REGISTERED NUMBER: 10671764 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

FOR

ADVANCED MARKETS (UK) LIMITED

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 Statement of Financial Position

12

Company Statement of Financial Position

13

Consolidated Statement of Changes in Equity

14

Company Statement of Changes in Equity

15

Consolidated Statement of Cash Flows

16

Notes to the Consolidated Statement of Cash Flows

17

Notes to the Consolidated Financial Statements

18

DIRECTORS:

G Gooch

A P Brocco

SECRETARY:

G Gooch

REGISTERED OFFICE:

10 John Street

London

WC1N 2EB

REGISTERED NUMBER:

10671764 (England and Wales)

AUDITORS:

Oury Clark Chartered Accountants

Statutory Auditors

Herschel House

58 Herschel Street

Slough

Berkshire

SL1 1PG

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

REVIEW OF BUSINESS

The results for the period were in line with the expectations of the directors. The year-over-year growth in client acquisition resulted in increased core trading volumes, resulting in corresponding revenue growth. Fiscal year 2026 has started well and the directors continue to expect positive returns moving forward.

Principal activity

The principal activity of the Group during the year was trading operations for foreign currency, which was the primary driver of turnover. However, the Group also engages in trading of commodities and commodity futures, and contracts for differences (CFDs), including for energy futures, major global indices, and stocks. The Group is authorised and regulated by the Financial Conduct Authority (FCA), under Firm License Reference Number 777739.

PRINCIPAL RISKS AND UNCERTAINTIES

The Group's operations exposes it to a variety of financial risks that includes foreign exchange risk and liquidity risk. The directors review and agree policies for managing each of these risks and they are summarized below:

Market risk

The Group does not hold any market risk as it operates strictly in a matched principal relationship model. Any risks associated with liquidity or foreign exchange, due to market movement are directly proportional to clients' positions and equity. In this model a trade does not exist against the Group's clients unless it has been already covered with one of the Group's counterparties. Therefore, the Group never has a position of their own in the market.

Credit risk

The Group has a low credit risk profile, given that there are no interest-bearing debts, and the significant portion of the Group's total assets to pay its liabilities is held in either cash and cash equivalents, or as trading deposits held with counterparties, which are readily callable and convertible into cash.

Foreign exchange risk

Foreign exchange risk is negligible as the Group does not take or hold any positions in the market with regards to foreign currency trading. The Group does hold cash assets at banks that are denominated in currencies other than US dollar (USD), the balances of which can be material and subject the Group to foreign exchange risk. In these situations, the Group will sell the currency against USD in the foreign currency trading market to reduce or materially eliminate the exposure.

Liquidity risk

The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs. The Group's policy throughout the year has been to ensure continuity of funding by matching the source of funds to the intended use of those funds. Short-term flexibility is achieved through the Group's cash reserves. The Group has budgetary and financial reporting procedures, supported by appropriate key performance indicators, to manage liquidity and other financial risks. All key financial figures are monitored on an ongoing basis.

FINANCIAL KEY PERFORMANCE INDICATORS

We consider that our key performance indicators are those that communicate the financial performance and strength of the Group, being turnover and net profit. These are the performance indicators that are most effective in assessing the progress against our objectives and strategy and measure the performance of the entity.

2025

2024

Turnover

$ 5,907,822

$ 3,444,654

Net profit/(loss)

$ (209,814

)

$ (32,708

)

OTHER KEY PERFORMANCE INDICATORS

The directors consider the following non-financial key performance indicators to be appropriate: new customer rate and customer turnover. Both of these key performance indicators showed improvements compared to the prior year.

ON BEHALF OF THE BOARD:

G Gooch - Director

11 September 2026

The directors present their 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.

FUTURE DEVELOPMENTS

The group plans to continue its present activities and ongoing growth strategies.

DIRECTORS

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

G Gooch

A P Brocco

Other changes in directors holding office are as follows:

A A H Atteya - resigned 1 April 2025

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 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, Oury Clark Chartered Accountants, are deemed to be re-appointed under Section 487 (2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

G Gooch - Director

11 September 2026

Opinion

We have audited the financial statements of Advanced Markets (UK) 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 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 affairs as at 31 December 2025 and of the group's loss for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months and one day 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 Report of the Directors and the Strategic Report, 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 inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be misstated. If we identify such inconsistencies or apparent 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 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 company and its environment obtained in the course of the audit, we have not identified any matters in the Report of the Directors and the Strategic Report that are inconsistent with our overall view of the financial statements.

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:

Identifying and assessing potential irregularities, including fraud

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non

compliance with laws and regulations, our procedures included the following:

1. Considering the nature of the industry, sector, control environment and current business activities, including possible performance targets and subsequent remuneration;

2. Enquiring of management concerning policies and procedures relating to:

- complying with laws and regulations and whether there were any instances of non-compliance; and

- mitigating, detecting and responding to fraud risk and whether there has been any actual or possible instances of fraud;

3. Discussing with the engagement team regarding how and where fraud may occur in the financial statements along with the possible indicators of fraud;

We identified the following areas most likely to be susceptible to fraud:

- Revenue recognition;

- Management override.

4. Discussing with the engagement team the legal and regulatory framework in which the company operates and in particular those which would have an impact on the financial statements. The key laws and regulations considered were the Companies Act 2006, UK tax legislation, UK employment law and FCA compliance.

Audit response to the risks identified

As noted above, we identified revenue recognition and management override as matters that would most likely be susceptible to fraud. Our procedures to respond to these risks included the following:

- Recalculating and agreeing revenue in line with contracts with customers;

- Reviewing the nominal ledger and journal entries for any indication of management override.

Further, we also identified compliance with the Companies Act 2006, UK tax legislation, UK employment law and FCA regulation as being key areas where there may be possible non-compliance. Our procedures to respond to these risks included the following:

- Review the financial statement disclosures with completion of a disclosure checklist and testing to supporting documentation to assess compliance with the Companies Act 2006;

- Review the corporation tax return to ensure it complies with UK tax legislation and completion of our detailed corporation tax checklist;

- A safeguard review of the financial statements by an accountant not on the engagement team;

- A safeguard review of the tax computations by a person qualified as a CTA not on the engagement team;

- We have checked a sample of compliance with right to work checks and reviewed legal fees for indications of material issues arising out of non-compliance with employment law. We have reviewed FCA compliance and reporting as well as liquidity calculations and ensured no client money was held during the year.

The above matters and identified laws and regulations and potential fraud risks were communicated to all engagement team members in order to enable the team to have the ability to identify such risks. The whole team remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

There are inherent limitations in the audit procedures described above and the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment.

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.

Rachel Lockwood (Senior Statutory Auditor)

for and on behalf of Oury Clark Chartered Accountants

Statutory Auditors

Herschel House

58 Herschel Street

Slough

Berkshire

SL1 1PG

15 September 2026

TURNOVER

4

5,907,822

3,444,654

Administrative expenses

6,099,821

3,482,100

OPERATING LOSS

6

(191,999

)

(37,446

)

Interest receivable and similar income

8

14,386

7,908

(177,613

)

(29,538

)

Interest payable and similar expenses

9

31,892

-

LOSS BEFORE TAXATION

(209,505

)

(29,538

)

Tax on loss

10

309

3,170

LOSS FOR THE FINANCIAL YEAR

(209,814

)

(32,708

)

Loss attributable to:

Owners of the parent

(209,814

)

(32,708

)

LOSS FOR THE YEAR

(209,814

)

(32,708

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(209,814

)

(32,708

)

Note

Prior year adjustment

12

(235,808

)

TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT

(445,622

)

Total comprehensive income attributable to:

Owners of the parent

(445,622

)

(32,708

)

FIXED ASSETS

Intangible assets

14

37,771

69,327

Tangible assets

15

6,637

2,406

Investments

16

-

-

44,408

71,733

CURRENT ASSETS

Debtors

17

25,617,128

18,715,730

Cash at bank

6,388,937

4,825,555

32,006,065

23,541,285

CREDITORS

Amounts falling due within one year

18

29,843,883

21,196,614

NET CURRENT ASSETS

2,162,182

2,344,671

TOTAL ASSETS LESS CURRENT LIABILITIES

2,206,590

2,416,404

CAPITAL AND RESERVES

Called up share capital

20

4

4

Share premium

21

1,309,892

1,309,892

Capital contribution reserve

21

1,111,093

1,111,093

Retained earnings

21

(214,399

)

(4,585

)

SHAREHOLDERS' FUNDS

2,206,590

2,416,404

The financial statements were approved by the Board of Directors and authorised for issue on 11 September 2026 and were signed on its behalf by:

G Gooch - Director

FIXED ASSETS

Intangible assets

14

37,771

69,327

Tangible assets

15

6,637

2,406

Investments

16

1

1

44,409

71,734

CURRENT ASSETS

Debtors

17

25,499,989

18,696,197

Cash at bank

6,380,350

4,815,973

31,880,339

23,512,170

CREDITORS

Amounts falling due within one year

18

29,777,482

21,204,012

NET CURRENT ASSETS

2,102,857

2,308,158

TOTAL ASSETS LESS CURRENT LIABILITIES

2,147,266

2,379,892

CAPITAL AND RESERVES

Called up share capital

20

4

4

Share premium

1,309,892

1,309,892

Capital contribution reserve

1,111,093

1,111,093

Retained earnings

(273,723

)

(41,097

)

SHAREHOLDERS' FUNDS

2,147,266

2,379,892

Company's loss for the financial year

(232,626

)

(44,877

)

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 11 September 2026 and were signed on its behalf by:

G Gooch - Director

Called up

Capital

share

Retained

Share

contribution

Total

capital

earnings

premium

reserve

equity

$

$

$

$

$

Balance at 1 January 2024

4

28,123

1,309,892

1,111,093

2,449,112

Changes in equity

Total comprehensive income

-

203,100

-

-

203,100

Balance at 31 December 2024

4

231,223

1,309,892

1,111,093

2,652,212

Prior year adjustment

-

(235,808

)

-

-

(235,808

)

As restated

4

(4,585

)

1,309,892

1,111,093

2,416,404

Changes in equity

Total comprehensive income

-

(209,814

)

-

-

(209,814

)

Balance at 31 December 2025

4

(214,399

)

1,309,892

1,111,093

2,206,590

Called up

Capital

share

Retained

Share

contribution

Total

capital

earnings

premium

reserve

equity

$

$

$

$

$

Balance at 1 January 2024

4

3,780

1,309,892

1,111,093

2,424,769

Changes in equity

Total comprehensive income

-

190,931

-

-

190,931

Balance at 31 December 2024

4

194,711

1,309,892

1,111,093

2,615,700

Prior year adjustment

-

(235,808

)

-

-

(235,808

)

As restated

4

(41,097

)

1,309,892

1,111,093

2,379,892

Changes in equity

Total comprehensive income

-

(232,626

)

-

-

(232,626

)

Balance at 31 December 2025

4

(273,723

)

1,309,892

1,111,093

2,147,266

Cash flows from operating activities

Cash generated from operations

1

1,586,846

3,474,750

Interest paid

(31,892

)

-

Tax paid

-

(3,535

)

Net cash from operating activities

1,554,954

3,471,215

Cash flows from investing activities

Purchase of tangible fixed assets

(5,958

)

-

Interest received

14,386

7,908

Net cash from investing activities

8,428

7,908

Increase in cash and cash equivalents

1,563,382

3,479,123

Cash and cash equivalents at beginning of year

2

4,825,555

1,346,432

Cash and cash equivalents at end of year

2

6,388,937

4,825,555

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

31.12.25

31.12.24

as restated

$

$

Loss before taxation

(209,505

)

(29,538

)

Depreciation charges

33,283

32,574

Finance costs

31,892

-

Finance income

(14,386

)

(7,908

)

(158,716

)

(4,872

)

Increase in trade and other debtors

(6,901,397

)

(3,598,809

)

Increase in trade and other creditors

8,646,959

7,078,431

Cash generated from operations

1,586,846

3,474,750

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

6,388,937

4,825,555

Year ended 31 December 2024

31.12.24

1.1.24

as restated

$

$

Cash and cash equivalents

4,825,555

1,346,432

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.25

Cash flow

At 31.12.25

$

$

$

Net cash

Cash at bank

4,825,555

1,563,382

6,388,937

4,825,555

1,563,382

6,388,937

Total

4,825,555

1,563,382

6,388,937

1.	STATUTORY INFORMATION

Advanced Markets (UK) Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements are prepared in US dollars, which is the functional currency of the group. Monetary amounts in these financial statements are rounded to the nearest $.

The trading address is Unit 5, The Warehouse, Woolyard, Bermondsey St, London. SE1 3UD.

Going concern

The Group has obtained a letter of support from the ultimate parent Company. The directors of the ultimate parent Company have provided a commitment to provide any financial support which may be necessary in order for the Group to meet liabilities, as they fall due, for a period in excess of twelve months and one day from the signing of the audit report. As a result of this commitment the directors have continued to adopt the going concern basis in preparing these financial statements.

Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Advanced Markets (UK) Limited together with all entities controlled by the parent company (its subsidiaries).

All financial statements are made up to 31 December 2025.

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.

Subsidiaries are consolidated in the group's financial statements from the date that control commences until the date that control ceases.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Commission and fees revenue are recognised on a trade-date basis. Swap revenue represents overnight interest charges earned on the open positions of clients at the end of the trading day. Gains and losses open foreign currency positions are recognised using closing settlement prices. Interest revenue is recognised as interest earned while cash is being held in certain banking institutions.

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 three years.

Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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

Computer equipment Straight line over 5 years

Financial instruments

Financial assets and financial liabilities are recognised in the group’s balance sheet when the group becomes a party to the contractual provisions of the relevant instrument, and derecognised when it ceases to be a party to such provisions.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through the statement of total comprehensive income are recognised immediately in profit or loss.

Financial assets

The group classifies its financial assets into the categories, discussed below, due to the purpose for which the asset was acquired. The group has not classified any of its financial assets as held to maturity.

Loans and receivables

These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of services to customers (e.g. trade debtors), but also incorporate other types of contractual monetary asset. They are initially recognised at fair value, including transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost.

The group’s loans and receivables consist of trade and other debtors and prepayments included within the balance sheet. Cash and bank balances include cash held at bank and cash on hand.

Impairment provisions are recognised when there is objective evidence, for example, significant financial difficulties on the part of the counterparty, or default, or significant delay in payment, that the group will be unable to collect all of the amounts due under the terms of the receivable. The amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable.

For certain categories of financial asset, such as trade debtors, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables includes the group’s past experience of collecting payments.

For trade debtors which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in the statement of total comprehensive income. On confirmation that the trade receivables will not be collectable, the gross carrying value of the asset is written off against the associated provision. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

Financial liabilities and equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Ordinary shares are classified as equity; ordinary shares issued by the Group are recognised at the proceeds received, net of direct issue costs.

Financial liabilities

Borrowings are initially recognised at fair value net of any directly attributable transaction costs. These interest-bearing liabilities are subsequently measured at amortised cost using the effective interest method, with the interest expense charged at a constant rate on the outstanding liabilities.