REGISTERED NUMBER: 13352071 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTOR AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD 1 MAY 2024 TO 31 DECEMBER 2024

FOR

CLAN EQUITY LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Director

3

Report of the Independent Auditors

4

Consolidated Income Statement

7

Consolidated Other Comprehensive Income

8

Consolidated Statement of Financial Position

9

Company Statement of Financial Position

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Statement of Cash Flows

13

Notes to the Consolidated Statement of Cash Flows

14

Notes to the Consolidated Financial Statements

15

DIRECTOR:

Mr J D Moodie

REGISTERED OFFICE:

71-75 Shelton Street

Covent Garden

London

WC2H 9JQ

REGISTERED NUMBER:

13352071 (England and Wales)

AUDITORS:

Cube Partners Limited

Chartered Accountants and Registered Auditors

5 Giffard Court

Millbrook Close

Northampton

Northamptonshire

NN5 5JF

The director presents his strategic report of the company and the group for the period 1 May 2024 to 31 December 2024.

REVIEW OF BUSINESS

The Directors consider that the Group performed steadily in the year given the general economic conditions.The Group maintained a strong balance sheet with adequate liquidity to support ongoing operations.The Group continues to actively manage its working capital, funding and investment requirements.

PRINCIPAL RISKS AND UNCERTAINTIES

The Directors monitor risks through regular reporting and risk review processes across the Group. The key risks and uncertainties include:

Market Risk

The Group is exposed to market conditions affecting demand, pricing and investment valuations. Economic uncertainty and interest rate volatility may impact group results.

Operational Risk

Risks include dependence on key management, integration of acquisitions and operational efficiency. The Group mitigates this through strong governance and internal controls.

Credit and Liquidity Risk

The Group is exposed to credit and liquidity risk and ensures sufficient liquidity through cash management and banking facilities.

IT and Cybersecurity Risk

As with all modern businesses, the Group faces risks related to data security. IT systems and controls are reviewed regularly, and cybersecurity measures are in place.

KEY PERFORMANCE INDICATORS

The Group uses a number of financial KPIs to measure progress and performance including:

Gross profit margin: 79% (prior year: 86%)

Operating margin: 21% (prior year :16%)

Profit before tax: £1.8m for 8 month period (prior year: £1.4m)

The Group also assesses financial KPI's on a individual investment level.

ON BEHALF OF THE BOARD:

Mr J D Moodie - Director

19 December 2025

The director presents his report with the financial statements of the company and the group for the period 1 May 2024 to 31 December 2024.

PRINCIPAL ACTIVITY

Clan Equity Limited ("the Group") operates as a medium-sized investment and trading group. The principal activity of the Group during the period was maintaining the portfolio of trading businesses predominantly in the recruitment and factoring sectors and its listed investments. There were no material changes to the principal activities during the year.

DIVIDENDS

The total distribution of dividends for the period ended 31 December 2024 will be £106,169.

EVENTS SINCE THE END OF THE PERIOD

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

DIRECTOR

Mr J D Moodie held office during the whole of the period from 1 May 2024 to the date of this report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Group Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is 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 director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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 director is 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 he 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, Cube Partners Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr J D Moodie - Director

19 December 2025

Opinion

We have audited the financial statements of Clan Equity Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 December 2024 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, 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 December 2024 and of the group's profit for the period 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 director's 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 director with respect to going concern are described in the relevant sections of this report.

Other information

The director is responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Director, 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 Director 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 Director 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 Director.

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 director's remuneration specified by law are not made; or

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

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page three, the director is 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 director determines 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 director is 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 director either intends to liquidate the group or the parent company or to cease operations, or has 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 considered the central laws and regulations and identified those of significance to the entity and group. The significant laws and regulations include GDPR, health and safety, employment laws and UK tax laws. We undertook an enquiry of management and those charged with governance to evaluate those of significance and any instances of non-compliance..

Through discussion, and where appropriate, written representations, we obtained an understanding of the entity’s policies and procedures on fraud risks, including knowledge of any actual, suspected or alleged fraud.

Where necessary documentation scrutiny was used to determine the significance of any instances of non-compliance of central laws and regulations or fraud.

We communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. The audit team remained vigilant throughout the audit for any evidence of non-compliance or fraud.

The risk of management override of controls and understatement of revenue were identified to have the greatest risk of material misstatement from irregularities, including fraud, on the financial statements. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of regularities, sample testing on the posting of journals, reviewing of regulatory correspondence and professional fees, detailed substantive testing on the completeness of income, and reviewing accounting estimates for biases.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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.

Other matter

This is the first period of audit, and as such the corresponding figures are unaudited.

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.

Steven Jones (Senior Statutory Auditor)

for and on behalf of Cube Partners Limited

Chartered Accountants and Registered Auditors

5 Giffard Court

Millbrook Close

Northampton

Northamptonshire

NN5 5JF

22 December 2025

TURNOVER

3

8,917,782

8,645,323

Cost of sales

1,838,326

1,200,470

GROSS PROFIT

7,079,456

7,444,853

Administrative expenses

4,496,327

5,319,318

2,583,129

2,125,535

Other operating income

14,851

7,425

OPERATING PROFIT

5

2,597,980

2,132,960

Income from other participating interests

119,721

208,895

Interest receivable and similar income

15,832

18,065

135,553

226,960

2,733,533

2,359,920

Interest payable and similar expenses

6

894,614

1,007,249

PROFIT BEFORE TAXATION

1,838,919

1,352,671

Tax on profit

7

574,081

442,281

PROFIT FOR THE FINANCIAL PERIOD

1,264,838

910,390

Profit attributable to:

Owners of the parent

1,024,559

793,252

Non-controlling interests

240,279

117,138

1,264,838

910,390

PROFIT FOR THE PERIOD

1,264,838

910,390

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

1,264,838

910,390

Total comprehensive income attributable to:

Owners of the parent

1,024,559

793,252

Non-controlling interests

240,279

117,138

1,264,838

910,390

FIXED ASSETS

Intangible assets

10

7,104,159

7,713,301

Tangible assets

11

144,440

96,538

Investments

12

Interest in associate

145,083

149,583

Other investments

6,165,610

5,963,303

13,559,292

13,922,725

CURRENT ASSETS

Debtors

13

36,612,420

29,326,136

Cash at bank

3,096,211

2,470,604

39,708,631

31,796,740

CREDITORS

Amounts falling due within one year

14

45,245,465

41,715,212

NET CURRENT LIABILITIES

(5,536,834

)

(9,918,472

)

TOTAL ASSETS LESS CURRENT LIABILITIES

8,022,458

4,004,253

CREDITORS

Amounts falling due after more than one year

15

(2,842,667

)

-

PROVISIONS FOR LIABILITIES

18

(34,743

)

(17,874

)

NET ASSETS

5,145,048

3,986,379

CAPITAL AND RESERVES

Called up share capital

19

100

100

Retained earnings

20

1,890,338

971,948

1,890,438

972,048

NON-CONTROLLING INTERESTS

3,254,610

3,014,331

TOTAL EQUITY

5,145,048

3,986,379

The financial statements were approved by the director and authorised for issue on 19 December 2025 and were signed by:

Mr J D Moodie - Director

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

275

459

Investments

12

6,303,999

6,101,692

6,304,274

6,102,151

CURRENT ASSETS

Debtors

13

33,759

11,587

Cash at bank

973,741

663,397

1,007,500

674,984

CREDITORS

Amounts falling due within one year

14

6,191,225

6,322,765

NET CURRENT LIABILITIES

(5,183,725

)

(5,647,781

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,120,549

454,370

CAPITAL AND RESERVES

Called up share capital

19

100

100

Retained earnings

20

1,120,449

454,270

1,120,549

454,370

Company's profit for the financial year

690,539

773,884

The financial statements were approved by the director and authorised for issue on 19 December 2025 and were signed by:

Mr J D Moodie - Director

Called up

share

Retained

Non-controlling

Total

capital

earnings

Total

interests

equity

£

£

£

£

£

Balance at 1 May 2023

100

293,301

293,401

2,897,193

3,190,594

Changes in equity

Dividends

-

(114,605

)

(114,605

)

-

(114,605

)

Total comprehensive income

-

793,252

793,252

117,138

910,390

Balance at 30 April 2024

100

971,948

972,048

3,014,331

3,986,379

Changes in equity

Dividends

-

(106,169

)

(106,169

)

-

(106,169

)

Total comprehensive income

-

1,024,559

1,024,559

240,279

1,264,838

Balance at 31 December 2024

100

1,890,338

1,890,438

3,254,610

5,145,048

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 May 2023

100

(287,241

)

(287,141

)

Changes in equity

Dividends

-

(32,373

)

(32,373

)

Total comprehensive income

-

773,884

773,884

Balance at 30 April 2024

100

454,270

454,370

Changes in equity

Dividends

-

(24,360

)

(24,360

)

Total comprehensive income

-

690,539

690,539

Balance at 31 December 2024

100

1,120,449

1,120,549

Cash flows from operating activities

Cash generated from operations

1

(4,892,921

)

1,421,446

Interest paid

(894,614

)

(1,007,249

)

Consolidation adjustment

(50,268

)

-

Tax paid

(366,670

)

(348,867

)

Net cash from operating activities

(6,204,473

)

65,330

Cash flows from investing activities

Purchase of intangible fixed assets

(5,300

)

(3,549,398

)

Purchase of tangible fixed assets

(72,903

)

(10,558

)

Purchase of fixed asset investments

(299,490

)

(649,457

)

Sale of tangible fixed assets

100

333

Sale of fixed asset investments

310,317

475,599

Interest received

15,832

18,065

Dividends received

119,721

208,895

Net cash from investing activities

68,277

(3,506,521

)

Cash flows from financing activities

Loan movement in the year

6,867,972

5,026,963

Equity dividends paid

(106,169

)

(114,605

)

Net cash from financing activities

6,761,803

4,912,358

Increase in cash and cash equivalents

625,607

1,471,167

Cash and cash equivalents at beginning of period

2

2,470,604

999,437

Cash and cash equivalents at end of period

2

3,096,211

2,470,604

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

Period

1.5.24

to

Year Ended

31.12.24

30.4.24

(Unaudited)

£

£

Profit before taxation

1,838,919

1,352,671

Depreciation charges

639,343

661,269

Loss on disposal of fixed assets

29,748

72,819

Gain on revaluation of fixed assets

(178,894

)

(257,364

)

Finance costs

894,614

1,007,249

Finance income

(135,553

)

(226,960

)

3,088,177

2,609,684

Increase in trade and other debtors

(7,286,284

)

(4,474,734

)

(Decrease)/increase in trade and other creditors

(694,814

)

3,286,496

Cash generated from operations

(4,892,921

)

1,421,446

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Period ended 31 December 2024

31.12.24

1.5.24

£

£

Cash and cash equivalents

3,096,211

2,470,604

Year ended 30 April 2024

30.4.24

1.5.23

(Unaudited)

£

£

Cash and cash equivalents

2,470,604

999,437

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.5.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank

2,470,604

625,607

3,096,211

2,470,604

625,607

3,096,211

Debt

Debts falling due within 1 year

(15,673,984

)

(4,025,305

)

(19,699,289

)

(15,673,984

)

(4,025,305

)

(19,699,289

)

Total

(13,203,380

)

(3,399,698

)

(16,603,078

)

1.	STATUTORY INFORMATION

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

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

These financial statements are for a short period of eight months. This has been done to bring the period end of each company within the group, in line with each other.

These financial statements represent the first set of consolidated financial statements prepared by the Group. In prior periods, the parent company qualified as a small group and was therefore exempt from the requirement to prepare group accounts under section 399 of the Companies Act 2006.

During the current financial year, the Group no longer qualified as a small group and, accordingly, group accounts have been prepared for the first time in accordance with FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland..

Financial Reporting Standard 102 - reduced disclosure exemptions

This company meets the definition of a qualifying entity per FRS102 and has taken advantage of the exemption available in paragraph 1.12 of FRS102 from presenting a statement of cash flows of the parent company. The statement of cash flows of the consolidated entity has been prepared and included in these financial statements.

Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiary undertaking up to 31 December 2024. The acquisition method of accounting has been adopted. Under this method, the results of subsidiary undertakings acquired in the year are included in the consolidated profit and loss account from the date of acquisition.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Significant judgements and estimates

In the application of the company's accounting policies, the directors are required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of revision and future periods where the revision affects both current and future periods.

Turnover

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

Turnover comprises fees for the provision of invoice financing services, net of Value Added Tax, and is recognised as explained below.

Fee income from invoice factoring and discounting is recognised on an accruals basis as services are provided, in line with contractual agreements with clients.

Ancillary to the provision of finance to its customers, the company provides various services for which it charges a fee. Income for these services is recognised as the service is provided.

Revenue from sale of services is recognised when the stage of completion of the transaction can be measured reliably. To the extent that the service provided has not been billed at the balance sheet date, the amount is recognised as revenue and recorded as accrued income. Sales billed in advance of the services being provided are recognised as deferred income.

Goodwill

Goodwill arising in connection with the acquisition of the subsidiaries is being amortised evenly over a period of ten years from the date in which the subsidiary was acquired.

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.

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 - 10% on cost

Fixtures and fittings - straight line over 4 years, 5 years or 6 years

Computer equipment - 33% on cost

Tangible fixed assets are stated at historical cost less accumulated depreciation. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.

Impairment of fixed assets

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

Investments in subsidiaries and associates

Investments in subsidiary and associate undertakings are recognised at cost.

Financial instruments

The group has elected to apply the provisions of section 11 ' Basic Financial Instruments' and section 12 'Other Financial Instruments issues' of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

The group's financial assets include trade debtors (invoices factored) and cash at bank. These are initially recognised at transaction price and subsequently measured at amortised cost less impairment.

Financial liabilities include borrowings and trade creditors (including client balances payable), measured at amortised cost.

Impairment of financial assets

The carrying amounts of financial assets are reviewed at each reporting date to determine whether there is objective evidence of impairment. Where a client is in financial difficulty or receivables are unlikely to be recovered, an impairment loss is recognised in profit or loss.

Borrowings

Borrowings are initially recorded at the amount of proceeds received, net of transaction costs. They are subsequently measured at amortised cost, with interest charged to the profit and loss account on an effective interest basis. Borrowing costs in relation to the back-back financing facility are shown within cost of sales. The facility is used to provide invoice finance to clients and is backed by the underlying debts of the clients.

Taxation

Taxation for the period 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 statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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 period 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.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

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

3.

TURNOVER

The turnover and profit before taxation all relate to sales made within the United Kingdom and are attributable to the principal activities of the the group.