REGISTERED NUMBER: 14886929 (England and Wales)

Group Strategic Report,

Report of the Director and

Consolidated Financial Statements

for the Year Ended 31 December 2025

for

Oakwrights Holding Ltd

Page

Company Information

1

Group Strategic Report

2

Report of the Director

5

Report of the Independent Auditors

6

Consolidated Income Statement

9

Consolidated Other Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

18

DIRECTOR:

T J Crump

REGISTERED OFFICE:

The Lakes

Swainshill

Hereford

Herefordshire

HR4 7PU

REGISTERED NUMBER:

14886929 (England and Wales)

AUDITORS:

DJH Audit Limited

Statutory Auditors

2 Wyevale Business Park

Kings Acre

Hereford

Herefordshire

HR4 7BS

The director presents his strategic report of the company and the group for the year ended 31 December 2025.

The Director presents the Strategic Report of Oakwrights Holding Ltd and its subsidiary undertakings for the year ended 31 December 2025.

Principal Activities

Oakwrights Holding Ltd is the parent company of a group of businesses operating within the sustainable construction sector. The Group's activities encompass bespoke oak frame design and manufacture, residential development, architectural and construction services, and innovative building performance technologies.

The Group continues to pursue opportunities that complement its established position in the oak frame market, expanding into broader areas of sustainable construction, timber framing, development, energy efficiency and construction innovation.

Business Review

During the year, the Group continued its strategy of diversification whilst maintaining its reputation for high-quality craftsmanship and sustainable building solutions.

The Group's principal trading businesses, T J Crump Oakwrights Ltd and Oakwrights Developments Ltd, continued to deliver projects across the residential construction and development sectors. The businesses benefited from continued demand for bespoke and sustainable building solutions, despite wider economic pressures affecting the construction industry. Oakwrights Developments has continued to procure plot opportunities for land owners specialising in the custom build and self build market. This is a long and slow process which sees almost all opportunities caught up in the planning process for 24 months.

The Group also continued to develop AeroBarrier UK, a specialist business focused on reducing air leakage within new and existing buildings. The directors believe that increasing regulatory requirements relating to energy efficiency and building performance present significant opportunities for growth in this area.

The directors remain committed to identifying and developing opportunities that align with the Group's long-term objective of becoming a leading provider of sustainable construction solutions.

Industry Environment

The UK construction sector continues to face a challenging economic backdrop characterised by inflationary pressures, higher borrowing costs and ongoing labour shortages. Despite these challenges, demand for sustainable and energy-efficient buildings remains strong.

Government initiatives aimed at increasing housing supply, together with the anticipated implementation of the Future Homes Standard, are expected to drive further demand for innovative construction methods and technologies that improve building performance and reduce environmental impact.

The directors believe that the Group is well positioned to benefit from these long-term market trends through its established reputation, technical expertise and diversified service offering.

Strategy

The Group's strategy is centred on the development of complementary businesses operating within the wider sustainable construction sector. This approach reduces reliance on any single market segment whilst allowing the Group to capitalise on emerging opportunities created by changing regulations, technological advancement and evolving customer preferences.

Key strategic priorities include:

- Continuing to diversify the Group's activities within the sustainable construction market.

- Expanding the adoption and market presence of AeroBarrier UK.

- Maintaining the Group's reputation for quality, craftsmanship and customer service.

- Improving operational efficiency and resource utilisation across all Group companies.

- Identifying strategic partnerships, acquisitions and development opportunities that support long-term growth.

- Investing in innovation and technologies that improve building performance and sustainability.

Principal Risks and Uncertainties

The Group operates within a sector that is influenced by economic conditions, consumer confidence and government policy. The principal risks and uncertainties facing the Group include:

- Economic Conditions

Demand for construction and development projects can be affected by wider economic conditions, including interest rates, inflation and consumer confidence.

- Construction Market Activity

A reduction in housing market activity or delays to development projects may impact future revenues and profitability.

- Labour and Skills Availability

The construction industry continues to experience skills shortages in certain trades, which may affect project delivery and operational efficiency.

- Material Costs and Supply Chain Disruption

Fluctuations in the cost and availability of timber, construction materials and specialist components may impact project margins and delivery schedules.

- Regulatory Changes

Changes to planning regulations, building standards and environmental legislation may create both opportunities and compliance challenges for the Group.

The directors monitor these risks regularly and seek to mitigate their impact through prudent financial management, operational planning, diversification of activities and maintaining strong relationships with customers and suppliers.

Financial Position

The last two financial years have presented challenging trading conditions for both the construction industry and the wider economy. Slower planning process, increased planning costs and reports, increased red tape and mitigation, higher interest rates, inflationary pressures and reduced consumer confidence have impacted demand across the self-build and residential development sectors. Despite these headwinds, the Group has remained financially resilient through prudent cost management, careful cash flow control and continued investment in its long-term strategic objectives.

Trading momentum strengthened significantly during the final four months of the financial year, with sales performance exceeding recent trends and generating a strong forward order book. Due to the nature of the Group's projects, there is typically a period of between nine and twelve months from securing a sale to recognising revenue, as projects progress through planning, design and regulatory approval before entering production.

At the year end, the Group held approximately £12 million of contracted work in progress scheduled for completion during 2027, together with a further £3 million of contracted projects programmed to commence during the year. This substantial pipeline provides strong visibility over future revenues and gives the directors confidence that the Group is well positioned to deliver improved financial performance as these projects progress through production and completion.

The directors remain satisfied with the Group's financial position at the year end. The Group continues to maintain a strong balance sheet and remains focused on generating sustainable long-term value for shareholders through disciplined investment, operational efficiency, prudent management of working capital and continued diversification within the sustainable construction sector.

Future Developments

The directors remain optimistic regarding the Group's future prospects. Increasing demand for sustainable construction solutions, together with evolving energy efficiency requirements and government support for housing delivery, are expected to create opportunities across the Group's operations.

The Group will continue to invest in its existing businesses whilst exploring new opportunities that align with its strategic objectives. Particular focus will be placed on technologies and services that improve building performance, reduce environmental impact and support the transition towards more sustainable construction practices.

The directors believe that the Group's diversified business model, experienced management team and strong reputation position it well to deliver continued growth and create long-term value for shareholders

ON BEHALF OF THE BOARD:

T J Crump - Director

6 September 2026

The director presents his report with the financial statements of the company and the group for the year ended 31 December 2025.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2025 will be £ 126,000 .

DIRECTOR

T J Crump held office during the whole of the period from 1 January 2025 to the date of this 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, DJH Audit Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

T J Crump - Director

6 September 2026

Opinion

We have audited the financial statements of Oakwrights Holding Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 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 31 December 2025 and of the group's 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 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.

We would like to draw your attention to the fact that during the year ended 31 December 2025 Oakwrights Developments Ltd, whose results are consolidated into these financial statements, had an overdrawn balance sheet position of £208,212 overdrawn (2024: £60,645), so is reliant on the parent company to support it for the foreseeable future. Refer to note 1 accounting policies - going concern, which explains how the Company is addressing the overdrawn position. If these actions were to prove to be unsuccessful, this may indicate that a material uncertainty exists and may cast doubt on the Company's ability to continue as a going concern.

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 five, 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:

We have also 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 are related to management bias in accounting estimates and judgemental areas of the financial statements.

Audit procedures performed by the engagement team included:

-

Discussions with the Board, Management and Company Secretary involved in the Risk and Compliance functions and the Company's legal function, including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;

-

Evaluation and testing of the operating effectiveness of management's controls designed to prevent and detect irregularities;

-

Assessment of matters reported on the Company's fraud register and the results of management's investigation of such matters;

-

Identifying and testing journal entries based on risk criteria;

-

Designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing; and

-

Testing transactions entered into outside the normal course of the Company's business as appropriate.

There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financials statements, the less likely we would become aware of it. 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 collusions.

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.

Daniel Crowther FCA FCCA (Senior Statutory Auditor)

for and on behalf of DJH Audit Limited

Statutory Auditors

2 Wyevale Business Park

Kings Acre

Hereford

Herefordshire

HR4 7BS

10 September 2026

TURNOVER

15,252,842

16,413,387

Cost of sales

(13,151,526

)

(13,920,551

)

GROSS PROFIT

2,101,316

2,492,836

Administrative expenses

(2,943,524

)

(3,156,841

)

(842,208

)

(664,005

)

Other operating income

180,656

171,188

OPERATING LOSS

4

(661,552

)

(492,817

)

Interest receivable and similar income

815

43,562

(660,737

)

(449,255

)

Interest payable and similar expenses

5

(113,517

)

(480,540

)

LOSS BEFORE TAXATION

(774,254

)

(929,795

)

Tax on loss

6

209,448

293,287

LOSS FOR THE FINANCIAL YEAR

(564,806

)

(636,508

)

Loss attributable to:

Owners of the parent

(564,806

)

(636,508

)

LOSS FOR THE YEAR

(564,806

)

(636,508

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(564,806

)

(636,508

)

Total comprehensive income attributable to:

Owners of the parent

(564,806

)

(636,508

)

FIXED ASSETS

Tangible assets

9

1,982,268

2,343,411

Investments

10

-

-

1,982,268

2,343,411

CURRENT ASSETS

Stocks

11

3,470,875

3,942,894

Debtors

12

916,729

715,433

Cash at bank and in hand

1,194,689

1,473,796

5,582,293

6,132,123

CREDITORS

Amounts falling due within one year

13

(3,781,719

)

(3,701,320

)

NET CURRENT ASSETS

1,800,574

2,430,803

TOTAL ASSETS LESS CURRENT LIABILITIES

3,782,842

4,774,214

CREDITORS

Amounts falling due after more than one year

14

(336,673

)

(505,610

)

PROVISIONS FOR LIABILITIES

17

(276,513

)

(408,142

)

NET ASSETS

3,169,656

3,860,462

CAPITAL AND RESERVES

Called up share capital

18

700

700

Retained earnings

19

3,168,956

3,859,762

SHAREHOLDERS' FUNDS

3,169,656

3,860,462

The financial statements were approved by the director and authorised for issue on 6 September 2026 and were signed by:

T J Crump - Director

FIXED ASSETS

Tangible assets

9

-

-

Investments

10

300

300

300

300

CURRENT ASSETS

Debtors

12

700

700

CREDITORS

Amounts falling due within one year

13

(300

)

(300

)

NET CURRENT ASSETS

400

400

TOTAL ASSETS LESS CURRENT LIABILITIES

700

700

CAPITAL AND RESERVES

Called up share capital

18

700

700

SHAREHOLDERS' FUNDS

700

700

Company's profit for the financial year

-

-

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the director and authorised for issue on 6 September 2026 and were signed by:

T J Crump - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2024

605

4,536,270

4,536,875

Changes in equity

Issue of share capital

95

-

95

Dividends

-

(40,000

)

(40,000

)

Total comprehensive income

-

(636,508

)

(636,508

)

Balance at 31 December 2024

700

3,859,762

3,860,462

Changes in equity

Dividends

-

(126,000

)

(126,000

)

Total comprehensive income

-

(564,806

)

(564,806

)

Balance at 31 December 2025

700

3,168,956

3,169,656

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2024

700

-

700

Changes in equity

Balance at 31 December 2024

700

-

700

Changes in equity

Balance at 31 December 2025

700

-

700

Cash flows from operating activities

Cash generated from operations

1

650,718

99,063

Interest paid

(81,654

)

(21,208

)

Interest element of hire purchase payments paid

(31,863

)

(459,332

)

Tax paid

-

127,908

Net cash from operating activities

537,201

(253,569

)

Cash flows from investing activities

Purchase of tangible fixed assets

(79,534

)

(63,864

)

Sale of tangible fixed assets

82,979

103,936

Interest received

815

43,562

Net cash from investing activities

4,260

83,634

Cash flows from financing activities

Loan repayments in year

(720,044

)

-

Capital repayments in year

(170,562

)

(244,051

)

Amount introduced by directors

196,055

123,961

Share issue

-

95

Equity dividends paid

(126,000

)

(40,000

)

Net cash from financing activities

(820,551

)

(159,995

)

Decrease in cash and cash equivalents

(279,090

)

(329,930

)

Cash and cash equivalents at beginning of year

2

1,473,779

1,803,709

Cash and cash equivalents at end of year

2

1,194,689

1,473,779

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

31.12.25

31.12.24

£

£

Loss before taxation

(774,254

)

(929,795

)

Depreciation charges

390,085

469,136

Profit on disposal of fixed assets

(32,387

)

(6,997

)

Bad debts written off

39,449

-

Finance costs

113,517

480,540

Finance income

(815

)

(43,562

)

(264,405

)

(30,678

)

Decrease in stocks

472,019

353,667

(Increase)/decrease in trade and other debtors

(29,696

)

52,651

Increase/(decrease) in trade and other creditors

472,800

(276,577

)

Cash generated from operations

650,718

99,063

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2025

31.12.25

1.1.25

£

£

Cash and cash equivalents

1,194,689

1,473,796

Bank overdrafts

-

(17

)

1,194,689

1,473,779

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

1,473,796

1,803,709

Bank overdrafts

(17

)

-

1,473,779

1,803,709

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.25

Cash flow

At 31.12.25

£

£

£

Net cash

Cash at bank and in hand

1,473,796

(279,107

)

1,194,689

Bank overdrafts

(17

)

17

-

1,473,779

(279,090

)

1,194,689

Debt

Finance leases

(425,308

)

170,562

(254,746

)

Debts falling due within 1 year

(491,058

)

468,789

(22,269

)

Debts falling due after 1 year

(252,221

)

40,207

(212,014

)

(1,168,587

)

679,558

(489,029

)

Total

305,192

400,468

705,660

1.	STATUTORY INFORMATION

Oakwrights Holding Ltd 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.

Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Oakwrights Holding Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates. The group was formed on 01/11/2023.

These consolidated accounts reflect the combined results of Oakwrights Holding Limited and its 100% owned subsidiaries T J Crump Oakwrights Limited and Oakwrights Developments Ltd. All financial statements are made up to 31 December 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases. A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Turnover

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

The turnover shown in the profit and loss account represents amounts invoiced during the year, exclusive of Value Added Tax.

In respect of long-term contracts and contracts for on-going services, turnover represents the value of work done in the year, including estimates of amounts not invoiced. Turnover in respect of long-term contracts and contracts for on-going services is recognised by reference to the stage of completion.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

New Workshop

-

Straight line over 25 years

Improvements to property

-

Straight line over 25 years

Plant and machinery

-

15% on reducing balance

Motor vehicles

-

25% reducing balance

Office equipment

-

15% on reducing balance

Items under £500 are not capitalised.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks

Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Where the company enters into a lease which entails taking substantially all the risks and rewards of ownership of an asset, the lease is treated as a finance lease. The asset is recorded in the balance sheet as a tangible fixed asset and is depreciated in accordance with the above depreciation policies. Future instalments under such leases, net of finance charges, are included within creditors. Rentals payable are apportioned between the finance element, which is charged to the profit and loss account on a straight line basis, and the capital element which reduces the outstanding obligation for future instalments

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.