REGISTERED NUMBER: 14723915 (England and Wales)

Group Strategic Report,

Report of the Director and

Consolidated Financial Statements

for the Year Ended 31 December 2024

for

Vision International Holdings Ltd

Page

Company Information

1

Group Strategic Report

2

Report of the Director

4

Report of the Independent Auditors

6

Consolidated Income Statement

10

Consolidated Other Comprehensive Income

11

Consolidated Balance Sheet

12

Company Balance Sheet

13

Consolidated Statement of Changes in Equity

14

Company Statement of Changes in Equity

15

Consolidated Cash Flow Statement

16

Notes to the Consolidated Cash Flow Statement

17

Notes to the Consolidated Financial Statements

18

DIRECTOR:

A Juneja

REGISTERED OFFICE:

First Floor Building 2000 Vortex Court

Enterprise Way

Liverpool

United Kingdom

L13 1FB

REGISTERED NUMBER:

14723915 (England and Wales)

AUDITORS:

DKR Audit Services Ltd

Registered Auditor

36 Lichfield Street

Walsall

West Midlands

WS1 1TJ

BANKERS:

Santander UK plc

Liverpool Business Centre

7th Floor, No 4 St Paul's Place

Old Hall Street

Liverpool

Merseyside

L3 9SJ

The director presents his strategic report of the company and the group for the year ended 31 December 2024.

REVIEW OF BUSINESS

Business model

The Company retails across various channels to market, its own retail stores, online platform (www.tjhughes.co.uk) and various 3rd party online platforms.

The Company has a strong branding and design management team, bringing branded goods and private label to the UK market. The global sourcing capabilities and established buying operations in Asia continued to leverage to control the cost of goods sold and therefore benefit our customers.

Our development of the Lewis's Brand has continued to develop with sales of these branded items increasing in 2024.

For well over 150 years Lewis's has offered customers beautiful kitchen and homeware products, all combining outstanding quality and affordability. In keeping with Mr Lewis's original vision, we're committed to fairness and honesty; to providing stylish household essentials at the best possible prices.

We have a relentless focus on delivering outstanding value to our customers that ultimately encourages customers to shop with us regularly.

Performance

The company had an EBITDA margin of 7% for the year ended 31 December 2024 - £1,787,094 (2023: £1,723,065).

There was a loss before tax of £184,807 for the year ended 31 December 2024 (2023: profit of £429,665).

Key performance indicators (KPI's)

The board uses a range of KPI's to monitor the company's performance and progress towards it's strategic objectives. The principal KPI's which are reviewed at both company and brand level include sales growth, margins, and current asset ratios.

Gross profit percentage: 43% (2023: 42%)

Current asset ratio: 1.28 times (2023: 1.17 times)

PRINCIPAL RISKS AND UNCERTAINTIES

The nature of the group's activities in the current retail environment, together with the uncertainties associated with the standing of the UK as a trading nation mean the business is exposed to a number of inherent risks. The directors have adopted a thorough risk management process which involves review of all the risks identified. The solutions to these risks involve closer connections with supply partnerships in the Far East, better management of costs, improved economies of scale and improved buying and financial strategies.

The Company is well funded and well placed to exploit current market opportunities despite the current economic conditions on the high street and will continue to move forward in a positive manner, whilst being prudent and cautious.

SECTION 172(1) STATEMENT

The Directors believe that they have, in good faith, acted in a way that they consider would be most likely to promote the success of the Company for the benefit of its shareholding and, in doing so, have had regard to and recognised the importance of all stakeholders in its decision-making. The Company is committed to be a responsible business whose behaviour is aligned with the expectations of our people, suppliers and customers.

Our people are fundamental to the delivery of our strategy. For the Company to succeed we need to manage our people's performance and develop new talent, while ensuring we operate as efficiently as possible. We aim to be a responsible employer in our approach to the remuneration and benefits our employees receive.

The Company works closely with customers and suppliers to build long-term relationships and to understand their needs and priorities. The Board's intention is to behave responsibly and ensure that management operates the business in a responsible manner.

FUTURE DEVELOPMENTS

The results for the year to Dec 2024 have been encouraging after the difficulties of recent years which were affected by the Pandemic, as the company returned to profitability and improved levels of trade.

During the year new stores were opened and we continue to look for opportunities to continue to develop the retail

estate and serve a broader geographical reach. In conjunction to our new store openings, we continue to maintain and update the existing store estate both to appeal to current and new customers but also to ensure that we are environmentally responsible.

In the early part of 2024, there was significant disruption to trade passing through the Suez Canal with freight rates

rising rapidly, but this seems to have stabilised recently, though there is increased geopolitical tensions and conflicts in the Middle East that could impact trade routes in the coming year.

A combination of the Company's portfolio of diverse, market-leading brands along with the control of costs, and an

enthusiastic, dedicated workforce, lead the Board to view the company's future performance to be secure.

ON BEHALF OF THE BOARD:

A Juneja - Director

30 September 2025

The director presents his 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 is the operation of retail stores and online trading. The group trades under the brand name of TJ Hughes.

DIVIDENDS

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

DIRECTOR

A Juneja held office during the whole of the period from 1 January 2024 to the date of this report.

DONATIONS

During the year, donations totalling £3,843 were made by the group. These donations were made for charitable purposes.

ENGAGEMENT WITH EMPLOYEES

Employee involvement

The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

STREAMLINED ENERGY AND CARBON REPORTING

Due to the energy usage in the year being less than 40 MWh, the group is exempt from reporting on their energy

and carbon usage.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Group Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

-	select suitable accounting policies and then apply them consistently;

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

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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

The director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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 director is 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 he 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 group's auditors are aware of that information.

AUDITORS

The auditors, DKR Audit Services Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

A Juneja - Director

30 September 2025

Opinion

We have audited the financial statements of Vision International Holdings Ltd (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 loss 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 director's 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 director with respect to going concern are described in the relevant sections of this report.

Other information

The director is responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Director, 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 Director 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 Director 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 Director.

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 director's remuneration specified by law are not made; or

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

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on pages four and five, the director is 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 director determines 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 director is 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 director either intends to liquidate the group or the parent company or to cease operations, or has 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 material misstatements in respect of irregularities, including fraud.

Based on our understanding of the company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation, anti-money laundering regulation.

To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:

1. Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;

2. Inspecting correspondence, if any, with relevant licensing or regulatory authorities;

3. Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and

4. Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.

We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as: tax legislation, pension legislation, the Companies Act 2006.

In addition, we evaluated the directors' and management's incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to revenue recognition, which we pinpointed the cut-off assertion and significant one-off or unusual transactions.

Our audit procedures in relation to fraud included but were not limited to:

1. Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;

2. Gaining an understanding of the internal controls established to mitigate risks related to fraud;

3. Discussing amongst the engagement team the risks of fraud; and

4. Addressing the risks of fraud through management override of controls by performing journal entry testing.

There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

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.

Stephen Gray (Senior Statutory Auditor)

for and on behalf of DKR Audit Services Ltd

Registered Auditor

36 Lichfield Street

Walsall

West Midlands

WS1 1TJ

30 September 2025

TURNOVER

3

25,668,083

26,574,375

Cost of sales

(14,718,267

)

(15,427,761

)

GROSS PROFIT

10,949,816

11,146,614

Administrative expenses

(12,213,173

)

(12,024,763

)

(1,263,357

)

(878,149

)

Other operating income

1,294,181

1,508,603

OPERATING PROFIT

5

30,824

630,454

Interest payable and similar expenses

6

(215,631

)

(200,789

)

(LOSS)/PROFIT BEFORE TAXATION

(184,807

)

429,665

Tax on (loss)/profit

7

(106,666

)

(79,520

)

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(291,473

)

350,145

(Loss)/profit attributable to:

Owners of the parent

(291,473

)

350,145

(LOSS)/PROFIT FOR THE YEAR

(291,473

)

350,145

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(291,473

)

350,145

Total comprehensive income attributable to:

Owners of the parent

(291,473

)

350,145

FIXED ASSETS

Intangible assets

9

6,400,123

7,062,164

Tangible assets

10

4,466,296

5,200,215

Investments

11

-

-

10,866,419

12,262,379

CURRENT ASSETS

Stocks

12

8,794,230

7,030,992

Debtors

13

1,039,564

1,149,531

Cash at bank and in hand

2,244,180

2,525,399

12,077,974

10,705,922

CREDITORS

Amounts falling due within one year

14

(9,428,217

)

(9,174,128

)

NET CURRENT ASSETS

2,649,757

1,531,794

TOTAL ASSETS LESS CURRENT LIABILITIES

13,516,176

13,794,173

CREDITORS

Amounts falling due after more than one year

15

(9,918,736

)

(9,843,960

)

PROVISIONS FOR LIABILITIES

17

(780,692

)

(841,992

)

NET ASSETS

2,816,748

3,108,221

CAPITAL AND RESERVES

Called up share capital

18

1,500,000

1,500,000

Revaluation reserve

19

2,205,000

2,205,000

Retained earnings

19

(888,252

)

(596,779

)

SHAREHOLDERS' FUNDS

2,816,748

3,108,221

The financial statements were approved and authorised for issue by the director and authorised for issue on 30 September 2025 and were signed by:

A Juneja - Director

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

-

-

Investments

11

3,000,000

3,000,000

3,000,000

3,000,000

TOTAL ASSETS LESS CURRENT LIABILITIES

3,000,000

3,000,000

CAPITAL AND RESERVES

Called up share capital

18

1,500,000

1,500,000

Retained earnings

19

1,500,000

1,500,000

SHAREHOLDERS' FUNDS

3,000,000

3,000,000

Company's profit for the financial year

-

-

The financial statements were approved and authorised for issue by the director and authorised for issue on 30 September 2025 and were signed by:

A Juneja - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2023

1,500,000

(946,924

)

2,205,000

2,758,076

Changes in equity

Total comprehensive income

-

350,145

-

350,145

Balance at 31 December 2023

1,500,000

(596,779

)

2,205,000

3,108,221

Changes in equity

Total comprehensive income

-

(291,473

)

-

(291,473

)

Balance at 31 December 2024

1,500,000

(888,252

)

2,205,000

2,816,748

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

1,500,000

1,500,000

3,000,000

Changes in equity

Balance at 31 December 2023

1,500,000

1,500,000

3,000,000

Changes in equity

Balance at 31 December 2024

1,500,000

1,500,000

3,000,000

Cash flows from operating activities

Cash generated from operations

1

657,153

8,096,516

Interest paid

(215,631

)

(200,789

)

Tax paid

163,876

(26,969

)

Net cash from operating activities

605,398

7,868,758

Cash flows from investing activities

Purchase of intangible fixed assets

(11,860

)

(3,635

)

Purchase of tangible fixed assets

(348,450

)

(936,019

)

Sale of tangible fixed assets

-

989,984

Net cash from investing activities

(360,310

)

50,330

Cash flows from financing activities

Loan repayments in year

(526,307

)

(7,732,123

)

Net cash from financing activities

(526,307

)

(7,732,123

)

(Decrease)/increase in cash and cash equivalents

(281,219

)

186,965

Cash and cash equivalents at beginning of year

2

2,525,399

2,338,434

Cash and cash equivalents at end of year

2

2,244,180

2,525,399

1.	RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31.12.24

31.12.23

£

£

(Loss)/profit before taxation

(184,807

)

429,665

Depreciation charges

1,719,020

1,639,700

Loss/(profit) on disposal of fixed assets

37,250

(547,089

)

Finance costs

215,631

200,789

1,787,094

1,723,065

(Increase)/decrease in stocks

(1,763,238

)

7,405,883

Increase in trade and other debtors

(76,049

)

(9,591

)

Increase/(decrease) in trade and other creditors

709,346

(1,022,841

)

Cash generated from operations

657,153

8,096,516

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

2,244,180

2,525,399

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

2,525,399

2,338,434

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

2,525,399

(281,219

)

2,244,180

2,525,399

(281,219

)

2,244,180

Total

2,525,399

(281,219

)

2,244,180

1.	STATUTORY INFORMATION

Vision International Holdings Ltd 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.

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

Merger accounting

On 19 July 2023, following a share-for-share exchange with the shareholders of Vision International Group Limited, as part of a group restructure, the company became the parent undertaking for the group comprising the company, Vision International Holdings Limited, LHR Holding Limited and AY Ventures Limited.

As the combination met the qualifying conditions under FRS 102, merger accounting has been adopted in these financial statements.

The assets and liabilities of the combined entities have been recognised at their carrying amounts in the financial statements. No adjustments have been made to reflect fair value at the date of the combination, and no goodwill has been recognised as a result of the combination.

The results and cashflows of the combined entities are included in these financial statements from the beginning of the financial year in which the combination occurred.

Comparative information has been included as though the business combination has always been in place.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying

amount of assets and liabilities are as follows:

Useful economic lives of fixed assets

The company depreciates tangible and intangible fixed assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and performance and therefore requires assumptions to be applied by management. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes. Judgement is applied by the directors when determining the residual values for plant, machinery and equipment. When determining the residual value management assesses the amount that company would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful economic life.

Slow moving and stock losses

Stock provisions are recognised where there are indicators of recoverable value being lower than cost. In establishing the level of provisioning required, management consider discontinued lines, slow moving or obsolete stock, and stock losses from damage or theft.

Impairment of fixed assets and investments

Where an indication of impairment exists, the directors will carry out an impairment review to determine the recoverable amount, which is the higher of fair value less cost to sell and value in use. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the asset or cash generating unit and a suitable discount rate in order to calculate present value.

Turnover

Turnover comprises the fair value of consideration received or receivable for the sales of goods and provision of services in the ordinary course of the company's activities. Turnover is shown net of value added tax and returns.

Cash sales are recognised at the point of sale. Credit sales including online sales are recognised when goods are delivered to the customer.

Goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an at asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over it's expected life, which is 10 years.

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

Intangible assets

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.

Patents and licences are being amortised evenly over their estimated useful life of ten years.

Computer software is being amortised evenly over its estimated useful life of ten years.

Tangible fixed assets

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

Improvements to property

-

12.5% on cost

Fixtures and fittings

-

12.5% on cost

Computer equipment

-

12.5% on cost

Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amount of its tangible and intangible

assets to determine whether there is any indication that those assets have suffered an impairment loss. If any

such indicator exists, the recoverable amount of the asset is estimated in order to determine the extent of the

impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An

impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued

amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for impairment have ceased to apply.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have ben determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as revaluation increase.

Stocks

Stocks are stated at the lower of cost and estimated selling price. Cost is determined using the first in, first out (FIFO) method. Cost represents the purchase price including transport costs and, where applicable, import duty on goods purchased from overseas.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks

over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or

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

Financial instruments

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

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

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial instruments

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial instruments

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

Impairment of financial assets

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

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

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

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 group after deducting all of its liabilities.