REGISTERED NUMBER: 03142087 (England and Wales)

Amelia Knight Limited

Strategic Report, Directors' Report and

Financial Statements for the Year Ended 31 December 2024

Page

Company Information

1

Strategic Report

2

Directors' Report

5

Statement of Directors' Responsibilities

8

Independent Auditors' Report

9

Statement of Income and Retained Earnings

13

Statement of Financial Position

14

Statement of Cash Flows

15

Notes to the Statement of Cash Flows

16

Notes to the Financial Statements

18

DIRECTORS:

Mr D B Salmon

Mrs L Salmon

Mr D E Salmon

Mr P J Salmon

Miss T L Salmon

Mr M W Salmon

SECRETARY:

Mrs L Salmon

REGISTERED OFFICE:

The Pavilions

Mobberley Road

Knutsford Business Park

Knutsford

Cheshire

WA16 8ZR

REGISTERED NUMBER:

03142087 (England and Wales)

AUDITORS:

SCB (Accountants) Limited

31 Sackville street

Manchester

M1 3LZ

BANKERS:

National Westminster Bank PLC

Spinningfields Square

182 Deansgate

Manchester

M3 3LY

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

BUSINESS REVIEW

Against a backdrop of ongoing global challenges, the board is satisfied with the company's overall strong performance for 2024. We have focused on stability and the careful management of the company's debt and cash flow in preparation for the period ahead. Substantial efforts have been made to streamline processes and generate efficiencies across the business, which we hope will bear fruit in 2025 and beyond. Retained earnings stand at £5.0m as at the balance sheet date and the company has considerable cash reserves to fund its future working capital and expansion projects in the forthcoming year.

Turnover for the year increased by 5% to £36.4m (2023: £34.7m) and gross profit was £10.07m (2023: £8.7m), giving rise to a gross profit margin of 30% (2023: 25%). The company incurred a profit for the year of £1.5m (2023: loss of £0.1m).

Going forward, we intend to continue with the same determination and focus into 2025. The board would like to thank our colleagues at home and in China for their efforts throughout the year.

FUTURE DEVELOPMENT

The company will continue to operate in designing, manufacturing, and distribution of cosmetics and related products.

KEY PERFORMANCE INDICATORS

The board of directors monitor the effectiveness of the company's operations by considering various key performance indicators against budgets, forecasts and prior periods.

The company's key financial and other performance indicators during the year were as follows:

Unit

2024

2023

Turnover

£

36,458,385

34,711,310

Gross profit percentage

%

30

25

Operating profit / (loss)

£

1,575,778

36,001

Profit / (loss) after tax

£

1,560,863

(659,859

)

Shareholder funds

£

2,012,219

3,451,356

Average employees

No

186

187

OTHER PERFORMANCE INDICATORS

The company's main objective is to provide best of class service to its customer in a highly competitive market. In particular with some big customers certain KPI are agreed and reviewed on a regular basis (like quality of service and punctuality).

On a global basis the company monitors new customers, customer satisfaction, customer loyalty and analyses customer feedback on demand for new product offerings.

The company considers its staff as one of its key assets and strengths. In this context the company monitors its staff turnover, reasons for departures and encourages staff to participate in training.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties facing the company are reviewed in detail by the directors and no material additional risk or uncertainty has been identified other than those detailed below. These risks are broadly accompanied with competitive, operational and financial risks. The directors risk management objectives consist of identifying and monitoring those risks which could have an adverse impact on the company assets, profitability or cash flows. As all sales are based on orders received, the risk of stock obsolescence is mitigated, and with all customer orders are closely monitored,and contact with suppliers maintained through the manufacturing process supply chain factors and risk is also reduced.The company is exposed to financial risks including credit risk, liquidity risk, and market risk, arising from the company's normal business activities. These risks and the company's approach to dealing with them are discussed below.

COMPETITIVE RISK

The company operates in the cosmetics industry. The market remains competitive with price and margin fluctuations which are dependent on relationships with key suppliers. Additionally, the uncertainty surrounding the economy as a direct result of Brexit remains a prominent factor affecting the sector.

OPERATIONAL RISK

The main operational risks relating to the company's operations relate to customer relationships, product quality and the company's ability to supply products that meet customer requirements. The overall risk is mitigated by fostering strong customer relationships, ensuring that orders are delivered to client's specifications and that quality control procedures are in place.

PRICE RISK

The company is exposed to price fluctuations which impact on margins and profitability. The directors manage exposure by closely working with their suppliers and controlling purchasing volumes in order to remain efficient, and by the diversification of products that the company provides.

FOREIGN EXCHANGE RISK

The company has certain balances due to and from customers, suppliers and related parties in other currencies, primarily in Euros and US Dollars, and the company is therefore exposed to currency fluctuations. As a matter of policy, the company chooses not to currently use financial derivatives or currency hedging to manage its exposure. The directors review the exposure to foreign exchange risks and observe currency fluctuations on an ongoing basis to ensure any adverse effect is limited.

CREDIT RISK

The company's principal financial assets are bank balances, trade and other receivables. The company's credit risk is primarily attributable to its trade receivables and balances from the related parties. The company gives significant attention to credit risk and manages the risk though credit control procedures to ensure that credit risk is at an acceptable level for its future operations.

LIQUIDITY RISK

Liquidity risk is the risk that sufficient working capital is not generated by the company's business activities and that in this event suitable sources of funding may not be available. The company ensures that sufficient cash is available to fund ongoing operations and has sufficient cash reserves for its operations.

FINANCIAL INSTRUMENTS

The company has a normal level of exposure to price, credit, liquidity and cash flow risks arising from its trading activities which are conducted in sterling and foreign currencies, for which the company minimises its exposure to exchange rate volatility through internal management processes. The company does not enter into any formally designated hedging arrangements.

IMPACT OF THE WAR IN UKRAINE

In light of the war in Ukraine which commenced on 24 February 2022, the company has considered whether any adjustments are required to reported amounts in the financial statements. The company does not have any operations in Ukraine or Russia, but does have trading relationships with countries which border Ukraine. The company is therefore not directly affected by trading restrictions or sanctions, but could be affected in future by possible wider macroeconomic consequences should the situation develop further. This could include an increase in domestic inflation from supply chain disruption, commodity shortages or commodity price increases affecting cashflows, or changes in market discount rates and valuations.

ON BEHALF OF THE BOARD:

Mr D B Salmon - Director

29 September 2025

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

PRINCIPAL ACTIVITY

The principal activity of the company during the year under review was the design, manufacture and worldwide distribution of cosmetics and related products.

DIVIDENDS

The dividend of £30,000 per share (totalling £3,000,000) for the year ended 31 December 2024 was agreed at a meeting of the board of directors. Particulars of recommended dividends are detailed in note 13 to the financial statements.

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 D B Salmon

Mrs L Salmon

Mr D E Salmon

Mr P J Salmon

Miss T L Salmon

Other changes in directors holding office are as follows:

Mr M W Salmon was appointed as a director after 31 December 2024 but prior to the date of this report.

INFORMATION INCLUDED IN THE STRATEGIC REPORT

As permitted by paragraph 1A of Schedule 7 to the Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008, certain matters which are required to be disclosed in the Director's Report have been omitted as they are included in the Strategic Report on page 2. These matters relate to the business review, principal risks and uncertainties, financial instruments and future developments.

EMPLOYMENT OF DISABLED PERSONS

The company gives full consideration to applications for employment from disabled persons where the candidate's particular aptitudes and abilities are consistent with adequately meeting the requirements of the job. Opportunities are available to disabled employees for training, career development and promotion. Where existing employees become disabled, it is the company's policy to provide continuing employment wherever practicable in the same or an alternative position and to provide appropriate training to achieve this aim.

ENGAGEMENT WITH EMPLOYEES

The company operates a framework for employee information and consultation. Amongst other things, regular meetings are held between local management and employees to allow a free flow of information and ideas.

CHARITABLE CONTRIBUTIONS

Total donations and sponsorships made during the year to registered charities and other good causes amounted to £31,515 (2023: £66,771). As in previous years, this has included foodbanks, charities providing protection for vulnerable people fleeing abuse and violence, as well as young adults struggling after having left the care system. Some fund were used to send underprivileged children and adults, mainly fleeing abuse, on seaside days out in the summer months and to Pantomime outings to the theatre during the Christmas period. It is our intention to continue this support over the coming years and to expand this to other similar providers of help and protection.

ETHICS AND SUSTAINABILITY

We strive to meet the highest ethical standards. We are members of Sedex and have regular SMETA audits (Sedex Members Ethical Trade Audit), which focus on standards of labour, health and safety, environmental issues and business ethics. Customers are welcomed to audit and approve our factories if so required. We are accredited to the following standards - ISL:9001 Quality Management System and ISL:4001 - Environmental Management System. We aim to constantly improve our sustainability practices and we are proud to use RSPO (sustainably sourced) Palm Oil and biodegradable Bio-Glitter in our products. We also use biodegradable plastic bags and DHL Go Green for our UK deliveries. We are proud to be a certified cruelty-free company. We have never tested on animals and will never do so.

GOING CONCERN

Based on the current position of the company, the borrowing facilities available, as well as future orders and forecasts that have been prepared, the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of signing the financial statements and therefore have prepared the financial statements on a going concern basis.

RESEARCH AND DEVELOPMENT

The company conducts research and development into improving its manufacturing processes and the development of new products.

REAPPOINTMENT OF AUDITORS

Pursuant to Section 487 of the Companies Act 2006, the auditor will be deemed to be reappointed and SCB (Accountants) Ltd will therefore continue in office.

DISCLOSURE OF INFORMATION TO THE AUDITORS

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

ON BEHALF OF THE BOARD:

Mr D B Salmon - Director

29 September 2025

The directors acknowledge their responsibilities 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

- select suitable accounting policies and apply them consistently;

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

- state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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

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

Opinion

We have audited the financial statements of Amelia Knight Limited (the 'company') for the year ended 31 December 2024 which comprise the Statement of Income and Retained Earnings, Statement of Financial Position, Statement of Cash Flows and Notes to the Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the 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.

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

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

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

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' 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.

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.

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We discussed with the Directors the policies and procedures in place regarding compliance with laws and regulations. We discussed amongst the audit team the identified laws and regulations and remained alert to any indications of non-compliance.

During the audit we focused on laws and regulations which could reasonably be expected to give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006, UK tax legislation and distributable profits legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management.

Our procedures in relation to fraud included but were not limited to: inquires of management whether they have any knowledge of any actual, suspected or alleged fraud, and discussions amongst the audit team regarding risk of fraud such as opportunities for fraudulent manipulation of financial statements. We determined that the principal risks related to posting manual journal entries to manipulate financial performance and management bias through judgements in accounting estimates.We also addressed the risk of management override of internal controls, including testing journals and appropriateness of other entries in the nominal ledger; reviewing transactions around the end of the reporting period; and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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 Auditors' Report.

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 Auditors' Report.

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 Auditors' 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.

Jeffrey Bor Bsc FCA (Senior Statutory Auditor)

For and on behalf of SCB (Accountants) Limited

31 Sackville street

Manchester

M1 3LZ

29 September 2025

TURNOVER

4

36,458,384

34,711,310

Cost of sales

(25,674,952

)

(25,948,633

)

GROSS PROFIT

10,783,432

8,762,677

Administrative expenses

(9,207,654

)

(7,848,366

)

OPERATING PROFIT

6

1,575,778

914,311

Exceptional item

8

-

(878,310

)

1,575,778

36,001

Other Interest receivable and similar Income

9

-

5,737

1,575,778

41,738

Interest payable and similar expenses

10

(47,359

)

(147,176

)

PROFIT/(LOSS) BEFORE TAXATION

1,528,419

(105,438

)

Tax on profit/(loss)

11

32,444

(554,421

)

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

1,560,863

(659,859

)

Retained earnings at beginning of year

3,451,256

7,111,115

Dividends

12

(3,000,000

)

(3,000,000

)

RETAINED EARNINGS AT END OF YEAR

2,012,119

3,451,256

FIXED ASSETS

Intangible assets

13

15,866

849

Tangible assets

14

1,081,048

1,214,980

Investment in subsidiaries

15

1,782,911

728,654

2,879,825

1,944,483

CURRENT ASSETS

Stocks

16

3,212,383

3,650,516

Debtors

17

6,512,216

5,936,140

Cash at bank

18

388,278

3,361,885

10,112,877

12,948,541

CREDITORS

Amounts falling due within one year

19

(10,717,006

)

(10,833,247

)

NET CURRENT (LIABILITIES)/ASSETS

(604,129

)

2,115,294

TOTAL ASSETS LESS CURRENT LIABILITIES

2,275,696

4,059,777

CREDITORS

Amounts falling due after more than one year

20

-

(312,500

)

PROVISIONS FOR LIABILITIES

24

(263,477

)

(295,921

)

NET ASSETS

2,012,219

3,451,356

CAPITAL AND RESERVES

Called up share capital

25

100

100

Retained earnings

2,012,119

3,451,256

SHAREHOLDERS' FUNDS

2,012,219

3,451,356

The financial statements were approved by the Board of Directors and authorised for issue on 29 September 2025 and were signed on its behalf by:

Mr D B Salmon - Director

Cash flows from operating activities

Cash generated from operations

1

5,442,697

6,016,795

Tax paid

(250,000

)

(83,311

)

Net cash from operating activities

5,192,697

5,933,484

Cash flows from investing activities

Purchase of intangible fixed assets

(20,355

)

-

Purchase of tangible fixed assets

(145,414

)

(50,621

)

Purchase of fixed asset investments

(1,054,257

)

-

Sale of tangible fixed assets

55,015

-

Interest received

-

5,737

Net cash from investing activities

(1,165,011

)

(44,884

)

Cash flows from financing activities

New loans in year

(1,782,296

)

-

Loan repayments in year

(312,500

)

(1,608,707

)

Interest paid

(47,359

)

(147,176

)

Equity dividends paid

(3,000,000

)

(3,000,000

)

Net cash from financing activities

(5,142,155

)

(4,755,883

)

(Decrease)/increase in cash and cash equivalents

(1,114,469

)

1,132,717

Cash and cash equivalents at beginning of year

2

1,502,747

370,030

Cash and cash equivalents at end of year

2

388,278

1,502,747

1.	RECONCILIATION OF PROFIT/(LOSS) FOR THE FINANCIAL YEAR TO CASH GENERATED FROM OPERATIONS

2024

2023

£

£

Profit/(loss) for the financial year

1,560,863

(659,859

)

Depreciation charges

229,669

230,167

Finance costs

47,359

147,176

Finance income

-

(5,737

)

Taxation

(32,444

)

554,421

1,805,447

266,168

Decrease/(increase) in stocks

438,133

(298,510

)

(Increase)/decrease in trade and other debtors

(29,383

)

4,577,975

Increase in trade and other creditors

3,228,500

1,471,162

Cash generated from operations

5,442,697

6,016,795

2.	CASH AND CASH EQUIVALENTS

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

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

388,278

3,361,885

Bank overdrafts

-

(1,859,138

)

388,278

1,502,747

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

3,361,885

2,076,168

Bank overdrafts

(1,859,138

)

(1,706,138

)

1,502,747

370,030

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank

3,361,885

(2,973,607

)

388,278

Bank overdrafts

(1,859,138

)

1,859,138

-

1,502,747

(1,114,469

)

388,278

Debt

Debts falling due within 1 year

(3,973,129

)

1,782,297

(2,190,832

)

Debts falling due after 1 year

(312,500

)

312,500

-

(4,285,629

)

2,094,797

(2,190,832

)

Total

(2,782,882

)

980,328

(1,802,554

)

1.	GENERAL INFORMATION

The company is a private company limited by share capital, incorporated in England.

The address of its registered office is:

The Pavilions

Knutsford Business Park

Mobberley Road

Knutsford

Cheshire

WA16 8ZR

2.	STATEMENT OF COMPLIANCE

These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.

3.	ACCOUNTING POLICIES

BASIS OF PREPARATION

The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.

The financial statements are prepared in sterling, which is the functional currency of the entity.

GOING CONCERN

As at 31 December 2024, the company had net assets of £2,012,219 (2023: £3,451,356) and had Profit after tax for the year of £1,560,863 (2023: Loss £659,859)

The Directors have concluded that it is reasonable to adopt a going concern basis in preparing the financial statements.

The Directors have prepared forecasts covering the period of 12 months which includes a number of assumptions in relation to varying levels of sales revenue. Whilst, the company's trading and cashflow forecasts have been prepared using current trading assumptions, the operating environment presents a number of challenges which could negatively impact the actual performance achieved. These challenges include, but not limited to, achieving forecast levels of sales and order intake, the impact of customer confidence as a result of general economic conditions, achieving forecast gross profit margin and improvements, and the director's ability to implement cost saving initiatives in areas of discretionary spend where required.

The company's cashflow forecast and projections, taking account of reasonable and possible changes in trading performance, offset by mitigating actions within the control of management, show that the company will be able to operate comfortably for next 12 months.

Based on the above indicators the directors believe that it remains appropriate to prepare the financial statements on a going concern basis.

CONSOLIDATION

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

Amelia Knight Limited is a wholly owned subsidiary of Amelia Knight Holdings Limited and the results of Amelia Knight Limited and its subsidiaries are included in the consolidated financial statements of Amelia Knight Holdings Limited, copies of which may be obtained from the Registrar of Companies, Companies House, Crown Way, Cardiff, CF14 3UZ.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

RESEARCH AND DEVELOPMENT

Research and development expenditure is written off in the period in which it is incurred.

FOREIGN CURRENCIES

Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the spot exchange rate as at the reporting date, with any gains or losses being recognised in the income statement. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

REVENUE RECOGNITION

Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied, stated net of Value Added Tax.

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

TAXATION

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

Current or deferred taxation assets and liabilities are not discounted.

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

DEFERRED TAX

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

OPERATING LEASES

Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.

INTANGIBLE ASSETS

Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Any intangible assets carried at revalued amounts, are recorded at the fair value at the date of revaluation, as determined by reference to an active market, less any subsequent accumulated amortisation and subsequent accumulated impairment losses.

AMORTISATION

Amortisation is calculated, using the straight-line method, to allocate the depreciable amount of the assets to their residual values over their estimated useful lives, as follows:

Asset class

Amortisation method and rate

Computer software

3 years

If there is an indication that there has been a significant change in the amortisation rate, useful life or residual value of an intangible asset, the amortisation charge is revised prospectively to reflect the new estimates.

TANGIBLE ASSETS

Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.

DEPRECIATION

Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset using the straight-line method. The estimated range for useful economic life of each asset category is as follows:

Asset class

Depreciation method and rate

Plant and machinery

10 years

Fixtures, fittings and equipment

3 - 5 years

If there is an indication that there has been a significant change in the depreciation rate, useful life or residual value of a tangible asset, the depreciation charge is revised prospectively to reflect the new estimates.

IMPAIRMENT OF FIXED ASSETS

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.

INVESTMENTS IN SUBSIDIARIES

Investment in subsidiaries are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.

TRADE DEBTORS

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

TRADE CREDITORS

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

STOCK

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Costs, which comprise direct production costs and an appropriate allocation of production overheads, are based on the method most appropriate to the type of inventory class, but usually on a first-in-first-out basis. Net realisable value is based on the estimated selling price less any estimated completion or selling costs.

When stocks are sold, the carrying amount of those stocks is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of stocks to net realisable value and all losses of stocks are recognised as an expense in the period in which the write-down or loss occurs. The amount of any reversal of any write-down of stocks is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

PROVISIONS

Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense.

Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.

FINANCIAL INSTRUMENTS

The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset, with 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

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

Other financial assets 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.

Impairment of financial assets

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.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company 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.

Other financial liabilities

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-masured 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.

The company is exposed to the usual credit risk and cash flow risk associated with selling on credit and manages this through robust credit control procedures and due diligence. As a consequence of its international activities, the company is exposed to changes in exchange rates. These exposures derive primarily from sales and purchases in foreign currencies (transaction exposure) or from holdings of foreign assets, debtors and creditors in currencies other than GBP (translation exposure). Euro and USD bank accounts are maintained to naturally hedge against

movements in either currency.

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 though 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.

Derecognition of financial liabilities

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