REGISTERED NUMBER: 07033682 (England and Wales)

Strategic Report, Report of the Directors and

Audited Financial Statements for the Year Ended 31 December 2025

for

Infinity Reliance Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Income Statement

8

Other Comprehensive Income

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

14

DIRECTORS:

M B Kraftman

J S Sitton

H J Thomas

REGISTERED OFFICE:

Unit 5 Cheaney Drive

Grange Park

Northampton

NN4 5FB

REGISTERED NUMBER:

07033682 (England and Wales)

SENIOR STATUTORY AUDITOR:

Phillip Harris BA BFP FCA

AUDITORS:

Harris & Co (Accountants) Ltd, Statutory Auditor

2 Pavilion Court

600 Pavilion Drive

Northampton

NN4 7SL

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

REVIEW OF BUSINESS

The principal activity of the Company is the sale of personalised baby and children's gifts through ecommerce channels.

The year to 31 December 2025 focused on revenue growth and improving profitability. Gross profit margin increased to 51.6% of revenue (2024: 49.5%), reflecting continued progress in managing product costs. Distribution costs were 23.5% of revenues (2024: 21.6%) and administrative expenses were 29.2% of revenues (2024: 28.5%), with both reflecting investment to support growth across the business.

Revenues increased by 10% to £25,677,150 (2024: £23,262,965), driven primarily by the Company's own website. International expansion, including into the US market, was constrained during the year by the impact of tariff changes. Loss for the current year was £269,865 (2024: £13,382 profit), which included non-recurring charges in connection with the replacement of operational machinery and the write-off of legacy website development costs.

As at 31 December 2025, the Company had net assets of £8,469,558 (2024: £8,739,423) with cash of £6,104,501 (2024: £5,655,941).

The directors consider key performance indicators to be revenue and profit measures as detailed above.

PRINCIPAL RISKS AND UNCERTAINTIES

Cybersecurity and GDPR

As an e-commerce business, the Company holds consumer data for order processing and marketing purposes. The Company complies with GDPR regulations and mitigates risks relating to cybersecurity, by adopting an IP whitelisted system, giving access to an approved list, as well as enforcing a minimum access policy to ensure users have the lowest level of privileges to complete necessary functions.

Supply chain

The Company regularly monitors global events that could cause disruption on the supply chain which supply key product lines for trading. This ranges from suppliers unable to manufacture the products to increased shipping time & costs. The Company has cultivated multiple sources of supply across multiple regions, to assure the resilience of the supply chain and to mitigate the risk of trading being impacted.

ON BEHALF OF THE BOARD:

J S Sitton - Director

21 July 2026

The directors present their annual report and the audited financial statements of Infinity Reliance Limited (the

"Company") for the year ended 31 December 2025.

DIVIDENDS

The Loss for the financial year amounted to £269,865 (2024: £13,382 (Profit)).

The directors do not recommend the payment of a dividend (2024: £Nil).

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2025 to the date of this report.

M B Kraftman

J S Sitton

H J Thomas

QUALIFYING THIRD-PARTY INDEMNITY PROVISIONS

As permitted by the Articles of Association, the directors have the benefit of an indemnity which is a qualifying third party indemnity provision as defined by Section 234 of the Companies Act 2006. The indemnity was in force throughout the last financial year and is currently in force. The Company also purchased and maintained throughout the financial year directors and officers’ liability insurance in respect of itself and its directors.

GOING CONCERN

The directors have reviewed the detailed budgets and cash flow forecasts for the business and consider that the Company has access to sufficient financial resources to enable it to continue its operations and meet its liabilities as they fall due for at least 12 months from the date of approval of these financial statements. As part of this assessment, the directors have also evaluated sensitivities to the base case forecast which represent a severe but plausible downside scenario. Accordingly, the directors deem it appropriate to prepare the financial statements on a going concern basis.

FUTURE DEVELOPMENTS

The Company continues to invest in its product sourcing and design functions. The directors believe that high quality and distinctive products are essential to enable further improvements in average order value and customer acquisition and retention metrics. As part of this investment in product, the Company will expand its offering within its existing product categories and develop products for adjacent categories within its core baby and children gifting proposition. The Company has realised increasing efficiencies over several years by reducing the cost per unit of personalising its products.

FINANCIAL RISK MANAGEMENT

Foreign exchange risk

The Company is exposed to foreign exchange risk, primarily with respect to the US dollar, which is the transactional currency for most of the Company’s stock suppliers & agencies. The Company monitors its US dollar exposure continuously and uses a mix of spot and forward exchange contracts to hedge the risk.

Credit risk

Credit risk is the loss of value of financial assets due to counterparties failing to meet all or part of their obligations as they fall due. Trade receivables are kept at a low level because of the nature of the Company's business and no major risks are considered to arise in this area.

Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting its financial obligations as they fall due. The Board receives regular cash flow projections and information regarding cash balances. The projections indicate the Company is expected to have sufficient liquid resources to meet its financial obligations as they fall due.

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.

Directors’ confirmations

In the case of each director in office at the date the Directors’ Report is approved:

-so far as the director is aware, there is no relevant audit information of which the Company's auditors

are unaware; and

-they have taken all the steps that they ought to have taken as a director in order to make themselves

aware of any relevant audit information and to establish that the Company’s auditors are aware of that

information.

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

AUDITORS

The auditors, Harris & Co (Accountants) Ltd, Statutory Auditor, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J S Sitton - Director

21 July 2026

Opinion

We have audited the financial statements of Infinity Reliance Limited (the 'company') for the year ended 31 December 2025 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the 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 company's affairs as at 31 December 2025 and of its 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 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. 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 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 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 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 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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 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 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:

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

- The company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant: Toys (Safety) Regulations 2011, BS EN 14682 Safety of children's clothing and the tax regulations relating to company eligibility under VCT's . We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

- We understood how the company is complying with those legal and regulatory frameworks by making enquiries through our review of relevant documentation and enquiries of the company's employees who are tasked with ensuring compliance with these laws and regulations.

- The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognize non-compliance with laws and regulations. Audit procedures performed by the engagement team included:

- Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;

- Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process; and

- Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.

- As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:

- Posting of unusual journals out of the normal course of business;

- Incorrectly recognising revenue in the wrong period that may inflate or deflate revenue;

- Posting of non-business related expenses.

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 for 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.

Phillip Harris BA BFP FCA (Senior Statutory Auditor)

for and on behalf of Harris & Co (Accountants) Ltd, Statutory Auditor

2 Pavilion Court

600 Pavilion Drive

Northampton

NN4 7SL

21 July 2026

TURNOVER

4

25,677,150

23,262,965

Cost of sales

12,414,698

11,745,510

GROSS PROFIT

13,262,452

11,517,455

Distribution costs

6,038,681

5,017,796

Administrative expenses

7,496,450

6,640,678

13,535,131

11,658,474

(272,679

)

(141,019

)

Other operating income

(4,769

)

(21,482

)

OPERATING LOSS

6

(277,448

)

(162,501

)

Interest receivable and similar income

8

25,429

193,729

(252,019

)

31,228

Interest payable and similar expenses

9

17,846

17,846

(LOSS)/PROFIT BEFORE TAXATION

(269,865

)

13,382

Tax on (loss)/profit

10

-

-

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(269,865

)

13,382

(LOSS)/PROFIT FOR THE YEAR

(269,865

)

13,382

OTHER COMPREHENSIVE INCOME

Share option reserve release

-

(94,814

)

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

-

(94,814

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(269,865

)

(81,432

)

FIXED ASSETS

Intangible assets

11

278,748

556,291

Tangible assets

12

2,990,995

2,977,941

Investments

13

-

-

3,269,743

3,534,232

CURRENT ASSETS

Stocks

14

2,630,237

2,682,959

Debtors

15

2,378,730

2,324,032

Cash at bank

16

6,104,501

5,655,941

11,113,468

10,662,932

CREDITORS

Amounts falling due within one year

17

4,811,166

4,336,193

NET CURRENT ASSETS

6,302,302

6,326,739

TOTAL ASSETS LESS CURRENT LIABILITIES

9,572,045

9,860,971

CREDITORS

Amounts falling due after more than one year

18

1,102,487

1,121,548

NET ASSETS

8,469,558

8,739,423

CAPITAL AND RESERVES

Called up share capital

22

5,543

5,543

Share premium

23

11,350,794

11,350,794

Retained earnings

23

(2,886,779

)

(2,616,914

)

8,469,558

8,739,423

The financial statements were approved by the Board of Directors and authorised for issue on 21 July 2026 and were signed on its behalf by:

J S Sitton - Director

Called up

Share

share

Retained

Share

options

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Balance at 1 January 2024

5,964

(2,630,296

)

11,650,373

94,814

9,120,855

Changes in equity

Issue of share capital

(421

)

-

(299,579

)

-

(300,000

)

Total comprehensive income

-

13,382

-

(94,814

)

(81,432

)

Balance at 31 December 2024

5,543

(2,616,914

)

11,350,794

-

8,739,423

Changes in equity

Total comprehensive income

-

(269,865

)

-

-

(269,865

)

Balance at 31 December 2025

5,543

(2,886,779

)

11,350,794

-

8,469,558

Cash flows from operating activities

Cash generated from operations

1

1,167,044

229,322

Interest paid

(17,846

)

(17,846

)

Net cash from operating activities

1,149,198

211,476

Cash flows from investing activities

Purchase of intangible fixed assets

(233,487

)

(146,777

)

Purchase of tangible fixed assets

(751,229

)

(523,023

)

Sale of intangible fixed assets

(621

)

-

Sale of tangible fixed assets

259,270

-

Interest received

25,429

193,729

Net cash from investing activities

(700,638

)

(476,071

)

Cash flows from financing activities

Share issue

-

(421

)

Share buyback

-

(299,579

)

Net cash from financing activities

-

(300,000

)

Increase/(decrease) in cash and cash equivalents

448,560

(564,595

)

Cash and cash equivalents at beginning of year

2

5,655,941

6,220,536

Cash and cash equivalents at end of year

2

6,104,501

5,655,941

1.	RECONCILIATION OF (LOSS)/PROFIT FOR THE FINANCIAL YEAR TO CASH GENERATED FROM OPERATIONS

2025

2024

£

£

(Loss)/profit for the financial year

(269,865

)

13,382

Depreciation charges

675,138

740,583

Loss on disposal of fixed assets

315,418

-

Fixed asset reclassification

-

26

Share option reserve

-

(94,814

)

Finance costs

17,846

17,846

Finance income

(25,429

)

(193,729

)

713,108

483,294

Decrease/(increase) in stocks

52,722

(490,439

)

Increase in trade and other debtors

(54,698

)

(320,217

)

Increase in trade and other creditors

455,912

556,684

Cash generated from operations

1,167,044

229,322

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 December 2025

31/12/25

1/1/25

£

£

Cash and cash equivalents

6,104,501

5,655,941

Year ended 31 December 2024

31/12/24

1/1/24

£

£

Cash and cash equivalents

5,655,941

6,220,536

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1/1/25

Cash flow

At 31/12/25

£

£

£

Net cash

Cash at bank

5,655,941

448,560

6,104,501

5,655,941

448,560

6,104,501

Debt

Debts falling due after 1 year

(594,852

)

-

(594,852

)

(594,852

)

-

(594,852

)

Total

5,061,089

448,560

5,509,649

1.	STATUTORY INFORMATION

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

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared on a going concern basis, under the historical cost convention and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied consistently throughout the year:

Exemption from preparation of consolidated financial statements

The Company is exempt from the requirement to prepare consolidated financial statements as all of its subsidiaries are required to be excluded from consolidation by section 402 of the Companies Act 2006.

Going concern

The directors have reviewed the detailed budgets and cash flow forecasts for the business and consider that the Company has access to sufficient financial resources to enable it to continue its operations and meet its liabilities as they fall due for at least 12 months from the date of approval of these financial statements. As part of this assessment, the directors have also evaluated sensitivities to the base case forecast which represent a severe but plausible downside scenario. Accordingly, the directors deem it appropriate to prepare the financial statements on a going concern basis.

Foreign currency

Functional and presentation currency

The Company's functional and presentational currency is GBP and the financial statements have been presented to the nearest pound.

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 year 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.

Revenue

Revenue is measured as the fair value of the consideration received or receivable, net of 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 dispatched the order from the warehouse and it has been delivered to the buyer;

-the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control 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.

Rendering of services

Revenue from providing storage space for 3rd party customers. The income is recognised when the Company has provided the service to the 3rd party, which occurs on a weekly & monthly basis

Operating Leases:the Company as lessee

Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

Leased assets: the Company as lessee

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the Company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

The estimated useful lives range as follows:

Patents - 6 years straight line

Website development - 6 years straight line

Other intangible assets represent website development costs. Expenditure on internal development is capitalised only if the costs can be measured reliably, the product or output is technically feasible, future economic benefits are probable and the Company intends to and has sufficient resources to complete and use or sell the asset. Otherwise it is recognised in the Statement of Comprehensive Income when incurred.

Tangible fixed assets

Tangible assets are stated at cost less accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.

The estimated useful lives range as follows:

Short-term leasehold property - 10 years straight line

Plant and machinery - 10 years straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income.

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Cost includes the purchase price, including taxes and duties and transport and handling directly attributable to bringing the stocks to its present location and condition.

At each Balance Sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss. Where a reversal of the impairment is required the impairment charge is reversed, up to the original impairment loss, and is recognised as a credit in the profit or loss.

Current and deferred taxation

Tax is recognised in the Statement of Comprehensive Income, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

Current or deferred tax assets and liabilities are not discounted.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:

-The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and

-Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax.

Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax assets and liabilities arise from income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an ability and intention to settle the balances at the same time.

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which is 6 years.

If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only and expensed within the Statement of Comprehensive Income.

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

Finance cost

Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Borrowing costs

All borrowing costs are recognised in the Statement of Comprehensive Income in the year in which they are incurred.

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.

Deferred income

Deferred income includes transactions and payments that have taken place in the year, but the sale has not been fulfilled. This includes orders where a payment is taken from the buyer, with the order not being dispatched from the warehouse.

Impairment of non-financial assets

Assets that are subject to depreciation or amortisation are assessed at each Balance Sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGU's). Non-financial assets that have been previously impaired are reviewed at each Balance Sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Financial Instruments

The Company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.

(i) Financial assets

Basic financial assets, including trade and other receivables, 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 the market rate of interest.

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

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit and loss.

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

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks. and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability unilaterally to sell the asset to an unrelated third party without imposing additional restrictions.

(ii) Financial liabilities

Basic financial liabilities, including trade and other payables and loans from fellow group companies, 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 the market rate of interest.

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

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Loans to fellow group undertakings are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Financial liabilities are derecognised when the liability is extinguished, that is, when the contractual obligation is discharged, cancelled or expires.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in interest payable and similar expenses or interest income and similar expenses as appropriate.