REGISTERED NUMBER: 13774047 (England and Wales)

QS GROUP HOLDINGS LIMITED

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Consolidated Income Statement

8

Consolidated Other Comprehensive Income

9

Consolidated Balance Sheet

10

Company Balance Sheet

11

Consolidated Statement of Changes in Equity

12

Company Statement of Changes in Equity

13

Consolidated Cash Flow Statement

14

Notes to the Consolidated Cash Flow Statement

15

Notes to the Consolidated Financial Statements

16

DIRECTORS:

R Fernandez

Miss I Fernandez

J Fernandez

Mrs J M Fernandez

REGISTERED OFFICE:

Unit 21

The Office Village

North Road

Loughborough

Leicestershire

LE11 1QJ

REGISTERED NUMBER:

13774047 (England and Wales)

SENIOR STATUTORY AUDITOR:

Niall Kingsley FCA

AUDITORS:

Duncan & Toplis Audit Limited, Statutory Auditor

3 Princes Court

Royal Way

Loughborough

Leicestershire

LE11 5XR

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

REVIEW OF BUSINESS

The directors are pleased to announce a profit before tax of £2,350,492 (2023: £1,643,795)

DEVELOPMENT AND PERFORMANCE

The company continues to build on its outstanding reputation as one of the UK's leading natural stone and porcelain tile retailers.

KEY PERFORMANCE INDICATORS

Year ended 31.12.24

Year ended 31.12.23

% inc / (dec)

£'000

£'000

Revenue

17,708

12,683

94.6

Gross Profit

9,129

6,042

51.1

Gross Profit %

51.6%

47.6%

4.0

Net Profit Before Taxation

2,350

1,644

42.9

Net Profit %

13.3%

13.0%

0.3

PRINCIPAL RISKS AND UNCERTAINTIES

The company's operations are subject to a range of risks, most notably within its supply chain, which can be affected by economic, political, and logistical factors. In addition, sourcing natural products carries inherent uncertainties. To mitigate these exposures, the company maintains a diversified product portfolio, working with multiple suppliers across several countries.

The company also closely monitors its liquidity position on a regular basis.

ON BEHALF OF THE BOARD:

J Fernandez - Director

30 September 2025

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

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of the distribution and retail of stone products.

DIVIDENDS

Interim dividends per share were paid as follows:

A Ordinary £0.01 shares

24.8

- 26 January 2024

B Ordinary £0.01 shares

24.28571

- 26 January 2024

C Ordinary £0.01 shares

56.66666

- 26 January 2024

The directors recommend that no final dividends be paid.

The total distribution of dividends for the year ended 31 December 2024 will be £ 586,000 .

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes 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.

R Fernandez

Miss I Fernandez

J Fernandez

Mrs J M Fernandez

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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, Duncan & Toplis Audit Limited, Statutory Auditor, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J Fernandez - Director

30 September 2025

Opinion

We have audited the financial statements of QS Group Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the 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 Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

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

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

Auditors' responsibilities for the audit of the financial statements

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We have identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial experience, knowledge of the sector, a review of regulatory and legal correspondence and through discussions with Directors and other management obtained as part of the work required by auditing standards. We have also discussed with the Directors and other management the policies and procedures relating to compliance with laws and regulations. We communicated laws and regulations throughout the team and remained alert to any indications of non-compliance throughout the audit.

The potential impact of different laws and regulations varies considerably. Firstly, the parent company and group is subject to laws and regulations that directly impact the financial statements (for example financial reporting legislation) and we have assessed the extent of compliance with such laws as part of our financial statements audit. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including risk of override of controls) and determined that the principal risks were related to management bias in accounting estimates and judgemental areas of the financial statements such as depreciation of property, plant and equipment, investment property valuations as well as the risk of inappropriate journal entries to manipulate reported profitability. Audit procedures performed by the engagement team included the identification and testing of unusual material journal entries and challenging management on key estimates, assumptions and judgements made in the preparation of the financial statements. We carried out detailed substantive tests on accounting estimates, including reviewing the methods and data used by management to make those estimates such as residual values and expected asset replacement cycles, reperforming the calculation, reviewing commercial and residential property sales in the local area, reviewing the outcome of prior year estimates, and reviewing the outcome of current year estimates since the financial reporting date.

Secondly, the parent company and group is subject to other laws and regulations where the consequence for non-compliance could have a material effect on the amounts or disclosures in the financial statements. We identified the following areas as those most likely to have such an effect: Import duties and customs regulations, Health and Safety regulations and Employment laws.

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and other management and inspection. This inspection included a review of HMRC correspondence to ensure that customs regulations were being complied with. Health and safety requirements were reviewed for any evidence of non-compliance, in addition to an assessment of the parent company and group's employment and health and safety controls. Through these procedures, if we became aware of any non-compliance, we considered the impact on the procedures performed on the related financial statement items.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. The further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. As with any audit, there is a greater risk of non-detection of irregularities as these may involve collusion, intentional omissions of the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

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.

Other matters

The previous year’s financial statements were not audited as the parent company and group were entitled to exemption from audit under Section 477 of the Companies Act 2006. Accordingly, the comparatives to the current year’s financial statements are not audited.

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.

Niall Kingsley FCA (Senior Statutory Auditor)

for and on behalf of Duncan & Toplis Audit Limited, Statutory Auditor

3 Princes Court

Royal Way

Loughborough

Leicestershire

LE11 5XR

30 September 2025

REVENUE

3

17,707,923

12,683,415

Cost of sales

8,578,446

6,641,358

GROSS PROFIT

9,129,477

6,042,057

Administrative expenses

6,783,915

4,397,450

2,345,562

1,644,607

Other operating income

3,928

1,366

OPERATING PROFIT

5

2,349,490

1,645,973

Interest receivable and similar income

8,650

626

2,358,140

1,646,599

Interest payable and similar expenses

6

7,650

2,804

PROFIT BEFORE TAXATION

2,350,490

1,643,795

Tax on profit

7

605,894

361,252

PROFIT FOR THE FINANCIAL YEAR

1,744,596

1,282,543

Profit attributable to:

Owners of the parent

1,744,596

1,282,543

PROFIT FOR THE YEAR

1,744,596

1,282,543

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,744,596

1,282,543

Total comprehensive income attributable to:

Owners of the parent

1,744,596

1,282,543

FIXED ASSETS

Intangible assets

10

230,568

55,366

Property, plant and equipment

11

1,457,391

1,071,716

Investments

12

-

-

Investment property

13

792,035

259,668

2,479,994

1,386,750

CURRENT ASSETS

Inventories

14

2,755,863

2,588,941

Debtors

15

1,029,955

580,375

Cash at bank and in hand

2,534,371

2,214,368

6,320,189

5,383,684

CREDITORS

Amounts falling due within one year

16

2,179,126

1,495,051

NET CURRENT ASSETS

4,141,063

3,888,633

TOTAL ASSETS LESS CURRENT LIABILITIES

6,621,057

5,275,383

CREDITORS

Amounts falling due after more than one year

17

(62,489

)

-

PROVISIONS FOR LIABILITIES

20

(248,155

)

(123,566

)

NET ASSETS

6,310,413

5,151,817

CAPITAL AND RESERVES

Called up share capital

21

100

100

Retained earnings

22

6,310,313

5,151,717

SHAREHOLDERS' FUNDS

6,310,413

5,151,817

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

J Fernandez - Director

FIXED ASSETS

Intangible assets

10

-

-

Property, plant and equipment

11

32,285

-

Investments

12

101

101

Investment property

13

1,208,320

675,953

1,240,706

676,054

CURRENT ASSETS

Debtors

15

62,819

72,456

CREDITORS

Amounts falling due within one year

16

1,221,191

688,833

NET CURRENT LIABILITIES

(1,158,372

)

(616,377

)

TOTAL ASSETS LESS CURRENT LIABILITIES

82,334

59,677

PROVISIONS FOR LIABILITIES

20

6,315

-

NET ASSETS

76,019

59,677

CAPITAL AND RESERVES

Called up share capital

21

100

100

Retained earnings

22

75,919

59,577

SHAREHOLDERS' FUNDS

76,019

59,677

Company's profit for the financial year

602,342

30,026

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

J Fernandez - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

100

3,869,174

3,869,274

Changes in equity

Total comprehensive income

-

1,282,543

1,282,543

Balance at 31 December 2023

100

5,151,717

5,151,817

Changes in equity

Dividends

-

(586,000

)

(586,000

)

Total comprehensive income

-

1,744,596

1,744,596

Balance at 31 December 2024

100

6,310,313

6,310,413

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

100

29,551

29,651

Changes in equity

Total comprehensive income

-

30,026

30,026

Balance at 31 December 2023

100

59,577

59,677

Changes in equity

Dividends

-

(586,000

)

(586,000

)

Total comprehensive income

-

602,342

602,342

Balance at 31 December 2024

100

75,919

76,019

Cash flows from operating activities

Cash generated from operations

1

2,553,108

1,738,515

Interest paid

(7,650

)

(2,804

)

Tax paid

(453,614

)

(827,335

)

Net cash from operating activities

2,091,844

908,376

Cash flows from investing activities

Purchase of intangible fixed assets

(196,622

)

(26,020

)

Purchase of tangible fixed assets

(651,403

)

(361,693

)

Purchase of investment property

(532,367

)

(259,668

)

Sale of tangible fixed assets

10,100

57,938

Interest received

8,650

626

Net cash from investing activities

(1,361,642

)

(588,817

)

Cash flows from financing activities

New HP in year

71,975

-

Amount introduced by directors

602,565

13,990

Amount withdrawn by directors

(498,739

)

(223,528

)

Equity dividends paid

(586,000

)

-

Net cash from financing activities

(410,199

)

(209,538

)

Increase in cash and cash equivalents

320,003

110,021

Cash and cash equivalents at beginning of year

2

2,214,368

2,104,347

Cash and cash equivalents at end of year

2

2,534,371

2,214,368

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

2024

2023

£

£

Profit before taxation

2,350,490

1,643,795

Depreciation charges

274,815

247,570

Loss on disposal of fixed assets

2,234

1,847

Finance costs

7,650

2,804

Finance income

(8,650

)

(626

)

2,626,539

1,895,390

Increase in inventories

(166,922

)

(394,161

)

Increase in trade and other debtors

(495,794

)

(321,055

)

Increase in trade and other creditors

589,285

558,341

Cash generated from operations

2,553,108

1,738,515

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

2,534,371

2,214,368

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

2,214,368

2,104,347

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank and in hand

2,214,368

320,003

2,534,371

2,214,368

320,003

2,534,371

Debt

Finance leases

-

(71,975

)

(71,975

)

-

(71,975

)

(71,975

)

Total

2,214,368

248,028

2,462,396

1.	STATUTORY INFORMATION

QS Group 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 financial statements are presented in sterling which is the functional currency of the company and rounded to the nearest £.

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

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.

Basis of consolidation

The group accounts consolidate the accounts of QS Group Holdings Limited and its subsidiary undertakings for the period ended 31 December 2024.

Unless otherwise stated, the acquisition method of accounting has been adopted. Under this method, the results of subsidiary undertakings acquired or disposed of in the period are included in the consolidated income statement from the date of acquisition or up the date of disposal.

In the comparative year Quorn Country Tiles Limited, shortened their individual reporting period from 1 May 2023 to 30 April 2024 to 1 May 2023 to 31 December 2023 and have reported their individual financial statements for this eight-month period.

However, the results of Quorn Country Tiles Limited incorporated in the comparative year of the consolidated financial statements are for the year ended 31 December 2023 in line with QS Group Holdings Limited's reporting period.

Financial reporting standard 102 - reduced disclosure exemptions

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

-

the requirements of Section 7 Statement of Cash Flows;

-

the requirement of paragraph 33.7.

The disclosure above is incorporated within these consolidated financial statements.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Significant judgements and estimates

In the application of the Company's accounting policies, management is required to make judgements, estimates and assumptions about the carrying value 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 periods.

The key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are described below.

(i) Useful economic lives of property, plant and equipment

The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful economic lives of the assets. The useful economic lives are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.

(ii) Useful economic lives of intangible assets

The annual amortisation charge for intangible assets is dependent on the estimated useful economic lives of the assets. The useful economic lives are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments and economic utilisation.

(iii) Investment property valuation

The group owns investment properties, the values of which are subject to the changing market conditions. The directors are of the opinion that, based on available market evidence, there were no material changes to the property valuations. The valuation of the properties is included in the financial statements at £792,035 (2023 - £259,668).

Revenue

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

Revenue is recognised on the despatch of goods or provision of services.

Rents received is recognised over the lease term on a straight line basis.

Goodwill

Acquired goodwill is written off in equal annual instalments over its estimated useful economic life.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any

accumulated amortisation and any accumulated impairment losses.

Costs associated with the development of software for use within the business which will generate economic benefits exceeding one year are capitalised. Such costs are amortised evenly over the expected economic life of 3 years.

Website and computer software development costs

33% Straight line

Patents and licences

33% Straight line

Property, plant and equipment

Property, plant and equipment is stated at cost (or deemed cost) or valuation less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended.

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

Land and buildings - short leasehold

20% Straight line

Improvements to property

20% Straight line

Plant and machinery

15% Reducing balance

Fixtures, fittings and equipment

15% Reducing balance and 33.33% Straight line

Motor vehicles

25% Reducing balance

An investment property owned by the parent company and leased to the subsidiary is accounted for in accordance with Sections 16 & 17 of FRS102 at group level.

In the parent's own financial statements it is shown as an investment property measured at fair value at each reporting date, with changes in fair value recognised in the income statement and the revaluation reserve. No depreciation is provided in respect of investment properties.

In the consolidated financial statements it is shown as freehold property measured at the cost of acquisition to the group. Depreciation is charged at 2% per annum straight line.

In the subsidiary's accounts in short leasehold costs there are costs relating to the investment property which have been reanalysed to improvements to property in the group accounts.

At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If the estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in the income statement.

If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment is recognised immediately in the income statement.

Investment property

Investment property is included at fair value. Any aggregate surplus or deficit arising form changes in fair value is recognised in the income statement.

Inventories

Inventories are valued at the lower of cost and fair value less costs to complete and sell, after making due allowance for obsolete slow moving items. Inventories are accounted for on a first-in-first-out basis.