REGISTERED NUMBER: SC175001

KILTANE LIMITED

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS FOR THE PERIOD 1 JULY 2024 TO 31 DECEMBER 2024

Page

Strategic Report

1

Report of the Directors

2

Report of the Independent Auditors

4

Profit and Loss Account

7

Other Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Cash Flow Statement

11

Notes to the Cash Flow Statement

12

Notes to the Financial Statements

13

The directors present their strategic report for the period 1 July 2024 to 31 December 2024.

The results for the year and financial position of the company are as shown in the annexed financial statements.

We aim to present a balanced and comprehensive review of the development and performance of our business during the year and its position at the year end. Our review is consistent with the size and nature of our business and is written in the context of the risks and uncertainties we face.

REVIEW OF BUSINESS

Our key financial performance indicators are those that communicate the financial performance and strength of the company as a whole. They are turnover, gross profit margin and net assets.

Turnover decreased from £19,214,471 for the year ended 30 June 2024 to £13,941,792 for the 6 month period ended 31 December 2024. Gross profit margin has dropped slightly in the current period at 61.78% from 62.48% as at 30 June 2024. Net assets at 31 December 2024 have risen to £20,061,868 from £16,519,486 as at 30 June 2024.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors regularly review the risks that we believe could seriously affect the company's performance, future prospects and ability to trade and we are satisfied that sufficient controls are in place to reduce these risks to an acceptable level.

The directors have considered the risks associated with their supply chain and the associated currency exchange rate risks and have taken all steps to ensure the relationships built up remain strong and ready for any changes that arise together with the close monitoring of currency rate movements.

FUTURE DEVELOPMENTS

The directors expect that turnover for current year will show an increase on 2024. The company will continue to invest in people, processes and systems to help deliver business growth.

ON BEHALF OF THE BOARD:

J M Keane - Director

23 April 2025

The directors present their report with the financial statements of the company for the period 1 July 2024 to 31 December 2024.

The period was adjusted to align the company's annual reporting date with the calendar year.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was the retail of cashmere, woollens, tweeds and other luxury products to international and domestic tourists.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2024 will be £26,526 (2024: £53,053).

POST BALANCE SHEET EVENTS

Information relating to events since the end of the period is given in the notes to the financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 July 2024 to the date of this report.

J M Keane

K Keane

FINANCIAL INSTRUMENTS

The company's operations expose it to a variety of financial risks that include the effects of changes in commodity market prices, exchange rate risk, credit risk, liquidity risk and interest rate risk. The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company by monitoring all levels of the related costs.

DISCLOSURE IN THE STRATEGIC REPORT

The company has chosen in accordance with Section 414C(11) Companies Act 2006 to set out in the company's Strategic Report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the Directors' Report. It has done so in respect of future developments.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

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

- select suitable accounting policies and then apply them consistently;

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

ON BEHALF OF THE BOARD:

J M Keane - Director

23 April 2025

Opinion

We have audited the financial statements of Kiltane Limited (the 'company') for the period ended 31 December 2024 which comprise the Profit and Loss Account, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its profit for the 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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Other information

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

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

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

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

Auditors' responsibilities for the audit of the financial statements

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

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

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

-

the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

-

we identified the laws and regulations applicable to the company through discussions with directors and other management and from our knowledge of the retail sector;

-

we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, FRS102, taxation legislation and Sale of Goods Act. We also considered those laws and regulations having an indirect impact but nonetheless significant, including, GDPR, anti-bribery, employment, environmental and health and safety legislation;

-

we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

-

identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

-

making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

-

considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

Auditors' responsibilities for the audit of the financial statements - continued

To address the risk of fraud through management bias and override of controls, we:

-

performed analytical procedures to identify any unusual or unexpected relationships;

-

tested journal entries to identify unusual transactions;

-

assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 2 were indicative of potential bias; and

-

investigated the rationale behind significant or unusual transactions.

In assessing the risk of material misstatements due to fraud in relation to revenue recognition, we:

-

performed analytical procedures to identify unusual or unexpected relationships;

-

performed walkthrough tests and substantive sample testing; and

-

carried out cut off testing to ensure revenue recognised in the correct period.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

-

agreeing financial statement disclosures to underlying supporting documentation;

-

enquiring of management as to actual and potential litigation and claims; and

-

reviewing correspondence with HMRC, relevant regulators and the company's legal advisors.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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.

Jayne F Clifford MA CA (Senior Statutory Auditor)

for and on behalf of Martin Aitken & Co Ltd

Statutory Auditor

Chartered Accountants

Caledonia House

89 Seaward Street

Glasgow

G41 1HJ

23 April 2025

TURNOVER

3

13,941,792

19,214,471

Cost of sales

(5,328,621

)

(7,208,385

)

GROSS PROFIT

8,613,171

12,006,086

Administrative expenses

(4,001,629

)

(6,233,348

)

4,611,542

5,772,738

Other operating income

4

77,134

177,913

4,688,676

5,950,651

Interest payable and similar expenses

6

(38,168

)

(255,327

)

PROFIT BEFORE TAXATION

7

4,650,508

5,695,324

Tax on profit

8

(1,167,850

)

(1,437,812

)

PROFIT FOR THE FINANCIAL PERIOD

3,482,658

4,257,512

PROFIT FOR THE PERIOD

3,482,658

4,257,512

OTHER COMPREHENSIVE INCOME

Revalued heritable property

115,000

131,500

Income tax relating to other comprehensive income

(28,750

)

(32,875

)

OTHER COMPREHENSIVE INCOME FOR THE PERIOD, NET OF INCOME TAX

86,250

98,625

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

3,568,908

4,356,137

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

7,731,691

7,499,209

Investment property

12

4,800,000

4,800,000

12,531,691

12,299,209

CURRENT ASSETS

Stocks

13

8,599,211

9,059,109

Debtors

14

3,542,146

3,958,483

Cash at bank and in hand

4,611,242

1,530,069

16,752,599

14,547,661

CREDITORS

Amounts falling due within one year

15

6,930,976

7,943,351

NET CURRENT ASSETS

9,821,623

6,604,310

TOTAL ASSETS LESS CURRENT LIABILITIES

22,353,314

18,903,519

CREDITORS

Amounts falling due after more than one year

16

(692,799

)

(849,299

)

PROVISIONS FOR LIABILITIES

20

(1,598,647

)

(1,534,734

)

NET ASSETS

20,061,868

16,519,486

CAPITAL AND RESERVES

Called up share capital

21

400,000

400,000

Non - distributable reserve

22

2,109,485

2,082,374

Capital redemption reserve

22

40,000

40,000

Revaluation reserve

22

2,974,284

2,915,145

Retained earnings

22

14,538,099

11,081,967

SHAREHOLDERS' FUNDS

20,061,868

16,519,486

The financial statements were approved by the Board of Directors and authorised for issue on 23 April 2025 and were signed on its behalf by:

J M Keane - Director

Called up

Non -

share

Retained

distributable

capital

earnings

reserve

£

£

£

Balance at 1 July 2023

400,000

6,877,508

4,898,894

Changes in equity

Dividends

-

(53,053

)

-

Total comprehensive income

-

4,356,137

-

Transfer of revaluation

-

(131,500

)

131,500

Transfer of deferred tax on

revaluation

-

32,875

(32,875

)

Transfer of heritable property

to revaluation reserve

-

-

(2,915,145

)

Balance at 30 June 2024

400,000

11,081,967

2,082,374

Changes in equity

Dividends

-

(26,526

)

-

Total comprehensive income

-

3,568,908

-

Transfer of revaluation

-

(115,000

)

-

Transfer of deferred tax on

revaluation

-

28,750

-

Transfer of heritable property

to revaluation reserve

-

-

27,111

Balance at 31 December 2024

400,000

14,538,099

2,109,485

Capital

redemption

Revaluation

Total

reserve

reserve

equity

£

£

£

Balance at 1 July 2023

40,000

-

12,216,402

Changes in equity

Dividends

-

-

(53,053

)

Total comprehensive income

-

-

4,356,137

Transfer of heritable property

to revaluation reserve

-

2,915,145

-

Balance at 30 June 2024

40,000

2,915,145

16,519,486

Changes in equity

Dividends

-

-

(26,526

)

Total comprehensive income

-

-

3,568,908

Transfer of revaluation

-

115,000

-

Transfer of deferred tax on

revaluation

-

(28,750

)

-

Transfer of heritable property

to revaluation reserve

-

(27,111

)

-

Balance at 31 December 2024

40,000

2,974,284

20,061,868

Cash flows from operating activities

Cash generated from operations

1

3,846,803

1,613,211

Interest paid

(38,169

)

(255,327

)

Tax paid

-

(61,872

)

Net cash from operating activities

3,808,634

1,296,012

Cash flows from investing activities

Purchase of property plant and equipment

(222,585

)

(1,928,311

)

Sale of tangible fixed assets

26,922

-

Net cash from investing activities

(195,663

)

(1,928,311

)

Cash flows from financing activities

Loan repayments in year

(505,272

)

(3,643,015

)

Equity dividends paid

(26,526

)

(53,053

)

Net cash from financing activities

(531,798

)

(3,696,068

)

Increase/(decrease) in cash and cash equivalents

3,081,173

(4,328,367

)

Cash and cash equivalents at beginning of period

2

1,530,069

5,858,436

Cash and cash equivalents at end of period

2

4,611,242

1,530,069

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

PERIOD

1/7/24

TO

YEAR ENDED

31/12/24

30/6/24

£

£

Profit before taxation

4,650,508

5,695,324

Depreciation charges

78,951

166,207

(Profit)/loss on disposal of fixed assets

(770

)

12,671

Finance costs

38,168

255,327

4,766,857

6,129,529

Decrease/(increase) in stocks

459,898

(4,559,951

)

Decrease/(increase) in trade and other debtors

416,337

(756,040

)

(Decrease)/increase in trade and other creditors

(1,796,289

)

799,673

Cash generated from operations

3,846,803

1,613,211

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:

Period ended 31 December 2024

31/12/24

1/7/24

£

£

Cash and cash equivalents

4,611,242

1,530,069

Year ended 30 June 2024

30/6/24

1/7/23

£

£

Cash and cash equivalents

1,530,069

5,858,436

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1/7/24

Cash flow

At 31/12/24

£

£

£

Net cash

Cash at bank and in hand

1,530,069

3,081,173

4,611,242

1,530,069

3,081,173

4,611,242

Debt

Debts falling due within 1 year

(594,472

)

348,772

(245,700

)

Debts falling due after 1 year

(849,299

)

156,500

(692,799

)

(1,443,771

)

505,272

(938,499

)

Total

86,298

3,586,445

3,672,743

1.	STATUTORY INFORMATION

Kiltane Limited is a private company incorporated in Scotland. The registered office is Caledonia House, 89 Seaward Street, Glasgow, G41 1HJ.

The financial statements are presented in Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The 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. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy. There were no material departures from this standard.

Going concern

After reviewing the company's adjusted forecasts and projections which cover the next 24 months, alongside post year end performance, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.

The company therefore continues to adopt the going concern basis in preparing its financial statements.

Critical accounting judgements

The company considers on an annual basis the judgements that are made by directors when applying its significant accounting policies that would have the most significant effect on amounts that are recognised in the financial statements. In preparing these financial statements, the directors have the following judgements:

- Whether a stock provision is required in the financial statements at the year end.

- Determination of whether leases entered into by the company as a lessee are operating leases or hire purchase agreements. These decisions depend on the assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.

Key sources of estimation uncertainty

In the application of the company's accounting policies, the directors are required to make estimates and assumptions about the carrying amounts 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 relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.

Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The directors consider the key sources of estimation uncertainty to be as follows: -

- Tangible fixed assets (note 11) are depreciated over their estimated useful lives. The actual lives of the assets are assessed annually and may vary depending on several factors. In re-assessing asset lives, factors such as usage and maintenance programmes are taken into account. The directors assessed that no changes were required to the estimated useful lives of the tangible fixed assets and, therefore, determined that the stated depreciation policies applied in prior years remain appropriate.

- Determination of the valuation placed on stock - stock levels are considered across all retail outlets and the warehouse in relation to consideration of damaged and obsolete stock to ensure appropriate write offs are made.

- Intangible fixed assets (note 10) are amortised over their estimated useful lives. The actual lives of the assets are assessed annually and various factors are considered in this. These factors include the ongoing income from the brand and its market standing. The directors assessed that no changes were required to the estimated useful lives of the intangible fixed assets and, therefore, determined that the stated amortisation policies applied in prior years remain appropriate.

Turnover

Turnover represents net invoiced sales of goods, excluding value added tax. The company's policy is to recognise revenue when substantively all risks and rewards in connection with the goods have been passed to the buyer.

Store revenue is recognised at the point of sale of a product to the customer.

E-commerce revenue is recognised when goods are delivered to the customer.

Wholesale revenue is recognised at the point that control of the goods has passed to the customer, which is typically upon delivery.

Rental income

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

Goodwill

Positive purchased goodwill arising on acquisitions is capitalised, classified as an asset on the balance sheet and amortised over its estimated useful life up to a maximum of 20 years. This length of time is presumed to be the maximum useful life of purchased goodwill because it is difficult to make projections beyond this period. Goodwill is reviewed for impairment at the end of the first full financial year following each acquisition and subsequently, as and when necessary, if circumstances emerge that indicate that the carrying value may not be recoverable.

Intangible assets

Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated, using the straight-line method, to allocate the depreciable amount of the assets to their residual values over their estimated useful life. Intellectual property, comprising trademarks and domain names are being amortised evenly over their estimated useful life of 5 years. This was based on the company objective of absorbing the brand name acquired into its own unique brand.

Amortisation is included in administrative expenses in the profit and loss account.

Where factors indicate that residual value or useful life have changed, the residual value, useful life or amortisation rate are amended prospectively to reflect the new circumstances.

Tangible fixed assets

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

Heritable property

-

2% straight line

Leasehold improvements

-

10% on cost

Property improvements

-

10% on cost

Plant and machinery

-

10% on cost

Fixtures & equipment

-

20% on cost

Motor vehicles

-

25% on reducing balance

Computer equipment

-

20% on cost

Tangible fixed assets (excluding heritable property) are included in the financial statements at cost less accumulated depreciation and impairment losses.

At each balance sheet date, the directors review the carrying amounts of tangible fixed assets (excluding heritable property) to determine whether there is any indication that any items have suffered impairment loss and that if any such indication exists, the recoverable amount of an asset is estimated in order to determine the extent of the impairment loss, if any an impairment loss is recognised in the profit and loss account. Where it is not possible to estimate the recoverable amount of the asset, the directors estimate the recoverable amount of the cash-generating unit to which the asset belongs.

Heritable property is carried at its revalued amounts, being fair value at the date of valuation less any subsequent depreciation and impairment losses. Revaluations are performed by professionally qualified valuers with sufficient regularity to ensure that the carrying amounts do not differ materially from those that would be determined using fair values. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Where estimated residual value at the balance sheet date is considered to be equivalent to fair value, no depreciation will be charged.

Any revaluation increase in the carrying amount of heritable property is recognised in other comprehensive income and included in a revaluation reserve in equity, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in the profit or loss, in which case the increase is credited to the profit and loss to the extent of the decrease previously expended. Decreases that offset previous increases of the same asset are charged in other comprehensive income and debited against the revaluation reserve in equity: decreases exceeding the balance in non-distributable reserve relating to an asset are recognised in the profit and loss. Each year the difference between depreciation based on the revalued carrying amount of the asset recognised in profit or loss and depreciation based on the asset's original cost is transferred from revaluation reserve to retained earnings.

Deferred tax is provided on any gains at the rate expected to apply when any property is sold.

Tangible fixed assets are only capitalised if their acquisition cost is above £1,000.

Investment property

The company holds an investment property for rental purposes. Investment properties are accounted for as follows:

(i) Investment properties are initially recorded at cost which includes purchase cost and any directly attributable expenditure.

(ii) Thereafter, investment properties are revalued at each balance sheet date to their fair value, where this can be measured reliably.

(iii) The surplus or deficit on revaluation in the financial year is recognised in the profit and loss account for that year. Revaluation gains and losses are accumulated in the profit and loss account reserve, unless the revaluation amount exceeds original cost in which case, a transfer is made of the surplus to a non-distributable reserve in the balance sheet.

(iv) Deferred taxation is provided on any gains at the rate expected to apply when a property is sold.

Stocks

Stock has been valued at the lower of cost and estimated selling price less costs to sell. Stock is recognised as an expense in the period in which the related revenue is recognised.

Due to the nature of the products supplied, the directors deem it necessary to consider the recoverability of the cost of the stock and the associated provisioning required due to changing consumer seasonal demands and the condition of the stock.

Tax

Current tax is recognised at the amount of tax payable in respect of the taxable profit for the current or past reporting periods using the tax rates and laws that have been enacted or substantively enacted at the balance sheet date.

The charge for taxation takes into account taxation deferred as a result of timing differences between the treatment of certain items for taxation and accounting purposes. In general, deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. However, deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred taxation is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which the timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

With the exception of changes arising on the initial recognition of a business combination, the tax expense is presented either in profit or loss, other comprehensive income or statement of changes in equity depending on the transaction that resulted in the tax expense.

Deferred tax liabilities are presented within provisions for liabilities and deferred tax assets within debtors.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.