REGISTERED NUMBER: 05800388 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 May 2025

for

Thor Atkinson Steel Fabrications Ltd

Page

Company Information

1

Strategic Report

2

Report of the Directors

6

Report of the Independent Auditors

7

Income Statement

9

Balance Sheet

10

Statement of Changes in Equity

11

Cash Flow Statement

12

Notes to the Cash Flow Statement

13

Notes to the Financial Statements

15

DIRECTORS:

T P Atkinson

Mrs J Atkinson

REGISTERED OFFICE:

Fabrication House

Newland

Ulverston

Cumbria

LA12 7SH

REGISTERED NUMBER:

05800388 (England and Wales)

INDEPENDENT AUDITORS:

Hillier Hopkins LLP

Statutory Auditor

First Floor, Radius House

51 Clarendon Road

Watford

Hertfordshire

WD17 1HP

ACCOUNTANTS:

RF Miller & Co Ltd

Doubletree Court,

10a Cavendish Street,

Ulverston,

Cumbria,

England,

LA12 7AD

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

REVIEW OF BUSINESS

The Company's principal activities are the provision of steel fabrication and quarry services together with mobile crushing and demolition services to the quarry industry. The Company also fabricates and erects steel framed buildings for the industrial and agricultural sectors.

The performance in this financial year shows continued stability following the COVID pandemic, with the bounce back in sales maintained with an increase on the prior year. The results show a 3.6% increase in the gross profit margin which is aided to management of direct costs throughout the year.

The strategic review covered all three business sectors. The focus was ensuring that work would only be accepted if it would generate acceptable margins. This has been achieved by a combination of cost saving and supply chain initiatives together with ensuring that cost increases are managed effectively by limiting the validity of quote times and maintaining the labour rate increases put in place in the prior year. The volatility of steel and other commodity prices due to the ongoing conflict in Ukraine and global energy shortages made this important to maintain. The company continued to develop its most profitable demolition sector.

The company has continued to service its loans during the year, the overdraft at the bank has decreased but within the limit set by the bank. New equipment purchased in the year was mainly financed by hire purchase arrangements to continue investment in the business, whilst maintaining sufficient cashflows. Debt potentially repayable within one year has decreased from 31.4% to 29.7%, mainly due to a reduction in the bank overdraft balance at the year end and represents a reduction from 2023.

PRINCIPAL RISKS AND UNCERTAINTIES

Market demand risk

The market in which the Company operates is closely linked to general economic conditions, in particular the level of public and private investment in infra structure. Projects such as roads and rail links, which affect investment in the quarry industry, together with small scale industrial buildings and investment incentives to the agricultural sector will also affect demand. The Company has sought to diversify its customer base so that it is less dependent on quarries. The Company has obtained contracts in the recycling and water treatment sectors as well as supplying fabricated items to a major concrete plant manufacturer. The Company also notes the government's recent commitment to long-term infra structure development and to existing projects for the next two years.

Competition risk

The Company operates throughout the UK mainland and faces local competition from several companies. The Company maintains strong relations with its customers and has obtained preferred supplier status in several geographical areas, which it seeks to maintain by providing the highest level of training to staff and compliance with industry standards.

Credit risk

Credit risk is the potential exposure of the Company to loss in the event of non-payment by a customer. The Company controls the risk through monitoring existing and potential new customers through information provided by credit agencies.

Borrowing risk

The Company has borrowing facilities with its principal banker which are reviewed annually. During the past two years, the Company has invested heavily in new plant to support the mobile crushing business stream, as well as the increased capacity provided by the recent workshop extension. These have been funded largely through lease-purchase finance and short-term funding loans.

As noted in the Business Review above, the Company has over the last two years completed a thorough review of its banking and finance requirements and put in place facilities which it considers to be appropriate to its needs.

Bank of England base rates rose from 4.50% on 1 June 2023 peaking at 5.25% in August 2023 where they remained until August 2024. High interest rates affected the debt service requirements of the Company. Almost 59% of the Company's debt is in the form of HP liabilities where the financing cost is effectively fixed at inception which means that new financing agreement will reflect the latest interest rates. The Company continues to manage its cash flow on a day-to-day basis to ensure that short-term borrowing facilities such as the overdraft are used as efficiently as possible.

The ongoing invasion of Ukraine and growth of far eastern economies have had and will continue to have a significant impact on commodity prices, especially those of fuel and steel. (Ukraine and Russia are significant suppliers of certain types of steel). Although the market continues to adjust to these supply changes, the Company has sought to mitigate its exposure to price fluctuations by limiting the validity of quote times and negotiating payment terms with customers which allow commodities to be ordered earlier than previously to guarantee prices.Electricity contracts are continued to be reviewed with these being reviewed annually. Post year end a new electricity contract has been agreed from October 2025 taking advantage of lower market rates.

Talent risk

The Company is a relatively small business based in an area of low population density. Loss of key employees could result in the failure of the business to operate at a level at which it is able to maintain customer satisfaction. The Company provides rewards packages which it considers reflect the market rate for such roles and encourages staff to undertake training and professional development to upskill them to levels where higher rewards can be earned.

Health and safety environment

The health and safety of our workforce is of paramount importance as failure to adhere to the highest standards could result in both personal and reputational damage, resulting in loss of confidence by staff and customers. The Company engages staff in extensive training, both online and face to face. The Company holds health and safety accreditations from several organisations including ROSPA (gold award), has achieved ISO 45001 accreditation as well as maintaining Safety Schemes in Procurement (SIPP) accreditation.

Financial key performance indicators

Key performance indicators (KPI's) are used to review the performance of the Company as a whole and individual business streams. These include Sales volume by sector, profit margins, orders on hand, operating cash flow and overall cash flow.

Business sectors and performance

The Company has identified three business sectors in which it operates.

Steel fabrication and quarry services

This sector is involved in the erection of steel framed buildings, conveyors and other structures for the quarry industry, plus the provision of maintenance services and specialist machine operators. This business continued to form the core of the Company's business, accounting for over 80% of turnover. The Company maintained its sales levels following its return to normal trading in the prior year and continued to meet the challenges of price fluctuations due to external factors by careful management of supply chain and quote validity times. Labour rates have been reviewed annually since they were increased in August 2021, for the first time in four years prior. The emphasis will remain on maintaining strong margins and minimising exposure to fluctuations in input prices.

Mobile crushing

This business began operating in 2018 and supplies mobile crushing services to the quarry and demolition sectors. The Company has previously invested over £2 million in equipment to support a long-term commitment in one quarry which is operated by the Company. The focus remains on margins in this sector and the Company continues to concentrate on the major sites in operation where long term commitment and owned plant existed with the most experienced staff. Labour rates have been reviewed annually as mentioned above.

Demolition services

This business provides demolition and relocation services, predominantly to the quarry sector, where it has preferred supplier status with some customers. Since its acquisition in 2016 this sector has maintained its strong reputation for quality and professionalism where projects are largely bespoke in nature. The business continues to show significant potential and looks to take advantage of increased opportunities in the industry and capacity was doubled in the prior year in favour of these goals.

FUTURE DEVELOPMENTS

Since the year end, the Company has reduced sales volume by 7.5% but increased margin by 1.14%. Net profit has increased by roughly 5% over the previous year. The directors however anticipate strong sales in the final months of the year to 31 May 2025 which will recover some of the volume whilst maintaining higher margin.

In addition, an opportunity has been identified to work more closely with one quarry to boost production and crushing volumes significantly over the medium term. This will require investment in plant and labour which will be more than matched by increased, regular cash inflow from the upscaled project. Management has negotiated with the customer to secure twice monthly measurement and billing.

FINANCIAL INSTRUMENTS

The company has medium exposure to financial risk since it maximises available working capital to continue to operate on a daily basis.

The company maximises the use of financial instruments to continue to reinvest within the business, with a large focus on hire purchase contracts for capital expenditure which can be demonstrated on the balance sheet. Due to maximising working capital for day-to-day operations, there remains a level of exposure to price risk, credit risk, liquidity risk and cash flow risk however this is continued to be monitored on a daily basis to ensure that there is no negative impact had on the overall financial position of the company.

ON BEHALF OF THE BOARD:

T P Atkinson - Director

5 May 2026

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of steel fabrication and quarry services.

DIVIDENDS

The total distribution of dividends for the year ended 31 May 2025 will be £ 500,000 .

DIRECTORS

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

T P Atkinson

Mrs J Atkinson

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO 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 company'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 company's auditors are aware of that information.

AUDITORS

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

ON BEHALF OF THE BOARD:

T P Atkinson - Director

5 May 2026

Disclaimer of opinion

We were engaged to audit the financial statements of Thor Atkinson Steel Fabrications Ltd (the 'Company') for the year ended 31 May 2025 which comprise the Income Statement, Balance Sheet, Statement of Changes in Equity, and the Cash Flow Statement and 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).

We do not express an opinion on the accompanying financial statements of the company. Because of the significance of the matter described in the basis for disclaimer of opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.

Basis for disclaimer of opinion

The financial statements for the year ended 31 May 2024 were not audited by us and the audit opinion expressed by the predecessor auditor was qualified due to their inability to obtain sufficient appropriate audit evidence, nor to satisfy themselves by alternative means, in respect of the following matters:

- Inventories amounting to £169,315, as inventory quantities were not physically counted at 31 May 2024.

- Other loans amounting to £111,457 as at 31 May 2024.

- Social security and other taxes payable amounting to £331,766 as at 31 May 2024.

As part of our audit of the financial statements for the year ended 31 May 2025, we were unable to obtain sufficient appropriate audit evidence to determine whether any adjustments might have been necessary to the comparative information or the opening balances arising from these matters.

In addition, for the year ended 31 May 2025, we were unable to obtain sufficient appropriate audit evidence to substantiate the valuation of work in progress and accrued income, other loans, nor to support the existence and valuation of plant and machinery and motor vehicles included within fixed assets.

As a result of these matters, which are material and pervasive to the financial statements, we were unable to determine whether any adjustments might have been necessary in respect of these balances or the related elements of the financial statements, including the Income Statement, Balance Sheet, Statement of Changes in Equity and the Cash Flow Statement,

.

.

Opinions on other matters prescribed by the Companies Act 2006

Because of the significance of the matter described in the basis for disclaimer of opinion section of our report, we have been unable to form an opinion, whether based on the work undertaken in the course of the audit:

the information given in the strategic report and directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and the strategic report and directors’ report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

Notwithstanding our disclaimer of an opinion on the financial statements, in the light of the knowledge and understanding of the company and its environment obtained in the course of the audit performed subject to the pervasive limitation described above, we have not identified material misstatements in the strategic report.

Arising from the limitation of our work referred to above:

- we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

- we were unable to determine whether adequate accounting records have been kept.

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

- returns adequate for our audit have not been received from branches not visited by us; or

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

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

Responsibilities of directors

As explained more fully in the Director's responsibilities statement set out on page 6, 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 is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the director is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our responsibility is to conduct an audit of the company's financial statements in accordance with International Standards on Auditing (UK) and to issue an auditor's report.

However, because of the matter described in the basis for disclaimer of opinion section of our report, we were

not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these

financial statements.

We are independent of the company 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.

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.

Neal Carter ACA (Senior Statutory Auditor)

for and on behalf of Hillier Hopkins LLP

Statutory Auditor

First Floor, Radius House

51 Clarendon Road

Watford

Hertfordshire

WD17 1HP

18 May 2026

TURNOVER

3

18,824,754

17,571,016

Cost of sales

13,515,128

11,754,271

GROSS PROFIT

5,309,626

5,816,745

Administrative expenses

3,858,478

3,981,233

1,451,148

1,835,512

Other operating income

6,360

2,414

OPERATING PROFIT

5

1,457,508

1,837,926

Interest receivable and similar income

7

23,798

173

1,481,306

1,838,099

Interest payable and similar expenses

8

475,805

376,058

PROFIT BEFORE TAXATION

1,005,501

1,462,041

Tax on profit

9

(497,185

)

414,392

PROFIT FOR THE FINANCIAL YEAR

1,502,686

1,047,649

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,502,686

1,047,649

FIXED ASSETS

Tangible assets

11

6,120,373

4,278,230

CURRENT ASSETS

Stocks

12

528,101

697,749

Debtors

13

5,417,151

3,686,199

5,945,252

4,383,948

CREDITORS

Amounts falling due within one year

14

5,065,957

4,246,495

NET CURRENT ASSETS

879,295

137,453

TOTAL ASSETS LESS CURRENT LIABILITIES

6,999,668

4,415,683

CREDITORS

Amounts falling due after more than one year

15

(3,768,417

)

(2,384,228

)

PROVISIONS FOR LIABILITIES

18

(820,123

)

(623,013

)

NET ASSETS

2,411,128

1,408,442

CAPITAL AND RESERVES

Called up share capital

19

2

2

Retained earnings

20

2,411,126

1,408,440

SHAREHOLDERS' FUNDS

2,411,128

1,408,442

The financial statements were approved by the Board of Directors and authorised for issue on 5 May 2026 and were signed on its behalf by:

T P Atkinson - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 June 2023

2

835,791

835,793

Changes in equity

Dividends

-

(475,000

)

(475,000

)

Total comprehensive income

-

1,047,649

1,047,649

Balance at 31 May 2024

2

1,408,440

1,408,442

Changes in equity

Dividends

-

(500,000

)

(500,000

)

Total comprehensive income

-

1,502,686

1,502,686

Balance at 31 May 2025

2

2,411,126

2,411,128

Cash flows from operating activities

Cash generated from operations

1

1,149,435

2,348,348

Interest paid

(264,260

)

(208,140

)

Interest element of hire purchase payments paid

(192,490

)

(167,918

)

Tax paid

1

165,164

Taxation refund

699,495

-

Net cash from operating activities

1,392,181

2,137,454

Cash flows from investing activities

Purchase of tangible fixed assets

(1,551,928

)

(505,291

)

Sale of tangible fixed assets

405,500

161,977

Interest received

23,798

173

Net cash from investing activities

(1,122,630

)

(343,141

)

Cash flows from financing activities

New HP's in year

1,562,000

-

Capital repayments in year

(693,830

)

(747,241

)

Amount introduced by directors

795,178

966,991

Amount withdrawn by directors

(1,817,071

)

(1,272,042

)

Equity dividends paid

(500,000

)

(475,000

)

Net cash from financing activities

(653,723

)

(1,527,292

)

(Decrease)/increase in cash and cash equivalents

(384,172

)

267,021

Cash and cash equivalents at beginning of year

2

(214,849

)

(481,870

)

Cash and cash equivalents at end of year

2

(599,021

)

(214,849

)

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

31.5.25

31.5.24

£

£

Profit before taxation

1,005,501

1,462,041

Depreciation charges

914,246

799,664

(Profit)/loss on disposal of fixed assets

(47,960

)

32,862

Government grants

(3,000

)

-

Finance costs

475,805

376,058

Finance income

(23,798

)

(173

)

2,320,794

2,670,452

Decrease/(increase) in stocks

169,648

(155,300

)

Increase in trade and other debtors

(1,228,310

)

(48,775

)

Decrease in trade and other creditors

(112,697

)

(118,029

)

Cash generated from operations

1,149,435

2,348,348

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 May 2025

31.5.25

1.6.24

£

£

Bank overdrafts

(599,021

)

(214,849

)

Year ended 31 May 2024

31.5.24

1.6.23

£

£

Bank overdrafts

(214,849

)

(481,870

)

3.	ANALYSIS OF CHANGES IN NET DEBT

Other

non-cash

At 1.6.24

Cash flow

changes

At 31.5.25

£

£

£

£

Net cash

Bank overdrafts

(214,849

)

(384,172

)

(599,021

)

(214,849

)

(384,172

)

(599,021

)

Debt

Finance leases

(1,991,235

)

(1,810,339

)

(1,562,000

)

(3,801,574

)

Debts falling due

within 1 year

(99,997

)

(40,901

)

-

(140,898

)

Debts falling due

after 1 year

(1,086,046

)

(75,735

)

-

(1,161,781

)

(3,177,278

)

(1,926,975

)

(1,562,000

)

(5,104,253

)

Total

(3,392,127

)

(2,311,147

)

(1,562,000

)

(5,703,274

)

1.	STATUTORY INFORMATION

Thor Atkinson Steel Fabrications 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 Company 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.

Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the company 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.

The Directors continue to monitor the financial position of the company using KPIs such as Turnover compared with the same period in the previous year, gross profit margin and operating profit margin. Short term cash flows are also prepared to ensure sufficient working capital is available for short term liabilities, with current year management accounts prepared showing an improvement across the profit and loss and balance sheet.

Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Critical accounting judgements and key sources of estimation uncertainty

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

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

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Fixed assets

The useful life and depreciation rate of tangible fixed assets is reviewed annually and amended when necessary. When assessing the depreciation rates, residual values are considered for certain asset classes at the end of the expected useful life.

Revenue recognition

Management's assessment relating to the recognition of revenue and profit are based on estimates and assumptions regarding the completeness of a project.

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.

Revenue from the sale of goods is recognised when the significant risks and rewards 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, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Tangible fixed assets

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

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

Buildings

2% straight line

Plant and equipment

15% straight line prior to May 2020 / 33% straight line from June 2020 or length of lease

Fixtures and fittings

33% straight line prior to May 2020 / 20% straight line from June 2020

Motor vehicles

15%/33% straight line or length of lease

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

Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

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.

Stocks and work in progress are stated at the lower of cost and estimated costs to complete and sell, 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.

Estimated selling price less costs to complete and sell is based on the estimated selling price of the goods less any estimated completion or selling costs likely to be incurred on the sale.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the 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 year 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.

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more 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 company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

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 of 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 realize 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 and 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 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 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 company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards or 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 creditors, bank loans, loans from fellow group companies 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 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.

Other financial liabilities

All of the company's financial liabilities fall to be classed as basic financial liabilities, and the company therefore has no other financial liabilities.

Derecognition of financial liabilities

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

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which he employee's services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

CONSTRUCTION CONTRACTS

As noted in the turnover policy, turnover in respect of steel work and demolition contracts represent the amounts receivable on those contracts during the year with reference to certified contract values and variations agreed with customers. Amounts outstanding at the year end in respect f these contracts are included within trade debtors.

The section under critical accounting judgements and key sources of estimation uncertainty provides further details about the company's accounting for such contracts.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents are basic financial assets and include cash in hand and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.