REGISTERED NUMBER: 11494119 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 31 December 2024

for

Arke Creative Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

6

Report of the Independent Auditors

8

Income Statement

12

Other Comprehensive Income

13

Balance Sheet

14

Statement of Changes in Equity

15

Cash Flow Statement

16

Notes to the Cash Flow Statement

17

Notes to the Financial Statements

19

Reconciliation of Equity

33

Reconciliation of Profit

35

DIRECTORS:

A Ellis

S D Lennon

R Westran

REGISTERED OFFICE:

10 Hills Place

London

W1F 7SD

REGISTERED NUMBER:

11494119 (England and Wales)

AUDITORS:

PKB Accountants Limited

Chartered Certified Accountants

Statutory Auditor

Beechey House

87 Church Street

Crowthorne

Berkshire

RG45 7AW

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

PRINCIPAL ACTIVITIES

The principle activities of the business continues to be the design and delivery of outstanding quality office interiors at high speed with a core emphasis on the quality of both products and relationships.

The company continues to excel in its professionalism, client value add and ability to go above and beyond supporting clients with building knowledge, navigating complex landlord and regulatory requirements to create spaces that promote a positive environment and help attract employees back to the office.

REVIEW OF BUSINESS

Arke has continued its strong and stable growth trajectory year with 2024 being no exception to the rule seeing turnover of £37.5m up from £21m in 2023. Management recognises however that within this number there is an anomaly project which represents circa £7m of the year's turnover. This however still signifies a comparative 45% turnover growth of circa £9.5m. This secured Arke a place in the Times 100 UK's fastest growing companies for the second year in a row achieving 47th in the listings. Notably within this year's projects include 3 High Risk Building projects all being successfully completed. This is something Arke prepared for given the majority of clients and the buildings in Mayfair were likely to be of this classification.

Arkes brand reputation still remains strong with average project size and number of projects delivered each year increasing steadily. With the drastic increase in turnover the team has continued to grow with headcount up 41% in the year with very few members of the team leaving the business demonstrating the culture and environment created. Arke invested significantly in the move from Duke Street to Hills place in late 2023 with additional work in Jan-24, creating a safe, professional working environment that has generated business and desire to work in the office. Arke also took the opportunity to switch IT service providers and overhaul IT servers with a view to futureproofing for the next 5-10 years. To support the evolving workplaces landscape, laptops were overhauled and the bespoke customisation of design laptops to outperform high performance gaming laptops to enable seamless working remotely.

The business continued to service clients mostly from the Financial services and private equity markets and continues to secure new opportunities with clients from different market sectors with multiple projects being rolled out throughout 2025.

PRINCIPAL RISKS AND UNCERTAINTIES

Arke remains vigilant in identifying and managing key risks and uncertainties that may impact ongoing operations and strategic goals. Our ability to deliver consistent service is closely tied to the professionalism of our staff, the reliability and experience of our supply chain, and the strength of our leadership team. We continue to maintain a proactive and disciplined approach to risk management, ensuring that contractual obligations are assessed at a high level and are taken in line with the companies approach strong financial discipline and control. As the market evolves which is driven through increased competition and fluctuations in the availability of high-quality office space, we remain committed to servicing our longstanding clients while actively seeking opportunities to attract new ones. Maintaining high standards of service delivery is critical to our success in a fast-paced and shifting environment, and we continuously adapt our strategies to meet these challenges.

PRICE RISK

Due to the nature of the service provided, price risk is apparent in all contracts, any instances where unforeseen costs arise unless these are specified change requests from a client are very rarely recoverable.

PRODUCT RISK

In a highly competitive marketplace where speed and quality are paramount, our commitment to delivering exceptional and fast-paced services requires continual vigilance from management. As the business continues to grow, the risk of compromised quality, supply chain performance and accelerated time-to-market pressures combined with new regulations means process refinement remains a key strategic concern. To mitigate these risks, we have begun to reshape the business to build in increased time and support roles to prevent errors prior to contract signing. This proactive stance ensures that we uphold our reputation for excellence while maintaining the agility required to compete effectively in a dynamic environment.

CREDIT RISK

When appropriate relevant credit checks are performed on potential customers and subcontractors before contracts are entered into. The amount of exposure to any individual customers and subcontractors is controlled by means of an upfront payment schedule with fixed milestones for payments agreed and forming part of the works contracts.

LIQUIDITY RISK

Liquidity risk is mitigated through the strong partnership of finance and the commercial team. Regular involvement in meetings means that real time cashflows can be achieved on a project-by-project basis. This is then used to create the businesses cashflow which is updated by the Finance Manager and reviewed weekly by the CFO. Any exceptional payments or project risks can be factored in and planned for accordingly.

INTEREST RATE RISK

The business capitalises on variable interest rates on its banking and finance facilities. Changes to these rates is monitored and reviewed by the Board. The directors keep current market rates and anticipated future market trends under close review. The risk is assessed as low as there is no debt involved within the business.

CLIMATE RISK

This has been assessed as a relatively low risk, most sites will remain open during adverse weather conditions. In instances of heavy rainfall making good to sites may be required after any external leaks from the roof or ingress via windows

HEALTH AND SAFETY

Arke is committed to maintaining the highest standards in health and safety, as such we ensure full compliance with all UK construction health and safety regulations. This includes adherence to the Health and Safety at Work etc. Act 1974 and all relevant industry best practices. To provide assurance and maintain transparency, our health and safety performance is monitored regularly by an independent third-party specialist. This external oversight supports our proactive risk management approach, verifies compliance, and helps identify opportunities for continuous improvement across all our construction activities. Through this rigorous monitoring, we aim to foster a culture of safety, protect our workforce, and uphold our legal and ethical responsibilities. Arke to date have had 0 RIDDOR reportable incidents.

FINANCIAL OVERVIEW

The business performance is a market reflection on the quality of service and internal and external brand reputation which the business continues to build upon. The below KPI's are considered the most financially relevant indication of the business performance and are monitored by the senior management team regularly.

KEY PERFORMANCE INDICATORS

Performance

2024

2023

Turnover (£m)

37.50

21.30

Profit before tax

0.464

0.321

Cash at Bank (£m)

5.50

2.60

Management has maintained a strong strategic focus on liquidity control to ensure financial resilience and operational stability in the face of evolving market and contracting conditions.

Project

2024

2023

Projects - (less exceptional)

33

31

Average project value (£) - (less exceptional)

950,000

687,000

Average project size has increased based on market confidence and evidenced quality of delivery.

Liquidity

2024

2023

Quick ratio

1.17

1.13

Debtors days

11

54

Creditor days

50

110

The restructuring and enhancement of the finance department has led to improved financial control with significant improvements to cash collection removing the need for any short-term working capital enhancements.

FUTURE DEVELOPMENTS

Arke has plans to continue to invest in employees through training programmes throughout the business and upskill through external training providers in many industry specific areas. As the business continues to grow new roles within the business and being recruited following the need for additional support roles to further enhance Arke's offerings and to enable operational employees time to focus on delivering high quality projects.

Following this rapid expansion of the team, a review of the current office is being undertaken to ensure the space is being utilised as best as possible. It is predicted that 2025 performance will in real terms exceed prior years with the proposed plans to attract additional business development talent.

The marketplace continues to change with the ongoing economic climate but the pipeline of work remains healthy with a continual throughput of work and more overseas clients looking to take space in the heart of London. Arke continues to deliver outstanding projects and always has its mind open to improved ways of working and opportunities to enhance its offerings.

ON BEHALF OF THE BOARD:

A Ellis - Director

22 September 2025

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of office refurbishment.

DIVIDENDS

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

DIRECTORS

A Ellis 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:

G Howell - deceased 13 February 2024

S D Lennon - appointed 18 March 2024

Mrs H K Vagha - appointed 18 March 2024

R Westran was appointed as a director after 31 December 2024 but prior to the date of this report.

Mrs H K Vagha ceased to be a director after 31 December 2024 but prior to the date of this report.

POLITICAL DONATIONS AND EXPENDITURE

Donations for the year total £776 none of which were political.

POST BALANCE SHEET EVENTS

There have been no significant events affecting the company since the year end.

GOING CONCERN

The company has prepared budgets and forecasts that cover the period of 12 months from the date of the

financial statements being authorised for issue in order to assess going concern It is anticipated that the

company's level of activity will remain fairly constant over that period with similar results being attained in

line with the current trading period. The company has also sought comfort from it parent company that

they will provide financial support should it be required. At the time of approving the financial statements,

the directors have a reasonable expectation that the company has adequate resources to continue in

operational existence for the foreseeable future. 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

approval of the financial statements and consequently have prepared the financial statements on a going

concern basis.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

AUDITORS

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

ON BEHALF OF THE BOARD:

A Ellis - Director

22 September 2025

Opinion

We have audited the financial statements of Arke Creative Limited (the 'company') for the year ended 31 December 2024 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the 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 company's affairs as at 31 December 2024 and of its profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

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

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

Auditors' responsibilities for the audit of the financial statements

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

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. 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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

. We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant are those that relate to the High Risk Buildings Procedures Act 2022, Disability Discrimination Act 1995, High Risk Building Procedures Act 2023 the reporting framework FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", Companies Act 2006, Bribery Act 2010, Money Laundering regulations and relevant tax compliance regulations in the United Kingdom.

. We understood how Arke Creative Limited is complying with those frameworks by making enquiries of management and those responsible for legal and compliance procedures. We corroborated our enquiries through the review of the following documentation or completion of the following procedures:

. Review of all minutes of board meetings held during the period and through to the most recent meeting held prior to the approval of these financial statements;

. Review of accounting policies and completion of a disclosure checklist to assess compliance with FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and Company law requirements;

. Review of any relevant correspondence with local tax authorities; and

. Review of any relevant correspondence received from regulatory bodies

. We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur by holding a discussion within the audit team which included identification of related parties, understanding the company's business, the control environment and assessing the inherent risk for relevant assertions at the significant account level. We also held discussions with management and those charged with governance to gain an understanding of those areas of the financial statements which are susceptible to fraud, as identified by management. Following these procedures, we identified a risk of management override of control and risk of inappropriate revenue recognition. We gained an understanding of the entity level of controls and policies that the company applies.

Based on this understanding we designed our audit procedures to identify noncompliance with such laws and regulations. Our procedures involved testing of journal entries, with focus on journals indicating large or unusual transactions, or meeting our defined risk criteria based on our understanding of the business, reviewing accounting estimates for evidence of management bias and enquiries of senior members of the management team regarding their knowledge of any instances of non-compliance with laws and regulations that could impact the financial statements.

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.

Yvonne Miles (Senior Statutory Auditor)

for and on behalf of PKB Accountants Limited

Chartered Certified Accountants

Statutory Auditor

Beechey House

87 Church Street

Crowthorne

Berkshire

RG45 7AW

26 September 2025

TURNOVER

37,533,373

21,332,062

Cost of sales

30,225,771

16,749,732

GROSS PROFIT

7,307,602

4,582,330

Administrative expenses

6,905,128

4,247,514

OPERATING PROFIT

4

402,474

334,816

Interest receivable and similar income

78,295

1,464

480,769

336,280

Interest payable and similar expenses

5

15,997

14,908

PROFIT BEFORE TAXATION

464,772

321,372

Tax on profit

6

214,275

127,727

PROFIT FOR THE FINANCIAL YEAR

250,497

193,645

PROFIT FOR THE YEAR

250,497

193,645

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

250,497

193,645

FIXED ASSETS

Tangible assets

7

692,178

910,023

CURRENT ASSETS

Debtors

8

4,282,364

6,188,542

Cash at bank

5,489,769

2,601,119

9,772,133

8,789,661

CREDITORS

Amounts falling due within one year

9

8,363,805

7,751,375

NET CURRENT ASSETS

1,408,328

1,038,286

TOTAL ASSETS LESS CURRENT LIABILITIES

2,100,506

1,948,309

CREDITORS

Amounts falling due after more than one year

10

(80,740

)

(177,706

)

PROVISIONS FOR LIABILITIES

12

(67,404

)

(68,738

)

NET ASSETS

1,952,362

1,701,865

CAPITAL AND RESERVES

Called up share capital

13

304,878

304,878

Share premium

14

335,366

335,366

Retained earnings

14

1,312,118

1,061,621

SHAREHOLDERS' FUNDS

1,952,362

1,701,865

The financial statements were approved by the Board of Directors and authorised for issue on 22 September 2025 and were signed on its behalf by:

A Ellis - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 January 2023

304,878

867,976

335,366

1,508,220

Changes in equity

Total comprehensive income

-

193,645

-

193,645

Balance at 31 December 2023

304,878

1,061,621

335,366

1,701,865

Changes in equity

Total comprehensive income

-

250,497

-

250,497

Balance at 31 December 2024

304,878

1,312,118

335,366

1,952,362

Cash flows from operating activities

Cash generated from operations

1

2,873,713

1,517,872

Interest paid

(15,997

)

(14,908

)

Tax paid

(73,129

)

(312,082

)

Net cash from operating activities

2,784,587

1,190,882

Cash flows from investing activities

Purchase of tangible fixed assets

(146,195

)

(993,383

)

Interest received

78,295

1,464

Net cash from investing activities

(67,900

)

(991,919

)

Cash flows from financing activities

Capital repayments in year

(51,456

)

244,619

Amount introduced by directors

223,875

-

Amount withdrawn by directors

(456

)

(220,500

)

Net cash from financing activities

171,963

24,119

Increase in cash and cash equivalents

2,888,650

223,082

Cash and cash equivalents at beginning of year

2

2,601,119

2,378,037

Cash and cash equivalents at end of year

2

5,489,769

2,601,119

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

31.12.24

31.12.23

£

£

Profit before taxation

464,772

321,372

Depreciation charges

330,705

161,262

Loss on disposal of fixed assets

33,335

5,123

Finance costs

15,997

14,908

Finance income

(78,295

)

(1,464

)

766,514

501,201

Decrease/(increase) in trade and other debtors

1,682,303

(3,553,861

)

Increase in trade and other creditors

424,896

4,570,532

Cash generated from operations

2,873,713

1,517,872

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

5,489,769

2,601,119

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

2,601,119

2,378,037

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank

2,601,119

2,888,650

5,489,769

2,601,119

2,888,650

5,489,769

Debt

Finance leases

(244,619

)

51,456

(193,163

)

(244,619

)

51,456

(193,163

)

Total

2,356,500

2,940,106

5,296,606

1.	STATUTORY INFORMATION

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

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

The functional currency of the company is Pound Sterling (£)

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

Going Concern

The company has prepared budgets and forecasts that cover the period of 12 months from the date of the financial statements being authorised for issue in order to assess going concern It is anticipated that the company's level of activity will remain fairly constant over that period with similar results being attained in line with the current trading period. The company has also sought comfort from it parent company that they will provide financial support should it be required. At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. 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 approval of the financial statements and consequently have prepared the financial statements on a going concern basis.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the Company's accounting policies, management is required to make

judgements, estimates and assumptions about the carrying values of assets and liabilities that are

not readily apparent from other sources. The estimates and underlying 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 if the revision

affects only that period, or in the period of the revision and future periods if the revision affects

both current and future period.

(a) Critical accounting estimates and assumptions

The company makes estimates and assumptions concerning the future. The resulting accounting

estimates will seldom equal the related actual results. The estimates and assumptions that have a

significant risk of causing material adjustment to the carrying amounts of assets and liabilities within

the next financial year are addressed below:

(i) Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful

economic lives and residual values of the assets. The useful economic lives and residual values are

reassessed annually. They are amended when necessary to reflect current estimates based on

physical condition and economic utilisation of the assets. See note 7 for the carrying amount of the

assets and the accounting policies note Tangible Fixed Assets for the useful economic lives of each

class of asset.

(ii) Impairment of debtors

The company makes an estimate of the recoverable value of trade and other debtors. When

assessing impairment of trade and other debtors, management considers factors including the

current credit rating of the debtor, the ageing profile of debtors and historical experience. See note

8 for the net carrying amount of the debtors.

(iii) Impairment of creditors

The company makes an estimate of the payable value of trade and other creditors including

accruals. When assessing impairment of trade and other creditors including accruals, management

considers factors including the ageing profile of the balances and historical experience. See note 9

to 10 for the net carrying amount of the creditors.

(iv) Work in progress

The company recognises work in progress on ongoing contracts at the balance sheet date. The valuation of work in progress requires management to exercise judgement in assessing the stage of completion, the recoverability of costs, and the treatment of contract retentions. Work in progress is measured at cost incurred, including attributable overheads, less any foreseeable losses. Recoverability is assessed with reference to contract terms, progress to date, and the likelihood of customer acceptance. Certain balances include retentions which are expected to be recovered on completion of projects or after the defects liability period. Please see note 9 for the carrying amount of work in progress and retentions.

Turnover

Turnover represents contracts of office refurbishments, net of VAT and traded discounts. Turnover is recognised upon completion of projects or stage payments where applicable and beneficial ownership of work performed has been passed to the client. Where a contract has only been partially completed at the balance sheet date turnover represents the value of the service provided to date based on a proportion of the total expected consideration at completion. Where payments are received from customers in advance of services provided, the amounts are recorded as Deferred Income and included as part of Creditors due within one year.

Interest Income

Interest income is recognised on an accruals basis using the effective interest method. Income is recognised in the profit and loss account in the period to which it relates, when it is probable that the economic benefits will flow to the company and the amount can be measured reliably.

Tangible fixed assets

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

Short leasehold

-

Straight line over term of lease

Improvements to property

-

Straight line over term of lease

Fixtures and fittings

-

15% on reducing balance

Computer equipment

-

25% on reducing balance

Tangible assets are held at historical cost less accumulated depreciation and any accumulated impairment losses.

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and any costs of disposal are recognised in the Income statement.

At each balance sheet date, the Company reviews the carrying amounts of its tangible fixed assets to determine whether there is any indication that any items have suffered an impairment loss. If any such indication exists, the recoverable amount of an asset is estimated in order to determine the extent of the impairment loss, if any.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment loss is recognised as an expense immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined ( net of depreciation ) had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately.

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 when the company becomes party to the contractual

provisions of the instrument.

Financial assets and liabilities are offset, with 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 trade and other debtors, amounts owed by group undertakings

and accrued income, 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 financial asset is measured at the present value of the

future receipts discounted at a market rate of interest.

Impairment of financial assets

Financial assets 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 and 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.

Classification of financial liabilities

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 company after deducting all of its liabilities.

Basic Financial liabilities

Basic financial liabilities, including trade and other creditors, amounts due to fellow group companies, accruals, 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.

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

Trade payables 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 payment is due within one year or less. If not, they are presented as non]current liabilities. Trade payables with no stated interest rate or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in administrative expenses.

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the company's contractual obligations

are discharged, cancelled, or they expire.

Taxation

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

Current Tax

The tax currently payable is based on taxable profit for the year. Taxable profits differs from net profit as reported in the profit and loss account as 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 company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred Tax

Deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.