REGISTERED NUMBER: 06522213 (England and Wales)

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31 May 2025

for

Outform Group EMEA Ltd

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Consolidated Statement of Comprehensive Income

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Cash Flow Statement

13

Notes to the Consolidated Cash Flow Statement

14

Notes to the Consolidated Financial Statements

15

DIRECTORS:

A Haroush

D C Littlefield

Mrs A Picard

REGISTERED OFFICE:

20 Margaret Street

Fitzrovia

London

W1W 8RS

REGISTERED NUMBER:

06522213 (England and Wales)

AUDITORS:

Clayton & Brewill

Statutory Auditors and

Chartered Accountants

Cawley House

149-155 Canal Street

Nottingham

Nottinghamshire

NG1 7HR

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

REVIEW OF BUSINESS

During 2025, Outform Group EMEA Limited continued to expand its offering and enhancing its operational excellence and in-house manufacturing on mainland Europe. The implementation of the restructuring in the prior years brought together a complimentary client base and leveraged the innovative creative approach of Outform with the operational excellence of Alrec.

The restructure took place in June 2023 and the combination of the teams was through informal alignment. Following on from this there was a global rebranding to Outform Group with a simplification into 3 operating businesses in each country UK, PL and NL.

The commercial arm of the business has worked on broadening the offering from predominantly CE clients into Beauty and we continue to deliver exciting new approaches for the Beauty industry.

PRINCIPAL RISKS AND UNCERTAINTIES

Operational & Commercial risk

Our customers continue to look for new innovation.Through our team we continue to engage with existing and new client organisations for flagship projects and experiential offerings.

Our new operational structure has now been implemented and we can see the positive impact operationally across the group. We continue to receive positive feedback from clients on the new strategic structure.

Liquidity risk

The Group's policy towards liquidity risk is through local treasury management and remaining cash positive. We review group liquidity positions on an ongoing basis and continue to leverage synergies accross the group to maintain our positive cash position.

Employee risk

Our employees remain at the heart of Outform and we know that to drive innovation we need self starting, strategic thinkers across the business. We continue to drive our talent program to ensure we have the right talent looking after the right clients to thrive and bring ideas to the table. Our back office functions have been strengthened with presence in each of the locations with common ways of working.

Environmental risk

We continue to move forward on our environmental program and continue to look at sustainable products and processes with more of our clients with special focus on end of life management. We have continued to refresh our portal offering and this provides reporting and tracking on all assets to help our clients manage their portfolio and investigate recycling or sustainable disposal options.

The directors are not aware of any other significant risks that may impact the Group.

FINANCIAL KEY PERFORMANCE INDICATORS

The Directors consider the financial KPI's of the business to be:

- Pipeline and orderbook

- Strategic Client Engagement levels

- Turnover

- Gross Margin

- Project profitability

- Net Profit

- Cash Balances and working capital metrics

These are monitored on a monthly basis and resultant actions are taken as and when necessary.

ON BEHALF OF THE BOARD:

D C Littlefield - Director

31 May 2026

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

DIVIDENDS

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

DIRECTOR

A Haroush held office during the whole of the period from 1 June 2024 to the date of this report.

Other changes in directors holding office are as follows:

D C Littlefield and Mrs A Picard were appointed as directors after 31 May 2025 but prior to the date of this report.

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 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, Clayton & Brewill, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

D C Littlefield - Director

31 May 2026

Opinion

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

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 May 2025 and of the group's loss for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page 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:

- Enquiry of management and those charged with governance around actual and potential litigation and claims;

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

- Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias;

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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.

Douglas Perry FCA (Senior Statutory Auditor)

for and on behalf of Clayton & Brewill

Statutory Auditors and

Chartered Accountants

Cawley House

149-155 Canal Street

Nottingham

Nottinghamshire

NG1 7HR

31 May 2026

TURNOVER

4

26,802,873

33,447,815

Cost of sales

17,459,376

21,023,279

GROSS PROFIT

9,343,497

12,424,536

Administrative expenses

13,000,839

14,681,091

(3,657,342

)

(2,256,555

)

Other operating income

21,963

226,363

OPERATING LOSS

6

(3,635,379

)

(2,030,192

)

Interest receivable and similar income

38,496

89,244

(3,596,883

)

(1,940,948

)

Interest payable and similar expenses

8

600,416

667,216

LOSS BEFORE TAXATION

(4,197,299

)

(2,608,164

)

Tax on loss

9

318,424

268,438

LOSS FOR THE FINANCIAL YEAR

(4,515,723

)

(2,876,602

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(4,515,723

)

(2,876,602

)

Loss attributable to:

Owners of the parent

(4,515,723

)

(2,876,602

)

Total comprehensive income attributable to:

Owners of the parent

(4,515,723

)

(2,876,602

)

FIXED ASSETS

Intangible assets

11

4,414,484

5,088,944

Tangible assets

12

408,215

569,779

Investments

13

-

-

4,822,699

5,658,723

CURRENT ASSETS

Stocks

14

2,403,427

1,539,547

Debtors

15

7,180,370

7,645,134

Cash at bank and in hand

1,346,576

1,092,771

10,930,373

10,277,452

CREDITORS

Amounts falling due within one year

16

16,644,112

8,436,507

NET CURRENT (LIABILITIES)/ASSETS

(5,713,739

)

1,840,945

TOTAL ASSETS LESS CURRENT LIABILITIES

(891,040

)

7,499,668

CREDITORS

Amounts falling due after more than one year

17

(5,473,435

)

(8,780,761

)

PROVISIONS FOR LIABILITIES

19

(109,841

)

(677,500

)

NET LIABILITIES

(6,474,316

)

(1,958,593

)

CAPITAL AND RESERVES

Called up share capital

20

100

100

Retained earnings

21

(6,474,416

)

(1,958,693

)

SHAREHOLDERS' FUNDS

(6,474,316

)

(1,958,593

)

The financial statements were approved by the Board of Directors and authorised for issue on 31 May 2026 and were signed on its behalf by:

D C Littlefield - Director

FIXED ASSETS

Intangible assets

11

-

-

Tangible assets

12

-

-

Investments

13

8,400,391

8,400,391

8,400,391

8,400,391

CURRENT ASSETS

Debtors

15

100

5,400,190

Cash at bank

71,454

75,384

71,554

5,475,574

CREDITORS

Amounts falling due within one year

16

6,653,967

6,180,504

NET CURRENT LIABILITIES

(6,582,413

)

(704,930

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,817,978

7,695,461

CREDITORS

Amounts falling due after more than one year

17

746,190

6,390,147

NET ASSETS

1,071,788

1,305,314

CAPITAL AND RESERVES

Called up share capital

20

100

100

Retained earnings

21

1,071,688

1,305,214

SHAREHOLDERS' FUNDS

1,071,788

1,305,314

Company's loss for the financial year

(233,526

)

(229,817

)

The financial statements were approved by the Board of Directors and authorised for issue on 31 May 2026 and were signed on its behalf by:

D C Littlefield - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 June 2023

100

917,909

918,009

Changes in equity

Total comprehensive income

-

(2,876,602

)

(2,876,602

)

Balance at 31 May 2024

100

(1,958,693

)

(1,958,593

)

Changes in equity

Total comprehensive income

-

(4,515,723

)

(4,515,723

)

Balance at 31 May 2025

100

(6,474,416

)

(6,474,316

)

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 June 2023

100

1,535,031

1,535,131

Changes in equity

Total comprehensive income

-

(229,817

)

(229,817

)

Balance at 31 May 2024

100

1,305,214

1,305,314

Changes in equity

Total comprehensive income

-

(233,526

)

(233,526

)

Balance at 31 May 2025

100

1,071,688

1,071,788

Cash flows from operating activities

Cash generated from operations

1

4,245,796

564,793

Interest paid

(600,416

)

(667,216

)

Tax paid

(86,565

)

(450,493

)

Net cash from operating activities

3,558,815

(552,916

)

Cash flows from investing activities

Purchase of intangible fixed assets

(9,341

)

(481,022

)

Purchase of tangible fixed assets

(31,488

)

(96,385

)

Sale of tangible fixed assets

4,649

371,736

Purchase of subsidiary

-

(8,108,469

)

Interest received

38,496

89,244

Net cash from investing activities

2,316

(8,224,896

)

Cash flows from financing activities

New loans from group in year

-

8,780,761

Loan repayments in year

(3,307,326

)

-

Net cash from financing activities

(3,307,326

)

8,780,761

Increase in cash and cash equivalents

253,805

2,949

Cash and cash equivalents at beginning of year

2

1,092,771

1,089,822

Cash and cash equivalents at end of year

2

1,346,576

1,092,771

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

2025

2024

£

£

Loss before taxation

(4,197,299

)

(2,608,164

)

Depreciation charges

871,389

1,022,435

Loss/(profit) on disposal of fixed assets

814

(836

)

Movement in provisions

(567,659

)

155,093

Finance costs

600,416

667,216

Finance income

(38,496

)

(89,244

)

(3,330,835

)

(853,500

)

(Increase)/decrease in stocks

(863,880

)

315,428

Decrease in trade and other debtors

345,344

8,150,710

Increase/(decrease) in trade and other creditors

8,095,167

(7,047,845

)

Cash generated from operations

4,245,796

564,793

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

£

£

Cash and cash equivalents

1,346,576

1,092,771

Year ended 31 May 2024

31.5.24

1.6.23

£

£

Cash and cash equivalents

1,092,771

1,089,822

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.6.24

Cash flow

At 31.5.25

£

£

£

Net cash

Cash at bank and in hand

1,092,771

253,805

1,346,576

1,092,771

253,805

1,346,576

Total

1,092,771

253,805

1,346,576

1.	STATUTORY INFORMATION

Outform Group EMEA 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.

This company provides business support

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

The group held net liabilities of £6,474,316 (2024: £1,958,593 (net liabilities)) at the year end with net current liabilities of £5,713,739 (2024: £1,840,945 (net assets)) being held.

The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future including a period of at least twelve months from the date of approval of these financial statements. They thus determine that the going concern basis of accounting is appropriate in preparing these financial statements.

Cash forecasts and profitability reviews have been carried out by the company directors to ensure that the group continues to meet its working capital demands for the next 12 months.

Long term debt held in the group is owed to the parent entity. The parent entity continues to support the financially and operationally.

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:

- the company has transferred the significant risks and rewards of ownership to the buyer;

- the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective controls over the goods sold;

- the amount of revenue can be measured reliably;

- it is probable that the company will receive the consideration due under the transaction; and

- the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

- the amount of revenue can be measured reliably;

- it is probable that the company will receive the consideration due under the contract;

- the stage of completion of the contract at the end of the reporting period can be measured reliably; and

- the costs incurred and the costs to complete the contract can be measured reliably.

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination

and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and

liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is

measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is

amortised on a straight line basis to the Consolidated Statement of Comprehensive Income over

its useful economic life.

Goodwill is being amortised evenly over its estimated useful life of ten years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Negative goodwill are being amortised evenly over their estimated useful life of nil years.

Computer software is being amortised evenly over its estimated useful life of nil years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

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

Plant and machinery

-

20% on cost, 10% on cost and Straight line over 5 years

Fixtures and fittings

-

20% on cost and Straight line over 5 years

Motor vehicles

-

25% reducing balance

Computer equipment

-

33% on cost, Straight line over 3 years and Straight line over 5 years

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.

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

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

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.

Foreign currencies

Functional and presentation currency

The Company's functional and presentational currency is GBP

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non- monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Statement of Comprehensive Income within 'other operating income'.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

Provisions

Provisions are made where an event has taken place that gives the company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.

Provisions are charged as an expense to the Statement of Comprehensive Income in the year that the company becomes aware of the obligation, and are measured at the best estimate at the Statement of Financial Position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.

When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.

The other provisions balance is made up of a warranty provision and a provision for dilapidation.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The critical judgements that the directors have made in the process of applying the Group's

accounting policies that have the most significant effect on the amounts recognised in the

statutory financial statements are discussed below.

(i) Assessing indicators of impairment

In assessing whether there have been any indicators of impairment of assets, the directors have

considered both external and internal sources of information such as market conditions,

counterparty credit ratings and experience of recoverability and where applicable, the ability of the

asset to be operated as planned. There have been no indicators of impairment identified during the

current financial year.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty, that

have a significant risk of causing a material adjustment to the carrying amounts of assets and

liabilities within the next financial year are discussed below.

(ii) Recoverability of trade and other receivables

The Group establishes a provision for trade and other receivables that are estimated not to be

recoverable. When assessing recoverability the directors have considered factors such as the

ageing of the receivables, past experiences of recoverability, financial position of the other party

and the credit profile of individual or groups of customers.

(iii) Stock provisioning

The Group reviews stock for non moving and obsolete items, and determines whether a provision

would be appropriate. The directors consider factors such as the age of the stock, the ability for

sale, faults with items and any other indicators which may suggest that stock needs to be provided

for.

It should be noted that inherent faults are covered under the manufacturers warranty and as such

no warranty provision is deemed to be required.

(iv) Other provisions

Where sales are made under a warranty agreement, the directors will review to assess whether

any provision against potential future repair work is required. When considering if a provision

should be made for future repair work, the directors consider repair work over the past periods in

order to make an estimation of the value of future repair work.

The directors will also review additional provisions where it is deemed that they should be made

against future obligations. The directors will estimate the value of the future cost utilising past

experience and their knowledge in order to be able to make these provisions.