REGISTERED NUMBER: 09812304 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JANUARY 2026

FOR

CHIGWELL (LONDON) PLC

Page

Company Information

1

Strategic Report

2

Report of the Directors

6

Report of the Independent Auditors

8

Income Statement

11

Other Comprehensive Income

12

Statement of Financial Position

13

Statement of Changes in Equity

14

Statement of Cash Flows

15

Notes to the Statement of Cash Flows

16

Notes to the Financial Statements

17

DIRECTORS:

Mr P S Attlas

Mrs M Floyd

Mr D A Floyd

Mr A J King

Mrs A S Willcock

SECRETARY:

Mr J S Carmichael

REGISTERED OFFICE:

Aaron House

8 Hainault Business Park

Forest Road

Hainault

Essex

IG6 3JP

REGISTERED NUMBER:

09812304 (England and Wales)

AUDITORS:

Xeinadin Audit Limited

46 Hamilton Square

Birkenhead

Merseyside

CH41 5AR

The directors present their strategic report for the year ended 31 January 2026.

REVIEW OF BUSINESS

The principal activities of the Company continue to be specialist structural alterations, groundwork contracts and traditional building contracts.

The Company performed well during the year, securing a greater volume of projects which contributed to increased levels of activity and turnover. Turnover increased by approximately 33.62% to £23,844,967 (2025: £17,844,894).

Gross profit increased to £7,520,350 (2025: £5,613,129), while the gross margin increased slightly to 31.54% (2025: 31.46%). Profit before tax increased to £2,167,467 (2025: £1,024,278), reflecting the strong financial performance achieved during the year.

The Directors consider the results for the year to be satisfactory and remain focused on securing further opportunities while maintaining appropriate control over project delivery, costs and profitability.

PRINCIPAL RISKS AND UNCERTAINTIES

The Directors regularly assess the principal risks and uncertainties facing the Company as part of the Company's strategic and operational decision-making. The principal risks considered most significant to the Company's activities and future performance are set out below.

Economic and Market Risk

Potential impact on the Company

The Company's performance is influenced by conditions within the UK construction sector and the wider economic environment. Reduced customer investment, delays or cancellation of construction projects, increased competition or pressure on tender pricing could adversely affect the volume of work secured, revenue and profitability.

Mitigating factors or controls

The Company monitors market conditions and its portfolio of current and prospective contracts. It seeks to maintain strong relationships with existing customers while developing opportunities with new clients. The Company's established reputation and continued focus on service quality support its ability to compete for new work.

Contract Delivery, Input Cost and Supply Chain Risk

Potential impact on the Company

The profitability of construction contracts is dependent on effective project delivery and the management of labour, subcontractor, plant and material costs. Cost inflation, supplier or subcontractor disruption, project delays or unforeseen variations may result in additional costs and could adversely affect project margins and profitability.

Mitigating factors or controls

Management maintains oversight of project performance and cost control throughout the delivery of contracts. The Company maintains regular dialogue with key suppliers and undertakes periodic supplier performance reviews. Commercial and procurement decisions are monitored with regard to project requirements, cost movements and the timely delivery of works.

Credit, Working Capital and Financing Risk

Potential impact on the Company

The nature of the Company's activities can require expenditure on labour, subcontractors, materials and other project costs before the related amounts are collected from customers. Delays in customer payments, disputed balances or extended payment terms could therefore place pressure on working capital and liquidity. The Company also has ongoing financing commitments which require sufficient cash resources to meet repayments as they fall due.

Mitigating factors or controls

The Board monitors the Company's cash resources, debtor balances and financing requirements as part of its ongoing financial management. Customer balances and overdue amounts are monitored, with disputes addressed promptly where they arise. The Company's strategy of controlled growth is intended to ensure that expansion is managed with appropriate regard to available financial resources and the maintenance of a sound capital structure.

Health, Safety and Regulatory Compliance Risk

Potential impact on the Company

The Company's construction activities are subject to health and safety, building, environmental and other regulatory requirements. Failure to comply with applicable requirements could result in injury, project delays or suspension, financial penalties, legal claims and reputational damage. Changes in regulation may also increase project complexity, compliance costs or delivery times.

Mitigating factors or controls

The Company maintains policies, training arrangements and management oversight designed to support compliance with applicable requirements and safe working practices. Regulatory developments are monitored and procedures are updated where considered necessary. The Company also continues to invest in staff training and development to maintain appropriate skills and standards across the business.

SECTION 172(1) STATEMENT

The directors of the Company acknowledge their duty under Section 172(1) of the Companies Act 2006 to act in a way that they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole. In fulfilling this duty during the year, the directors have had regard to the following factors:

(a) The likely consequences of any decision in the long term

The board considers the long-term sustainability and growth of the Company when making strategic decisions. Investment decisions, cost control measures, and governance oversight are all made with the future viability of the business in mind, supporting consistent long-term returns for shareholders.

(b) The interests of the Company’s employees

The Company has a flat organisational structure that facilitates open communication between employees and management. Regular staff meetings, email updates, and formal appraisal processes allow employees to share views and contribute to decision-making. During the year, the Company also reviewed employee welfare policies and invested in professional development opportunities.

(c) The need to foster the Company’s business relationships with suppliers, customers and others

Strong relationships with suppliers and customers are essential to our business model. The Company engages in regular dialogue with major suppliers and conducts periodic performance reviews. Similarly, customer feedback is gathered and acted upon promptly. Any disputes are escalated and resolved efficiently to maintain good commercial relationships.

(d) The impact of the Company’s operations on the community and the environment

The Company recognises its responsibility to the wider community and the environment. Efforts have been made to reduce waste and improve energy efficiency across operations. The Company also supports local initiatives and charities where possible, and seeks to engage with the communities in which it operates.

(e) The desirability of the Company maintaining a reputation for high standards of business conduct

The Company is committed to maintaining high standards of integrity, ethics, and corporate governance. All employees are expected to adhere to the Company's Code of Conduct, and training on anti-bribery, data protection, and compliance is provided as required.

(f) The need to act fairly as between members of the Company

The directors ensure that all decisions are made with due regard to the interests of all shareholders, balancing short- and long-term interests. The Company promotes transparency and equal access to information for all shareholders.

KEY PERFORMANCE INDICATORS

The Directors consider the following as key performance indicators

2026

2025

£

£

Turnover

23,844,967

17,844,894

Cost of sales

16,324,617

12,231,765

Gross profit

7,520,350

5,613,129

Gross margin

31.54%

31.46%

Profit before tax

2,167,467

1,024,278

Net assets

4,249,226

2,635,254

KEY STRATEGY AND FUTURE DEVELOPMENTS

Following the strong performance achieved during the year, the Board's focus remains on delivering controlled and profitable growth while maintaining service quality, margins and financial resilience. The Company intends to build on its existing portfolio of contracts and established client relationships, while continuing to develop opportunities with both existing and new customers.

The Company will continue to invest in modern construction technologies, digital and data-driven systems and sustainable working practices to support project efficiency, quality and cost control. While the Board remains positive about the Company's prospects, future performance will continue to be influenced by conditions within the UK construction market, competitive pricing, input costs, project delivery, customer payment timing and changes in the regulatory environment. These areas will continue to be monitored closely as the business develops.

FINANCIAL POSITION

The Company is in good health and allows expansion of the business from its own resources. The results for the year and the financial position at the year-end were considered satisfactory by the Directors who expect controlled growth and profitability to continue in the foreseeable future.

The Directors are confident that the company will be able to strengthen its financial position by building on its current portfolio of contracts and grow the business with both existing and new clients in the future.

ENVIRONMENTAL POLICY

The Board acknowledges that environmental protection is one of the Company's business responsibilities. It aims for a continuous improvement in the Company's environmental performance and to comply with all relevant regulations. Also the Board does not consider that this line of business has a large adverse impact upon the environment. As a result the company does not manage its business by reference to any environmental key performance indicators. the company aims to keep most of its records in electronic format, and for the paper it does use, over 80% is recycled using designated recycling bags.

EMPLOYEES

It is the Company's policy to encourage and develop all members of staff to realise their maximum potential. Wherever possible, vacancies are filled from within the Company and adequate opportunities for internal promotion are created. The Board is committed to a systematic training policy and has a comprehensive training and development plan. In this way, staff will endeavor to do their best to contribute to the organization's success. The Company supports the principle of equal opportunities in employment and opposes all forms of unlawful or unfair discrimination on the grounds of race, age, nationality, religion, ethnic or national origin, sexual orientation, gender or gender reassignment, marital status or disability.

ON BEHALF OF THE BOARD:

Mr D A Floyd - Director

21 August 2026

The directors present their report with the financial statements of the company for the year ended 31 January 2026.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of specialist structural alterations, groundwork contracts and traditional building contracts.

DIVIDENDS

No dividends will be distributed for the year ended 31 January 2026.

FUTURE DEVELOPMENTS

The Company remains committed to sustainable growth and innovation within the construction sector. Investment continues in modern construction technologies, digital tools, and data-driven systems to improve project efficiency and quality. Research and development efforts focus on sustainable materials and environmentally responsible practices, supporting the delivery of high-quality, cost-effective services in line with evolving industry standards.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

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

Mr P S Attlas

Mrs M Floyd

Mr D A Floyd

Mr A J King

Mrs A S Willcock

DONATIONS AND EXPENDITURE

Charitable donations totalling £62,165 were made to various causes during the year. No political donations were made.

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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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;

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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

ON BEHALF OF THE BOARD:

Mr D A Floyd - Director

21 August 2026

Opinion

We have audited the financial statements of Chigwell (London) PLC (the 'company') for the year ended 31 January 2026 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 January 2026 and of its profit 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.

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, or 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; 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 six, 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:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognize non-compliance with applicable laws and regulations;

- we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the industry;

- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

- performed analytical procedures to identify any unusual or unexpected relationships;

- tested journal entries to identify unusual transactions;

- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and

- investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

- agreeing financial statement disclosures to underlying supporting documentation;

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

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

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

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Bradley Kelly (Senior Statutory Auditor)

for and on behalf of Xeinadin Audit Limited

46 Hamilton Square

Birkenhead

Merseyside

CH41 5AR

21 August 2026

REVENUE

23,844,967

17,844,894

Cost of sales

16,324,617

12,231,765

GROSS PROFIT

7,520,350

5,613,129

Administrative expenses

5,486,738

4,731,421

2,033,612

881,708

Other operating income

282,590

305,641

OPERATING PROFIT

5

2,316,202

1,187,349

Interest receivable and similar income

11,932

23,674

2,328,134

1,211,023

Interest payable and similar expenses

6

160,667

186,745

PROFIT BEFORE TAXATION

2,167,467

1,024,278

Tax on profit

7

553,495

275,911

PROFIT FOR THE FINANCIAL YEAR

1,613,972

748,367

PROFIT FOR THE YEAR

1,613,972

748,367

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,613,972

748,367

FIXED ASSETS

Property, plant and equipment

9

845,113

774,187

Investment property

10

3,260,000

3,260,000

4,105,113

4,034,187

CURRENT ASSETS

Inventories

11

527,854

377,854

Debtors

12

5,791,590

3,873,388

Cash at bank and in hand

1,002,954

1,024,497

7,322,398

5,275,739

CREDITORS

Amounts falling due within one year

13

4,170,207

3,505,938

NET CURRENT ASSETS

3,152,191

1,769,801

TOTAL ASSETS LESS CURRENT LIABILITIES

7,257,304

5,803,988

CREDITORS

Amounts falling due after more than one year

14

(2,600,522

)

(2,783,422

)

PROVISIONS FOR LIABILITIES

18

(407,556

)

(385,312

)

NET ASSETS

4,249,226

2,635,254

CAPITAL AND RESERVES

Called up share capital

19

100,000

100,000

Fair value reserve

20

575,295

575,295

Retained earnings

20

3,573,931

1,959,959

SHAREHOLDERS' FUNDS

4,249,226

2,635,254

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

Mr D A Floyd - Director

Called up

Fair

share

Retained

value

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 February 2024

100,000

1,811,592

575,295

2,486,887

Changes in equity

Dividends

-

(600,000

)

-

(600,000

)

Total comprehensive income

-

748,367

-

748,367

Balance at 31 January 2025

100,000

1,959,959

575,295

2,635,254

Changes in equity

Total comprehensive income

-

1,613,972

-

1,613,972

Balance at 31 January 2026

100,000

3,573,931

575,295

4,249,226

Cash flows from operating activities

Cash generated from operations

1

842,481

1,305,108

Interest paid

(148,029

)

(161,188

)

Interest element of hire purchase payments paid

(12,638

)

(25,557

)

Tax paid

(383,388

)

(80,744

)

Net cash from operating activities

298,426

1,037,619

Cash flows from investing activities

Purchase of tangible fixed assets

(194,494

)

(316,954

)

Sale of tangible fixed assets

12,714

306,613

Interest received

11,932

23,674

Net cash from investing activities

(169,848

)

13,333

Cash flows from financing activities

Loan repayments in year

(121,177

)

(121,667

)

HP repayments in year

(28,944

)

(391,888

)

Amount introduced by directors

-

9,500

Equity dividends paid

-

(600,000

)

Net cash from financing activities

(150,121

)

(1,104,055

)

Decrease in cash and cash equivalents

(21,543

)

(53,103

)

Cash and cash equivalents at beginning of year

2

1,024,497

1,077,600

Cash and cash equivalents at end of year

2

1,002,954

1,024,497

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

2026

2025

£

£

Profit before taxation

2,167,467

1,024,278

Depreciation charges

104,209

112,052

Loss on disposal of fixed assets

6,644

67,008

Amount owed to group undertakings

(2,038,928

)

924,438

Finance costs

160,667

186,745

Finance income

(11,932

)

(23,674

)

388,127

2,290,847

(Increase)/decrease in inventories

(150,000

)

83,333

Increase in trade and other debtors

(837,865

)

(294,618

)

Increase/(decrease) in trade and other creditors

1,442,219

(774,454

)

Cash generated from operations

842,481

1,305,108

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 January 2026

31.1.26

1.2.25

£

£

Cash and cash equivalents

1,002,954

1,024,497

Year ended 31 January 2025

31.1.25

1.2.24

£

£

Cash and cash equivalents

1,024,497

1,077,600

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.2.25

Cash flow

At 31.1.26

£

£

£

Net cash

Cash at bank and in hand

1,024,497

(21,543

)

1,002,954

1,024,497

(21,543

)

1,002,954

Debt

Finance leases

(126,722

)

28,944

(97,778

)

Debts falling due within 1 year

(75,500

)

(46,167

)

(121,667

)

Debts falling due after 1 year

(2,664,533

)

167,344

(2,497,189

)

(2,866,755

)

150,121

(2,716,634

)

Total

(1,842,258

)

128,578

(1,713,680

)

1.	STATUTORY INFORMATION

Chigwell (London) PLC is a public limited company, 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 the provisions of Financial Reporting Standard 102.

Revenue

Revenue represents the fair value of consideration receivable for construction services and contract work undertaken in the ordinary course of business, excluding value added tax and net of any applicable discounts.

Revenue from construction contracts is recognised by reference to the stage of completion of each contract at the reporting date where the outcome of the contract can be estimated reliably. The stage of completion is assessed by reference to the work performed at the reporting date, supported, where appropriate, by Applications for Payment, customer or surveyor certifications and other relevant project records.

Where work has been performed at the reporting date but has not yet been certified or invoiced, revenue is recognised as accrued income within debtors to the extent that the amount can be measured reliably and recovery is considered probable. The recoverability of accrued income is assessed having regard to subsequent customer certifications, receipts and other relevant information.

Where the outcome of a contract cannot be estimated reliably, revenue is recognised only to the extent of contract costs incurred that are considered recoverable. Contract costs are recognised as an expense in the period in which they are incurred. Any expected loss on a contract is recognised immediately in profit or loss.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated

impairment losses. Such cost includes costs directly attributable to making the assets capable of operating

as intended.

The carrying value of tangible assets are reviewed for impairment when events or changes in

circumstances indicate the carrying value may not be recoverable.

Depreciation has been provided at the following rates in order to write off the assets over their estimated useful lives:

Plant and machinery

- 15% reducing balance method

Motor vehicle

- 15% reducing balance method

Fixtures and fittings

- 15% reducing balance method

Short leasehold property

- 10% reducing balance method

Investment property

Investment property, which is property held to earn rentals, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure.

Subsequently it is measured at fair value at the reporting date. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit or loss.

Deferred tax is provided on these gains at the rate expected to apply if the property is sold at the balance sheet date.

Inventories

Inventories are measured at the lower of cost and estimated selling price less costs to complete and sell. The carrying amount of inventory sold is recognised as an expense in the period in which the related revenue is recognised.

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 statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all material timing differences that have originated but not reversed at the statement of financial position 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.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

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 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.

Cash and cash equivalents

Cash at bank and in hand 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.

Financial instruments

The company has chosen to adopt the 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 and investments in commercial paper, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Such assets are subsequently carried at amortised cost using the effective interest method.

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 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.

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 or 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.

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 to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

ii. Financial liabilities

Basic financial liabilities, including trade and other payables, 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 receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Preference shares, which result in fixed returns to the holder or are mandatorily redeemable on a specific date, are classified as liabilities. The dividends on these preference shares are recognised in the profit and loss account as interest expense.

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.

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

iii. Offsetting

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Share capital