REGISTERED NUMBER: 15461080 (England and Wales)

PITTEN HOLDINGS LIMITED

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

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

DIRECTORS:

M D Richards

R J Richards

E C Richards

M A Richards

D H Richards

REGISTERED OFFICE:

Speedwell Kia

The Avenue

Newton Abbot

Devon

TQ12 2DD

REGISTERED NUMBER:

15461080 (England and Wales)

AUDITORS:

WP Audit Services LLP

Chartered Accountant & Statutory Auditor

Chancery House

30 St Johns Road

Woking

Surrey

GU21 7SA

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

REVIEW OF BUSINESS

The company was incorporated in the prior period, acquiring 100% of the share capital of Pitten Limited on 27th February 2024.

This report has been prepared looking at the full year performance of the trading subsidiary, in order to provide a meaningful analysis.

The trading subsidiary has enjoyed another year of consolidation since moving to Exeter and the staff have settled well into the new routines.

Our key performance indicators for 2025, compared to 2024, are as follows:

2025

2024 - full year for trading subsidiary

Vehicle Sales Units (Retail New / Used)

2,171

1,996

Turnover

£52.6m

£48.9m

NPBT (£)

£0.453m

£0.417m

GPM (%)

9.3%

8.5%

There was an improvement in turnover for 2025 compared to 2024, but net margins are under pressure as new car sales volumes continue to be supported by Motability and Fleet volumes which have significantly lower percentage margins. The introduction of the Kia PBV Van franchise will bring additional volume to the business coupled with healthier margins. Used car volumes have again increased but margins have held at the 2024 levels. Aftersales hours have improved strongly across the group and coupled with an improved margin this is contributing to an improved overhead absorption.

Key factors currently affecting the business are;

1. Improved new vehicle supply from Kia and all manufacturers increasing competition.

2. New car margin decline affected by sales of Fleet and Motability increasing.

3. Establishing and incorporating the Kia PBV site into the total business.

4. Rising Aftersales labour costs and consequential margin decreases.

5. Refurbishment costs for the Kia PBV and vehicle preparation facility being incurred.

The consolidation of Speedwell to represent Kia in two adjacent territories continues to afford opportunities to share costs in areas like advertising, demonstrators and overheads whilst also offering opportunities in used cars, aftersales, corporate and business sales.

The Honda aftersales franchise at Newton Abbot continues to offer a good source of labour and parts sales, which, although declining, offers a good contribution to the dealership performance. It has been almost 5 years since Honda new car sales finished at Newton and the effect of a rapidly declining PARC will be felt more in the next few years although Kia growth is more than covering any reduction.

The Directors are always mindful of areas offering future growth opportunities and explore the viabilities when offered. The strength of the balance sheet offers the opportunity for well-funded growth and allows the business to act quickly if an opportunity does arise. Negotiations have been undertaken with an additional franchise to be introduced at our Kingsteignton dealership opening in mid 2026 which will offer an avenue for growth into 2027 as product deliveries come fully on stream.

PRINCIPAL RISKS AND UNCERTAINTIES

The poor consumer confidence is affecting the retail new car market, with higher interest rates, the decline of ICE product, introduction of EV and product cycle changes are all risk factors which the business will be faced with over the next months and years.

The effect of the Chinese disrupter brands on the market is being felt and the challenges ahead for established brands is to stay relevant through new product, customer loyalty and retention. Pitten Ltd will work with Kia to maximise our position in the areas of responsibility whilst viewing any further opportunities for broadening our portfolio.

ON BEHALF OF THE BOARD:

M D Richards - Director

26 August 2026

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

PRINCIPAL ACTIVITY

The principal activity of the company in the period under review was that of trading as a motor dealer.

DIVIDENDS

The total distribution of dividends for the period ended 31 December 2025 will be £111,000 (2024: £65,000)

DIRECTORS

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

M D Richards

R J Richards

In addition E C Richards, M A Richards, D H Richards were appointed as directors on 21 July 2026.

FINANCIAL INSTRUMENTS

The group's financial instruments comprise bank balances, trade creditors, trade debtors, loans and vehicle finance. The group's approach to managing the risks associated with these instruments is as follows:

- Currency and price risk - these do not pose a real risk to the business, due to the nature of the above financial instruments, which are all in Sterling. Although the group has a franchise with Kia, which is not a UK based brand, the invoicing is all in GBP.

- Interest rate risk - interest rates are regularly monitored and re-negotiated whenever possible. Funds are allocated in a way that results in the lowest possible interest burden on the group. There is adequate interest cover from profits generated and a good relationship with bankers.

- Credit risk - credit is only granted to customers who have been reviewed for credit worthiness. Amounts of credit are kept to a minimum and consistent credit control processes ensure minimal exposure to credit risk.

- Liquidity risk - working capital is reviewed and managed pro-actively, on a daily basis. Planning and forecasting ensures that liquidity is always sufficient to meet future requirements of the business.

DISCLOSURE IN THE STRATEGIC REPORT

Disclosures related to business performance, key performance indicators, future developments and risks and uncertainties have been given in the Strategic Report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

AUDITORS

The auditors, WP Audit Services LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

M D Richards - Director

26 August 2026

Opinion

We have audited the financial statements of Pitten 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 directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

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

Other information

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

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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.

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, thorough 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 group.

Audit Approach

Our approach was as follows:

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

- We obtained an understanding of how the group 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 group 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 group'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 group 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 entities or business activities within the group, to express an opinion on the consolidated 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 non-compliance 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

26 August 2026

TURNOVER

52,564,189

41,848,643

Cost of sales

(47,668,980

)

(38,422,779

)

GROSS PROFIT

4,895,209

3,425,864

Administrative expenses

(4,885,620

)

(3,588,533

)

9,589

(162,669

)

Other operating income

452,210

385,905

OPERATING PROFIT

6

461,799

223,236

Interest receivable and similar income

2,040

10,405

463,839

233,641

Interest payable and similar expenses

7

(10,778

)

(47,831

)

PROFIT BEFORE TAXATION

453,061

185,810

Tax on profit

8

(129,500

)

(51,366

)

PROFIT FOR THE FINANCIAL YEAR

323,561

134,444

Profit attributable to:

Owners of the parent

323,561

134,444

PROFIT FOR THE YEAR

323,561

134,444

OTHER COMPREHENSIVE INCOME

Negative goodwill to fair value reserve

-

2,261,702

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

-

2,261,702

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

323,561

2,396,146

Total comprehensive income attributable to:

Owners of the parent

323,561

2,396,146

FIXED ASSETS

Tangible assets

11

2,179,593

2,341,431

Investments

12

-

-

Investment property

13

900,618

-

3,080,211

2,341,431

CURRENT ASSETS

Stocks

14

6,207,991

3,369,016

Debtors

15

428,373

311,480

Cash at bank and in hand

1,900

501,006

6,638,264

4,181,502

CREDITORS

Amounts falling due within one year

16

6,033,889

2,851,502

NET CURRENT ASSETS

604,375

1,330,000

TOTAL ASSETS LESS CURRENT LIABILITIES

3,684,586

3,671,431

CREDITORS

Amounts falling due after more than one year

17

(544,879

)

(707,285

)

PROVISIONS FOR LIABILITIES

21

(71,000

)

(108,000

)

NET ASSETS

3,068,707

2,856,146

CAPITAL AND RESERVES

Called up share capital

22

525,000

525,000

Fair value reserve

23

2,261,702

2,261,702

Retained earnings

23

282,005

69,444

SHAREHOLDERS' FUNDS

3,068,707

2,856,146

The financial statements were approved by the Board of Directors and authorised for issue on 26 August 2026 and were signed on its behalf by:

M D Richards - Director

FIXED ASSETS

Tangible assets

11

-

-

Investments

12

637,090

637,000

Investment property

13

900,618

-

1,537,708

637,000

CURRENT ASSETS

Debtors

15

170,200

-

CREDITORS

Amounts falling due within one year

16

597,297

112,000

NET CURRENT LIABILITIES

(427,097

)

(112,000

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,110,611

525,000

CREDITORS

Amounts falling due after more than one year

17

544,879

-

NET ASSETS

565,732

525,000

CAPITAL AND RESERVES

Called up share capital

22

525,000

525,000

Retained earnings

23

40,732

-

SHAREHOLDERS' FUNDS

565,732

525,000

Company's profit for the financial year

151,732

65,000

The financial statements were approved by the Board of Directors and authorised for issue on 26 August 2026 and were signed on its behalf by:

M D Richards - Director

Called up

Fair

share

Retained

value

Total

capital

earnings

reserve

equity

£

£

£

£

Changes in equity

Issue of share capital

637,000

-

-

637,000

Reduction in share capital

(112,000

)

-

-

(112,000

)

Dividends

-

(65,000

)

-

(65,000

)

Total comprehensive income

-

134,444

2,261,702

2,396,146

Balance at 31 December 2024

525,000

69,444

2,261,702

2,856,146

Changes in equity

Dividends

-

(111,000

)

-

(111,000

)

Total comprehensive income

-

323,561

-

323,561

Balance at 31 December 2025

525,000

282,005

2,261,702

3,068,707

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Changes in equity

Issue of share capital

637,000

-

637,000

Reduction in share capital

(112,000

)

-

(112,000

)

Dividends

-

(65,000

)

(65,000

)

Total comprehensive income

-

65,000

65,000

Balance at 31 December 2024

525,000

-

525,000

Changes in equity

Dividends

-

(111,000

)

(111,000

)

Total comprehensive income

-

151,732

151,732

Balance at 31 December 2025

525,000

40,732

565,732

Cash flows from operating activities

Cash generated from operations

1

727,118

196,864

Interest paid

(10,778

)

-

Tax paid

(84,800

)

(202,714

)

Net cash from operating activities

631,540

(5,850

)

Cash flows from investing activities

Purchase of tangible fixed assets

(111,011

)

(543,146

)

Purchase of investment property

(900,618

)

-

Sale of tangible fixed assets

-

7,920

Cash acquired on group reconstruction

-

1,183,387

Interest received

2,040

10,405

Net cash from investing activities

(1,009,589

)

658,566

Cash flows from financing activities

New loans in year

700,000

-

Loan repayments in year

(777,185

)

(38,879

)

Interest paid in the year on loans

-

(47,831

)

Equity dividends paid

(111,000

)

(65,000

)

Net cash from financing activities

(188,185

)

(151,710

)

(Decrease)/increase in cash and cash equivalents

(566,234

)

501,006

Cash and cash equivalents at beginning of year

2

501,006

-

Cash and cash equivalents at end of year

2

(65,228

)

501,006

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

Period

2.2.24

Year Ended

to

31.12.25

31.12.24

£

£

Profit before taxation

453,061

185,810

Depreciation charges

272,849

204,060

Profit on disposal of fixed assets

-

(7,920

)

Finance costs

10,778

47,831

Finance income

(2,040

)

(10,405

)

734,648

419,376

(Increase)/decrease in stocks

(2,838,975

)

383,763

(Increase)/decrease in trade and other debtors

(116,893

)

376,405

Increase/(decrease) in trade and other creditors

2,948,338

(982,680

)

Cash generated from operations

727,118

196,864

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

1,900

501,006

Bank overdrafts

(67,128

)

-

(65,228

)

501,006

Period ended 31 December 2024

31.12.24

2.2.24

£

£

Cash and cash equivalents

501,006

-

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.25

Cash flow

At 31.12.25

£

£

£

Net cash

Cash at bank and in hand

501,006

(499,106

)

1,900

Bank overdrafts

-

(67,128

)

(67,128

)

501,006

(566,234

)

(65,228

)

Debt

Debts falling due within 1 year

(38,880

)

(85,217

)

(124,097

)

Debts falling due after 1 year

(707,285

)

162,406

(544,879

)

(746,165

)

77,189

(668,976

)

Total

(245,159

)

(489,045

)

(734,204

)

1.	STATUTORY INFORMATION

Pitten 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.

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 group 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.

Critical accounting judgements and key sources of estimation uncertainty

During the preparation of the accounts, the director must make certain judgements and estimates concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. However, these are not generally considered to be significantly subjective, and the majority are easily supported by subsequent transactions and documentation. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

There are no estimates and assumptions that are determined to have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.