REGISTERED NUMBER: 02210812 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

FOR

GREENBROOK INDUSTRIES LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Cash Flow Statement

12

Notes to the Financial Statements

13

DIRECTORS:

H Richard Green

David R Green

Peter M Ratcliffe

Jonathan J Green

Alexander D Green

Kim Farrell

SECRETARY:

Kim Farrell

REGISTERED OFFICE:

62 West Road

Harlow

Essex

CM20 2BG

REGISTERED NUMBER:

02210812 (England and Wales)

SENIOR STATUTORY AUDITOR:

Andrew Green LLB FCA

AUDITORS:

THP Limited

Chartered Accountants

and Statutory Auditors

34-40 High Street

Wanstead

London

E11 2RJ

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

REVIEW OF BUSINESS

The loss for the year was £2,185,959, resulting from severe market conditions, stock shortages, write-off of slow and discontinued lines. During the year, we also incurred a number of exceptional costs and write offs and when adjusting for these amounts, our 2024 EBITDA would have been a loss of £920,060 (2023 : Loss £559,009).

On a more positive note, our current year's performance is significantly improved and, even after allowing for the final £300,000 tranche of write-off against goodwill which comes to an end in December 2025, the company should see break-even for the year. In addition, the year saw decisive steps taken towards positioning the company for growth, most significantly:

Key progress was made with the new ERP system which now, in 2025, is substantially complete and already delivering efficiencies through stronger stock control, faster order processing and greater integration of the different areas of the business.

In parallel, we commenced a full re-brand, supported by a new website which, integrating with the ERP system, will modernise our customer platform, strengthen brand recognition and enhance digital engagement with our retail and national account partners.

The company secured the sole UK licence for the MK Circuit Protection brand, thus complementing PowerBreaker and reinforcing our position in RCD and circuit protection.

We have exited the highly competitive and ever-changing LED luminaire market, allowing us to focus on our core product markets.

Notwithstanding the above, the market remains challenging, however the steps already taken have already laid a stronger foundation for the future and our move towards a return to profitability.

Pension Schemes

Our two direct benefit pension schemes, comprising 127 preserved and pensionable members, have been closed for further accrual since 2009. The latest FRS 102 valuations show a surplus of £1,650,000 which, owing to accounting rules, are not reflected in these accounts. We are constantly reviewing the two schemes and are also looking at the possibility of exiting the company from both.

The Company's key performance indicators are as follows:

2024

2023

£

£

Turnover

13,657,558

14,386,084

Gross profit

3,706,894

4,014,345

Gross profit %

27.14%

27.90%

Adjusted EBITDA

(920,060

)

(559,009

)

Operating result

(2,040,281

)

(1,144,804

)

Loss before tax

(2,185,959

)

(1,124,585

)

At the year end the the balance sheet is showing position of £93,343 (2023: £2,279,302). Further comments in relation to the net current liability position are made on page 4.

PRINCIPAL RISKS AND UNCERTAINTIES

The Directors are of the opinion that a thorough risk management process is adopted which involves a formal review of all risks identified below. Where possible, processes are in place to mitigate such risks.

Liquidity risk

Liquidity risks are managed by utilising various financing options, in addition to proactive cashflow management, so as to maintain a healthy cash position to meet the operational business needs and ensure sufficient working capital for day-to-day activities.

Currency Risk

Currency fluctuations, outside our control, can impact the cost of products and thus profitability. Hedging options to lessen these risks are constantly under review.

Supply Chain Logistics and Freight Costs

Potential high freight costs arising from supply chain disruptions are an increasing threat that could create inventory shortages and thus impact our ability to meet customer demand and maintain cost efficiency. We mitigate these risks by maintaining a broad base of freight suppliers, to ensure we receive the most competitive pricing while still having continuity of supply. We also explore and evaluate new technology in this area to create further efficiencies.

Credit Risk

As with most businesses, the Company is exposed to the credit risk of customers and their ability to pay debts on a timely basis. Our policy is to exercise prudence in credit checking new and existing customers, keeping debtor days as low as possible and limiting the dominance of any single customer in our overall turnover.

Price Risk and Competition

The business is encountering significant challenges due to high competition and ongoing price pressures in the electrical sector. We are addressing these risks through targeted commercial activities, such as optimising our product mix, strengthening supplier relationships, and implementing competitive pricing strategies to sustain profitability and market position.

IT Systems

The business faces risks associated with our IT systems. All steps are taken to ensure protection of our data and systems through appropriate back-up and recovery solutions. We plan on implementing a new ERP system which will dramatically improve our efficiency across the whole business and significantly reduce our IT costs.

ON BEHALF OF THE BOARD:

H Richard Green - Director

26 September 2025

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the design and distribution of electrical products and accessories to the wholesale and re-sale markets.

GOING CONCERN

The accounts have been prepared on a going concern basis despite the losses suffered in the year.

At the balance sheet date the company had net current liabilities of £103,948 (2023: Net Current Assets £1,615,332) and net assets of £93,343 (2023: £2,279,302), which are net of preference shares of £3,605,513 (2023: £3,605,513).

The Directors have produced cashflow forecasts that show that with the existing trade finance and invoice discount facilities in place, the Company will have sufficient funds available to meet its debts as they fall due, for the foreseeable future. The debt factoring company are also holding a rebate reserve of £1,028,373 that will be released to the company as customer rebates are paid. This will also support cashflow in the short term.

Two of the Directors have provided personal guarantees of £767,501 (2023: £1,580,867) of third party loans.

The Directors are however hopeful that the year ended 31 December 2025 will see a breakeven and that the decisions that they had made during this difficult times since the Coronavirus pandemic, coupled with the underlying strength of the business and its brands, will ensure that the Company can continue as a going concern.

DIVIDENDS

An interim dividend of £nil (2023: £102,394) was paid for the year ended 31 December 2024. The Directors recommend that no final dividend be paid.

FUTURE DEVELOPMENTS

The company continues to invest in maintaining its leading position in portable RCD technology as well as continuing the development of new products. This is achieved by utilising both internal and external resources.

DIRECTORS

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

H Richard Green

David R Green

Peter M Ratcliffe

Jonathan J Green

Alexander D Green

Other changes in directors holding office are as follows:

Kim Farrell was appointed as a director after 31 December 2024 but prior to the date of this report.

DISCLOSURE IN THE STRATEGIC REPORT

The Company has chosen to make disclosures in relation to financial risk management and other matters considered to be of strategic importance which would otherwise be in the Directors report within the Strategic Report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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;

-	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.

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.

AUDITORS

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

ON BEHALF OF THE BOARD:

H Richard Green - Director

26 September 2025

Opinion

We have audited the financial statements of Greenbrook Industries Limited (the 'company') for the year ended 31 December 2024 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and 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 December 2024 and of its 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 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 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 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 pages four and five, 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.

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, taxation legislation, GDPR and data protection, anti-money laundering and anti-bribery, contract and employment law.

- 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; and

- 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 were indicative of

potential bias; and

- investigated the rationale behind significant or unusual transactions.

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;

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

- reviewing correspondence with HMRC and any other relevant regulators as required.

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 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 Green LLB FCA (Senior Statutory Auditor)

for and on behalf of THP Limited

Chartered Accountants

and Statutory Auditors

34-40 High Street

Wanstead

London

E11 2RJ

26 September 2025

TURNOVER

13,657,558

14,386,084

Cost of sales

9,950,664

10,371,739

GROSS PROFIT

3,706,894

4,014,345

Distribution costs

733,244

606,587

Administrative expenses

5,013,931

4,552,562

5,747,175

5,159,149

OPERATING LOSS

(2,040,281

)

(1,144,804

)

Amounts written off investments

5

-

3,371

(2,040,281

)

(1,148,175

)

Interest payable and similar expenses

6

145,678

(23,590

)

LOSS BEFORE TAXATION

7

(2,185,959

)

(1,124,585

)

Tax on loss

9

-

50,923

LOSS FOR THE FINANCIAL YEAR

(2,185,959

)

(1,175,508

)

FIXED ASSETS

Intangible assets

11

323,121

640,724

Tangible assets

12

3,576,625

3,768,419

Investments

13

10,315

10,315

3,910,061

4,419,458

CURRENT ASSETS

Stocks

14

2,691,489

2,946,447

Debtors

15

3,876,921

5,497,230

Cash at bank

112,699

1,872

6,681,109

8,445,549

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

16

6,785,057

6,830,217

NET CURRENT (LIABILITIES)/ASSETS

(103,948

)

1,615,332

TOTAL ASSETS LESS CURRENT LIABILITIES

3,806,113

6,034,790

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

17

3,712,770

3,755,488

NET ASSETS

93,343

2,279,302

CAPITAL AND RESERVES

Called up share capital

21

78,764

78,764

Revaluation reserve

22

1,690,496

1,710,372

Capital redemption reserve

22

4,146

4,146

Other reserves

22

59,064

59,064

Retained earnings

22

(1,739,127

)

426,956

SHAREHOLDERS' FUNDS

93,343

2,279,302

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:

H Richard Green - Director

Called up

share

Retained

Revaluation

capital

earnings

reserve

£

£

£

Balance at 1 January 2023

78,764

1,645,230

1,770,000

Changes in equity

Deficit for the year

-

(1,175,508

)

-

Other comprehensive income

-

59,628

(59,628

)

Total comprehensive income

-

(1,115,880

)

(59,628

)

Dividends

-

(102,394

)

-

Balance at 31 December 2023

78,764

426,956

1,710,372

Changes in equity

Deficit for the year

-

(2,185,959

)

-

Other comprehensive income

-

19,876

(19,876

)

Total comprehensive income

-

(2,166,083

)

(19,876

)

Balance at 31 December 2024

78,764

(1,739,127

)

1,690,496

Capital

redemption

Other

Total

reserve

reserves

equity

£

£

£

Balance at 1 January 2023

4,146

59,064

3,557,204

Changes in equity

Deficit for the year

-

-

(1,175,508

)

Other comprehensive income

-

-

-

Total comprehensive income

-

-

(1,175,508

)

Dividends

-

-

(102,394

)

Balance at 31 December 2023

4,146

59,064

2,279,302

Changes in equity

Deficit for the year

-

-

(2,185,959

)

Other comprehensive income

-

-

-

Total comprehensive income

-

-

(2,185,959

)

Balance at 31 December 2024

4,146

59,064

93,343

Cash flows from operating activities

Cash generated from operations

27

(551,579

)

222,630

Interest paid

(139,615

)

(144,140

)

Interest element of hire purchase payments paid

(6,063

)

(3,532

)

Tax paid

(198,513

)

(255,000

)

Net cash from operating activities

(895,770

)

(180,042

)

Cash flows from investing activities

Purchase of tangible fixed assets

(64,092

)

(285,717

)

Sale of tangible fixed assets

78,366

36,579

Sale of fixed asset investments

-

423,710

Net cash from investing activities

14,274

174,572

Cash flows from financing activities

Capital repayments in year

(74,746

)

163,583

Amount introduced by directors

1,357,299

8,414

Amount withdrawn by directors

(164,011

)

-

Equity dividends paid

-

(102,394

)

Net cash from financing activities

1,118,542

69,603

Increase in cash and cash equivalents

237,046

64,133

Cash and cash equivalents at beginning of year

28

(124,347

)

(188,480

)

Cash and cash equivalents at end of year

28

112,699

(124,347

)

1.	STATUTORY INFORMATION

Greenbrook Industries 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.	STATEMENT OF COMPLIANCE

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.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements and going concern

The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

The accounts have been prepared on a going concern basis despite the losses suffered in the year.

At the balance sheet date the company had net current liabilities of £103,948 (2023: Net Current Assets £1,615,332) and net assets of £93,343 (2023: £2,279,302), which are net of preference shares of £3,605,513 (2023: £3,605,513).

The Directors have produced cashflow forecasts that show that with the existing trade finance and invoice discount facilities in place, the Company will have sufficient funds available to meet its debts as they fall due, for the foreseeable future. The debt factoring company are also holding a rebate reserve of £1,028,373 that will be released to the company as customer rebates are paid. This will also support cashflow in the short term.

Two of the Directors have provided personal guarantees of £767,501 (2023: £1,580,867) of third party loans.

The Directors are however hopeful that the year ended 31 December 2025 will see a breakeven and that the decisions that they had made during this difficult times since the Coronavirus pandemic, coupled with the underlying strength of the business and its brands, will ensure that the Company can continue as a going concern.

Preparation of consolidated financial statements

The Company is exempt from the requirement to prepare consolidated financial statements as all its subsidiaries are required to be excluded from consolidation by section 402 of the Companies Act 2006.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Significant judgements and estimates

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

a) Critical judgements in applying the entity's accounting policies

There are no specific judgements, apart from those involving estimates as detailed below, that management has made in the process of applying the entity’s accounting policies that have a significant effect on the amounts recognised in the financial statements.

b) Critical accounting estimates and assumptions

The company makes estimates and assumptions concerning the future. The resulting accounting estimates can differ from the related actual results. 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.

(i) Useful economic live of intangible assets

Goodwill and intangible assets are amortised over their useful economic lives and are assessed annually for indications of impairment.

(ii) Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates based on technological advancements, future investments, economic utilisation and the physical condition of the assets.

(iii) Stock provisioning

Due to the nature of the business, it is necessary for the management to consider the recoverability of the cost of stock and the associated provisioning required. When calculating stock provisions, management considers the nature, condition and future saleability of the stock.

(iv) Impairment of debtors

The company makes an estimate of the recoverable value of trade and other debtors. When assessing their impairment, the management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience.

Changes in accounting policies

The company has changed the presentation of comprehensive income to the single-statement approach. In prior years a two-statement approach was used.

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied, net of returns, discounts and value added taxes.

Sales of goods are recognised on sale to the customer, which is considered to be the point of delivery and when the significant risks and rewards of the goods have been passed to the customer.

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirers interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the profit and loss account over its useful economic life of 10 years.

Goodwill will be fully amortised by 31/12/25.

Other intangible assets

The company applies the rules set out in FRS102 Section 18 when considering the capitalization of Software and Development costs. Therefore, the company only recognises an intangible asset as an asset if, and only if:

(a) it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and

(b) the cost or value of the asset can be measured reliably.

Any expenditure carried forward is amortised in line with the expected future life of the asset less any accumulated impairment losses, commencing from the month in which the relevant asset begins generating revenue.

The estimated useful lives range as follows:

Purchased computer software

3-5 years

Development costs

3 years

Tangible fixed assets

Tangible Fixed Assets are stated at cost less depreciation, except in the case of freehold land and buildings which are included at fair value.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold Property

- 2% on cost of buildings

Plant and Equipment

- 10 to 33% on cost

Motor Vehicles

- 25% on cost

Freehold land is not depreciated.

Depreciation commences in the month that the asset is brought into use.

Freehold properties are shown at fair values determined by the Directors, with assistance from external valuers, derived from comparable valuations and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. Any aggregate surplus or deficit that arises from a change in fair value is recognised in the Statement of Comprehensive Income, net of deferred tax.

Investments in subsidiaries

Investments in subsidiaries are measured at cost less accumulated impairment.

Other Investments

Investments in unlisted Company shares, whose market value can be reliably determined, are adjusted to fair value at each balance sheet date. Gains and losses on revaluation are recognised in the profit or loss for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

Investments in listed company shares are adjusted to fair value at the balance sheet date. Gains and losses on revaluation are recognised in profit or loss for the period.

Gains and losses arising from disposals are recognised in the profit or loss for the period in which the disposal takes place.

Stocks

Stock is stated at the lower of cost and selling price less costs to complete and sell, after making due allowance for obsolete and slow moving items. Stocks are recognized as an expense in the period in which the related revenue is recognized.

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.

Cost is determined on an average cost basis. Cost includes the purchase price, including taxes and duties, transport and all other costs directly attributable to bringing the stock to its present location and condition.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, 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.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

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 provides a range of benefits to employees, including paid holiday arrangements and a group personal pension plan.

(i) Short Term Benefits

Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.

(ii) Group Personal Pension Plan

The company operates a group personal pension plan for its employees. This 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 when they are due. Amounts not paid are shown as a creditor on the balance sheet. The assets of the scheme are held separately from the group in independently administered funds.

(iii) Defined Benefit Scheme

The company also operates a defined benefit scheme, as further explained in Note 23.