REGISTERED NUMBER: 15724074 (England and Wales)

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTOR AND

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD 16 MAY 2024 TO 31 DECEMBER 2024

FOR

DPJ NORWOOD HOLDINGS LTD

Page

Company Information

1

Group Strategic Report

2

to

3

Report of the Director

4

to

5

Report of the Independent Auditors

6

to

9

Consolidated Statement of Comprehensive Income

10

Consolidated Statement of Financial Position

11

Company Statement of Financial Position

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Statement of Cash Flows

15

Notes to the Consolidated Statement of Cash Flows

16

Notes to the Consolidated Financial Statements

17

to

26

DIRECTOR:

D W Norwood

REGISTERED OFFICE:

262 Cobridge Road

Hanley

Stoke-on-Trent

Staffordshire

ST1 5JU

REGISTERED NUMBER:

15724074 (England and Wales)

SENIOR STATUTORY AUDITOR:

Helen Tidyman

AUDITORS:

Sumer Auditco Limited

Chartered Accountants & Statutory Auditors

Stone House

Stone Road Business Park

Stoke-on-Trent

ST4 6SR

The director presents his strategic report of the company and the group for the period 16 May 2024 to 31 December 2024.

The company is an independent company that was formed in 1954, it operates one of the largest Kia franchises in the UK. With a highly experienced management team, the company prides itself on working hard to deliver class customer service, currently number one in Kia's league table for Customer Service.

REVIEW OF BUSINESS

Financial year ending 31st December 2024 was a steady year for Ken Jervis. New car retail numbers were marginally down on the previous year, whereas Used car sales were marginally up. Motability sales increased by 25%.

The government's ZEV mandate continues to put pressure on manufacturers.

Looking forward to 2025 we feel that we will at least match this year's performance in both turnover and profit.

We are in a good position with a strong data base of loyal customers, alongside the Manufacturer, as Kia continues to win numerous awards, including 'Car of the year' and 'Manufacturer of the year' in 2024.

FINANCIAL KEY PERFORMANCE INDICATORS

Turnover for the year including turnover prior to the full acquisition has risen to £24m (2023: £23m) whilst the GP profit margin dropped to 8.06% (2023 9.13%) we still achieved a very strong performance against the industry.

OTHER KEY PERFORMANCE INDICATORS

The company continues to monitor and achieve manufacturer partner performance objectives in terms of sales units, market share and customer service.

PRINCIPAL RISKS AND UNCERTAINTIES

The company's principle financial controls remain robust and in place with a strong day to day management of all key indicators and areas.

The company's principle financial instruments comprise bank balances, stocking facilities, trade debtors and trade creditors. The purpose of these financial instruments is to manage the company's day to day working capital and finance growth as required.

The company has processes in place to ensure that Company's sales are paid in full ahead of delivery, the Company does not consider that it is exposed significantly to credit risk from retail customers. Other trade debtors are managed through regular monitoring of accounts outstanding for both time and credit limits.

Trade creditor liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

The general economic environment gives rise to the company's market risk.

FUTURE DEVELOPMENTS

Staff are a key part of the success of the business. The company is committed to the training and developing of its staff to ensure the continuity of success continues, the average employee has been employed with the company for in excess of fifteen years.

The leadership team continuously review the performance of the business and are always eager to consider opportunities for growth.

ON BEHALF OF THE BOARD:

D W Norwood - Director

30 September 2025

The director presents his report with the financial statements of the company and the group for the period 16 May 2024 to 31 December 2024.

INCORPORATION

The group was incorporated on 16 May 2024 .

DIVIDENDS

Dividends paid during the year amounted to £12,000. The directors have recommended that there be no final dividend.

DIRECTOR

D W Norwood was appointed as a director on 16 May 2024 and held office during the whole of the period from then to the date of this report.

DISCLOSURE IN THE STRATEGIC REPORT

The group has chosen in accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out in the group's strategic report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 and future developments and financial risk management.

The strategic report can be found on page 2 of these financial statements.

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;

-	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 are deemed to have been re-appointed in accordance with section 487 of the Companies Act 2006.

ON BEHALF OF THE BOARD:

D W Norwood - Director

30 September 2025

Opinion

We have audited the financial statements of Dpj Norwood Holdings Ltd (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 December 2024 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2024 and of the group's profit for the period 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 page four, 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:

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit

evidence that is sufficient and appropriate to provide a basis for our opinion.

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

•

the nature of the industry and sector, control environment and business performance including the design of the group remuneration policies, key drivers for directors' remuneration, bonus levels and performance targets;

•

results of our enquiries of management about their own identification and assessment of the risks of irregularities;

•

any matters we identified having obtained and reviewed the group documentation of their policies and procedures relating to:

-

identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance;

-

detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

-

the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;

•

the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

Based on this approach, we were able to assess the group risks and ensure the risks were considered throughout all areas of audit testing. The audit team was professionally sceptical throughout the audit and remained alert for inaccurate or misleading information.

Audit response to risks identified

As a result of performing the above, we identified the sale of the group related to the potential risk of fraud or irregularities. Our procedures to respond to risks identified included the following:

• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

• enquiring of management concerning actual and potential litigation and claims;

• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

• obtaining an understanding of provisions and held discussions with management to understand the basis of recognition or non-recognition of tax provisions; and

• in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

Audit testing was completed on a targeted sample basis based on our assessment of risk and materiality. Due 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. For example, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.

As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

-

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

-	Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group's internal control.

-	Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the director.

-

Conclude on the appropriateness of the director's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group or the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Report of the Auditors to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Report of the Auditors. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern.

-	Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

-	Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express and opinion on the consolidated financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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.

Helen Tidyman (Senior Statutory Auditor)

for and on behalf of Sumer Auditco Limited

Chartered Accountants & Statutory Auditors

Stone House

Stone Road Business Park

Stoke-on-Trent

ST4 6SR

30 September 2025

TURNOVER

4,530,642

Cost of sales

(4,127,790

)

GROSS PROFIT

402,852

Administrative expenses

(182,457

)

220,395

Other operating income

25,344

OPERATING PROFIT

5

245,739

Interest receivable and similar income

12,715

258,454

Interest payable and similar expenses

6

(54,458

)

PROFIT BEFORE TAXATION

203,996

Tax on profit

7

(79,492

)

PROFIT FOR THE FINANCIAL PERIOD

124,504

FIXED ASSETS

Intangible assets

10

784,659

Tangible assets

11

-

Investments

12

-

784,659

CURRENT ASSETS

Stocks

13

2,582,421

Debtors

14

922,903

Cash at bank

1,150,116

4,655,440

CREDITORS

Amounts falling due within one year

15

(3,507,877

)

NET CURRENT ASSETS

1,147,563

TOTAL ASSETS LESS CURRENT LIABILITIES

1,932,222

CREDITORS

Amounts falling due after more than one year

16

(811,557

)

NET ASSETS

1,120,665

CAPITAL AND RESERVES

Called up share capital

20

3,436

Retained earnings

21

1,117,229

SHAREHOLDERS' FUNDS

1,120,665

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

D W Norwood - Director

FIXED ASSETS

Intangible assets

10

-

Tangible assets

11

-

Investments

12

1,813,110

1,813,110

CURRENT ASSETS

Debtors

14

553,856

Cash at bank

32,245

586,101

CREDITORS

Amounts falling due within one year

15

(1,392,514

)

NET CURRENT LIABILITIES

(806,413

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,006,697

CREDITORS

Amounts falling due after more than one year

16

(811,557

)

NET ASSETS

195,140

CAPITAL AND RESERVES

Called up share capital

20

3,436

Retained earnings

21

191,704

SHAREHOLDERS' FUNDS

195,140

Company's profit for the financial year

203,704

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

D W Norwood - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Changes in equity

Equity previously held as non-

controlling interest

-

1,004,725

1,004,725

Dividends

-

(12,000

)

(12,000

)

Total comprehensive income

-

124,504

124,504

Balance at 31 December 2024

-

1,117,229

1,117,229

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Changes in equity

Issue of share capital

3,436

-

3,436

Dividends

-

(12,000

)

(12,000

)

Total comprehensive income

-

203,704

203,704

Balance at 31 December 2024

3,436

191,704

195,140

Cash flows from operating activities

Cash generated from operations

1

175,527

Interest paid

(54,458

)

Tax paid

9,000

Net cash from operating activities

130,069

Cash flows from investing activities

Interest received

12,715

Net cash from investing activities

12,715

Cash flows from financing activities

Amounts introduced /(drawn) by directors

732,308

Share issue

3,436

Proceeds from borrowings

850,617

Acquisition of subsidiary

(1,813,110

)

Cash acquired

1,246,081

Equity dividends paid

(12,000

)

Net cash from financing activities

1,007,332

Increase in cash and cash equivalents

1,150,116

Cash and cash equivalents at beginning of period

2

-

Cash and cash equivalents at end of period

2

1,150,116

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

£

Profit before taxation

203,996

Depreciation charges

23,592

Finance costs

54,458

Finance income

(12,715

)

269,331

Increase in stocks

(125,948

)

Decrease in trade and other debtors

211,681

Decrease in trade and other creditors

(179,537

)

Cash generated from operations

175,527

2.	CASH AND CASH EQUIVALENTS

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

Period ended 31 December 2024

31.12.24

16.5.24

£

£

Cash and cash equivalents

1,150,116

-

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 16.5.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank

-

1,150,116

1,150,116

-

1,150,116

1,150,116

Debt

Debts falling due within 1 year

-

(39,060

)

(39,060

)

Debts falling due after 1 year

-

(811,557

)

(811,557

)

-

(850,617

)

(850,617

)

Total

-

299,499

299,499

1.	STATUTORY INFORMATION

Dpj Norwood 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.

The principal activity of the company was that of a holding company. The principal activity of the group was that of operating in the motor industry.

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.

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

BASIS OF CONSOLIDATION

The consolidated financial statements incorporate those of DPJ Norwood Holdings Limited and its subsidiary undertakings for the year. Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes. The difference between the cost of acquisition of shares in subsidiaries and the fair value of the identifiable net assets acquired is capitalised as purchased goodwill and amortised through the profit and loss account over its estimated economic life. Provision is made for any impairment. The financial statements are made up to 31 December 2024.

All companies have co-terminus year ends. All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation.

As permitted by Section 408 of the Companies Act 2006, the company has not presented its own profit and loss account. The company's profit and total comprehensive income are presented in the company Statement of Financial Position.

REVENUE RECOGNITION

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

Turnover represents the total invoice value, excluding value added tax of sales made during the year, together with commissions and bonuses received as a direct consequence of the invoiced amounts.

GOODWILL

Goodwill, being the amount paid in connection with the acquisition of a business in 0, is being amortised evenly over its estimated useful life of nil years.

Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business.

Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed ten years.

Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:

Goodwill - 10 years straight line

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

TANGIBLE FIXED ASSETS

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

Long leasehold

-

25% straight line

Improvements to property

-

25% straight line

Plant and machinery

-

25% straight line

Fixtures and fittings

-

25% straight line

CAPITALISATION POLICY

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

This policy outlines the criteria for capitalising fixed assets in the company's financial records. It applies to all departments of the dealership, including the Sales Showroom, Service Workshop, Parts Department and Bodyshop. Any single asset with a purchase cost of £10,000 or more (excluding VAT) will be capitalised. Assets below this amount will be treated as an expense in the period in which they are purchased. Capitalised assets will be recorded in the fixed asset register, and depreciation will be applied on a straight line basis over a four year period. Routine repairs and maintenance, regardless of value, will be expensed as incurred. Only purchases meeting the capitalisation threshold will be added as fixed assets. This policy will be reviewed annually and updated where necessary to reflect current practices and compliance requirements.

IMPAIRMENT OF FIXED ASSETS

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

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

STOCKS

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

FINANCIAL INSTRUMENTS

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

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

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

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

TAXATION

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

Current or deferred taxation assets and liabilities are not discounted.

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

DEFERRED TAX

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

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

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

HIRE PURCHASE AND LEASING COMMITMENTS

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

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

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

PENSION COSTS AND OTHER POST-RETIREMENT BENEFITS

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

The company provides a range of benefits to employees. Short term benefits, including holiday pay, are recognised as an expense in the profit and loss account in the period in which they are incurred.

3.	EMPLOYEES AND DIRECTORS

£

Wages and salaries

613,913

Social security costs

80,575

Other pension costs

5,129

699,617

The average number of employees during the period was as follows:

Employees

56

4.	DIRECTORS' EMOLUMENTS

£

Director's remuneration

-

5.	OPERATING PROFIT

The operating profit is stated after charging:

£

Hire of plant and machinery

3,189

Other operating leases

40,986

Depreciation - owned assets

16,105

Goodwill amortisation

20,289

Auditors' remuneration

17,950

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

£

Corporation tax interest

9,000

Interest payable

14,933

Stocking interest

16,076

Loan interest

14,449

54,458

7.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the period was as follows:

£

Current tax:

UK corporation tax

79,492

Tax on profit

79,492

RECONCILIATION OF TOTAL TAX CHARGE INCLUDED IN PROFIT AND LOSS

The tax assessed for the period is higher than the standard rate of corporation tax in the UK. The difference is explained below:

£

Profit before tax

203,996

Profit multiplied by the standard rate of corporation tax in the UK of 25 %

50,999

Effects of:

Expenses not deductible for tax purposes

30,557

Capital allowances in excess of depreciation

(2,064

)

Total tax charge

79,492