REGISTERED NUMBER: 00808986 (England and Wales)

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements for the Year Ended 31 December 2024

for

Advance Tapes Group Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Consolidated Income Statement

8

Consolidated Other Comprehensive Income

9

Consolidated Balance Sheet

10

Company Balance Sheet

11

Consolidated Statement of Changes in Equity

12

Company Statement of Changes in Equity

13

Consolidated Cash Flow Statement

14

Notes to the Consolidated Cash Flow Statement

15

Notes to the Consolidated Financial Statements

17

DIRECTORS:

Mr M D Ayres

Mr K C Ellington

REGISTERED OFFICE:

2 Westmoreland Avenue

Thurmaston

Leicester

LE4 8PH

REGISTERED NUMBER:

00808986 (England and Wales)

INDEPENDENT AUDITORS:

BK Plus Audit Limited

Azzurri House

Walsall Road

Aldridge

Walsall

West Midlands

WS9 0RB

Introduction

The principal activities of the group during the year were the manufacture, conversion and sale of speciality self-adhesive tapes.

Business review

It is extremely disappointing to have to report our first loss since for 10 years. The principal reasons for this are the weak economic conditions in key market sectors across the group and several unexpected material supply problems. In this review I will set out the main challenges we have faced and the actions taken to ensure a return to profitability from 2025.

The rise in incoming order levels that I highlighted in my report last year did not continue into the second half of the year as a period of restocking by our distributors was met with the reality of low underlying demand from users. All markets were affected but France and Germany were particularly poor and this has continued into 2025. Throughout this time the group has not lost any major accounts but has seen their demand fall.

The progress on service improvement in early 2024 was adversely affected in the latter part of the year by the insolvency of two key suppliers. Fortunately work was well advanced on the approval of alternative sources but the resultant disruption to our sourcing did affect despatches from the autumn until the end of the second quarter of 2025. In addition to these supply challenges the Group also had to deal with a major quality problem caused by a faulty raw material. This fault required the recall of a substantial quantity of finished product which represented a further hit to turnover. Financial compensation was agreed with the supplier but this could not offset the full impact to the Group and its customers.

The management team have responded to the persistent low demand by recalibrating the overhead base to match the lower demand whilst also favouring investment in commercial resources to widen the customer base and lessen reliance on the Group's traditional distributors. A slow recovery in sales is now forecast with improving profitability as work to improve productivity keeps overheads in check.

The major bright spot in this years accounts is the reduction in the pension fund deficit to the lowest level we have reported since it had to be included on our balance sheet. The deficit stood at £405,000 at the year end, an improvement of £1.262m over the preceding year. This reflects a huge amount of work done to restructure the scheme's investments to better align them with its liabilities and thereby reduce the volatility in the deficit. The improvement made in the pension funding position means that, although the Group recorded a trading loss for the year, it still managed to add to its already strong balance sheet.

Principal risks and uncertainties

Exchange rates

The exchange rate between Sterling and the Euro remains important for the profitability of the business. The Euro is the group's main trading currency and wherever possible this is naturally hedged although it is still necessary to sell Euros to meet Sterling commitments.

The Group uses forward exchange deals to minimise currency risk and as previously reported, the Group's approach to currency management is to achieve stability rather than to speculate.

Pension fund deficit

The deficit in the main defined benefit pension fund which was closed to future accrual in 2005 remains the group's primary non-trading risk.

The deficit as disclosed under the requirements of FRS102 made substantial progress towards self-sufficiency in 2024. This reflected the work done by the Directors and the Trustees to better match the scheme's assets to its liabilities. This has involved a change in both advisers and investment managers.

Deficit reduction payments resumed in 2024 and these together with the scheme expenses means that the cost to the Group based on the current recovery plan is £132k per annum.

Financial key performance indicators

The Board uses a dashboard of weekly and monthly financial measures to track the performance of the group. Key among these are turnover, operating profit, net current assets and cash flow. Progress is monitored weekly by the Board and action taken to address any indicators that are off target.

Other key performance indicators

In addition to financial targets the dashboard referred to above also includes non-financial measures. A particular focus is on indicators of operating efficiency, environmental and health and safety compliance and customer service.

Land and buildings

The directors are of the opinion that the market value of the freehold land and buildings is in excess of the net

book amount but, in the absence of a recent valuation, the amount of the excess cannot be quantified.

Business prospects

The outlook for the UK and other major European economies remains weak. Whilst this does mean lower overall demand it does present opportunities for locally based suppliers given their ability to enable lower inventory for their customers than more remote producers. As businesses focus on protecting cash this proximity represents a compelling argument along with Advance's strong reputation for product quality for both existing and new customers to buy our products. We have recently focussed our marketing efforts on promoting the fact that we are a British business and highlighting our strong environmental credentials and we have seen evidence in 2025 that this is resonating with customers.

The Board expects the growth in sales to be slow and non-linear as new business replaces the reductions in more traditional markets but is confident that, with the changes made to the overhead base, improving profitability is achievable during this period of transition.

ON BEHALF OF THE BOARD:

Mr M D Ayres - Director

26 September 2025

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

DIVIDENDS

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

DIRECTORS

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

Mr M D Ayres

Mr K C Ellington

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, BK Plus Audit Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr M D Ayres - Director

26 September 2025

Opinion

We have audited the financial statements of Advance Tapes Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated 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 group's and of the parent company affairs as at 31 December 2024 and of the group's loss 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 group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

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

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

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

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.

From the preliminary of the audit, we ensure our understanding of the entity is up to date. This includes, but is not limited to, current knowledge of their activities, the business and control environments, and their compliance with the applicable legal and regulatory frameworks. This information supports our risk identification and the subsequent design of audit procedures to mitigate those risks; ensuring that the audit evidence obtained is sufficient and appropriate to support our opinion.

In response to the risks identified, specific to this entity, we designed procedures which included, but were not limited to:

· Enquiry of management and those charged with governance around actual and potential litigation and claims;

· Reviewing minutes of meetings of those charged with governance, if available;

· Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

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

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.

Andrew Williams FCCA (Senior Statutory Auditor)

for and on behalf of BK Plus Audit Limited

Azzurri House

Walsall Road

Aldridge

Walsall

West Midlands

WS9 0RB

26 September 2025

TURNOVER

15,840,611

18,248,136

Cost of sales

10,009,251

11,283,376

GROSS PROFIT

5,831,360

6,964,760

Distribution costs

721,773

690,897

Administrative expenses

5,542,843

6,049,313

6,264,616

6,740,210

(433,256

)

224,550

Other operating income

3

62,971

125,749

OPERATING (LOSS)/PROFIT

5

(370,285

)

350,299

Interest payable and similar expenses

6

275,324

188,314

(LOSS)/PROFIT BEFORE TAXATION

(645,609

)

161,985

Tax on (loss)/profit

7

148,973

(18,713

)

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(794,582

)

180,698

(Loss)/profit attributable to:

Owners of the parent

(794,582

)

180,698

(LOSS)/PROFIT FOR THE YEAR

(794,582

)

180,698

OTHER COMPREHENSIVE INCOME

Currency translation differences

(27,570

)

(39,318

)

(Losses)/gains of defined pension scheme

1,329,000

(769,000

)

Deferred tax movement on pension deficit

(315,500

)

192,250

Income tax relating to components of other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

985,930

(616,068

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

191,348

(435,370

)

Total comprehensive income attributable to:

Owners of the parent

191,348

(435,370

)

FIXED ASSETS

Tangible assets

9

5,714,329

5,670,272

Investments

10

151

151

5,714,480

5,670,423

CURRENT ASSETS

Stocks

11

3,847,618

3,305,176

Debtors

12

1,972,315

2,218,594

Cash at bank

216,996

375,159

6,036,929

5,898,929

CREDITORS

Amounts falling due within one year

13

4,097,893

3,339,978

NET CURRENT ASSETS

1,939,036

2,558,951

TOTAL ASSETS LESS CURRENT LIABILITIES

7,653,516

8,229,374

CREDITORS

Amounts falling due after more than one year

14

(474,971

)

(204,633

)

PROVISIONS FOR LIABILITIES

18

(684,699

)

(460,243

)

PENSION LIABILITY

21

(405,000

)

(1,667,000

)

NET ASSETS

6,088,846

5,897,498

CAPITAL AND RESERVES

Called up share capital

19

1,097,995

1,097,995

Share premium

20

87,256

87,256

Retained earnings

20

4,903,595

4,712,247

SHAREHOLDERS' FUNDS

6,088,846

5,897,498

The financial statements were approved by the Board of Directors and authorised for issue on 26 September 2025 and were signed on its behalf by:

Mr M D Ayres - Director

FIXED ASSETS

Tangible assets

9

-

-

Investments

10

5,681,808

5,681,808

5,681,808

5,681,808

CURRENT ASSETS

Debtors

12

163,608

559,096

Cash at bank

9,732

9,732

173,340

568,828

CREDITORS

Amounts falling due within one year

13

357,670

373,945

NET CURRENT (LIABILITIES)/ASSETS

(184,330

)

194,883

TOTAL ASSETS LESS CURRENT LIABILITIES

5,497,478

5,876,691

PROVISIONS FOR LIABILITIES

18

-

(303,381

)

PENSION LIABILITY

21

(405,000

)

(1,667,000

)

NET ASSETS

5,092,478

3,906,310

CAPITAL AND RESERVES

Called up share capital

19

1,097,995

1,097,995

Share premium

20

87,256

87,256

Retained earnings

20

3,907,227

2,721,059

SHAREHOLDERS' FUNDS

5,092,478

3,906,310

Company's profit for the financial year

172,668

-

The financial statements were approved by the Board of Directors and authorised for issue on 26 September 2025 and were signed on its behalf by:

........................................................................

Mr M D Ayres - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 January 2023

1,097,995

5,147,617

87,256

6,332,868

Changes in equity

Total comprehensive income

-

(435,370

)

-

(435,370

)

Balance at 31 December 2023

1,097,995

4,712,247

87,256

5,897,498

Changes in equity

Total comprehensive income

-

191,348

-

191,348

Balance at 31 December 2024

1,097,995

4,903,595

87,256

6,088,846

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 January 2023

1,097,995

3,297,809

87,256

4,483,060

Changes in equity

Total comprehensive income

-

(576,750

)

-

(576,750

)

Balance at 31 December 2023

1,097,995

2,721,059

87,256

3,906,310

Changes in equity

Total comprehensive income

-

1,186,168

-

1,186,168

Balance at 31 December 2024

1,097,995

3,907,227

87,256

5,092,478

Cash flows from operating activities

Cash generated from operations

1

(552,017

)

884,737

Interest paid

(122,689

)

(72,282

)

Interest element of hire purchase payments paid

(635

)

(1,032

)

Tax paid

(35,045

)

(36,640

)

Taxation refund

110,626

-

Net cash from operating activities

(599,760

)

774,783

Cash flows from investing activities

Purchase of tangible fixed assets

(394,391

)

(695,162

)

Sale of tangible fixed assets

15,012

-

Net cash from investing activities

(379,379

)

(695,162

)

Cash flows from financing activities

New loans in year

800,000

-

Loan repayments in year

(402,848

)

(492,124

)

Capital repayments in year

(14,290

)

(2,714

)

Net cash from financing activities

382,862

(494,838

)

Decrease in cash and cash equivalents

(596,277

)

(415,217

)

Cash and cash equivalents at beginning of year

2

148,546

572,235

Effect of foreign exchange rate changes

-

(8,472

)

Cash and cash equivalents at end of year

2

(447,731

)

148,546

1.	RECONCILIATION OF (LOSS)/PROFIT FOR THE FINANCIAL YEAR TO CASH GENERATED FROM OPERATIONS

2024

2023

£

£

(Loss)/profit for the financial year

(794,582

)

180,698

Depreciation charges

330,675

419,301

(Profit)/loss on disposal of fixed assets

(282

)

4,896

Increase/(decrease) in provisions

(303,381

)

8,221

Employer pension contributions

(85,000

)

(84,000

)

Finance costs

275,324

188,314

Taxation

148,973

(18,713

)

(428,273

)

698,717

(Increase)/decrease in stocks

(542,441

)

424,411

Decrease in trade and other debtors

300,017

934,281

Increase/(decrease) in trade and other creditors

118,680

(1,172,672

)

Cash generated from operations

(552,017

)

884,737

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 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

216,996

375,159

Bank overdrafts

(664,727

)

(226,613

)

(447,731

)

148,546

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

375,159

572,235

Bank overdrafts

(226,613

)

-

148,546

572,235

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank

375,159

(158,163

)

216,996

Bank overdrafts

(226,613

)

(438,114

)

(664,727

)

148,546

(596,277

)

(447,731

)

Debt

Finance leases

(14,290

)

14,290

-

Debts falling due within 1 year

(313,332

)

(126,814

)

(440,146

)

Debts falling due after 1 year

(204,633

)

(270,338

)

(474,971

)

(532,255

)

(382,862

)

(915,117

)

Total

(383,709

)

(979,139

)

(1,362,848

)

1.	STATUTORY INFORMATION

Advance Tapes Group Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared on a going concern basis under the historical cost convention and in accordance with Financial Reporting Standard (FRS) 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in conformity with FRS 102 requires the use of certain critical accounting estimates. It also requires the directors to exercise judgement in the process of applying the group's accounting policies. The areas involving a higher degree of judgement or complexity or areas where assumptions and estimates are significant to the financial statements are disclosed in note 2.

The following principal accounting policies have been applied consistently throughout the year.

The financial statements are prepared in Sterling (£), which is the functional currency of the group. The financial statements are for the year ended 31 December 2024 (2023: year ended 31 December 2023).

Going concern

At the balance sheet date, the business remains in a net assets position. This, combined with the financial forecasts prepared by the directors show that the group will be able to operate within the facilities available to it for a period of at least 12 months from the date of signing these accounts.

On that basis, the directors have prepared these financial statements on a going concern basis

Basis of consolidation

The financial statements consolidate the accounts of Advance Tapes Group Limited and all of its subsidiary undertakings ('subsidiaries').

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own profit and loss account in these financial statements.

Critical accounting judgements and key sources of estimation uncertainty

The directors make estimates and assumptions concerning the future, they are also required to exercise judgement in the process of applying the group's accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations or future events that are believed to be reasonable under the circumstances.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

In preparing these financial statements, the directors have made the following judgements:

Impairment of fixed assets

The directors assess the impairment of fixed assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors considered important that could trigger an impairment review include the following:

- Significant underperformance relative to historical or projected future operating results;

- Significant changes in the use of the acquired assets or the business strategy, and

- Significant negative industry or economic trends.

Carrying value of stocks

The directors review the standard costs of raw material on a quarterly basis. The stock is then revalued to ensure it is recorded in the financial statements at the lower of cost and net realisable value. Any provision for impairment is recorded against the carrying value of stocks. The directors use their knowledge of market conditions, historical experiences and estimates of future events to assess future demand for the group's products and achievable selling prices.

Recoverability of trade debtors

Trade and other receivables are recognised to the extent that they are judged recoverable. The directors review is performed to estimate the level of reserves required for irrecoverable debt. Provisions are made specifically against invoices where recoverability is uncertain.

The directors make allowances for doubtful debts based on an assessment of the recoverability of debtors. Allowances are applied to debtors where events or changes in circumstances indicate that the carrying amounts may not be recoverable. The directors specifically analyse historical bad debts, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of the provision for doubtful debts. Where the expectation is different from the original estimate, such difference will impact the carrying value of debtors and the charge in the statement of comprehensive income.

Depreciation and residual values

The directors have reviewed the asset lives and associated residual values of all fixed asset classes and have concluded that asset lives and residual values are appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projects disposal values.

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the group and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, Value Added Tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Sale of goods

Turnover from the sale of goods is recognised when all of the following conditions are satisfied

-

the group has transferred the significant risks and rewards of ownership to the buyer;

-

the group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

-

the amount of turnover can be measured reliably;

-

it is probable that the group will receive the consideration due under the transaction; and

-

the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Tangible fixed assets

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.

The group adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the group. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to the statement of comprehensive income during the period in which they are incurred.

Depreciation is provided on the following bases:

Freehold land and buildings

25 years straight line

Plant and machinery

10 - 25 years straight line

Motor vehicles

10 years straight line

Furniture, fittings and equipment

4 - 10 years straight line

Freehold land and assets under construction are not depreciated.

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within other external charges in the consolidated statement of comprehensive income.

At each balance sheet date, the group reviews the carrying amounts of its tangible fixed assets to determine whether there is any indication that any items have suffered an impairment loss. If any such indication exists, the recoverable amount of an asset is estimated in order to determine the extent of the impairment loss, if any.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and an impairment loss is recognised as an expense immediately.