REGISTERED NUMBER: SC186341 (Scotland)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025

FOR

NEOGEN EUROPE LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

6

Independent Auditor's Report

9

Statement of Comprehensive Income

13

Balance Sheet

14

Statement of Changes in Equity

15

Notes to the Financial Statements

16

DIRECTORS:

S Donnachie

A M Rocklin

W J Waelke

A Holmes

SECRETARY:

Corporation Service Company (UK) Limited

REGISTERED OFFICE:

Auchincruive House

Auchincruive

Ayr

KA6 5HN

REGISTERED NUMBER:

SC186341 (Scotland)

AUDITOR:

BDO LLP

Statutory Auditor

30 Semple Street

Edinburgh, UK

EH3 8BL

SOLICITORS:

Harper McLeod LLP

The Ca'd'oro

45 Gordon Street

Glasgow

G1 3PE

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

PRINCIPAL ACTIVITY

The company develops and markets products and services dedicated to food safety including diagnostic test kits to detect food borne bacteria, natural toxins, food allergens, drug residues, plant diseases and sanitation concerns. It also provides genomics services for agricultural, livestock and food customers.

REVIEW OF BUSINESS

From 1 February 2025, some of the group's European business started being routed through a fellow European subsidiary. Increased competition also resulted in the loss of a significant contract. As a result, turnover dropped back from £46.9m to £42.7m.

The loss of the group European business will result in a material reduction in the company's turnover in the year to 31 May 2026 and beyond. However, taking account of expected other (ongoing) group revenue and an investment disposal in the current financial year, the directors expect the company to return to profitability in the year to 31 May 2026 and beyond.

The business was also impacted by the cancellation of an unsuccessful product line and by restructuring costs related to closing an operating site. These resulted in stock provisions, asset impairments and other costs totalling more than £1m.

The impact of these costs and a change in sales mix reduced the gross profit percentage from 39.3% to 32.2% and caused administrative expenses to increase from £8.3m to £8.8m.

Other operating income increased significantly, from £209k to £3.28m, because of higher intra-group re-charges associated with the restructuring of EU distribution.

There was no income from shares in group undertakings this year. The £5m included in last year's result was as a result of final steps being taken to hive-up a subsidiary and such income is not expected to be a regular occurrence. The £2.4m written off investments last year also related to the hive-up of a subsidiary. The £1.8m written off investments this year arose following an impairment review of the company's investment in Neogen Italia.

Finance costs dropped from £1.05m to £510k because intra-group loans were settled during the year.

There was a loss before tax of £2.1m this year compared to a profit of £4.2m last year, but last year's result was unusually high because the net £2.6m increase in profits arising from the above mentioned hive-up adjustments and this years results have been adversely impacted by the stock provisions, asset impairment, investment impairments and other restructuring costs totalling more than £2.8m.

The company invested £484k in new fixed assets during the year and sold a surplus property for £3.25m, which largely accounts for the increase in net current assets from £174k to £4.4m.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks facing the business are:

Potential disruption to the supply chain from unforeseen events

Changing raw material prices

Loss of customers due to external market factors

Being unable to retain and attract skilled and efficient employees

Financial risks

The company operates in an innovative and competitive global market and manages the risks associated with that market with a commitment to innovation and product improvement, continually looking to improve and expand its product and service range through research and development and acquisitions. The company also strives to provide an excellent standard of customer service, using customer surveys and other means as it seeks to maintain and improve our customers experience.

The company works closely with its suppliers to build long term relationships and secure the best possible prices and reliable supplies, where possible ensuring alternative sources of supply are identified for key products. The company carries a significant level of buffer stock to allow it to withstand any short term disruption or delay to supplies.

We aim to provide an exceptional working environment for our employees and offer training and other opportunities for them to progress and thrive within the company. Our HR department carries out regular staff surveys, interviews and other programmes to ensure training and other requirements are identified and to monitor and improve staff welfare.

The company's activities expose it to a number of financial risks - primarily risks of changes in foreign currency exchange rates and credit risk.

The company purchases goods and services from key suppliers in (principally) US dollars and also Euros. It also makes sales and therefore has debtors and bank deposits denominated in both US dollars and Euros. It also has substantial foreign denominated loans from other group entities. Because the company has both assets and liabilities denominated in foreign currencies there is an element of natural hedging. However because of the level of US dollar denominated group loans, the company's result will be adversely affected if the US dollar strengthens against the pound.

All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors balances are monitored closely on an ongoing basis and provision is made for any doubtful debts where necessary.

The company's bank deposits are held by banks with high credit ratings assigned by international credit rating agencies.

SECTION 172(1) STATEMENT

The directors, in line with their duties under s172 of the Companies Act, act individually and collectively in the way they consider, in good faith, would be most likely to promote the success of the company for the overall benefit of its members and in doing so have regard to the impact on the company's key stakeholders as described in more detail below.

The decisions of the board mainly relate to the delivery of goods and and services to the company's customers. The principal decisions that the company took in the period were:

Sale of a property

During the year, a surplus property in Rochdale was sold for £3.25m. As the property was surplus to requirements, the decision was made to accept an offer for the property. Other than adding to working capital, the sale is not expected to have any other significant impact on the business.

Re-routing of group turnover

At a group board level, it was decided that sales to EU customers would be routed through an EU subsidiary, rather than through Neogen Europe. Instead of group manufactured goods being imported to the UK from (primarily) the United States of America and then exported to the EU, the goods will be imported directly by the EU subsidiary and supplied on to the EU customer base. UK produced goods will also be sold to the European subsidiary for onwards supply to the EU customer base, so that customers are dealing with a single entity within the EU. This decision will have an adverse impact on Neogen Europe's trade, but the new arrangement will allow the group to service its EU customer base more efficiently.

Abandoning the UK supply of an unsuccessful product

The group developed a new product offering and Neogen Europe acquired a significant stock and specific plant and equipment to service the expected customer demand for the product. Take-up of the product fell well short of expectations and the decision was made to abandon the new offering, writing off the stock and imparing or selling related plant and equipment. Although there was a significant cost involved in taking this step, the directors believe that it is in the interest of the business to do so.

In making its decisions, the board considers:

Likely consequences of any decision in the long term

Interest of the company's employees

Need to foster the company's business relationships with suppliers, customers and others

Impact of the company's operations on the community and the environment

Desirability of the company maintaining a reputation of high standards of business conduct

Need to act fairly between members of the company

Our employees remain fundamental to the achievement of our business plan and we continue to engage with all employees on a regular basis. The company invests in training, coaching and skills acquisition and personal development is a key element of the company's strategy. The company carries out well-being surveys and holds well-being sessions to monitor and improve how employees are coping with changes in working habits, mental health and other key issues.

We continue to work closely with our customers to ensure our products and services are tailored to meet their requirements. Our customer services team works closely with our customers to ensure they remain satisfied with the service we provide. Customer surveys are regularly carried out and processes and procedures are adapted as necessary to maintain and improve performance.

We value our suppliers as partners and our aim is to develop and enter into strong stable working relationships. The company has regular contact with key suppliers with a view to fostering a partnership approach.

The board takes sustainability and environmental responsibility very seriously and tries to minimise environmental impact by recycling as much waste created as possible, ensuring employees are all aware of their impact and, where possible, make use of more energy efficient products. The company regularly reviews its manufacturing processes and works with suppliers and external consultants to identify ways of reducing packaging and other waste and reducing other environmental impacts, for example by seeking to reduce fuel and energy use by adapting or using greener or more energy efficient processes, products or equipment.

The company complies with environmental legislation and is committed to reducing its environmental impact through a process of continuous improvement via its internal auditing and use of approved management companies in order to meet environmental objectives.

We have a responsibility to engage with the shareholders of our business and their views are an important driver of our strategy. We keep our shareholders regularly informed through submission of monthly financial information and regular meetings.

The directors' intention is to act responsibly and to ensure that the management team operates the business in a responsible manner, acting with high standards of business conduct and good governance expected of companies of our nature and size and in alignment with legal requirements. In doing so, we believe we will achieve our long term business strategy.

GOING CONCERN

In preparing forecasts for the next 12 months, management have prepared sensitivities considering the "worst case scenario" that the company could face. Management were able to conclude that under all scenarios modelled there would be sufficient cash to allow the company to meets its liabilities as they fall due.

Following the sale of a surplus property for £3.25m, the company's working capital position has improved with net current assets of £4.4m at the year end. Post year end, following the sale of an investment, the company has settled the loans advanced to it by group companies which were repayable on demand.

Looking forward, the company continues to be reliant on fellow group companies to honour the cash settlement of management recharges on a timely basis. The relevant group companies have confirmed their intention to settle those recharge invoices in cash. The company has also sought confirmation from its ultimate parent company that it will provide financial support insofar as is necessary to allow this company to meet its liabilities as they fall due.

Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements.

ON BEHALF OF THE BOARD:

S Donnachie - Director

22 December 2025

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

DIVIDENDS

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

RESEARCH AND DEVELOPMENT

The company conducts research and development on its own accord. The emphasis of such activities is on developing commercial testing products from diagnostic technologies. Expenditure of £83,447 (2024, £371,161) was incurred on research and development during the period and that cost is reflected in the Statement of Comprehensive Income.

FUTURE DEVELOPMENTS

Whilst the company's turnover is expected to fall back significantly in the year to 31 May 2026 as a a result of some of the group's European business being routed through a fellow European subsidiary, the directors are confident that, moving forward the company can again achieve steady revenue growth.

EVENTS SINCE THE END OF THE YEAR

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

DIRECTORS

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

S Donnachie

A M Rocklin

W J Waelke

Other changes in directors holding office are as follows:

D E Jones - resigned 31 October 2024

A Holmes was appointed as a director after 31 May 2025 but prior to the date of this report.

M L Mittino ceased to be a director after 31 May 2025 but prior to the date of this report.

The directors hold shares and share options in the ultimate parent company, Neogen Corporation.

STREAMLINED ENERGY AND CARBON REPORTING

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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and 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 AUDITOR

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 auditor is 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 company's auditor is aware of that information.

ON BEHALF OF THE BOARD:

S Donnachie - Director

22 December 2025

Other Companies Act 2006 reporting

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

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 in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

- adequate accounting records have not been kept, 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 report of the directors, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the 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.

Auditor's 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 an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

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

Non-compliance with laws and regulations

Based on

- Our understanding of the Company and the industry in which it operates;

- Discussion with management and those charged with governance; and

- Obtaining and understanding of the Company's policies and procedures regarding compliance with laws

and regulations

we considered the significant laws and regulations to be the applicable accounting framework, UK tax legislation, Companies Act 2006.

The Company is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be Companies Act 2006, Corporate and VAT legislations, Employment Taxes, Health and Safety and the Bribery Act 2020.

Our procedures in respect of the above included:

- Review of minutes of meeting of those charged with governance for any instances of

non-compliance with laws and regulations;

- Review of financial statement disclosures and agreeing to supporting documentation;

- Involvement of tax specialists in the audit: and

- Review of legal expenditure accounts to understand the nature of expenditure incurred.

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

- Enquiry with management and those charged with governance regarding any known or suspected

instances of fraud;

- Obtaining an understanding of the company's policies and procedures relating to:

- Detecting and responding to the risks of fraud; and

- Internal controls established to mitigate risks related to fraud.

- Review of minutes of meeting of those charged with governance for any known or suspected

instances of fraud;

- Discussion amongst the engagement team as to how and where fraud might occur in the financial

statements;

- Performing analytical procedures to identify any unusual or unexpected relationships that

may indicate risks of material misstatement due to fraud; and

- Considering remuneration incentive schemes and performance targets and the related financial

statement areas impacted by these.

Based on our risk assessment, we considered the areas most susceptible to fraud to be management override of controls, revenue recognition and stock provision.

Our procedures in respect of the above included:

- Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing

to supporting documentation;

- Assessing significant estimates made by management for bias;

- Carrying out detailed testing, on a sample basis, of revenue transactions which occurred around the

year end, agreeing to despatch documentation or confirmation of receipt of service from customer and

ensuring that revenue is recognised in the correct period; and

- Carrying out detailed testing on the stock provision by testing a sample of items for completeness by

considering items from the stock listing to determine whether they should be included in the provision.

Further testing was undertaken to ensure that the net realisable value for a sample of stock items was

in excess of their carrying value.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council's website at:

https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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 an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Alastair Rae (Senior Statutory Auditor)

for and on behalf of BDO LLP

Statutory Auditor

Edinburgh, UK

23 December 2025

BDO LLP is a limited liability partnership registered in England and Wales (with

registered number OC305127).

TURNOVER

3

42,742,939

46,905,659

Cost of sales

28,990,398

28,483,790

GROSS PROFIT

13,752,541

18,421,869

Distribution costs

8,067,858

7,893,192

Administrative expenses

8,788,666

8,267,117

16,856,524

16,160,309

(3,103,983

)

2,261,560

Other operating income

4

3,284,481

209,460

OPERATING PROFIT

6

180,498

2,471,020

Income from shares in group undertakings

-

5,005,354

Interest receivable and similar income

7

93,330

122,474

93,330

5,127,828

273,828

7,598,848

Amounts written off investments

8

1,831,805

2,379,103

(1,557,977

)

5,219,745

Interest payable and similar charges

9

510,419

1,053,991

(LOSS)/PROFIT BEFORE TAXATION

(2,068,396

)

4,165,754

Tax on (loss)/profit

10

74,746

616,150

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(2,143,142

)

3,549,604

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(2,143,142

)

3,549,604

FIXED ASSETS

Intangible assets

11

3,034,166

3,540,040

Tangible assets

12

6,139,395

10,455,134

Investments

13

28,673,346

30,505,151

37,846,907

44,500,325

CURRENT ASSETS

Stocks

14

8,167,154

9,160,062

Debtors

15

10,075,283

9,325,924

Cash at bank and in hand

5,295,304

5,039,205

23,537,741

23,525,191

CREDITORS

Amounts falling due within one year

16

19,094,380

23,351,079

NET CURRENT ASSETS

4,443,361

174,112

TOTAL ASSETS LESS CURRENT LIABILITIES

42,290,268

44,674,437

PROVISIONS FOR LIABILITIES

19

(265,752

)

(400,922

)

ACCRUALS AND DEFERRED INCOME

20

-

(105,857

)

NET ASSETS

42,024,516

44,167,658

CAPITAL AND RESERVES

Called up share capital

21

40,000

40,000

Share premium

22

170,000

170,000

Retained earnings

22

41,814,516

43,957,658

SHAREHOLDERS' FUNDS

42,024,516

44,167,658

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

S Donnachie - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 June 2023

40,000

40,408,054

170,000

40,618,054

Changes in equity

Total comprehensive income

-

3,549,604

-

3,549,604

Balance at 31 May 2024

40,000

43,957,658

170,000

44,167,658

Changes in equity

Total comprehensive income

-

(2,143,142

)

-

(2,143,142

)

Balance at 31 May 2025

40,000

41,814,516

170,000

42,024,516

1.	ACCOUNTING POLICIES

General information and basis of preparation

Neogen Europe Limited is a private limited company, limited by shares, registered in Scotland. The address of its registered office and company number is given in the company information on page 1 of these financial statements and the nature of the company's operations and principal activities are set out in the Strategic Report.

The financial statements have been prepared in accordance with the applicable accounting standards including Financial Reporting Standard 102 The Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements have been prepared in pounds sterling which is the functional currency of the company, rounded to the nearest pound.

Going concern

In preparing forecasts for the next 12 months, management have prepared sensitivities considering the "worst case scenario" that the company could face. Management were able to conclude that under all scenarios modelled there would be sufficient cash to allow the company to meets its liabilities as they fall due.

Following the sale of a surplus property for £3.25m, the company's working capital position has improved with net current assets of £4.4m at the year end. Post year end, following the sale of an investment, the company has settled the loans advanced to it by group companies which were repayable on demand.

Looking forward, the company continues to be reliant on fellow group companies to honour the cash settlement of management recharges on a timely basis. The relevant group companies have confirmed their intention to settle those recharge invoices in cash. The company has also sought confirmation from its ultimate parent company that it will provide financial support insofar as is necessary to allow this company to meet its liabilities as they fall due.

Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements.

The significant accounting policies applied in the preparation of these financial statements are set out below.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of paragraph 3.17(d);

•

the requirements of paragraphs 26.18(b), 26.19 to 26.21 and 26.23;

•

the requirement of paragraph 33.7.

The information is included in the consolidated financial statements of Neogen Corporation which may be obtained from Lesher Place, Lansing MI, USA.

Preparation of consolidated financial statements

The financial statements contain information about Neogen Europe Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 401 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertakings are included by full consolidation in the consolidated financial statements of its parent, Neogen Corporation, a publicly owned company based in the United States of America.

Related party exemption

Turnover

Turnover is measured at the fair value of the consideration received or receivable net of VAT and trade discounts.

The policies adopted for the recognition of turnover are as follows:

Sale of goods

Turnover from the sale of goods (principally test kits and related products and equipment) is recognised when significant risks and rewards of ownership of the goods have transferred to the buyer, the amount of turnover can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the company and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

The company provides analysis and testing services and recognises revenue from such services when the test/analysis is complete and reported to the customer.

Goodwill

The company has elected not to restate any business combinations which took place prior to the transition to FRS102. Goodwill therefore includes other intangible assets (such as customer lists) which were acquired prior to the transition date.

Goodwill is measured at cost less accumulated amortisation and any accumulated impairment losses. It is being amortised evenly over its estimated useful life of between five and twenty 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

-

Straight line over 50 years

Long leasehold property

-

Straight line over 50 years

Improvements to property

-

Straight line over 5 and 10 years

Plant and machinery

-

Straight line over 5 and 6.67 years

Fixtures and fittings

-

Straight line over 5, 6.67 and 10 years

Computer equipment

-

Straight line over 3 years

Assets under construction

-

Not depreciated

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

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income.

Antiques, which are included in fixtures and fittings, are not depreciated on the grounds that, taking their residual value into consideration, any depreciation would be immaterial.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing stock to its present location and condition. Cost is calculated using the first-in, first-out basis. Provision is made for damaged, obsolete and slow-moving stock where appropriate.

Tax

Current tax represents the amount of tax payable or receivable in respect of the taxable profit (or loss) for the current or past reporting periods. It is measured at the amount expected to be paid or recovered using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax represents the future tax consequences of transactions and events recognised in the financial statements of current and previous periods. It is recognised in respect of all timing differences, with certain exceptions. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expense in tax assessments in periods different from those in which they are recognised in the financial statements. 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.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date that are expected to apply to the reversal of timing differences.

Research and development

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

Foreign currencies

Foreign currency transactions are initially recognised by applying to the foreign currency amount a set monthly exchange rate between the functional currency and the foreign currency for the month of the transaction.

Monetary assets and liabilities denominated in foreign currency at the balance sheet date are translated using the closing rate.

Leasing

Rentals payable under operating leases are charged on a straight line basis over the term of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution scheme. The assets of the scheme are held separately from those of the company in independently administered funds. Contributions payable to the scheme are charged to the statement of comprehensive income in the period to which they relate.