The directors present the strategic report for the year ended 31 March 2025.

The principal activity of the company is that of an investment holding company.

The principal activity of the group is the provision of both products and services in the optical and audiology retail sectors. The group operates under three distinct operating divisions: Retail, Corporate and Manufacturing and is the largest privately-owned optical group in Scotland and the only one with its own proprietary lens manufacturing capability.

The retail division operates 42 practices located throughout Scotland, with a footprint covering the Borders, Central Belt, the North East and the Highlands, trading as Duncan and Todd, 20 20 Opticians, Douglas Dickie, JM McDonald, Browns and James Hughes.

The group’s manufacturing facilities, at Caledonian Optical, provide optical lenses to the group’s own retail practices, third party laboratories and other independent opticians across the UK. Caledonian Optical continues on its growth journey to support both internal group supply as well as ever increasing numbers of external customers. The growth is enabled with further investment for capacity and applications of new technologies, together with a refocused customer service, account management and sales team.

The Corporate division, Smart Employee EyeCare (SEE), operates throughout the UK and is a market leading provider of Visual Display User (VDU), safety and general eye-care services to corporate customers.

The trading results for the financial year show a revenue of £29.5m (2024: £28.7m) with a loss for the year of £4.6m (2024: loss of £5.4m). The year includes significant costs for amortisation of intangibles £2.4m (2024: £2.3m) and interest on loan notes £2.9m (2024: £2.6m), which is reflective of the shareholders’ choice of acquisition funding arrangement and not the operational performance of the group.

The group’s principal KPI that is used to monitor performance is EBITDA (Earnings Before Interest, Taxation, Depreciation and Amortisation) excluding Exceptional costs as it is the fundamental measure of operational performance. This adjusted EBITDA performance was £3.1m in the year to 31 March 2025 and £2.6m in the year to 31 March 2024. Exceptional costs in 2025 were £1.0m (2024: £1.2m) and represent costs associated with closure of certain branches, non recurring restructuring and professional fees. The EBITDA improvement year on year was driven by a focus on operational efficiency both within the Retail and Manufacturing business.

The directors view the balance sheet and cash-flow generation of the group as strong underpinned by the operational performance and selective acquisitions added to the group. Although the group balance sheet continues to have a net liability position this reflects the shareholders’ choice of funding arrangement and not the operational performance and the group can meet all debt repayments due to external parties as scheduled. The group has a net current liabilities position at year end of £1.2m (2024: £2.0m) however sensitised forecasts have been prepared showing the group can continue to meet all external obligations including compliance with terms associated with the existing lending facilities. External Net debt, excluding shareholder loan notes closed the year at £3.4m (2024: £4.4m), which represents 1.1x Adjusted EBITDA (2024: 1.69x) which further supports this position. The group’s year-end cash position of £1.1m (net of overdrafts) (2024: £0.7m) highlights the continuing financial strength of the group.

The Group made Capex investments in Tangible Fixed Assets of £0.8m (2024: £1.4m), mainly driven by additional Plant, Machinery and Equipment for the manufacturing facility at Caledonian Optical. This further increases the Groups Capability and Capacity to support future growth.

During the year, the group also strengthened the leadership team, appointing Kevin Sutherland as its new CFO, and Karen Sharpe in the newly created role of CCO, with both joining the board as directors.

Principle risks and uncertainties

The principal risks facing the business come from increasing price and promotional competition from existing, national and new entrants to the optical sector, particularly within the retail environment. Inflation presents a risk to the group’s cost base through increased salaries and other inputs across the supply chain. Additionally, within Retail it may impact customer demand in certain areas due to heightened economic uncertainty. However, it also represents an opportunity for the group to enhance cost management and improve operational efficiencies.

Future developments

The business intends to further improve the financial and operational performance of the retail network, and continue to extend the provision of audiology services. In addition, the business continues to invest in the manufacturing capability of the Caledonian Optical business. Within the Corporate division, there is continued focus on expansion of the optician network to improve service to both new and existing customers. In doing so, the group will look to provide opportunities to all employees fairly and operate in both a socially and environmentally responsible manner.

The directors are required, as stated in section 172 of the Companies Act 2006, to take actions which, in good faith, promote the success of each company in the group for the benefit of its members as a whole, and in doing so have regard, amongst other matters, to:

• the likely consequences of any decision in the long term

• the interests of the company’s employees

• the need to foster the company’s business relationships with suppliers, customers and others

• the impact of the company’s operations on the community and the environment

• the desirability of the company maintaining a reputation for high standards of business conduct

• the need to act fairly between members of the company

The following provides an overview of how the directors have met their obligations under section 172 in promoting the success of the Duncan and Todd group of companies.

Purpose

Our purpose is to be one of the leading UK optical and hearing care providers delivering exceptional and consistent customer service over the long term, offering the latest in high-quality ophthalmic lenses manufactured in-house with new product development initiatives and supplying superior standard hearing care products.

Shareholders

The directors of the company recognise their responsibility to deliver attractive returns to its shareholders and enact strategic plans for the long-term creation of value in a responsible and sustainable manner.

Employees

Our high-quality employees engaged across the group of companies are fundamental to the delivery of leading services and products to our customer base and, by extension, cornerstone to the delivery of the long-term strategy. Accordingly, the group has a people and performance focus, driven by the management team that aims to keep employees engaged, motivated and rewarded, which in turn leads to higher levels of performance. The company is committed to equality of opportunity that focuses on treating all employees fairly in all aspects of employment, which includes recruitment, training, development (encompassing professional qualifications) and promotion.

Promoting company success - section 172 statement (continued)

Customers

The long-term strategy can only be delivered with excellent relationships across the customer base underpinned by the ability to deliver high-quality services and products consistently on time. The reputation of Duncan and Todd and all of its high-quality brands, and their ability to deliver a market-leading offering, is built on the professional and close working relationships with customers delivered across the full spectrum of the practice, laboratory, office and management teams.

Furthermore, the group of companies has many years of experience providing optical and audiology services and products that has been recognised both informally and formally by both customers and industry bodies.

Attention to safety, health and environmental concerns is paramount to the continued success with customers and so the directors seek to ensure continued high standards.

Suppliers

The Duncan and Todd Group recognises that its suppliers are an essential part of the group’s ability to provide high-quality, safe and dependable products and services to customers. Positive, enduring supplier relationships are important and as part of that Duncan and Todd aims to pay all suppliers within agreed payment terms. Any disputes are resolved as quickly as possible.

The group also has an Anti-Bribery and Corruption policy, which every employee is expected to read, understand and comply with.

Community and Environment

The group has extensive operations across many parts of Scotland often operating at the centre of local communities. As a result, the directors carefully consider the impact of the group’s operations on these local communities and are committed to ensure its services and products have a positive impact on its employees, neighbours and the environment.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 March 2025.

The principal activity of the parent company is that of an investment holding company.

The principal activity of the group is provision of ophthalmic services. The group operates under three distinct operating divisions; Retail, Corporate and Manufacturing. The group is the largest privately owned optical group in Scotland and the only one with its own proprietary lens manufacturing capability.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The results for the year are set out on page 12.

No ordinary dividends were paid (2024: £nil). The directors do not recommend payment of a dividend (2024: £nil).

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Information on the fostering of business relationships with suppliers, customers and others, and the impact on principal decisions taken during the year can be found in the Strategic Report and form part of this report through cross-reference.

The Group's Energy and Carbon reporting is as follows:

We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2024 UK Government’s Conversion Factors for Company Reporting.

The chosen intensity measurement ratio is total gross emissions in Tonnes CO2 equivalent per £M Turnover.

The Duncan and Todd Group Ltd continue to strive for energy and carbon reduction arising from their activities. Although no specific principal energy efficiency actions were taken during this year, they continue to use more efficient LED lighting in displays and as ongoing replacement on lamp failure. The company has also moved all possible contracts to a 100% renewable energy and will move the last few remaining when they complete their current contract. 95% of sites are supplied by 100% renewable energy reinforcing their commitment to environmental, social and corporate governance.

Many of their sites have upgraded their energy meters to ‘Smart’ meters to help manage energy consumption proactively with the few remaining to happen in due course. The company plan to outsource invoice validation which will capture consumption information allowing further analysis of individual site performance and target reductions.

At the groups Manufacturing facility, there has been investment in water management equipment that has resulted in a 50% reduction of water use in the lens manufacturing processes. Water in the lens generators are now continually recycled and reused for a period of 3 months, whereas previously fresh water was used daily. In addition, there is planned continued investment in dry cut technology to increase lens edging capacity with further reduction in water use.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

The directors are responsible for preparing the annual report 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 group and company, 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 UK 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 group and company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of Duncan and Todd Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2025 which comprise the Group Statement of Comprehensive Income, the Group Balance Sheet, the Company Balance Sheet, the Group Statement of Changes in Equity, the Company Statement of Changes in Equity, the Group Statement of Cash Flows and notes to the Group financial statements, including 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 the parent company's affairs as at 31 March 2025 and of the group's loss 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 Auditor 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 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 other information comprises the information included in the annual report and financial statement other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report and financial statement. 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. 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 course of 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 our audit:

• the information given in the Strategic Report and the Director's Report for which the financial statements are prepared is consistent with the financial statements; and

• the Strategic Report and the Director's Report have been prepared in accordance with applicable legal requirements.

In the light of our knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

We have nothing to report in respect of the following matters in relation to which 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.

As explained more fully in the directors' responsibilities statement, 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 is 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 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 parent company or to cease operations, or have no realistic alternative but to do so.

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 an auditor's report 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Extent to which the audit is considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.

All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Extent to which the audit is considered capable of detecting irregularities, including fraud (continued)
We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and parent company. focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:

• UK GAAP;

• Companies Act 2006;

• Corporation Tax legislation;

• VAT legislation; and

• Employment legislation.
  

We gained an understanding of how the group and parent company is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of submitted returns, and relevant correspondence with regulatory bodies.

We assessed the susceptibility of the group’s financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:

• Management override of controls; and

• Revenue recognition.
  

In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:

• Performing audit procedures confirming the completeness, occurrence and accuracy of revenue recognised within the financial statements, including reconciliation of sales from the till systems to the sales ledger ensuring sales have been accurately recorded and also performing appropriate cut-off procedures at year-end;

• Reviewing minutes of meetings of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;

• Reviewing the level of and reasoning behind the parent company’s procurement of legal and professional services;

• Performing audit work procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing judgements made by management in their calculation of accounting estimates for potential management bias;

• Completion of appropriate checklists and use of our experience to assess the parent company’s compliance with the Companies Act 2006; and

• Agreement of the financial statement disclosures to supporting documentation.
  

Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that 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 intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed 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 are to become aware of it.

Use of our report

This report is made solely to the parent 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 parent company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

As permitted by s408 Companies Act 2006, the parent company has not presented its own profit and loss account and related notes. The parent company’s loss for the year was £2,538,956 (2024: £2,328,224 loss).

Duncan and Todd Holdings Limited (“the parent company”) is a private limited company domiciled and incorporated in Scotland. The registered office is Unit 4 Kirkhill Commercial Park, Dyce Avenue, Aberdeen, Scotland, AB21 0LQ. The company's registered number is SC588310

The group consists of Duncan and Todd Holdings Limited and all of its subsidiaries (note 13).

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the parent company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The parent company is a qualifying entity for the purposes of FRS 102, being a member of a group that prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The parent company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated financial statements incorporate those of Duncan and Todd Holdings Limited and all of its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

All financial statements are made up to 31 March 2025.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

At the time of approving the financial statements, the directors have a reasonable expectation that the Group and parent company have adequate resources to continue in operational existence for the foreseeable future.

The parent company has made a net loss of £2,539k (2024: £2,328k), but has net current assets of £10,749k (2024: £10,645k) with net liabilities of £13,554k (2024: £11,015k). The group has made a loss for the year of £4,665k (2024: £5,216k), has net current liabilities of £1,119k (2024: £1,961k) and net liabilities of £23,601k (2024: £18,930k). The group had net cash of £1,168k at the year-end (an decrease of £89k) and strong operating cash generation in the year that demonstrates the financial strength of the group.

In making their assessment, the directors have reviewed cashflow and trading forecasts more than 12 months following the date of approval of these financial statements, which include sensitivities for different scenarios, and consideration of the compliance with terms associated with the existing lending facilities. The group’s senior borrowing facilities remain in place, with the group’s debt with its shareholders and bank not due for repayment until June 2029 following a refinance exercise post year end.

Based on their assessment, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of turnover can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Turnover from the sale of services is recognised at the time of the related services.

Where payments are received in advance of the sale of goods, turnover is deferred to future periods and reverses when the above criteria is met.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Goodwill is amortised over its useful life of 10 years.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Software in development is not amortised until it is brought into use.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the parent company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Stocks are stated at the lower of cost and estimated selling price. Cost comprises direct materials.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally 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.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and loan notes, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the parent company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

VAT

The parent company makes both taxable and exempt supplies to customers. Where costs cannot be directly linked to related turnover, the parent company applies partial exemption rules in accordance with VAT notice 706.

Irrecoverable VAT is recognised in administrative expenses at the time of related expense. Where the VAT on assets or liabilities recorded on the balance sheet has not been or will not be fully recoverable, it is incorporated into individual asset or liability carrying values.

In the application of the group’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.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Depreciation

Depreciation is provided based on management's estimation of the useful economic life of each class of asset. Depreciation is taken to the profit and loss in order to write off the asset over its useful economic life.

Dilapidation provision

Included in these accounts is a dilapidation provision of £618,695 (2024: £508,692). During the period, £8,500 of the provision has been utilised (2024: £124,130) and a further provision of £118,503 (2024: £nil) has been made. The amount of this provision is an estimate made by management on the basis of experience of exiting leases in the past.

Valuation of investments

Included within the parent company only balance sheet, are investments of £9,974,275 (2024: £9,974,275). At the year end management have considered the carrying value and any potential impairment of investments held by Duncan and Todd Holdings Limited and concluded no indicators of impairment

Recoverability of intercompany debt

Included within the balance sheet is intercompany debt receivable of £14,219,559 (2024: £14,276,136) from other group undertakings. The recoverability of this balance has been considered by management with reference to future forecasted trading performance. No allowance of impairment is considered necessary.

Carrying value of fixed asset investments and related goodwill

The directors regularly assess the carrying value of fixed asset investments, and related goodwill, and recognise any impairment charge in the profit and loss account if any impairment is identified. The useful life of goodwill (10 years) is also an estimate made by management. No impairment was identified in the current year (2024: £nil) and goodwill amortisation charge of £2,331,312 (2024: £2,252,884) was recorded during the year.

An analysis of the group's turnover is as follows:

The average monthly number of persons (including directors) employed by the group and parent company during the year was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2024: 2)

The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

The group has unrecognised deferred tax assets of £473,207 (2024: £244,143) in relation to losses carried forward and other timing differences, that have not been recognised as there is no certainty that they will reverse.

Goodwill comprises three elements as follows:

Goodwill arising on the acquisition of several individual operational business being amortised evenly over the directors' estimate of their useful lives of 10 years.

Goodwill arising on the acquisition of Duncan and Todd Group Limited. The directors estimate the useful economic life of Duncan and Todd Group Limited as 10 years.

Goodwill arising on the acquisition of nine trading branches from Black and Lizars in April 2019. The directors estimate the useful economic life of this goodwill to be 10 years.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Details of the company's subsidiaries at 31 March 2025 are as follows:

All the above-named subsidiaries have the registered office address of Unit 4 Kirkhill Commercial Park Dyce Avenue, Dyce, Aberdeen, Scotland, AB21 0LQ.

Amounts owed by group undertakings are repayable on demand and carry interest at SONIA + 3.25%.

Amounts owed to group undertakings are repayable on demand and carry interest at SONIA + 3.25%.

Borrowings consist of an overdraft facility, three bank loan facilities and loan notes.

The bank overdraft is repayable on demand and has a limit of £1.0m.

Bank loan A has a carrying value of £220,000 (2024: £421,987) and carries interest at SONIA + 3.0% and is repayable in June 2029. Interest is payable quarterly.

Bank loan B has a carrying value of £1,762,875 (2024: £2,542,875) and carries interest at SONIA + 3.0% and is repayable in June 2029.

Bank loan C has a carrying value of £534,617 (2024: £610,989) and carries interest at SONIA + 3.0%. and is repayable in June 2029.

The bank loans are secured by a bond and floating charge over the assets of the group.

The loan notes are repayable in a single payment in June 2029. Interest accrues at a fixed rate of 10% but is not payable until the loan notes are repaid. Accrued interest is included in the carrying value.

Finance lease payments represent rentals payable by the parent company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

£8,500 (2024: £124,130) of the provision was utilised within the year. A further provision of £118,503 (2024: £nil) was made during the year.

Deferred tax assets and liabilities are offset where the group or parent company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

The parent company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the parent company in an independently administered fund. Outstanding amounts at the year end payable to the scheme amounted to £76,345 (2024: £81,470).

All shares have equal rights to distributions of income and capital and equal voting rights, except that holders of the A ordinary shares cannot control more than 40% of votes, and holders of the D ordinary shares cannot control more than 12% of votes.

The share premium account represents the premium arising on the issue of shares net of issue costs.

The profit and loss account represents cumulative profits and losses net of dividends and other adjustments.

The Royal Bank of Scotland holds a bond and floating charge over the assets and undertakings of the group as security over group loans and overdrafts totalling £3,413,625 (2024: £4,605,443).

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

At the reporting end date the group had contracted with tenants for the following minimum lease payments:

The parent company has taken advantage of the exemption under paragraph 33.1A from the provisions of FRS 102, 'Related party disclosures' from disclosing transactions with other group companies.

During the year the group made lease payments of £62,000 to other related parties (2024: £64,200). The amount owed to other related parties at the year end was £nil (2024: £nil).

During the current year, a review of customer contracts was undertaken. This review identified an obligation in respect of unused sales vouchers, impacting one customer contract and creating a liability to that customer. This obligation had, in error, not been recognised across a number of historical accounting periods. As such a prior year restatement has been proposed by management to correct the balance sheet and prior period statement of comprehensive income as follows;

Opening reserves at 1 April 2023 have been reduced by £311,128 with a corresponding increase in Accruals and deferred income.

Administrative expenses for the year ending 31 March 2024 have been increased by £82,503 with a corresponding entry to Accruals and Deferred income.

Overall restatement to closing reserves at 31 March 2024 is a reduction of £393,631.