FFIINANNANCCIALIAL S STTAATTEEMMEENNTTSS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS S 1 ACCOUNTING POLICIES The nature of the Group's business is such that there can be variation in the TR Authorisation of Financial Statements and statement of compliance with timing of cash flows around the development and launch of new models. In A FRS 101 addition, the availability of funds provided through the vehicle wholesale TE G I The Parent Company Financial Statements of Aston Martin Lagonda Global finance facility changes as the availability of credit insurance and sales C Holdings plc (the “Company”) for the year were authorised for issue by the volumes vary, in total and seasonally. The forecasts take into account these R E Board of Directors on 27 February 2024 and the Statement of Financial factors to the extent that the Directors consider them to represent their best P O Position was signed on the Board’s behalf by Amedeo Felisa and Doug estimate of the future based on the information that is available to them at R Lafferty. The Company is a public limited company incorporated and the time of approval of these Financial Statements. T domiciled in the UK. The Company’s ordinary shares are traded on The Directors have considered a severe but plausible downside scenario that the London Stock Exchange and it is not under the control of any G single shareholder. includes considering the impact of a 15% reduction in DBX volumes and O a 10% reduction in sports volumes from forecast levels covering, although VE An overview of the business activities of Aston Martin Lagonda Global not exclusively, instances of reduced volume due to delayed product R Holdings plc, including a review of the key business risks that the Group launches, operating costs higher than the base plan, incremental working NAN faces, is given in the Strategic Report on pages 2-70. The debt facilities capital requirements such as a reduced deposit inflows or increased deposit C available to the Group and the maturity profile of this debt are shown in outflows and the impact of the strengthening of the sterling dollar exchange E note 23 to the Group Financial Statements. rate. F Going concern The Group plans to make continued investment for growth in the period I The Group meets its day-to-day working capital requirements and medium and, accordingly, funds generated through operations are expected to be NAN term funding requirements through a mixture of $1,143.7m First Lien notes reinvested in the business mainly through new model development and C at 10.5% which mature in November 2025, $121.7m of Second Lien split other capital expenditure. To a certain extent, such expenditure is IAL coupon notes at 15% per annum (8.89 % cash and 6.11% Payment in Kind) discretionary and, in the event of risks occurring which could have a S T which mature in November 2026, a Revolving Credit Facility (£99.6m) which particularly severe effect on the Group, as identified in the severe but A T E matures August 2025, facilities to finance inventory, a bilateral RCF facility plausible downside scenario, actions such as constraining capital spending, M E and a wholesale vehicle financing facility (as described in note 18 of the working capital improvements, reduction in marketing expenditure and the N T Group Financial Statements). As previously announced, the Group expects continuation of strict and immediate expense control would be taken to S to refinance the outstanding debt during the first half of 2024, however, the safeguard the Group’s financial position. going concern assessment is not dependent on this occurring. Under the In addition, we also considered the circumstances which would be needed F RCF the Group is required to comply with a leverage covenant tested U to exhaust the Group’s liquidity over the assessment period, a reverse stress R quarterly. Leverage is calculated as the ratio of adjusted EBITDA to net debt, T test. This would indicate that vehicle sales would need to reduce by more H after certain accounting adjustments are made. Of these adjustments, the E than 15% from forecast levels without any of the above mitigations to result R most significant is to account for lease liabilities under “frozen GAAP”, i.e. in having no liquidity. The likelihood of these circumstances occurring is INF under IAS17 rather than IFRS 16. Details of this adjustment are included in note 16 of the Group Financial Statements. The Group has complied with its considered remote both in terms of the magnitude of the reduction and that OR covenant requirements for the year ended 31 December 2023 and expects over such a long period, management could take substantial mitigating M A actions, such as reducing capital spending to preserve liquidity. T to do so for the Going Concern period. I Accordingly, after considering the forecasts, appropriate sensitivities, ON The amounts outstanding on all the borrowings are shown in note 23 of the current trading and available facilities, the Directors have a reasonable Group Financial Statements. expectation that the Group has adequate resources to continue in The Directors have developed trading and cash flow forecasts for the period operational existence for the foreseeable future and to comply with its from the date of approval of these Financial Statements through 30 June financial covenants, therefore, the Directors continue to adopt the going 2025 (the going concern review period). These forecasts show that the concern basis in preparing the Financial Statements. Group has sufficient financial resources to meet its obligations as they fall The Parent Company Financial Statements are presented in sterling. due, including repayment of the current RCF were it needing to be repaid on 30 June 2025 and to comply with covenants for the going concern review These Financial Statements have been prepared in accordance with period. The forecasts reflect the Group’s ultra-luxury performance-oriented Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (“FRS strategy, balancing supply and demand and the actions taken to improve 101”). No Income Statement is presented for the Company as permitted cost efficiency and gross margin. The forecasts include the costs of the by Section 408 of the Companies Act 2006. There were no gains or losses Group's environmental, social and governance (“ESG”) commitments and in the year (2022: £nil) in Other Comprehensive Income. The fee relating to make assumptions in respect of future market conditions and, in particular, the audit of these Financial Statements of £0.3m was borne by the Company wholesale volumes, average selling price, the launch of new models, and (2022: £0.3m). future operating costs. ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2023 202