REGISTERED NUMBER: 02374363 (England and Wales)

Strategic Report,

Report of the Directors and

Financial Statements

for the Year Ended 31 December 2024

for

DURHAM BOX COMPANY LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

7

Income Statement

10

Other Comprehensive Income

11

Balance Sheet

12

Statement of Changes in Equity

13

Notes to the Financial Statements

14

DIRECTORS:

D C Morris

D J Richardson

D J McConnell

REGISTERED OFFICE:

2 Franks Road

Bardon Hill

Coalville

LE67 1TT

REGISTERED NUMBER:

02374363 (England and Wales)

AUDITORS:

Mitchells Grievson Limited

Kensington House

3 Kensington

Bishop Auckland

Co. Durham

DL14 6HX

BANKERS:

National Westminster Bank plc

28 Market Place

Barnard Castle

Co. Durham

DL12 8NB

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

The principal activity of the company in the period under review was the manufacture of corrugated cardboard packaging. The focus of the business is to continue to strengthen its position as an innovative supplier of corrugated packaging products, serving markets across the UK in a variety of industry sectors.

REVIEW OF BUSINESS

The business has invested in cutting edge printing and manufacturing capabilities that help distinguish it, enabling it to not only react to the changing requirements of the client but to proactively drive change in both the specific products that are offered and the way they are offered to market.

Increased utilisation of these new assets provides a clear opportunity to both increase revenue & retain margins whilst providing existing, new and potential clients with good value, high quality products and services.

Route to market is an important area for development to respond to changing buying habits and desires. Providing simple yet effective means for clients to both interact & transact is growing in importance and will be a key area of development.

That said, personal customer service and the availability to our clients of knowledgeable and experienced sales professionals remains a key element of our service offering and an intrinsic part of who we are.

The company has a number of responsibilities, beyond those of its shareholders and considers the health, safety and wellbeing of its workforce as being paramount. As such there has been considerable investment and development into the protection of its workforce and these initiatives will continue unabated.

Additionally, the business clearly recognises and embraces its responsibilities to minimise the impact on the environment and as part of the wider Logson Group is embarking on various initiatives to strategize how best to focus efforts to minimise environmental impact. We will assess our impact on the environment, such as our carbon emissions, waste disposal practices, and resource usage. We will then set goals and initiatives to reduce our environmental impact, such as investing in renewable energy, reducing waste, and using sustainable materials.

FINANCIAL PERFORMANCE

Financial results for the year ended 31st December 2024 show a profit before tax of £2,717,605 (period to 31st December 2023 - £3,257,300), equating to a 13.12% margin from the sales revenue of £20.6 million.

Sales revenue increased by 12%, with the volume of packaging sold increasing by 18.3%

In what was generally seen as a challenging market, these results were very well received. However, margin erosion did occur throughout the year, with the price per ksm, which is a key measure falling quite significantly. This was not unexpected and had been budgeted for, with end of year profit exceeding budget by 5.2%.

Net assets fell during the year to £10,482,956 (period to 31st December 2023 - £11,229,519). Whilst some of this is due to variance in working capital, the principal driver is a reduction in cash resulting from dividends paid.

Return on Capital Employed for the year was 25.9% (period to 31st December 2023 - 29%)

BUSINESS ENVIRONMENT & OUTLOOK

Trading conditions became increasingly more challenging as the year progressed, with very strong performance during Q1 & Q2 being countered by increasingly subdued performance during the second half of the year. Primarily this is a reflection of the evolving business environment which has been in decline for much of the period.

The increasingly challenging conditions point towards what may be a less buoyant 2025. The directors have budgeted for modest growth of around 4%, but a further erosion of margin resulting from the anticipated continuation of competitive pressures.

PRINCIPAL RISKS AND UNCERTAINTIES

There remains significant unease about the state of the economy with low business confidence, particularly in the manufacturing sector. The demand for corrugated products is intrinsically linked with wider economic conditions and alongside reduced demand comes increased competitive pressures, so the continuation of the economic downturn is presently seen as the principal risk.

After a prolonged period of volatility in the energy market the industry remains vulnerable to further factors that could cause energy prices to spike, so global events that impact the price of energy are a continued threat.

Inflationary pressures that have been pervasive in the UK economy for the previous 2 years have seemingly eased, but with the potential for global events to impact energy costs and the flowing of trade, the risk of inflation remains. The company is exposed to risks relating to changes in paper prices, and additional costs would need to be passed on to customers, in order to maintain margins.

Looking forward, there are further cost rises pending, largely arising from the Autumn budget, which will lead to material cost increases to all businesses

The Directors consider that the company is well placed to manage these risks successfully, despite the current uncertainty within the economy.

FINANCIAL RISK MANAGEMENT

The company's operations expose it to a variety of financial risks that include changes in price, credit exposure, interest rates and liquidity. These risks are outlined below:

Changes in price

The main expenditure of the company is on corrugated sheet, the price of which is directly linked to the price of paper which is traded as a global commodity. Significant fluctuations in the price of paper therefore have a profound impact on the input cost of the company's finished goods. There are a number of drivers that impact the price of paper and as such there can be significant movements in the price the company pays for corrugated sheet. One such driver is however energy, and any shock to the energy market resulting in surging prices would have a corresponding impact on the cost of paper.

Historically the price of paper has been dictated by demand, with prices rising and falling in line with demand. Currently, demand is low, but other factors within the papermaking sector are increasing the likelihood of price rises in the months ahead.

Combined with subdued demand, these price rises could present real difficulties for some businesses within the sector. Durham Box has a stable supply chain and buys at a competitive rate, so should remain well placed to cope with rising prices and will endeavour to cover any cost increases through the selling price of its products.

Rising costs (non-paper)

After paper and wages, energy is the most significant cost to the business having risen significantly during the last year. Combined with a desire to lessen the environmental impact of its operations, these high costs are leading many businesses to look at ways of lessening their energy consumption. As such, an existing solar PV scheme is being considered for significant expansion to enable the business to generate a significant portion of its energy requirement.

Competition

Competitive pressures are always prevalent in the packaging industry. The current market situation, with relatively subdued levels of demand only exacerbates this. This brings the threat that custom can be lost, or margin can be eroded due to having to defend existing business.

Cyber Crime

Increasingly, cyber related threats are becoming prevalent and this is now considered to be a major risk. A thorough review of current levels of security has been undertaken and moves have been made to tighten things up and enhance security from the risk of malicious activity. Rather than being a single project, the maintenance of robust cyber security will be an ongoing task.

Credit exposure

Credit insurance is in place, providing cover against the vast majority of credit given. That said, the company remains responsible towards credit control. Appropriate credit checks are conducted on prospective customers and existing customers are monitored and evaluated according to their published creditworthiness and observed payment history. Further to this, the company has a wide portfolio of customers, the largest of which provides less than 5% of the overall turnover. As such, the directors consider the risk to the company from exposure to credit to be suitably mitigated.

Liquidity

The company aims to mitigate liquidity risk by managing cash generated by its operations. Capital expenditure is the responsibility of the Directors and flexibility is maintained by retaining surplus cash in readily accessible bank accounts.

The company has an approved line of credit by way of an approved overdraft facility, but the cash is maintained at a level to ensure this facility is not required. The Directors continuously monitor and evaluate the ongoing performance of the business. Data is analysed monthly through the swift generation of management accounts.

GOING CONCERN

The financial statements have been prepared using the going concern basis of accounting. The Directors have considered all material uncertainties, in particular the current economic concerns, when making their assessment on the appropriateness of using the going concern basis. The Directors have considered a period of at least 12 months from the date the financial statements are expected to be approved.

The Directors monitor and evaluate the ongoing performance of the company. Monthly reports are produced on a timely basis and current financial performance of the business during the current year looks promising and shows an increase in both turnover and profitability compared to the previous year.

The company is managing the business risks faced, despite the current uncertain economic outlook and taking into consideration both the recent financial performance and current financial liquidity of the company, the Directors continue to adopt the going concern basis in preparing the financial statements.

ON BEHALF OF THE BOARD:

D C Morris - Director

19 September 2025

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

DIVIDENDS

An interim dividend of £3,000,000 (2023: £Nil) was paid during the year. The Directors do not recommend the payment of a final dividend.

DIRECTORS

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

D C Morris

D J Richardson

Other changes in directors holding office are as follows:

G A O'Callaghan - resigned 7 November 2024

D J McConnell - appointed 7 November 2024

LAND AND BUILDINGS

The freehold property shown in the accounts have, in the opinion of the Directors, a market value of approximately £3,450,000.

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). 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, Mitchells Grievson Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

D C Morris - Director

19 September 2025

Opinion

We have audited the financial statements of Durham Box Company Limited (the 'company') for the year ended 31 December 2024 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity 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 profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report 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 page 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:

-Enquiries of management and those charged with governance around actual and potential litigation and claims.

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

-Enquiries of management and staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.

-Reviewing minutes of board meetings of those charged with governance.

-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 identifying and testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.

-Reviewing correspondence with HMRC, relevant regulators including the Health and Safety Executive, and the company’s legal and HR advisors.

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.

Nigel Rea (Senior Statutory Auditor)

for and on behalf of Mitchells Grievson Limited

Kensington House

3 Kensington

Bishop Auckland

Co. Durham

DL14 6HX

25 September 2025

TURNOVER

20,629,289

18,463,959

Other operating income

42,000

55,971

20,671,289

18,519,930

Raw materials and consumables

10,696,778

9,286,770

Other external expenses

235,544

204,050

10,932,322

9,490,820

9,738,967

9,029,110

Staff costs

4

4,259,058

3,670,374

Depreciation

743,895

629,197

Other operating expenses

2,095,268

1,396,474

7,098,221

5,696,045

OPERATING PROFIT

5

2,640,746

3,333,065

Interest receivable and similar income

168,050

69,958

2,808,796

3,403,023

Interest payable and similar expenses

6

91,191

145,723

PROFIT BEFORE TAXATION

2,717,605

3,257,300

Tax on profit

7

458,598

658,621

PROFIT FOR THE FINANCIAL YEAR

2,259,007

2,598,679

PROFIT FOR THE YEAR

2,259,007

2,598,679

OTHER COMPREHENSIVE INCOME

Revaluation of freehold property

-

827,845

Deferred tax on revaluation movement

(5,570

)

-

Income tax relating to components of other comprehensive income

-

(206,961

)

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(5,570

)

620,884

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

2,253,437

3,219,563

FIXED ASSETS

Tangible assets

9

9,338,772

8,365,918

CURRENT ASSETS

Stocks

10

843,832

823,140

Debtors

11

5,799,216

4,726,732

Cash at bank and in hand

2,284,589

4,152,126

8,927,637

9,701,998

CREDITORS

Amounts falling due within one year

12

3,776,553

3,726,325

NET CURRENT ASSETS

5,151,084

5,975,673

TOTAL ASSETS LESS CURRENT LIABILITIES

14,489,856

14,341,591

CREDITORS

Amounts falling due after more than one year

13

(2,125,801

)

(1,495,285

)

PROVISIONS FOR LIABILITIES

17

(1,835,199

)

(1,528,887

)

ACCRUALS AND DEFERRED INCOME

18

(45,900

)

(87,900

)

NET ASSETS

10,482,956

11,229,519

CAPITAL AND RESERVES

Called up share capital

19

2,000

2,000

Revaluation reserve

20

1,037,766

1,115,295

Capital redemption reserve

20

2,000

2,000

Retained earnings

20

9,441,190

10,110,224

SHAREHOLDERS' FUNDS

10,482,956

11,229,519

The financial statements were approved by the Board of Directors and authorised for issue on 19 September 2025 and were signed on its behalf by:

D C Morris - Director

D J McConnell - Director

Called up

Capital

share

Retained

Revaluation

redemption

Total

capital

earnings

reserve

reserve

equity

£

£

£

£

£

Balance at 1 February 2023

2,000

7,475,987

529,969

2,000

8,009,956

Changes in equity

Total comprehensive income

-

2,634,237

585,326

-

3,219,563

Balance at 31 December 2023

2,000

10,110,224

1,115,295

2,000

11,229,519

Changes in equity

Dividends

-

(3,000,000

)

-

-

(3,000,000

)

Total comprehensive income

-

2,330,966

(77,529

)

-

2,253,437

Balance at 31 December 2024

2,000

9,441,190

1,037,766

2,000

10,482,956

1.	STATUTORY INFORMATION

Durham Box Company 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 (£).

The principal activity of the company during the year under review was the design and manufacture of corrugated cardboard packaging.

The company traded for a shorter period in the prior year due to a change in accounting period. Therefore, the comparative amounts in the financial statements (including related notes) are not entirely comparable.

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

The financial statements have been prepared on a going concern basis under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 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 compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies.

The following principal accounting policies have been consistently applied unless otherwise stated:

Going concern

The company meets its day-to-day working capital requirements through its bank facilities. The current economic conditions are indicative of an economic slowdown and dampened consumer spending which may negatively impact on the level of demand for the company's products. The company's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the company should be able to operate within the level of its current facilities. The Group maintains a strong balance sheet, significant borrowing facility headroom and working capital facilities. The directors have a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due for a period of at least 12 months from the date of this report and have therefore continued to adopt the going concern basis in preparing the financial statements.

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

•

the requirements of paragraphs 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A;

•

the requirements of paragraphs 26.18(b), 26.19 to 26.21 and 26.23;

•

the requirement of paragraph 33.7.

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company 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 company has transferred the significant risks and rewards of ownership to the buyer;

- the company 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 company 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.

Sale of goods are recognised on sale to customer which is upon receipt of goods.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

-

4% on cost

Plant and machinery

-

10% on reducing balance

Fixtures and fittings

-

10% on reducing balance

Motor vehicles

-

25% on reducing balance

Computer equipment

-

20% on cost

Tangible 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 company 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 company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.

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 in the Statement of comprehensive income.

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each Balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of comprehensive income.

Financial instruments

The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.

i. Financial assets

Basic financial assets, including trade debtors, cash at bank and in hand and amounts owed by group undertakings, are initially recognised at transaction price, 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.

Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period, financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 the Statement of comprehensive income.

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 the Statement of comprehensive income.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

ii. Financial liabilities

Basic financial liabilities, including trade creditors, other creditors and amounts owed to group undertakings 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 receipts discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors 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.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

iii. Offsetting

Financial assets and liabilities are offset and the net amounts are 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.

Current and deferred taxation

The tax expense for the period comprises current and deferred tax. Tax is recognised in the Statement of comprehensive income, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the Balance sheet date in the countries where the company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance sheet date, except that:

- The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and

- Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the Balance sheet date.

Research and development

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

Foreign currency translation

Functional and presentation currency

The company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within "finance income or costs". All other foreign exchange gains and losses are presented in the Statement of comprehensive income within "other operating income".

Exceptional administrative expenses

Exceptional administrative expenses are transactions that fall within the ordinary activities of the company but are presented separately due to their size or incidence.

Operating leases: lessee

Rentals paid under operating leases are charged to the Statement of comprehensive income on a straight line basis over the period of the lease.

Employee benefits

The company provides a range of benefits to employees, including paid holiday arrangements and a defined contribution 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) Defined contribution pension plan

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which th company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the Balance sheet. The assets of the plan are held separately from the company in an independently administered fund.

Interest income

Interest income is recognised in the Statement of comprehensive income using the effective interest method.

Finance costs

Finance costs are charged to the Statement of comprehensive income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Cash at bank and in hand

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Borrowing costs

All borrowing costs are recognised in the Statement of comprehensive income in the period in which they are incurred.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from proceeds.

Critical judgements and estimation uncertainty

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

a) Critical judgements in applying the company's accounting policies.

There are no critical judgements in applying the company's accounting policies.

b) Key accounting estimates and assumptions.

There are no critical accounting estimates and assumptions.

4.	EMPLOYEES AND DIRECTORS

Period

1.2.23

Year Ended

to

31.12.24

31.12.23

£

£

Wages and salaries

3,792,479

3,247,764

Social security costs

391,041

329,313

Other pension costs

75,538

93,297

4,259,058

3,670,374

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

Period

1.2.23

Year Ended

to

31.12.24

31.12.23

Directors

1

3

Office administration and management

30

31

Factory and warehouse

74

70

105

104

Period

1.2.23

Year Ended

to

31.12.24

31.12.23

£

£

Directors' remuneration

148,270

241,592