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

Principal activities

The company’s core business areas provide environmental services across compliance, trading, and recycling activities.

Compliance

The company delivers environmental compliance and data services within the regulated areas of Extended Producer Responsibility for Packaging Compliance, alongside other compliance services for Batteries and WEEE (Waste Electrical and Electronic Equipment). Our Data Services Division provides in depth, cost-effective support for compliance and sustainability data collection and reporting, helping businesses meet environmental regulations, manage supply chains, and manage environmental compliance costs easily and efficiently.

Trading

The company operates a well-established PRN Trading Division, strongly positioned as one of the market’s leading PRN Trading operations which purchases and sells Packaging Recovery Notes (PRNs) to support Producers to ethically fulfil obligations to meet Environment Agency requirements.

The company also operates a long-standing battery trading division. As an approved exporter of lead acid batteries, our service collects batteries for recycling across the UK, offering safe solutions to scrap lead battery disposal.

Recycling

The company’s Recycle with Clarity division assists waste producers with the safe, cost-effective movement of waste, across all materials.

Results

The company made a profit after tax of £5,923,422 during the year (2024) achieving a year-on-year increase of over 35%.

Continuous improvement initiatives and investment in systems contributed to an increase in expenses of over 33% which enabled a strong company performance across customer retention and acquisition achieving over 36% growth in gross profit.

Business review and future developments

The company maintained its position as one of the UK’s leading Packaging Scheme Operators, PRN trading operations, and lead acid battery trading operations, delivering cost effective and ethical compliance with the highest quality of service ensuring customers’ legal obligations were met.

Working closely with customers and regulators, the company smoothly transitioned into the regulatory requirements of Extended Producer Responsibility, ensuring continued investment in systems, people, and the customer experience.

The company upheld the mission to provide cost effective environmental services, and ensured cost-effective, highly competitive pricing despite the increase in workload caused by changing environmental regulations.

Our high quality and proven Extended Producer Responsibility services enabled the growth of our customer base however the spend on Packaging Recovery Notes reduced due to the variation in PRN pricing for 2024 compared to 2023. This is reflected in the reduction in turnover.

Customer satisfaction remained high, exceeding 99% satisfaction and we continued our long-standing record as one of the market leading compliance schemes for customer retention. The company was awarded the Best Customer Service Team at the 2024 Engage Awards.

Throughout 2024, the company invested significantly in the development and enhancement of packaging compliance software solutions, ensuring the most relevant and up to date systems for packaging compliance management for Extended Producer Responsibility and wider packaging decisions and sustainability initiatives. This contributed to the company being named as a finalist for The Best Use of Innovation in the Engage Awards.

Our investment in salary related costs increased by over 35% due to increased headcount, necessary for the increase in customer demands and changing regulatory requirements. The company committed to this investment to uphold the achievement of our unique service standards which differentiate our compliance services in our competitive sector.

Investment in people increased year on year enabling the retention and development of top talent to provide specialist services with advanced industry expertise. The company remains committed to paying above London Living Wage and offers a diverse range of rewards and benefits for personal and professional growth, physical wellbeing initiatives and mental health and wellbeing support. Our investment in people contributed to successful survey results reporting an engaged, empowered, and inspired workforce. Our training and development gained recognition, and the company was named as a finalist for Best Use of Employee Voice and Best Use of Training at the Engage Awards.

Our investment in people continues, to ensure we retain market leading talent, offering continuity for customers from an engaged team of experts.

The company remains committed to corporate social responsibility and throughout 2024, the company significantly increased financial support for charities within our Clarity Cares programme reflecting the ongoing commitment to the company mission to make a difference to the world, improving lives, protecting nature, and making the world around us a better place to live.

Research and development

The company invested significantly in technological advancement to develop new solutions for the changing legislative landscape and the implementation of Extended Producer Responsibility.

During 2024 the company invested significantly in our packaging data services. From listening to the customer needs and assessing the impacts of new regulatory requirements, we continued to invest in enhanced software solutions for comprehensive supply chain management, compliance, and sustainability reporting.

The company set out to solve complex problems within supply chain management, data collection and accurate data reporting and following significant investment in research and development, successfully implemented technological advancements leading to significant cost savings and outstanding levels of data accuracy.

The company continued further technological development, strengthening products and assets throughout the business driving improvements to services across all areas of the business.

Innovation continues into 2025 to ensure the most robust compliance, sustainability, and financial forecasting for Producers as they navigate the evolution of Extended Producer Responsibility.

Key performance indicators

The key performance indicators (KPIs) used by the company are as follows:

Future developments

The company remains committed to ongoing technological developments and has budgeted for continued increase in investment towards systems for existing and new services.

We expect to see technology and marketing related costs increase along with further increases in salary costs as the customer base continues to grow for all services.

As our business grows, our financial support for charities is budgeted to increase in accordance with our ongoing commitment to corporate social responsibility.

The company accepts exposure to risks and opportunities and is committed to upholding a rigorous, robust risk management system and quality procedure. Throughout our reporting procedures risks are closely monitored in line with our commitment to ISO standards.

The principal risks and uncertainties of the business are as follows:

Supplier quality

Clarity’s Recycling Evidence Quality Standard (CREQS), maintained excellence throughout our supplier network.

Our standard ensures robust due diligence, and we trade with the most ethical, market leading suppliers across the industry.

Throughout 2024, the Environment Agency continued the increased scrutiny of PRN suppliers, and as an ethical business acknowledging the risk of waste crime existing within the industry, we have further evolved our supplier assessments year on year alongside regulatory bodies to ensure we only trade with PRN suppliers able to evidence the excellence required to meet our ethical quality standards.

We continued to increase our supplier network alongside our growth, managing risk of loss of suppliers or market changes.

IT Systems and Infrastructure

Our business depends on highly efficient IT systems. Investment in our systems and technical expertise continued at high levels and increased further within data services and cyber security, reflecting our innovative approach to our customer and employee experience.

Regulatory transitions can lead to ambiguity as in some cases, the exact system requirements are not finalised until close to the date of the new requirement as the regulators share official announcements. This can lead to the risk of increased pressure on technological advancement and short timeframes for ensuring the systems meet the regulatory requirements in the easiest ways for customers.

In recognising this risk, the company made the decision to bring all software development in house and expand the team to ensure the agility required to adjust to ever evolving customer and compliance requirements.

The company systems have successfully transitioned into the new regulatory landscape and ensured preparedness for the further changes throughout 2025 with the introduction of RAM (Recyclability Assessment Methodology).

This innovation continues into 2025 to ensure the most robust compliance, sustainability, and financial forecasting for Producers as they navigate the evolution of Extended Producer Responsibility.

Legislative risks

The company’s compliance business is regulated by the Environment Agency and other regulatory bodies and must meet the compliance standards defined by the UK government (and other relevant authorities relating to material movement).

These standards are under continuous review and the revision of the legislation may have a material impact on the ability to operate in our existing business structure.

We remain close to legislative changes throughout our policy experts’ close contact with the government and environment agencies, ensuring we are informed and prepared.

Across all compliance, trading and recycling services, the company ensures the highest quality procedures and robust strategic and operational planning for regulatory change.

The company ensures a strong financial position regardless of regulatory change through the broad range of established services and the ongoing innovation and diversification of services.

Reputational risks

We recognise that evolving regulatory landscapes and increased compliance requirements may lead to potential cost increases for our customers, which can cause them stress and financial strain.

As the primary communicators of these changes, we understand the potential impact on customer perception.

While these regulatory shifts apply across the sector, effective management is crucial to mitigate customer dissatisfaction and reputational risks.

The company manages this risk through continuous evolution of our value proposition, implementing enhanced features and benefits to our services, alongside advanced staff development to ensure the best technical expertise to support customers through changes.

The management of these risks and opportunities have enabled the company to enhance our service differentiators and achieve significant year-on-year growth in our customer base, whilst maintaining our reputation for customer excellence and retention.

Financial risk management

Price risk

PRN pricing is continuously changing based on market trends and recycling data. This presents potential risks to our purchasing costs, cashflow and the pricing effects for members, this in turn could lead to customer retention risk. To enable an agile response to market changes, we utilise robust forecasting and financial planning for higher than market average costs, so we are prepared for any price increases and can keep our customers well informed.

Our pricing model helped us to remain competitive in a market facing price volatility and change.

Credit risk

The highest risks are caused by trade debt. To manage credit risk, the company monitors payment terms and payment performance and can terminate contracts if terms are not met. Due to our robust financial management, we did not need to terminate any memberships due to non-payment.

Customer risk

The company has built a diverse portfolio of clients ranging from large international companies to sole traders, therefore financial performance does not rely on any one client. The company continues to remain unaffected by external economic pressures post-covid as environmental compliance and sustainability continues to be a high global priority.

Supplier risk

Within the PRN sector, supplier risk directly impacts customer risk, because to meet members’ legal requirements, cost-effective and ethical PRN supply is critical.

Our PRN Trading operation uniquely positions us to work with a large portfolio of suppliers and our quality procedures ensure suppliers can responsibly and ethically meet requirements.

Additional information

Throughout 2024 the company invested in improvements for staff, customers and suppliers, increased client base whilst maintaining high satisfaction and retention and enjoyed high performance exceeding 2024 financial objectives.

Looking ahead at 2025, the company forecasts growth across all areas of the business, further diversification of services, and investments will continue throughout 2025, as we continue to fulfil our mission:

It is our mission to make a difference to the world and all who occupy it: helping improve lives, protect nature, and make the environment around us a better place to live.

We achieve this by providing expert, ethical, cost-effective environmental care, and compliance services.

Uniting the world of business in the protection of the world we live in.

On behalf of the board

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

As noted in the Strategic Report, the company’s core business areas provide environmental services across compliance, trading, and recycling activities.

Compliance

The company delivers environmental compliance and data services within the regulated areas of Extended Producer Responsibility for Packaging Compliance, alongside other compliance services for Batteries and WEEE (Waste Electrical and Electronic Equipment). Our Data Services Division provides in depth, cost-effective support for compliance and sustainability data collection and reporting, helping businesses meet environmental regulations, manage supply chains, and manage environmental compliance costs easily and efficiently.

Trading

The company operates a well-established PRN Trading Division, strongly positioned as one of the market’s leading PRN Trading operations which purchases and sells Packaging Recovery Notes (PRNs) to support Producers to ethically fulfil obligations to meet Environment Agency requirements.

The company also operates a long-standing battery trading division. As an approved exporter of lead acid batteries, our service collects batteries for recycling across the UK, offering safe solutions to scrap lead battery disposal.

Recycling

The company’s Recycle with Clarity divisions assists waste producers with the safe, cost-effective movement of waste, across all materials.

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

The results for the year are set out on page 13.

Ordinary dividends were paid amounting to £3,524,000. The directors do not recommend payment of a final dividend.

In accordance with the company's articles, a resolution proposing that Friend-James Limited be reappointed as auditor of the company will be put at a General Meeting.

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.

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; and

• 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.

We have audited the financial statements of Clarity Environmental Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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's 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 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.

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

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:

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

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

• we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the sector in which the company operates;

• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, relevant UK taxation legislation, the Data Protection Act, the Bribery Act 2010, relevant employment laws and environmental and health and safety legislation;

• we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

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

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

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

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

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

• tested journal entries to identify unusual transactions;

• assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 2 were indicative of potential bias;

• investigated the rationale behind significant or unusual transactions; and

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

• agreeing financial statement disclosures to underlying supporting documentation;

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

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

• reviewing correspondence with HMRC and the company’s legal advisors.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities 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.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

Clarity Environmental Limited is a private company limited by shares incorporated in England and Wales. The registered office is CEL House, 9 & 10 Hunns Mere Way, Woodingdean Business Park, Brighton, East Sussex, BN2 6AH.

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.

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.

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Goodwill is considered to have a finite useful life and is amortised on a straight line basis over its expected life of 5 years.

Intangible fixed assets other than goodwill are initially measured at cost. Subsequent measurement is also at cost, net of amortisation and any impairment losses. Internally developed software is recognised as an intangible asset when the criteria in Section 18 of FRS 102 are met.

Amortisation 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:

As referred to in the Strategic Report, the company has invested significantly in the development and enhancement of its packaging compliance software. Following a reassessment of the nature of the software and website development costs, management has determined that they now meet the criteria to be recognised as an intangible asset. Consequently, the carrying amount of these assets have been reclassified from tangible fixed assets to intangible assets in the balance sheet. This reclassification reflects a more accurate presentation of the assets' economic substance and aligns with the company's accounting policy for internally generated intangible assets.

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 and intangible 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.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and 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.

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 and other short-term credit facilities. Bank overdrafts and other short-term credit facilities 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.

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, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.

If material, 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.

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.

Group accounts

The company has taken advantage of the exemption under sections 402 and 405 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

The company's subsidiary undertakings are dormant and hence their inclusion is not material for the purposes of giving a true and fair view. Details of the company's subsidiary undertakings can be found in Note 13 to these financial statements.

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

Their aggregate remuneration comprised:

Payments were made in the year amounting to £3,858 in respect of redundancy and £8,642 in relation to compensation for loss of office.

The rate applicable to the company's profits in the year ended 31 December 2024 was 25.00%. On 1 April 2023 the main rate of UK corporation tax increased to 25.00% meaning that in the comparative period the rate applicable to the company's profits was 23.52%.

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

Details of the company's subsidiaries at 31 December 2024 are as follows:

'Other borrowings', above, represents invoice discounting advances and are secured by fixed and floating charges over the assets of the company.

The aggregate amount of secured creditors due after more than one year is £Nil (2023: £Nil).

Included within amounts payable within one year, above, is £795,882 (2023: £884,058) in respect of invoice discounting advances which are secured by fixed and floating charges over the assets of the company.

The long-term loans represent amounts owed to the company's directors and are unsecured.

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

Based on current depreciation rates, it is expected that the net reversal of the deferred tax liability in the following financial year will be £46,044.

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.

Contributions totalling £9,870 (2023: £8,520) were payable to the fund at the year-end and are included in creditors.

Other ordinary shares comprise 10,000 ordinary 'C' shares of £1 and 10,000 ordinary 'D' shares of £1. Ordinary 'B', Ordinary 'C' and Ordinary 'D' shares do not carry voting rights.

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:

Dividends totalling £3,434,000 (2023 - £3,042,500) were paid in the year in respect of shares held by the company's directors.

In the period under review the movement on the directors' loan accounts was as follows (negative amounts indicate credits). Where relevant, the company charges interest on debit balances in accordance with the prevailing official rate relating to beneficial loans.

The company's ultimate controlling parties are Mr David Honcoop and Mr John Adams, who each own 50% of the company's voting share capital.