REGISTERED NUMBER: 12016803 (England and Wales)

Group Strategic Report,

Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31 January 2025

for

K & L Freight Holdings Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Consolidated Income Statement

8

Consolidated Other 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:

Mr C M Buckley

Mr M Kidd

REGISTERED OFFICE:

16 Cheshire Avenue

Cheshire Business Park

Lostock Gralam

Northwich

Cheshire

CW9 7UA

REGISTERED NUMBER:

12016803 (England and Wales)

AUDITORS:

Thompson Wright (Audit) Limited

Chartered Accountants

and Statutory Auditors

Ebenezer House

Ryecroft

Newcastle under Lyme

Staffordshire

ST5 2BE

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

REVIEW OF BUSINESS

Overall profitability of the group has decreased with a resultant operating profit of £1,881,426 compared to £2,193,706 in the previous year.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors have identified the key risks faced by the group to be market risk, financial risk, credit risk and exchange rate risk.

The directors are constantly monitoring both the quality and range of services it supplies, to minimise market risk.

The group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs.

The group's policy throughout the year has been to try and maintain liquid funds at the bank whilst also funding the repayment of finance and supplier obligations.

Where the group has had to undertake short term borrowings, the group's exposure to interest rate fluctuations on its borrowings is managed by the use of fixed and floating facilities. It is the group''s policy to minimise the amount of borrowings at floating rates of interest.

The maturity of borrowings are set out in note 16 of the financial statements. The principal credit risk arises from its trade debtors.

In order to manage credit risk, the directors set limits for its customers based on a combination of payment history and credit references. Credit limits are reviewed by the credit controller on a regular basis in conjunction with debt ageing and collection history. Credit risk exposure is spread out over a large number of customers.

Exchange rate risk is minimised by quotations being caveated that the current rate of exchange at the time of shipment / arrival will be used and quoted rates can change accordingly.

FINANCIAL KEY PERFORMANCE INDICATORS

The directors assess the financial performance of the group by reviewing key financial benchmarks, namely, gross profit percentage, debtor days and creditor days:

2025

2024

Gross profit margin

21.37%

26.64%

Debtors days

28

40

Creditors days

32

44

FUTURE DEVELOPMENTS

Looking to the future, the directors wish to maintain appropriate investment levels in the group to maintain and secure the group's position in the market. The trading outlook for 2025 is positive with trading levels and operating margins being maintained.

ON BEHALF OF THE BOARD:

Mr C M Buckley - Director

21 October 2025

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

PRINCIPAL ACTIVITIES

The principal activity of the parent company was that of the holding of investments, shipping and forwarding agents and investment holding company.

DIVIDENDS

The total distribution of dividends for the year ended 31 January 2025 will be £ 1,136,000 .

EVENTS SINCE THE END OF THE YEAR

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

DIRECTORS

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

Mr C M Buckley

Mr M Kidd

DISCLOSURE IN THE STRATEGIC REPORT

The group has chosen in accordance with Section 414(c) of Companies Act 2006 (Strategic Report and Directors Report) Regulations 2013 to set out in the Group's Strategic Report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.

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;

-	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, Thompson Wright (Audit) Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr C M Buckley - Director

21 October 2025

Opinion

We have audited the financial statements of K & L Freight Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 January 2025 which comprise the Consolidated Income Statement, Consolidated Other 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.

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

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

- the engagement partner ensured that the audit 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 shipping and forwarding agents and property investment businesses;

- 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, consumer rights act, other industry specific accreditations and health and safety legislation;

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

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

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

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

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

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; and

- investigated the rationale behind significant or unusual transactions.

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; and

- reviewing correspondence with HMRC, relevant regulators including the Health and Safety Executive, 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.

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.

Richard Thompson FCA (Senior Statutory Auditor)

for and on behalf of Thompson Wright (Audit) Limited

Chartered Accountants

and Statutory Auditors

Ebenezer House

Ryecroft

Newcastle under Lyme

Staffordshire

ST5 2BE

21 October 2025

TURNOVER

3

14,201,492

11,877,061

Cost of sales

11,167,037

8,712,555

GROSS PROFIT

3,034,455

3,164,506

Administrative expenses

1,215,691

1,032,960

1,818,764

2,131,546

Other operating income

62,662

62,160

OPERATING PROFIT

5

1,881,426

2,193,706

Interest receivable and similar income

3,777

721

1,885,203

2,194,427

Gain/loss on revaluation of investment property

-

25,000

1,885,203

2,219,427

Interest payable and similar expenses

6

49,859

60,914

PROFIT BEFORE TAXATION

1,835,344

2,158,513

Tax on profit

7

461,854

535,517

PROFIT FOR THE FINANCIAL YEAR

1,373,490

1,622,996

Profit attributable to:

Owners of the parent

1,373,490

1,622,996

PROFIT FOR THE YEAR

1,373,490

1,622,996

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,373,490

1,622,996

Total comprehensive income attributable to:

Owners of the parent

1,373,490

1,622,996

FIXED ASSETS

Tangible assets

10

364,317

361,072

Investments

11

1,708

1,708

Investment property

12

1,056,000

1,056,000

1,422,025

1,418,780

CURRENT ASSETS

Debtors

13

3,112,356

3,053,976

Cash at bank and in hand

2,409,664

2,254,984

5,522,020

5,308,960

CREDITORS

Amounts falling due within one year

14

2,047,238

1,898,065

NET CURRENT ASSETS

3,474,782

3,410,895

TOTAL ASSETS LESS CURRENT LIABILITIES

4,896,807

4,829,675

CREDITORS

Amounts falling due after more than one year

15

(529,663

)

(702,447

)

PROVISIONS FOR LIABILITIES

19

(69,604

)

(67,178

)

NET ASSETS

4,297,540

4,060,050

CAPITAL AND RESERVES

Called up share capital

20

2

2

Non distributable reserve

21

217,206

217,206

Retained earnings

21

4,080,332

3,842,842

SHAREHOLDERS' FUNDS

4,297,540

4,060,050

The financial statements were approved by the Board of Directors and authorised for issue on 21 October 2025 and were signed on its behalf by:

Mr C M Buckley - Director

FIXED ASSETS

Tangible assets

10

332,071

339,467

Investments

11

2

2

Investment property

12

1,056,000

1,056,000

1,388,073

1,395,469

CURRENT ASSETS

Debtors

13

2,415,846

1,636,003

Cash at bank

5,870

589,041

2,421,716

2,225,044

CREDITORS

Amounts falling due within one year

14

62,171

56,411

NET CURRENT ASSETS

2,359,545

2,168,633

TOTAL ASSETS LESS CURRENT LIABILITIES

3,747,618

3,564,102

CREDITORS

Amounts falling due after more than one year

15

(499,663

)

(552,447

)

PROVISIONS FOR LIABILITIES

19

(67,084

)

(67,178

)

NET ASSETS

3,180,871

2,944,477

CAPITAL AND RESERVES

Called up share capital

20

2

2

Non distributable reserve

21

217,206

217,206

Retained earnings

21

2,963,663

2,727,269

SHAREHOLDERS' FUNDS

3,180,871

2,944,477

Company's profit for the financial year

1,372,394

1,539,214

The financial statements were approved by the Board of Directors and authorised for issue on 21 October 2025 and were signed on its behalf by:

Mr C M Buckley - Director

Called up

Non

share

Retained

distributable

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 February 2023

2

3,360,124

212,928

3,573,054

Changes in equity

Dividends

-

(1,136,000

)

-

(1,136,000

)

Total comprehensive income

-

1,618,718

4,278

1,622,996

Balance at 31 January 2024

2

3,842,842

217,206

4,060,050

Changes in equity

Dividends

-

(1,136,000

)

-

(1,136,000

)

Total comprehensive income

-

1,373,490

-

1,373,490

Balance at 31 January 2025

2

4,080,332

217,206

4,297,540

Called up

Non

share

Retained

distributable

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 February 2023

2

2,328,333

212,928

2,541,263

Changes in equity

Dividends

-

(1,136,000

)

-

(1,136,000

)

Total comprehensive income

-

1,534,936

4,278

1,539,214

Balance at 31 January 2024

2

2,727,269

217,206

2,944,477

Changes in equity

Dividends

-

(1,136,000

)

-

(1,136,000

)

Total comprehensive income

-

1,372,394

-

1,372,394

Balance at 31 January 2025

2

2,963,663

217,206

3,180,871

Cash flows from operating activities

Cash generated from operations

1

1,999,756

1,593,129

Interest paid

(49,859

)

(60,914

)

Tax paid

(415,228

)

(478,363

)

Net cash from operating activities

1,534,669

1,053,852

Cash flows from investing activities

Purchase of tangible fixed assets

(21,389

)

(9,162

)

Interest received

3,777

721

Net cash from investing activities

(17,612

)

(8,441

)

Cash flows from financing activities

Loan repayments in year

(171,255

)

(169,082

)

Amount introduced by directors

150,982

39,556

Amount withdrawn by directors

(206,104

)

(274,777

)

Equity dividends paid

(1,136,000

)

(1,136,000

)

Net cash from financing activities

(1,362,377

)

(1,540,303

)

Increase/(decrease) in cash and cash equivalents

154,680

(494,892

)

Cash and cash equivalents at beginning of year

2

2,254,984

2,749,876

Cash and cash equivalents at end of year

2

2,409,664

2,254,984

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

31.1.25

31.1.24

£

£

Profit before taxation

1,835,344

2,158,513

Depreciation charges

18,144

14,663

Gain on revaluation of fixed assets

-

(25,000

)

Finance costs

49,859

60,914

Finance income

(3,777

)

(721

)

1,899,570

2,208,369

Decrease/(increase) in trade and other debtors

147,724

(362,167

)

Decrease in trade and other creditors

(47,538

)

(253,073

)

Cash generated from operations

1,999,756

1,593,129

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

2,409,664

2,254,984

Year ended 31 January 2024

31.1.24

1.2.23

£

£

Cash and cash equivalents

2,254,984

2,749,876

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.2.24

Cash flow

At 31.1.25

£

£

£

Net cash

Cash at bank and in hand

2,254,984

154,680

2,409,664

2,254,984

154,680

2,409,664

Debt

Debts falling due within 1 year

(172,161

)

(1,529

)

(173,690

)

Debts falling due after 1 year

(702,447

)

172,784

(529,663

)

(874,608

)

171,255

(703,353

)

Total

1,380,376

325,935

1,706,311

1.	STATUTORY INFORMATION

K & L Freight Holdings 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.	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 as modified by the revaluation of certain assets.

Basis of consolidation

The group financial statements consolidate the financial statements of the limited company and its subsidiary and its associate undertakings.

Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control and continue to be consolidated until the date that such control ceases.

Subsidiaries are included in the consolidated financial statements on the merger acquisition basis whilst associates are included using the equity method.

Group reconstructions are included in the consolidated financial statements using the merger basis.

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, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Turnover

Turnover represents net invoiced sales of services, excluding value added tax.

Revenue is recognised as the company becomes entitled to consideration for the services supplied.

Rental income is recognised in the period that it falls due.

Tangible fixed assets

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

Freehold property

-

2% on cost

Fixtures and fittings

-

15% on reducing balance

Office equipment

-

25% on reducing balance

Investment property

Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit or loss.

Financial instruments

The company enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, bank financing facilities and loans from related parties.

Debt instruments, including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account.

For financial assets measured at amortised cost, the impairment loss is measured at the difference between an asset's carrying amount and the present value of estimated cash flows.

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

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

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Taxation

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

Current 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.

Foreign currencies

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

Hire purchase and leasing commitments

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 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.