REGISTERED NUMBER: 12871951 (England and Wales)

Group Strategic Report, Report of the Director and

Consolidated Financial Statements for the Year Ended 30 November 2025

for

S.A.R. Corporate Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Director

6

Report of the Independent Auditors

7

Consolidated Income Statement

10

Consolidated Other Comprehensive Income

11

Consolidated Balance Sheet

12

Company Balance Sheet

13

Consolidated Statement of Changes in Equity

14

Company Statement of Changes in Equity

15

Consolidated Cash Flow Statement

16

Notes to the Consolidated Cash Flow Statement

17

Notes to the Consolidated Financial Statements

18

DIRECTOR:

Mr J Valentinas

REGISTERED OFFICE:

RJA House

Manby Road

Immingham

North Lincolnshire

DN40 2DW

REGISTERED NUMBER:

12871951 (England and Wales)

AUDITORS:

BK Plus Ltd Chartered Accountants

and Statutory Auditors

Abacus House

Pennine Business Park

Huddersfield

West Yorkshire

HD2 1GQ

This report explains the development and performance of the business during the year, its position at the year end, the principal risks and uncertainties facing it, and the priorities that will support its future development.

During 2025, turnover increased by 0.6% from £31 million to £31.3 million following the previous years' of increase of 7.68%. Following the increase in turnover the gross profit margin has increased from 17.09% to 21.36%. The Group has also increased it's net profit by £2,846,229..

The director is aware of the strong results for the year and feels that the business is still well placed to deal with future challenges that may arise in the future. The management accounts for the subsequent period showed that the Group is trading at high levels of profitability.

Business model and principal activities

SAR Metals operates in the recovery, processing and responsible onward supply of recyclable materials, with expertise in catalytic converters and waste electrical and electronic equipment (WEEE). The business combines purchasing and collection capability, controlled receipt and storage, technical identification and assessment, processing, stock management, secure handling, and sales to approved downstream outlets in the United Kingdom and international markets.

The operating model is organised around three complementary areas:

Catalytic converters (CATS): purchasing, grading, sampling, processing and sale of materials containing platinum group metals. Commercial returns depend on accurate material assessment, disciplined purchasing and stock control, and effective management of commodity price exposure.

WEEE and IT assets: collection, receipt, segregation, processing and downstream recovery of electrical equipment and components. During 2025 the Group strengthened its focus with investment on ability to complete secure IT asset disposition, including controlled data sanitisation and the development of an auditable data wiping service through accreditation.

International trading and supply: development of overseas supplier and customer relationships, export and logistics coordination, and access to specialist refiners and downstream processors. This diversifies routes to market while increasing the need for effective currency, customs, transport and counterparty controls.

The Group seeks to create value through technical knowledge, speed of service, reliable settlement, compliance led operations and the ability to offer customers an integrated route for both commodity recovery and secure data bearing equipment.

REVIEW OF BUSINESS

Operational development

Throughout 2025 management continued to develop the business beyond a predominantly commodity led model. Greater emphasis was placed on operational control, traceability, margin recognition within controls of the management team not market volatility.

The Group continued to invest in its Immingham operations, including site capacity, workflow design, security, material segregation and the management information

needed to monitor stock, processing and customer activity. Management maintained oversight across purchasing, collections, warehouse processing, international movements and downstream sales, with a focus on protecting margin.

Systems, data and management information

During the year the Group progressed the digitisation of operational and commercial workflows. The strategic direction is to connect customer due diligence, collections, weights, stock, laboratory or assay information, commissions, compliance records and management reporting more effectively. Better quality operational data is expected to improve purchasing decisions, margin visibility, traceability and management accountability.

Systems development brings its own governance requirements. Management therefore recognises the need for access controls, change management, reliable backups, supplier due diligence, data protection compliance, testing and clear ownership of automated decisions.

People, health and safety

The Group’s operations rely on experienced employees across purchasing, logistics, warehouse processing, technical assessment, compliance, finance, security and management. Recruitment, retention, supervision and competency are therefore key operational priorities.

Management heavily focussed on a safe environment and continued to promote safe systems of work, incident reporting, housekeeping, segregation and accountability. The Group recognises that growth must be matched by sufficient management capacity and consistent standards across permanent employees, agency workers, contractors and transport providers.

Customers, suppliers and markets

The Group serves a broad range of suppliers and customers, from smaller collectors and recyclers to larger commercial and institutional organisations. Its strategy is to deepen relationships with quality counterparties while avoiding excessive dependence on any single customer, supplier, refiner, territory or route to market.

Customer expectations increasingly extend beyond price and collection speed to include evidence of legal compliance, environmental performance, information security, reporting and downstream transparency. The Group’s investment in certifications, documented processes and digital reporting is intended to improve its ability to compete for larger and longer term contracts.

Strategy and priorities

The Group’s strategy is to develop a resilient, compliance led recycling and resource recovery business with a broader service offering and stronger recurring customer relationships. The principal priorities are:

Grow secure IT asset disposition and data-destruction services using ISO 27001 controls, auditable evidence and clear customer service levels.

Increase WEEE processing volumes within permitted capacity while maintaining segregation, fire prevention, battery control and downstream assurance.

Maintain technical and commercial strength in catalytic converters through disciplined buying, accurate grading and assay, stock control and diversified refining routes.

Develop larger corporate and public sector opportunities where compliance, security, reporting and national collection capability are valued.

Strengthen management information so that decisions are based on physical volumes, unit economics, cash conversion and risk adjusted return as well as headline revenue and gross profit.

Invest selectively in sites, plant, security and people where there is a clear operational need which emphasis on a sales approach with growth targets in the forefront of our priority.

PRINCIPAL RISKS AND UNCERTAINTIES

Commodity price risk

The value of catalytic converters and recovered metals is influenced by global markets. Rapid price movements can affect purchasing margins, stock values and customer behaviour. The Group manages this through selective purchasing, shorter exposure periods where practicable, stock monitoring, diversified outlets and regular review of margin and market exposure.

Foreign currency risk

International purchases and sales create exposure to sterling, euro and US dollar movements. Management monitors currency positions, seeks to match receipts and payments where possible and considers the timing of conversions. Formal hedging has been investigated and continues to be in the pipeline conversation.

People and skills

Specialist knowledge and effective supervision are essential. Loss of key employees or insufficient management capacity could affect service and control. The Group addresses this through recruitment, training, succession planning, documented procedures and clearer accountability.

Stakeholder considerations

In making strategic and operational decisions, the director considers the likely long term consequences for the Group and the interests of employees, customers, suppliers, regulators, local communities, lenders and other business partners. Attention is given to safe employment, reliable customer service, fair dealing, environmental compliance, information security, cash discipline and maintaining the Group’s reputation for responsible recycling.

Key decisions involving new services, sites, equipment, contracts or international movements are assessed based on commercial return, operational capability, legal permissions, health and safety, environmental impact, data protection, insurance and the availability of competent people to deliver the activity.

Outlook

The director believes that the Group remains well placed to develop its position in catalytic converter recovery, WEEE processing while new VAS offering with secure IT asset disposition. Demand for transparent recycling, secure data handling and auditable downstream recovery is expected to create opportunities with larger commercial and public sector customers.

The outlook is nevertheless subject to commodity prices, exchange rates, regulation, working capital requirements, insurance conditions and the pace at which new contracts convert into profitable activity. Management’s focus will therefore remain on controlled growth, compliance, margin quality, cash conversion and the delivery of projects within the Group’s operational capacity.

ON BEHALF OF THE BOARD:

Mr J Valentinas - Director

26 August 2026

The director presents his report with the financial statements of the company and the group for the year ended 30 November 2025.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of the collection of non-hazardous waste.

DIVIDENDS

The total distribution of dividends for the year ended 30 November 2025 will be £ 2,500,000 .

DIRECTOR

Mr J Valentinas held office during the whole of the period from 1 December 2024 to the date of this report.

DISCLOSURE IN THE STRATEGIC REPORT

The director's review of the business and their consideration of the risks and uncertainties surrounding the business maybe found in the Strategic Report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Group Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the director is 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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, BK Plus Ltd Chartered Accountants, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr J Valentinas - Director

26 August 2026

Opinion

We have audited the financial statements of S.A.R. Corporate Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 November 2025 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 30 November 2025 and of the group's 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 group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Other information

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

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page six, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the director is responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the group or the parent company or to cease operations, or has 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 work involves obtaining an understanding of the company and the relevant laws and regulations applicable in the industry.

We design our audit work based on our assessment of the risk of material misstatement in the accounts but recognising that the risk of not detecting fraud is higher as this is likely to involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

We plan our work so that the information disclosed in the financial statements agrees to supporting documentation and management expectations. Our tests included agreeing the financial statement disclosures to underlying supporting

documentation, enquiries with management, review of client's operation of controls within the year. There are inherent limitations in the audit procedures described and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

Our work includes an assessment of the company's accounting systems which enables us to focus our testing on areas that may be more susceptible to misstatement. This work involves :assessing the company's susceptibility to material misstatement or occurrence of fraud the testing of transactions where the assessment of risk is higher including in particular journal entries, management estimates and large or unusual transactions checking that the information contained in the financial statements is consistent with the company's underlying accounting records and the results of our audit work

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.

Chris Hession C.A (Senior Statutory Auditor)

for and on behalf of BK Plus Ltd Chartered Accountants

and Statutory Auditors

Abacus House

Pennine Business Park

Huddersfield

West Yorkshire

HD2 1GQ

26 August 2026

TURNOVER

31,285,944

31,009,068

Cost of sales

24,603,174

25,711,146

GROSS PROFIT

6,682,770

5,297,922

Distribution costs

2,761,774

2,194,546

Administrative expenses

2,431,198

4,703,937

5,192,972

6,898,483

OPERATING PROFIT/(LOSS)

5

1,489,798

(1,600,561

)

Interest receivable and similar income

298,342

547,691

1,788,140

(1,052,870

)

Interest payable and similar expenses

8

8

5,227

PROFIT/(LOSS) BEFORE TAXATION

1,788,132

(1,058,097

)

Tax on profit/(loss)

9

266,154

69,174

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

1,521,978

(1,127,271

)

Profit/(loss) attributable to:

Owners of the parent

1,521,978

(1,127,271

)

PROFIT/(LOSS) FOR THE YEAR

1,521,978

(1,127,271

)

OTHER COMPREHENSIVE INCOME

Interest from associates

(20,021

)

19,686

Reversed interest from associates

1,034

(170,831

)

Income tax relating to components of other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(18,987

)

(151,145

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,502,991

(1,278,416

)

Total comprehensive income attributable to:

Owners of the parent

1,502,991

(1,278,416

)

FIXED ASSETS

Intangible assets

12

8,124

23,643

Tangible assets

13

544,245

581,204

Investments

14

123,741

122,176

Investment property

15

773,000

773,000

1,449,110

1,500,023

CURRENT ASSETS

Stocks

16

2,288,122

634,481

Debtors

17

10,470,235

9,157,961

Cash at bank and in hand

3,398,747

6,656,254

16,157,104

16,448,696

CREDITORS

Amounts falling due within one year

18

3,542,511

2,889,488

NET CURRENT ASSETS

12,614,593

13,559,208

TOTAL ASSETS LESS CURRENT LIABILITIES

14,063,703

15,059,231

PROVISIONS FOR LIABILITIES

20

135,066

133,585

NET ASSETS

13,928,637

14,925,646

CAPITAL AND RESERVES

Called up share capital

21

17

17

Capital redemption reserve

22

83

83

Other reserves

22

13,472

12,613

Retained earnings

22

13,915,065

14,912,933

SHAREHOLDERS' FUNDS

13,928,637

14,925,646

The financial statements were approved by the director and authorised for issue on 26 August 2026 and were signed by:

Mr J Valentinas - Director

FIXED ASSETS

Intangible assets

12

-

-

Tangible assets

13

-

22,988

Investments

14

36

36

Investment property

15

773,000

773,000

773,036

796,024

CURRENT ASSETS

Debtors

17

4,151,634

3,969,087

Cash at bank

3,078,988

5,034,340

7,230,622

9,003,427

CREDITORS

Amounts falling due within one year

18

13,956

14,443

NET CURRENT ASSETS

7,216,666

8,988,984

TOTAL ASSETS LESS CURRENT LIABILITIES

7,989,702

9,785,008

CAPITAL AND RESERVES

Called up share capital

21

17

17

Other reserves

13,472

12,613

Retained earnings

7,976,213

9,772,378

SHAREHOLDERS' FUNDS

7,989,702

9,785,008

Company's profit for the financial year

724,715

1,324,237

The financial statements were approved by the director and authorised for issue on 26 August 2026 and were signed by:

Mr J Valentinas - Director

Called up

Capital

share

Retained

redemption

Other

Total

capital

earnings

reserve

reserves

equity

£

£

£

£

£

Balance at 1 December 2023

17

20,191,349

83

12,613

20,204,062

Changes in equity

Dividends

-

(4,000,000

)

-

-

(4,000,000

)

Total comprehensive income

-

(1,278,416

)

-

-

(1,278,416

)

Balance at 30 November 2024

17

14,912,933

83

12,613

14,925,646

Changes in equity

Dividends

-

(2,500,000

)

-

-

(2,500,000

)

Total comprehensive income

-

1,502,132

-

859

1,502,991

Balance at 30 November 2025

17

13,915,065

83

13,472

13,928,637

Called up

share

Retained

Other

Total

capital

earnings

reserves

equity

£

£

£

£

Balance at 1 December 2023

17

12,469,371

12,613

12,482,001

Changes in equity

Dividends

-

(4,000,000

)

-

(4,000,000

)

Total comprehensive income

-

1,303,007

-

1,303,007

Balance at 30 November 2024

17

9,772,378

12,613

9,785,008

Changes in equity

Dividends

-

(2,500,000

)

-

(2,500,000

)

Total comprehensive income

-

703,835

859

704,694

Balance at 30 November 2025

17

7,976,213

13,472

7,989,702

Cash flows from operating activities

Cash generated from operations

1

(871,255

)

2,644,242

Interest paid

(8

)

(5,227

)

Tax paid

38,977

(102,769

)

Taxation refund

-

277,769

Net cash from operating activities

(832,286

)

2,814,015

Cash flows from investing activities

Purchase of intangible fixed assets

(2,205

)

(3,488

)

Purchase of tangible fixed assets

(255,011

)

(242,839

)

Purchase of fixed asset investments

-

(19

)

Sale of tangible fixed assets

18,899

36,390

Interest received

298,342

376,861

Loans with related undertakings

(16,585

)

15,472

Net cash from investing activities

43,440

182,377

Cash flows from financing activities

Loans to associates

(45,047

)

(1,108,328

)

Associate loan repayments

76,386

395,000

Equity dividends paid

(2,500,000

)

(4,000,000

)

Net cash from financing activities

(2,468,661

)

(4,713,328

)

Decrease in cash and cash equivalents

(3,257,507

)

(1,716,936

)

Cash and cash equivalents at beginning of year

2

6,656,254

8,373,190

Cash and cash equivalents at end of year

2

3,398,747

6,656,254

1.	RECONCILIATION OF PROFIT/(LOSS) BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

30.11.25

30.11.24

£

£

Profit/(loss) before taxation

1,788,132

(1,058,097

)

Depreciation charges

286,811

253,203

Loss on disposal of fixed assets

3,993

57,779

Unrealised exchange rate variances

(540

)

1,456

Equity distribution of interest

(20,021

)

-

Finance costs

8

5,227

Finance income

(298,342

)

(547,691

)

1,760,041

(1,288,123

)

(Increase)/decrease in stocks

(1,653,641

)

1,160,883

(Increase)/decrease in trade and other debtors

(1,331,849

)

2,304,555

Increase in trade and other creditors

354,194

466,927

Cash generated from operations

(871,255

)

2,644,242

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

3,398,747

6,656,254

Year ended 30 November 2024

30.11.24

1.12.23

£

£

Cash and cash equivalents

6,656,254

8,373,190

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.12.24

Cash flow

At 30.11.25

£

£

£

Net cash

Cash at bank and in hand

6,656,254

(3,257,507

)

3,398,747

6,656,254

(3,257,507

)

3,398,747

Total

6,656,254

(3,257,507

)

3,398,747

1.	STATUTORY INFORMATION

S.A.R. Corporate 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 General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

The financial statements have been prepared under the historical cost convention, modified to include investment properties and certain financial instruments at fair value.

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 £.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases it judgements, estimates and assumptions on historical experience and on various other factors, including expectations of future events, management believes this to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The following judgments have the most significant effect on the amounts recognised in the financial statements:

Investments

On a periodic basis of every three years the company director obtains a professional valuation of the investment properties and any adjustment to the fair value are reflected in the Income Statement. In the intervening years, assessment of fair value is made through observation of similar properties marketed in the local area.

Estimation of useful lives of assets

The company determines the estimated useful lives and related depreciation charges for its property, plant and equipment. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation charge will increase where the useful lives are less than previously estimated. Technically obsolete or non-strategic assets that have been abandoned or sold will be written off or impaired.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Intangible assets

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

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

Tangible fixed assets

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

At each reporting date the company assess 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 recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land and property

- In accordance with the property

Plant and machinery

- 20% on cost

Fixtures and fittings

- 20 - 33% on cost

Motor vehicles

- 33% on cost

Computer equipment

- 33% on cost

No depreciation charge is provided in respect of freehold land, however, the depreciation charge for freehold property is assessed on an annual basis after taking into consideration the condition and value of the property. Subject to this assessment, depreciation is accounted for where deemed necessary.

Investment property

Investment property is recognised at fair value at the year end date. Any aggregate surplus or deficit arising from changes in fair value is recognised in the profit and loss account.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Cost is derived from the purchase price of materials.

Financial instruments

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

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

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

Basic financial assets

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

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.