REGISTERED NUMBER: 06791303 (England and Wales)

Group Strategic Report,

Report of the Directors and

Audited

Consolidated Financial Statements

for the Year Ended 31 March 2025

for

GRACLOEM HOLDINGS LTD

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Consolidated Statement of Comprehensive Income

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Cash Flow Statement

13

Notes to the Consolidated Cash Flow Statement

14

Notes to the Consolidated Financial Statements

15

Directors:

G Raistrick

J Raistrick

Secretary:

J Raistrick

Registered office:

Langton Business Park

Durham Way South

Newton Aycliffe

Co. Durham

DL5 6BL

Registered number:

06791303 (England and Wales)

Senior statutory auditor:

Simon Davies MMath FCA

Auditors:

Mitchell Gordon LLP

Accountants and Statutory Auditor

43 Coniscliffe Road

Darlington

Co. Durham

DL3 7EH

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

Review of business and future developments

The financial year ended 31 March 2025 was one of transition and strategic investment. The group reported a reduction in gross profit percentage from 23.96% to 15.58% and losses for the year of £63,653 (2024 - profit of £1,273,663). The principal reason for the reduction in gross profit percentage and losses reported in the period was the temporary suspension of our manufacturing operations to facilitate a major capital investment in new production equipment.

In December 2023, the group committed to a £1 million investment in a new saw and drill line, scheduled for installation during June and July 2024. To prepare for this upgrade, the existing line was removed in April and May 2024, during which time extensive factory refurbishment and installation of new plinths and flooring works were undertaken. This programme necessitated a significant pause in production.

During this downtime, operational staff were redeployed to assist with installation and improvement works rather than generating revenue. The impact of these activities, together with associated non-recurring costs such as repairs, renewals, and production downtime, contributed to the reported losses for the year.

Compounding this, a wider market slowdown through 2024 and 2025 resulted in a deferral of several projects originally planned for the 2025 financial year. While opportunities existed for sublet fabrication work, the prevailing market rates were uneconomic. The board therefore made a considered decision to preserve value by maintaining discipline on pricing anticipating and focusing internal efforts on improving efficiency and productivity ahead of anticipated market recovery.

Principal risks and uncertainties

Financial Management Risk

The group's operations expose it to various financial risks, including price risk, credit risk, and liquidity risk. The processes of risk acceptance and risk management are addressed through a framework of policies, procedures, and internal controls. All policies are subject to Board approval and ongoing review by management, risk management, and internal audit.

Credit Risk

The group operates a credit insurance policy to minimize exposure. The operation of this policy requires ongoing credit analysis of existing customers, identifying any risks associated with customers, and ensuring that the correct trading terms are in place to reduce the potential of bad debt.

Principal Risks & Uncertainties

The business performance is subject to several risks and uncertainties. The main risks affecting the business are considered to relate to the overall strength of the construction market, raw material costs, and competition in the manufacturing sector.

The directors regularly re-evaluate the ongoing performance of the business. During YE2025, the group successfully maintained ISO9001, ISO3834 and CE Marking certifications. Additionally, monthly management accounts are produced and assessed against prior year's performance and expectations with financial performance constantly reviewed.

On behalf of the board:

G Raistrick - Director

10 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

Interim dividends per share were paid during the year as follows:

Ordinary £1

-

£1853.60

- 6 April 2024

Ordinary A £1

-

£45000

- 10 March 2025

Ordinary B £1

-

£37500

- 6 April 2024

Ordinary C £1

-

£7350

- 6 April 2024

The total distribution of dividends for the year ended 31 March 2025 will be £ 275,210 .

Directors

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

G Raistrick

J Raistrick

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

Auditors

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

On behalf of the board:

G Raistrick - Director

10 December 2025

Opinion

We have audited the financial statements of Gracloem Holdings Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2025 which comprise the Consolidated Statement of 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 loss for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Other information

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

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

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

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

Auditors' responsibilities for the audit of the financial statements

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

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

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

-

plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities within the group as a basis for an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for the purposes of the group audit. We remain solely responsible for our audit opinion.

-

the engagement partner ensured that the group's and parent company's engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

-

we identified the laws and regulations applicable to the group and parent company through discussions with directors and other management, and from our commercial knowledge and experience of the sectors in which the company operates;

-

we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group and parent company, including the Companies Act 2006, taxation legislation, data protection compliance, anti-bribery, employment, environmental and health and safety legislation.

-

we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

-

identified laws and regulations were communicated within the group audit engagement teams regularly and requested the teams remained alert to instances of non-compliance throughout the audit and report any instances to the group engagement partner.

These procedures did not identify any potentially material actual or suspected non-compliance.

We assessed the susceptibility of the group's consolidated financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

-

making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;

-

considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

-

performed analytical procedures to identify any unusual or unexpected relationships;

-

reviewed material journal entries to identify unusual transactions or posting by unusual users;

-

assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias;

-

investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

-

agreeing financial statement disclosures to underlying supporting documentation;

-

reading the minutes of meetings of those charged with governance;

-

enquiring of management as to actual and potential litigation and claims;

-

reviewing correspondence with HMRC and the company's legal advisors.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remains a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance of fraud and cannot be expected to detect non-compliance with all laws & regulations.

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.

Simon Davies MMath FCA (Senior Statutory Auditor)

for and on behalf of Mitchell Gordon LLP

Accountants and Statutory Auditor

43 Coniscliffe Road

Darlington

Co. Durham

DL3 7EH

10 December 2025

Turnover

3

5,408,458

13,145,548

Cost of sales

4,565,795

9,996,209

Gross profit

842,663

3,149,339

Administrative expenses

1,516,257

1,565,017

(673,594

)

1,584,322

Other operating income

240,169

211,054

Operating (loss)/profit

5

(433,425

)

1,795,376

Interest receivable and similar income

6

84,811

182,252

(348,614

)

1,977,628

Interest payable and similar expenses

7

27,582

27,225

(Loss)/profit before taxation

(376,196

)

1,950,403

Tax on (loss)/profit

8

(312,543

)

676,740

(Loss)/profit for the financial year

(63,653

)

1,273,663

Other comprehensive income

-

-

Total comprehensive income for the year

(63,653

)

1,273,663

(Loss)/profit attributable to:

Owners of the parent

(63,653

)

1,273,663

Total comprehensive income attributable to:

Owners of the parent

(63,653

)

1,273,663

Fixed assets

Intangible assets

11

-

-

Tangible assets

12

2,529,433

2,892,940

Investments

13

-

-

Investment property

14

67,748

67,748

2,597,181

2,960,688

Current assets

Stocks

15

38,780

36,228

Debtors

16

1,830,987

1,874,900

Cash at bank and in hand

1,696,615

2,613,154

3,566,382

4,524,282

Creditors

Amounts falling due within one year

17

1,126,347

1,913,865

Net current assets

2,440,035

2,610,417

Total assets less current liabilities

5,037,216

5,571,105

Creditors

Amounts falling due after more than one year

18

(834,279

)

(909,971

)

Provisions for liabilities

21

(313,620

)

(432,954

)

Net assets

3,889,317

4,228,180

Capital and reserves

Called up share capital

22

104

104

Retained earnings

23

3,889,213

4,228,076

Shareholders' funds

3,889,317

4,228,180

The financial statements were approved by the Board of Directors and authorised for issue on 10 December 2025 and were signed on its behalf by:

G Raistrick - Director

Fixed assets

Intangible assets

11

-

-

Tangible assets

12

-

-

Investments

13

10,150

10,150

Investment property

14

-

-

10,150

10,150

Current assets

Debtors

16

1,344,731

1,238,302

Cash at bank and in hand

1,203,786

1,458,621

2,548,517

2,696,923

Creditors

Amounts falling due within one year

17

91,721

29,236

Net current assets

2,456,796

2,667,687

Total assets less current liabilities

2,466,946

2,677,837

Capital and reserves

Called up share capital

22

104

104

Retained earnings

23

2,466,842

2,677,733

Shareholders' funds

2,466,946

2,677,837

Company's profit for the financial year

64,319

1,193,143

The financial statements were approved by the Board of Directors and authorised for issue on 10 December 2025 and were signed on its behalf by:

G Raistrick - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2023

104

3,207,823

3,207,927

Changes in equity

Dividends

-

(253,410

)

(253,410

)

Total comprehensive income

-

1,273,663

1,273,663

Balance at 31 March 2024

104

4,228,076

4,228,180

Changes in equity

Dividends

-

(275,210

)

(275,210

)

Total comprehensive income

-

(63,653

)

(63,653

)

Balance at 31 March 2025

104

3,889,213

3,889,317

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2023

104

1,738,000

1,738,104

Changes in equity

Dividends

-

(253,410

)

(253,410

)

Total comprehensive income

-

1,193,143

1,193,143

Balance at 31 March 2024

104

2,677,733

2,677,837

Changes in equity

Dividends

-

(275,210

)

(275,210

)

Total comprehensive income

-

64,319

64,319

Balance at 31 March 2025

104

2,466,842

2,466,946

Cash flows from operating activities

Cash generated from operations

1

(1,120,456

)

2,570,355

Interest paid

(27,582

)

(25,797

)

Interest element of hire purchase or finance lease rental payments paid

-

(1,428

)

Tax paid

(232,898

)

(685,146

)

Net cash from operating activities

(1,380,936

)

1,857,984

Cash flows from investing activities

Purchase of tangible fixed assets

(29,573

)

(1,130,939

)

Sale of tangible fixed assets

77,334

17,700

Loans (issued)/repaid

1,088,404

(1,238,146

)

Interest received

84,811

182,252

Net cash from investing activities

1,220,976

(2,169,133

)

Cash flows from financing activities

Bank loan repayments in year

(33,754

)

(32,757

)

Other loan repayments in year

(52,485

)

(49,888

)

Capital repayments in year

-

(36,158

)

Amount withdrawn by directors

(392,914

)

(100,463

)

Shareholder loan movement

(2,216

)

27,289

Equity dividends paid

(275,210

)

(253,410

)

Net cash from financing activities

(756,579

)

(445,387

)

Decrease in cash and cash equivalents

(916,539

)

(756,536

)

Cash and cash equivalents at beginning of year

2

2,613,154

3,369,690

Cash and cash equivalents at end of year

2

1,696,615

2,613,154

1.	RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31/3/25

31/3/24

£

£

(Loss)/profit before taxation

(376,196

)

1,950,403

Depreciation charges

311,824

255,802

Loss on disposal of fixed assets

3,922

1,245

Government grants

(22,500

)

-

Finance costs

27,582

27,225

Finance income

(84,811

)

(182,252

)

(140,179

)

2,052,423

Increase in stocks

(2,552

)

(13,757

)

(Increase)/decrease in trade and other debtors

(515,115

)

1,416,802

Decrease in trade and other creditors

(462,610

)

(885,113

)

Cash generated from operations

(1,120,456

)

2,570,355

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

1,696,615

2,613,154

Year ended 31 March 2024

31/3/24

1/4/23

£

£

Cash and cash equivalents

2,613,154

3,369,690

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1/4/24

Cash flow

At 31/3/25

£

£

£

Net cash

Cash at bank and in hand

2,613,154

(916,539

)

1,696,615

2,613,154

(916,539

)

1,696,615

Debt

Debts falling due within 1 year

(84,310

)

10,547

(73,763

)

Debts falling due after 1 year

(699,607

)

75,692

(623,915

)

(783,917

)

86,239

(697,678

)

Total

1,829,237

(830,300

)

998,937

1.	STATUTORY INFORMATION

Gracloem Holdings Ltd 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.

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors

continue to adopt the going concern basis of accounting in preparing the financial statements.

Basis of consolidation

The consolidated financial statements present the results of the Group and it's own subsidiaries ("the group") as they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

85% of the shares in Raisco Limited were acquired on 1 August 2008 with the remaining 15% purchased 31 August 2009. Raisco Limited has been consolidated on the acquisition method of accounting.

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.

Turnover

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

Revenue from contracts for the rendering of services is recognised by reference to the stage of completion of the contract. Applications for payment are issued throughout the duration of a contract based on work carried out and income is recognised at the date of application. Provision is made for any expected variations and losses on all contracts in the year in which they are foreseen.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2008, is being amortised evenly over its estimated useful life of ten years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Freehold property

-

not provided

Improvements to property

-

not provided

Plant and machinery

-

25% on cost, 15% on cost and 10% on cost

Fixtures and fittings

-

25% on cost

Motor vehicles

-

25% on reducing balance

Computer equipment

-

25% on cost

No depreciation is provided on freehold property and improvements to the property as the directors believe that the estimated residual value is not materially different from the carrying amounts of the asset in the financial statements and there is a policy of regular repair expenditure to maintain the property in its original condition being expensed to profit and loss.

Investment property

Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit or loss.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

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.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit and loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financial transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.