for issue on 20 August 2026 and were signed by:

H Pantelides - Director

ASSETS

NON-CURRENT ASSETS

Goodwill

12

-

-

Investments

13

34,046,029

40,430,023

Loans and other financial assets

14

-

10,690,192

34,046,029

51,120,215

CURRENT ASSETS

Trade and other receivables

17

16,454,470

6,983,171

Cash and cash equivalents

18

846,909

762,734

17,301,379

7,745,905

TOTAL ASSETS

51,347,408

58,866,120

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital

19

43,292,500

43,292,500

Share premium

20

52,925

52,925

Retained earnings

20

(5,127,893

)

1,026,512

TOTAL EQUITY

38,217,532

44,371,937

LIABILITIES

NON-CURRENT LIABILITIES

Financial liabilities - borrowings

Interest bearing loans and borrowings

22

-

5,276,250

CURRENT LIABILITIES

Trade and other payables

21

13,129,876

8,494,183

Financial liabilities - borrowings

Interest bearing loans and borrowings

22

-

723,750

13,129,876

9,217,933

TOTAL LIABILITIES

13,129,876

14,494,183

TOTAL EQUITY AND LIABILITIES

51,347,408

58,866,120

The financial statements were approved by the director and authorised for issue on 20 August 2026 and were signed by:

H Pantelides - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 January 2024

43,292,500

(1,398,364

)

52,925

41,947,061

Changes in equity

Total comprehensive loss

-

(2,290,781

)

-

(2,290,781

)

Balance at 31 December 2024

43,292,500

(3,689,145

)

52,925

39,656,280

Changes in equity

Total comprehensive loss

-

(1,696,165

)

-

(1,696,165

)

Balance at 31 December 2025

43,292,500

(5,385,310

)

52,925

37,960,115

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 January 2024

43,292,500

788,014

52,925

44,133,439

Changes in equity

Total comprehensive income

-

238,498

-

238,498

Balance at 31 December 2024

43,292,500

1,026,512

52,925

44,371,937

Changes in equity

Total comprehensive loss

-

(6,154,405

)

-

(6,154,405

)

Balance at 31 December 2025

43,292,500

(5,127,893

)

52,925

38,217,532

Cash flows from operating activities

Cash generated from operations

1

(10,510,922

)

(823,679

)

Interest paid

(84,639

)

(1,467,921

)

Tax paid

74,919

(15,469

)

Net cash from operating activities

(10,520,642

)

(2,307,069

)

Cash flows from investing activities

Sale of investment properties

16,604,498

18,845,000

Net cash from investing activities

16,604,498

18,845,000

Cash flows from financing activities

Loan repayments in year

(6,000,000

)

(20,257,134

)

Net cash from financing activities

(6,000,000

)

(20,257,134

)

Increase/(decrease) in cash and cash equivalents

83,856

(3,719,203

)

Cash and cash equivalents at beginning of year

2

762,762

4,481,278

Effect of foreign exchange rate changes

310

687

Cash and cash equivalents at end of year

2

846,928

762,762

1.	RECONCILIATION OF LOSS BEFORE CORPORATE TAX TO CASH GENERATED FROM OPERATIONS

2025

2024

£

£

Loss before corporate tax

(1,771,084

)

(2,349,295

)

Depreciation charges

-

8,609

Loss on revaluation of fixed assets

1,097,498

543,000

Finance costs

84,639

1,467,921

(588,947

)

(329,765

)

Increase in trade and other receivables

(9,511,030

)

(420,899

)

Decrease in trade and other payables

(410,945

)

(73,015

)

Cash generated from operations

(10,510,922

)

(823,679

)

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 December 2025

31.12.25

1.1.25

£

£

Cash and cash equivalents

846,928

762,762

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

762,762

4,481,278

1.	STATUTORY INFORMATION

Amathus Capital 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 preparation and statement of compliance

The accompanying financial statements for both group and company have been prepared on a historical cost basis except for investment properties that have been measured at fair value. The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK and in compliance with the requirements of the Companies Act 2006.

The presentation currency of the financial statements is the Pound Sterling (£).

As disclosed in the Group Strategic Report and Note 15, the Group has adopted a strategy of no longer acquiring further properties, and pursuing an orderly realisation of the existing property portfolio. A number of properties were disposed of during the year and, at 31 December 2025, the remaining investment properties continued to be classified as assets held for sale. The Company and Group are expected to remain in existence in order to manage the orderly disposal process, settle liabilities as they fall due, manage existing assets and receivables, and meet ongoing statutory and administrative obligations.

Accordingly, the director considers that the going concern basis of preparation remains appropriate in the preparation of these financial statements.

Application of accounting policies

During the year ended 31 December 2025, the company has applied accounting policies and methods of

computation consistent with those applied in the prior year.

Principal activity

The principal activity of the group is the letting of investment properties.

Revenue recognition

The group generates revenue primarily from rental income of its investment properties. Revenue is measured based on the consideration specified in a contract with a customer and recognised on a straight-line basis over the term of the lease, except for contingent rental income which is recognised when it arises.

Operating leases as lessor

The Group leases out investment properties under operating leases.

Finance income

Finance income from bank deposits is recognised on a time apportionment basis using the effective interest method.

Basis of consolidation

(i) subsidiaries

The financial statements of the subsidiaries are prepared for the same reporting period as the company, using consistent accounting policies. All intercompany balances, transactions, unrealized gains and losses resulting from intercompany transactions and dividends are eliminated in full on consolidation. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the group gains control until the date the group ceases to control the subsidiary.

Subsidiaries are consolidated from the date of their acquisition, being the date on which the group obtains control, and continue to be consolidated until the date such control ceases. Control is achieved when the group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

Specifically, the group controls an investee if and only if the group has:

- Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)

- Exposure, or rights, to variable returns from its involvement with the investee, and

- The ability to use its power over the investee to affect its returns

When the group has less than a majority of the voting or similar rights of an investee, the group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

- The contractual arrangement with the other vote holders of the investee

- Rights arising from other contractual arrangements

- The group's voting rights and potential voting rights

The group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the group's accounting policies.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an

equity transaction. If the group loses control over a subsidiary, it:

- Derecognizes the assets (including goodwill) and liabilities of the subsidiary

- Derecognizes the carrying amount of any non-controlling interests

- Derecognizes the cumulative translation differences recorded in equity

- Recognizes the fair value of the consideration received

- Recognizes the fair value of any investment retained

- Recognizes any surplus or deficit in profit or loss

- Reclassifies the parent's share of components previously recognized in OCI to profit or loss or retained earnings, as appropriate, as would be required if the group had directly disposed of the related assets or liabilities

Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether it measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree's identifiable net assets. Acquisition costs incurred are expensed and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IAS 39 Financial Instruments: Recognition and Measurement, is measured at fair value with changes in fair value recognized either in the profit or loss or as a change to other comprehensive income. If the contingent consideration is not within the scope of IAS 39, it is measured in accordance with the appropriate IFRS. Contingent consideration that is classified as equity is not remeasured and subsequent settlement is accounted for within equity.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the gain is recognized in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Finance costs

Interest expense and other borrowing costs are charged to profit or loss as incurred.

Investment property

Investment property principally comprising residential buildings, is held for long-term rental yields and/or for capital appreciation and is not occupied by the group. Investment property is carried at fair value, representing open market value determined annually by external valuers. Changes in fair values are recorded in profit or loss and are included in other operating income.

An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the continued use of the asset. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognised.

Fair value measurement

The carrying amounts of the group's financial assets and liabilities approximate their fair value at the reporting date.

The fair value of financial assets traded in active markets is based on quoted market prices at the reporting date. The quoted market price is used for financial assets held by the group is the current bid price. The appropriate quoted market price used for financial liabilities is the current ask price.

The fair value of financial assets that are not traded in an active markets is determined by using valuation techniques. The group uses a variety methods, such as estimated discounted cash flows, and makes assumptions that are based on market conditions existing at the reporting date.

All assets, liabilities and equity items for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to fair value measurement as a whole.

1. Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities.

2. Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

3. Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly probably that they will be recovered primarily through sale rather than through continuing use.

Such assets or disposal groups, are generally measured at the lower of their carrying amount and fair value less cost to sell. Where a sale is not completed within 12 months of classification due to circumstances beyond the group's control, the assets remain classified as held for sale provided the group remains committed to the plan to sell, continues to actively market the assets at a price reasonable in relation to their current fair value, and is taking all necessary steps to complete the sale in accordance with IFRS 5.9(b).

Any impairment loss on the disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets or investment property, which continue to be measured in accordance with the group's other accounting policies. Impairment losses on initial classification as held-for-sale or held-for-distribution and subsequent gains and losses on remeasurement are recognised in profit and loss.

Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortised or depreciated, and any equity-accounted investee is no longer equity accounted.

Impairment of non-financial assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non financial assets, other than goodwill, that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.