REGISTERED NUMBER: 06461826 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

FOR

TASK CONSUMER PRODUCTS LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

7

Income Statement

11

Other Comprehensive Income

12

Statement of Financial Position

13

Statement of Changes in Equity

14

Statement of Cash Flows

15

Notes to the Statement of Cash Flows

16

Notes to the Financial Statements

18

DIRECTORS:

R Patel

Mrs J Patel

K Patel

N Patel

SECRETARY:

R Patel

REGISTERED OFFICE:

34 Waterloo Road

Wolverhampton

West Midlands

WV1 4DG

REGISTERED NUMBER:

06461826 (England and Wales)

SENIOR STATUTORY AUDITOR:

Ian Cattell FCA

AUDITORS:

Crombies Accountants Limited

Chartered Accountants and Statutory Auditor

34 Waterloo Road

Wolverhampton

West Midlands

WV1 4DG

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

REVIEW OF BUSINESS

The principal activity of the company is the manufacture and wholesale of household paper products.

RESULTS AND PERFORMANCE

The results for the year are set out on page 9 of the financial statements. Profit before tax for the year was £4,549,534 (2023: £6,629,058). The directors consider both the profit achieved on ordinary activities before taxation and the year-end financial position to be satisfactory in light of the trading environment described below.

During the year we continued to prioritise product quality, service and innovation while maintaining competitive pricing. Investments in plant and equipment made in recent periods supported improved production efficiency and capacity utilisation, while ongoing cost-control measures helped offset persistent input cost volatility.

BUSINESS ENVIRONMENT

Market conditions in 2024 were shaped by:

- Input costs: Pulp prices were volatile and reached multi-year highs in spring 2024 before normalising later in the year, impacting tissue reel costs and pricing across the value chain.

- Energy: Wholesale energy costs eased from the extreme peaks of 2022/23 but remained structurally higher than pre-COVID levels, sustaining pressure on energy-intensive manufacturing.

- Demand & pricing: UK household paper categories saw more promotional activity and lower average unit prices, with volumes improving year-on-year.

- Macro & rates: Inflation moderated versus 2023 and the Bank of England maintained Bank Rate at 5.25% through much of 2024, keeping financing costs elevated by recent standards.

- People & regulation: The National Living Wage rose from April 2024 (now applying to workers aged 21+), and producer responsibilities continued to expand with UK packaging EPR reporting requirements for 2024 and an increased Plastic Packaging Tax rate from April 2024.

PRINCIPAL RISKS AND UNCERTAINTIES

The process of risk acceptance and risk management is addressed through a framework of policies, procedures and internal controls.

Commodity & input price risk

Volatility in pulp, reels, chemicals and energy costs is managed through supplier diversification, operational efficiency, and pricing discipline.

Customer & market risk

Category pricing normalisation and retailer promotional intensity can affect margins. We mitigate through a balanced customer portfolio, service excellence and product differentiation.

Regulatory & compliance risk

Ongoing obligations include SECR, EPR data reporting for 2024, and Plastic Packaging Tax compliance, with rates uprated from April 2024. We maintain dedicated compliance processes and external advisory support.

Interest rate risk

The company is vulnerable to changes in interest rates thereby potentially increasing the interest cost. This risk is addressed by planning for repayments of the interest and principal and monitoring the mix of borrowings to ensure the balance between fixed and floating rate instruments is appropriate.

Liquidity risk

The company monitors cash flow, both as part of its day-to-day control procedures and with regard to longer-term planning to ensure that adequate liquidity remains available to the company for the short, medium and long term.

Foreign exchange risk

Managed using forward contracts for significant non-GBP exposures.

Operational & H&S risk

Continuous focus on safety, reliability, planned maintenance, and business continuity planning.

Cyber risk

Ongoing investments in systems, training and incident response plans

FINANCIAL KEY PERFORMANCE INDICATORS

The key performance indicators used by the directors in assessing the performance of the company revolve around the monthly margin and volume analysis, for each product sector. The performance of the company is reviewed at the monthly director's management meeting, where the results are examined and decisions taken on any corrective action needed to maximise growth in target sectors and enhance profitability. The company have continued to invest in new machinery which has led to further improvements in production quality and capacity.

For 2024 the key financial indicators were as follows:

- Turnover: £152.0m (2023: £151.0m)

- EBITDA: £7.4m (2023: £9.4m)

- Profit before tax: £4.55m (2023: £6.63m)

- Net assets: £22.8m (2023: £19.4m)

- Net funds: £4.7m (2023: £0.57m)

FUTURE DEVELOPMENTS

We expect UK tissue and hygiene demand to remain resilient, with stable to improving volumes and a more competitive pricing environment than in 2024. Category volumes across Europe recovered in 2024, and UK market data indicate unit price deflation supported volume growth-trends we will monitor into 2025. While input costs and energy remain above pre-pandemic levels and can be volatile, our operational improvements and customer partnerships position us to respond effectively

SECTION 172(1) STATEMENT

The directors confirm that they have acted in good faith in the way they consider what would be most likely to promote the success of the company for the benefit of its stakeholders as a whole. In doing so they have considered, amongst other matters, those set out in section 172(1) (a) to (f) of the Companies Act 2006 as to :

-the likely consequence of any decision in the long term

-the interests of the company's employees

-the need to foster the company's business relationships with suppliers, customers and others

-the impact of the company's operations on the community and the environment

-the desirability of the company to maintain a reputation for high standards of business conduct and

-the need to act fairly as between the members of the company

The stakeholders the directors consider in this regard are primarily its employees and customers but also the wider community. Engagement with all the stakeholders is of fundamental importance across the business and the directors are focused on building these relationships on a continuous basis.

STATEMENT OF CORPORATE GOVERNANCE ARRANGEMENTS

The directors recognise the importance of high standards of corporate governance to ensure that the company is managed in an efficient, effective and entrepreneurial manner for the benefit of all shareholders over the longer term.

The directors are committed to providing the leadership required to ensure that the culture that is so integral to the success of the business is embedded within it and work hard to engage with employees and other key stakeholders to ensure that this healthy corporate culture continues to be delivered through open and honest dialogue regarding, amongst other things, HR policies, GDPR, gender pay review, health and safety and employee communications.

ON BEHALF OF THE BOARD:

R Patel - Director

25 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 manufacture & wholesale of other household goods.

DIVIDENDS

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

DIRECTORS

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

The directors shown below were in office at 31 December 2024 but did not hold any interest in the Ordinary shares of £1 each at 1 January 2024 or 31 December 2024.

R Patel

Mrs J Patel

K Patel

N Patel

STREAMLINED ENERGY AND CARBON REPORTING

Unit

2024

2023

Emissions resulting from the purchase of propane by the company for its own use (Scope 1)

tCO2e

339

200

Emissions resulting from the purchase of electricity by the company for its own use (Scope 2)

tCO2e

1,116

1,070

Total emissions

tCO2e

1,455

1,270

Total energy consumption

kWh

5,390,946

5,168,595

Intensity metric (Tonnes per pallet)

0.0015

0.002

Methodologies for energy and emissions calculations

The directors have followed the Government policy Streamlined Energy & Carbon Reporting (SECR), as implemented by the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018.They have also utilised the UK Government's Conversion factors for company reporting.

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per pallet of goods produced

which is a valid and comparable ratio for the industry

Measures taken to improve energy efficiency

The company is committed to year on year improvements in its operational efficiency and management are continually reviewing and appraising alternative sources of energy that would be feasible, practical and cost effective.

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;

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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

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

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 or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

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

ON BEHALF OF THE BOARD:

R Patel - Director

25 September 2025

Opinion

We have audited the financial statements of Task Consumer Products Limited (the 'company') for the year ended 31 December 2024 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 six, 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:

-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

-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, UK taxation legislation and other laws and regulations identified as risk areas from 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 set out in note 2 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;

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

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

-reviewing correspondence with HMRC, relevant regulators including the Health and Safety Executive, and the company's legal advisors.

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

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

A further description of our responsibilities 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.

Ian Cattell FCA (Senior Statutory Auditor)

for and on behalf of Crombies Accountants Limited

Chartered Accountants and Statutory Auditor

34 Waterloo Road

Wolverhampton

West Midlands

WV1 4DG

25 September 2025

TURNOVER

152,018,143

151,072,477

Cost of sales

123,668,829

124,302,728

GROSS PROFIT

28,349,314

26,769,749

Distribution costs

7,427,327

6,251,998

Administrative expenses

15,488,444

13,838,023

22,915,771

20,090,021

5,433,543

6,679,728

Other operating income

42,671

42,669

OPERATING PROFIT

4

5,476,214

6,722,397

Interest receivable and similar income

188,143

34,009

5,664,357

6,756,406

Interest payable and similar expenses

5

114,823

127,348

PROFIT BEFORE TAXATION

5,549,534

6,629,058

Tax on profit

6

1,404,987

1,551,455

PROFIT FOR THE FINANCIAL YEAR

4,144,547

5,077,603

PROFIT FOR THE YEAR

4,144,547

5,077,603

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

4,144,547

5,077,603

FIXED ASSETS

Tangible assets

8

17,149,431

17,507,606

CURRENT ASSETS

Stocks

9

8,240,000

5,355,000

Debtors

10

31,011,304

30,081,738

Prepayments and accrued income

3,039,042

1,300,684

Cash at bank and in hand

12,135,598

3,790,197

54,425,944

40,527,619

CREDITORS

Amounts falling due within one year

11

45,328,433

36,134,192

NET CURRENT ASSETS

9,097,511

4,393,427

TOTAL ASSETS LESS CURRENT LIABILITIES

26,246,942

21,901,033

CREDITORS

Amounts falling due after more than one year

12

-

(266,764

)

PROVISIONS FOR LIABILITIES

16

(2,655,950

)

(2,145,153

)

ACCRUALS AND DEFERRED INCOME

17

-

(42,671

)

NET ASSETS

23,590,992

19,446,445

CAPITAL AND RESERVES

Called up share capital

18

100

100

Retained earnings

19

23,590,892

19,446,345

SHAREHOLDERS' FUNDS

23,590,992

19,446,445

The financial statements were approved by the Board of Directors and authorised for issue on 25 September 2025 and were signed on its behalf by:

R Patel - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

100

19,368,742

19,368,842

Changes in equity

Dividends

-

(5,000,000

)

(5,000,000

)

Total comprehensive income

-

5,077,603

5,077,603

Balance at 31 December 2023

100

19,446,345

19,446,445

Changes in equity

Total comprehensive income

-

4,144,547

4,144,547

Balance at 31 December 2024

100

23,590,892

23,590,992

Cash flows from operating activities

Cash generated from operations

1

18,204,569

8,568,971

Interest paid

(49,097

)

(4,445

)

Interest element of hire purchase payments paid

(65,726

)

(122,903

)

Tax paid

(1,997,989

)

(1,198,737

)

Net cash from operating activities

16,091,757

7,242,886

Cash flows from investing activities

Purchase of tangible fixed assets

(3,575,858

)

(2,851,108

)

Sale of tangible fixed assets

968,907

-

Interest received

188,143

34,009

Net cash from investing activities

(2,418,808

)

(2,817,099

)

Cash flows from financing activities

Loans from group companies

(4,321,313

)

6,187,389

Capital repayments in year

(1,048,824

)

(3,769,620

)

Amount introduced by directors

-

525,000

Amount withdrawn by directors

-

(525,000

)

Government grants

42,671

42,669

Equity dividends paid

-

(5,000,000

)

Net cash from financing activities

(5,327,466

)

(2,539,562

)

Increase in cash and cash equivalents

8,345,483

1,886,225

Cash and cash equivalents at beginning of year

2

3,790,115

1,903,890

Cash and cash equivalents at end of year

2

12,135,598

3,790,115

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

2024

2023

£

£

Profit before taxation

5,549,534

6,629,058

Depreciation charges

2,951,905

2,737,954

Loss on disposal of fixed assets

39,870

-

Government grants

(42,671

)

(42,669

)

Finance costs

114,823

127,348

Finance income

(188,143

)

(34,009

)

8,425,318

9,417,682

(Increase)/decrease in stocks

(2,885,000

)

4,932,922

Decrease in trade and other debtors

346,754

1,276,865

Increase/(decrease) in trade and other creditors

12,317,497

(7,058,498

)

Cash generated from operations

18,204,569

8,568,971

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

12,135,598

3,790,197

Bank overdrafts

-

(82

)

12,135,598

3,790,115

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

3,790,197

1,903,890

Bank overdrafts

(82

)

-

3,790,115

1,903,890

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank and in hand

3,790,197

8,345,401

12,135,598

Bank overdrafts

(82

)

82

-

3,790,115

8,345,483

12,135,598

Debt

Finance leases

(1,315,588

)

1,048,824

(266,764

)

(1,315,588

)

1,048,824

(266,764

)

Total

2,474,527

9,394,307

11,868,834

1.	STATUTORY INFORMATION

Task Consumer Products Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

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

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The preparation of financial statements in compliance with FRS102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies. (See later note)

Significant judgements and estimates

In preparing these financial statements, the directors have had to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenditure.

The estimates and associated assumptions are based on historic experiences and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The judgements, estimates and assumptions which have significant risk of material adjustments to carrying amount of assets and liabilities are:

-Tangible fixed assets

Tangible fixed assets are depreciated over their useful lives taking into account residual values, where 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 technical 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 projected disposal values.

-Stock provisions

The company has recognised provisions for the impairment of stock. The judgements, estimates and associated assumptions necessary to calculate these provisions are based on historical experience and other reasonable factors. In the case of the provisions for the impairment of stock, this covers obsolescence through technological or customer specific reasons. This provision is based on the assessment of stock value and ageing, quantities on hand, usage, changes in the market, technical developments and warranty periods. The value of stock included in the financial statements is net of the provision for the impairment of stock.

-Bad debt provision

The company has recognised provisions against specific trade debtor balances. The judgements and estimates necessary to calculate these provisions are based on historical experience and other reasonable factors. This provision is based on the age of debt balances and the assessed recoverability. The value of trade debtors in note 11 is stated net of the provision of bad debts.

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and it 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. Turnover is recognised from the sale of goods when the entity has transferred to the buyer the significant risks and rewards of ownership of the goods. This occurs when the buyer takes possession of the goods.

All revenue during the period relates to the sale of goods.

Tangible fixed assets

Tangible assets 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.

At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined by which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

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 the statement of income and retained earnings during the period in which they are incurred.

Stocks

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its net realisable value. The impairment loss is recognised immediately in the financial statements.

Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Financial instruments

Financial assets

Financial assets comprise cash at bank and in hand, trade debtors, amounts owed by group undertakings and other debtors; these are initially recorded at cost on the date they originate and are subsequently recorded at cost less provisions for impairment. The company considers evidence of impairment for all individual trade and other debtors and amounts owed by group undertakings, and any subsequent impairment is recognised in the statement of income and retained earnings.

Impairment of financial assets

Impairment provisions are recognised when there is objective evidence that a financial asset or group of financial assets is impaired. Objective evidence includes significant financial difficulties of the counterparty, default or significant delays in payment.

Impairment provisions represent the difference between the net carrying amount of a financial asset and the value of the expected future cash receipts from that asset.

Financial liabilities

Financial liabilities comprise trade creditors, other creditors and accruals; these are initially recorded, and subsequently carried, at cost on the date they originate.

Financial liabilities also comprise obligations under finance lease and hire purchase contracts; these are initially recorded at cost on the date they originate and are subsequently carried at amortised cost under the effective interest method.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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 statement of financial position 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 operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. The assets of the scheme are held separately from those of the company in an independently administered fund.

Invoice discounting

Amounts due in respect of invoice discounting are separately disclosed as current liabilities. The company can use these facilities to draw down a percentage of the value of certain sales invoices. The management and collection of trade receivables remains with the company.

Government grants

Government grants are recognised when it is reasonable to expect that the grants will be received and that all related conditions will be met, usually on submission of a valid claim for payment.

Government grants in respect of capital expenditure are credited to a deferred income account and are released as income by equal annual amounts over the expected useful lives of the relevant assets.

Grants of a revenue nature are credited to income so as to match them with the expenditure to which they relate.