REGISTERED NUMBER: 14081700 (England and Wales)

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2024

FOR

FRIXOS GROUP LTD

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:

Mr D Koutsou

Mr S Savva

Mr K Koutsou

REGISTERED OFFICE:

1 Kings Avenue

London

N21 3NA

REGISTERED NUMBER:

14081700 (England and Wales)

AUDITORS:

AGK Partnership Ltd

Chartered Accountants & Statutory Auditors

1 Kings Avenue

London

N21 3NA

The directors present their strategic report of the company and the group for the year ended 30 September 2024.

REVIEW OF BUSINESS

Turnover of £27,354,334 (2023: £20,600,284) generated a gross profit of £9,898,879 (2023: £4,954,593). Operating profit for the year was £6,501,032 (2023: £2,185,276), whilst the profit on ordinary activities before taxation was £6,460,142 (2023: £2,149,419). These improvements were attributable to improved production efficiencies together with contribution earned from a one off project.

The profit for the financial year increased to £4,752,120 (2023: £1,661,099) due to operating efficiencies realised and tight management of the Group's fixed cost base.

PRINCIPAL RISKS AND UNCERTAINTIES

The company's operations are subject to a spectrum of principal risks and uncertainties:

Economic Risk: The company's performance is closely tied to the broader economic climate in the UK, with market demand fluctuating in line with macroeconomic indicators. The company periodically monitors the economic climate in the UK and uses forecasting tools to monitor key economic indicators, such as interest rates, construction activities and patterns to mitigate economic risk.

Credit and Liquidity Risk: Stringent credit policies are in place to minimize risk, with deferred payment terms being extended selectively based on robust creditworthiness assessments. Apart from regularly reviewing and updating credit policies to ensure they align with the latest market conditions, the company maintains a healthy mix of short-term and long-term financing to ensure liquidity during fluctuations.

Competition Risk: The company maintains a vigilant stance on market competition, focusing on distinguishing its offerings through superior customer service and a profitable pricing framework.

Reputation Risk: Active management of the company's reputation involves promptly addressing customer feedback and misconceptions across various media platforms.

FUTURE OUTLOOK AND STRATEGIC FOCUS

Despite the economic challenges, Frixos Group Limited is poised for continued growth and innovation. The Group's strategic initiatives are geared towards reinforcing its market position and enhancing operational effectiveness through:

Market Diversification: Efforts will be intensified to explore new markets, reducing reliance on the UK market and mitigating local economic impacts.

Operational Efficiency and Cost Control: A detailed review of operational processes will be undertaken to identify and implement cost-saving measures without compromising service quality.

Technological Advancements: Continued investment in advanced technology and innovation will be a priority to drive production efficiency and industry leadership.

Credit Management Enhancement: Strengthening credit control mechanisms will be crucial in navigating the uncertain economic landscape.

Risk Management Strategies: The Group will actively engage in risk mitigation tactics, such as hedging and long-term procurement contracts, to manage price volatility.

Human Capital Investment: Ongoing investment in employee development will underscore the Group's commitment to fostering a culture of excellence and innovation.

Sustainability and Environmental Responsibility: The Group is dedicated to embedding sustainable practices into its operations, aligning with environmental standards and focusing on long-term efficiency and cost savings.

KEY PERFORMANCE INDICATORS

The Key Performance Indicators (KPIs) for the year ending 30 September 2024 are indicative of the Group's commitment to sustainable growth and financial stability:

- Revenue Growth: An increase in turnover to £27,354,334 in 2024 from £20,600,284 in 2023, demonstrates resilience in a recovering economic environment.

- Gross Profit Improvement: Gross profit improved to £9,898,879 in 2024 from £4,954,593 in 2023, reflecting effective cost management and enhanced operational efficiency.

- Net Profit Growth: The net profit after tax grew to £4,752,120 in 2024 from £1,661,099 in 2023, underscoring strong financial health and effective management strategies.

- Non-Financial Performance Indicators: A range of non-financial indicators, including customer satisfaction, employee engagement, and innovation capabilities, are monitored to support the company's strategic vision and long-term success.

These KPIs collectively provide a holistic view of our financial and operational health, serving as a foundation for strategic decision-making and future business planning.

ON BEHALF OF THE BOARD:

Mr S Savva - Director

26 March 2025

The directors present their report with the financial statements of the company and the group for the year ended 30 September 2024.

PRINCIPAL ACTIVITY

The principal activity of the Group in the year under review was that of structural steelworks and architectural metal work.

DIVIDENDS

No interim dividends were paid during the year ended 30 September 2024.

The directors recommend final dividends per share as follows:

A Ordinary £1 shares

£8,263

B Ordinary £1 shares

£20,000

The total distribution of dividends for the year ended 30 September 2024 will be £ 1,723,108 .

FUTURE DEVELOPMENTS

2025 is expected to be a challenging year due to general economic conditions and inflationary pressures. However, the Directors believe that the Group is in a strong position for business growth.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 October 2023 to the date of this report.

Mr D Koutsou

Mr S Savva

Mr K Koutsou

All Directors were appointed on 3 May 2022.

POLITICAL DONATIONS AND EXPENDITURE

During the year, the Group made charitable donations of £8,315 (2023: £8,089).

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). 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 Group'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 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, AGK Partnership Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr S Savva - Director

26 March 2025

Opinion

We have audited the financial statements of Frixos Group Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2024 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 30 September 2024 and of the group's profit 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:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognize non-compliance with applicable laws and regulations;

- we identified the laws and regulations applicable to the group through discussions with directors and other management, and from our commercial knowledge and experience of the industry;

- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the group's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

- performed analytical procedures to identify any unusual or unexpected relationships;

- tested journal entries to identify unusual transactions;

- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and

- investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

- agreeing financial statement disclosures to underlying supporting documentation;

- reading the minutes of meetings of those charged with governance;

- enquiring of management as to actual and potential litigation and claims; and

- reviewing correspondence with HMRC, relevant regulators, and the group's legal advisors.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or 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.

Alekos Christofi (Senior Statutory Auditor)

for and on behalf of AGK Partnership Ltd

Chartered Accountants & Statutory Auditors

1 Kings Avenue

London

N21 3NA

26 March 2025

TURNOVER

3

27,354,334

20,600,284

Cost of sales

17,455,455

15,645,691

GROSS PROFIT

9,898,879

4,954,593

Administrative expenses

3,397,847

2,769,317

OPERATING PROFIT

5

6,501,032

2,185,276

Interest receivable and similar income

24,068

13,312

6,525,100

2,198,588

Interest payable and similar expenses

6

64,958

49,169

PROFIT BEFORE TAXATION

6,460,142

2,149,419

Tax on profit

7

1,708,022

488,320

PROFIT FOR THE FINANCIAL YEAR

4,752,120

1,661,099

Profit attributable to:

Owners of the parent

4,752,120

1,661,099

PROFIT FOR THE YEAR

4,752,120

1,661,099

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

4,752,120

1,661,099

Total comprehensive income attributable to:

Owners of the parent

4,752,120

1,661,099

FIXED ASSETS

Tangible assets

10

376,599

349,348

Investments

11

13,640

-

390,239

349,348

CURRENT ASSETS

Stocks

12

237,227

183,917

Debtors

13

9,612,409

4,974,738

Cash at bank

4,813,879

3,391,902

14,663,515

8,550,557

CREDITORS

Amounts falling due within one year

14

7,099,024

3,903,372

NET CURRENT ASSETS

7,564,491

4,647,185

TOTAL ASSETS LESS CURRENT LIABILITIES

7,954,730

4,996,533

CREDITORS

Amounts falling due after more than one year

15

(489,480

)

(594,193

)

PROVISIONS FOR LIABILITIES

19

(94,150

)

(60,252

)

NET ASSETS

7,371,100

4,342,088

CAPITAL AND RESERVES

Called up share capital

20

200

200

Retained earnings

21

7,370,900

4,341,888

SHAREHOLDERS' FUNDS

7,371,100

4,342,088

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

Mr S Savva - Director

Mr D Koutsou - Director

FIXED ASSETS

Tangible assets

10

-

-

Investments

11

13,740

100

13,740

100

CURRENT ASSETS

Debtors

13

3,906,231

1,204,154

Cash at bank

57,382

9,211

3,963,613

1,213,365

CREDITORS

Amounts falling due within one year

14

490,965

1,500

NET CURRENT ASSETS

3,472,648

1,211,865

TOTAL ASSETS LESS CURRENT LIABILITIES

3,486,388

1,211,965

CAPITAL AND RESERVES

Called up share capital

20

200

200

Retained earnings

21

3,486,188

1,211,765

SHAREHOLDERS' FUNDS

3,486,388

1,211,965

Company's profit for the financial year

3,997,531

2,665,858

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

Mr S Savva - Director

Mr D Koutsou - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Changes in equity

Issue of share capital

200

-

200

Dividends

-

(1,454,093

)

(1,454,093

)

Total comprehensive income

-

1,661,099

1,661,099

Reserves on acquisition

-

4,134,882

4,134,882

Balance at 30 September 2023

200

4,341,888

4,342,088

Changes in equity

Dividends

-

(1,723,108

)

(1,723,108

)

Total comprehensive income

-

4,752,120

4,752,120

Balance at 30 September 2024

200

7,370,900

7,371,100

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Changes in equity

Issue of share capital

200

-

200

Dividends

-

(1,454,093

)

(1,454,093

)

Total comprehensive income

-

2,665,858

2,665,858

Balance at 30 September 2023

200

1,211,765

1,211,965

Changes in equity

Dividends

-

(1,723,108

)

(1,723,108

)

Total comprehensive income

-

3,997,531

3,997,531

Balance at 30 September 2024

200

3,486,188

3,486,388

Cash flows from operating activities

Cash generated from operations

1

3,710,126

5,720,812

Interest paid

(45,988

)

(43,649

)

Interest element of hire purchase payments paid

(18,970

)

(5,520

)

Tax paid

(315,938

)

(229,943

)

Net cash from operating activities

3,329,230

5,441,700

Cash flows from investing activities

Purchase of tangible fixed assets

(114,858

)

(793,438

)

Purchase of fixed asset investments

(13,640

)

-

Sale of tangible fixed assets

14,990

-

Interest received

24,068

13,312

Net cash from investing activities

(89,440

)

(780,126

)

Cash flows from financing activities

Loan repayments in year

(169,825

)

-

Capital repayments in year

75,120

184,221

Share issue

-

200

Equity dividends paid

(1,723,108

)

(1,454,093

)

Net cash from financing activities

(1,817,813

)

(1,269,672

)

Increase in cash and cash equivalents

1,421,977

3,391,902

Cash and cash equivalents at beginning of year

2

3,391,902

-

Cash and cash equivalents at end of year

2

4,813,879

3,391,902

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

Period

3.5.22

Year Ended

to

30.9.24

30.9.23

£

£

Profit before taxation

6,460,142

2,149,419

Depreciation charges

46,857

38,334

Loss on disposal of fixed assets

25,760

-

Finance costs

64,958

49,169

Finance income

(24,068

)

(13,312

)

6,573,649

2,223,610

Increase in stocks

(53,310

)

(183,917

)

Increase in trade and other debtors

(4,637,671

)

(3,080,305

)

Increase in trade and other creditors

1,827,458

6,761,424

Cash generated from operations

3,710,126

5,720,812

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 30 September 2024

30.9.24

1.10.23

£

£

Cash and cash equivalents

4,813,879

3,391,902

Period ended 30 September 2023

30.9.23

3.5.22

£

£

Cash and cash equivalents

3,391,902

-

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.10.23

Cash flow

At 30.9.24

£

£

£

Net cash

Cash at bank

3,391,902

1,421,977

4,813,879

3,391,902

1,421,977

4,813,879

Debt

Finance leases

(184,221

)

(75,120

)

(259,341

)

Debts falling due within 1 year

(184,040

)

(26

)

(184,066

)

Debts falling due after 1 year

(439,267

)

169,851

(269,416

)

(807,528

)

94,705

(712,823

)

Total

2,584,374

1,516,682

4,101,056

1.	STATUTORY INFORMATION

Frixos Group Ltd 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.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The group and individual financial statements of Frixos Group Ltd 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.

These consolidated and separate financial statements have been prepared on a going concern basis, under the historical cost convention.

The company has taken advantage of the exemption in section 408 of the Companies Act from presenting its individual profit and loss account.

The principal accounting policies adopted are set out below.

Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continues to adopt the going concern basis of accounting in preparing the financial statements.

The directors regards the foreseeable future as no less than twelve months following the publication of these annual financial statements. The directors have considered the group's balance sheet position as at the year end, its working capital forecasts and projections, taking account of possible changes in trading performance and the current state of its operating market, and is satisfied that for the foreseeable future, the group's financial position is improving and will enable the company to remain in operational existence. In addition, the directors and the shareholders have agreed to provide continuing financial support as and when required to enable the group to continue in operational existence. Consequently, the directors considers it to be appropriate to prepare the financial statements on a going concern basis.

Basis of consolidation

The group consolidated financial statements include the financial statements of the company and its subsidiary undertaking for the period ended 30 September 2024.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Where the group owns less than 50% of the voting powers of an entity but controls the entity by virtue of an agreement with other investors which give it control of the financial and operating policies of the entity, it accounts for that entity as a subsidiary.

The group have adopted aligned accounting policies.

Any subsidiary undertakings or associates sold or acquired during the year are included up to, or from, the dates of change of control or change of significant influence respectively.

All intra-group transactions, balances, income and expenses are eliminated on consolidation. Adjustments are made to eliminate the profit or loss arising on transactions with associates to the extent of the group’s interest in the entity.

Significant judgements and estimates

In the application of the group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Significant judgement and estimates relates to the recognition of revenue on long term contracts. Recognition of revenue and profit on long term contracts are based on judgements made in respect of the ultimate profitability of a contract. Such judgements are arrived at through the use of estimates in relation to the costs and value of the work performed to date and to be performed in bringing contracts to completion. The group has appropriate control procedures to ensure all estimates are determined on a consistent basis and subject to appropriate review and authorisation.

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 is based on the invoiced value of goods, services and the value of work supplied and executed during the year. Turnover excludes value added tax.

Turnover is recognised at the point the group has transferred to the buyer the significant risks and rewards, the amount of the turnover can be measured reliably and it is probable the economic benefits associated with the transactions will flow to the company.

When the outcome of a contract can be estimated reliably, contract revenue and contract costs are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the balance sheet date. When the outcome of a contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that are likely to be recoverable. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

Contract revenue comprises the initial amount of revenue agreed in the contract and variations in the contract work and claims that can be measured reliably. A variation or a claim is recognised as contract revenue when it is probable that the customer will approve the variation or negotiations have reached an advanced stage such that it is probable that the customer will accept the claim.

The stage of completion is measured by reference to the ratio of contract costs incurred to date to the estimated total costs for the contract. Costs incurred during the financial year in connection with future activity on a contract are excluded from the costs incurred to date when determining the stage of completion of a contract. Such costs are shown as contract work-in-progress on the balance sheet unless it is not probable that such contract costs are recoverable from the customers, in which case, such costs are recognised as an expense immediately.

At the balance sheet date, the cumulative costs incurred plus recognised profit (less recognised loss) on each contract is compared against the progress billings. Where the cumulative costs incurred plus the recognised profits (less recognised losses) exceed progress billings, the balance is presented as due from customers on contracts within debtors. Where progress billings exceed the cumulative costs incurred plus recognised profits (less recognised losses), the balance is presented as due to customers on contracts within creditors.

Progress billings not yet paid by customers and retentions by customers are included within debtors. Advances received are included within creditors.

Tangible fixed assets

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

Tangible fixed assets are initially measured at cost and subsequently measured at cost, 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 or, if held under a finance lease, over the lease term, whichever is the shorter.

Short leasehold

- 10% on cost

Plant and machinery

- 10% on reducing balance

Fixtures and fittings

- 10% on reducing balance

Computer equipment

- 25% on reducing balance

The company has a policy not to depreciate in the year of acquisition but to fully depreciate in the year of

disposal.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Costs include all costs incurred in bringing each product to its present location and condition under first-in

first-out (FIFO) basis.

Net realisable value is based on the estimated selling price less any estimated completion or selling costs.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated 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 statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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.

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.