NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED S S 1 ACCOUNTING POLICIES The nature of the Group's business is such that there can be variation in the TR1 ACCOUNTING POLICIES CONTINUED Where the carrying amount of an asset exceeds its recoverable amount, the TR Authorisation of Financial Statements and statement of compliance with timing of cash flows around the development and launch of new models. In ABasis of preparation asset is considered impaired and is written down to its recoverable amount. A FRS 101 addition, the availability of funds provided through the vehicle wholesale TEThe Parent Company Financial Statements have been prepared in In assessing value-in-use, the estimated future cash flows are discounted to TE G G I I The Parent Company Financial Statements of Aston Martin Lagonda Global finance facility changes as the availability of credit insurance and sales Caccordance with FRS 101, as applied in accordance with the provisions of their present value using a pre-tax discount rate that reflects current market 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 Rthe Companies Act 2006. FRS 101 sets out a reduced disclosure framework assessments of the time value of money and the risks specific to the asset. R E 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 Pfor a ‘qualifying entity’ as defined in the standard which addresses the Impairment losses on continuing operations are recognised in the Income P O 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 Rfinancial reporting requirements and disclosure exemptions in the individual Statement in those expense categories consistent with the function of the R Lafferty. The Company is a public limited company incorporated and the time of approval of these Financial Statements. TFinancial Statements of qualifying entities that otherwise apply this impaired asset. T domiciled in the UK. The Company’s ordinary shares are traded on The Directors have considered a severe but plausible downside scenario that recognition, measurement and disclosure requirements of UK adopted IFRS. Where an impairment loss subsequently reverses, the carrying amount of the London Stock Exchange and it is not under the control of any G G single shareholder. includes considering the impact of a 15% reduction in DBX volumes and OFRS 101 sets out amendments to UK adopted IFRS that are necessary to the asset (or cash-generating unit) is increased to the revised estimate of its O a 10% reduction in sports volumes from forecast levels covering, although VEachieve compliance with the Companies Act and related Regulations. The recoverable amount, but so that the increased carrying amount does not VE An overview of the business activities of Aston Martin Lagonda Global not exclusively, instances of reduced volume due to delayed product Rfollowing disclosures have not been included as permitted by FRS 101: exceed the carrying amount that would have been determined had no R Holdings plc, including a review of the key business risks that the Group launches, operating costs higher than the base plan, incremental working NANimpairment loss been recognised for the asset (or cash-generating unit) NAN – A Cash Flow Statement and related notes as required by IAS 7 ‘Statement 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 Cin prior periods. A reversal of an impairment loss is recognised as 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 Eof Cash Flows’. income immediately. E note 23 to the Group Financial Statements. rate. – Disclosures in respect of transactions with wholly-owned subsidiaries as required by IAS 24 ‘Related Party Disclosures’. Management have further considered the impact of climate change on a F F Going concern The Group plans to make continued investment for growth in the period I– Disclosures in respect of capital management as required by paragraphs number of key estimates within the Financial Statements and has not found I The Group meets its day-to-day working capital requirements and medium and, accordingly, funds generated through operations are expected to be NAN134 to 136 of IAS 1 ‘Presentation of Financial Statements’. climate change to have a material impact on the conclusions reached. 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– The effects of new but not yet effective IFRSs as required by paragraphs Climate change considerations have been factored into the Directors’ 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 IAL30 and 31 of IAS 8 ‘Accounting Policies, Changes in Accounting Estimates impairment assessments of the carrying value of non-current assets (such as 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 Sand Errors’. the parent company investment) through usage of a pre-tax discount rate S T 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– Disclosures in respect of the compensation of key management which reflects the individual nature and specific risks relating to the business A T T E E matures August 2025, facilities to finance inventory, a bilateral RCF facility plausible downside scenario, actions such as constraining capital spending, Mpersonnel as required by paragraph 17 of IAS 24 ‘Related and the market in which the Group operates. M E E and a wholesale vehicle financing facility (as described in note 18 of the working capital improvements, reduction in marketing expenditure and the NParty Disclosures’. N T Amounts due to Group undertakings T Group Financial Statements). As previously announced, the Group expects continuation of strict and immediate expense control would be taken to S– The requirements of paragraphs 88C and 88D of IAS 12 Income Taxes in Amounts due to Group undertakings are initially recognised at fair value. S to refinance the outstanding debt during the first half of 2024, however, the safeguard the Group’s financial position. respect of the impact of Pillar Two legislation. Subsequent to initial recognition they are measured at amortised cost using going concern assessment is not dependent on this occurring. Under the In addition, we also considered the circumstances which would be needed FAs the Financial Statements of the Group include the equivalent disclosures, the effective interest method. F RCF the Group is required to comply with a leverage covenant tested U U to exhaust the Group’s liquidity over the assessment period, a reverse stress Rthe Company has also taken the exemptions under FRS 101 available in R quarterly. Leverage is calculated as the ratio of adjusted EBITDA to net debt, T Amounts due from Group undertakings T test. This would indicate that vehicle sales would need to reduce by more Hrespect of the following disclosures: H after certain accounting adjustments are made. Of these adjustments, the E Amounts due from Group undertakings are initially recognised at fair value E than 15% from forecast levels without any of the above mitigations to result R 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– The requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 ‘Share-and subsequently measured at amortised cost on an effective interest basis. INF under IAS17 rather than IFRS 16. Details of this adjustment are included in based Payment’ in respect of group-settled shared based payments. The Company assess the loans for recoverability from surplus undiscounted 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– The requirements of paragraphs 91 to 99 of IFRS 13 ‘Fair Value cashflows from the operating Group and determined no loss provision OR covenant requirements for the year ended 31 December 2023 and expects over such a long period, management could take substantial mitigating MMeasurement’ and the disclosures required by IFRS 7 ‘Financial necessary. The Company does not expect to receive payment within the M A A actions, such as reducing capital spending to preserve liquidity. T T to do so for the Going Concern period. IInstruments: Disclosures’. next 12 months and therefore presents the loan as non-current. I Accordingly, after considering the forecasts, appropriate sensitivities, ON 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 The accounting policies set out herein have, unless otherwise stated, been Financial assets and liabilities Group Financial Statements. expectation that the Group has adequate resources to continue in applied consistently to all periods presented in these Financial Statements. Financial assets are cash or a contractual right to receive cash or another The Directors have developed trading and cash flow forecasts for the period operational existence for the foreseeable future and to comply with its Investments financial asset from another entity or to exchange financial assets or from the date of approval of these Financial Statements through 30 June financial covenants, therefore, the Directors continue to adopt the going The Company recognises investments in subsidiaries at cost less impairment in liabilities with another entity under conditions that are potentially 2025 (the going concern review period). These forecasts show that the concern basis in preparing the Financial Statements. its individual Financial Statements. The Company assesses at each reporting favourable to the entity. In addition, contracts that result in another Group has sufficient financial resources to meet its obligations as they fall date whether there is an indication that an asset may be impaired. If any such entity delivering a variable number of its own equity instruments are due, including repayment of the current RCF were it needing to be repaid on The Parent Company Financial Statements are presented in sterling. indication exists, or when annual impairment testing for an asset is required, financial assets. 30 June 2025 and to comply with covenants for the going concern review These Financial Statements have been prepared in accordance with the Company makes an estimate of the asset’s recoverable amount. An asset’s Derivative financial instruments including equity options are held at fair period. The forecasts reflect the Group’s ultra-luxury performance-oriented Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (“FRS recoverable amount is the higher of an asset’s or cash-generating unit’s fair value. All other financial instruments are held at amortised cost. strategy, balancing supply and demand and the actions taken to improve 101”). No Income Statement is presented for the Company as permitted value less costs to sell and its value-in-use and is determined for an individual Auditors remuneration 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 asset, unless the asset does not generate cash inflows that are largely Auditors remuneration has been included in the group accounts. The Group Group's environmental, social and governance (“ESG”) commitments and in the year (2022: £nil) in Other Comprehensive Income. The fee relating to independent of those from other assets or groups of assets. accounts are required to comply with regulation 5(1)(b) of the Companies 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 (Disclosure of Auditor Remuneration and Liability Limitation Agreements) wholesale volumes, average selling price, the launch of new models, and (2022: £0.3m). Regulations 2008. future operating costs. ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2023 203