REGISTERED NUMBER: 12709136 (England and Wales)

AARON ENGINEERING GROUP LIMITED

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2025

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

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:

N P Eastwood

D Ferguson

REGISTERED OFFICE:

Unit 4a Pepper Road

Hazel Grove

Stockport

SK7 5BW

REGISTERED NUMBER:

12709136 (England and Wales)

AUDITORS:

Rushtons

Chartered Accountants

Statutory Auditors

Shorrock House

1 Faraday Court

Fulwood

Preston

Lancashire

PR2 9NB

The directors are pleased to present their strategic report of the company and the group for the year ended 31 March 2025. Aaron Engineering Group (the group) was formed in April 2021 to bring together three sister companies which were delivering complementary services across several industry sectors. The directors' aims in forming Aaron group were to enhance the commercial strength of the combined businesses, and to improve the efficiency of services and projects delivered to customers.

After four full financial years the directors are delighted with the progress made in achieving these objectives; the group continues to invest in health, safety, personnel and management systems, and in the last year has significantly strengthened its senior management teams as part of the group's growth strategy.

The group is built on long term relationships, with a high level of recurring business from key customer partners, with many of which the group has framework agreements. Aaron group remains committed to building on this ethos, and maintaining long term relationships and partnerships with customers, suppliers and employees alike

REVIEW OF BUSINESS

The principal activities of the group remain the provision of specialist integrated engineering solutions in four main sectors - Rail, Civils, Building & Facilities Infrastructure and High Voltage Electrical Infrastructure. In the year to 31 March 2025 the group achieved consolidated turnover of £18,016,992 (2024: £17,676,344).

The group's activities are delivered by three entities:

Aaron Rail Limited provides rail and civil engineering solutions to the rail, construction, HV and associated sectors throughout the UK, from planning through to full installation services. During and subsequent to the financial year, the company has strengthened its senior management team with the appointment of a new COO and Operations Director, each of which brings significant experience at senior levels in the rail and civils sectors.

Aaron Access Limited is a multi-skilled gate automation and access control company, providing automatic gates, access control & entry systems, CCTV, turnstiles, bollards, barriers, specialist fire & security systems, and building support services to the FM industry. Aaron Access also significantly strengthened its senior management team during the year; the company's new COO brings high-level experience of managing national engineering teams in blue-chip companies and is focused on growth with improved service delivery.

Aaron HV Systems Limited delivers a full range of services for the High Voltage electrical industry in the UK, from network and system design, construction, installation and project management, through to testing & commissioning. Aaron HV has significantly increased its activity levels in the past year and following recent contract awards has an order book in excess of £15M. Since the year-end the company has appointed a new senior industry executive as Managing Director to drive the company's growth.

Although structured into three trading entities, the companies work seamlessly together and operate as a group, with a group approach to all areas of health, safety, compliance and project delivery.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors have assessed the main risks and uncertainties which face the business and are satisfied that they have systems in place to address these risks. These matters are reviewed at monthly Board meetings, which also review health & safety, operational matters, financial results, and strategies for maintaining high quality standards and training and developing staff.

The group's core markets are the Rail (network infrastructure), Civils, Commercial Buildings & Facilities Infrastructure, and High Voltage sectors in the UK. In the Rail and High Voltage sectors investment is driven by targets established by the government and delivered by Network Rail and National Grid plc respectively. Most of the group's revenue is derived from multi-year framework agreements and long-term contracts with major national infrastructure providers.

Health & safety is at the forefront of all business practices, along with staff training and personnel development.

KEY PERFORMANCE INDICATORS

The main financial Key Performance Indicators (KPI's) are turnover and gross profit. The results for the year are as follows:

31 March 2025

31 March 2024

Turnover

£18,016,992

£17,676,344

Gross Profit

£5,269,717

£5,037,206

LEGAL NOTICE

Certain statements contained in the accounts of Aaron Engineering Group Limited contain informational current and predicted future operations. While it is the declared intention of the directors to maintain the forward strategy of the group, future variations in the market and underlying economic conditions may force the board to make short term changes which cannot be predicted or foreseen when writing this report.

ON BEHALF OF THE BOARD:

N P Eastwood - Director

23 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 total distribution of dividends for the year ended 31 March 2025 will be £161,387.

RESEARCH AND DEVELOPMENT

The principal activity of the company is the provision of integrated engineering services. Group companies may develop bespoke design and / or installation solutions as part of their day-to-day activities, although the companies do not undertake formal research and development.

FUTURE DEVELOPMENTS

Aaron Engineering Group Limited is the holding company for a group of companies delivering a range of integrated engineering solutions to the Rail (network infrastructure), Building & Facilities Management and HV Electrical sectors in the UK. These services are delivered by three main group companies: Aaron Rail Limited, Aaron Access Limited, and Aaron HV Systems Limited.

Since the year-end the group has secured additional large-project contracts in Aaron HV Systems, new frameworks in Aaron Rail and new national clients in Aaron Access. Aaron Engineering Group is now delivering projects involving multiple group companies, with the senior management teams of the relevant companies working closely to ensure seamless delivery of services to the clients.

The group has developed an outline Environmental, Social & Governance Strategy which will be expanded upon in 2026 to include clear targets and timescales for achieving decarbonisation in the coming year. The group's aim is to reduce operational carbon emissions by 50% by the end of the decade, leading to a 100% reduction (net zero) in early 2030's.

The directors remain committed to expanding the group's capabilities and resources in all areas, to deliver market-leading levels of customer service nationwide.

DIRECTORS

The directors who have held office during the period from 1 April 2024 to the date of this report are as follows:

N P Eastwood

D Ferguson

DONATIONS AND EXPENDITURE

During the year the group made the following donations:

Armstrong Watson - Charity Day

£1,610

Reubens Retreat

£1,350

Macmillan

£1,000

Touchline UK

£807

Enthuse

£550

Beatson Cancer Charity

£500

Cancer Research

£500

Lets Do This Charity Race

£352

Cronhns Colitis

£348

Other Donations - Less than £200 Each

£627

£7,644

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). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

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

ON BEHALF OF THE BOARD:

N P Eastwood - Director

23 December 2025

Opinion

We have audited the financial statements of Aaron Engineering Group Limited (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 pages four and 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 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.

In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered a number of issues, such as the nature of the company's industry, their control environment and business performance. We also discussed amongst our engagement team how and where fraud might occur and any potential indicators of fraud.

We obtained an understanding of the legal and regulatory framework that the company operates in and focussed our attention on any laws and regulations which might be considered as "showstoppers". We also looked at internal controls in place at the company, established to mitigate risks related to fraud or non-compliance with laws and regulations.

In response to other identified risks, we reviewed the financial statement disclosures, we made enquiries of the company as to potential litigation and claims, we performed analytical procedures to look for unusual trends or unexpected relationships and we read any available meeting minutes.

We also addressed the risk of fraud through management override of controls by testing appropriate journal entries and other adjustments. We also assessed accounting estimates and considered any significant transactions that might be considered unusual in the normal course of business

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.

Adam Calvert FCA (Senior Statutory Auditor)

for and on behalf of Rushtons

Chartered Accountants

Statutory Auditors

Shorrock House

1 Faraday Court

Fulwood

Preston

Lancashire

PR2 9NB

23 December 2025

TURNOVER

18,016,992

17,676,344

Cost of sales

12,747,275

12,639,138

GROSS PROFIT

5,269,717

5,037,206

Administrative expenses

4,983,171

4,493,878

286,546

543,328

Other operating income

41,991

6,500

OPERATING PROFIT

4

328,537

549,828

Interest receivable and similar income

23,023

17

351,560

549,845

Interest payable and similar expenses

6

132,020

112,200

PROFIT BEFORE TAXATION

219,540

437,645

Tax on profit

7

101,781

83,404

PROFIT FOR THE FINANCIAL YEAR

117,759

354,241

Profit attributable to:

Owners of the parent

113,328

342,331

Non-controlling interests

4,431

11,910

117,759

354,241

PROFIT FOR THE YEAR

117,759

354,241

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

117,759

354,241

Total comprehensive income attributable to:

Owners of the parent

113,328

342,331

Non-controlling interests

4,431

11,910

117,759

354,241

FIXED ASSETS

Intangible assets

10

12,270

-

Tangible assets

11

1,834,026

2,118,264

Investments

12

-

-

1,846,296

2,118,264

CURRENT ASSETS

Stocks

13

59,658

17,000

Debtors

14

3,438,571

3,639,024

Cash at bank and in hand

1,345,923

369,324

4,844,152

4,025,348

CREDITORS

Amounts falling due within one year

15

4,738,376

3,691,365

NET CURRENT ASSETS

105,776

333,983

TOTAL ASSETS LESS CURRENT LIABILITIES

1,952,072

2,452,247

CREDITORS

Amounts falling due after more than one year

16

(893,567

)

(1,362,156

)

PROVISIONS FOR LIABILITIES

20

(393,125

)

(381,083

)

NET ASSETS

665,380

709,008

CAPITAL AND RESERVES

Called up share capital

21

200

200

Retained earnings

665,160

698,328

SHAREHOLDERS' FUNDS

665,360

698,528

NON-CONTROLLING INTERESTS

20

10,480

TOTAL EQUITY

665,380

709,008

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:

N P Eastwood - Director

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

-

180,000

Investments

12

271

256

271

180,256

CURRENT ASSETS

Debtors

14

90,440

276,261

Cash at bank

426,812

4,002

517,252

280,263

CREDITORS

Amounts falling due within one year

15

88,872

56,540

NET CURRENT ASSETS

428,380

223,723

TOTAL ASSETS LESS CURRENT LIABILITIES

428,651

403,979

CREDITORS

Amounts falling due after more than one year

16

424,090

337,404

NET ASSETS

4,561

66,575

CAPITAL AND RESERVES

Called up share capital

21

200

200

Retained earnings

4,361

66,375

SHAREHOLDERS' FUNDS

4,561

66,575

Company's (loss)/profit for the financial year

(51,778

)

87,101

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

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:

N P Eastwood - Director

Called up

share

Retained

Non-controlling

Total

capital

earnings

Total

interests

equity

£

£

£

£

£

Balance at 1 April 2023

200

691,517

691,717

11,341

703,058

Changes in equity

Dividends - non-controlling

interests

-

-

-

(13,611

)

(13,611

)

Movement - non-controlling

interests

-

(840

)

(840

)

840

-

Dividends

-

(334,680

)

(334,680

)

-

(334,680

)

Total comprehensive income

-

342,331

342,331

11,910

354,241

Balance at 31 March 2024

200

698,328

698,528

10,480

709,008

Changes in equity

Dividends - non-controlling

interests

-

-

-

(976

)

(976

)

Movement - non-controlling

interests

-

13,915

13,915

(13,915

)

-

Dividends

-

(160,411

)

(160,411

)

-

(160,411

)

Total comprehensive income

-

113,328

113,328

4,431

117,759

Balance at 31 March 2025

200

665,160

665,360

20

665,380

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2023

200

59,274

59,474

Changes in equity

Dividends

-

(80,000

)

(80,000

)

Total comprehensive income

-

87,101

87,101

Balance at 31 March 2024

200

66,375

66,575

Changes in equity

Dividends

-

(10,236

)

(10,236

)

Total comprehensive income

-

(51,778

)

(51,778

)

Balance at 31 March 2025

200

4,361

4,561

Cash flows from operating activities

Cash generated from operations

1

2,026,187

1,712,399

Interest paid

(50,079

)

(57,979

)

Interest element of hire purchase payments paid

(81,941

)

(54,221

)

Tax paid

(125

)

(94,670

)

Net cash from operating activities

1,894,042

1,505,529

Cash flows from investing activities

Purchase of intangible fixed assets

(13,950

)

-

Purchase of tangible fixed assets

(454,522

)

(1,126,338

)

Sale of tangible fixed assets

202,149

169,991

Interest received

23,023

17

Net cash from investing activities

(243,300

)

(956,330

)

Cash flows from financing activities

Loan repayments

(286,708

)

(208,737

)

Factoring arrangements

(251,887

)

(631,230

)

Capital advances/(repayments)

(191,683

)

340,380

Amount introduced by directors

385,408

222,048

Amount withdrawn by directors

(167,886

)

(395,634

)

Equity dividends paid

(161,387

)

(348,291

)

Net cash from financing activities

(674,143

)

(1,021,464

)

Increase/(decrease) in cash and cash equivalents

976,599

(472,265

)

Cash and cash equivalents at beginning of year

2

369,324

841,589

Cash and cash equivalents at end of year

2

1,345,923

369,324

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

2025

2024

£

£

Profit before taxation

219,540

437,645

Depreciation charges

466,188

464,013

Loss on disposal of fixed assets

72,100

24,205

Finance costs

132,020

112,200

Finance income

(23,023

)

(17

)

866,825

1,038,046

Increase in stocks

(42,658

)

-

Decrease in trade and other debtors

7,757

696,599

Increase/(decrease) in trade and other creditors

1,194,263

(22,246

)

Cash generated from operations

2,026,187

1,712,399

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

1,345,923

369,324

Year ended 31 March 2024

31.3.24

1.4.23

£

£

Cash and cash equivalents

369,324

841,589

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.4.24

Cash flow

At 31.3.25

£

£

£

Net cash

Cash at bank and in hand

369,324

976,599

1,345,923

369,324

976,599

1,345,923

Debt

Finance leases

(1,582,455

)

191,683

(1,390,772

)

Debts falling due within 1 year

(142,952

)

79,188

(63,764

)

Debts falling due after 1 year

(220,030

)

207,521

(12,509

)

(1,945,437

)

478,392

(1,467,045

)

Total

(1,576,113

)

1,454,991

(121,122

)

1.	STATUTORY INFORMATION

Aaron Engineering Group Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

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.

The financial statements are prepared in £ sterling which is the functional currency of the company and the group.

Going concern

The financial statements have been prepared on a going concern basis. The directors are of the opinion that the group will continue its business in the foreseeable future. Comment has been made within the strategic report regarding the results for the year.

Basis of consolidation

The consolidated financial statements comprise the financial statements of the parent company and all its direct subsidiaries - Aaron Access Limited, Aaron Rail Limited, Aaron HV Systems Limited and its indirect subsidiary Aaron Pay Limited. 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.

The results of subsidiary undertakings acquired during the year are included in the income statement from the date of acquisition.

The results of subsidiary undertakings disposed of during the prior year are included in the income statement up to the date of disposal.

Non-controlling interests are recognised to the extent that the non-controlling interests have a right to equity. The non-controlling interests hold growth shares. As the valuation of the subsidiary company grows, the proportion of the realised proceeds, upon a share sale or distribution, payable to the holders of the shares increases. Any changes in the proportion of the non-controlling interests are adjusted through the statement of changes in equity each year.

Significant judgements and estimates

In the preparation of the financial statements, the directors have made judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for income and expenses during the year. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis..

In the process of applying the groups accounting policies a critical accounting judgement has been made to recognise long term contract income. At each balance sheet date, management undertake a review of the long term contract work completion and estimate the values that should be accrued and deferred. The calculation is based upon the percentage of completion method.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

In respect of long-term contracts and contracts for ongoing services turnover represents the value of the work done in the year, including estimates of amounts not invoiced. Turnover in respect of long-term contracts is recognised by reference to the stage of completion. Profit is recognised if the final outcome can be assesses with reasonable certainty, by including in the profit and loss account, turnover and relates costs as contract activity progresses.

If a contract is forecast to make a loss, the full loss is recognised immediately.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Computer software is being amortised evenly over its estimated useful life of five years.