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

The principal activities of the group are the design, manufacture, import, export, hire, supply and installation of partitions, hoardings and all other associated products or accessories incidental thereto across the UK, Europe and Rest of the World.

Business environment

One of the main sectors the group operates in is the construction sector. Customers rely on a secure and efficient supply chain and the group has a long established and stable supply chain with key suppliers across the UK (predominately) and Europe.

There have been no specific negative impacts on the supply chain during the financial year, and the group is continually working with its suppliers to ensure this remains the case in the short, medium and long term. The group also reviews the level of stock to make sure appropriate levels are held.

The group’s five-year plan for growth focuses upon excelling in delivering solutions to customers utilising its product range, by region, across the UK, Europe and Rest of the World. The group monitors targets against the five-year plan ensuring that it identifies key detractors to enable it to manage any risks and uncertainties that have the potential to affect the achievement of its targets.

Strategy

As part of a family-controlled group, the directors, have strong values and hold themselves to the highest standards. This is reflected in the group's values which include: collaboration, progressive. loyalty, flexibility and trustworthy. All hires are reviewed against these criteria and are appraised to make sure maintaining the core values of the group.

The success and longevity of the business is built upon revenue growth, profit growth, sustainable cash flow and debtor management. To ensure the continued success of the business, management have introduced a suite of KPIs that have been cascaded down through the business to individual people and how they affect the overall performance.

Principal risk and uncertainties

Risk acceptance and risk management is continually monitored by means of a framework of policies, procedures and internal controls. All such policies and procedures are overseen by the board of directors and senior management and are constantly under review to comply with statutory regulations and best practice.

Main risks: the ability to identify, evaluate, monitor and, where appropriate, mitigate risk within the group is fundamental to the continued success of the business. Revenue is derived from either supply, or supply and installation projects. Contracts undertaken on a subcontract basis affect 20% of total revenue and is subject to up to 5% of retention, which can impact cashflow planning. Risk associated with increased raw material prices; exchange rate implications and project delays can affect both gross margin and revenue conversion timings respectively.

Monitoring risks: the group actively monitors its own day to day working capital requirements and is in a very strong position to maintain a suitable level of self-financed liquidity. It reinforces this ability by having a trade credit insurance facility in place to mitigate debt risk factors.

The business has quarterly reviews of the risk register where all Senior Management, review risks and reassess the score.

Contract risks are managed internally by employing suitably qualified and experienced staff to manage the contracts process, supplemented with external support as required.

In the wider macro environment shortages of resources, and skilled staff at all levels, is constraining all sectors of industry. Resource planning and talent reviews ensure the group can build the pipeline of talent it needs to meet its business requirements. A robust talent acquisition process, with line managers trained to make the best hiring decisions and onboarding processes, this ensures new starters are fully integrated into the business effectively and that internal progression opportunities are encouraged and facilitated.

Policies and procedures: senior management are responsible for the Integrated Management System which they are committed to reviewing monthly ensuring that particular focus is given to driving continuing improvements to achieve scalable processes for future growth. The group was recertified in 2024 for ISO9001 & ISO14001 certifications.

The group's approach to managing liquidity and credit risk is provided in the financial instrument section of the directors’ report.

The group has undertaken a 5 year-planning cycle for the business and has employed Senior professionals to support them on their strategic journey. As part of this review an external advisor is planned to review group performance every quarter in 2025 and play back how the Senior Leadership Team has performed against Long-term targets.

Directors’ opinion: The directors are confident that the group's five-year plan has enabled the business to retain a strong financial position and together with the dedication of its staff, and a secure order book, will successfully deliver the group's objectives for 2025 and beyond.

The directors were pleased to report a group operating profit of 10.6% for the year (2023 - 13.5%), which continues a track record of strong performance.

At the year end the group had shareholders funds of £19,272,261 (2023 - £20,253,495). The directors believe the groups position to be satisfactory, especially as the groups current assets exceed its current liabilities by £11,646,223 (2023 - £12,616,114), resulting in a strong current ratio, at the end of the year, of 4.4 (2023 - 4.9).

Client satisfaction and repeat work are key non-financial indicators. NPI (net promotor indicator) feedback is formally requested from clients either upon delivery of goods or at the end of each project.

The directors and its senior management team consider health and safety performance to be a primary non-financial indicator. Health and safety leaders are appointed within each business unit who monitor both warehouse production activities and on-site projects through their life cycle. A health and safety committee also meets regularly, which consists of representatives from across the business.

Future developments

The group continues to invest in product development conformance, undertaking research and development into both new and existing products and their application methodologies.

The group is currently implementing a new ERP system which will significantly improve the performance of the business and give end to end visibility of customer profitability and customer insights.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

The results for the year are set out on page 9.

Ordinary dividends were paid amounting to £2,725,258. The directors do not recommend payment of a further dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The group utilises a variety of financial instruments to support its operations, manage risks, and achieve its strategic objectives including cash and cash equivalents, trade receivables, trade payables, bank loans, and other forms of debt. Each instrument plays a critical role in ensuring liquidity, funding growth initiatives, and managing financial risks such as credit, market, and liquidity risks.

Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board that also provide optimal interest rates for the group.

All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary. Insurance is held against debt as a further protection measure.

On the 24 January 2025 the company increased its shareholding in its subsidiary, Westgate Global Ltd, from sixty percent to one hundred percent by purchasing the shares held by the other shareholders. The total purchase price was £8.2m, with an initial completion payment of £4.9m, and deferred payments of £3.3m. The initial payment has been settled in cash of £1.6m, and a credit to the directors' loan accounts of £3.3m, which is the amount owed by the other shareholders to the directors of Hexdown Ltd. The three deferred payments of £1.1m each are payable in December 2025, December 2026 and December 2027.

Details of future developments are given in the Strategic Report.

The auditor, Benee Consulting Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

The directors are responsible for preparing the Annual Report 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 group and company, 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;

• state whether applicable UK 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 group and company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of Hexdown Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including 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 the parent company's 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 our audit:

• The information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which 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.

As explained more fully in the directors' responsibilities statement, 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 is 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 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 parent company or to cease operations, or have no realistic alternative but to do so.

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 an auditor's report 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.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

• Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;

• Reviewing minutes of meetings of those charged with governance;

• Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;

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

• Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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 an auditor’s report 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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £48,225 (2023 - £2,351,670 profit).

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

Hexdown Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Westgate House, Verulam Road, Stafford, Staffordshire, ST16 3EA.

The group consists of Hexdown Ltd and all of its subsidiaries.

The principal activities of the company are the design, manufacture, import, export, hire, supply and installation of partitions, hoardings and all other associated products or accessories incidental thereto across the UK, Europe and Rest of the World.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated group financial statements consist of the financial statements of the parent company Hexdown Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from the hire of goods is recognised evenly over the duration of the hire period. The hire period ranges from four to fifty weeks in duration.

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is ten years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land is not depreciated.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

At each reporting period 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 company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

Stock is measured on a first in, first-out basis.

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 profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and the net amounts 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.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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 profit or loss.

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 profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

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

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

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

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.

The average monthly number of persons (including directors) employed by the group and company during the year was:

Their aggregate remuneration comprised:

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

Deferred tax of £158,903 is expected to reverse in the next year as accelerated capital allowances reduce (see note 24).

Factors that may affect future tax charges

The group expects capital allowances to be broadly in line with the depreciation charged in the financial statements in future years. As a result, no significant timing differences are anticipated from fixed assets expenditure that would materially affect taxable profits.

However, the group undertakes qualifying research and development activities and intends to continue claiming R&D tax relief. These claims are expected to reduce taxable profits through enhanced deductions. Accordingly, the group anticipates that its future corporation tax liabilities will be lower than would be expected based solely on accounting profits.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Investment property comprises £4,605,000. The fair value of the investment property has been arrived, during January 2023, at on the basis of a valuation carried out by Chivers Commercial Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.

Other investments relates to an interest in land acquired by the company. The land has been accounted for as an investment as it does not yet meet the recognition criteria as either property, plant and equipment or investment property. Please refer to note 30 for further information.

Details of the company's subsidiaries at 31 December 2024 are as follows:

The differences between purchase and replacement cost are not material.

The amount of inventories recognised as an expense during the year was £10,777,517 (2023 - £10,304,983). This includes materials purchased, carriage inward, and other related direct costs allocated to goods sold during the period.

Other debtors includes loans made by Hexdown Ltd totalling £567,400 (2023 - £1,728,594). The loans have been made at varying rates of interest and have been accounted for as a basic financial instrument.

Hire purchase contracts and finance leases are secured on the assets subject to the financing arrangement.

The redeemable preference shares, which were issued at par, are redeemable at par at the option of the shareholder or company. The shares carry the right to a fixed cumulative preferential dividend at an annual rate of 0.001%, but have no voting rights, There are no fixed dates for redemption.

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

Contributions totalling £17,341 (2023 - £4,287) were payable to the fund at the balance sheet date and are included in other creditors due within one year.

The share premium account represents the amount by which shares have been issued in excess of their nominal value.

The capital redemption reserve represents the amounts transferred following the redemption of the company's own shares.

The profit and loss reserve represents accumulated profits generated since incorporation less distributions made to shareholders.

The non-controlling interest control 40% of the ordinary share capital of Westgate Global Ltd.

While preparing the 2024 financial statements some errors were identified in the 2023 financial statements relating to the group's hire fleet, which is included within tangible fixed assets on the group balance sheet.

The hire fleet additions figure for 2023 was overstated due to duplications and misallocated purchases, and the hire fleet disposals figure was understated due to some items that had been sold or scrapped not being accounted for. The prior year figures have been restated to amend the hire fleet figures and the effect of these adjustments is detailed below:

• The net book value of the hire fleet, included in tangible fixed assets on the group balance sheet, has reduced by £152,704.

• Cost of sales, in the group profit and loss account, has increased by £152,704.

• Deferred tax, included in the group profit and loss account tax charge and group balance sheet provisions for liabilities, has reduced by £38,176 due to the reduction in accelerated capital allowances.

• The group's net profit has reduced by £114,528.

• Total equity of the group has reduced by £114,528.

• And non-controlling interests share of total equity has reduced by £45,811.

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

The company holds an investment in land, of £463,089 (2023 - £458,062), which is held under an option agreement. The company has entered into an option agreement under which a non-related entity will decide whether either a cash sum equal to the value of the investment will be returned, or whether legal title to the asset will be transferred to the company. A final decision is due in 2025, unless the option agreement period is extended. Negotiations are in progress for the land to be transferred to two non-group companies on a no gain/no loss basis. The two companies are shareholders of Hexdown Ltd and controlled by directors of the company. The transfer is expected to complete during the year ended 31 December 2025.

During the year ended 31 December 2024 the company has made a provision, of £121,059, to write off loan receivables considered to be irrecoverable. Any recoverable amounts will only be recognised when they are received.

On the 24 January 2025 the company increased its shareholding in its subsidiary, Westgate Global Ltd, from sixty percent to one hundred percent by purchasing the shares held by the other shareholders. The total purchase price was £8.2m, with an initial completion payment of £4.9m, and deferred payments of £3.3m. The initial payment has been settled in cash of £1.6m, and a credit to the directors' loan accounts of £3.3m, which is the amount owed by the other shareholders to the directors of Hexdown Ltd. The three deferred payments of £1.1m each are payable in December 2025, December 2026 and December 2027.

Other creditors due within one year includes interest free loans of £78,665 (2023 - £Nil) from non-group companies controlled by directors of the company. There are no formal repayment terms.

Other creditors due within one year includes loans from the directors, and their close family members, totalling £79,706 (2023 - £131,632). The loans have been made on an interest free basis and are repayable on demand.

Other debtors due within one year includes interest free advances, of £83,380 (2023 - £116,964), to a Trust in which directors of the company serve as trustees.

Other debtors due within one year includes loans to close family members of the directors totalling £194,368 (2023 - £30,715). The loans have been made on an interest free basis and are repayable on demand.

Also included in other debtors due within one year are interest free loans of £Nil (2023 - £846,136) to non-group companies controlled by directors of the company. There are no formal repayment terms.

Included within wages costs are amounts paid to close family members of the directors totalling £153,577 (2023 - £223,469) relating to salary, pensions and benefits provided during the year.

Included within other debtors due within one year is an unsecured loan to a director totalling £180,096 (2023 - £Nil). The maximum amount outstanding during the year was £180,096, Interest is charged on an annual basis at 2.25%. The loan is repayable on demand, and was repaid in full on 24 January 2025.

Included within other debtors due within one year is an unsecured loan to a director totalling £702,715 (2023 - £Nil). The maximum amount outstanding during the year was £715,773, Interest is charged on an annual basis at 2.25%. The loan is repayable on demand, and was repaid in full on 24 January 2025.

The ultimate controlling party is the board of directors of Hexdown Ltd.