REGISTERED NUMBER: 09703549 (England and Wales)

LION QUAYS HOTEL LIMITED

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 NOVEMBER 2025

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Income Statement

10

Other Comprehensive Income

11

Balance Sheet

12

Statement of Changes in Equity

13

Cash Flow Statement

14

Notes to the Cash Flow Statement

15

Notes to the Financial Statements

16

DIRECTORS:

Mrs S Bansal

Dr A Bansal

C R Jenno

Mrs P J Walker

SECRETARY:

Mrs S Bansal

REGISTERED OFFICE:

Lion Quays Hotel & Spa

Weston Rhyn

Gobowen

Oswestry

SY11 3EN

REGISTERED NUMBER:

09703549 (England and Wales)

AUDITORS:

FWC Advisory Ltd

29 Wood Street

Stratford-Upon-Avon

Warwickshire

CV37 6JG

The directors present their strategic report for the year ended 30 November 2025.

REVIEW OF BUSINESS

The year ended 30 November 2025 represented a significant improvement in the Company's performance following the operational challenges experienced during the previous year.

The Company continued to experience inflationary pressure on payroll, utilities, food costs and other operating costs. Gross profit reduced during the year, reflecting these pressures and changes in departmental mix. However, administrative expenses reduced significantly, demonstrating the benefit of continued cost control and operational review.

During the year management continued to focus on stabilising operations, improving guest experience, strengthening sales conversion, reviewing departmental structures and improving operational efficiency. The directors believe that the actions taken provide a stronger platform for future trading performance.

The operating loss reduced to £84k compared with £159k in the prior year. After finance costs of £595k, the Company reported a loss before tax of £678k compared with a loss before tax of £789k in the previous year.

The balance sheet remains positive, with net assets of £1.0m at 30 November 2025, this is despite a significant impairment charge recognised in the year of £1.7m which saw a net negative movement in the revaluation reserve of £1.3m . The Company continues to hold substantial freehold property assets and remains focused on improving profitability and cash generation.

Key performance indicators

The directors monitor performance using the following key performance indicators:

o Revenue - monitored to assess overall trading performance across accommodation, leisure and ancillary operations.

o Average Room Rate (ARR) - used to measure achieved room pricing and yield management performance.

o EBITDA - used to evaluate underlying operational performance and cash generation.

o Gross Margin - reviewed to assess pricing, purchasing efficiency and supplier management.

o Cash Flow - monitored to ensure sufficient liquidity to meet operational requirements and capital commitments.

o Net Debt and Covenant Compliance - reviewed regularly in relation to banking facilities and financial resilience.

The directors consider these KPIs to provide an appropriate assessment of trading performance, financial efficiency and liquidity.

PRINCIPAL RISKS AND UNCERTAINTIES

The company's principle risks continue to include operating within a sector exposed to economic uncertainty, inflationary pressures, changing consumer spending patterns and labour market challenges.

The directors actively manage these risks through detailed forecasting, close monitoring of working capital, disciplined cost control and selective investment in facilities and technology.

The company also remains exposed to interest rate movements and financing risk. During the year the directors continued to engage with funding partners regarding the long-term financing structure of the business.

During the year the Bank of England reduced base rates, which contributed to a reduction in finance costs.

ON BEHALF OF THE BOARD:

Mrs P J Walker - Director

19 August 2026

The directors present their report with the financial statements of the company for the year ended 30 November 2025.

PRINCIPAL ACTIVITY

The principal activity of the company is the operation of Lion Quays Resort, comprising hotel, leisure, spa, and associated hospitality facilities.

DIVIDENDS

No dividends will be distributed for the year ended 30 November 2025.

FUTURE DEVELOPMENTS

During 2026, the Company's principal capital investment will focus on the Spa and Leisure building. A significant investment has been made in the replacement of the roof, and, at the date of approval of these financial statements, quotations are being obtained for the replacement of the air handling system and boilers. These investments are intended to improve operational efficiency, reduce maintenance requirements and enhance the guest experience.

DIRECTORS

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

Mrs S Bansal

Dr A Bansal

C R Jenno

Mrs P J Walker

FINANCIAL INSTRUMENTS

Price risk, credit risk, liquidity risk and cash flow risk

The company aims to mitigate liquidity risk and cash flow risk by managing working capital, and as a result, it continues to closely monitor the working capital requirements. In addition, the directors continue to work with company’s bankers to ensure that these working capital requirements are met.

OBJECTIVES AND POLICIES

The company's objective is to deliver high-quality guest experiences while working towards sustainable and

profitable growth. Policies focus on service quality, staff development, customer satisfaction, prudent financial

management, cost control and risk management. These policies are reviewed regularly by the directors.

GOING CONCERN

The directors have considered the Company's financial position, forecast cash flows and banking arrangements when assessing the Company's ability to continue as a going concern.

During the year, certain financial covenants under the Company's banking facilities were not met. These matters have been discussed with Punjab National Bank, which has confirmed its ongoing support for the Company.

The directors have prepared forecasts which indicate that the Company is expected to have sufficient resources to meet its 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.

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

FWC Advisory Ltd were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

ON BEHALF OF THE BOARD:

Mrs P J Walker - Director

19 August 2026

Opinion

We have audited the financial statements of Lion Quays Hotel Limited (the 'company') for the year ended 30 November 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 30 November 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.

Material uncertainty related to going concern

We draw your attention to note 2 on Going concern in the financial statements, which indicates that the company has incurred a net loss after tax of £787,380 during the year ended 30 November 2025 and, as of that date, the company had a net current liabilities of £1,690,500. These conditions, along with other matters as set forth in note 2, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. However, the directors have a reasonable expectation that the company will continue to operate and meet its liabilities as they fall due with the support of its directors, bankers, and other related parties, and therefore, the financial statements have been prepared on a going concern basis. Our opinion is not modified in respect of this matter.

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.

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 five, 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:

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

- the nature of the industry and sector, control environment and business performance including the design of the Company remuneration policies, key drivers for directors' remuneration, bonus levels and performance targets;

- results of our enquiries of management about their own identification and assessment of the risks of irregularities;

- any matters we identified having obtained and reviewed the Company documentation of their policies and procedures relating to:

- identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance;

- detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

- the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;

- the matters discussed among the audit engagement team and involving relevant internal specialists, including tax specialists, regarding how and where fraud might occur in the financial statements and any

potential indicators of fraud.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in relation to valuation of fixed assets. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and tax legislation.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Company ability to operate or to avoid a material penalty. These included compliance with GDPR regulation.

Audit response to risks identified:

As a result of performing the above, we identified valuation of fixed assets as a key audit matter related to the

potential risk of fraud.

Our procedures to respond to risks identified included the following:

- reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

- enquiring of management concerning actual and potential litigation and claims;

- performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud and reviewing internal reports;

- obtained an understanding of provisions and held discussions with management to understand the basis of recognition or non-recognition of tax provisions; and

- in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists, and remained alert to any indications of fraud or noncompliance with laws and regulations throughout the audit.

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.

Michelle Vincent (Senior Statutory Auditor)

for and on behalf of FWC Advisory Ltd

29 Wood Street

Stratford-Upon-Avon

Warwickshire

CV37 6JG

19 August 2026

TURNOVER

4

6,499,536

6,439,762

Cost of sales

(4,023,250

)

(3,786,979

)

GROSS PROFIT

2,476,286

2,652,783

Administrative expenses

(2,559,966

)

(2,812,301

)

OPERATING LOSS

6

(83,680

)

(159,518

)

Interest payable and similar expenses

8

(594,692

)

(630,252

)

LOSS BEFORE TAXATION

(678,372

)

(789,770

)

Tax on loss

9

(109,008

)

90,571

LOSS FOR THE FINANCIAL YEAR

(787,380

)

(699,199

)

LOSS FOR THE YEAR

(787,380

)

(699,199

)

OTHER COMPREHENSIVE INCOME

Revaluation of Property

-

214,875

Impairment of Property

(1,672,349

)

-

Income tax relating to components of other comprehensive income

418,087

(53,719

)

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(1,254,262

)

161,156

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(2,041,642

)

(538,043

)

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

10,497,186

12,689,209

10,497,186

12,689,209

CURRENT ASSETS

Stocks

12

51,966

50,658

Debtors

13

2,028,945

1,762,713

Cash at bank and in hand

68,479

6,731

2,149,390

1,820,102

CREDITORS

Amounts falling due within one year

14

3,839,890

3,298,536

NET CURRENT LIABILITIES

(1,690,500

)

(1,478,434

)

TOTAL ASSETS LESS CURRENT LIABILITIES

8,806,686

11,210,775

CREDITORS

Amounts falling due after more than one year

15

(7,525,097

)

(7,578,465

)

PROVISIONS FOR LIABILITIES

18

(281,817

)

(590,896

)

NET ASSETS

999,772

3,041,414

CAPITAL AND RESERVES

Called up share capital

19

1,000

1,000

Revaluation reserve

20

706,558

1,980,947

Retained earnings

20

292,214

1,059,467

SHAREHOLDERS' FUNDS

999,772

3,041,414

The financial statements were approved by the Board of Directors and authorised for issue on 19 August 2026 and were signed on its behalf by:

Mrs P J Walker - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 December 2023

1,000

1,738,539

1,839,918

3,579,457

Changes in equity

Total comprehensive income

-

(699,199

)

161,156

(538,043

)

Transfers

-

20,127

(20,127

)

-

Balance at 30 November 2024

1,000

1,059,467

1,980,947

3,041,414

Changes in equity

Total comprehensive income

-

(787,380

)

(1,254,262

)

(2,041,642

)

Transfers

-

20,127

(20,127

)

-

Balance at 30 November 2025

1,000

292,214

706,558

999,772

Cash flows from operating activities

Cash generated from operations

1

161,873

(957,758

)

Interest paid

(594,692

)

(630,252

)

Tax refund / (paid)

(226,794

)

4,373

Net cash from operating activities

(659,613

)

(1,583,637

)

Cash flows from investing activities

Purchase of tangible fixed assets

(120,391

)

(264,586

)

Increase in loans to related parties

-

(331,975

)

Net cash from investing activities

(120,391

)

(596,561

)

Cash flows from financing activities

New loans in year

-

7,500,000

Loan repayments in year

-

(5,986,706

)

Finance lease repayment

(53,420

)

(36,559

)

Amount introduced by directors

169,283

37,086

Increase in loans from related parties

841,180

416,135

New finance lease in year

-

91,850

Net cash from financing activities

957,043

2,021,806

Increase/(decrease) in cash and cash equivalents

177,039

(158,392

)

Cash and cash equivalents at beginning of year

2

(108,560

)

49,832

Cash and cash equivalents at end of year

2

68,479

(108,560

)

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

2025

2024

£

£

Loss before taxation

(678,372

)

(789,770

)

Depreciation charges

640,065

610,252

Finance costs

594,692

630,252

556,385

450,734

(Increase)/decrease in stocks

(1,308

)

24,572

Increase in trade and other debtors

(266,232

)

(1,254,761

)

Decrease in trade and other creditors

(126,972

)

(178,303

)

Cash generated from operations

161,873

(957,758

)

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 30 November 2025

30/11/25

1/12/24

£

£

Cash and cash equivalents

68,479

6,731

Bank overdrafts

-

(115,291

)

68,479

(108,560

)

Year ended 30 November 2024

30/11/24

1/12/23

£

£

Cash and cash equivalents

6,731

49,832

Bank overdrafts

(115,291

)

-

(108,560

)

49,832

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1/12/24

Cash flow

At 30/11/25

£

£

£

Net cash

Cash at bank and in hand

6,731

61,748

68,479

Bank overdrafts

(115,291

)

115,291

-

(108,560

)

177,039

68,479

Debt

Finance leases

(131,891

)

53,420

(78,471

)

Debts falling due within 1 year

(1,127,143

)

(841,135

)

(1,968,278

)

Debts falling due after 1 year

(7,500,000

)

(45

)

(7,500,045

)

(8,759,034

)

(787,760

)

(9,546,794

)

Total

(8,867,594

)

(610,721

)

(9,478,315

)

1.	STATUTORY INFORMATION

Lion Quays Hotel 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

Accounting convention

These financial statements have been prepared in accordance with FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" ("FRS 102") and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold property at fair value. The principal accounting policies adopted are set out below.

Going Concern

The directors have considered the financial position of the company and its ability to continue as a going concern. The company is reliant on the support of its directors, bankers, and other related parties to meet its liabilities as they fall due. The company balance sheet shows net current liabilities of £1.7m which includes £430K payable to related parties. The net current liabilities does not include bank loans of £7.5m. The financial statements show losses after tax of £787,380 for the year ended 30 November 2025, compared to a losses after tax of £699,199 for the previous year.

During the year, management performed an impairment review of the Company's tangible fixed assets. As a result of this assessment, an impairment charge of £1,672,349 was recognised, of which £1,672,349 was recognised through other comprehensive income against the revaluation reserve.

However, the directors have a reasonable expectation that the company will continue to operate and meet its liabilities as they fall due, with the continued support of the investors and lenders, and therefore, the financial statements have been prepared on a going concern basis.

Turnover

Revenue is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue is recognised as follows:

Rooms

Revenue is recognised when the rooms are occupied.

Food and beverages

Revenue is recognised at the point of sale, when the food and beverages have been provided.

Health club and spa memberships

Revenue is recognised over the period of membership.

Health club and spa treatments and products

Revenue is recognised when the goods or service has been provided.

Deferred revenue consisting of deposits paid in advance are recognised on the day that services are performed.

Goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Tangible fixed assets

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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

Asset class

Depreciation method and rate

Freehold property

2% straight line

Plant and machinery

10% - 20% straight line

Fixtures and fittings

10% - 25% straight line

Office equipment

20% - 25% straight line

Freehold land is not depreciated.

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

Impairment of non-current assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks

Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of inventories over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents

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

Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

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

Basic financial assets

Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit 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.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

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

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.