REGISTERED NUMBER: 05953566 (England and Wales)

Group Strategic Report,

Report of the Directors and

Audited

Consolidated Financial Statements

for the Year Ended 31 December 2024

for

PHCO154 Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Statement of Profit or Loss

10

Consolidated Statement of Profit or Loss and Other Comprehensive Income

11

Consolidated Statement of Financial Position

12

Company Statement of Financial Position

14

Consolidated Statement of Changes in Equity

15

Company Statement of Changes in Equity

16

Consolidated Statement of Cash Flows

17

Notes to the Consolidated Statement of Cash Flows

18

Notes to the Consolidated Financial Statements

19

DIRECTORS:

S Mitchell

P Hansen

N Luycx

REGISTERED OFFICE:

Shadwell House

65 Lower Green Road

Rusthall

Tunbridge Wells

Kent

TN4 8TW

REGISTERED NUMBER:

05953566 (England and Wales)

SENIOR STATUTORY AUDITOR:

Aidan Smyth

AUDITORS:

Peter Hodgson & Co. Ltd. (Statutory Auditor)

Chartered Accountants

Shadwell House

65 Lower Green Road

Tunbridge Wells

Kent

TN4 8TW

The directors present their strategic report of the company and the group for the year ended 31 December 2024.

REVIEW OF BUSINESS

The two entities that comprise PHCO154, Starspeed Limited and Starspeed Training Limited have concluded a lot of restructuring and positioning for future growth over the period 2024. The companies have identified opportunities for significant synergies based on the dominance of one type of helicopter in the chosen market sectors, namely the Airbus H145. This type of helicopter increasingly features as the helicopter of choice for super yachts and also the Quark contract (Antarctic Cruise Ship).

Through investments in the new H145 simulator installed at Starspeed Training, Kemble during winter 2024 and through the expansion of capability to support the H145 by the new MRO (Maintenance, Repair and Overhaul) facility established for the Penzance Helicopter Service in 2023; the combined group will be better positioned to provide an almost end-to-end service, at reduced cost to clients and improved profitability to Starspeed.

Starspeed Training has experienced a significant increase in all training enquiries and expects that to continue through 2025 and beyond.

Starspeed Limited has ironed out many of the issues concerned with initial set up on the Penzance Helicopter Service; and is now anticipating to manage the costs of operation at a lower level with the investment in MRO and also increase the revenue through price increases and improved passenger numbers. On the management side of the business, Starspeed limited and successfully completed a major renegotiation of its largest single contract that will provide new fees in 2025.

The group made a pre-tax loss amounting to £363,856 for the year after management charges of £717,652.

The directors are confident that the group will return to profits in 2025 and future years.

PRINCIPAL RISKS AND UNCERTAINTIES

As an aircraft operator, the largest risks are relating to the incalculable consequences of a very serious incident or accident; however, as a highly regulated entity, the majority of company systems and processes are designed and maintained to minimise the possibility of such an outcome.

The consequences of Brexit or EU Exit are still feeding challenges and hurdles into the industry; with access to materials and parts becoming more restricted and costly to obtain, and with a significant reduction in available skilled workers. The aviation industry has been getting older year on year since 2000, but this trend is now accelerating and there are very real shortages in qualified and licensed professionals required to meet all the various regulatory requirements.

FINANCIAL REVIEW

The group turnover for the year gross of expenses recharged to aircraft owners amounted to £23,499,858.

Gross margin amounted to 8.9% compared to 5.2% in the previous year. The increase is mainly attributed to the two aircraft on the Penzance route being available for most of the year unlike 2023 when there were major availability and reliability issues.,

The group loss for the year after tax amounted to £266,864 after group management fees of £717,652. This is a major improvement compared to 2023 and the directors are confident the group will return to full profitability in 2025.

The group's net assets amounted to £3,741,837 at the year end after declaring a dividend of £nil for the year.

FUTURE PLANS

The market conditions for Penzance Helicopter Service indicate that even with the necessary price increases made for 2025, there is still a capacity to increase the number of passengers flown by 60-70%. Starspeed is making plans to increase the number of aircraft available to meet this demand, with some of the capacity increasing during the 2025 summer season.

The diversification of services achieved through expansion of the MRO facility will improve services offered to existing clients, and strengthen our capability to attract new business in our key market sector of helicopter support for super yachts. The addition of the H145 simulator may open the door to further expansion and investment in the training market. Generally, the Starspeed entities are looking to bring more services 'in house' and to offer a wider range of these services to clients directly rather than via 3rd party suppliers.

ON BEHALF OF THE BOARD:

S Mitchell - Director

23 May 2025

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2024.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of helicopter management, charter and training. It also operates scheduled rotary wing services between Penzance and the isles of Scilly.

DIVIDENDS

The directors do not propose paying a final dividend for the year.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2024 to the date of this report.

S Mitchell

P Hansen

Other changes in directors holding office are as follows:

S Jones - resigned 31 May 2024

M Casiraghi - appointed 29 January 2024 - resigned 6 November 2024

P Casiraghi - appointed 29 January 2024 - resigned 6 November 2024

N Luycx - appointed 31 May 2024

CONSOLIDATED ACCOUNTS

These accounts consolidate the results of the company's two wholly owned subsidiaries; Starspeed Limited and Starspeed Training Limited for the year to 31 December 2024.

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 UK-adopted international accounting standards. 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:

S Mitchell - Director

23 May 2025

Opinion

We have audited the financial statements of PHCO154 Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the Consolidated Statement of Profit or Loss, the Consolidated Statement of Profit or Loss and Other Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity, the 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 International Financial Reporting Standards (IFRSs) as adopted by the UK.

In our opinion:

-	the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2024 and of the group's loss for the year then ended;

-	the group financial statements have been properly prepared in accordance with IFRSs as adopted by the UK;

-	the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the UK and as applied in accordance with the provisions of the Companies Act 2006; and

-	the financial statements 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:

The objectives of our audit in respect of fraud are to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

Our approach was as follows:

- we obtained an understanding of the legal and regulatory requirements applicable to the group.

- we obtained an understanding of how the group complies with these requirements through discussion with management and those charged with governance.

- we assessed the risk of material misstatement in the financial statements through discussions with management and those charged with governance.

- we enquired of management and those charged with governance of any known instances of non compliance with legal and regulatory requirements.

- based on this understanding, we designed specific and appropriate audit procedures to identify instances of non compliance to include discussions and obtaining additional corroborative evidence.

As part of the audit in accordance with ISAs (UK) we exercised professional judgement and scepticism throughout the audit. In addition, we also:

- identified and assessed the risks of material misstatement of the financial statements, whether due to fraud or error, designed and performed audit procedures consistent with those risks and obtained sufficient and relevant audit evidence to support and provide a basis for our opinion. The risk of misstatement from fraud is invariably higher than one resulting from error as fraud may involve collusion or intentional omissions and misrepresentations to override the systems of internal control.

- obtained an understanding of the internal controls relevant to the audit and designed

audit procedures and tests that were appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the group's internal controls.

- evaluated the appropriateness of the accounting policies used and the reasonableness of any accounting estimates and disclosures used and made by the directors.

- assessed the appropriateness of the directors' use of the going concern basis of accounting and based on the audit evidence obtained, whether any material uncertainty existed that may have cast doubt on the group's ability to continue as a going concern.

- evaluated the overall presentation, structure and content of the financial statements including disclosures and whether the financial statements represent the underlying transactions and events in a manner that achieved a fair presentation of the results for the period and the financial standing of the group at the period end.

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.

Aidan Smyth (Senior Statutory Auditor)

for and on behalf of Peter Hodgson & Co. Ltd. (Statutory Auditor)

Chartered Accountants

Shadwell House

65 Lower Green Road

Tunbridge Wells

Kent

TN4 8TW

23 May 2025

CONTINUING OPERATIONS

Revenue

3

23,499,858

25,796,958

Direct costs

(21,402,245

)

(24,475,987

)

GROSS PROFIT

2,097,613

1,320,971

Other operating income

533,872

108,401

Administrative expenses

(3,051,867

)

(3,063,128

)

Finance costs

5

(87,613

)

(4,628

)

Finance income

5

144,139

148,573

LOSS BEFORE INCOME TAX

6

(363,856

)

(1,489,811

)

Income tax

7

96,992

(70,114

)

LOSS FOR THE YEAR

(266,864

)

(1,559,925

)

Loss attributable to:

Owners of the parent

(266,864

)

(1,559,925

)

LOSS FOR THE YEAR

(266,864

)

(1,559,925

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE LOSS FOR THE YEAR

(266,864

)

(1,559,925

)

Total comprehensive loss attributable to:

Owners of the parent

(266,864

)

(1,559,925

)

ASSETS

NON-CURRENT ASSETS

Owned

Property, plant and equipment

9

3,497,675

4,061,925

Right-of-use

Investments

10

-

-

Trade and other receivables

11

6,683,743

6,640,388

10,181,418

10,702,313

CURRENT ASSETS

Trade and other receivables

11

4,369,437

3,518,159

Cash and cash equivalents

12

730,779

755,629

5,100,216

4,273,788

TOTAL ASSETS

15,281,634

14,976,101

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital

13

2,400

2,400

Capital redemption reserve

14

720

720

Retained earnings

14

3,738,717

4,005,581

TOTAL EQUITY

3,741,837

4,008,701

LIABILITIES

NON-CURRENT LIABILITIES

Trade and other payables

15

692,823

346,693

Financial liabilities - borrowings

Lease liabilities

16, 17

1,145,721

1,683,365

Deferred tax

18

198,297

288,970

2,036,841

2,319,028

CURRENT LIABILITIES

Trade and other payables

15

8,965,287

8,135,988

Financial liabilities - borrowings

Lease liabilities

16, 17

537,669

512,384

9,502,956

8,648,372

TOTAL LIABILITIES

11,539,797

10,967,400

TOTAL EQUITY AND LIABILITIES

15,281,634

14,976,101

The financial statements were approved by the Board of Directors and authorised for issue on 23 May 2025 and were signed on its behalf by:

S Mitchell - Director

ASSETS

NON-CURRENT ASSETS

Owned

Property, plant and equipment

9

-

-

Right-of-use

Investments

10

984,875

984,875

984,875

984,875

CURRENT ASSETS

Trade and other receivables

11

644,332

644,332

TOTAL ASSETS

1,629,207

1,629,207

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital

13

2,400

2,400

Capital redemption reserve

14

720

720

Retained earnings

14

981,755

981,755

TOTAL EQUITY

984,875

984,875

LIABILITIES

CURRENT LIABILITIES

Trade and other payables

15

644,332

644,332

TOTAL LIABILITIES

644,332

644,332

TOTAL EQUITY AND LIABILITIES

1,629,207

1,629,207

The financial statements were approved by the Board of Directors and authorised for issue on 23 May 2025 and were signed on its behalf by:

S Mitchell - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2023

2,400

5,565,506

720

5,568,626

Changes in equity

Total comprehensive loss

-

(1,559,925

)

-

(1,559,925

)

Balance at 31 December 2023

2,400

4,005,581

720

4,008,701

Changes in equity

Total comprehensive loss

-

(266,864

)

-

(266,864

)

Balance at 31 December 2024

2,400

3,738,717

720

3,741,837

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2023

2,400

981,755

720

984,875

Changes in equity

Balance at 31 December 2023

2,400

981,755

720

984,875

Changes in equity

Balance at 31 December 2024

2,400

981,755

720

984,875

Cash flows from operating activities

Cash generated from operations

1

38,942

830,664

Interest paid

(87,613

)

(4,628

)

Tax paid

-

(39,132

)

Taxation refund

102,332

-

Net cash from operating activities

53,661

786,904

Cash flows from investing activities

Purchase of tangible fixed assets

(84,073

)

(1,819,538

)

Interest received

144,139

148,573

Net cash from investing activities

60,066

(1,670,965

)

Cash flows from financing activities

Bank loans advanced

346,130

-

Payment of lease liabilities

(512,359

)

(335,576

)

Amount introduced by directors

71,007

-

Loans advanced to related parties

(43,355

)

-

Loans repaid by related parties

-

(29,761

)

Equity dividends paid

-

(43,668

)

Net cash from financing activities

(138,577

)

(409,005

)

Decrease in cash and cash equivalents

(24,850

)

(1,293,066

)

Cash and cash equivalents at beginning of year

2

755,629

2,048,695

Cash and cash equivalents at end of year

2

730,779

755,629

1.	RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS

2024

2023

£

£

Loss before income tax

(363,856

)

(1,489,811

)

Depreciation charges

648,323

588,531

IFRS 16 depreciation adjustments

(591,044

)

(524,877

)

Finance costs

87,613

4,628

Finance income

(144,139

)

(148,573

)

(363,103

)

(1,570,102

)

(Increase)/decrease in trade and other receivables

(851,278

)

1,591,813

Increase in trade and other payables

1,253,323

808,953

Cash generated from operations

38,942

830,664

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 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

730,779

755,629

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

755,629

2,048,695

1.	STATUTORY INFORMATION

PHCO154 Limited 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.

2.	ACCOUNTING POLICIES

Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention and are presented in £Stg

Basis of consolidation

The consolidated accounts incorporate the financial statements of Starspeed Limited and Starspeed Training Limited, both of which are wholly owned. The company has the power to govern their financial and operating policies by virtue of its 100% shareholding in both entities.

All inter group balances and transactions are eliminated on consolidation.

Critical accounting judgements and key sources of estimation uncertainty

There are no critical accounting judgements or key sources of estimation uncertainty pertaining to these financial statements or matters that need to be brought to the attention of users of these accounts which have not already been disclosed.

Changes in accounting policies

There have been no changes in the accounting policies adopted by the group in either the current or previous year.

Revenue recognition

All income in the current and previous accounting period was from carrying out aircraft charter, pilotage, aircraft management and maintenance activities and training activities for clients under contract.

The group regards all contracts as point in time contracts under IFRS 15 and income is recognised in the accounts on that basis as required by the standard.

Revenue is measured at fair value or receivable and represents the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of the group's business, net of discounts, rebates and sales related taxes.

Revenue is recognised when the goods are delivered and the significant risks and rewards of ownership have passed to the customer.

Revenue is recognised with reference to the stage of completion provided that the amount of revenue and its related costs can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the company.

Interest income is recognised, in profit or loss, using the effective interest rate method.

Cash and cash equivalents

Cash represents cash in hand and deposits held on demand with financial institutions. Cash equivalents are short-term, highly-liquid investments with original maturities of three months or less (as at their date of acquisition). Cash equivalents are readily convertible to known amounts of cash and subject to an insignificant risk of change in that cash value.

In the presentation of the Statement of Cash Flows, cash and cash equivalents also include bank overdrafts. Any such overdrafts are shown within borrowings under ‘current liabilities’ on the Statement of Financial Position.

Property, plant and equipment

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

Right of use assets

-

over the period of the lease and at varying rates on cost

Improvements to property

-

over the period of the lease

Plant and machinery

-

25% on reducing balance and 4 to 20 years

Computer equipment

-

25% on reducing balance

Property, plant and equipment are tangible assets that:

- are held for use in the production or supply of goods or services, for rental to others for administrative purposes; and

- are expected to be used for more than one period.

Items of property, plant and equipment are initially recognised at cost. Costs include all costs incurred to bring the asset to the condition necessary for it to be capable of operating in the manner intended by management.

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

Leases where the group has right of use and control of identifiable assets are treated as fixed assets and the obligation to pay the rentals under the lease are treated as leases payable as required by IFRS 16.

Rentals paid under leases where the group does not have control over the use of the underlying asset are charged through the income statement.

Financial instruments

Initial Measurement

Financial instruments are initially measured at the transaction price (this includes transaction cost except in the initial measurement of financial assets and liabilities that will be measured at fair value through profit or loss). If however the arrangement constitutes a financing transaction it is then measured at the present value of the future payments, discounted at a market related interest rate.

Trade and other receivables

Most sales are made on the basis of normal credit terms, and the receivables do not bear interest. Where credit is extended beyond normal credit terms, receivables are measured at amortised cost using the effective interest method. At the end of each reporting period, the carrying amounts of trade and other receivables are reviewed to determine whether there is any objective evidence that the amounts are not recoverable. If so, an impairment loss is recognised immediately in profit or loss.

Trade payables

Trade payables are obligations on the basis of normal credit terms and do not bear interest. Trade payables denominated in a foreign currency are translated into (currency) using the exchange rate at the reporting date. Foreign exchange gains or losses are included in other income or other expenses.

Bank loans and overdrafts

Interest expense is recognised on the basis of the effective interest method and is included in finance costs.

Taxation

Current tax assets and liabilities

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset, limited to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised.

Deferred Tax

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and their corresponding tax bases (known as temporary differences). Deferred tax liabilities are recognised for all temporary differences that are expected to increase taxable profit in the future.

Deferred tax assets are recognised for all temporary differences that are expected to reduce taxable profit in the future, and any unused tax losses or unused tax credits, limited to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised.

The net carrying amount of deferred tax assets is reviewed at each reporting date and is adjusted to reflect the current assessment of future taxable profits. Any adjustments are recognised in profit or loss. Deferred tax is calculated at the tax rates that are expected to apply to the taxable profit (tax loss) of the periods in which it expects the deferred tax asset to be realised or the deferred tax liability to be settled, on the basis of tax rates that have been enacted or substantively enacted by the end of the reporting period.

Tax Expense

Tax expense represents the sum of the tax currently payable and deferred tax movement for the current period. The tax currently payable is based on taxable profit for the year.

Impairment of assets

At each reporting date, the group assesses whether there is any indication that any asset may be impaired. If there is an indication of possible impairment, the recoverable amount of any affected asset (or group of related assets) is estimated and compared with its carrying amount. If the estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.

If an impairment loss subsequently reverses, the carrying amount of the asset (or group of related assets) is

increased to the revised estimate of its recoverable amount but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset (group of related assets) in prior years.

A reversal of an impairment loss is recognised immediately in profit or loss, this does not apply to impairment losses allocated to goodwill, the reversal of which is prohibited by the standard.

Foreign currencies

Transactions in foreign currencies are translated to the functional currency of the group at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the reporting period.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Foreign currency differences arising in retranslation are recognised in profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

Employee benefit costs

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to the income statement in the period to which they relate.