REGISTERED NUMBER: 10811384 (England and Wales)

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements for the Year Ended 31 December 2024

for

Mottram Interiors Group Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

6

Report of the Independent Auditors

8

Consolidated Profit and Loss Account

12

Consolidated Other Comprehensive Income

13

Consolidated Balance Sheet

14

Company Balance Sheet

15

Consolidated Statement of Changes in Equity

16

Company Statement of Changes in Equity

17

Consolidated Cash Flow Statement

18

Notes to the Consolidated Financial Statements

19

DIRECTORS:

Mr S T Holding

Mr J T Barton

Mr L M McKeever

Mr M P Leyden

Mr J R Dodds

Mr N A Poole

REGISTERED OFFICE:

St Andrew's Court

Lees Lane

Mottram St Andrew

Macclesfield

Cheshire

SK10 4LJ

REGISTERED NUMBER:

10811384 (England and Wales)

AUDITORS:

Thompson Wright (Audit) Limited

Chartered Accountants and Statutory Auditors

Ebenezer House

Ryecroft

Newcastle under Lyme

Staffordshire

ST5 2BE

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

REVIEW OF BUSINESS

Financial overview

The year 2024 has seen a more positive trading environment with the easing of higher interest rates and inflationary pressures. The company, however, continues to face strong competition when winning orders, pressure on margins and ever increasing costs.

The trading conditions encountered during the year are reflected in the increased turnover and the overall profit achieved.

The group continues to try to expand and diversify in a very difficult and competitive market. Cash management remains fundamental to the business and ensuring robust financial health gives the directors' confidence that the group retains the flexibility required in the current marketplace to ensure longer term profitable growth.

Financial performance

Financial performance for the year has been analysed as follows:

Year to

Year to

31 December

31 December

2024

2023

Change

Turnover

£40,874,546

£28,538,171

£12,336,375

(Loss)/Profit before tax

£1,065,968

(£49,064

)

£1,115,032

Strategy

Cash management remains fundamental to the business and ensuring robust financial health gives the directors confidence to make decisions which are appropriate for the development of the business for the medium to long term, without being pressured into short term targets.

Turnover

The number of contracts won was significantly higher than the previous year and this resulted in a 43% increase in turnover.

Gross profit

Despite the continuing challenging trading conditions the company has seen its gross profit margin remain relatively stable at 13% (2023: 12%).

Operating costs

The group continues to actively review its operating costs, the majority of which relate to administrative expenses, and to seek reductions where possible.

Environmental policy

The group's objective is to meet the Construction Industry's best practice. To achieve this, management seek to continuously develop the group's environmental policy and in assessing the performance of the group in this area, pay particular attention to lowering the carbon dioxide emissions of its vehicles and reducing the overall amount of waste generated whilst increasing the amount recycled.

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the group's strategy are subject to a number of risks. The key risks identified by the directors include:

Business strategy development and implementation

If the directors adopt the wrong business strategy or do not implement its strategies effectively, the business may suffer. The directors need to understand and properly manage strategic risk in order to deliver long term growth.

Key personnel

The success of the group depends in part on the continued service of its key management and workforce and on its ability to continue to attract, motivate and retain employees. The construction industry is very competitive and staff are frequently targeted by other companies for recruitment.

Product quality and delivery

The success of the group depends on providing a quality product and on time. Success also depends upon the ability to anticipate and respond to changing client preferences and trends, together with staying up to date with the latest building techniques.

Suppliers and subcontractors

The group depends on its supplier/subcontractor base to deliver products on time and to the quality which is expected. Failure to develop the supplier/subcontractor base may produce an over-reliance on particular providers and reduce the group's competitiveness when tendering for contracts.

Health and safety

The industry in which the group operates is subject to regulation. Failure to keep up to date with new legislation will mean that the company will be non-compliant and may result in litigation. It may also impact upon the group's ability to generate income, either through decreased sales, increased costs or a combination of both.

CORPORATE RESTRUCTURE

After successfully transitioning to an Employee Ownership Trust in 2023, this is giving the group substantial practical benefits with increased levels of employee engagement and commitment to improved business performance. This was a significant development and the strategic direction we wanted to take the business in order to continue to build a successful future.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Financial Instruments

The company's principal financial instruments comprise bank balances, trade creditors and trade debtors. The main purpose of these instruments is to raise funds for the company's operations and to finance the company's operations. Due to the nature of the financial instruments used by the company there is no exposure to price risk. The company's approach to managing other risks applicable to the financial instruments concerned is shown below:

Liquidity risk

This is the risk that the company will not be able to meet its financial obligations as they fall due. The company aims to manage liquidity by ensuring that it will always have sufficient resources to meet its liabilities when they fall due, under both normal and stress conditions, without incurring unacceptable losses or risking damage to the company's reputation. Liquidity is provided through cash balances.

Credit risk

The company's principal assets are trade debtors. Trade debtors are managed in respect of credit and cash flow risk by policies concerning credit offered to customers and the regular monitoring of amounts outstanding. All customers are monitored on an ongoing basis and any variance from agreed terms is immediately highlighted and reported to the board.

Interest rate risk

In respect of interest rate risk, the Company currently has no debt but does have interest-bearing assets. Interest-bearing assets include cash balances, all of which have interest rates applied at floating market rates.

Inflation risk

Inflation risk comes from entering into long term, fixed price contracts and reliance on the performance of the supply chain. This is mitigated through early and regular engagement with supply chain partners, completing financial due diligence ahead of orders been placed, regular monitoring and making cost provisions where necessary

SUMMARY OF KEY PERFORMANCE INDICATORS

The directors have monitored the progress of the overall group strategy and individual strategic elements by reference to certain financial and non-financial key performance indicators.

2024

2023

Growth in sales

43%

(18%

)

Return on capital employed

40%

0%

Capital expenditure

£173,951

£119,572

DEVELOPMENT AND PERFORMANCE

The balance sheet on page 14 of the financial statements shows that the group's financial position at the year end, in both net assets and liquidity terms, has increased over the previous year. This is even after the current year's payment to the employee ownership trust of £124,183.

FUTURE DEVELOPMENTS

In the early part of 2025 we saw interest rates starting to reduce and inflationary pressures easing, both of which benefited the group with customers giving the go ahead to new projects previously placed on hold or delayed. That said the uncertainty arising due to the tariffs imposed by America and possible trade wars are expected to impact on the turnover expectations for the latter part of 2025 and into 2026.

The group is, however, in a good position financially to weather any downturn in the demand for its services. It is also committed to staying true to its declared intent to prioritise quality rather than quantity of workload.

The board of directors therefore expect that the group will continue in operational existence for the foreseeable future (see note 2).

ON BEHALF OF THE BOARD:

Mr L M McKeever - Director

24 September 2025

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

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of a holding company and contractors to industry but specialising in the leisure industry and the financial sector.

DIVIDENDS

No dividends were paid during the year (2023: £60,500). The directors do not recommend payment of a final dividend.

FUTURE DEVELOPMENTS

Future developments are as detailed in the strategic report on page 5.

DIRECTORS

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

Mr S T Holding

Mr J T Barton

Mr L M McKeever

Other changes in directors holding office are as follows:

Mr M P Leyden , Mr J R Dodds and Mr N A Poole were appointed as directors after 31 December 2024 but prior to the date of this report.

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

Mr S T Holding

Mr L M McKeever

Mr J R Dodds

Mr M P Leyden

Mr N A Poole

Other changes in directors holding office in subsidiary undertakings are as follows:

Mr J T Barton - resigned 31 December 2024

FINANCIAL INSTRUMENTS

Please see notes on financial risk management on page 4 as part of the Strategic report.

POLITICAL DONATIONS AND EXPENDITURE

The group made charitable donations during the year totalling £2,408 (2023: £2,765) all of which were in line with its corporate social responsibility policy.

GOING CONCERN

On reviewing the going concern basis for the group the directors looked at projected workload and in particular the level of secured turnover for the next 12 months adjusting for the effects of price increases and inflationary pressure. Cash flow projections demonstrate the ability to meet working capital requirements from reserves with a reasonable level of head room therefore allowing the financial statements to be prepared on a going concern basis.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

AUDITORS

Thompson Wright (Audit) Limited, offer themselves for re-appointment as auditors in accordance with Section 487 of the Companies Act 2006.

ON BEHALF OF THE BOARD:

Mr L M McKeever - Director

24 September 2025

Opinion

We have audited the financial statements of Mottram Interiors Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the Consolidated Profit and Loss Account, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2024 and of the group's 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 group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Other information

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

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

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

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

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

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

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

- we identified the laws and regulations applicable to the group and parent company through discussions with directors and other management, and from our commercial knowledge and experience of the construction industry;

- 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 group and parent company, including the Companies Act 2006, taxation legislation, data protection regulations, anti-bribery and corruption legislation, anti-slavery and employment legislation together with The Health and Safety at Work Act 1974 together with various other legislation designed to provide a safe working environment within the construction industry.

- 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 group's and parent 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;

- 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 group's and parent 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.

Jeremy Bostock BA BFP FCA (Senior Statutory Auditor)

for and on behalf of Thompson Wright (Audit) Limited

Chartered Accountants and Statutory Auditors

Ebenezer House

Ryecroft

Newcastle under Lyme

Staffordshire

ST5 2BE

24 September 2025

TURNOVER

3

40,874,546

28,538,171

Cost of sales

35,604,717

25,247,528

GROSS PROFIT

5,269,829

3,290,643

Administrative expenses

4,267,713

3,372,334

OPERATING PROFIT/(LOSS)

5

1,002,116

(81,691

)

Interest receivable and similar income

64,289

32,710

1,066,405

(48,981

)

Interest payable and similar expenses

6

437

83

PROFIT/(LOSS) BEFORE TAXATION

1,065,968

(49,064

)

Tax on profit/(loss)

7

288,715

5,014

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

777,253

(54,078

)

Profit/(loss) attributable to:

Owners of the parent

777,253

(54,078

)

PROFIT/(LOSS) FOR THE YEAR

777,253

(54,078

)

OTHER COMPREHENSIVE INCOME

Employment ownership trust contribution

(124,183

)

(605,500

)

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(124,183

)

(605,500

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

653,070

(659,578

)

Total comprehensive income attributable to:

Owners of the parent

653,070

(659,578

)

FIXED ASSETS

Tangible assets

10

311,875

295,126

Investments

11

-

-

311,875

295,126

CURRENT ASSETS

Stocks

12

1,418,609

395,684

Debtors

13

3,386,276

3,670,417

Cash at bank and in hand

5,609,003

2,036,266

10,413,888

6,102,367

CREDITORS

Amounts falling due within one year

14

8,397,357

4,727,168

NET CURRENT ASSETS

2,016,531

1,375,199

TOTAL ASSETS LESS CURRENT LIABILITIES

2,328,406

1,670,325

PROVISIONS FOR LIABILITIES

16

48,676

43,665

NET ASSETS

2,279,730

1,626,660

CAPITAL AND RESERVES

Called up share capital

17

132

132

Share premium

18

15,120

15,120

Retained earnings

18

2,264,478

1,611,408

SHAREHOLDERS' FUNDS

2,279,730

1,626,660

The financial statements were approved by the Board of Directors and authorised for issue on 24 September 2025 and were signed on its behalf by:

Mr S T Holding - Director

FIXED ASSETS

Tangible assets

10

-

-

Investments

11

221

221

221

221

CURRENT ASSETS

Debtors

13

51

62,503

Cash at bank and in hand

161,472

120,130

161,523

182,633

CREDITORS

Amounts falling due within one year

14

40,352

143,854

NET CURRENT ASSETS

121,171

38,779

TOTAL ASSETS LESS CURRENT LIABILITIES

121,392

39,000

CAPITAL AND RESERVES

Called up share capital

17

132

132

Share premium

14,740

14,740

Retained earnings

106,520

24,128

SHAREHOLDERS' FUNDS

121,392

39,000

Company's profit for the financial year

206,575

274,416

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 24 September 2025 and were signed on its behalf by:

Mr S T Holding - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 January 2023

120

2,331,486

492

2,332,098

Changes in equity

Issue of share capital

12

-

14,628

14,640

Dividends

-

(60,500

)

-

(60,500

)

Total comprehensive income

-

(659,578

)

-

(659,578

)

Balance at 31 December 2023

132

1,611,408

15,120

1,626,660

Changes in equity

Total comprehensive income

-

653,070

-

653,070

Balance at 31 December 2024

132

2,264,478

15,120

2,279,730

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 January 2023

120

415,712

112

415,944

Changes in equity

Issue of share capital

12

-

14,628

14,640

Dividends

-

(60,500

)

-

(60,500

)

Total comprehensive income

-

(331,084

)

-

(331,084

)

Balance at 31 December 2023

132

24,128

14,740

39,000

Changes in equity

Total comprehensive income

-

82,392

-

82,392

Balance at 31 December 2024

132

106,520

14,740

121,392

Cash flows from operating activities

Cash generated from operations

23

3,917,546

(1,077,874

)

Interest paid

(437

)

(83

)

Tax paid

(20,289

)

85,340

Net cash from operating activities

3,896,820

(992,617

)

Cash flows from investing activities

Purchase of tangible fixed assets

(173,951

)

(119,572

)

Sale of tangible fixed assets

7,251

32,590

Interest received

64,289

32,710

Net cash from investing activities

(102,411

)

(54,272

)

Cash flows from financing activities

Amount withdrawn by directors

(2,489

)

(3,475

)

Share issue

-

12

Share premium

-

14,628

Related parties

(95,000

)

69,933

Employee ownership trust contribution

(124,183

)

(605,500

)

Equity dividends paid

-

(60,500

)

Net cash from financing activities

(221,672

)

(584,902

)

Increase/(decrease) in cash and cash equivalents

3,572,737

(1,631,791

)

Cash and cash equivalents at beginning of year

24

2,036,266

3,668,057

Cash and cash equivalents at end of year

24

5,609,003

2,036,266

1.	STATUTORY INFORMATION

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

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 financial statements are prepared in sterling which is the functional currency of the group.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the company and its subsidiary undertakings. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Acquisitions of subsidiaries are dealt with by the acquisition method of accounting.

Group restructures are accounted for on the merger basis.

Significant judgements and estimates

In the application of the group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical accounting judgements and key sources of estimation uncertainty

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

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.

The group makes judgements and estimates concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. These judgements and estimates 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:

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Contract accounting

The values recognised in relation to long term contracts that are in progress at the balance sheet date are based upon the proportion of work carried out on a contract by contract basis generally determined by a review of progress on site by a quantity surveyor which is reviewed periodically. Profit on these contracts is calculated on a prudent basis and reflects turnover and related costs as contract progresses. Profit is only recognised when the final outcome of each project can be assessed with reasonable certainty. Where a contract is likely to make a loss, full provision is made in the period in which the loss is foreseen.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Turnover represents amounts receivable for goods and services provided in the normal course of business, net of trade discounts, VAT and other sales related taxes.

Profit is recognised on long-term contracts, if the final outcome can be assessed with reasonable certainty, by including in the profit and loss account turnover and related costs as contract activity progresses. Turnover is calculated as that proportion of total contract value which costs to date bear to total expected costs for that contract.

Tangible fixed assets

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

Plant and machinery

-

25% on reducing balance

Fixtures and fittings

-

25% on reducing balance

Motor vehicles

-

33% on reducing balance

Computer equipment

-

33% on reducing balance

Tangible fixed assets are stated at cost, net of depreciation and any provision for impairment.

Impairment of fixed assets

At each reporting end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) prior years. A reversal of an impairment loss is recognised immediately in profit or loss unless the relevant asset is carried in at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Investments

Fixed asset investments are shown at cost less provision for impairment. Current asset investments are stated at the lower of cost and net realisable value.

Stocks and long term contracts

Stocks and work in progress are stated at the lower of cost and net realisable value. Net realisable value is based on estimated selling price, less further costs expected to be incurred to completion and disposal.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in the profit or loss. Reversals of impairment losses are also recognised in the profit or loss.

Amounts recoverable on long-term contracts, which are included in debtors, are stated at the net sales value of the work done less amounts received as progress payments on account. Excess progress payments are included in creditors as payments on account. Cumulative costs incurred net of amounts transferred to cost of sales, less provision for contingencies and anticipated future losses on contracts, are included as long-term contract balances in stock.