REGISTERED NUMBER: 01977248 (England and Wales)

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 MARCH 2026

FOR

YORKSHIRE PLYWOOD LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Income Statement

10

Other Comprehensive Income

11

Balance Sheet

12

Statement of Changes in Equity

14

Cash Flow Statement

15

Notes to the Cash Flow Statement

16

Notes to the Financial Statements

18

DIRECTORS:

J J Aylward

I C Thomson

SECRETARY:

I C Thomson

REGISTERED OFFICE:

228 Leads Road

Hull

HU7 0DF

REGISTERED NUMBER:

01977248 (England and Wales)

AUDITORS:

Sowerby

Chartered Accountants and Statutory Auditors

Beckside Court

Annie Reed Road

Beverley

East Yorkshire

HU17 0LF

The directors present their strategic report for the year ended 30 March 2026.

PRINCIPAL ACTIVITIES AND REVIEW OF BUSINESS

The principal activity of the company throughout the year has continued to be the manufacture and distribution of wood-based panel products.

The directors are pleased to advise that the sales in the 25 / 26 year were up almost 10% on year 24 / 25 which is an excellent result in what has been a difficult year both industrially and politically. The position in the Middle East has had and will continue to cause unrest in markets generally.

The confusing oil and freight cost fluctuations creating pressure on gross margins have been difficult to navigate and despite the situation we have managed to improve our returns in year 25 / 26.

In year 25 the directors decided to increase production capacity by installing a new bonding line expecting this to be operational during the 25/26 year but due to manufacturing delays at the supplier the machine was only operational in March 26 but we can see the effect it will have on the 26 / 27 results.

With this in mind the directors have actioned a plan to make several site improvements to make savings on offsite storage by creating additional factory and storage space at the Hull site. A modernization of machinery has been taken up and by the end of the 26 / 27 year will see a further increase in capacity.

Day to day trading in raw timber / plywood has remained tough but has contributed to the overall performance of the company. The directors are pleased to have been able to retain a settled workforce / staff in production and sales as it is important to have a team that work together to produce and deliver products for customers across the country on time.

With this situation despite the current geopolitical problems we feel we are in a position to improve our balance sheet in the 26 / 27 year.

Finally, the directors would like to take this opportunity to acknowledge the invaluable contribution of our staff, whose dedication, commitment and hard work have enabled us to navigate the challenges we face whilst delivering exceptional customer service.

KEY PERFORMANCE INDICATORS

The company's key financial performance indicators during the year were as follows:

2026

2025

£

£

Gross profit

5,774,197

4,458,997

EBITDA

2,503,437

1,621,556

The directors believe that the key risks facing the company include:

o continued uncertainty due to the economic environment within the UK and import markets;

o unpredictable supply availability and cost price impacts of raw materials; and

o uncertain consumer demand

In managing the business the directors have established controls to enable them to respond to and mitigate the impact of such risks.

ON BEHALF OF THE BOARD:

J J Aylward - Director

26 August 2026

The directors present their report with the financial statements of the company for the year ended 30 March 2026.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the manufacture and distribution of wood-based panel products.

DIVIDENDS

The total distribution of dividends for the year ended 30 March 2026 will be £ 355,500 .

FUTURE DEVELOPMENTS

The directors intend to continue developing and extending the customer base of the company.

DIRECTORS

The directors shown below have held office during the whole of the period from 31 March 2025 to the date of this report.

J J Aylward

I C Thomson

FINANCIAL INSTRUMENTS

The directors have reviewed the financial risk management objectives and policies of the company.

The company's principal financial instruments comprise trade debtors, trade creditors, bank loans and overdrafts, and hire purchase agreements. The main purpose of these instruments is to raise funds to finance the company's operations.

The company's approach to managing risks applicable to the financial instruments is shown below.

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.

Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

In respect of bank loans and overdrafts, these loans are from financial institutions. The interest rate on the loans is variable, but the monthly repayments are fixed.

Currency risk is restricted to the short term settlement of trading balances with customers and suppliers.

The company is a lessee in respect of finance leased assets. The monthly repayments on finance lease agreements are fixed and liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	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 ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

J J Aylward - Director

26 August 2026

Opinion

We have audited the financial statements of Yorkshire Plywood Limited (the 'company') for the year ended 30 March 2026 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 30 March 2026 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page 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:

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.

The primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

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

- The nature of the industry and sector, control environment and business performance;

- We also obtained an understanding of the legal and regulatory frameworks that the company operates in and determined that the most significant are those that relate to the reporting framework, FRS 102, the Companies Act 2006 and the relevant tax laws and regulations in the UK. In addition, we concluded that there are certain significant laws and regulations which may have an effect on the determination of the amounts and disclosures in the financial statements, relating in majority to general health and safety and employee matters;

- We reviewed results of our enquiries of management about their own identification and assessment of the risks of irregularities; and assessed how the entity identifies, evaluates and complies with laws and regulations and whether management were aware of any instances of non-compliance. We corroborated our enquiries through consideration of the results of our audit procedures across the company;

- We also considered how the entity detects and responds to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud, and;

- We considered the controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how management monitors those controls

- The internal controls established to mitigate risks of non-compliance with laws and regulations were also investigated.

- We also considered the existence of performance targets and their potential influence on management to manage earnings.

- Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk.

- These procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error.

- We reviewed financial statement disclosures and performed testing to supporting documentation to assess compliance with applicable laws and regulations.

- We also tested the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. There was a focus on manual journals and journals indicating large or unusual transactions; enquiries of company management; and challenging the assumptions and judgements made by management by reviewing third party evidence wherever possible. It must be noted that there are significant manual procedures that are not often seen for a company of this size, our audit procedures were therefore adjusted to account for this.

- The results of our procedures did not identify any instances or irregularities, including fraud.

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.

Patrick Scargill ACA FCCA (Senior Statutory Auditor)

for and on behalf of Sowerby

Chartered Accountants and Statutory Auditors

Beckside Court

Annie Reed Road

Beverley

East Yorkshire

HU17 0LF

26 August 2026

TURNOVER

3

30,565,133

28,021,588

Cost of sales

24,790,936

23,562,591

GROSS PROFIT

5,774,197

4,458,997

Administrative expenses

3,366,543

2,921,180

OPERATING PROFIT

5

2,407,654

1,537,817

Interest payable and similar expenses

6

173,446

221,000

PROFIT BEFORE TAXATION

2,234,208

1,316,817

Tax on profit

7

574,985

336,084

PROFIT FOR THE FINANCIAL YEAR

1,659,223

980,733

PROFIT FOR THE YEAR

1,659,223

980,733

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,659,223

980,733

FIXED ASSETS

Intangible assets

9

208

208

Tangible assets

10

946,068

623,038

946,276

623,246

CURRENT ASSETS

Stocks

11

5,647,680

6,681,069

Debtors

12

7,760,188

6,961,922

Cash in hand

229

229

13,408,097

13,643,220

CREDITORS

Amounts falling due within one year

13

9,821,627

11,072,362

NET CURRENT ASSETS

3,586,470

2,570,858

TOTAL ASSETS LESS CURRENT LIABILITIES

4,532,746

3,194,104

CREDITORS

Amounts falling due after more than one year

14

(8,840

)

(66,667

)

PROVISIONS FOR LIABILITIES

18

(235,509

)

(142,763

)

NET ASSETS

4,288,397

2,984,674

CAPITAL AND RESERVES

Called up share capital

19

20,100

20,100

Retained earnings

20

4,268,297

2,964,574

SHAREHOLDERS' FUNDS

4,288,397

2,984,674

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:

I C Thomson - Director

J J Aylward - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 31 March 2024

20,100

2,339,341

2,359,441

Changes in equity

Dividends

-

(355,500

)

(355,500

)

Total comprehensive income

-

980,733

980,733

Balance at 30 March 2025

20,100

2,964,574

2,984,674

Changes in equity

Dividends

-

(355,500

)

(355,500

)

Total comprehensive income

-

1,659,223

1,659,223

Balance at 30 March 2026

20,100

4,268,297

4,288,397

Cash flows from operating activities

Cash generated from operations

1

2,331,382

1,366,053

Interest paid

(171,366

)

(220,262

)

Interest element of hire purchase payments paid

(2,080

)

(738

)

Tax paid

(597,475

)

-

Net cash from operating activities

1,560,461

1,145,053

Cash flows from investing activities

Purchase of tangible fixed assets

(368,813

)

(112,225

)

Net cash from investing activities

(368,813

)

(112,225

)

Cash flows from financing activities

New loans in year

-

4,863,597

Loan repayments in year

(373,326

)

(5,667,368

)

Movement in other loans

(568,262

)

211,154

Capital repayments in year

(15,875

)

(17,938

)

Amount introduced by directors

521,609

629,209

Amount withdrawn by directors

(405,608

)

(547,885

)

Equity dividends paid

(355,500

)

(355,500

)

Net cash from financing activities

(1,196,962

)

(884,731

)

(Decrease)/increase in cash and cash equivalents

(5,314

)

148,097

Cash and cash equivalents at beginning of year

2

(81,603

)

(229,700

)

Cash and cash equivalents at end of year

2

(86,917

)

(81,603

)

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

2026

2025

£

£

Profit before taxation

2,234,208

1,316,817

Depreciation charges

95,783

83,739

Finance costs

173,446

221,000

2,503,437

1,621,556

Decrease in stocks

1,033,389

354,879

Increase in trade and other debtors

(883,044

)

(503,243

)

Decrease in trade and other creditors

(322,400

)

(107,139

)

Cash generated from operations

2,331,382

1,366,053

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 March 2026

30/3/26

31/3/25

£

£

Cash and cash equivalents

229

229

Bank overdrafts

(87,146

)

(81,832

)

(86,917

)

(81,603

)

Year ended 30 March 2025

30/3/25

31/3/24

£

£

Cash and cash equivalents

229

229

Bank overdrafts

(81,832

)

(229,929

)

(81,603

)

(229,700

)

3.	ANALYSIS OF CHANGES IN NET DEBT

Other

non-cash

At 31/3/25

Cash flow

changes

At 30/3/26

£

£

£

£

Net cash

Cash at bank

and in hand

229

-

229

Bank overdrafts

(81,832

)

(5,314

)

(87,146

)

(81,603

)

(5,314

)

(86,917

)

Debt

Finance leases

-

15,875

-

(34,125

)

Debts falling due

within 1 year

(6,297,283

)

874,921

-

(5,422,362

)

Debts falling due

after 1 year

(66,667

)

66,667

-

-

(6,363,950

)

957,463

-

(5,456,487

)

Total

(6,445,553

)

952,149

-

(5,543,404

)

1.	STATUTORY INFORMATION

Yorkshire Plywood Limited is a private company limited by shares and incorporated and domiciled in England. It has its registered office and principal place of business at 228 Leads Road, Hull, England, HU7 0DF.

The principal activity of the company throughout the year has continued to be the manufacture and distribution of wood-based panel products.

The presentational currency of the financial statements is Pound Sterling (£).

The financial statements are prepared for the 12-month period ended 31 March 2026. The company's accounting reference date is 30 March. In accordance with section 390 Companies Act 2006, the directors have determined the financial year end to be 31 March 2026, being within seven days of the accounting reference date

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.

The directors believe that the development, performance, and business position is fairly reflected within the Strategic Report.

Going Concern

Having regard to liquidity risk, current market conditions and other factors affecting the company including , current economic impacts, the use of the going concern basis of accounting is appropriate as, in the opinion of the directors, there are no material uncertainties related to events or conditions that may cast significant doubt about the ability of the company to continue as a going concern.

As of 31 March 2026, the company had net assets of £4,288,397 an increase from the 2025 position of £2,984,674 and net current assets of £3,586,470 (2025: £2,570,858). The financial statements have been prepared on a going concern basis.

The company's financial forecasts show that the company's cashflow gives the company the ability to continue to operate for the foreseeable future. In the near future the company will have reduced their debt servicing as the bank loans mature over the next few years (see note 15). The company's overdraft and lending facilities were renewed with the bank in November 2025 and the company continues to trade within its thresholds. The company has the support of the directors and its bankers.

The directors are confident about the future position of the company and prepare these accounts on a going concern basis with the understanding that the directors and shareholders will offer financial support to the company if required for a period of not less than twelve months from the date of these financial statements.

Based on these facts and the current financial position, forecasts and cash flows of the company, the directors have concluded it is appropriate for the financial statements to be prepared on a going concern basis.

Significant judgements and estimates

In the application of the company's accounting policies management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

No key sources of estimation uncertainty are noted by management that have a significant effect on the amounts recognised in the financial statements.

Turnover

Turnover is the amount derived from ordinary activities, measured at the fair value of the consideration received or receivable. Turnover excludes value added tax and trade discounts.

Turnover from the sale of goods is recognised at the point of sale.

All sales are recognised at the point which the company has fulfilled its contractual obligations and the risks and rewards attached to the product, have been transferred to the customer.

Tangible fixed assets

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

Improvements to property

-

10% on reducing balance

Plant and machinery

-

10% on reducing balance

Fixtures and fittings

-

10% on reducing balance

Motor vehicles

-

25% on a reducing balance basis

Tangible fixed assets are held under the historical cost model. A prior revaluation was taken as deemed cost upon transition to Financial Reporting Standard 102.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment loss is recognised as an expense immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell, after making, due allowance for obsolete and slow moving items. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Stock is calculated on an average basis.

In respect of work in progress and finished goods, cost includes a relevant proportion of overheads according to the stage of manufacture/completion.

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

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

Foreign currencies

The financial statements are presented in Sterling, which is also the functional currency of the company. Transactions in currencies other than the functional currency of the company are recorded at the rate of exchange on the date the transaction occurred. Monetary items denominated in other currencies are translated at the rate prevailing at the end of the reporting period. All differences are taken to the profit and loss. Non-monetary items that are measured at historic cost in a foreign currency are not translated.

Hire purchase and leasing commitments

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

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

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

Pension costs and other post-retirement benefits

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

Trade and other debtors

Trade and other debtors are initially recognised at the transaction price and thereafter stated at amortised cost using the effective interest method, less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such case the receivables are stated at cost less impairment losses for bad and doubtful debts.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the balance sheet, bank overdrafts are shown within borrowings or current liabilities.

Trade and other creditors

Trade and other creditors are initially recognised at the transaction price and are thereafter stated at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

Impairment of financial assets

Financial assets, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that have occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

Interest bearing borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between the amount initially recognised and redemption value being recognised in the statement of comprehensive income over the period of the borrowings, together with any interest and fees payable, using the effective interest method.

Related parties

For the purposes of these financial statements, a party is considered to be related to the company if:

(i) the party has the ability, directly or indirectly, through one or more intermediaries, to control the company or exercise significant influence over the company in making financial and operating policy decisions, or has joint control over the company;

(ii) the company and the party are subject to common control;

(iii) the party is an associate of the company or a joint venture in which the company is a venture

(iv) the party is a member of key management personnel of the company or the company's parent, or a close family member of such an individual, or is an entity under the control, joint control or significant influence of such individuals;

(v) the party is a close family member of a party referred to in (i) or is an entity under the control, joint control or significant influence of such individuals; or