REGISTERED NUMBER: 03729407 (England and Wales)

Group Strategic Report, Directors' Report and

Consolidated Financial Statements for the Year Ended 31 December 2024

for

Electrical Testing (Holdings) Limited

Page

Company Information

1

Group Strategic Report

2

Directors' Report

4

Report of the Independent Auditors

6

Consolidated Statement of Income and Retained Earnings

10

Consolidated Balance Sheet

11

Company Balance Sheet

13

Consolidated Cash Flow Statement

14

Notes to the Consolidated Cash Flow Statement

15

Notes to the Consolidated Financial Statements

18

Directors:

Mr S A Hobbs

Mrs M Hobbs

Secretary:

Mrs M Hobbs

Registered office:

The Bridge

Old Road

Acle

Norwich

Norfolk

NR13 3AT

Registered number:

03729407 (England and Wales)

Senior statutory auditor:

Mr Jeremy Laurence Hyde FCCA

Auditors:

CG LEE Limited

Ingram House

6 Meridian Way

Norwich

NR7 0TA

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

Review of business and future outlook

The Group has continued to deliver steady growth through 2024/25, maintaining strong client relationships and consistent performance across all operating divisions. In line with our strategic objectives, the Group completed the acquisition of NetworksUK, securing valuable intellectual property and strengthening our competitive advantage in the highways electrical testing sector.

The Group remains focused on sustainable long-term growth, investment in people and systems, and maintaining high standards of quality, safety, and compliance. Our strategy continues to provide resilience and opportunity as we move beyond the original 2023-2025 plan.

The main financial objectives during this period will include increasing overall revenues by 5% year-on-year, whilst maintaining a consistent net profit margin. In addition, we aim to maintain existing service offerings, ensure high levels of customer satisfaction, develop new software technology solutions, expand our services into the electric vehicle supply charging market, and establish ourselves as a traffic management service provider, primarily servicing our own contracts.

The group's expansion into the EV market will involve venturing into DNO Connections for electrical services associated with EV supplies. As the demand for EV charging infrastructure and related services continues to grow, this move will strengthen our position within the industry and diversify our service offerings.

Establishing a specialised traffic management services division within the group will enable us to provide expert solutions to a growing market segment.

In addition to organisational changes, we will continuously review and assess our existing service offerings to ensure they meet the changing needs of our clients. We will implement a comprehensive quality assurance programme to maintain the highest standards of service delivery and regularly solicit customer feedback to identify areas for improvement and enhancement.

To support our growth and stay ahead of the curve, we will invest in research and development to identify new software solutions that can improve the efficiency and effectiveness of our services. Collaborating with technology partners and regularly reviewing and updating our technology infrastructure will support innovation and growth.

Market research will be conducted to identify new opportunities within the electric vehicle supply charging market, and a targeted marketing strategy will be developed to promote our services within this market segment. Establishing strategic partnerships with key stakeholders within the electric vehicle supply charging industry will help us gain market access and share expertise.

Our growth strategy will require an investment of £1.5 million over the next two years, which will be allocated towards research and development activities, technology infrastructure upgrades, and market expansion efforts. It is crucial that we remain agile and responsive to the changes in the market, maintain a focus on our primary strengths, and carefully manage and support our expansion efforts to ensure success.

The group's expansion into the EV market, traffic management sector, and the necessary restructuring within the organisation, will position the group to capitalise on emerging opportunities in the rapidly growing electrical services market and secure our position for the duration of this business plan cycle.

Financial highlights

The directors consider that the key performance indicators (KPIs) are turnover and profit or loss before taxation. The KPIs for the year ended 31 December 2024 with comparatives for the year ended 31 December 2023 are as follows:

Group turnover for the year ended 31 December 2024 is £13,735,449 (2023: £13,714,399)

Profit before taxation for the year ended 31 December 2024 is £1,599,728 (2023: profit of £818,353)

Principal risks and uncertainties

Principal risks and uncertainties are categorised as operational risks, commercial risks, ethical risks, environmental risks and training risks.

Risk analysis is considered a key business activity and we maintain a risk control spreadsheet that:-

1) Accurately identifies the category of risk

2) Provides details of the risk

3) Specifies the measures in place to minimise the risk and:

4) Details the potential consequences if the risk is not managed or mitigated

The risk register is discussed during board meetings and is regularly reviewed, updated and revised as necessary. It is considered that all risks identified are currently managed or mitigated.

On behalf of the board:

Mr S A Hobbs - Director

25 September 2025

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

Principal activity

We are a leading provider of Highways Services in the United Kingdom. With over 30 years of experience, we have built the business on a foundation of trust, performance and unparalleled customer service.

Our team of chartered engineers and specialists work with a large range of clients across the UK, from local authorities and contractors to consultants and individuals. We're proud to be recognised as a significant independent player in the world of electrical inspection and testing, connections and training in cities and on highways across the country.

We're respected as one of the first independent companies to receive accreditation under the National Electricity Registration Scheme (NERS) run by Lloyds Register on behalf of the UK Distribution Network Operators.

With a commitment to modernisation, impartiality and technological innovation, we aim higher, to raise the bar and set the standards for others to follow.

We employ only the best staff, offering a broad range of experience and skills across industry, and we inspect and test a complete range of premises including Government buildings, MOD sites, petrol and oil installations, swimming pools, tower blocks, shopping malls, council assets, utility company assets, museums, public buildings, office blocks and private homes.

We offer a wide spectrum of services including electrical testing and inspections, Underground cable route tracing and plotting, Thermographic surveys, Street lighting data collection surveys, Jointing (live/dead) of street light columns, Structural testing street lighting using Dipstik, Underground cable fault locating.

We are approved to the highest standards for technical expertise, quality, environmental standards and health & safety. This is demonstrated with registrations held through UKAS, Lloyds (NERS), HEA (HERS), NICEIC, Lantra Awards and City and Guilds.

Dividends

Dividends of £379,996 were paid to the owners of the parent company during the year. Dividends of £60,210 were also paid to non-controlling interests during the year.

Research and development

The group continues to invest in research and development activities to support improvements in internal systems and proprietary service tools.

Directors

Mr S A Hobbs has held office during the whole of the period from 1 January 2024 to the date of this report.

Other changes in directors holding office are as follows:

Mr A J Hobbs - resigned 29 October 2024

Mrs E J Hobbs - resigned 29 October 2024

Mrs M Hobbs - appointed 29 October 2024

Matter included in the strategic report

Details regarding a review of the business, including future developments, principal risk and uncertainties are provided in the Strategic Report on pages 2 and 3.

Statement of directors' responsibilities

The directors are responsible for preparing the Group Strategic Report, the Directors' 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

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

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

Statement as to disclosure of information to auditors

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

Auditors

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

On behalf of the board:

Mr S A Hobbs - Director

25 September 2025

Opinion

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

In our opinion the financial statements:

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

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

-	the Group 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

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

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

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

Responsibilities of directors

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

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

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting 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.

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to employment laws and tax legislation, and we considered the extent to which non­ compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to revenue and management bias in accounting estimates. Audit procedures performed by the engagement team included:

- discussions with management including consideration of known or suspected instances of non-compliance with laws and regulation;

- evaluating management's controls designed to prevent and detect irregularities;

- identifying and testing of journal entries for appropriateness and evaluating the business rationale of significant transactions outside the normal course of business; and

- reviewing significant accounting estimates for management bias.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Mr Jeremy Laurence Hyde FCCA (Senior Statutory Auditor)

for and on behalf of CG LEE Limited

Ingram House

6 Meridian Way

Norwich

NR7 0TA

25 September 2025

Turnover

4

13,735,449

13,714,399

Cost of sales

(7,227,394

)

(8,110,435

)

Gross profit

6,508,055

5,603,964

Administrative expenses

(5,007,148

)

(4,821,292

)

Operating profit

7

1,500,907

782,672

Interest receivable and similar income

98,901

35,731

1,599,808

818,403

Interest payable and similar expenses

8

(80

)

(52

)

Profit before taxation

1,599,728

818,351

Tax on profit

9

(339,798

)

(137,011

)

Profit for the financial year

1,259,930

681,340

Retained earnings at beginning of year

6,481,511

6,220,619

Dividends

11

(440,206

)

(447,224

)

Retained earnings for the group at end of year

7,301,235

6,454,735

Profit attributable to:

Owners of the parent

1,256,150

680,890

Non-controlling interests

3,780

450

1,259,930

681,340

Fixed assets

Intangible assets

12

2,645,984

-

Tangible assets

13

1,320,607

1,108,769

Investments

14

-

-

3,966,591

1,108,769

Current assets

Stocks

15

473,021

467,877

Debtors

16

2,209,177

2,672,827

Cash at bank and in hand

4,449,314

3,318,028

7,131,512

6,458,732

Creditors

Amounts falling due within one year

17

(1,052,448

)

(1,038,613

)

Net current assets

6,079,064

5,420,119

Total assets less current liabilities

10,045,655

6,528,888

Creditors

Amounts falling due after more than one year

18

(2,700,000

)

-

Provisions for liabilities

21

(71,094

)

(74,053

)

Net assets

7,274,561

6,454,835

Capital and reserves

Called up share capital

22

100

100

Retained earnings

23

7,357,665

6,481,509

Shareholders' funds

7,357,765

6,481,609

Non-controlling interests

24

(83,204

)

(26,774

)

Total equity

7,274,561

6,454,835

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

Mr S A Hobbs - Director

Fixed assets

Intangible assets

12

-

-

Tangible assets

13

-

-

Investments

14

3,840,995

625,095

3,840,995

625,095

Current assets

Debtors

16

540

-

Creditors

Amounts falling due within one year

17

(13,807

)

(1,099

)

Net current liabilities

(13,267

)

(1,099

)

Total assets less current liabilities

3,827,728

623,996

Creditors

Amounts falling due after more than one year

18

(3,216,000

)

-

Net assets

611,728

623,996

Capital and reserves

Called up share capital

22

100

100

Retained earnings

23

611,628

623,896

Shareholders' funds

611,728

623,996

Company's profit for the financial year

367,728

420,000

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

Mr S A Hobbs - Director

Cash flows from operating activities

Cash generated from operations

1

2,038,137

1,027,884

Interest paid

(80

)

(52

)

Tax paid

(222,654

)

(196,574

)

Net cash from operating activities

1,815,403

831,258

Cash flows from investing activities

Purchase of intangible fixed assets

(848

)

-

Purchase of tangible fixed assets

(411,628

)

(208,371

)

Sale of tangible fixed assets

2,832

-

Interest received

98,901

35,731

Net cash from investing activities

(310,743

)

(172,640

)

Cash flows from financing activities

Amount introduced by directors

77,000

15,791

Amount withdrawn by directors

(10,171

)

(322,154

)

Equity dividends paid

(440,206

)

(447,224

)

Net cash from financing activities

(373,377

)

(753,587

)

Increase/(decrease) in cash and cash equivalents

1,131,283

(94,969

)

Cash and cash equivalents at beginning of year

2

3,318,028

3,412,993

Cash and cash equivalents at end of year

2

4,449,314

3,318,028

1.	Reconciliation of profit before taxation to cash generated from operations

2024

2023

£

£

Profit before taxation

1,599,728

818,351

Depreciation charges

179,166

109,338

Loss on disposal of fixed assets

64,367

3,725

Net creditors on acquisition

425

-

Cash introduced on acquisition

29,786

-

Finance costs

80

52

Finance income

(98,901

)

(35,731

)

1,774,651

895,735

(Increase)/decrease in stocks

(5,144

)

51,306

Decrease in trade and other debtors

397,469

411,420

Decrease in trade and other creditors

(128,839

)

(330,577

)

Cash generated from operations

2,038,137

1,027,884

2.	Cash and cash equivalents

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

4,449,314

3,318,028

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

3,318,028

3,412,993

3.	Analysis of changes in net funds/(debt)

At 1.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank and in hand

3,318,028

1,131,286

4,449,314

3,318,028

1,131,286

4,449,314

Debt

Debts falling due after 1 year

-

(2,700,000

)

(2,700,000

)

-

(2,700,000

)

(2,700,000

)

Total

3,318,028

(1,568,714

)

1,749,314

**	CURRENT YEAR - MOVEMENT IN CASH AND CASH EQUIVALENTS

AS CALCULATED IN CONSOLIDATED CASH FLOW STATEMENT

DOES NOT AGREE TO MOVEMENT PER BALANCE SHEET

COMPARE MOVEMENT ON CONSOLIDATED CASH FLOW STATEMENT

=

1,131,283

TO

MOVEMENT PER BALANCE SHEET

CASH AND CASH EQUIVALENTS

=

1,131,286

**	LAST YEAR - MOVEMENT IN CASH AND CASH EQUIVALENTS

AS CALCULATED IN CONSOLIDATED CASH FLOW STATEMENT

DOES NOT AGREE TO MOVEMENT PER BALANCE SHEET

COMPARE MOVEMENT ON CONSOLIDATED CASH FLOW STATEMENT

=

(94,969

)

TO

MOVEMENT PER BALANCE SHEET

CASH AND CASH EQUIVALENTS

=

(94,965

)

1.	Statutory information

Electrical Testing (Holdings) Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

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

2.	Statement of compliance

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

3.	Accounting policies

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention.

Financial Reporting Standard 102 - reduced disclosure exemptions

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

•

the requirement of paragraph 33.7.

Basis of consolidation

The group consolidated financial statements include the financial statements of the company and all of its subsidiaries as if they form a single entity. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Subsidiaries are consolidated from the date of their acquisition, being the date on which the group obtains control and continue to be consolidated until the date that such control ceases. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The critical accounting judgements and key sources of estimation uncertainty are considered to be:-

Investments in subsidiaries

At the balance sheet date management reviews the carrying amount of investments and considers the indicators of impairment.

Goodwill

At the balance sheet date management reviews the carrying amount of goodwill and considers the indicators of impairment.

Tangible fixed assets

At the balance sheet date management reviews the carrying value of fixed assets achievable on a third party sale and compares this to the net book value to determine if there are any indicators of impairment.

Debtors

Management compares the year end debtors to afterdate cash receipts and trading activity for recoverability. Year end amounts considered irrecoverable are provided for in the accounts.

Work in hand

Management reviews invoices raised after the balance sheet date to ensure amounts are fully recoverable.

Turnover

Turnover is measured at the fair value of consideration received or receivable, excluding discounts, rebates, VAT and other sales taxes. Revenue is recognised at the point at which the company satisfies its performance obligations under a contract and has enforceable right to payment. The specific revenue recognition points for each income stream are as follows:-

Income generated from highways contracts is recognised upon completion of the contracted works or services. Contracts which comprise stage payments are recognised at each milestone.

Income generated from Electric Vehicle ("EV") Charging Infrastructure contracts is recognised when installation or testing is completed.

Income generated from connections contracts is recognised after testing and verification, i.e. upon completion.

Income generated from other contract works and multi-stage projects is recognised in accordance with the individual contracts, typically at milestone points of on full completion.

Income generated from the provision of training services is recognised when the training has been delivered in full. Where courses are prepaid the income is deferred and recognised in the period the training is delivered.

Goodwill

Purchased goodwill arising on the acquisition of subsidiary undertakings and businesses, represents any excess of the fair value of the consideration given over the fair value of the identifiable assets and liabilities acquired. Goodwill is capitalised and stated at cost less accumulated amortisation and provisions for impairment. The amortisation of goodwill is calculated on a straight line basis over 10 years..

Tangible fixed assets

Tangible fixed 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 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 as follows:

Improvements to property - 4% on a straight line basis

Plant and machinery - 15% on a reducing balance basis

Fixtures and fittings - 25% on a reducing balance basis

Computer equipment - 25% on a straight line basis

Motor Vehicles - 25% on a straight line basis

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and

slow moving items. Net realisable value is calculated at the lower of cost or selling price less cost to complete.

Financial instruments

A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument.

Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Debt instruments are subsequently measured at amortised cost.

Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.

For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics.

Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised. 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 entity after deducting all of its financial liabilities.

Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.

Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

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

Research and development

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

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Assets held under finance leases and hire purchase contracts are recognised in the balance sheet as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset.

Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

Investments in subsidiaries

Investments in subsidiary undertakings are held at cost less accumulated impairment losses.

Trade and other debtors

Trade and other debtors that are receivable within one year and do not constitute a financing transaction are recorded at the undiscounted amount expected to be received, net of impairment. Those that are receivable after more than one year or that constitute a financing transaction are recorded initially at fair value less transaction costs and subsequently at amortised cost, net of impairment.