The directors present the strategic report for the year ended 31 December 2024.

The statement of income and retained earnings is set out on page 12 and shows turnover for the year at £37,668,836 (2023 - £40,933,133) and profit before tax for the year of £2,147,951 (2023 - £2,060,307) with profit after tax of £1,588,658 (2023 - £1,558,539). Further details of turnover are given in note 3 to the financial statements.

Turnover decreased on the prior year by £3,264,297 (2023 – £18,262,679); This decline is predominantly attributed to the economic landscape of market-driven price reductions, continuing high interest rates and, whilst lower than in prior years, the impact of inflation. These have lead to a continued caution across all industry sectors throughout 2024. Despite these challenges, the company has continued to work with its customers to navigate through, efficiently managing stock levels and preserving overall margins.

As we transition into 2025, the initial months have demonstrated a continuing caution still in the marketplace, but alongside a quiet optimism for the remainder of the year. While acknowledging this level of initial uncertainty, management continues to closely monitor economic drivers that will shape the year ahead.

Sterling has fluctuated somewhat during the year, and therefore foreign currency (particularly Euros) continues to require careful management.

Cash management controls continue to be successful, and the company continues to maintain the positive cash position achieved in prior years. The cash position for the business continues to be relatively stable.

The position of the company at the year end

The balance sheet on page 13 of the financial statements shows the company's financial position at the year end in terms of its net assets position. Details of amounts owed to group undertakings, which include the parent company, are shown in note 13 on page 24.

Whilst there are no longer any restrictions with regards to COVID-19, ALBIS UK and the Otto Krahn Group continue to remain vigilant, actively monitoring the situation throughout the year. This ongoing commitment ensures continuous and responsive support to both our customers and staff.

The ongoing uncertainty stemming from the current economic climate, coupled with the impact of the new government policies, pose ongoing challenges. In response, the Board, in collaboration with the Group Management Board, has undertaken an assessment of the potential financial implications on the company. This includes a comprehensive evaluation of the company's financial position and results for future periods. The Board has prepared a forecast grounded in prudent estimates, considering the company's robust cash resources, absence of external borrowings, group support, and the ability to secure funds if needed. It is crucial to note that, based on these robust forecasts, the financial statements have been prepared with the confident assumption that there is no material uncertainty regarding the company's ability to continue as a going concern.

There have been no other events since the balance sheet date which materially affect the position of the company.

The directors of ALBIS (U.K.) Limited confirm that we have carried out a robust assessment of the principal risks facing the company, including those that would threaten its business model, future performance, solvency or liquidity. The principal risks and uncertainties facing the company are as follows:-

Competitive risk

Competitive pressure in the UK is a continuing risk for the company, which could result in it losing sales. The company manages this risk by delivering customer excellence and by providing added value to its customers, having competitive lead and response times in the supply of material and handling of customer queries as well as by maintaining strong relationships and local representation with key customers and suppliers.

Foreign currency risk

Sales to Ireland and mainland Europe are made in Euros and to the Far East and the US in US dollars. The company is therefore exposed to movements in the Euro to Sterling and US dollar to Sterling exchange rates.

Management monitors the exchange rate fluctuations closely according to its clearly defined strategy and considers the need to take out forward foreign currency contracts to fix the exchange rate, where it appears there will be significant fluctuations. In addition, most of the company’s supplies are bought in Euros to mitigate the receipt of Euros generated from such sales.

Liquidity risk

The company has an overdraft facility with its main bank, Deutsche Bank. This facility is charged at rates over SONIA and EONIA. If the company uses this facility then it is exposed to any interest rate fluctuation.

The overall position is monitored closely by the Board of Directors and the group to ensure the company has sufficient funds for operations.

Credit risk

Credit risk is the risk that one party will cause a financial loss for that other party by failing to discharge an obligation. Group and company policies are aimed at minimising such losses, and require that deferred terms are only granted to customers who demonstrate an appropriate payment history and satisfy credit worthiness procedures. Details of the company’s debtors are shown in note 12 on page 24 to the financial statements. The company’s credit risk is managed through insurance and appropriate credit checks which are made on all business prior to sales being allowed.

Impact of Brexit

In the aftermath of the UK referendum's decision to exit the European Union, the UK and EU encountered an extended period of political and economic uncertainty. Although a trade deal defining the UK's relationship with the EU was negotiated by the end of 2020, the repercussions persist, particularly in the wake of the new customs and duties rules that were introduced and subsequently evolved at the commencement of 2022. Recognizing the dynamic nature of this situation, the Board remains steadfast in closely monitoring any new developments. Furthermore, we are committed to ensuring that our staff receives ongoing training to comprehend and implement any new requirements that may arise, demonstrating our dedication to compliance in a continually changing landscape.

Impact of COVID 19

The global pandemic significantly impacted nearly all entities, creating uncertainty about the immediate outlook as countries managed their own variants, outbreaks, and borders. The COVID-19 pandemic presented considerable challenges for supply chains globally. Following the initial wave, the polymer industry witnessed an unexpected surge in demand, leading to gradual fulfilment and, at times, extended lead times. Multiple national lockdowns impeded the flow of raw materials, resulting in unforeseeable delays across the entire supply chain.

All pandemic-related restrictions have been lifted. For the second year running, the business has successfully operated with the majority of staff based in the office. We are pleased to report that there is no discernible impact on our supply chains, staff, or business operations. Nevertheless, the group and local Board remain vigilant and continue to monitor developments, ensuring a proactive approach to any potential future challenges.

Impact of Russia - Ukraine War

The geopolitical situation in Eastern Europe escalated on February 24, 2022, when Russia initiated its invasion of Ukraine. The conflict between the two nations is ongoing, marked by evolving military activities and the imposition of additional sanctions. Now, approaching the fourth year since the commencement of this conflict, its repercussions persist, significantly influencing economic and global financial markets. The war further compounds existing economic challenges, contributing to rising inflation and continued disruption in global supply chains.

The group and local Board maintain a vigilant stance, actively monitoring the potential impacts stemming from this prolonged conflict. Close attention is being given to the ongoing supply-chain and travel disruptions in Eastern Europe, with a keen eye on the repercussions on the volatility of commodity prices and currencies. Additionally, the escalation of the conflict has resulted in increased costs and expenditures, prompting the need for continuous evaluation and proactive management.

Impact of Palestine – Israel Conflict

On October 7, 2023, the Palestinian group Hamas, officially designated as a terrorist organization by numerous countries, including Israel, the United States, the European Union, and the United Kingdom, initiated an armed assault against Israel. This crisis, resulting in heightened tensions in the Middle East, has had a discernible impact on global supply chain routes and the flow of goods and materials in and through the region. This has led to increased operational costs and extended lead times, as efforts are made to identify alternative transportation routes.

The group and local Board remain actively engaged in monitoring the potential impacts arising from this conflict, particularly its effects on the supply chain. Close attention is given to the potential impact on the volatility of commodity prices and currencies, as well as the consequent rise in costs and expenditures.

The company now operates to the ISO 9001 Quality Standard and is part of the distribution business trading under the globally established ALBIS brand. During the year ALBIS UK was externally audited and successfully obtained recertification. Management reviews the current systems and processes to ensure the company continues to meet the requirements of the standard and the demands customers place on us.

As part of this quality regime, management has identified Key Performance Indicators (KPIs) which are constantly monitored for improvement in the business. Two such indicators which are important to the business and are measured monthly are stock days and debtors days. Average monthly stock days were 37 days in 2024 (2023 - 39 days) and average monthly debtors days were 57 in 2024 (2023 - 56 days), these achievements were as a result of a wider group focus on working capital, in particular stock management and these measures continue to be key focuses in 2025 and management is pleased at the continuing progress being made.

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled every effort is made to ensure that their employment with the company continues and that appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical with that of other employees.

The company places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the company and group. This is achieved through regular meetings and newsletters to allow a free flow of information and ideas. Employee representatives are consulted regularly on a wide range of matters affecting their interests.

During the year, the directors have acted together and individually in good faith when performing their duties to promote the success of the company for the benefit of its members as a whole while having regard (amongst other matters) to the following matters, examples of which can be found throughout this strategic report:

• Likely long-term consequences

• Interests of the company’s staff and colleagues

• Business relationships with suppliers and customers

• Impact on the community and environment

• Reputation for high standards of business conduct

• Acting fairly between shareholders

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

The company is a wholly owned subsidiary of ALBIS Distribution GmbH & Co. KG, based in Hamburg, Germany. The company continues to distribute engineering, compound, and specialist thermoplastics for customers in the UK and many other countries. The directors are not aware, at the date of this report, of any likely changes in the company’s activities in the next year.

The results for the year are set out on page 12.

Ordinary dividends were paid amounting to £1,500,000. The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Details of financial instruments are provided in the accounting policies. Details of financial risk management, objectives and strategies are provided in the strategic report.

There have been no significant events affecting the company since the year end.

The directors aim to maintain the management policies which have resulted in the company's growth and improved profitability in recent years.

The auditor, MHA, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Details of the energy and carbon report are provided in the strategic report.

The directors are responsible for preparing the annual report 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;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• 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 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.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

We have audited the financial statements of ALBIS (U.K.) Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of income and retained earnings, the balance sheet and notes to the financial statements, including 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 company's affairs as at 31 December 2024 and of its 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 Auditor responsibilities for the audit of the financial statements section of our report. We are independent of the company 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 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 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the 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.

As explained more fully in the directors' responsibilities statement, 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 is 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 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 company or to cease operations, or have no realistic alternative but to do so.

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 an auditor's report 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:

• Enquiries with management, about any known or suspected instances of non-compliance with laws and regulations and fraud;

• Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to stock provisioning, debtor recoverability and future performance in light of the impact of the current economic uncertainty;

• Reviewing board minutes and legal and professional expenditure to identify any evidence of ongoing litigation or enquiries;

• Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business; and

• Auditing the risk of fraud in revenue, through the testing of a sample of sales to assess whether revenue is complete in the financial statements and recognised in the correct accounting period.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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 an auditor's report 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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

ALBIS (U.K.) Limited is a private company limited by shares incorporated in England and Wales. The registered office is No. 5 LGA/LGC Booths Park, Chelford Road, Cheshire, WA16 8GS.

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.

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 £.

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

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of ALBIS Distribution GmbH & Co. KG. These consolidated financial statements are available from Otto Krahn (GmbH & Co.) KG, Grimm 10, D-20457, Hamburg, Germany.

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

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

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

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 and deposits held at call with banks.

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.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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 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.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

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.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Research and development

Expenditure on research and development is written off to the income statement in the year which it is incurred.

Group commissions receivable and management fee

Group commissions are determined annually and accounted for on a receivable basis. A management service fee is determined on an annual basis for services provided by Head Office.

In the application of the company’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.

The directors review the stock held for slow moving items which may indicate impairment. For items which have not been sold for a period greater than 12 months, a provision is generally made. Items which have not been sold for more than a period of 24 months are provided for in full unless there is a specific reason not to.

This policy is in line with the parent company, ALBIS Distribution GmbH & co. KG.

The Company insures the majority of its trade debtors. For debts that are not insured, the directors make an estimate of the recoverable value. When assessing recoverability the directors consider the net risk along with the ageing profile of debtors and historic experience.

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

Their aggregate remuneration comprised:

The number of directors and key management personnel for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 2).

The actual charge for the year can be reconciled to the expected charge for the year based on the profit and the standard rate of tax as follows:

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge above represents contributions payable by the company to the fund. Contributions totalling £25,313 (2023 - £36,213) were payable to the fund at the balance sheet date and are included in creditors.

All shares have equal voting rights and equal rights to participate in dividends and other distributions.

Capital reserves

The Capital reserve represents a capital contribution from the company's parent undertaking.

Profit and loss account

Retained earnings represents accumulated comprehensive income for the year and prior periods less dividends paid.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

The directors regard Otto Krahn (GmbH & Co.) KG, a company incorporated in Germany, as the company's ultimate parent undertaking.

ALBIS Distribution GmbH & Co. KG, a company incorporated in Germany, is the immediate parent undertaking of which ALBIS (U.K.) Limited is a member and for which group accounts are prepared. Otto Krahn (GmbH & Co.) KG is the parent undertaking of the largest group of which ALBIS (U.K.) Limited is a member and for which group accounts are prepared. A copy of the group accounts can be obtained from Otto Krahn (GmbH & Co.) KG, Grimm 10, D-20457, Hamburg, Germany.

The ultimate controlling party is Krahn Verwaltung-Gesellschaft GmbH, a company incorporated in Germany.