REGISTERED NUMBER: 15290819 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD

17 NOVEMBER 2023 TO 31 DECEMBER 2024

FOR

FSG SERVICES GROUP LTD

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Consolidated Income Statement

9

Consolidated Other Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

17

DIRECTORS:

Mr A Huckle

Mr J D Lennox

Mr S Milne

Mr G J Young

REGISTERED OFFICE:

Unit 2

Blackhill Drive

Wolverton Mill

Milton Keynes

MK12 5TS

REGISTERED NUMBER:

15290819 (England and Wales)

AUDITORS:

Xeinadin Audit Limited Chartered Accountants

Statutory Auditor

8th Floor, Becket House

36 Old Jewry

London

EC2R 8DD

The directors present their strategic report of the company and the group for the period 17 November 2023 to 31 December 2024.

GROUP OVERVIEW

Together, the group provides a full lifecycle property service, from day-to-day repairs to specialist refurbishment installations and large-scale construction, with cross-business collaboration supporting operational efficiency and growth.

2024 was a year of consolidation, restructuring, and strategic positioning across the Group. While each company operates in distinct segments, they share common objectives of improving performance, strengthening operational structures, and building a diversified, resilient order book for 2025 and beyond.

REVIEW OF BUSINESS

The result for the year is shown on page 9. As shown in the profit and loss account, the group's operating profit for the period was £188,766.

The group's balance sheet on page 11 shows net liabilities of £150,151 at the end of the period, with a cash position of £369,646.

FSG Services Group Limited continues to act as the holding company for the group.

The Group delivered a year of operational strengthening and strategic repositioning across its property services businesses.

Major framework mobilisation work, particularly under the expanded Amplius (formerly Grand Union Housing) contract, drove significant investment in structure, workforce alignment, and systems integration, laying the groundwork for improved margins and scalable growth in 2025. Operational resilience was demonstrated through the resolution of a major remediation issue and the shift toward more flexible blended labour models.

Demand remained strong across core maintenance and small works activities, while the Group also advanced its capabilities in renewable technologies, including solar, heat pumps, and related systems. This positions the Group to capitalise on increasing environmental and regulatory drivers, supporting continued expansion in both social housing and commercial markets.

PRINCIPAL RISKS AND UNCERTAINTIES

Market & Client Concentration - Dependence on a small number of large contracts poses a revenue concentration risk.

Supply Chain & Materials Inflation - Construction and maintenance sectors continue to experience volatility in material pricing and availability.

Subcontractor Availability - Reliance on subcontractors for multi-trade delivery creates exposure to labour shortages and inconsistent quality if not carefully managed.

Health & Safety Compliance - As works are often carried out in occupied homes; safety, safeguarding, and compliance with housing sector regulations remain critical risks.

Regulatory/Policy Changes - Shifts in housing standards, environmental regulations, or procurement frameworks may affect contract conditions and profitability.

KEY PERFORMANCE INDICATORS (KPI'S)

Across the Group, KPIs include both operational and financial measures:

Operational KPIs

· Contract delivery within service levels and agreed programmes

· Client satisfaction and complaint resolution metrics

· Health & safety performance across all workstreams

Financial KPIs

· Gross profit margin

· Turnover growth

· Cash conversion

- Client satisfaction - the group continuously strives to be better and maintains good relationships with its clients. The group in the main, only works on large projects for long term clients who understand the group's way of working, having formed an understanding on and off site over the years.

- Employee Satisfaction - whilst employment in the industry is probably at its most competitive, the group has still managed to maintain key staff which has been a factor in the group's growth.

- Qualifications and Skills - regularly kept up to date and in line with the Construction Industry Standards.

- Fixed assets - group's growth has resulted in constant vehicle and plant purchases.

FUTURE OUTLOOK

The Group enters 2025 with a strong and diversified platform for growth.

· Poised for margin improvement and operational strengthening, with a secure order book across repairs, planned works, and small works.

· Well positioned to grow in the high-demand renewables sector while maintaining a strong presence in the roofing and property maintenance market.

· Secured pipeline of major new build projects for 2026 provides medium-term revenue certainty and supports continued development of capability in large-scale construction.

The Group’s diversification across social housing, private sector, renewables, repairs, and construction provides resilience and a strong foundation for sustainable growth.

EMPLOYEES

The policy of the group is to employ the most suitably qualified persons regardless of age, religion, gender, sexual orientation or ethnic origin or any other grounds not related to a person's ability to work safely and effectively for the business. FSG recognises the importance of ensuring that relevant business information is provided to the employees prior to the employee's commencement date. This is achieved through initial induction (Health Questionnaire, Health & Safety, Anti-Bribery Policy, Skills and Qualifications Assessment) and regular training as required per the Construction Industry Standards.

ON BEHALF OF THE BOARD:

Mr J D Lennox - Director

31 December 2025

The directors present their report with the financial statements of the company and the group for the period 17 November 2023 to 31 December 2024.

INCORPORATION

The group was incorporated on 17 November 2023 and commenced trading on 9 January 2024.

DIVIDENDS

No dividends will be distributed for the period ended 31 December 2024.

DIRECTORS

The directors who have held office during the period from 17 November 2023 to the date of this report are as follows:

Mr A Huckle - appointed 9 January 2024

Mr J D Lennox - appointed 17 November 2023

Mr S Milne - appointed 9 January 2024

Mr G J Young - appointed 9 January 2024

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.

ON BEHALF OF THE BOARD:

Mr J D Lennox - Director

31 December 2025

Opinion

We have audited the financial statements of FSG Services Group Ltd (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 December 2024 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated 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 December 2024 and of the group's loss for the period then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the 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 four, 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:

The engagement partner ensured that the 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 through discussions with directors and other management, and from our commercial knowledge and experience of the group's sector;

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, taxation legislation, data protection, employment including IR35 rules, legislations applicable to building trade, 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 where necessary.

We assessed the susceptibility of the group's 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; and 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 transactions;

-tested the appropriateness of journal entries;

-assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and investigated the rationale behind significant or unusual transactions.

To address the risk that revenue could be misstated due to fraud, we:

-we obtained an understanding of the group's revenue recognition policies and compared these to the accounting standard;

-performed a walkthrough test to confirm our understanding of the processes and controls through which the business initiates, records, processes and reports revenue transactions;

-tested a sample of revenue transactions to supporting evidence; and tested, on a sample basis, revenue related balances in the balance sheet.

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;

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

-reviewing correspondence with HMRC, relevant regulators, and the company's legal advisors.

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. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

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.

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.

Thurairatnam Sudarshan FCCA (Senior Statutory Auditor)

for and on behalf of Xeinadin Audit Limited Chartered Accountants

Statutory Auditor

8th Floor, Becket House

36 Old Jewry

London

EC2R 8DD

31 December 2025

TURNOVER

3

19,383,710

Cost of sales

(15,429,730

)

GROSS PROFIT

3,953,980

Administrative expenses

(3,902,719

)

51,261

Other operating income

137,505

OPERATING PROFIT

5

188,766

Interest receivable and similar income

1,917

190,683

Interest payable and similar expenses

6

(164,587

)

PROFIT BEFORE TAXATION

26,096

Tax on profit

7

(54,820

)

LOSS FOR THE FINANCIAL PERIOD

(28,724

)

Loss attributable to:

Owners of the parent

(28,724

)

LOSS FOR THE PERIOD

(28,724

)

OTHER COMPREHENSIVE INCOME

-

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

(28,724

)

Total comprehensive income attributable to:

Owners of the parent

(28,724

)

FIXED ASSETS

Tangible assets

9

579,375

Investments

10

-

579,375

CURRENT ASSETS

Stocks

11

1,377,977

Debtors

12

3,445,024

Cash at bank and in hand

369,646

5,192,647

CREDITORS

Amounts falling due within one year

13

4,222,175

NET CURRENT ASSETS

970,472

TOTAL ASSETS LESS CURRENT LIABILITIES

1,549,847

CREDITORS

Amounts falling due after more than one year

14

(1,578,627

)

PROVISIONS FOR LIABILITIES

18

(121,371

)

NET LIABILITIES

(150,151

)

CAPITAL AND RESERVES

Called up share capital

19

1,000

Retained earnings

20

(151,151

)

SHAREHOLDERS' FUNDS

(150,151

)

The financial statements were approved by the Board of Directors and authorised for issue on 31 December 2025 and were signed on its behalf by:

Mr J D Lennox - Director

FIXED ASSETS

Tangible assets

9

-

Investments

10

432,226

432,226

CURRENT ASSETS

Debtors

12

209,371

Cash at bank and in hand

27,958

237,329

CREDITORS

Amounts falling due within one year

13

200,531

NET CURRENT ASSETS

36,798

TOTAL ASSETS LESS CURRENT LIABILITIES

469,024

CAPITAL AND RESERVES

Called up share capital

19

1,000

Share premium

20

432,226

Retained earnings

20

35,798

SHAREHOLDERS' FUNDS

469,024

Company's profit for the financial year

35,798

The financial statements were approved by the Board of Directors and authorised for issue on 31 December 2025 and were signed on its behalf by:

Mr J D Lennox - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Changes in equity

Issue of share capital

1,000

-

1,000

Total comprehensive income

-

(28,724

)

(28,724

)

Pre acquisition reserves

-

(122,427

)

(122,427

)

Balance at 31 December 2024

1,000

(151,151

)

(150,151

)

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Changes in equity

Issue of share capital

1,000

-

432,226

433,226

Total comprehensive income

-

35,798

-

35,798

Balance at 31 December 2024

1,000

35,798

432,226

469,024

Cash flows from operating activities

Cash generated from operations

1

651,218

Interest paid

(126,697

)

Interest element of hire purchase payments paid

(37,890

)

Tax paid/received

(3,120

)

Net cash from operating activities

483,511

Cash flows from investing activities

Purchase of tangible fixed assets

(254,136

)

Sale of tangible fixed assets

70,916

Cash inflow on acquisition

575,226

Interest received

1,917

Net cash from investing activities

393,923

Cash flows from financing activities

Loan repayments in year

(475,960

)

Capital repayments in year

(56,062

)

Net amount from directors

23,234

Share issue

1,000

Net cash from financing activities

(507,788

)

Increase in cash and cash equivalents

369,646

Cash and cash equivalents at beginning of period

2

-

Cash and cash equivalents at end of period

2

369,646

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

£

Profit before taxation

26,096

Depreciation charges

315,144

Profit on disposal of fixed assets

(3,987

)

Loss on revaluation of fixed assets

26,300

Finance costs

164,587

Finance income

(1,917

)

526,223

Increase in stocks

(327,904

)

Increase in trade and other debtors

(911,738

)

Increase in trade and other creditors

1,364,637

Cash generated from operations

651,218

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:

Period ended 31 December 2024

31.12.24

17.11.23

£

£

Cash and cash equivalents

369,646

-

3.	ANALYSIS OF CHANGES IN NET DEBT

At 17.11.23

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank and in hand

-

369,646

369,646

-

369,646

369,646

Debt

Finance leases

-

(640,806

)

(640,806

)

Debts falling due within 1 year

-

(205,374

)

(205,374

)

Debts falling due after 1 year

-

(890,399

)

(890,399

)

-

(1,736,579

)

(1,736,579

)

Total

-

(1,366,933

)

(1,366,933

)

1.	STATUTORY INFORMATION

FSG Services Group 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 (£).

Rounding

All financial figures have been rounded off to the nearest pound.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

FSG Services Group Limited (the "Company") is a company limited by shares and incorporated and domiciled in the UK.

These group and parent company financial statements were prepared in accordance with Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of lreland ("FRS 102'').

The parent company is included in the consolidated financial statements, and is considered to be a qualifying entity under FRS 102 paragraphs 1.8 to 1.12. The following exemptions available under FRS 102 in respect of certain disclosures for the parent company financial statements have been applied:

- The reconciliation of the number of shares outstanding from the beginning to the end of the period has not been included a second time;

- No separate parent company Cash Flow Statement with related notes is included; and

- The disclosures required by FRS 102.11 Basic Financial Instruments and FRS 102.12 Other Financial Instrument Issues in respect of financial instruments not falling within the fair value accounting rules of Paragraph 36(4) of Schedule 1.

The accounting policies set out below have, unless otherwise stated, been applied consistently to the first period presented in these financial statements.

The financial statements are prepared on the historical cost basis.

Basis of consolidation

The group financial statements consolidate the results and balance sheets of FSG Services Group Limited and its subsidiaries undertakings drawn up to 31 December using acquisition method of accounting. The results of the subsidiaries acquired on 9 January 2024 are consolidated for the period of ownership by the group using acquisition basis accounting.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the group's accounting policies, which are described above, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

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

The key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are described below;

- assessing the recoverability of outstanding debtors; and

- estimating future income and expenditure flows for the purpose of assessing the group’s going concern.

Turnover

Turnover is recognised based upon an internal assessment of the value of work carried out. This assessment is arrived at after due consideration of the performance against the programme of works, measurement of the works, evaluation of the costs incurred and comparison to certification of the work performed.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Plant and machinery

-

20% on cost

Fixtures and fittings

-

25% on cost

Motor vehicles

-

25% on cost

Computer equipment

-

25% on cost

Depreciation methods, useful lives and residual values are reviewed if there is an indication of a significant change since last annual reporting date in the pattern by which the company expects to consume an asset's future economic benefits.

Stocks

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

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition.

Financial instruments

Basic financial assets, including trade and other receivables and cash and bank balances, are initially recognised at transaction price, 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.

Such assets are subsequently carried at amortised cost using the effective interest method.

Basic financial liabilities, including trade and other payables, bank loans, and preference shares that are classified as debt, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

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

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

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

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Assets that are held by the company under leases which transfer to the group substantially all the risks and rewards of ownership are classified as being held under finance leases. Leases which do not transfer substantially all the risks and rewards of ownership to the group are classified as operating leases.

Assets held under finance leases are initially recognised as assets of the group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the group's policy on borrowing costs (see the accounting policy above). Contingent rentals are recognised as expenses in the periods in which they are incurred.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straightline basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. A defined contribution plan is a post-employment benefit plan under which the company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss account in the periods during which services are rendered by employees.

Trade and other debtors

Trade and other debtors are initially recognised at the transaction price and thereafter stated at amortised cost using the effective interest method, less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases, the receivables are stated at cost less impairment losses for bad and doubtful debts.

Trade and other creditors

Trade and other creditors are initially recognised at the transaction price and are thereafter stated at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

Going concern

The directors have prepared forecasts including projected cash flows for twelve months from the date of their approval of these financial statements. These forecasts indicate that the group will be able to meet its working capital requirements through its existing facilities and continued support of the directors.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the group.

An analysis of turnover by geographical market is given below:

£

United Kingdom

19,383,710

19,383,710

4.	EMPLOYEES AND DIRECTORS

£

Wages and salaries

4,370,876

Social security costs

110,463

Other pension costs

72,522

4,553,861

The average number of employees during the period was as follows:

39

The average number of employees by undertakings that were proportionately consolidated during the period was 39 .

£

Directors' remuneration

492,144

Information regarding the highest paid director is as follows:

£

Emoluments etc

185,625

5.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

£

Hire of plant and machinery

22,540

Depreciation - owned assets

39,183

Depreciation - assets on hire purchase contracts

272,697

Profit on disposal of fixed assets

(3,987

)

Auditors' remuneration

40,498

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

£

Bank loan interest

106,716

Other interest

8,816

HMRC interest

1,762

Mortgage

9,403

Hire purchase

37,890

164,587

7.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the period was as follows:

£

Current tax:

UK corporation tax

63,057

Deferred tax

(8,237

)

Tax on profit

54,820

Reconciliation of total tax charge included in profit and loss

The tax assessed for the period is higher than the standard rate of corporation tax in the UK. The difference is explained below:

£

Profit before tax

26,096

Profit multiplied by the standard rate of corporation tax in the UK of 23.218 %

6,059

Effects of:

Expenses not deductible for tax purposes

6,728

Income not taxable for tax purposes

157,084

Depreciation in excess of capital allowances

25,300

Utilisation of tax losses

(131,716

)

Adjustments to tax charge in respect of previous periods

(398

)

Deferred tax

(8,237

)

Total tax charge

54,820