REGISTERED NUMBER: 01370637 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

AUDITED

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

FOR

MASSARELLA CATERING GROUP LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Statement of Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

17

DIRECTORS:

M S Massarella

M J Massarella

S R Massarella

Mrs D M Massarella

REGISTERED OFFICE:

Thurcroft Hall

Brookhouse

Sheffield

S25 1XZ

REGISTERED NUMBER:

01370637 (England and Wales)

AUDITORS:

Sowerby

Chartered Accountants and Statutory Auditors

Beckside Court

Annie Reed Road

Beverley

East Yorkshire

HU17 0LF

BANKERS:

Barclays Bank PLC

Sheffield 2 City Office

South Yorkshire Group

The directors present their strategic report of the company and the group for the year ended 31 December 2024.

PRINCIPAL ACTIVITIES AND REVIEW OF BUSINESS

The principal activity of the group throughout the year has continued to be the provision of catering services within shopping centres, department stores, garden centres, retail and leisure outlets.

The principal activity of the company is that of a holding company incurring central costs.

The Group has continued to adapt its strategy throughout the year to the changing market conditions within the Hospitality sector. It has recovered well from site closures forced upon its subsidiary company in 2023 and has managed its cost base efficiently throughout the 2024. It has also completed invested in a new Accounting and Payroll systems and updated all site IT systems and equipment.

The Directors continue to focused on it strategy to grow the business, whilst recognising a reduction in opportunities within Department stores sector. The focus has now moved towards opportunities on leasehold sites in retail outlets and High streets locations in selected towns. The Group is well capitalised and has the cash reserves to continue its programme of expansion.

In relation to the Group subsidiaries-

Massarella Restaurants Ltd - The company has a mix of sites operating within the retail sector and Garden centre environment. The company has continued to maintain positive relationship with all it stores clients and landlords, whilst also entering into contract extensions on a number of its current sites. The directors continue to review any underperforming sites and will dispose of any locations that fail to meet our investment criteria. The company has invested in 2 new site this year.

Caffe Ori Ltd- operates solely within department store sector. The company has maintained positive relations with its client and has seen good organic sales growth throughout the year. It expanded its portfolio with one new site and is in advanced discussions to add two new sites in 2025. Whilst the company is not exposed to the current energy market, the directors are conscious of the upward trend in increased food prices and remain optimistic that Gross profit margins will be maintained.

The group's key financial performance indicators during the year were as follows:

2024

2023

Gross profit margin

19.05%

16.94%

EBITDA

1,771,322

1,315,537

PRINCIPAL RISKS AND UNCERTAINTIES

The directors believe the key risks of the company include:

Overheads - Product costs and energy costs in its leasehold sites, and escalation of wage reviews especially MLW. The company has managed to maintain its gross margin and continues to review it supplier list and to work closely with its supplier network.

Staffing - the company continues to maintain a positive relationship with its staff and to support them through difficult periods. Whilst the company has many loyal and long serving employees, it still has a high turnover of leavers and new starters in certain parts of the country. However, the company has been rewarded with staff loyalty, which has ensured that the group has been able to maintain its customer facing services at a high level.

Cash Reserves - the group has maintained it cashflows, and removed all none essential costs, and has reviewed its management structure. However, capital expenditure for existing sites is likely to increase over the next 2/3 years with the desire to renew contracts, impacting on the company reserves if profits are not maintained.

Competitive retail pricing - This remains the focus for Directors, to ensure we do not lose sight of fair and sensitive price reviews which have been required to maintain margins and customer loyalty

In managing the business the directors have established controls to enable them to respond to and mitigate the impact of such risks and having reviewed the company's cost base are making positive strides to mitigate excessive overheads and risks.

ON BEHALF OF THE BOARD:

M S Massarella - Director

30 September 2025

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2024.

DIVIDENDS

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

FUTURE DEVELOPMENTS

There are positive discussions on going with the client for expanding the brand and it is expected that this will gather pace in 2025. The group has positive cash flow and the reserves to expand operations without incurring debt.

DIRECTORS

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

M S Massarella

M J Massarella

S R Massarella

Mrs D M Massarella

FINANCIAL INSTRUMENTS

The groups principal financial instruments comprise trade debtors, trade creditors, bank balances, bank overdrafts and hire purchase agreements. The main purpose of these instruments is to raise funds to finance the group's operations.

The group's approach to managing risks applicable to the financial instruments is shown below.

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.

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

In respect of bank balances the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of overdrafts at floating rates of interest.

The group is a lessee in respect of finance leased assets. The monthly repayments on finance lease agreements are fixed and liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

EMPLOYEES

The groups employment policy provides equal opportunity, irrespective of sex, religion, race or marital status. Applications by persons with disabilities are given full and fair consideration and, wherever practicable, provision is made for their special needs. The same criteria for training and promotion apply to persons with disabilities as to any other employee. If employees become disabled, every effort is made to ensure their continued employment.

The group places considerable value on the involvement of its employees and has continued its previous practice of keeping them informed on matters affecting them as employees and on the various factors affecting the performance of the group. This is achieved through formal and informal meetings and briefings. Employee representatives are consulted regularly on a wide range of matters affecting the current and future interest of the employees.

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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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;

-	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 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 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 group's auditors are aware of that information.

ON BEHALF OF THE BOARD:

M S Massarella - Director

30 September 2025

Opinion

We have audited the financial statements of Massarella Catering Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 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 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 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 five, 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.

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

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

- the nature of the industry and sector, control environment and business performance;

- we also obtained an understanding of the legal and regulatory frameworks that the group operates in and determined that the most significant are those that relate to the reporting framework, FRS 102, the Companies Act 2006 and the relevant tax laws and regulations in the UK. In addition, we concluded that there are certain significant laws and regulations which may have an effect on the determination of the amounts and disclosures in the financial statements, relating in majority to general health and safety, employee matters and specific food hygiene regulations;

- we reviewed results of our enquiries of management about their own identification and assessment of the risks of irregularities; and assessed how the entity identifies, evaluates and complies with laws and regulations and whether management were aware of any instances of non-compliance. We corroborated our enquiries through our review of board minutes and consideration of the results of our audit procedures across the group;

- we also considered how the entity detects and responds to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud, and;

- we considered the controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how management monitors those controls

- the internal controls established to mitigate risks of non-compliance with laws and regulations were also investigated.

- we also considered the existence of performance targets and their potential influence on management to manage earnings.

- where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk.

These procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error.

We reviewed financial statement disclosures and performed testing to supporting documentation to assess compliance with applicable laws and regulations.

We also tested the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. There was a focus on manual journals and journals indicating large or unusual transactions; enquiries of group management; and challenging the assumptions and judgements made by management by reviewing third party evidence wherever possible.

The results of our procedures did not identify any instances or irregularities, including fraud.

No inherent difficulties were found in the standard processes for detecting irregularities; there was no significant shift in the control environment in the current year.

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.

Elizabeth Blanchard BA(Hons) BFP ACA PGCE (Senior Statutory Auditor)

for and on behalf of Sowerby

Chartered Accountants and Statutory Auditors

Beckside Court

Annie Reed Road

Beverley

East Yorkshire

HU17 0LF

30 September 2025

TURNOVER

21,643,966

21,614,797

Cost of sales

17,520,383

17,953,760

GROSS PROFIT

4,123,583

3,661,037

Distribution costs

1,948,681

2,020,374

Administrative expenses

976,954

976,549

2,925,635

2,996,923

OPERATING PROFIT

5

1,197,948

664,114

Interest receivable and similar income

184,509

48,956

1,382,457

713,070

Interest payable and similar expenses

6

-

10,199

PROFIT BEFORE TAXATION

1,382,457

702,871

Tax on profit

7

408,724

145,603

PROFIT FOR THE FINANCIAL YEAR

973,733

557,268

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

973,733

557,268

Profit attributable to:

Owners of the parent

973,733

557,268

Total comprehensive income attributable to:

Owners of the parent

973,733

557,268

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

2,002,271

1,959,926

Investments

12

-

-

2,002,271

1,959,926

CURRENT ASSETS

Stocks

13

362,999

373,220

Debtors

14

988,809

811,597

Cash at bank and in hand

8,358,775

7,522,799

9,710,583

8,707,616

CREDITORS

Amounts falling due within one year

15

4,874,738

4,817,715

NET CURRENT ASSETS

4,835,845

3,889,901

TOTAL ASSETS LESS CURRENT LIABILITIES

6,838,116

5,849,827

PROVISIONS FOR LIABILITIES

17

351,158

336,602

NET ASSETS

6,486,958

5,513,225

CAPITAL AND RESERVES

Called up share capital

18

100,000

100,000

Retained earnings

19

6,386,958

5,413,225

SHAREHOLDERS' FUNDS

6,486,958

5,513,225

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

M S Massarella - Director

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

133,900

85,161

Investments

12

76,100

76,100

210,000

161,261

CURRENT ASSETS

Debtors

14

97,858

70,719

Cash at bank and in hand

1,743,401

1,950,250

1,841,259

2,020,969

CREDITORS

Amounts falling due within one year

15

796,738

856,343

NET CURRENT ASSETS

1,044,521

1,164,626

TOTAL ASSETS LESS CURRENT LIABILITIES

1,254,521

1,325,887

CAPITAL AND RESERVES

Called up share capital

18

100,000

100,000

Retained earnings

19

1,154,521

1,225,887

SHAREHOLDERS' FUNDS

1,254,521

1,325,887

Company's (loss)/profit for the financial year

(71,366

)

182,819

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

M S Massarella - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

100,000

5,055,957

5,155,957

Changes in equity

Dividends

-

(200,000

)

(200,000

)

Total comprehensive income

-

557,268

557,268

Balance at 31 December 2023

100,000

5,413,225

5,513,225

Changes in equity

Total comprehensive income

-

973,733

973,733

Balance at 31 December 2024

100,000

6,386,958

6,486,958

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

100,000

1,243,068

1,343,068

Changes in equity

Dividends

-

(200,000

)

(200,000

)

Total comprehensive income

-

182,819

182,819

Balance at 31 December 2023

100,000

1,225,887

1,325,887

Changes in equity

Total comprehensive loss

-

(71,366

)

(71,366

)

Balance at 31 December 2024

100,000

1,154,521

1,254,521

Cash flows from operating activities

Cash generated from operations

1

1,666,055

1,076,912

Interest paid

-

(9,712

)

Interest element of hire purchase or finance lease rental payments paid

-

(487

)

Tax paid

(397,655

)

-

Net cash from operating activities

1,268,400

1,066,713

Cash flows from investing activities

Purchase of tangible fixed assets

(630,461

)

(213,809

)

Sale of tangible fixed assets

12,446

1,452

Interest received

184,509

48,956

Net cash from investing activities

(433,506

)

(163,401

)

Cash flows from financing activities

Loan repayments in year

-

(791,690

)

Capital repayments in year

-

(5,237

)

Amount introduced by directors

45,059

40,000

Amount withdrawn by directors

(43,977

)

(66,680

)

Equity dividends paid

-

(130,000

)

Net cash from financing activities

1,082

(953,607

)

Increase/(decrease) in cash and cash equivalents

835,976

(50,295

)

Cash and cash equivalents at beginning of year

2

7,522,799

7,573,094

Cash and cash equivalents at end of year

2

8,358,775

7,522,799

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

2024

2023

£

£

Profit before taxation

1,382,457

702,871

Depreciation charges

473,722

516,987

Loss on disposal of fixed assets

99,648

134,408

Finance costs

-

10,199

Finance income

(184,509

)

(48,956

)

1,771,318

1,315,509

Decrease in stocks

10,221

70,148

Increase in trade and other debtors

(177,212

)

(154,435

)

Increase/(decrease) in trade and other creditors

61,728

(154,310

)

Cash generated from operations

1,666,055

1,076,912

2.	CASH AND CASH EQUIVALENTS

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

Year ended 31 December 2024

31/12/24

1/1/24

£

£

Cash and cash equivalents

8,358,775

7,522,799

Year ended 31 December 2023

31/12/23

1/1/23

£

£

Cash and cash equivalents

7,522,799

7,573,094

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1/1/24

Cash flow

At 31/12/24

£

£

£

Net cash

Cash at bank and in hand

7,522,799

835,976

8,358,775

7,522,799

835,976

8,358,775

Total

7,522,799

835,976

8,358,775

1.	STATUTORY INFORMATION

Massarella Catering Group Limited is a private company, limited by shares and incorporated and domiciled in England. It has its registered office at Thurcroft Hall, Sheffield, S25 1XZ.

The principle activity of the company is that of a holding company incurring central costs.

The principle activity of the group is the provision of catering services.

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

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

Having regard to liquidity risk, current market conditions and other factors affecting the group, including the impact of the economic environment, the use of the going concern basis of accounting is appropriate as, in the opinion of the directors, there are no material uncertainties related to events or conditions that may cast significant doubt about the ability of the company to continue as a going concern.

The financial statements have been prepared on a going concern basis.

The directors have considered the impact of the economy on the company's business operations and the future prospects of the group. The group's financial forecasts, taking into consideration the current environment, show that the company is expected to make profit and generate positive cashflows going forward. These positive cashflows and current strong cash holding give the company the ability to continue to operate for the foreseeable future.

Based on these facts and the current financial position, forecasts and cash flows of the company, the directors have concluded it is appropriate for the financial statements to be prepared on a going concern basis.

The group has a mix of sites operating within department stores, the retail sector and Garden centre environment. The group has continued to maintain positive relationship with all it stores clients and landlords, whilst also entering into contract extensions on a number of its current sites. The directors continue to review any underperforming sites and will dispose of any locations that fail to meet our investment criteria.

The group has maintained it cashflows, and removed all none essential costs, and has reviewed its management structure. However, capital expenditure for existing sites is likely to increase over the next 2/3 years with the desire to renew contracts, impacting on the company reserves if profits are not maintained

Basis of consolidation

Having regard to liquidity risk, current market conditions and other factors affecting the group, the use of the going concern basis of accounting is appropriate as, in the opinion of the directors, there are no material uncertainties related to events or conditions that may cast significant doubt about the ability of the group to continue as a going concern.

The groups financial statements consolidate the financial statements of Massarella Catering Group Limited and the following subsidiary undertakings:

Massarella Restaurants Limited

Massarella Catering Limited - Dormant

Massarella Supplies Limited - Dormant

Caffe Ori Limited

Intra-group balances and transactions are eliminated fully on consolidation. The results of subsidiaries acquired or disposed of during the year are included in total comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate using accounting policies consistent with those of the parent.

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.

Significant judgements and estimates

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

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised 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.

No key sources of estimation uncertainty are noted by management that have a significant effect on the amounts recognised in the financial statements.

Turnover

Turnover is the amount derived from ordinary activities, measured at the fair value of the consideration received or receivable. Turnover excludes value added tax and trade discounts.

Sales are recognised at the point which the company has fulfilled its contractual obligations and the risks and rewards attached to the product, have been transferred to the customer.

Goodwill

Goodwill arising on consolidation represents the excess of the fair value of the consideration given over the fair value of the identifiable net assets acquired. Amortisation is calculated so as to write off the cost of the asset, less its estimated residual value, over the useful economic life of 10 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.

Short leasehold

-

4% on cost and over the period of the lease

Plant and machinery

-

10% on cost

Motor vehicles

-

20% on cost

Assets are recognised under the historical cost model.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment loss is recognised as an expense immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately.

Stocks

Stocks are stated at the lower of cost, using the first in first out method, and selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

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.