REGISTERED NUMBER: 03000662 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025

FOR

TOP TUBES LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

7

Income Statement

11

Other Comprehensive Income

12

Balance Sheet

13

Statement of Changes in Equity

14

Cash Flow Statement

15

Notes to the Cash Flow Statement

16

Notes to the Financial Statements

18

DIRECTORS:

Ms A L Pearson-Myatt

D A Van Zyl

REGISTERED OFFICE:

2 Smith Road

Off Potters Lane

Wednesbury

WS10 0PD

REGISTERED NUMBER:

03000662 (England and Wales)

AUDITORS:

Blackthorns

Chartered Accountants

and Registered Auditors

Admiral House

Waterfront East

Brierley Hill

West Midlands

DY5 1XG

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

REVIEW OF BUSINESS

We aim to present a review of the development and performance of our business during the year and its position at the year end. Our review is consistent with the size and nature of our business and is written in the context of risks and uncertainties we face.

The directors and management team believe that the financial results for the year ended 31 March 2025 are in line with their expectations. Steel prices and UK steel demand continued to decrease from the previous year, which impacted the overall gross margin generated by the business, along with the gross margin percentage. Despite the reduction in gross margin, the strategies implemented by management have continued to improve production performance, and this has enabled the business to finish the year with a small loss.

Throughout the year, the company has continued to invest in its manufacturing technology, logistics capabilities and IT infrastructure, the benefits of which are being seen by way of process improvements and cost savings.

PRINCIPAL RISKS AND UNCERTAINTIES

The company's activities have exposed it to a number of risks and uncertainties during the year as set out below. The directors' risk management process is driven by:

1) Economic outlook

High interest rates continues to be challenging for the company both in terms of finance costs, and it's knock-on effect on inflation, particularly in the area of energy costs. The company feels very positive that with its strong supplier relations, these costs will be mitigated wherever possible.

2) Steel cost inflation

The fluctuation in both steel prices and exchange rates has created a downward pressure on the steel supply chain, which in turn has impacted availability of material. Alternative sources of steel supply have been secured where necessary in order to lessen this burden, and the company feels that these alternative suppliers will form a basis for future on-going purchases. It is anticipated that this pressure will reverse at some point in the next financial year.

3) Wage cost inflation

The company is inherently exposed to the risk of wage cost inflation due to the labour intensive nature of the business, with wage costs representing the largest cost to the business outside raw material costs.

Inflationary risks have been driven by increases in interest rates, which in turn has fuelled a higher than normal annual wage increase. The company ensures complete compliance with labour market regulations and offers a fair employment policy.

4) Competition

The company operates in a highly competitive market, with a high level of price sensitivity. The company's prices are continuously monitored in order to maintain them at a competitive level.

The company also aims to ensure continued strong demand for its products by improving its product and service offerings, whilst combining stringent quality standards.

SECTION 172(1) STATEMENT

The board of directors, in line with their duties under s172 of the Companies Act 2006, act in a way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard to a range of matters when making decisions for the long term. Key decisions and matters that are of strategic importance to the company are appropriately informed by factors referred to in s172(1)(a) to (f).

Through an open and transparent dialogue with our key stakeholders, we have been able to develop a clear understanding of their needs, assess their perspectives and monitor their impact on our strategic ambition and culture. As part of the board's decision-making process, the board considers the potential impact of decisions on relevant stakeholders whilst also having regard to a number of broader factors, including the impact of the company's operations on the community and environment, responsible business practices and the likely consequences of decisions in the long term.

KEY PERFORMANCE INDICATORS

The directors have taken the decision not to disclose KPIs in these financial statements as they are not considered necessary to understand the performance or position of the company. KPI's form an integral part of the company's monthly reporting process, allowing the directors and their management team to quickly react where necessary.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The company uses various financial instruments including cash, bank loans, trade creditors, invoice discounting and

asset finance that arise directly from its operations.

The existence of these financial instruments exposes the company to a number of financial risks but the directors are confident that these do not pose a material risk to the underlying profitability of the business.

The main risks arising from the company's financial instruments are liquidity risk and interest rate risk. The directors review and manage each of these risks and they are summarised below.

1) Liquidity risk

The company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.

The company's policy throughout the year has been to achieve this through management's day to day involvement in business decisions rather than setting maximum or minimum liquidity ratios.

2) Interest rate risk

The company finances its operations through a mixture of retained profits, invoice discounting, asset finance and its bank lending. The interest rate risk on the borrowings is managed by the company.

ON BEHALF OF THE BOARD:

D A Van Zyl - Director

23 December 2025

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of steel tube manufacturer and processor.

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2025.

RESEARCH AND DEVELOPMENT

The company invests heavily in research and development to ensure that it has the most modern technology and machinery available to promote efficiency, whilst maintaining a strong health and safety record.

DIRECTORS

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

Ms A L Pearson-Myatt

D A Van Zyl

ENGAGEMENT WITH EMPLOYEES

The board promotes effective engagement with the company's workforce by way of various meetings involving every area of the business. Dedicated working groups review, revise and implement updated policies to provide a safe working environment. Usual channels have supported regular communication of information and guidance which has taken place with employees throughout the year. Risk assessments, training and support have been provided to ensure that all employees are comfortable that they are operating within a secure environment.

ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS

Customers

The board engages both directly with its customers and also indirectly through its senior managers, who provide information about key customer relationships. During the year, the board and senior managers have remained in close contact with its key customers, ensuring that they are informed of production schedules and delivery lead times.

Suppliers

The board has reviewed and approved key supplier contracts, as well as reviewing and revising our raw material strategy. Suppliers are treated fairly and paid promptly and the board and senior managers have remained in close contact with its key suppliers throughout the year, particularly in relation to production schedules and delivery lead times

Community and environment

The board recognises its impact on the local community, and its responsibility to the environment, and this is reinforced with its ISO 14001 accreditation.

STREAMLINED ENERGY AND CARBON REPORTING

Greenhouse gas emissions and energy consumption

Unit

2025

2024

Fuel - vehicles

tCO2e

314

317

Gas

tCO2e

7

12

Purchased electricity

749

760

Total emissions

tCO2e

1,070

1,089

Total energy consumption

3,555,008

3,608,409

Intensity ratio: tonnes CO2e per production staff

24.57

31.53

Methodologies for energy and emissions calculations

We have followed the reporting methodology as set out in HM Government Environmental Reporting Guidelines and based on the 2020 UK Government Conversion Factors.

Principal measures taken to increase energy efficiency

The company is progressing in various areas to improve energy efficiency in the operation, including:

- Replacement of partial HGV fleet with Euro 6 compliant vehicles

- Replacement of partial company car fleet with EV and Hybrid models

- Continued LED technology as default for all swap outs and new installations

DISCLOSURE IN THE STRATEGIC REPORT

The directors have opted to disclose the principal activity of the business, its results, its likely future developments and its financial risk management objectives and policies within the strategic report as they consider these items to be of sufficient strategic importance to the financial statements.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he 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 company's auditors are aware of that information.

AUDITORS

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

ON BEHALF OF THE BOARD:

Ms A L Pearson-Myatt - Director

23 December 2025

Opinion

We have audited the financial statements of Top Tubes Limited (the 'company') for the year ended 31 March 2025 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 March 2025 and of its 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page five, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

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 risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following, however, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management:

- the nature of the industry and sector;

- control environment and business performance;

- results of our enquiries of management about their own identification and assessment of the risks;and

- the matters discussed amongst the audit engagement team involving relevant internal specialists, including tax, regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, we considered the opportunities and incentives that may have existed within the organisation and sought to identify those with the greatest potential for fraud and irregularities. In common with all audits under ISAs (UK), we also performed specific procedures to respond to the risk of management override.

We considered the legal and regulatory frameworks that affect the company, focusing on provisions of those laws and regulations that would have had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations that we considered in this context included the Companies Act 2006, tax legislation and pension regulations.

We also considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. The key laws and regulations that we considered in this context included compliance with health and safety regulations.

Audit response to risks identified

As a result of performing the above, our procedures to respond to risks identified included the following:

-

reviewing the disclosures within the financial statements and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

-

enquiring of management concerning actual and potential litigation and claims;

-

performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatements due to fraud;

-

reviewing minutes of meetings involving those charged with governance, reviewing correspondence and reviewing appropriate regulatory correspondence;

-

obtaining an understanding of provisions through discussions with management in order to understand the basis of recognition;

-

in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; and

-

assessing whether the judgements made in making accounting estimates are indicative of a potential bias and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit .

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.

Victoria Brassington BA FCA (Senior Statutory Auditor)

for and on behalf of Blackthorns

Chartered Accountants

and Registered Auditors

Admiral House

Waterfront East

Brierley Hill

West Midlands

DY5 1XG

23 December 2025

TURNOVER

3

39,661,234

45,637,774

Cost of sales

31,529,109

36,082,240

GROSS PROFIT

8,132,125

9,555,534

Administrative expenses

8,066,882

7,275,223

65,243

2,280,311

Other operating income

72,250

4,088

OPERATING PROFIT

5

137,493

2,284,399

Interest receivable and similar income

25,365

50,065

162,858

2,334,464

Interest payable and similar expenses

6

429,118

321,356

(LOSS)/PROFIT BEFORE TAXATION

(266,260

)

2,013,108

Tax on (loss)/profit

7

(71,355

)

388,174

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(194,905

)

1,624,934

(LOSS)/PROFIT FOR THE YEAR

(194,905

)

1,624,934

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(194,905

)

1,624,934

FIXED ASSETS

Tangible assets

8

7,933,105

8,087,250

CURRENT ASSETS

Stocks

9

6,447,428

5,969,557

Debtors

10

28,462,811

28,499,481

Cash at bank

1,600,207

760,044

36,510,446

35,229,082

CREDITORS

Amounts falling due within one year

11

15,048,630

13,736,966

NET CURRENT ASSETS

21,461,816

21,492,116

TOTAL ASSETS LESS CURRENT LIABILITIES

29,394,921

29,579,366

CREDITORS

Amounts falling due after more than one year

12

(1,669,263

)

(1,618,803

)

PROVISIONS FOR LIABILITIES

16

(1,185,000

)

(1,225,000

)

NET ASSETS

26,540,658

26,735,563

CAPITAL AND RESERVES

Called up share capital

17

6,650

6,650

Share premium

18

183,050

183,050

Revaluation reserve

18

1,855,000

1,855,000

Retained earnings

18

24,495,958

24,690,863

SHAREHOLDERS' FUNDS

26,540,658

26,735,563

The financial statements were approved by the Board of Directors and authorised for issue on 23 December 2025 and were signed on its behalf by:

Ms A L Pearson-Myatt - Director

D A Van Zyl - Director

Called up

share

Retained

Share

Revaluation

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Balance at 1 April 2023

6,650

23,065,929

183,050

1,855,000

25,110,629

Changes in equity

Total comprehensive income

-

1,624,934

-

-

1,624,934

Balance at 31 March 2024

6,650

24,690,863

183,050

1,855,000

26,735,563

Changes in equity

Total comprehensive income

-

(194,905

)

-

-

(194,905

)

Balance at 31 March 2025

6,650

24,495,958

183,050

1,855,000

26,540,658

Cash flows from operating activities

Cash generated from operations

1

1,469,955

6,415,941

Interest paid

(284,322

)

(182,432

)

Interest element of hire purchase payments paid

(114,796

)

(106,737

)

Finance costs paid

(30,000

)

(32,187

)

Tax paid

(77,408

)

(636,411

)

Net cash from operating activities

963,429

5,458,174

Cash flows from investing activities

Purchase of tangible fixed assets

(842,569

)

(743,664

)

Sale of tangible fixed assets

-

19,043

Interest received

25,365

50,065

Net cash from investing activities

(817,204

)

(674,556

)

Cash flows from financing activities

New loans made in year

(1,837,083

)

(1,969,604

)

New loans received in the year

578,593

302,138

Capital repayments in year

(941,170

)

(865,620

)

Net cash from financing activities

(2,199,660

)

(2,533,086

)

(Decrease)/increase in cash and cash equivalents

(2,053,435

)

2,250,532

Cash and cash equivalents at beginning of year

2

(1,890,532

)

(4,141,064

)

Cash and cash equivalents at end of year

2

(3,943,967

)

(1,890,532

)

1.	RECONCILIATION OF (LOSS)/PROFIT FOR THE FINANCIAL YEAR TO CASH GENERATED FROM OPERATIONS

31.3.25

31.3.24

£

£

(Loss)/profit for the financial year

(194,905

)

1,624,934

Depreciation charges

995,587

993,276

Loss on disposal of fixed assets

1,125

4,478

Finance costs

429,118

321,356

Finance income

(25,365

)

(50,065

)

Taxation

(71,355

)

388,174

1,134,205

3,282,153

Increase in stocks

(477,871

)

(102,818

)

Decrease in trade and other debtors

1,895,753

357,840

(Decrease)/increase in trade and other creditors

(1,082,132

)

2,878,766

Cash generated from operations

1,469,955

6,415,941

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

1,600,207

760,044

Bank overdrafts

(5,544,174

)

(2,650,576

)

(3,943,967

)

(1,890,532

)

Year ended 31 March 2024

31.3.24

1.4.23

£

£

Cash and cash equivalents

760,044

432,584

Bank overdrafts

(2,650,576

)

(4,573,648

)

(1,890,532

)

(4,141,064

)

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.4.24

Cash flow

At 31.3.25

£

£

£

Net cash

Cash at bank

760,044

840,163

1,600,207

Bank overdrafts

(2,650,576

)

(2,893,598

)

(5,544,174

)

(1,890,532

)

(2,053,435

)

(3,943,967

)

Debt

Finance leases

(1,263,174

)

226,295

(1,036,879

)

Debts falling due within 1 year

(125,950

)

(4,806

)

(130,756

)

Debts falling due after 1 year

(1,094,368

)

141,090

(953,278

)

(2,483,492

)

362,579

(2,120,913

)

Total

(4,374,024

)

(1,690,856

)

(6,064,880

)

1.	STATUTORY INFORMATION

Top Tubes Limited is a private company, limited by shares, registered in England and Wales, registered number 03000662. Its registered office is 2 Smith Road, Off Potters Lane, Wednesbury, WS10 0PD.

The financial statements are presented in Sterling, which is the functional currency of the company.

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.

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.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The judgements that management have made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows:

- determining the estimated useful lives of tangible assets

- determining the estimated realisable value of older stock items

Turnover

Turnover is measured at the fair value of the consideration received or receivable and represents

amounts receivable for goods supplied, net of discounts and of Value Added Tax.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.

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

Plant and machinery

-

at varying rates on cost

Fixtures and fittings

-

at varying rates on cost

Motor vehicles

-

20% on cost

Stocks

Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell.

If there is any evidence of impairment, the carrying amount of the stock is reduced to its recoverable amount. The impairment loss is recognised immediately in the statement of comprehensive income.

Financial instruments

A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument.

Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Taxation

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

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

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.

Assets held under finance lease and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease. Any initial direct costs of the lease are added to the amount recognised as an asset.

Pension costs and other post-retirement benefits

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