For the financial period ended 31 December 2024 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The members have not required the company to obtain an audit of its financial statements for the period in question in accordance with section 476.

The director acknowledges his responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The director of the company has elected not to include a copy of the profit and loss account within the financial statements.true

Two Windmills Limited is a private company limited by shares incorporated in England and Wales. The registered office is Marine House, Tide Mill Way, Woodbridge, IP12 1AP.

The reporting period of the Company has changed so that these financial statements present the 18 month period ended 31 December 2024. This change aligns the year-end with that of the parent company. As a result, the comparative amounts are not directly comparable.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest pound sterling.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The financial statements have been prepared on a going concern basis. Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources and continued support from other companies within the group to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

Revenue comprises the fair value of the consideration received or receivable from the sale of published books, net of discounts, returns, and value-added tax.

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

Revenue from sale of physical books is recognised when the significant risks and rewards of ownership have transferred to the customer, which is typically upon dispatch or delivery, depending on the terms of sale. Revenue is only recognised when it is probable that economic benefits will flow to the company and the amount can be measured reliably.

Interest income is recognised on an accrual basis using the effective interest method as defined in FRS 102.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials, publication costs and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

In the application of the company’s accounting policies, the director is 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.

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Management exercises significant judgment in assessing the net realisable value (NRV) of stock, particularly in relation to items subsequently sold at a discount, or those considered slow-moving or obsolete. The publishing industry is subject to changes in consumer demand and technological developments, which can affect the recoverability of stock. Key estimates and assumptions used in determining the stock provision include historical and forecasted sales performance by title and edition, market trends and content relevance, the physical condition and age of stock, and expected selling prices and associated costs. These estimates are reviewed regularly and adjusted as necessary. Changes in market conditions or consumer preferences may result in revisions to the provision in future periods.

The average monthly number of persons employed by the company (excluding directors) during the period was:

The company had no employees during the year. All necessary administrative and operational services were provided by other companies within the group, and no payroll costs were incurred directly by the company.

The banking facilities are secured by a mortgage debenture incorporating a fixed and floating charge over all current and future assets and an inter-company guarantee on all the assets of the company and fellow group companies.

The Coronavirus Business Interruption Loan entered into by the parent company was secured by a debenture over the parent company, and an unlimited guarantee provided by the parent company and its subsidiaries, including this company.

The parent company and ultimate parent controlling party of Two Windmills Limited is Gemini Children's Books Limited and Gemini Books Group Limited, respectively. Their registered office is Marine House, Tide Mill Way, Woodbridge IP12 1AP.