REGISTERED NUMBER: 00639690 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements

for the Period 4 March 2024 to 2 March 2025

for

Stange & Co. Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Income Statement

9

Other Comprehensive Income

10

Balance Sheet

11

Statement of Changes in Equity

12

Cash Flow Statement

13

Notes to the Cash Flow Statement

14

Notes to the Financial Statements

16

DIRECTORS:

N L Rowlands

D McLennan

SECRETARY:

D McLennan

REGISTERED OFFICE:

19 Trinity Square

Llandudno

North Wales

LL30 2RD

REGISTERED NUMBER:

00639690 (England and Wales)

AUDITORS:

Bennett Brooks & Co Limited

Chartered Accountants

& Statutory Auditors

St George's Court

Winnington Avenue

Northwich

Cheshire

CW8 4EE

The directors present their strategic report for the period 4 March 2024 to 2 March 2025. The financial statements are prepared to the Sunday closest to the February accounting reference date.

REVIEW OF BUSINESS

In recent years, several challenges have presented themselves to us. These have generally been of an international origin, be that COVID, the war in Ukraine or the implementation of US tariffs. This year the challenges we have faced, and are planning to face, are very much homegrown and government mandated. Increased employer National Insurance Contributions, further above inflation minimum wage increases, the reduction of business rates support, government policy induced inflation, changes to Business Property Relief, changes to employment rights, reduced consumer & business confidence and visitor levies.

The number of pubs we operated this year remained at nine, with the Ring O'Bells in West Kirby our most recent addition having now operated for the full year, with the prior year having included only 3 months trading from the new pub. Annual revenues for the group increased from £15.9m to £17.9m, £1.8m of that increase being attributable to the Ring O'Bells, the rest being a modest increase in sales from price increases, with little volume growth this year, due to low consumer confidence in the economy.

Thankfully some of those sales have made it to the bottom line, with Pub EBITDA increasing from £2.8m to £3.2m, Group EBITDA increasing from £1.9m to £2.3m and net pre tax profits increasing from £1.1m to £1.2m.

This year we have seen continued increases in product costs but have managed to maintain gross margin, through tight controls on menu design and sourcing.

Wages have again been the big story of this year, with government mandated above inflation increases in the National Living Wage far outstripping our ability to cover them with increases in sales, so our wages as a percentage of sales has increased again by 1%, a trend that is repeated across the industry and an unsustainable one, with several casualties across the sector with sadly more to come.

Another summer of unbelievably poor weather in 2024 did not boost sales in our weather sensitive pubs on the coast and those with beer gardens and terraces, but with a poor summer last year too (2023) the year on year comparisons are similar.

PRINCIPAL RISKS AND UNCERTAINTIES

With ongoing disruption in Middle-East and Ukraine and unpredictable tariff policies emanating from the USA, the state of the global economy remains far from certain. Consequently inflation, cost of living and interest rates remains far from certain and constantly in the news. All of which weighs constantly on consumer confidence, and the new Labour government's actions so far have done little to improve things.

Stange & Co remains insulated somewhat from moves in interest rates with a substantial part of our loans being on fixed rates. We also have fixed price contracts for many of the products we buy and utilities. Owning the freeholds of the majority of our pubs also gives us a higher operating margin than some of our competitors, which gives us some resilience against challenges to sales and costs.

CURRENT TRADING

Trading in the first six months of the current financial year has been strong, with sales over 10% up across the group, much of this is attributable to the good weather we have enjoyed in both the Spring and Summer of 2025. Some small investments at two of the pubs have also helped. We added five additional bedrooms at The Glengower in Aberystwyth and generally upgraded the accommodation areas. Secondly, we upgraded the kitchens at The Snowdon in Llandudno, dramatically improving our food provision there, which had resulted in an uplift of around 50% in food sales.

Wages remain the challenge again this year, with not only above inflationary increases in the National Living Wage but also the government's 2% increase in employers' NI and lowering of the NI threshold, which together will result in an increase of well over 10% in wages costs, significantly our biggest cost. This simply will not be able to be covered by increases in sales or prices, meaning operating margin will be squeezed again.

FUTURE

We have recently completed on the purchase of our eleventh pub, The Myddelton Arms in Ruthin in North Wales. This is a fascinating 15th century timber framed pub on St Peter's Square, which is a little down on its luck currently, but with some sensitive investment, we feel it will make for a great addition to the Stange & Co family and give the folks of Ruthin a cracking new local.

As this is written, the budget in November looms large for both businesses and individuals, and so sentiment is currently low, sales however remain fairly resilient but some certainty and positivity is now certainly the order of the day, and hopefully the government can deliver this in the coming weeks and months.....but I won't hold my breath.

ON BEHALF OF THE BOARD:

D McLennan - Director

26 November 2025

The directors present their report with the financial statements of the company for the period 4 March 2024 to 2 March 2025.

DIVIDENDS

The total distribution of dividends for the period ended 2 March 2025 will be £ 225,916 .

FUTURE DEVELOPMENTS

Information on the likely future developments in the business of the company is set out in the Strategic Report and is incorporated by reference into this report.

DIRECTORS

The directors shown below have held office during the whole of the period from 4 March 2024 to the date of this report.

N L Rowlands

D McLennan

POLITICAL DONATIONS AND EXPENDITURE

No political donations were made during the period ended 2 March 2025.

ENGAGEMENT WITH EMPLOYEES

Disabled employees

The company is committed to employment policies which follow best practice, based on equal opportunities for all employees regardless of race, sex, colour, disability or marital status. The company gives full and fair consideration to applications for employment from disabled persons, having regard to their aptitudes and abilities. Appropriate arrangements are made for the continued employment and training, career development and promotion of disabled employees. If members of staff become disabled the company continues employment, either in the same or an alternative role, with provides appropriate retraining if necessary.

Employee involvement

The company provides employees with information on matters of concern to them so that their views can be taken into account when making decisions that are likely to affect their interests. Employee involvement in the company is encouraged via regular meetings to update employees on performance and developments.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 of the profit or loss of the company 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 transactions and disclose with reasonable accuracy at any time the financial position of the company 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 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 company'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 company's auditors are aware of that information.

AUDITORS

The auditors, Bennett Brooks & Co Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

D McLennan - Director

26 November 2025

Opinion

We have audited the financial statements of Stange & Co. Limited (the 'company') for the period ended 2 March 2025 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the 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 company's affairs as at 2 March 2025 and of its profit for the period 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 company 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 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 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 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 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 material misstatements in the 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, or returns adequate for our audit have not been received from branches not visited by us; or

-	the 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 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 company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to UK tax legislation and regulations which govern the preparation of financial statements, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue, through management bias in manipulation of accounting estimates or accounting for significant transactions outside the normal course of business. Audit procedures performed included:

-Enquiry of management around actual and potential litigation and claims and instances of non-compliance with laws and regulations;

- Auditing the risk of management override of controls, through testing journal entries and other adjustments for appropriateness, testing accounting estimates (because of the risk of management bias), and evaluating the business rationale of significant transactions outside the normal course of business; and

- Reviewing financial statement disclosures and agreeing to supporting documentation to assess compliance with applicable laws and regulations.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, 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 by, for example, forgery or intentional misrepresentations, or through 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.

Jason Leach FCA (Senior Statutory Auditor)

for and on behalf of Bennett Brooks & Co Limited

Chartered Accountants

& Statutory Auditors

St George's Court

Winnington Avenue

Northwich

Cheshire

CW8 4EE

26 November 2025

TURNOVER

17,944,691

15,858,229

Cost of sales

(11,772,973

)

(10,360,693

)

GROSS PROFIT

6,171,718

5,497,536

Administrative expenses

(4,654,635

)

(4,144,645

)

1,517,083

1,352,891

Other operating income

39,590

4,113

OPERATING PROFIT

4

1,556,673

1,357,004

Interest receivable and similar income

146

4,453

1,556,819

1,361,457

Interest payable and similar expenses

5

(355,534

)

(262,872

)

PROFIT BEFORE TAXATION

1,201,285

1,098,585

Tax on profit

6

(129,400

)

(287,267

)

PROFIT FOR THE FINANCIAL PERIOD

1,071,885

811,318

PROFIT FOR THE PERIOD

1,071,885

811,318

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

1,071,885

811,318

FIXED ASSETS

Intangible assets

8

154,542

206,056

Tangible assets

9

13,595,569

13,150,325

Investments

10

100

100

13,750,211

13,356,481

CURRENT ASSETS

Stocks

11

205,912

178,879

Debtors

12

294,425

215,819

Cash at bank and in hand

458,211

537,867

958,548

932,565

CREDITORS

Amounts falling due within one year

13

(3,010,489

)

(3,504,831

)

NET CURRENT LIABILITIES

(2,051,941

)

(2,572,266

)

TOTAL ASSETS LESS CURRENT LIABILITIES

11,698,270

10,784,215

CREDITORS

Amounts falling due after more than one year

14

(4,756,044

)

(4,531,543

)

PROVISIONS FOR LIABILITIES

18

(572,543

)

(728,958

)

NET ASSETS

6,369,683

5,523,714

CAPITAL AND RESERVES

Called up share capital

19

219,250

219,250

Revaluation reserve

20

153,833

153,833

Retained earnings

20

5,996,600

5,150,631

SHAREHOLDERS' FUNDS

6,369,683

5,523,714

The financial statements were approved by the Board of Directors and authorised for issue on 26 November 2025 and were signed on its behalf by:

D McLennan - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 March 2023

219,250

4,339,313

153,833

4,712,396

Changes in equity

Total comprehensive income

-

811,318

-

811,318

Total transactions with owners, recognised directly in equity

-

-

-

-

Balance at 3 March 2024

219,250

5,150,631

153,833

5,523,714

Changes in equity

Total comprehensive income

-

1,071,885

-

1,071,885

Dividends

-

(225,916

)

-

(225,916

)

Total transactions with owners, recognised directly in equity

-

(225,916

)

-

(225,916

)

Balance at 2 March 2025

219,250

5,996,600

153,833

6,369,683

Cash flows from operating activities

Cash generated from operations

1

1,788,384

2,259,882

Interest paid

(293,997

)

(245,084

)

Interest element of finance lease payments paid

(61,537

)

(17,788

)

Tax paid

(169,187

)

(139,797

)

Net cash from operating activities

1,263,663

1,857,213

Cash flows from investing activities

Purchase of tangible fixed assets

(1,021,552

)

(2,072,216

)

Sale of tangible fixed assets

432

1,480

Interest received

146

4,453

Net cash from investing activities

(1,020,974

)

(2,066,283

)

Cash flows from financing activities

New loans in year

950,000

850,000

Loan repayments in year

(641,530

)

(412,866

)

Capital repayments in year

(404,899

)

(17,048

)

Amount introduced by directors

-

5,817

Equity dividends paid

(225,916

)

-

Net cash from financing activities

(322,345

)

425,903

(Decrease)/increase in cash and cash equivalents

(79,656

)

216,833

Cash and cash equivalents at beginning of period

2

537,867

321,034

Cash and cash equivalents at end of period

2

458,211

537,867

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

Period

Period

4.3.24

1.3.23

to

to

2.3.25

3.3.24

£

£

Profit before taxation

1,201,285

1,098,585

Depreciation charges

718,464

544,458

Profit on disposal of fixed assets

(349

)

(222

)

Finance costs

355,534

262,872

Finance income

(146

)

(4,453

)

2,274,788

1,901,240

Increase in stocks

(27,033

)

(33,148

)

Increase in trade and other debtors

(78,605

)

(21,394

)

(Decrease)/increase in trade and other creditors

(380,766

)

413,184

Cash generated from operations

1,788,384

2,259,882

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:

Period ended 2 March 2025

2.3.25

4.3.24

£

£

Cash and cash equivalents

458,211

537,867

Period ended 3 March 2024

3.3.24

1.3.23

£

£

Cash and cash equivalents

537,867

321,034

3.	ANALYSIS OF CHANGES IN NET DEBT

Other

non-cash

At 4.3.24

Cash flow

changes

At 2.3.25

£

£

£

£

Net cash

Cash at bank

and in hand

537,867

(79,656

)

458,211

537,867

(79,656

)

458,211

Debt

Finance leases

(332,348

)

404,899

(90,725

)

(18,174

)

Debts falling due

within 1 year

(436,718

)

76,081

-

(360,637

)

Debts falling due

after 1 year

(4,359,302

)

(384,552

)

-

(4,743,854

)

(5,128,368

)

96,428

(90,725

)

(5,122,665

)

Total

(4,590,501

)

16,772

(90,725

)

(4,664,454

)

1.	STATUTORY INFORMATION

Stange & Co. Limited is a private company, limited by shares, incorporated and registered in England and Wales. The company's registered number and registered office address can be found on the Company 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.

Preparation of consolidated financial statements

The company is also a parent entity and holds the entire share capital of Stange Inn & Co Limited, which is dormant and has share capital and net assets of £100. The company has not prepared consolidated accounts in accordance with Section 402 of the Companies Act 2006 as its subsidiary undertaking is excluded from consolidation under section 405 of the Companies Act on materiality grounds.

Related party exemption

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

Going concern

The company has net current liabilities at 2 March 2025 of £2,051,941 (2024: £2,572,266). The company meets its day-to-day working capital requirements through its bank facilities which are secured on the company's assets. As noted in the Strategic Report, the current economic conditions continue to create uncertainty over customer confidence and the potential impact on consumer spending in the company's pubs. The directors have prepared cashflow forecasts that take into account this economic uncertainty and the availability of funding from their bankers.

The company's forecasts and projections, taking account a severe but plausible change in trading performance, show that the company should be able to operate within the level of its current facilities. After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Turnover

Turnover represents sales (excluding taxes) of goods and services net of discounts. Turnover principally consists of sales of food, drink and accommodation which are recognised at the point at which goods and services are provided.

Cost of sales

Presented within cost of sales are direct costs of operating the company's pubs and inns, including stock purchases (wet and dry) and payroll costs of the service staff.

Goodwill

Goodwill, being the amount paid in connection with acquisitions, is initially measured at cost. After initial recognition goodwill is measured at cost less any accumulated amortisation and any accumulated impairment losses. Goodwill is being amortised evenly over its estimated useful life of 10 years.

Tangible fixed assets

Freehold property are stated at cost (or frozen at deemed cost held at valuation at the date of transition to FRS 102) less accumulated depreciation.

Freehold properties owned by the company and long leaseholds have not been depreciated because, in the opinion of the directors, the programme of the refurbishment and repair maintains the properties to a standard whereby the total residual value will be maintained. Consequently, the amount of any depreciation would not be material.

Other fixed assets are stated at cost less accumulated depreciation. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.

Depreciation is provided on all tangible fixed assets, at rates calculated to write off the cost, less estimated residual value, of each asset on a systematic basis over its expected useful life as follows:

Fixtures and fittings

15% reducing balance

Motor vehicles

25% reducing balance

Improvements to property

10% straight line

Stocks

Stock is valued at the lower of cost and net realisable value. Cost includes the purchase cost of the item. Provision is made for slow moving items.

Taxation

Taxation for the period comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Impairment of non-financial assets

At each balance sheet date non-financial assets are assessed to determine whether there is an indication that the asset (or asset's cash generating unit) may be impaired. If there is such an indication the recoverable amount of the asset (or asset's cash generating unit) is compared to the carrying amount of the asset (or asset's cash generating unit).

The recoverable amount of the asset (or asset's cash generating unit) is the higher of the fair value less costs to sell and value in use. Value in use is defined as the present value of the future cash flows before interest and tax obtainable as a result of the asset's (or asset's cash generating unit's) continued use. These cash flows are discounted using a pre-tax discount rate that represents the current market risk-free rate and the risks inherent in the asset.

If the recoverable amount of the asset (or asset's cash generating unit) is estimated to be lower than the carrying amount, the carrying amount is reduced to its recoverable amount. An impairment loss is recognised in the profit and loss account, unless the asset has been revalued when the amount is recognised in other comprehensive income to the extent of any previously recognised revaluation. Thereafter any excess is recognised in profit or loss.

If an impairment loss is subsequently reversed, the carrying amount of the asset (or asset's cash generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the revised carrying amount does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised in prior periods. A reversal of an impairment loss is recognised in the profit and loss account

Subsidiary investment

The subsidiary investment is stated in the parent company’s balance sheet at cost less any provisions for impairment.

Share capital

Ordinary shares are classed as equity.

Short term debtors and creditors

Short term debtors and creditors with no stated interest rate are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account.

Distributions to equity holders

Dividends are recognised as a liability in the financial statements in the period in which the dividends are approved by the company's shareholders. These amounts are recognised in the statement of changes in equity.

Cash and cash equivalents

Cash and cash equivalents includes cash in hand, cash held with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Loans and borrowings

Loans and borrowings are initially recognised at the transaction price including transaction costs. Subsequently, they are measure at amortised cost using the effective interest rate method, less impairment.

Related party transactions

The company discloses transactions with related parties which are not wholly owned. Where appropriate, transactions of a similar nature are aggregated unless, in the opinion of the directors, separate disclosure is necessary to understand the effect of the transactions on the company's financial statements.

Critical accounting judgements and estimation uncertainty

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.

a. Critical judgements in applying the company's accounting policies

i. Carrying value of freehold and long-leasehold properties

The directors are of the opinion that the programme of refurbishment and repair maintains the properties to a standard whereby the total residual value will be maintained, and as a result, the depreciable amount and annual depreciation charge would not be material. This requires judgement.