Ambassador Group Holdings Limited - Limited company accounts 22.3

REGISTERED NUMBER: SC630720 (Scotland)

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements for the Year Ended 31 December 2021

for

Ambassador Group Holdings Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Consolidated Statement of Comprehensive Income

8

Consolidated Balance Sheet

10

Company Balance Sheet

11

Consolidated Statement of Changes in Equity

12

Company Statement of Changes in Equity

13

Consolidated Cash Flow Statement

14

Notes to the Consolidated Cash Flow Statement

15

Notes to the Consolidated Financial Statements

16

DIRECTORS:

D Gaffney

R Boyd

SECRETARY:

Brodies

REGISTERED OFFICE:

c/o Brodies LLP

110 Queen Street

Glasgow

G1 3BX

REGISTERED NUMBER:

SC630720 (Scotland)

AUDITORS:

McLay McAlister & McGibbon LLP

Chartered Accountants and Statutory Auditors

145 St Vincent Street

Glasgow

G2 5JF

The directors present their strategic report of the company and the group for the year ended 31 December 2021.

REVIEW OF BUSINESS

The Accounts have been prepared under FRS 102.

The Group's key financial and performance indicators during the year are as follows:

2021

2020

£'000000

£'000000

Turnover

24,780

15,927

Operating Profit / (Loss)

1,653

581

Profit attributable to Group

(1,105

)

1,068

Total Shareholders' Funds

2,539

3,644

The Group continued to conduct the majority of its business through two main divisions - Ambassador Residential Management, which specialises in residential land acquisition and development (through Ambassador Living Brand); and Ambassador Investment Management focusing on real estate assets with significant development or asset management potential. The majority of the Group's earnings are derived from assets acquired through joint venture arrangements and associated structures, put in place with selected and long-standing capital partners. This has, over recent years, been a key feature of the Group's business model, whereby after sourcing the relevant opportunity, the Group then typically co-invests in the acquisition alongside the capital partner, and is then engaged in the ongoing development or management of the acquired asset.

The background of the Global Pandemic has, however, continued to drag on the operational efficiency of our Group, as we recover from its effects. We have however, continued to operate our business in a productive and efficient manner, despite the resultant impact.

Ambassador Investment Management

In prior year one of the two existing commercial units at Finnieston, Glasgow, was refurbished and reconfigured to accommodate LIDL, who commenced trading in June 2020. The other unit remains vacant, but forms part of the wider change-of-use plans for the remainder of the site. Broadway Park in Edinburgh continued to yield solid income for the Group, as we continued the execution of our asset management plan. In addition to these two investment properties, which are carried on the Balance Sheet at a combined £49.1m, Ambassador has invested in and manages a further four investment properties across the Central Belt of Scotland, with a combined carrying value of £72.8m as at 31 December 2021. During the year Ambassador successfully executed the disposal of one further investment property, being the HQ and laboratory facility of Q2 Solutions in Livingston.

Certain underlying asset values have been negatively impacted during the accounting period, which has also affected the consolidated Group results. We anticipate that certain of these factors will unwind as the market stabilises, and we continue with our asset management plans.

We continued our asset management plan to transform Ocean Terminal Shopping Centre in Leith, Edinburgh, commencing a Planning process which will lead to transformational change and longevity for the Centre.

Our Investments team continues to explore new opportunities for investment as we move forward with our capital partner base.

Ambassador Residential Management

At year-end, Ambassador was operational on six residential sites, providing excellent geographic coverage across several market sectors. We continued to carry out significant infrastructure and enabling works on Bangour Village Estate, in parallel with planning work as Development Masterplanner to progress the planning permission in principle for the site.

The business continues to improve procedures in relation to estimating, cost reporting and cost control to improve forecasting processes moving forward, as well as reducing the size of building contract phases, thus further mitigating the potential for significant irrecoverable costs as a consequence of industry macro forces, and the continuing impact of the pandemic.

We continue to look to expand and consolidate our Residential footprint, and expand our product offering moving forward.

OUTLOOK

The current economic position with regard to the impact of the war in Ukraine, volatility in the energy market and global supply chains, ongoing consequences of Brexit and the global pandemic, continues to impact on the costs of labour and materials. It is expected that these uncertainties will continue.

Despite these significant challenges, the Ambassador team has shown remarkable agility to cope with the seismic change in market circumstances, and the Board would once again wish to acknowledge the effort and contribution of the whole team.

Our underlying business continues to show its resilience during these challenging times, and we continue to redefine our operating model accordingly. As noted in prior Annual Reports, the Group will benefit from improvements in margin with the completion of older projects and commencement of new projects. The Group continues to manage its resources carefully, with new projects commenced during the year 2021 following the establishment of the 'Aspen' £100m equity joint venture.

The 'Mini-Budget' of September 2022 caused turmoil in the financial markets, and has resulted in additional economic headwinds for the Group to deal with.

Whilst we anticipate the impact of this turmoil will last for the medium term, we are confident about our ability to absorb any remaining impact through ongoing trading.

We remain passionate, prudent, but excited about the future of Ambassador.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors continue to monitor the key risks facing the group and assess controls for managing these risks.

ON BEHALF OF THE BOARD:

R Boyd - Director

28 February 2023

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2021.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2021.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2021 to the date of this report.

D Gaffney

R Boyd

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.

ON BEHALF OF THE BOARD:

R Boyd - Director

28 February 2023

Opinion

We have audited the financial statements of Ambassador Group Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2021 which comprise the Consolidated Statement of 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 2021 and of the group's loss for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

As explained more fully in the 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.

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

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

- the nature of the industry and sector, control environment and business performance;

- results of our enquiries of management about their own identification and assessment of the risks and irregularities;

- any matters we identified having reviewed the company's internal controls established to mitigate risks of fraud or

non- compliance with laws and regulations;

- the matters discussed among the audit engagement team regarding how and where fraud might occur in the

financial statements and any potential indicators of fraud.

We obtained an understanding of the legal and regulatory framework that the company operates in. The key laws and regulations we considered included the UK Companies Act and tax legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. In addition we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate. These included health and safety, GDPR and employment laws. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors, inspection of regulatory and legal correspondence, if any, and review of minutes of meetings.These limited procedures did not identify actual or suspected non-compliance.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Paul Martin (Senior Statutory Auditor)

for and on behalf of McLay McAlister & McGibbon LLP

Chartered Accountants and Statutory Auditors

145 St Vincent Street

Glasgow

G2 5JF

28 February 2023

TURNOVER

24,779,845

15,926,728

Cost of sales

(18,305,299

)

(12,158,523

)

GROSS PROFIT

6,474,546

3,768,205

Administrative expenses

including transaction costs

(4,865,868

)

(3,357,497

)

1,608,678

410,708

Other operating income

44,652

169,943

OPERATING PROFIT

5

1,653,330

580,651

Profit/loss on sale of invest

6

-

(2,555

)

1,653,330

578,096

Interest receivable and similar income

236,248

115,754

1,889,578

693,850

(Loss)/Profit share on investment

7

540,042

(967,615

)

Gain/loss on revaluation of investment property

(936,237

)

5,080,000

1,493,383

4,806,235

Interest payable and similar expenses

8

(2,411,186

)

(3,611,317

)

(LOSS)/PROFIT BEFORE TAXATION

(917,803

)

1,194,918

Tax on (loss)/profit

9

(354,483

)

(228,874

)

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(1,272,286

)

966,044

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(1,272,286

)

966,044

Prior year adjustment

11

862,532

362,088

TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT

(409,754

)

1,328,132

(Loss)/profit attributable to:

Owners of the parent

(1,104,924

)

1,068,434

Non-controlling interests

(167,362

)

(102,390

)

(1,272,286

)

966,044

Total comprehensive income attributable to:

Owners of the parent

(242,392

)

1,430,522

Non-controlling interests

(167,362

)

(102,390

)

(409,754

)

1,328,132

FIXED ASSETS

Intangible assets

12

(112,987

)

(127,886

)

Tangible assets

13

25,667

20,314

Investments

14

619,887

972,844

Investment property

15

49,080,000

49,580,000

49,612,567

50,445,272

CURRENT ASSETS

Stocks

16

21,040,720

14,060,849

Debtors

17

6,297,881

6,541,771

Cash at bank and in hand

5,596,790

1,619,693

32,935,391

22,222,313

CREDITORS

Amounts falling due within one year

18

(8,520,268

)

(9,166,984

)

NET CURRENT ASSETS

24,415,123

13,055,329

TOTAL ASSETS LESS CURRENT LIABILITIES

74,027,690

63,500,601

CREDITORS

Amounts falling due after more than one year

19

(71,239,182

)

(59,794,290

)

PROVISIONS FOR LIABILITIES

22

(500,000

)

(145,517

)

NET ASSETS

2,288,508

3,560,794

CAPITAL AND RESERVES

Called up share capital

23

100

100

Retained earnings

24

2,538,845

3,643,769

SHAREHOLDERS' FUNDS

2,538,945

3,643,869

NON-CONTROLLING INTERESTS

25

(250,437

)

(83,075

)

TOTAL EQUITY

2,288,508

3,560,794

The financial statements were approved by the Board of Directors and authorised for issue on 28 February 2023 and were signed on its behalf by:

R Boyd - Director

FIXED ASSETS

Intangible assets

12

-

-

Tangible assets

13

-

-

Investments

14

2

2

Investment property

15

-

-

2

2

CURRENT ASSETS

Debtors

17

98

98

TOTAL ASSETS LESS CURRENT LIABILITIES

100

100

CAPITAL AND RESERVES

Called up share capital

23

100

100

SHAREHOLDERS' FUNDS

100

100

Company's profit for the financial year

-

-

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 28 February 2023 and were signed on its behalf by:

R Boyd - Director

Called up

share

Retained

Non-controlling

Total

capital

earnings

Total

interests

equity

£

£

£

£

£

Balance at 1 January 2020

100

2,213,247

2,213,347

19,315

2,232,662

Prior year adjustment

-

362,088

362,088

-

362,088

As restated

100

2,575,335

2,575,435

19,315

2,594,750

Changes in equity

Total comprehensive income

-

205,902

205,902

(102,390

)

103,512

Balance at 31 December 2020

100

2,781,237

2,781,337

(83,075

)

2,698,262

Prior year adjustment

-

862,532

862,532

-

862,532

As restated

100

3,643,769

3,643,869

(83,075

)

3,560,794

Changes in equity

Total comprehensive income

-

(1,104,924

)

(1,104,924

)

(167,362

)

(1,272,286

)

Balance at 31 December 2021

100

2,538,845

2,538,945

(250,437

)

2,288,508

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2020

100

-

100

Changes in equity

Balance at 31 December 2020

100

-

100

Changes in equity

Balance at 31 December 2021

100

-

100

Cash flows from operating activities

Cash generated from operations

1

(5,243,935

)

(14,891,315

)

Interest paid

(2,411,186

)

(3,611,317

)

Tax paid

-

(90,135

)

Net cash from operating activities

(7,655,121

)

(18,592,767

)

Cash flows from investing activities

Purchase of tangible fixed assets

(17,989

)

(8,124

)

Purchase of fixed asset investments

(12,060

)

(64,587

)

Purchase of investment property

(436,237

)

-

Sale of fixed asset investments

707,692

-

Interest received

236,248

115,754

Net cash from investing activities

477,654

43,043

Cash flows from financing activities

New loans in year

11,560,795

17,454,232

Loan repayments in year

(406,231

)

-

Net cash from financing activities

11,154,564

17,454,232

Increase/(decrease) in cash and cash equivalents

3,977,097

(1,095,492

)

Cash and cash equivalents at beginning of year

2

1,619,693

2,715,185

Cash and cash equivalents at end of year

2

5,596,790

1,619,693

1.	RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31.12.21

31.12.20

as restated

£

£

(Loss)/profit before taxation

(917,803

)

1,194,918

Depreciation charges

(2,263

)

(6,007

)

Loss/(gain) on revaluation of fixed assets

936,237

(5,080,000

)

Share of (profit)/loss on investment

(342,675

)

164,838

Impairment of investment

-

350,000

Prior year adjustment

-

(776,604

)

Finance costs

2,411,186

3,611,317

Finance income

(236,248

)

(115,754

)

1,848,434

(657,292

)

Increase in stocks

(6,979,871

)

(5,306,566

)

Decrease/(increase) in trade and other debtors

243,890

(3,097,445

)

Decrease in trade and other creditors

(356,388

)

(5,830,012

)

Cash generated from operations

(5,243,935

)

(14,891,315

)

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 2021

31.12.21

1.1.21

£

£

Cash and cash equivalents

5,596,790

1,619,693

Year ended 31 December 2020

31.12.20

1.1.20

as restated

£

£

Cash and cash equivalents

1,619,693

2,715,185

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.21

Cash flow

At 31.12.21

£

£

£

Net cash

Cash at bank and in hand

1,619,693

3,977,097

5,596,790

1,619,693

3,977,097

5,596,790

Debt

Debts falling due within 1 year

(406,944

)

330,328

(76,616

)

Debts falling due after 1 year

(59,674,290

)

(11,484,892

)

(71,159,182

)

(60,081,234

)

(11,154,564

)

(71,235,798

)

Total

(58,461,541

)

(7,177,467

)

(65,639,008

)

1.	STATUTORY INFORMATION

Ambassador Group Holdings Limited is a private company, limited by shares , registered in Scotland. 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.	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 as modified by the revaluation of certain assets.

Basis of consolidation

The group financial statements incorporate Ambassador Group Holdings Limited and its subsidiaries made up to 31 December 2021.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Turnover

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

Turnover in respect of long term contracts is assessed on a contract by contract basis, whereby turnover and related costs are reflected in the profit and loss account in accordance with the stage of completion of the contract. Where the outcome of each long term contract can be assessed with reasonable certainty before its conclusion, the attributable profit is recognised in the profit and loss account as the difference between the reported turnover and related costs for that contract.

Goodwill

Where the fair value of net assets acquired exceed the fair value of consideration given, the difference is treated as negative goodwill. This is amortised over ten years from the date of acquisition.

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.

Tangible fixed assets

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

Fixtures and fittings

-

25% on cost

Computer equipment

-

25% on cost

The group's policy is to review the remaining useful lives and residual value of all tangible fixed assets on an on-going basis and to adjust the depreciation charge to reflect the remaining useful economic life and residual value.

Investment property

Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit or loss.

Stocks

Work in progress is valued at the lower of cost and net realisable value.

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition.

Financial instruments

Trade debtors

Trade debtors and other debtors are recognised at the settlement amount due with appropriate allowances for any irrecoverable amounts when there is objective evidence the asset is impaired.

Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash in hand and bank overdrafts.

Creditors

Trade creditors and other creditors are recognised where the company has a present obligation resulting from a past event and are recognised at the settlement amount due after allowing for any trade discounts due.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, 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 year end and that are expected to apply to the reversal of the timing difference.

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

Hire purchase and leasing commitments

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

Fixed asset investments

Fixed asset investments are stated at cost less provision for diminution in value.