REGISTERED NUMBER: 01523121 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 31 December 2025

for

Paul Hartmann Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

7

Income Statement

10

Other Comprehensive Income

11

Balance Sheet

12

Statement of Changes in Equity

13

Notes to the Financial Statements

14

DIRECTORS:

T J Coupe

R L Macfarlane

SECRETARY:

T J Coupe

REGISTERED OFFICE:

Unit P2 Parklands

Heywood Distribution Park

Pilsworth Road

Heywood

Greater Manchester

OL10 2TT

REGISTERED NUMBER:

01523121 (England and Wales)

AUDITORS:

Bennett Brooks & Co Limited

Chartered Accountants

& Statutory Auditors

St George's Court

Winnington Avenue

Northwich

Cheshire

CW8 4EE

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

REVIEW OF BUSINESS

The results for the Company show a profit before taxation of £394,302 (2024: £364,998) for the year and revenue of £21,365,602 (2024: £19,383,666). This increase is mainly due to the increase in Wound Management revenues from new product launches. Our Incontinence team are now concentrating on generating profitable private pay business and sales through the NHS national distributor.

Our key objectives for 2026 are a continuation of those set in 2025, namely the rapid penetration of the Wound Care market, consolidation of our position as a leading supplier of Continence Care products via all Private Pay channels and through the NHS National distributor. In support we will continue to develop Customer Partnership and service solutions across all Business Areas with a heavy focus on digital solutions. Above all, we will ensure the Company achieves a satisfactorily profitable result. These objectives were achieved in 2025 and this provides a solid foundation for the Company going forward into 2026.

Our Wound Management Division will continue to step up its marketing efforts, we will continue to ensure that we drive great visibility in the market place with specific focus on increasing our share of voice. Whilst we continue to focus on product sales we will have a larger focus on a wider end-to-end service offering making our Wound Management solutions more attractive to a wider audience.

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the Company’s strategy are subject to a number of risks. Risks are formally reviewed by the Board and appropriate measures put in place to monitor and mitigate them. If more than one event occurs, it is possible that the overall effect of such events would compound the adverse effects on the Company. The key business risks affecting the company are set out below:

Competition

The Company operates in a highly competitive market in relation to product performance, price and service provision. The result is not only a downward pressure on our margins but also a risk that we might fail to meet our customers’ expectations. An increasing amount of our business requires the submission of tenders in order to secure listings on National or Regional Framework Agreements. The customers’ adherence to the tender outcome is 100% and so the win or lose stakes are high. In Wound Management a similar tender process exists in order to become listed on a local or Regional NHS Formulary. Currently the adherence to the tender outcome by customers in this sector is less strict, joint awards are more common and often the winning companies are expected to police the Formulary awards. However, the trend is towards Formularies covering larger geographic areas, more sole supply awards and tighter policing of Formulary awards by NHS Procurement Managers.

In both Business Areas the tenders are decided on a mix of price and non-price service factors. In order to mitigate risk, our sales and marketing teams monitor relevant market prices and competitor service offerings and we undertake regular customer surveys to understand our customers’ expectations and measure how well we are meeting them. We attend de-brief meetings on the outcome of every tender submission and regular Management Team meetings review information gained and adjust future offers accordingly. In addition we meet regularly with a group of medical professionals in all our key Business Areas who assist and advise us regarding our product developments and Customer Partnership Solutions before we launch these.

Market changes

The Government’s Healthcare Reforms continue to progress. The advent of the Future Operating Model seeks to restrict variation through a governing of product choice whilst also controlling the supply chain to the NHS's own supply offering. We are working alongside customers as their business model changes and the devolution of budgets to NHS Commissioners and Clinical Commissioning Groups continues. However all changes serve as both a risk, and an opportunity to HARTMANN in the UK but often with a negative impact of margins.

KEY PERFORMANCE INDICATORS

We have made significant progress in the year on the Company's key objective of profitable growth. The board monitors progress of the overall Company strategy by reference to five KPIs.

Performance during the year, together with historical trend data is set out in the table below:

2025

2024

Growth/(Reduction) in sales

10.2%

-25.2%

This year's increase was due to significant gains in the Wound Management market.

Gross margin

52.8%

49.7%

Gross margin is the ratio of gross profit to sales expressed as a percentage. Gross margin has increased due to the exit from the NHS Tendered Incontinence Home Delivery market.

Return on capital

11.3%

10.9%

Operating profit expressed as a percentage of net assets. Return on invested capital was in line with expectations.

Carriage percentage

3.0%

3.1%

Carriage cost expressed as a percentage of revenue. The reduction was due to the continued more towards larger pallet sized consignments making the final mile cost more efficient.

Employee retention (average for the year)

85.7%

78.2%

Employee retention is the number of employees remaining in the company at the end of each month as a percentage of the total employees working that month. Retention rates have improved due to HR drives on improving staff morale.

ON BEHALF OF THE BOARD:

T J Coupe - Secretary

26 August 2026

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

PRINCIPAL ACTIVITY

Paul Hartmann Limited sells and distributes medical supplies within the UK and Ireland .

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2025 (2024: £Nil).

FUTURE DEVELOPMENTS

The changing NHS environment obliges us to engage effectively with new stakeholders as budgetary responsibility and procurement management becomes allocated to new organisations. Hence the management of the sales team continues to change to facilitate a closer engagement at a higher management level in the NHS and provide the Company with the opportunity to work alongside existing customers and new potential customers who also face changes due to the NHS reforms.

The Company benefits from a loyal and dedicated workforce who are always willing to go the extra mile when needed and the recent benefit of improved access to the resources of our HQ will further enable the UK staff to feel proud to be part of the global HARTMANN organisation.

When our ability to offer unique Customer Partnership Solutions is combined with a closer engagement at high levels within the NHS and improved access to the resources of our Head Quarters (HQ), then our overall competitive advantage is substantially enhanced.

We remain confident that our policy of adaptation to market changes, focus on defined and agreed priorities, training and development of key staff, provision of quality products and reliable service alongside added value Customer Partnership Solutions, will support the Company’s long term future sustainability.

The Company plans to concentrate on the more profitable segments of the business going forward and following the closure of the loss making NHS Continence Care tender business.

DIRECTORS

T J Coupe has held office during the whole of the period from 1 January 2025 to the date of this report.

Other changes in directors holding office are as follows:

R L Macfarlane was appointed as a director after 31 December 2025 but prior to the date of this report.

J D Marquard and J M O'Grady ceased to be directors after 31 December 2025 but prior to the date of this report.

POLITICAL DONATIONS AND EXPENDITURE

The Company made no political donations during the year (2024: £Nil).

THE ENVIRONMENT

The Company recognises its position in the communities in which it operates. The fulfilment of responsibilities towards the environment is viewed as an integral part of this. Specifically the Company aims to:

- comply with the environmental legislation;

- continually assess, and where possible improve, the impact of its operations on the environment

- include environmental considerations in its investment decisions;

- use energy efficiently; and

- progressively, seek similar environmental standards of the Company's suppliers, contractors and business partners.

FINANCIAL RISK AND MANAGEMENT

The Company’s operations expose it to a variety of financial risks including the effects of credit risk, liquidity risk and interest rate risk on debt. The Company has risk management procedures which identify and monitor market, fiscal, operational, regulatory, environmental and product led risks. These processes are also used to identify performance and business development opportunities.

Credit risk

The Company’s principal financial assets are bank balances and trade debtors, which represent the Company’s maximum exposure to credit risk in relation to financial assets. The Company’s credit risk is primarily attributable to its trade debtors. Credit risk is managed by monitoring the aggregate amount and duration of exposure to any one customer depending upon their credit rating. The amounts presented in the balance sheet are net of allowances for doubtful debts, estimated by the Company’s management based on prior experience and their assessment of the current economic climate.

Liquidity risk

The Company’s security with regards to liquidity is achieved through management of working capital and borrowings from other group companies. The amount of these facilities is renegotiated from time to time as required.

Interest rate risk

Interest bearing assets comprise cash and bank deposits, all of which earn interest at a fixed rate. Interest bearing liabilities comprise intercompany loans with fixed repayment terms. The directors monitor the overall level of borrowing and interest costs to limit any adverse effect on the financial performance of the Company.

GOING CONCERN

The company finances its operations through its cash resources. The directors, following a review of forecasts and the company's current financial position, believe that the company has sufficient resources to meet its obligations when they fall due. The directors are therefore of the opinion that the company should continue to adopt the going concern basis of accounting in preparing the annual financial statements.

EMPLOYEES

Disabled persons

The Company has an established policy of encouraging the employment of disabled persons wherever this is practicable and endeavours to ensure that disabled employees benefit from training and career development programmes in common with all other employees. The Company’s policy includes, where practicable, the continued employment of those who may become disabled during their employment.

Employee involvement

As a key part of the Company’s philosophy, great importance is placed on involving staff in the operations. Regular meetings are held between management and employee representatives through which staff are informed and involved in the progress and performance of the Company

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

The auditors, Bennett Brooks & Co Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

T J Coupe - Secretary

26 August 2026

Opinion

We have audited the financial statements of Paul Hartmann Limited (the 'company') for the year ended 31 December 2025 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and 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 101 'Reduced Disclosure Framework' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2025 and of its 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 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:

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to UK tax legislation and regulations which govern the preparation of financial statements, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue, through management bias in manipulation of accounting estimates or accounting for significant transactions outside the normal course of business.

Audit procedures performed included:

-Enquiry of management around actual and potential litigation and claims and instances of non-compliance with laws and regulations;

- Auditing the risk of management override of controls, through testing journal entries and other adjustments for appropriateness, testing accounting estimates (because of the risk of management bias), and evaluating the business rationale of significant transactions outside the normal course of business;

- Review of board minutes and;

- Reviewing financial statement disclosures and agreeing to supporting documentation to assess compliance with applicable laws and regulations.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through 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.

Jason Leach FCA (Senior Statutory Auditor)

for and on behalf of Bennett Brooks & Co Limited

Chartered Accountants

& Statutory Auditors

St George's Court

Winnington Avenue

Northwich

Cheshire

CW8 4EE

26 August 2026

TURNOVER

4

21,365,602

19,383,666

Cost of sales

(10,083,702

)

(9,749,969

)

GROSS PROFIT

11,281,900

9,633,697

Distribution costs

(632,869

)

(608,242

)

Administrative expenses

(10,207,154

)

(8,626,913

)

OPERATING PROFIT

441,877

398,542

Interest receivable and similar income

6

67,009

49,304

508,886

447,846

Interest payable and similar expenses

7

(114,584

)

(82,848

)

PROFIT BEFORE TAXATION

8

394,302

364,998

Tax on profit

9

(117,704

)

(110,772

)

PROFIT FOR THE FINANCIAL YEAR

276,598

254,226

PROFIT FOR THE YEAR

276,598

254,226

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

276,598

254,226

FIXED ASSETS

Owned

Tangible assets

10

635,527

473,418

Right-of-use

Tangible assets

10, 16

2,584,491

1,757,342

3,220,018

2,230,760

CURRENT ASSETS

Stocks

11

934,790

1,152,446

Debtors

12

8,975,449

6,657,796

Cash at bank

181,242

245,024

10,091,481

8,055,266

CREDITORS

Amounts falling due within one year

13

(6,384,644

)

(5,656,861

)

NET CURRENT ASSETS

3,706,837

2,398,405

TOTAL ASSETS LESS CURRENT LIABILITIES

6,926,855

4,629,165

CREDITORS

Amounts falling due after more than one year

14

(2,904,364

)

(922,928

)

PROVISIONS FOR LIABILITIES

17

(103,058

)

(63,402

)

NET ASSETS

3,919,433

3,642,835

CAPITAL AND RESERVES

Called up share capital

18

2,510,000

2,510,000

Retained earnings

1,409,433

1,132,835

SHAREHOLDERS' FUNDS

3,919,433

3,642,835

The financial statements were approved by the Board of Directors and authorised for issue on 26 August 2026 and were signed on its behalf by:

T J Coupe - Director

R L Macfarlane - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2024

2,510,000

878,609

3,388,609

Changes in equity

Total comprehensive income

-

254,226

254,226

Balance at 31 December 2024

2,510,000

1,132,835

3,642,835

Changes in equity

Total comprehensive income

-

276,598

276,598

Balance at 31 December 2025

2,510,000

1,409,433

3,919,433

1.	STATUTORY INFORMATION

Paul Hartmann Limited is a private Company limited by shares and is incorporated and registered in England, United Kingdom. The address of its registered office is Unit P2, Parklands, Heywood Distribution Park, Pilsworth Road, Heywood, OL10 2TT.

The principal activity of the Company is to sell and distribute medical supplies within the UK and Ireland.

2.	ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with Financial Reporting Standard 101 "Reduced Disclosure Framework" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 101 "Reduced Disclosure Framework":

•

the requirements of IFRS 7 Financial Instruments: Disclosures;

•

the requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement;

•

the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect of:

-

paragraphs 53(a), (h) and (j) of IFRS 16; and

-

paragraph 73(e) of IAS 16 Property, Plant and Equipment;

•

the requirements of

-

paragraphs 1 to 44E, 44H(b)(ii) and 45 to 63 of IAS 7 Statement of Cash Flows; and

-

paragraphs 44F, 44G, 44H(a), 44H(b)(i), 44H(b)(iii) and 44H(c) of IAS 7;

•

the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;

•

the requirements of paragraphs 88C and 88D of IAS 12 Income Taxes;

•

the requirements of paragraph 74(b) of IAS 16;

•

the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures;

•

the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group;

Changes in accounting policies

The company has applied the following standards and amendments for the first time for its annual reporting period commencing 1 January 2025:

IAS21 Transactions in Foreign Currencies (Amendment to Lack of Exchangeable).

This did not have an impact on the reported results.

Going Concern

The company finances its operations through its cash resources. The directors, following a review of forecasts and the company's current financial position, believe that the company has sufficient resources to meet its obligations when they fall due. The directors are therefore of the opinion that the company should continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Foreign Currencies

i) Functional and presentation currency

The Company’s functional and presentation currency is the pound sterling (£).

ii) Transactions and balances

Trading transactions denominated in foreign currencies are translated into sterling at the exchange rate ruling when the transaction was entered into. Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the exchange rates ruling at the balance sheet date. Exchange gains or losses are included in operating profit.

Turnover

Revenue comprises the total value of sales (excluding VAT and trade discounts) of goods sold and services provided in the normal course of business which are recognised as follows:

The Company recognises revenue at the point in time when ownership of the products is transferred to the buyer, mainly upon delivery. The transaction price is adjusted for any variable elements, such as rebates and discounts. When a customer has a right of return the period within a given period, the amount of revenue is adjusted for expected returns, which are estimated based on historical product return rates. A return provision for the expected returns is recognised as an adjustment to revenue.

Tangible fixed assets

The cost of property, plant and equipment is their purchase cost, together with any incidental costs of acquisition.

Depreciation is calculated so as to write off the cost of property, plant and equipment, less their estimated residual values, on a straight-line basis over the expected useful economic lives of the assets concerned. The principal annual rates used for this purpose are:

Computer and electrical equipment - 20% or 33%

Motor vehicles - 10%

Fixtures & Fittings - 7% to 33%

Improvements to property - 17%

Financial instruments

i. Financial assets

Basic financial assets, including trade receivables and cash and bank balances, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at 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 the statement of income and retained earnings.

If there is 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 statement of income and retained earnings

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 payables and short term loans, 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.

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.

The Company does not hold or issue derivative financial instruments.

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.

Inventories

Inventories are stated at the lower of cost and estimated selling price less cost to complete and sell. In general, cost is determined on an average cost basis and includes transport and handling costs. Estimated selling price less cost to complete and sell is the price at which inventories can be sold in the normal course of business after allowing for the costs of realisation. Provision is made where necessary for obsolete, slow moving and defective inventory.

Tax expense

Taxation comprises current and deferred tax recognised in the reporting period.

Current or deferred taxation assets and liabilities are not discounted.

Current tax

Current taxation is provided at amounts expected to be paid (or recovered) based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is provided in full on timing differences which result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the financial statements.

A net deferred tax asset is recognised as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as probable that there will be suitable taxable profits against which to recover carried forward tax losses and from which the future reversal of underlying timing differences can be deducted.

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is measured on an undiscounted basis.

Leases

The Company applies IFRS 16 to account for leases. At the inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to restore the underlying asset, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liabilities.

The lease liability is initially measured at the present value of lease payments that were not paid at the commencement date, discounted using the Company's incremental borrowing rate.

The lease liability is measured at amortised cost using the effective interest method. If there is a remeasurement of the lease liability, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded directly in profit or loss if the carrying amount of the right of use asset is zero.

Where a lease is terminated or modified such that all or part of the right-of-use asset is no longer recognised, the Company derecognises the relevant portion of the right-of-use asset and lease liability and recognises any resulting gain or loss in profit or loss.

The company presents right-of-use assets in a separate category in the balance sheet and the movement during the year is analysed in note 16.

Sub-leases

The Company sub-leases a designated area of its leased premises, which forms part of a recognised right-of-use asset, to a separate entity under a contractual lease arrangement. Where the sub-lease is classified as a finance lease, the Company derecognises the relevant portion of the right-of-use asset and recognises a lease receivable at the commencement date of the sub-lease.

The lease receivable is initially measured at the present value of future lease payments receivable under the sub-lease, discounted using the incremental borrowing rate determined at the commencement date. Subsequently, the lease receivable is measured using the effective interest method, with finance income recognised over the lease term. Any gain or loss arising on commencement of the sub-lease is recognised in profit or loss.

Impairment of non-financial assets

At each balance sheet date non-financial assets not carried at fair value are assessed to determine whether there is an indication that the asset may be impaired. If there is such an indication the recoverable amount of the asset is compared to the carrying amount of the asset.

The recoverable amount of the asset is the higher of the fair value less costs to sell and value in use. Value in use is defined as the present value of the future pre-tax and interest cash flows obtainable as a result of the asset’s continued use. The pre-tax and interest cash flows are discounted using a pre-tax discount rate that represents the current market risk-free rate and the risks inherent in the asset.

If the recoverable amount of the asset is estimated to be lower than the carrying amount, the carrying amount is reduced to its recoverable amount. An impairment loss is recognised in the operating profit, unless the asset has been revalued when the amount is recognised in the statement of income and retained earnings to the extent of any previously recognised revaluation. Thereafter any excess is recognised in the statement of income and retained earnings.

If an impairment loss is subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the revised carrying amount does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised in prior periods. A reversal of an impairment loss is recognised in the statement of income and retained earnings.

Employee benefits

The Company provides a range of benefits to employees, including paid holiday arrangements and defined contribution pension scheme.

Short term benefits

Short-term employee benefits such as salaries and compensated absence are recognised as an expense in the year employees render services to the Company.

Pension scheme

The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge disclosed in note 19 represents contributions payable by the Company to the fund.

3.	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 application of the accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are reasonable under the circumstances. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Depreciation

Tangible and intangible assets are recognised at cost, less accumulated depreciation, amortisation and any impairments. Amortisation and depreciation take place over the estimated useful life, down to the assessed residual value. The carrying amount of the company’s fixed assets is tested as soon as changed conditions show that a need for impairment has arisen.

Leases

The company calculates its lease liabilities using an incremental borrowing rate which is lower than available market borrowing rates. The rate used reflects the rate payable upon group borrowings. It is management's expectation, that the purchase of an equivalent building would be acquired through such funding.

The company calculates its lease liabilities for buildings in line with management’s expectation as to whether break clauses will be invoked prior to the termination of the lease. No liability is currently recognised in respect of the period following an assumed break clause exercise date.

4.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2025

2024

£

£

United Kingdom

20,666,117

18,821,765

Europe

699,485

561,901

21,365,602

19,383,666

5.	EMPLOYEES AND DIRECTORS

2025

2024

£

£

Wages and salaries

5,184,457

5,064,878

Social security costs

675,767

562,924

Other pension costs

286,604

278,359

6,146,828

5,906,161

The average number of employees during the year was as follows:

2025

2024

Selling and distribution

65

65

Administration

16

17

81

82

2025

2024

£

£

Directors' remuneration

434,171

447,569

Directors' pension contributions to money purchase schemes

43,188

41,680

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

2

3

Information regarding the highest paid director is as follows:

2025

2024

£

£

Emoluments etc

249,258

247,717

Pension contributions to money purchase schemes

30,254

29,092

6.

INTEREST RECEIVABLE AND SIMILAR INCOME

2025

2024

£

£

Deposit account interest

54,335

49,304

Lessor interest receivable from lessees

12,674

-

67,009

49,304

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

2025

2024

£

£

Other interest and charges

18,009

13,567

Interest payable to group

3,725

5,123

Right-of-use interest charges

92,850

64,158

114,584

82,848

8.	PROFIT BEFORE TAXATION

The profit before taxation is stated after charging/(crediting):

2025

2024

£

£

Cost of inventories recognised as expense

10,083,702

9,749,969

Depreciation - owned assets

146,581

145,456

Depreciation - right-of-use leased assets

831,157

868,549

Profit on disposal of fixed assets

(2,247

)

(550

)

Gain arising upon recognition of IFRS16 sub-lease

(58,293

)

-

Auditors' remuneration

26,275

23,130

Auditors' remuneration for non audit work

5,000

-

Foreign exchange differences

(17,586

)

24,531

9.

TAXATION

Analysis of tax expense

2025

2024

£

£

Current tax:

Tax

78,500

110,772

Overprovision in prior year

(452

)

-

Total current tax

78,048

110,772

Deferred tax

39,656

-

Total tax expense in income statement

117,704

110,772

Factors affecting the tax expense

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2025

2024

£

£

Profit before income tax

394,302

364,998

Profit multiplied by the standard rate of corporation tax in the UK of 25% (2024 - 25%)

98,576

91,250

Effects of:

Expenses not deductible for tax purposes

20,633

17,329

Adjustments in respect of prior years

(452

)

141

Other short term timing differences

(1,053

)

2,052

Tax expense

117,704

110,772