REGISTERED NUMBER: 00992884 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2025

FOR

SMITHS EQUIPMENT HIRE LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

6

Statement of Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Cash Flow Statement

12

Notes to the Cash Flow Statement

13

Notes to the Financial Statements

15

DIRECTORS:

Mr D Smith

Mr T G Smith

REGISTERED OFFICE:

De Havilland House

15-16 Avroe Crescent

Blackpool

Lancashire

FY4 2DP

REGISTERED NUMBER:

00992884 (England and Wales)

AUDITORS:

Xeinadin Audit Limited

Statutory Auditor

17 St Peters Place

Fleetwood

Lancashire

FY7 6EB

The directors present their strategic report for the year ended 28 February 2025.

The company's principal activity during the period under review was the hiring of plant, access and construction equipment to the construction, maintenance and DIY markets.

REVIEW OF BUSINESS

During the financial year turnover has decreased by 0.5% even with the opening of 2 new depots. The decline has been due to uncertainty in the construction sector with many new developments being cancelled or delayed. The personal cost of living crisis has also had a negative impact on our consumer business.

The company presents the following key performance indicators:

2025

2024

2023

£

£

£

Turnover

19,919

20,021

18,244

Gross profit

8,964

9,318

8,881

Profit before tax

1,255

1,850

2,042

A further breakdown of turnover is shown in the below table:

2025

2024

2023

£

£

£

Hire of own fleet

13,727

14,038

12,484

Consumables and other sales

1,983

1,744

1,899

Transport

1,330

1,312

1,284

Rehire

2,378

2,504

2,248

Training

501

423

329

During the year we opened new depots in Trafford Park, Manchester (September 2024) and Bradford (January 2025) bringing the number of operational depots to 18. The opening of these depots had a detrimental impact on profit in the year of c£120k as they are both within their establishment phases. We expect both depots to positively contribute to profit from FY26 onwards.

At the end of February 2025 the Company had hire fleet assets with a cost totalling £26.0m (2024 £25.8m). The main categories of items included within this figure are:

2025

2025

2024

2024

No.

£

No.

£

Powered Access Equipment

658

10,254

678

10,422

Excavators

148

2,907

144

2,854

Bulk Items (Scaffold towers, fencing etc)

1,834

1,708

Telehandlers

41

1,917

40

1,904

Dumpers

70

1,065

67

1,103

Generators

343

655

370

655

Rollers

63

766

65

797

All categories of hire fleet are monitored on a weekly / monthly basis for levels of utilisation and return on hire fleet investment. The results of these help formulate purchasing strategies for future additions enabling us to maximise our investments.

Maintaining cash flow is a high priority of the company considering the intensity of the capital expenditure required to not only maintain the hire fleet but to also expand it. The collection of customer debt is closely monitored and controlled. The average debtor days for the ¼ to 28th February 2025 was 56.83 (2024 55.21). Keeping debtor days below 60 is one of the highest priorities.

The balance sheet at 28th February 2025 shows net current liabilities of £2,502k (2024 £3,081k). Included within in this are asset finance repayments due over the next 12 months of £2.15m. The financing of the hire fleet assets has allowed the cash flow requirements to be met and this is expected to continue.

Larger items of hire fleet are financed by way of asset finance funding lines from 3 major banks. At the year end the total owing on these facilities was £3.22m with headroom available of £8.78m. All asset finance agreement are for a term no longer than 36 months. During the year the company has reduced its asset finance debt by £2.1m.

At the end of February 2025 the company had an overdraft by way of an invoice finance facility in the amount of £1,239k with a further £761k available.

The directors are of the opinion that the Balance Sheet is strong, and are confident that working capital is available to ensure the commitments the Company have can be met through cash flow and asset finance funding. This means the Company is reasonably placed to meet the demands placed upon it.

Non Financial KPI's

The Company also monitors the following non financial KPI's all of which improve the service to our customers and efficiency of the business. All of the KPI's are monitored on a weekly basis and monthly comparisons to previous periods / years.

- Transport planning & efficiency

- Equipment testing and inspections

- Workshop productivity & efficiency

- Equipment off hire & returns

- Depot resale stock & hire fleet availability and accuracy

- Depot safety & cleanliness

- Daily live open contracts

- Hire fleet utilisation

PRINCIPAL RISKS AND UNCERTAINTIES

In the opinion of the directors the principal risks currently facing the company are:

- Rising costs for our business and the economy as a whole which may impact on activity levels.

- Increasingly competitive market environment

- Bad debts

- Skilled labour shortages

Costs incurred by the Company are continually monitored and negotiated to ensure the best value for money is achieved. This linked with the extremely competitive marketplace in which operate could adversely affect the business. This risk is managed by ensuring that the best possible customer service is provided along with a modern well serviced hire fleet thus retaining customers and hire rates.

Trade debtors are closely managed and reported on a weekly basis to enable the Directors to ensure that the exposure to the risk of bad debts is mitigated as far as possible.

We continually try to enhance our employment packages in order to attract the best possible employees and provide extensive training and benefits in order to retain them.

The business is capital intensive and the company has deals with 3 main lenders for asset finance and an invoice finance facility, none of which are fully utilised. This ensures that there is sufficient working capital available for the continuing trading of the Company.

ON BEHALF OF THE BOARD:

Mr D Smith - Director

25 October 2025

The directors present their report with the financial statements of the company for the year ended 28 February 2025.

DIVIDENDS

No dividends will be distributed for the year ended 28 February 2025.

FUTURE DEVELOPMENTS

The directors and senior management are continuing to focus on and are confident of achieving the growth forecasts for the forthcoming financial year and continue to invest in staff training and development.

DIRECTORS

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

Mr D Smith

Mr T G Smith

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 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 of the profit or 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;

-	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 ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

Mr D Smith - Director

25 October 2025

Opinion

We have audited the financial statements of Smiths Equipment Hire Limited (the 'company') for the year ended 28 February 2025 which comprise the Statement of 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 28 February 2025 and of its 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 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 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 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:

Based on our understanding of the entity and the industry in which it operates we identified principal risks of non-compliance with laws and regulations related to Health and Safety, Sale of Goods Act and other trading laws. We considered the extent to which non-compliance with these laws and regulations might have a material effect on the financial statements. We also considered the Companies Act 2006 as this has a direct impact on the financial statements. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of override of controls, and determined that the principal risks were related to the posting of inappropriate journals in order to impact profitability and misappropriation of stock. Significant accounting estimates which could give rise to management bias within the company are: depreciation and useful economic life of Fixed Assets.

Audit procedures performed in order to mitigate the risks highlighted include the following:

- Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulation and fraud.

- Evaluation of the operating effectiveness of the management's controls designed to prevent and detect irregularities.

- Reviewing key correspondence with regulatory authorities in relation to compliance with relevant regulations.

- Challenging assumptions and judgements made by the management as well as explanations given.

- Identifying and testing journal entries, in particular those posted with unusual account combinations.

- Testing specific assets for existence and signs of impairment.

There are limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, 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.

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.

Charles Bryning FCA (Senior Statutory Auditor)

for and on behalf of Xeinadin Audit Limited

Statutory Auditor

17 St Peters Place

Fleetwood

Lancashire

FY7 6EB

25 October 2025

REVENUE

4

19,919,486

20,021,054

Cost of sales

10,955,407

10,702,851

GROSS PROFIT

8,964,079

9,318,203

Administrative expenses

7,413,990

7,161,435

OPERATING PROFIT

6

1,550,089

2,156,768

Interest payable and similar expenses

7

294,985

306,653

PROFIT BEFORE TAXATION

1,255,104

1,850,115

Tax on profit

8

336,257

471,346

PROFIT FOR THE FINANCIAL YEAR

918,847

1,378,769

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

918,847

1,378,769

FIXED ASSETS

Property, plant and equipment

10

16,722,281

17,634,237

CURRENT ASSETS

Inventories

11

648,512

603,817

Debtors

12

3,311,312

3,264,241

Cash at bank and in hand

51,724

54,717

4,011,548

3,922,775

CREDITORS

Amounts falling due within one year

13

(6,513,646

)

(7,003,848

)

NET CURRENT LIABILITIES

(2,502,098

)

(3,081,073

)

TOTAL ASSETS LESS CURRENT LIABILITIES

14,220,183

14,553,164

CREDITORS

Amounts falling due after more than one year

14

(1,077,253

)

(2,419,480

)

PROVISIONS FOR LIABILITIES

18

(2,021,708

)

(1,931,309

)

NET ASSETS

11,121,222

10,202,375

CAPITAL AND RESERVES

Called up share capital

19

1,500

1,500

Capital redemption reserve

20

250

250

Retained earnings

20

11,119,472

10,200,625

SHAREHOLDERS' FUNDS

11,121,222

10,202,375

The financial statements were approved by the Board of Directors and authorised for issue on 25 October 2025 and were signed on its behalf by:

Mr D Smith - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 March 2023

1,500

10,021,856

250

10,023,606

Changes in equity

Dividends

-

(1,200,000

)

-

(1,200,000

)

Total comprehensive income

-

1,378,769

-

1,378,769

Balance at 29 February 2024

1,500

10,200,625

250

10,202,375

Changes in equity

Total comprehensive income

-

918,847

-

918,847

Balance at 28 February 2025

1,500

11,119,472

250

11,121,222

Cash flows from operating activities

Cash generated from operations

1

5,019,830

5,124,732

Interest paid

(10,839

)

(3,150

)

Interest element of hire purchase payments paid

(284,146

)

(303,503

)

Tax paid

(212,384

)

(140,847

)

Net cash from operating activities

4,512,461

4,677,232

Cash flows from investing activities

Purchase of tangible fixed assets

(2,309,506

)

(2,146,560

)

Sale of tangible fixed assets

840,121

816,182

Net cash from investing activities

(1,469,385

)

(1,330,378

)

Cash flows from financing activities

Capital repayments in year

(2,757,832

)

(3,553,377

)

Movement on intercompany loan

196,145

305,877

Equity dividends paid

-

(1,200,000

)

Net cash from financing activities

(2,561,687

)

(4,447,500

)

Increase/(decrease) in cash and cash equivalents

481,389

(1,100,646

)

Cash and cash equivalents at beginning of year

2

(1,668,750

)

(568,104

)

Cash and cash equivalents at end of year

2

(1,187,361

)

(1,668,750

)

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

2025

2024

£

£

Profit before taxation

1,255,104

1,850,115

Depreciation charges

3,103,701

3,038,110

Profit on disposal of fixed assets

(62,367

)

(72,871

)

Finance costs

294,985

306,653

4,591,423

5,122,007

(Increase)/decrease in inventories

(44,695

)

57,968

(Increase)/decrease in trade and other debtors

(61,077

)

81,888

Increase/(decrease) in trade and other creditors

534,179

(137,131

)

Cash generated from operations

5,019,830

5,124,732

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 28 February 2025

28/2/25

1/3/24

£

£

Cash and cash equivalents

51,724

54,717

Bank overdrafts

(1,239,085

)

(1,723,467

)

(1,187,361

)

(1,668,750

)

Year ended 29 February 2024

29/2/24

1/3/23

£

£

Cash and cash equivalents

54,717

74,785

Bank overdrafts

(1,723,467

)

(642,889

)

(1,668,750

)

(568,104

)

3.	ANALYSIS OF CHANGES IN NET DEBT

Other

non-cash

At 1/3/24

Cash flow

changes

At 28/2/25

£

£

£

£

Net cash

Cash at bank

and in hand

54,717

(2,993

)

51,724

Bank overdrafts

(1,723,467

)

484,382

(1,239,085

)

(1,668,750

)

481,389

(1,187,361

)

Debt

Finance leases

(5,321,355

)

2,757,832

-

(3,223,515

)

(5,321,355

)

2,757,832

-

(3,223,515

)

Total

(6,990,105

)

3,239,221

-

(4,410,876

)

1.	STATUTORY INFORMATION

Smiths Equipment Hire 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 Company Information page.

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.

Going Concern

The directors going concern assessment covers 12 months and confirms that the company will continue in existence for the foreseeable future. The company has clearly demonstrated profitability over the past 12 months during times of uncertainty and there are no significant concerns at this time. There is a strong history of profitability and working capital management within the business. The company also has adequate resources to continue in operational existence and has a large quantity of unused additional finance available should it be required.

The company's balance sheet shows net assets at the year end of £11,121,222 and net current liabilities of £2,502,098. However, the company can rely on the support of its parent entity should it ever be required.

The directors have considered the future profitability of the company and wider group and its ability to continue as a going concern through the use of profit and cash flow forecasts. These cover a period of more than 12 months. Based on these projections the directors are satisfied that for the foreseeable future the company can meet its working capital requirements and continue to be a profitable entity.

Turnover

Where turnover represents the value of hire services provided under contracts it is recognised to the extent that there is a right to consideration and is recorded at the value of the consideration due. Where a contract has only been partially completed at the balance sheet date turnover represents the value of the service provided to date based on a proportion of the total expected consideration at completion. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within one year.

Where turnover represents sales of goods it is shown net of VAT and trade discounts. Turnover is recognised when the goods are physically delivered to the customer.

Property, plant and equipment

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 or, if held under a finance lease, over the lease term, whichever is the shorter.

Short leasehold

-

Over the remaining period of the lease

Plant and machinery

-

Between 5 and 12 years

Fixtures and fittings

-

33% on cost

Motor vehicles

-

20% on cost

Computer equipment

-

33% on cost

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Such cost includes costs directly attributable to making the asset capable of operating as intended.

Stocks

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

Cost includes all costs incurred in bringing each product to its present location and condition on a first in, first out basis.

Net realisable value is based on estimated selling price less any further costs expected to be incurred to disposal.

Financial instruments

Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and in hand and short-term deposits with an original maturity date of three months or less. For the purpose of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

Short-term debtors and creditors

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the income statement in other operating expenses.

Invoice financing

The company has an invoice finance facility secured against trade receivables which is presented as an overdraft within creditors.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the 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.

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

Pension costs and other post-retirement benefits

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

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company's accounting policies, which are described in note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and 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.

Critical judgements in applying the Company's accounting policies and key source of estimation uncertainty

Estimates

Fixed assets

Accounting for fixed assets involves the use of estimates for (a) the useful live of the assets over which they are to be depreciated and (b) the existence and any amount of impairment.

Fixed assets are depreciated on a straight line basis over the estimated useful lives. When the company estimates useful lives various factors are considered including expected technology obsolescence and the expected usage of the asset. The company regularly reviews these assets useful lives and future economic utilization and the physical condition of the assets concerned.

The carrying value of the assets is assessed periodically to determine whether there are any indications of any impairment of the value beyond the depreciation charge. If this is the case, an impairment charge is taken against the carrying value of the assets and charged to profit and loss account. The impairment of fixed assets require management judgement in determining the amounts to be impaired, in particular judgement is used when assessing the future cash flows.

Provisions

Provisions for onerous hire contracts are recognised when the group believes that there is no longer a possibility of economic benefits being received under the contract. The group monitors the risk profile of the debtors and provides a bad debt provision based on the directors past experiences and assessment of the current economic climate.

Judgements

Determining if an arrangement constitutes a lease

The directors have concluded that none of the groups hire contracts with customers are dependent on the use of a specific asset or group of assets as the group can swap hire stock as required to provide tool and equipment hire services. These arrangements are therefore not leases.