REGISTERED NUMBER: 05183938 (England and Wales)

Gunning Transmission & Distribution

Services Limited

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 August 2024

Page

Company Information

1

Strategic Report

2

Report of the Directors

6

Statement of Directors' Responsibilities

7

Report of the Independent Auditors

8

Income Statement

12

Other Comprehensive Income

13

Balance Sheet

14

Statement of Changes in Equity

15

Cash Flow Statement

16

Notes to the Cash Flow Statement

17

Notes to the Financial Statements

19

DIRECTORS:

Mr M Winkles

Mr T E R Kneen

REGISTERED OFFICE:

Unit 9

Dunchideock Barton

Dunchideock

Exeter

Devon

EX2 9UA

REGISTERED NUMBER:

05183938 (England and Wales)

AUDITORS:

Swindells LLP

Chartered Accountants

and Statutory Auditor

Atlantic House

8 Bell Lane

Bellbrook Industrial Estate

Uckfield

East Sussex

TN22 1QL

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

REVIEW OF BUSINESS

The principal activity of the Company is Mechanical & Electrical Design, Civil Design, Procurement, Civil works, Mechanical & Electrical works & Commissioning of High Voltage Power Systems and associated equipment.

On 10 May 2024, 100% of the share capital of the Company was acquired by Ethical Power Group Limited who are the industry leader in the energy sector, specialising in solar PV projects and battery energy storage systems. The directors believe that acquisition will enable both companies to build upon their areas of expertise and offer a comprehensive vertically integrated renewables and energy infrastructure business solution in the UK energy market.

The directors are pleased to announce that company turnover for this financial year has increased from £44.1m to £96.5m, delivering a gross profit of £2.59m (2023 - £2.41m). For the comparative figures for 2023, costs amounting to £2,719,591 have been reclassified from administrative expenses to cost of sales, resulting in a change in the gross profit figure reported. This adjustment was made to align the statutory accounts with the monthly management accounts. As this had no impact on the reported profit for the year or on the net assets, it was not considered necessary to account for this as a prior year adjustment.

Shareholders funds have increased to £2.49m (2023 - £2.07m).

The growth in turnover is a direct result of drive to de-carbonise the UK's Power Generation and Distribution System. GTDS specialises in the connection of the renewable energy to the National Grid Network. We have many years' experience in this field and have continually invested in the recruitment of highly qualified, experienced engineering staff, backed up with all the necessary training and equipment to carry out the works. This has resulted in a strong core of direct staff, highly motivated and committed to the Company.

Applications for renewable energy connections to the National Grid are growing year on year as the UK's dependence on fossil fuels diminishes. GTDS is ideally placed to take advance of these opportunities, providing the business remains competitive.

We have a strong order book for 2024/25 with the opportunities in the UK continuing to grow.

2024

2023

2022

Turnover

£96,464,691

£44,056,164

£15,825,662

Sales growth

119%

178%

5%

Gross profit

£2,586,766

£2,408,291

£2,991,925

Gross margin

2.7%

5.5%

18.9%

PRINCIPAL RISKS AND UNCERTAINTIES

The directors recognise the need to take a strategic approach to business planning, compliance, risk management and financial performance, ensuring that the management of the business delivers the best possible shareholder value.

In terms of safety, health, environment and quality risk management within the power generation and distribution industry, the Company continually invests in the training and development of our staff, to ensure we establish and maintain compliance with company policies and procedures, customers procedures and government legislation. We are proud of our record to date and continually improve our management systems with the aim of meeting and exceeding our customers' expectations through a continual improvement process.

Human resource remains a key challenge within our industry, GTDS recognises this, and we are committed to training more engineers and apprentices year on year. Additionally, the business is encouraging staff with a career path to develop into project mangers through a mixture of mentoring, training and on the job experience.

The Company is exposed to the risks surrounding the supply chain for key components and labour. The uncertain geopolitical situation due to the continuing conflict in Ukraine and instability in the Middle East, is continuing to result in unprecedented price increases, as well as pressure around the availability and lead times within the global supply chain. These global events are also leading to delays and diversions in shipping routes which can have adverse impacts on scheduled delivery timelines. The Company mitigates this risk by ensuring it has no responsibility for no fault delays.

The business is constantly looking at design/ procurement improvements to mitigate the impact of the steep cost increases within our supply chain.

Due to the long-term nature of the work carried out by the company, one of the principle risks to the Company is that of liquidity, ensuring that the business has the cash reserves to fulfil its operating requirements and deliverables. The Company mitigates against these risks using a number of different approaches, such as undertaking regular cash flow reviews and forecasting in order to best manage working capital demands. Contract milestones are also phased such that there are early increments for the purchase of long lead items allowing construction projects to remain cash flow positive throughout their lifecycles.

FINANCIAL AND OTHER KEY PERFORMANCE INDICATORS

The financial key performance indicators are detailed within the review of the business section. There are no other key performance indicators.

SECTION 172(1) STATEMENT

The Directors and the key management take into account a variety of stakeholders other than the Company's shareholders when making strategic business decisions. The Company is committed to engaging and reflecting on stakeholders' needs through regular dialogue and communication. The Directors and key management recognise the unique nature of relationships with different key stakeholder and dependencies of different elements of the business upon them. Relationships with key stakeholders are managed through relevant engagement activities in order to inform the Board of their decision making and delivery of strategy.

The key stakeholder groups and mechanisms of engagement are set out below.

Customers

Following the acquisition of the Company by Ethical Power Ltd, the business has the ability offer is customers multiple services throughout the High Voltage Power and renewables business lifecycle. The Company maintains open and regular conversations with its customers through out all stages of the project cycle. The Company's design and development teams offer technical advice and expertise to support early-stage developments and office guidance and expert opinion to further optimise the build and design process. Project management and operational staff maintain regular communication on project status and deliverables, from initial tendering to final acceptance. This includes discussion and agreement tendering and design process, agreeing contractual perms in alignment with the client's requirements, confirming on milestones, site inspections and sign off.

Employees

The company had an average of 73 employees during the year (2023: 63). Maintaining an engaged and motivated workforce driven by the desire to deliver growth whilst maintaining a quality service is a key priority for the Board. Through recruiting exceptional talent, the Company aims to build and maintain industry leading teams within the High Voltage Power sector.

The Company runs training and development programmes to support personal and professional development, covering apprenticeships, professional accreditation and memberships with industry recognised bodies.

Suppliers

The Company recognises that suppliers are a key part to the business process, ensuring the timely delivery of high quality components completed to the technical specifications of each project. The Company maintains close business relationships with suppliers, maintaining regular contact to discuss market and project specific demands.

All contractors are subject to a rigorous onboarding process, ensuring that in addition to having all regulatory required policies and processes in place, they can demonstrate effective risk controls to ensure safe systems of work.

Monitoring arrangements for contractors operations for quality and safety mirrors that of the Company's direct employees.

Board Decision Making

The Board takes into account the interest of it stakeholders during key decisions as part of their duty to promote the success of the Company. The Directors and key management act in a way that they consider, in good faith, would be most likely to promote the success of the business for the benefit of its members as a whole and in doing so have regard to the following factors in relation to Section 172 (1);

- The likely consequence of any decision in the long term;

- The interest of the Company's employees;

- The need to foster the Company's business relationships with suppliers, customers and others; and

- The desirability of the Company maintaining a reputation for high standards of business conduct.

Strategy

The aim of the Company is to offer a complete one stop service in the design, installation and commissioning of High Voltage Power Systems, whilst having the ability to utilise the skills of the Ethical Power Group to offer wider services in the renewable energy space.

FUTURE DEVELOPMENTS

The directors aim to continue to build on the success of 2024 and increase the company's market share in the UK by further investment in the company's operational capabilities.

ON BEHALF OF THE BOARD:

Mr M Winkles - Director

18 September 2025

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

DIVIDENDS

No dividends will be distributed for the year ended 31 August 2024.

FUTURE DEVELOPMENTS

Please refer to the future developments section within the Strategic report.

DIRECTORS

Mr M Winkles has held office during the whole of the period from 1 September 2023 to the date of this report.

Other changes in directors holding office are as follows:

Mr G Gunning - resigned 9 May 2024

Mrs D A Gunning - resigned 9 May 2024

Mr T E R Kneen - appointed 9 May 2024

POLITICAL DONATIONS AND EXPENDITURE

No donations or contributions have been made by the Company to any registered political parties, other political organisations within the UK, or any independent election candidates in the current or prior period.

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 Company'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 Company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

Mr M Winkles - Director

18 September 2025

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;

-	state whether applicable 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.

Opinion

We have audited the financial statements of Gunning Transmission & Distribution Services Limited (the 'company') for the year ended 31 August 2024 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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 company's affairs as at 31 August 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 Auditors' 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 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 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 Strategic Report, the Report of the Directors and the Statement of Directors' Responsibilities, 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 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 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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, 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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page seven, 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 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.

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.

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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

-

the company's internal controls have been discussed with management and understood prior to our audit testing. Internal controls have been tested through walkthrough testing, to assess whether controls are adequate, whether they are being followed, and whether irregularities and fraud are prevented.

-

deficiencies in internal controls have been highlighted and explained to management, along with recommendations as to how deficiencies can be improved and the risk of irregularity and fraud occurrence minimised.

-

representations have been provided by management that there were no identified cases of fraud or instances of non-compliance during or since the accounting period.

-

substantive testing has been carried out to test the validity of transactions, with entries in the accounting system vouched to corresponding third party documentation and evidence of appropriate authorisation.

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 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.

Melanie Richardson BA(Hons) FCA (Senior Statutory Auditor)

for and on behalf of Swindells LLP

Chartered Accountants

and Statutory Auditor

Atlantic House

8 Bell Lane

Bellbrook Industrial Estate

Uckfield

East Sussex

TN22 1QL

19 September 2025

TURNOVER

96,464,691

44,056,164

Cost of sales

93,877,925

41,647,873

GROSS PROFIT

2,586,766

2,408,291

Administrative expenses

2,126,120

1,592,014

OPERATING PROFIT

4

460,646

816,277

Interest receivable and similar income

138,970

66,256

599,616

882,533

Interest payable and similar expenses

5

17,786

28,344

PROFIT BEFORE TAXATION

581,830

854,189

Tax on profit

6

161,557

190,575

PROFIT FOR THE FINANCIAL YEAR

420,273

663,614

PROFIT FOR THE YEAR

420,273

663,614

OTHER COMPREHENSIVE INCOME

Share buy back/bonus issue

-

(290,520

)

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

-

(290,520

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

420,273

373,094

FIXED ASSETS

Tangible assets

7

73,573

69,339

CURRENT ASSETS

Debtors

8

27,908,780

11,239,842

Cash at bank and in hand

1,706,815

9,738,831

29,615,595

20,978,673

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

9

27,008,938

18,679,568

NET CURRENT ASSETS

2,606,657

2,299,105

TOTAL ASSETS LESS CURRENT LIABILITIES

2,680,230

2,368,444

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

10

189,749

298,236

NET ASSETS

2,490,481

2,070,208

CAPITAL AND RESERVES

Called up share capital

14

1,000

1,000

Capital redemption reserve

15

140

140

Retained earnings

15

2,489,341

2,069,068

SHAREHOLDERS' FUNDS

2,490,481

2,070,208

The financial statements were approved by the Board of Directors and authorised for issue on 18 September 2025 and were signed on its behalf by:

Mr M Winkles - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 September 2022

980

1,695,954

160

1,697,094

Changes in equity

Bonus issue of shares

160

-

-

160

Purchase of own shares

(140

)

-

-

(140

)

Total comprehensive income

-

373,114

(20

)

373,094

Balance at 31 August 2023

1,000

2,069,068

140

2,070,208

Changes in equity

Total comprehensive income

-

420,273

-

420,273

Balance at 31 August 2024

1,000

2,489,341

140

2,490,481

Cash flows from operating activities

Cash generated from operations

1

(8,205,984

)

6,241,976

Interest paid

(17,786

)

(25,300

)

Interest element of hire purchase payments paid

-

(3,044

)

Tax paid

(140,197

)

-

Net cash from operating activities

(8,363,967

)

6,213,632

Cash flows from investing activities

Purchase of tangible fixed assets

(57,094

)

(13,298

)

Sale of tangible fixed assets

26,153

-

Interest received

138,970

66,256

Net cash from investing activities

108,029

52,958

Cash flows from financing activities

Loan repayments in year

(95,689

)

(91,409

)

Capital repayments in year

(23,450

)

(14,474

)

Amount introduced by directors

343,061

-

Amount withdrawn by directors

-

(200,820

)

Share buyback

-

(290,500

)

Net cash from financing activities

223,922

(597,203

)

(Decrease)/increase in cash and cash equivalents

(8,032,016

)

5,669,387

Cash and cash equivalents at beginning of year

2

9,738,831

4,069,444

Cash and cash equivalents at end of year

2

1,706,815

9,738,831

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

2024

2023

£

£

Profit before taxation

581,830

854,189

Depreciation charges

25,016

22,026

Loss on disposal of fixed assets

1,691

-

Finance costs

17,786

28,344

Finance income

(138,970

)

(66,256

)

487,353

838,303

Increase in trade and other debtors

(17,011,999

)

(9,505,980

)

Increase in trade and other creditors

8,318,662

14,909,653

Cash generated from operations

(8,205,984

)

6,241,976

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 August 2024

31.8.24

1.9.23

£

£

Cash and cash equivalents

1,706,815

9,738,831

Year ended 31 August 2023

31.8.23

1.9.22

£

£

Cash and cash equivalents

9,738,831

4,069,444

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.9.23

Cash flow

At 31.8.24

£

£

£

Net cash

Cash at bank and in hand

9,738,831

(8,032,016

)

1,706,815

9,738,831

(8,032,016

)

1,706,815

Debt

Finance leases

(23,450

)

23,450

-

Debts falling due within 1 year

(96,088

)

(4,916

)

(101,004

)

Debts falling due after 1 year

(290,354

)

100,605

(189,749

)

(409,892

)

119,139

(290,753

)

Total

9,328,939

(7,912,877

)

1,416,062

1.	STATUTORY INFORMATION

Gunning Transmission & Distribution Services 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 Company Information page.

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

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements 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. The financial statements have been prepared under the historical cost convention.

Turnover

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.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

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.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Tangible fixed assets

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.

Plant and machinery

-

25% on reducing balance

Motor vehicles

-

25% on reducing balance

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the 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 balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet 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

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.

Pension costs and other post-retirement benefits

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in other creditors as a liability in the statement of financial position. The assets of the plan are held separately from the company in independently administered funds.

Construction contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

When it is probable that total contract costs will exceed total contract turnover, the expected loss is

recognised as an expense immediately. Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.

The "percentage of completion method" is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.

3.	EMPLOYEES AND DIRECTORS

2024

2023

£

£

Wages and salaries

4,348,149

3,346,653

Social security costs

505,375

402,492

Other pension costs

86,160

66,815

4,939,684

3,815,960

The average number of employees during the year was as follows:

2024

2023

Productive labour

70

60

Directors

3

3

73

63

2024

2023

£

£

Directors' remuneration

293,249

464,197

Directors' pension contributions to money purchase schemes

8,508

9,286