REGISTERED NUMBER: 01718809 (England and Wales)

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025

FOR

LONDON CLOCK HOLDING COMPANY

LIMITED(THE)

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

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:

A G Pestell

B E Pestell

K B Pestell

S Luxford

C E Pestell

SECRETARY:

K B Pestell

REGISTERED OFFICE:

London House

Sheldon Way

Larkfield

Aylesford

Kent

ME20 6SE

REGISTERED NUMBER:

01718809 (England and Wales)

AUDITORS:

BSR Bespoke

Chartered Accountants

Registered Auditors

Linden House

Linden Close

Tunbridge Wells

Kent

TN4 8HH

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

REVIEW OF BUSINESS

The Group's principal activity is the distribution of giftware and housewares and it continues working closely with premier UK retail groups across its core product competencies.

PRINCIPAL RISKS AND UNCERTAINTIES

In common with other designers and vendors to the premier UK retail groups, the Group operates in an environment which is extremely price sensitive. Accordingly, the Group constantly invests in producing original products at prices to deliver the desired margin requirements of their customers.

PERFORMANCE OF THE BUSINESS

Product innovation is an important part of the Group's operation. A high level of investment is maintained in originating and marketing new products and the brands. The Group's staff work closely with major retailers to satisfy consumer demand for innovative products that meet the highest standards of quality and value.

The directors are satisfied with the performance of the Group given the competitive trading environment. Turnover has increased by 25.3% to £13.14m (2024: £10.49m) with gross profits increasing to £5.84m (2024: £4.73m). The gross profit margin has decreased to 44.4% in the current year compared to 45.1% in 2024.

POSITION OF THE BUSINESS

The Group remains in a healthy financial position with strong liquidity. At the year-end the Group has a cash position of £3.7m (2024: £4.7m) and net current assets of £4.6m (2024: £4.6m). The directors anticipate the challenging retail trading environment will continue for the foreseeable future and therefore consider it prudent to retain cash within the business. Cash may also be required to develop our warehouse to make it online efficient.

The trade debtor day ratio has increased in the current year to 32 days (2024: 18 days). The directors are satisfied with the position of the business.

LIKELY FUTURE DEVELOPMENTS IN THE BUSINESS OF THE COMPANY

The company has seen a slowdown in consumer spending due to the cost of living crisis which has also affected the major retailers. As a result, the turnover is expected to fluctuate as the retail market goes through a period of reconciliation until consumer confidence returns. During this period the company will continue to put a high level of investment into its ecommerce presence both domestically and internationally.

KEY PERFORMANCE INDICATORS

The directors consider the Key Performance Indicators of the business to be revenue and gross profit. Details of these are given in the performance of the business discussion above.

ON BEHALF OF THE BOARD:

K B Pestell - Director

22 December 2025

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

DIVIDENDS

The directors proposed no dividends for the year ended 31 March 2025 (2024: £nil).

DIRECTORS

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

A G Pestell

B E Pestell

K B Pestell

S Luxford

C E Pestell

GOING CONCERN

Although the company has experienced a slowdown in consumer spending, mainly due to the cost of living crisis, it continues to have a strong online presence picking up new retailers worldwide. It also has a strong position financially, owning the premises for which it operates, and no concerns regarding cashflow. The directors therefore conclude that it is appropriate to continue to apply the going concern basis for preparation.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The main financial risks arising from the Group's activities are price, credit, liquidity and exchange risks. The Group's policy in respect of price risk is set out in the strategic report on page 2 of this annual report.

The Group's policy in respect of credit risk is to require appropriate credit checks on potential customers before sales are made, and to take out credit insurance.

The Group's policy in respect of the liquidity risk is to maintain a readily accessible bank deposit account to ensure that the Group has sufficient funds for operation. The cash deposits are held in a mixture of short-term deposits and current accounts which earn interest at a floating rate.

The Group's policy in respect of exchange risk, which primarily exists as a result of foreign currency purchases, is to maintain sufficient cash reserves in the appropriate foreign currencies which can be used to meet foreign currency liabilities. Also the Group is actively generating sales in the currency in which purchases are made to reduce the currency risk and thus act as a natural hedge.

RESEARCH AND DEVELOPMENT ACTIVITIES

The group continues to invest in research and development of the Stackers website. In the current year, development charged as an expense which totalled £128,089 (2024: £122,628).

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

AUDITORS

The auditors, BSR Bespoke, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

K B Pestell - Director

22 December 2025

Opinion

We have audited the financial statements of London Clock Holding Company Limited(The) (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 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 March 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 four, 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:

We obtained an understanding of the legal and regulatory frameworks that are applicable to the client and determined that the most significant are:

-

The form and content of the financial statements, FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006,

-

UK Employment Law and data protection, and

-

UK Corporate tax laws.

We gathered an understanding of how the entity is complying with the above frameworks by enquiring and observing management and those charged with governance, ensuring there is a culture of honesty with an emphasis on fraud prevention which may reduce opportunities for fraud to occur as well as acting as a deterrent.

We assessed the susceptibility of the financial statements to material misstatement due to fraud, by making an assessment of the key fraud risks, the manner in which any such risks may materialise, our knowledge of the client and an assessment of the current business environment.

We designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed additional audit procedures to address each identified fraud risk to obtain reasonable assurance that the financial statements were free of fraud or error.

We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business.

There are inherent limitations in the audit procedures described above, 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. The primary responsibility for the prevention and detection of fraud rests with management and those charged with governance.

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.

Stephen Pocock FCCA (Senior Statutory Auditor)

for and on behalf of BSR Bespoke

Chartered Accountants

Registered Auditors

Linden House

Linden Close

Tunbridge Wells

Kent

TN4 8HH

23 December 2025

TURNOVER

3

13,141,914

10,486,825

Cost of sales

7,302,866

5,761,392

GROSS PROFIT

5,839,048

4,725,433

Distribution costs

391,029

347,277

Administrative expenses

5,542,667

4,494,136

5,933,696

4,841,413

OPERATING LOSS

6

(94,648

)

(115,980

)

Interest receivable and similar income

7

107,081

119,992

PROFIT BEFORE TAXATION

12,433

4,012

Tax on profit

8

9,016

4,768

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

3,417

(756

)

Profit/(loss) attributable to:

Owners of the parent

3,417

(756

)

PROFIT/(LOSS) FOR THE YEAR

3,417

(756

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

3,417

(756

)

Total comprehensive income attributable to:

Owners of the parent

3,417

(756

)

FIXED ASSETS

Tangible assets

10

1,130,500

1,158,361

Investments

11

-

-

1,130,500

1,158,361

CURRENT ASSETS

Stocks

12

2,081,351

1,275,194

Debtors

13

1,481,734

585,731

Cash at bank and in hand

3,729,502

4,704,896

7,292,587

6,565,821

CREDITORS

Amounts falling due within one year

14

2,674,203

2,001,543

NET CURRENT ASSETS

4,618,384

4,564,278

TOTAL ASSETS LESS CURRENT LIABILITIES

5,748,884

5,722,639

PROVISIONS FOR LIABILITIES

15

214,213

191,385

NET ASSETS

5,534,671

5,531,254

CAPITAL AND RESERVES

Called up share capital

16

100,000

100,000

Share premium

17

200,000

200,000

Capital redemption reserve

17

693,900

693,900

Retained earnings

17

4,540,771

4,537,354

SHAREHOLDERS' FUNDS

5,534,671

5,531,254

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

A G Pestell - Director

FIXED ASSETS

Tangible assets

10

-

-

Investments

11

451,670

451,670

451,670

451,670

CURRENT ASSETS

Debtors

13

735,990

735,990

CREDITORS

Amounts falling due within one year

14

2,548

2,548

NET CURRENT ASSETS

733,442

733,442

TOTAL ASSETS LESS CURRENT LIABILITIES

1,185,112

1,185,112

CAPITAL AND RESERVES

Called up share capital

16

100,000

100,000

Share premium

17

200,000

200,000

Retained earnings

17

885,112

885,112

SHAREHOLDERS' FUNDS

1,185,112

1,185,112

Company's profit for the financial year

-

-

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

A G Pestell - Director

Capital

Called up

redempti-

share

Retained

Share

on

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Balance at 1 April 2023

100,000

4,538,110

200,000

693,900

5,532,010

Changes in equity

Total comprehensive income

-

(756

)

-

-

(756

)

Balance at 31 March 2024

100,000

4,537,354

200,000

693,900

5,531,254

Changes in equity

Total comprehensive income

-

3,417

-

-

3,417

Balance at 31 March 2025

100,000

4,540,771

200,000

693,900

5,534,671

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 April 2023

100,000

885,112

200,000

1,185,112

Changes in equity

Balance at 31 March 2024

100,000

885,112

200,000

1,185,112

Changes in equity

Balance at 31 March 2025

100,000

885,112

200,000

1,185,112

Cash flows from operating activities

Cash generated from operations

1

(1,053,970

)

(417,182

)

Tax paid

(7,757

)

(1,589

)

Net cash from operating activities

(1,061,727

)

(418,771

)

Cash flows from investing activities

Purchase of tangible fixed assets

(24,248

)

(40,540

)

Sale of tangible fixed assets

3,500

28,400

Interest received

107,081

119,992

Net cash from investing activities

86,333

107,852

Decrease in cash and cash equivalents

(975,394

)

(310,919

)

Cash and cash equivalents at beginning of year

2

4,704,896

5,015,815

Cash and cash equivalents at end of year

2

3,729,502

4,704,896

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

31.3.25

31.3.24

£

£

Profit before taxation

12,433

4,012

Depreciation charges

51,076

50,969

Profit on disposal of fixed assets

(2,467

)

(10,144

)

Increase/(decrease) in provisions

22,828

41,996

Finance income

(107,081

)

(119,992

)

(23,211

)

(33,159

)

Increase in stocks

(806,157

)

(109,685

)

(Increase)/decrease in trade and other debtors

(892,462

)

148,383

Increase/(decrease) in trade and other creditors

667,860

(422,721

)

Cash generated from operations

(1,053,970

)

(417,182

)

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 March 2025

31.3.25

1.4.24

£

£

Cash and cash equivalents

3,729,502

4,704,896

Year ended 31 March 2024

31.3.24

1.4.23

£

£

Cash and cash equivalents

4,704,896

5,015,815

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.4.24

Cash flow

At 31.3.25

£

£

£

Net cash

Cash at bank and in hand

4,704,896

(975,394

)

3,729,502

4,704,896

(975,394

)

3,729,502

Total

4,704,896

(975,394

)

3,729,502

1.	STATUTORY INFORMATION

London Clock Holding Company Limited(The) 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 and functional currency of the financial statements is the Pound Sterling (£). Amounts are rounded to the nearest Pound.

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.

Basis of consolidation

The consolidated financial statements incorporate the results of London Clock Holding Company Limited and all of its subsidiary undertakings ("the Group") as at 31 March 2025 using the acquisition method of accounting as if they formed a single entity. The results of subsidiary undertakings are included from the date of acquisition.

Associates

An entity is treated as an associate undertaking where the group has a participating interest and exercises significant influence over its operating and financial policy decisions.

In the consolidated accounts, interests in associated undertakings are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investor's share of the profit or loss, other comprehensive income and equity of the associate. The consolidated statement of comprehensive income includes the group's share of the operating results, interest, pre-tax results and attributable taxation of such undertakings applying accounting policies consistent with those of the Group. In the consolidated balance sheet, the interests in associated undertakings are shown as the Group's share of the identifiable net assets, including any unamortised premium paid on acquisition.

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Sale of goods

Turnover from the sale of giftware and housewares is recognised when all of the following conditions are satisfied:

-

the company has transferred the significant risks and rewards of ownership to the buyer;

-

the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

-

the amount of turnover can be measured reliably;

-

it is probable that the company will receive the consideration due under the transaction; and

-

the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on the following bases:

Freehold property

-

2% on cost

Motor vehicles

-

25% on reducing balance

Equipment, fixtures & fittings

-

15% on reducing balance

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the profit or loss.

Investments in subsidiaries

Investments in subsidiaries are measured at cost less accumulated impairment.

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to sell. Cost is based on the cost of purchase on a first in, first out basis.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to sell. The impairment loss is recognised immediately in the profit or loss.

Financial instruments

The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), 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. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

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 statement of comprehensive income.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the reporting date.

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.