REGISTERED NUMBER: NI014144 (Northern Ireland)

SPERRIN HOLDINGS LIMITED

Group Strategic Report, Director's Report and

Consolidated Financial Statements for the Year Ended 31 December 2024

Page

Company Information

1

Group Strategic Report

2

Director's Report

3

Independent Auditors' Report

5

Consolidated Income Statement

9

Consolidated Statement of Financial Position

10

Company Statement of Financial Position

11

Consolidated Statement of Changes in Equity

12

Company Statement of Changes in Equity

13

Consolidated Statement of Cash Flows

14

Notes to the Consolidated Statement of Cash Flows

15

Notes to the Consolidated Financial Statements

16

DIRECTOR:

Peter Francis Gormley

REGISTERED OFFICE:

Cahore Road

Draperstown

Co. Londonderry

BT45 7AP

REGISTERED NUMBER:

NI014144 (Northern Ireland)

INDEPENDENT AUDITORS:

CavanaghKelly

Chartered Accountants and Statutory Auditors

36-38 Northland Row

Dungannon

Co. Tyrone

BT71 6AP

BANKERS:

Danske Bank

North Business Centre

1-2 Broadway

Ballymena

Co. Antrim

BT43 7AA

SOLICITORS:

Elliot Duffy Garrett

34 Upper Queen Street

Belfast

BT1 6FD

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

REVIEW OF BUSINESS AND FUTURE DEVELOPMENTS

The group reported a profit for the financial year of £1,179,852 (2023: £2,407,270). The director considers the results of the financial year and the position of the group and company at the year end to be satisfactory. The group will continue to invest in people, product development and facilities to ensure its ongoing development and will continue to seek every opportunity to increase profitable turnover.

Key performance indicators

The group's key performance indicators are as follows:

2024

2023

2022

Net cash

£7.7m

£7.8m

£5.9m

Gross margin profit

29.2%

28.8%

15.9%

PRINCIPAL RISKS AND UNCERTAINTIES

Business operations and execution of the group's strategic plan are subject to several risks and

uncertainties:

Inflationary cost pressures: manufacturers continue to be exposed to pressures created by Brexit, rising

energy costs, supply chain disruption and the war in Ukraine. The business remains vigilant to the

potential headwinds experienced by all aspects of the project cycle and seeks to mitigate these risks

through robust commercial and risk management, on-going dialogue with key stakeholders, including

customers and supply chain.

Human resources: recruitment, retention and development of key employees is paramount in the current

economic climate, and the business continues to invest in employment training and development,

together with appropriate incentive and career progression arrangements.

ENVIRONMENT

The group recognises its corporate responsibility to carry out its operations whilst minimising environmental impacts. The directors' continued aim is to comply with all applicable environmental legislation, prevent pollution and reduce waste wherever possible.

HEALTH AND SAFETY

The group is committed to achieving the highest practicable standards in health and safety management and strives to make all sites and offices safe environments for employees and customers alike.

HUMAN RESOURCES

The group's most important resource is its people; their knowledge and experience is crucial to meeting customer requirements. Retention of key staff is critical.

FUTURE DEVELOPMENTS

The group is committed to long term creation of shareholder value. The Group aims to maintain revenue and operating profits. The Group will continue to develop relations with suppliers and generate new business where possible.

ON BEHALF OF THE BOARD:

Peter Francis Gormley - Director

30 May 2025

The director presents their report with the audited financial statements of the Company and the group for the year ended 31 December 2024.

PRINCIPAL ACTIVITY

The group's principal activity during the year was that of the manufacture, supply and installation of metal racking, shelving and related storage products. The principal activity of the company is that of a holding company.

DIVIDENDS

An interim dividend of £100,000, £1,000 per ordinary share was paid during the year (2023: £100,000). No final dividend is proposed (2023: £Nil).

FUTURE DEVELOPMENTS

The section on future developments which is detailed in the Strategic report is included in this report by cross reference.

DIRECTOR

Peter Francis Gormley held office during the whole of the period from 1 January 2024 to the date of this report.

FINANCIAL RISK MANAGEMENT

The group's operations expose it to a variety of financial risks which include the effects of credit risk, foreign exchange risk and price risk. Given the size of the group, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the group's finance department.

Credit risk

The group has implemented policies that require appropriate credit checks on potential customers before sales are made. The amount of exposure to individual customers is subject to a limit, which is reassessed regularly by management.

Foreign exchange risk

While the greater part of the group's revenues and expenses are denominated in sterling, the group is exposed to some foreign exchange risk in the normal course of business, principally on payments received in Euro. While the group has not used financial instruments to date to hedge foreign exchange exposure, this position is kept constantly under review.

Price risk

The group is exposed to commodity price risk as a result of its operations. However, given the size of the group's operations, the costs of managing exposure to commodity price risk exceed any potential benefits. The directors will revisit the appropriateness of this policy should the group's operations change in size or nature. The group has no exposure to equity securities price risk as it holds no listed or other equity investments.

Research and Development

The group is currently undertaking research and development projects covering new products and

process improvement.

EMPLOYEES

The group is dependent upon the skills and commitment of its employees in order to achieve its objectives. Company staff at every level are encouraged to make their fullest possible contribution to the Company's success. The company's selection, training, development and promotion policies ensure equal opportunities for all employees, regardless of gender, marital status, race, age or disability. All decisions are based on merit.

DIRECTOR'S RESPONSIBILITIES STATEMENT

The director is responsible for preparing the Group Strategic Report, the Director's Report 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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, CavanaghKelly, have indicated their willingness to continue in office in accordance with the provision of Section 485 of the Companies Act 2006.

ON BEHALF OF THE BOARD:

Peter Francis Gormley - Director

30 May 2025

Opinion

We have audited the financial statements of Sperrin Holdings Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2024 which comprise the Consolidated Income Statement, 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 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 Director's Report, but does not include the financial statements and our Auditors' Report 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 Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Director's Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Director's Report.

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

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

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

-	certain disclosures of 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 Director's Responsibilities Statement 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 an Auditors' Report 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:

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The objectives of our audit in respect of fraud are to assess the risk of material misstatement due to fraud, design and implement appropriate responses to those assessed risks and to respond appropriately to instances of fraud or suspected fraud identified during the course of our audit. However, the primary responsibility for the prevention and detection of fraud rests with management and those charged with governance of the company.

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

-

We obtained understanding of the legal and regulatory requirements applicable to the company’s financial statements and considered the most significant are the Companies Act 2006, Financial Reporting Standards (FRS102) and UK taxation legislation;

-

We have assessed the risk of material misstatement of the financial statements, including risk of material misstatement due to fraud and how it might occur by holding discussions with management and those charged with governance;

-

We enquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations;

-

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

-

Discussions amongst the audit engagement team regarding how fraud might occur in the financial statements and any potential indicators of fraud. As part of this discussion we identified the following potential areas where fraud may occur: timing of revenue recognition and management override.

The audit response to risks identified included:

-

Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the relevant laws and regulations above;

-

Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risk of material misstatement due to fraud;

-

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 reasonable and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

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 Auditors' Report.

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 an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Mr. Desmond Kelly (F.C.A) (Senior Statutory Auditor)

for and on behalf of CavanaghKelly

Chartered Accountants and Statutory Auditors

36-38 Northland Row

Dungannon

Co. Tyrone

BT71 6AP

30 May 2025

REVENUE

5

10,560,503

16,707,283

Cost of sales

(7,472,868

)

(11,895,036

)

GROSS PROFIT

3,087,635

4,812,247

Distribution costs

(1,280,577

)

(1,140,828

)

Administrative expenses

(508,799

)

(590,855

)

1,298,259

3,080,564

Other operating income

7,800

6,050

OPERATING PROFIT

7

1,306,059

3,086,614

Finance income

143,451

72,326

PROFIT BEFORE TAXATION

1,449,510

3,158,940

Tax on profit

8

(269,658

)

(751,670

)

PROFIT FOR THE FINANCIAL YEAR

1,179,852

2,407,270

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,179,852

2,407,270

Profit attributable to:

Owners of the parent

1,179,852

2,407,270

Total comprehensive income attributable to:

Owners of the parent

1,179,852

2,407,270

NON-CURRENT ASSETS

Property, plant and equipment

11

2,814,177

2,963,732

Investments

12

-

-

2,814,177

2,963,732

CURRENT ASSETS

Inventories

13

1,203,980

1,262,418

Receivables: amounts falling due within one year

14

1,357,882

1,552,656

Cash at bank

7,738,226

7,833,903

10,300,088

10,648,977

PAYABLES

Amounts falling due within one year

15

(1,542,231

)

(2,886,913

)

NET CURRENT ASSETS

8,757,857

7,762,064

TOTAL ASSETS LESS CURRENT LIABILITIES

11,572,034

10,725,796

PROVISIONS FOR LIABILITIES

17

(458,122

)

(670,861

)

GOVERNMENT GRANTS

18

(76,543

)

(97,418

)

NET ASSETS

11,037,369

9,957,517

CAPITAL AND RESERVES

Called up share capital

19

100

100

Retained earnings

11,037,269

9,957,417

SHAREHOLDERS' FUNDS

11,037,369

9,957,517

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

Peter Francis Gormley - Director

NON-CURRENT ASSETS

Property, plant and equipment

11

391,575

391,575

Investments

12

411,667

411,667

803,242

803,242

CURRENT ASSETS

Receivables: amounts falling due within one year

14

50,220

70,220

Cash at bank

2,670,616

2,126,045

2,720,836

2,196,265

PAYABLES

Amounts falling due within one year

15

(193,332

)

(105,738

)

NET CURRENT ASSETS

2,527,504

2,090,527

TOTAL ASSETS LESS CURRENT LIABILITIES

3,330,746

2,893,769

PROVISIONS FOR LIABILITIES

17

(251

)

(251

)

NET ASSETS

3,330,495

2,893,518

CAPITAL AND RESERVES

Called up share capital

19

100

100

Retained earnings

3,330,395

2,893,418

SHAREHOLDERS' FUNDS

3,330,495

2,893,518

Company's profit for the financial year

536,977

1,508,628

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

Peter Francis Gormley - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

100

7,650,147

7,650,247

Changes in equity

Dividends

-

(100,000

)

(100,000

)

Total comprehensive income

-

2,407,270

2,407,270

Balance at 31 December 2023

100

9,957,417

9,957,517

Changes in equity

Dividends

-

(100,000

)

(100,000

)

Total comprehensive income

-

1,179,852

1,179,852

Balance at 31 December 2024

100

11,037,269

11,037,369

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

100

1,484,790

1,484,890

Changes in equity

Dividends

-

(100,000

)

(100,000

)

Total comprehensive income

-

1,508,628

1,508,628

Balance at 31 December 2023

100

2,893,418

2,893,518

Changes in equity

Dividends

-

(100,000

)

(100,000

)

Total comprehensive income

-

536,977

536,977

Balance at 31 December 2024

100

3,330,395

3,330,495

Cash flows from operating activities

Cash generated from operations

1

789,542

2,797,920

Tax paid

(747,757

)

(437,002

)

Net cash from operating activities

41,785

2,360,918

Cash flows from investing activities

Purchase of tangible fixed assets

(180,913

)

(630,023

)

Sale of tangible fixed assets

-

151,000

Interest received

143,451

72,326

Net cash from investing activities

(37,462

)

(406,697

)

Cash flows from financing activities

Equity dividends paid

(100,000

)

(100,000

)

Net cash from financing activities

(100,000

)

(100,000

)

(Decrease)/increase in cash and cash equivalents

(95,677

)

1,854,221

Cash and cash equivalents at beginning of year

2

7,833,903

5,979,682

Cash and cash equivalents at end of year

2

7,738,226

7,833,903

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

2024

2023

£

£

Profit before taxation

1,449,510

3,158,940

Depreciation charges

330,468

331,591

Profit on disposal of fixed assets

-

(20,841

)

Movement in warranty provision

(159,236

)

201,982

Government grants

(20,875

)

(20,875

)

Finance income

(143,451

)

(72,326

)

1,456,416

3,578,471

Decrease in inventories

58,438

432,332

Decrease in trade and other debtors

194,774

504,530

Decrease in trade and other creditors

(920,086

)

(1,717,413

)

Cash generated from operations

789,542

2,797,920

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:

Year ended 31 December 2024

31/12/24

1/1/24

£

£

Cash and cash equivalents

7,738,226

7,833,903

Year ended 31 December 2023

31/12/23

1/1/23

£

£

Cash and cash equivalents

7,833,903

5,979,682

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1/1/24

Cash flow

At 31/12/24

£

£

£

Net cash

Cash at bank

7,833,903

(95,677

)

7,738,226

7,833,903

(95,677

)

7,738,226

Total

7,833,903

(95,677

)

7,738,226

1.	STATUTORY INFORMATION

Sperrin Holdings Limited is a private company limited by shares and is incorporated and domiciled in Northern Ireland, within the United Kingdom. The address of its registered office is Cahore Road, Draperstown, Co. Londonderry, BT45 7AP.

2.	STATEMENT OF COMPLIANCE

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

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared on a going concern basis under the historical cost convention and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the group and company's accounting policies (see note 4).

The following principal accounting policies have been applied consistently unless otherwise stated:

Financial Reporting Standard 102 - reduced disclosure exemptions

FRS 102 allows a qualifying entity certain disclosure exemptions, subject to certain conditions, which have been complied with, including no objection to the use of exemptions by the company's shareholders.

The company has take advantage of the following exemptions:

-

from disclosing the company's key management personnel compensation as required by FRS 102 para 33.7; and

-

from disclosing related party transactions that are wholly owned within the same group under paragraph 33.1A from the provisions of FRS 102, on the grounds that at 31 December 2023 it was a wholly owned subsidiary.

Consolidation

The consolidated financial statements present the results of the company and its own subsidiaries ("the group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of income and retained earnings from the date on which control is obtained. They are deconsolidated from the date control ceases.

Revenue

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the group and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Sale of goods

Turnover from the sale of goods is recognised when all of the following conditions are satisfied:

i)

the group has transferred the significant risks and rewards of ownership to the buyer;

ii)

the group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

iii)

the amount of turnover can be measured reliably;

iv)

it is probable that the group will receive the consideration due under the transaction; and

v)

the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Property, plant and equipment

Property, plant and equipment under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

The group adds to the carrying amount of an item of assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to the Consolidated statement of income and retained earnings during the period in which they are incurred.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives. Depreciation is provided on the following bases:

Freehold buildings

- 2% straight line

Plant and machinery

- 15% reducing balance

Motor vehicles

- 25% straight line

Canteen and office equipment

- 25% straight line

Freehold land is not depreciated.

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

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within the Consolidated statement of income and retained earnings.

Inventories

Inventories are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.

At each Balance sheet date, stocks are assessed for impairment. If inventory is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Consolidated statement of income and retained earnings.

Financial instruments

The group have chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.

(i) Financial assets

Basic financial assets, including trade and other receivables, cash and bank balances and amounts owed by related parties are initially recognised at transaction price, 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. Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 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.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

(ii) Financial liabilities

Basic financial liabilities, including trade and other payables, bank loans and overdrafts and amounts owed to related parties are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

(iii) Offsetting

Financial assets and liabilities are offset and 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.

Taxation

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

Current 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 taxation

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 year end and that are expected to apply to the reversal of the timing difference.

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

Foreign currencies

(i) Functional and presentation currency

The group's functional and presentational currency is GBP.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated statement of income and retained earnings except when deferred in other comprehensive income as qualifying cash flow hedges.

Employee benefits

The group operates a range of benefits to employees, including paid holiday arrangements and a defined contribution plan.

(i) Short term benefits

Short term benefits, including holiday pay and other similar non-monetary benefits are recognised as an expense, in the period in which the service is receivable.

(ii) Defined contribution plan

The group operated a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the Consolidated balance sheet. The assets of the plan are held separately from the company in independently administered funds

Cash flow statement

The company has availed of the exemption in FRS 102 Section 1A from the requirement to prepare a Statement of Cash Flows because it is classified as a small company.