REGISTERED NUMBER: 02464490 (England and Wales)

Group Strategic Report, Report of the Directors and

Audited Consolidated Financial Statements

for the Year Ended 31 January 2025

for

NPH Group Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Consolidated Statement of Comprehensive Income

9

Consolidated Balance Sheet

10

Company Balance Sheet

11

Consolidated Statement of Changes in Equity

12

Company Statement of Changes in Equity

13

Consolidated Cash Flow Statement

14

Notes to the Consolidated Cash Flow Statement

15

Notes to the Consolidated Financial Statements

16

DIRECTORS:

C N Jarvis

O R B Jarvis

Mrs M H Phair

SECRETARY:

Mrs D Jarvis

REGISTERED OFFICE:

C/o Newmarket Plant Hire Ltd

Depot Road

Newmarket

Suffolk

CB8 0AL

REGISTERED NUMBER:

02464490 (England and Wales)

AUDITORS:

Knights Lowe Limited

Eldo House

Kempson Way

Suffolk Business Park

Bury St Edmunds

Suffolk

IP32 7AR

The directors present their strategic report of the company and the group for the year ended 31 January 2025.

REVIEW OF BUSINESS

This year has seen another positive performance from the company, achieving strong annual Hire and Total turnover. There continues to be significant investment in new plant equipment with the continuing aim to both grow the portfolio to service customer requirements, and to reduce the age profile of the fleet available for hire.

Several large purchases of hire equipment, including investment in products to broaden the portfolio range have been made, along with an ongoing disposal programme of some older fleet assets. Additionally, Investment continues to be made on larger commercial vehicles to maintain customer service levels.

A positive cash flow has enabled the business to cease reliance on third party funding for fleet investment.

Ongoing investment in the Depot buildings continued in the year, to both improve standards and to reduce the company's carbon footprint.

Maintaining staffing levels in line with revenue growth have been challenging across the Depot network in the year although staff turnover has stabilised over the last two years.

Costs across the business continue to rise and the market remains challenging with competitors continuing to cut rates to secure revenue. Increases in both N.I contributions and minimum wage are expected to be a challenge for the upcoming year to 31 January 2026

The balance sheet has continued to strengthen, with net assets now standing at £8,434,259 (2024: £7,766,054).

Key performance indicators

The key performance indicators for Newmarket Plant Hire Ltd are net profit margin and gross profit margin. The company have chosen these to represent the company's performance and position as increasing turnover has been a key objective for the company in recent years and a significant amount of investment has gone into reducing the age of the fleet to achieve this. Net profit is a key indicator for the company as it gives a more holistic view of how the company is performing and allows them to review their costs for maximum efficiencies.

The results for the year, as shown on the statement of comprehensive income, shows a gross profit margin of 36.13% (2024: 37.30%) and net profit margin of 14.28% (2024: 13.07%).

Continued investment in the plant fleet and prudent cost control management helped the company in achieving promising turnover and net profit results, despite the higher administrative costs faced by businesses in the industry alike.

ON BEHALF OF THE BOARD:

C N Jarvis - Director

22 September 2025

The directors present their report with the financial statements of the company and the group for the year ended 31 January 2025.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of plant hire.

DIVIDENDS

An interim dividend of £100 per share on the Ordinary 'A' Shares £1 shares was paid on 31 January 2025. The directors recommend that no final dividend be paid on these shares.

No interim dividend was paid on the Ordinary 'B' Shares £1 shares. The directors recommend that no final dividend be paid on these shares.

The total distribution of dividends for the year ended 31 January 2025 will be £ 100,000 .

DIRECTOR

C N Jarvis held office during the whole of the period from 1 February 2024 to the date of this report.

Other changes in directors holding office are as follows:

O R B Jarvis and Mrs M H Phair were appointed as directors after 31 January 2025 but prior to the date of this report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

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

-	select suitable accounting policies and then apply them consistently;

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he 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, Knights Lowe Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

C N Jarvis - Director

22 September 2025

Opinion

We have audited the financial statements of NPH Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 January 2025 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 January 2025 and of the group's profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Other information

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

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

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

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

Auditors' responsibilities for the audit of the financial statements

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

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 commercial knowledge and experience of the companies operating 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, taxation legislation, data protection, 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;

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

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 were indicative of potential bias;

- investigated the rationale behind significant or unusual transactions; and

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;

- reading the minutes of meetings of those charged with governance;

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

- reviewing correspondence with HMRC 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.

James Knights ACA (Senior Statutory Auditor)

for and on behalf of Knights Lowe Limited

Eldo House

Kempson Way

Suffolk Business Park

Bury St Edmunds

Suffolk

IP32 7AR

30 September 2025

TURNOVER

7,281,942

7,417,752

Cost of sales

4,650,974

4,650,725

GROSS PROFIT

2,630,968

2,767,027

Administrative expenses

1,493,956

1,645,341

OPERATING PROFIT

6

1,137,012

1,121,686

Interest receivable and similar income

15,598

7,865

1,152,610

1,129,551

Interest payable and similar expenses

8

112,809

159,816

PROFIT BEFORE TAXATION

1,039,801

969,735

Tax on profit

9

271,596

239,256

PROFIT FOR THE FINANCIAL YEAR

768,205

730,479

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

768,205

730,479

Profit attributable to:

Owners of the parent

768,205

730,479

Total comprehensive income attributable to:

Owners of the parent

768,205

730,479

FIXED ASSETS

Intangible assets

12

-

-

Tangible assets

13

9,749,102

9,788,715

Investments

14

-

-

9,749,102

9,788,715

CURRENT ASSETS

Stocks

15

156,406

149,469

Debtors

16

915,006

887,105

Cash at bank and in hand

745,375

856,415

1,816,787

1,892,989

CREDITORS

Amounts falling due within one year

17

1,519,214

1,785,032

NET CURRENT ASSETS

297,573

107,957

TOTAL ASSETS LESS CURRENT LIABILITIES

10,046,675

9,896,672

CREDITORS

Amounts falling due after more than one year

18

(26,286

)

(623,708

)

PROVISIONS FOR LIABILITIES

21

(1,586,130

)

(1,506,910

)

NET ASSETS

8,434,259

7,766,054

CAPITAL AND RESERVES

Called up share capital

22

50,100

50,100

Retained earnings

23

8,384,159

7,715,954

SHAREHOLDERS' FUNDS

8,434,259

7,766,054

The financial statements were approved by the Board of Directors and authorised for issue on 22 September 2025 and were signed on its behalf by:

C N Jarvis - Director

FIXED ASSETS

Intangible assets

12

-

-

Tangible assets

13

170,000

170,000

Investments

14

1,000

1,000

171,000

171,000

CURRENT ASSETS

Debtors

16

100

100

CREDITORS

Amounts falling due within one year

17

170,000

170,000

NET CURRENT LIABILITIES

(169,900

)

(169,900

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,100

1,100

CAPITAL AND RESERVES

Called up share capital

22

50,100

50,100

Retained earnings

23

(49,000

)

(49,000

)

SHAREHOLDERS' FUNDS

1,100

1,100

Company's profit for the financial year

100,000

100,000

The financial statements were approved by the Board of Directors and authorised for issue on 22 September 2025 and were signed on its behalf by:

C N Jarvis - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 February 2023

50,100

7,085,475

7,135,575

Changes in equity

Dividends

-

(100,000

)

(100,000

)

Total comprehensive income

-

730,479

730,479

Balance at 31 January 2024

50,100

7,715,954

7,766,054

Changes in equity

Dividends

-

(100,000

)

(100,000

)

Total comprehensive income

-

768,205

768,205

Balance at 31 January 2025

50,100

8,384,159

8,434,259

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 February 2023

50,100

(49,000

)

1,100

Changes in equity

Dividends

-

(100,000

)

(100,000

)

Total comprehensive income

-

100,000

100,000

Balance at 31 January 2024

50,100

(49,000

)

1,100

Changes in equity

Dividends

-

(100,000

)

(100,000

)

Total comprehensive income

-

100,000

100,000

Balance at 31 January 2025

50,100

(49,000

)

1,100

Cash flows from operating activities

Cash generated from operations

1

2,441,127

2,401,533

Interest paid

-

(45

)

Interest element of hire purchase payments paid

(51,614

)

(104,429

)

Finance costs paid

(61,195

)

(55,342

)

Tax paid

(86,819

)

(71,892

)

Net cash from operating activities

2,241,499

2,169,825

Cash flows from investing activities

Purchase of tangible fixed assets

(1,745,478

)

(1,819,126

)

Sale of tangible fixed assets

506,279

354,651

Interest received

15,598

7,865

Net cash from investing activities

(1,223,601

)

(1,456,610

)

Cash flows from financing activities

Capital repayments in year

(1,089,568

)

(1,523,793

)

Amount introduced by directors

60,630

-

Amount withdrawn by directors

-

(44,684

)

New hire purchase loans advanced

-

1,171,325

Equity dividends paid

(100,000

)

(100,000

)

Net cash from financing activities

(1,128,938

)

(497,152

)

(Decrease)/increase in cash and cash equivalents

(111,040

)

216,063

Cash and cash equivalents at beginning of year

2

856,415

640,352

Cash and cash equivalents at end of year

2

745,375

856,415

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

2025

2024

£

£

Profit before taxation

1,039,801

969,735

Depreciation charges

1,607,268

1,596,218

Profit on disposal of fixed assets

(328,456

)

(223,902

)

Finance costs

112,809

159,816

Finance income

(15,598

)

(7,865

)

2,415,824

2,494,002

Increase in stocks

(6,937

)

(7,487

)

Increase in trade and other debtors

(27,901

)

(24,054

)

Increase/(decrease) in trade and other creditors

60,141

(60,928

)

Cash generated from operations

2,441,127

2,401,533

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 January 2025

31.1.25

1.2.24

£

£

Cash and cash equivalents

745,375

856,415

Year ended 31 January 2024

31.1.24

1.2.23

£

£

Cash and cash equivalents

856,415

640,352

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.2.24

Cash flow

At 31.1.25

£

£

£

Net cash

Cash at bank and in hand

856,415

(111,040

)

745,375

856,415

(111,040

)

745,375

Debt

Finance leases

(1,665,270

)

1,089,568

(575,702

)

(1,665,270

)

1,089,568

(575,702

)

Total

(808,855

)

978,528

169,673

1.	STATUTORY INFORMATION

NPH Group Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

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 under the historical cost convention.

The Group and Company have adopted Amendments to FRS 102 - Triennial Review 2017 in these financial statements.This introduced an accounting policy option that allows an entity whose investment property is rented to another group entity to measure this property at cost less accumulated depreciation and impairment, rather than at fair value through profit or loss as previously required. As the property was purchased during the 2019 financial year there is no restatement required to the 2023 figures.

The presentation currency of the financial statements is the Pound Sterling (£).

Basis of consolidation

The Group financial statements consolidate the financial statements of the Company and its subsidiary undertakings drawn up to 31 January each year.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Related party exemption

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

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

Turnover

Turnover is stated net of VAT and trade discounts and is recognised when the significant risks and rewards are considered to have been transferred to the buyer. Turnover from the sale of goods is recognised when the goods are collected by the customer or are physically delivered. Turnover from the hire of equipment represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the fair value of the consideration received or receivable. Where a hire contract extends past the balance sheet date, turnover represents the fair value of the service provided to date based on the length of hire and the estimated fuel and administrative charges. Where payments are received from customers in advance of hire services provided, the amounts are recorded as deferred income and included as part of creditors due within one year.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2001, is being amortised evenly over its estimated useful life of twenty years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

-

2% straight line on buildings

Plant and machinery

-

15% on reducing balance

Fixtures and fittings

-

4 years straight line

Motor vehicles

-

5 years straight line

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

Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the instrument.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities

Financial assets and liabilities

All financial assets and liabilities are initially measured at transaction price (including transaction costs). If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial assets and liabilities are only offset in the statement of financial position when, and only when, there exists a legally enforceable right to set off the recognised amounts and the company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Debt instruments which meet the following conditions are subsequently measured at amortised cost using the effective interest method:

(a) The contractual return to the holder is (i) a fixed amount; (ii) a positive fixed rate or a positive variable rate; or (iii) a combination of a positive or negative fixed rate and a positive variable rate.

(b) The contract may provide for repayments of the principal or return to the holder (but not both) to be linked to a single relevant observable index of general price inflation of the currency in which the debt instrument is denominated, provided such links are not leveraged.

(c) The contract may provide for a determinable variation of return to the holder during the life of the instrument, provided that (i) the new rate satisfies condition (a) and the variation is not contingent on future events other than (1) a change of contractual variable rate; (2) to protect the holder against credit deterioration of the issuer; (3) changes in levies applied by a central bank or arising from changes in relevant taxation or law; or (ii) the new rate is a market rate of interest and satisfies condition (a)).

(d) There is no contractual provision that could, by its terms, result in the holder losing the principal amount or any interest attributable to the current period or prior periods.

(e) Contractual provisions that permit the issuer to prepay a debt instrument or permit the holder to put it back to the issuer before maturity are not contingent on future events, other than to protect the holder against the credit deterioration of the issuer or a change in control of the issuer, or to protect the holder or issuer against changes in levies applied by a central bank or arising from changes in relevant taxation or law.

(f) Contractual provisions may permit the extension of the term of the debt instrument, provided that the return to the holder and any other contractual provisions applicable during the extended term satisfy the conditions of paragraphs (a) to (c).

Debt instruments that are classified as payable or receivable within one year on initial recognition and which meet the above conditions are measured at the undiscounted amount of the cash or other consideration expected to be paid or received, net of impairment.

Other debt instruments not meeting these conditions are measured at fair value through profit and loss.

Financial assets are derecognised when, and only when, (a) the contractual rights to the cash flows from the financial asset expire or are settled, (b) the company transfers to another part substantially all of the risks and rewards of ownership of the financial asset, or (c) the company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.

Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.

Taxation

Taxation for the year 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 balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet 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.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a 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.

For defined contribution schemes the amount charged to the profit and loss account in respect of pension costs and other retirement benefits is the contributions payable in the year. Differences between contributions payable in the year and actually paid are shown as either accruals or prepayments in the balance sheet.

Going concern

The Group's business activities, together with factors likely to affect its future development, performance and position are set out in the strategic report.

The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Impairment of assets

Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

Non-financial assets

An asset is impaired where there is objective evidence that, as a result of one of more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

The recoverable amount of goodwill is derived from measurement of the present value of the future cash flows of the cash-generating units of which the goodwill is a part. Any impairment loss in respect of a CGU is allocated first to the goodwill attached to that CGU, and then to other assets within that CGU on a pro-rata basis.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a CGU, the reversal is first applied to the assets (other than goodwill) of the CGU on a pro-rata basis and then to any goodwill allocated to that CGU.

Financial assets

For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows,, discounted at the financial asset's original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset's carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in the impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.