REGISTERED NUMBER: 10079648 (England and Wales)

Group Strategic Report, Report of the Director and

Consolidated Financial Statements for the Year Ended 31 March 2025

for

Macon Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Director

4

Report of the Independent Auditors

6

Consolidated Profit and Loss Account

10

Consolidated Other Comprehensive Income

11

Consolidated Balance Sheet

12

Company Balance Sheet

13

Consolidated Statement of Changes in Equity

14

Company Statement of Changes in Equity

15

Consolidated Cash Flow Statement

16

Notes to the Consolidated Cash Flow Statement

17

Notes to the Consolidated Financial Statements

18

DIRECTOR:

M A Mayock

REGISTERED OFFICE:

Unit 10

Monks Brook Industrial Estate

Chandlers Ford

Hampshire

SO53 4RA

REGISTERED NUMBER:

10079648 (England and Wales)

AUDITORS:

Harold Sharp Limited

5 Brooklands Place

Brooklands Road

Sale

Cheshire

M33 3SD

The director presents his strategic report of the company and the group for the year ended 31 March 2025.

REVIEW OF BUSINESS

The principal activity of the group is that of groundworks and civil engineering services and plant and machinery hire.

The directors monitor turnover, gross margins and working capital as key performance indicators, as well as other metrics to assess progress and performance on contracts.

The group's turnover for the financial year was £23,306,929 (2024 - £21,034,950).

The gross profit for the financial year was £1,561,477 (2024 - £3,354,930).

The net (loss)/profit for the year after taxation was (£440,229) (2024 profit - £1,058,012).

Net assets decreased to £4,992,767 (2024 - £5,557,996).

Fixed assets decreased to £1,413,428 (2024 - £1,614,734).

During the latter part of the financial year, there was a noticeable repeat decline in new contract wins between Q3 and Q4 following the same pattern experienced in the same quarters of 2024. This was primarily attributable to the Bank of England's base rate increase to 5% in the Summer of 2023, which prompted our clients to adopt a more cautious stance on capital expenditure.

Our clients still continued to focus on reducing overheads and withheld site releases unless a sale had already been secured. This 'WIP build release' approach ensured they only invested further once there was confirmed demand, rather than maintaining excess housing stock. Housebuilders were vocal in declaring that their budgets were not viable, having purchased land during stronger markets, seeing reduced sales figures as well as increased planning and build costs.

Concurrent with these challenges, our commercial department continued to negotiate price adjustments on existing contracts that have now spanned multiple financial years, much more prolonged than the initial contracts had been agreed. Material, labour resourcing and service costs continued to rise, outpacing many of the negotiated uplifts. This cost inflation narrowed profit margins and required disciplined cost control measures.

There is some positive momentum as Mackoy continues to tender new contracts, more than in previous years, with new contract leads steadily increasing.

Looking ahead, we anticipate ongoing growth in contract awards, despite the persistent backdrop of elevated interest rates. This is backed up by Mackoy achieving 8 new groundwork sites for 2026/27.

These enhancements position the company to respond effectively to rising demand and strengthen our ability to deliver consistent, high-quality groundworks and civil engineering services.

FUTURE DEVELOPMENTS

The directors anticipate no changes to the group's principal activities.

PRINCIPAL RISKS AND UNCERTAINTIES

Management Risks

Within the groundworks and civil engineering services, we have three appointed directors, each with their areas of responsibilities, against which there is a management team supporting them. We have within the financial year increased the internal management team structure to cover key risk areas such as construction performance, quality and safety, which we believe will require further key focus from our clients.

In all service areas, strategic matters and future development decisions are undertaken by the board of directors, utilising any necessary advisory services from qualified, experienced advisors.

Credit Risk

The group's companies each adopt credit control rules with its customers, regularly reviewing customer sales and payment performance to reduce risk within this area.

Financial Risks

The group's companies primarily manage their cash and borrowing requirements to ensure sufficient working liquid resources to meet the operational needs of the business, while at the same time seeking to minimise any interest expense.

Operating Risk

The group actively seeks to invest and train all people within the business who have an active part in our operations, to ensure that they adopt best practises, and adhere to industry standards and regulations, wherever possible and to the highest level that we and our customers expect.

ON BEHALF OF THE BOARD:

M A Mayock - Director

23 December 2025

The director presents his report with the financial statements of the company and the group for the year ended 31 March 2025.

PRINCIPAL ACTIVITY

Macon Limited is the holding company of the following:

Mackoy Limited

Macmanus Limited

The principal activities of the group were groundworks and civil engineering services, plant and machinery hire, and land development services.

DIVIDENDS

An interim dividend of £125,000 on the Ordinary A £1 shares was paid during the year. The director recommends that no final dividend be paid on these shares.

No interim dividend was paid on the Ordinary £1 shares during the year. The director recommends that no final dividend be paid on these shares.

DIRECTOR

M A Mayock held office during the whole of the period from 1 April 2024 to the date of this report.

FINANCIAL INSTRUMENTS

Objectives and policies

The group's principal financial instruments comprise of bank balances, trade debtors, trade creditors, hire purchase contracts, loans from directors and bank loans. The main purpose of these instruments is to finance the business' operations.

Price risk, credit risk, liquidity risk and cash flow risk

Price risk

Competitive pressure in the industry is a continuing risk for the group and might result in the loss of sales to key competitors. The company endeavours to alleviate this risk by continuing to maintain strong relationships with its customers and using key reliant suppliers.

Liquidity risk

The group actively maintains a mixture of long-term and short-term debt finance, in the form of hire purchase agreements and loans which are designed to ensure that the group has sufficient funds for its operations and any planned expansion, along with also taking into account the interest rate cost of different types of debt.

Interest rate cash flow risk

The group has both interest bearing assets, in the form of cash balances and interest bearing liabilities. Credit ratings are taken into account where cash balances are held in financial institutions.

Business risk

The directors consider the retention and renewal of contract work to be the principal risk to the business. The directors believe that by maintaining the quality of service and standards this risk can be mitigated.

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, Harold Sharp Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

M A Mayock - Director

23 December 2025

Opinion

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

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 March 2025 and of the group's 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 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 five, 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 focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including The Companies Act 2006.

- we obtained an understanding of the legal and regulatory framework applicable to the entity and how the entity is complying with the framework by making appropriate enquiries of management as well as considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulation:

- we made enquiries of those charged with governance and management concerning:

- the risk of fraud;

- instances of non-compliance with laws and regulations or knowledge of actual, suspected, or alleged fraud is documented during the period;

- we allocated an engagement team that we considered collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations.

Based on the results of our risk assessment, our procedures included, but were not limited to:

- performing analytical procedures to identify any unusual or unexpected relationships.

- evaluation whether the selection and application of accounting policies by the entity that may be indicative of fraudulent financial reporting resulting from management's efforts to manage earning.

- assessing whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias.

- agreeing financial statement disclosures to underlying supporting documentation.

- reading the minutes of meetings of those charged with governance.

- reviewing the correspondence with relevant regulatory bodies.

- testing of journal entries to address the risk of fraud through management override.

- incorporating an element of unpredictability in the selection of the nature, timing, and extent of our audit procedures.

- corroborating the business rationale for transactions outside the normal course of business.

CONCLUSIONS REGARDING THE RISKS OF IRREGULARITIES INCLUDING FRAUD

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

We considered our audit was capable of dete

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.

Frederick Norman (Senior Statutory Auditor)

for and on behalf of Harold Sharp Limited

5 Brooklands Place

Brooklands Road

Sale

Cheshire

M33 3SD

24 December 2025

TURNOVER

3

23,306,929

21,034,950

Cost of sales

21,745,452

17,680,020

GROSS PROFIT

1,561,477

3,354,930

Administrative expenses

2,042,222

1,805,431

(480,745

)

1,549,499

Other operating income

26,273

29,175

OPERATING (LOSS)/PROFIT

5

(454,472

)

1,578,674

Interest payable and similar expenses

6

152,713

144,495

(LOSS)/PROFIT BEFORE TAXATION

(607,185

)

1,434,179

Tax on (loss)/profit

7

(166,956

)

376,167

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(440,229

)

1,058,012

(Loss)/profit attributable to:

Owners of the parent

(440,229

)

1,058,012

(LOSS)/PROFIT FOR THE YEAR

(440,229

)

1,058,012

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(440,229

)

1,058,012

Total comprehensive income attributable to:

Owners of the parent

(440,229

)

1,058,012

FIXED ASSETS

Tangible assets

11

1,413,428

1,614,734

Investments

12

-

-

1,413,428

1,614,734

CURRENT ASSETS

Stocks

13

1,634,185

1,609,198

Debtors

14

9,589,138

7,894,707

Cash at bank

958,658

1,065,592

12,181,981

10,569,497

CREDITORS

Amounts falling due within one year

15

6,419,197

4,728,784

NET CURRENT ASSETS

5,762,784

5,840,713

TOTAL ASSETS LESS CURRENT LIABILITIES

7,176,212

7,455,447

CREDITORS

Amounts falling due after more than one year

16

(1,992,636

)

(1,642,228

)

PROVISIONS FOR LIABILITIES

19

(190,809

)

(255,223

)

NET ASSETS

4,992,767

5,557,996

CAPITAL AND RESERVES

Called up share capital

20

500

500

Group reconstruction reserve

21

1,642,998

1,642,998

Retained earnings

21

3,349,269

3,914,498

SHAREHOLDERS' FUNDS

4,992,767

5,557,996

The financial statements were approved by the director and authorised for issue on 23 December 2025 and were signed by:

M A Mayock - Director

FIXED ASSETS

Tangible assets

11

-

-

Investments

12

200

200

200

200

CURRENT ASSETS

Debtors

14

276,067

275,895

Cash at bank

8,898

9,070

284,965

284,965

CREDITORS

Amounts falling due within one year

15

271,765

271,765

NET CURRENT ASSETS

13,200

13,200

TOTAL ASSETS LESS CURRENT LIABILITIES

13,400

13,400

CAPITAL AND RESERVES

Called up share capital

20

500

500

Retained earnings

12,900

12,900

SHAREHOLDERS' FUNDS

13,400

13,400

Company's profit for the financial year

125,000

136,000

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

The financial statements were approved by the director and authorised for issue on 23 December 2025 and were signed by:

M A Mayock - Director

Called up

Group

share

Retained

reconstruction

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 April 2023

500

2,992,486

1,642,998

4,635,984

Changes in equity

Dividends

-

(136,000

)

-

(136,000

)

Total comprehensive income

-

1,058,012

-

1,058,012

Balance at 31 March 2024

500

3,914,498

1,642,998

5,557,996

Changes in equity

Dividends

-

(125,000

)

-

(125,000

)

Total comprehensive income

-

(440,229

)

-

(440,229

)

Balance at 31 March 2025

500

3,349,269

1,642,998

4,992,767

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2023

500

12,900

13,400

Changes in equity

Dividends

-

(136,000

)

(136,000

)

Total comprehensive income

-

136,000

136,000

Balance at 31 March 2024

500

12,900

13,400

Changes in equity

Dividends

-

(125,000

)

(125,000

)

Total comprehensive income

-

125,000

125,000

Balance at 31 March 2025

500

12,900

13,400

Cash flows from operating activities

Cash generated from operations

1

337,578

1,314,125

Interest paid

(104,854

)

(80,571

)

Interest element of hire purchase payments paid

(47,859

)

(63,924

)

Tax paid

(161,903

)

(58,209

)

Net cash from operating activities

22,962

1,111,421

Cash flows from investing activities

Purchase of tangible fixed assets

(172,327

)

(853,666

)

Sale of tangible fixed assets

126,360

55,325

New finance leases in year

-

166,766

Net cash from investing activities

(45,967

)

(631,575

)

Cash flows from financing activities

New loans in year

1,430,000

325,500

Loan repayments in year

(1,048,641

)

(224,626

)

Capital repayments in year

(214,934

)

(134,267

)

Amount introduced by directors

290,000

384,000

Amount withdrawn by directors

(440,354

)

(690,113

)

Inter-company loan

25,000

-

Equity dividends paid

(125,000

)

(136,000

)

Net cash from financing activities

(83,929

)

(475,506

)

(Decrease)/increase in cash and cash equivalents

(106,934

)

4,340

Cash and cash equivalents at beginning of year

2

1,065,592

1,061,252

Cash and cash equivalents at end of year

2

958,658

1,065,592

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

31.3.25

31.3.24

£

£

(Loss)/profit before taxation

(607,185

)

1,434,179

Depreciation charges

300,246

303,983

Profit on disposal of fixed assets

(52,972

)

(15,577

)

Finance costs

152,713

144,495

(207,198

)

1,867,080

Increase in stocks

(24,987

)

(39,068

)

Increase in trade and other debtors

(1,544,077

)

(356,857

)

Increase/(decrease) in trade and other creditors

2,113,840

(157,030

)

Cash generated from operations

337,578

1,314,125

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

958,658

1,065,592

Year ended 31 March 2024

31.3.24

1.4.23

£

£

Cash and cash equivalents

1,065,592

1,061,252

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.4.24

Cash flow

At 31.3.25

£

£

£

Net cash

Cash at bank

1,065,592

(106,934

)

958,658

1,065,592

(106,934

)

958,658

Debt

Finance leases

(875,434

)

214,934

(660,500

)

Debts falling due within 1 year

(1,167,035

)

320,231

(846,804

)

Debts falling due after 1 year

(1,003,514

)

(701,590

)

(1,705,104

)

(3,045,983

)

(166,425

)

(3,212,408

)

Total

(1,980,391

)

(273,359

)

(2,253,750

)

1.	STATUTORY INFORMATION

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

2.	ACCOUNTING POLICIES

Accounting convention

These financial statements have been prepared in accordance with FRS 102 "The financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

The financial statements have been prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principle accounting policies adopted are set out below.

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 recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

When cash inflows are deferred and represent a financial agreement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and reward of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The state of completion is calculated through agreement of the stage of completion with the customer, with revenue recognised proportionally to the stage of completion of the project against the value of the total contract. Where variations to the original contract occur, these are accounted for when approved by the client and when work has been completed..

Revenue Recognition

In respect of long-term contracts for on-going services, turnover represents the value of work done in the year. Turnover and costs in respect of long-term contracts and contracts for on-going services are recognised by reference to the stage of completion.

The stage of completion of contracts in progress is determined using the proportion that costs incurred for work performed to date bear to the estimated total costs. The amount of cost incurred to date as a proportion of total estimated costs to complete is applied to the estimated total turnover to identify the proportion of total turnover earned.

Retentions are released to the profit and loss account as income when the work is carried out and the company makes provision against retentions when considered necessary.

Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of valuation of assets less their residual values over their useful lives on the following bases:

Plant and Machinery - 25% Reducing balance

Fixtures and Fittings - 25% Reducing balance

Motor Vehicles - 25% Reducing balance

Computer Equipment - 25% Reducing balance

The gain or loss arising on the disposal of any asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Freehold Property - the group acquired a freehold property during the year. The property will be depreciated from 1 April 2019 at 2% pa (excluding the cost of land).

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit and loss. Reversals of impairment losses are also recognised in profit and loss.

Financial instruments

The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company 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 amotised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators or 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 or 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 and 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 company 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.