REGISTERED NUMBER: 01988357 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 31 December 2025

for

Gilpin Lodge Country House Hotel Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

7

Income Statement

10

Other Comprehensive Income

11

Statement of Financial Position

12

Statement of Changes in Equity

13

Statement of Cash Flows

14

Notes to the Statement of Cash Flows

15

Notes to the Financial Statements

17

DIRECTORS:

B Cunliffe

Mrs Z Cunliffe

SECRETARY:

Mrs Z Cunliffe

REGISTERED OFFICE:

Gilpin Lodge

Crook Road

Windermere

English Lakes

LA23 3NE

REGISTERED NUMBER:

01988357 (England and Wales)

AUDITORS:

Hardy & Company (Hyde) Ltd

Chartered Certified Accountants

& Statutory Auditors

Onward Chambers

34 Market Street

Hyde

Cheshire

SK14 1AH

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

FAIR REVIEW OF THE BUSINESS

The directors report that 2025 was a year of consolidation and improved financial performance following the significant strategic investment undertaken across the business during the previous year. Importantly, the directors consider that the work completed during 2025 established a stronger operational and commercial platform from which the company expects to realise further benefits during 2026 and beyond.

The company delivered a significant improvement in its reported financial performance during the year. Operating profit increased by approximately 29.7%, from £503,000 in 2024 to £652,000 in 2025.

The management team remained closely focused on cost control, operational efficiency and the quality of revenue generated, while continuing to protect the guest experience and the company's five-star positioning.

Reported earnings before interest, taxation, depreciation and amortisation increased to approximately £1.116 million, compared with £1.032 million in 2024, representing an increase of approximately £84,000, or 8.2%.

The directors note that comparisons between the two years are affected by certain non-recurring items, including a loss on the disposal of fixed assets recognised during 2024. Nevertheless, the improvement in operating profit and the return to a profit before taxation demonstrate meaningful progress during 2025.

The directors are encouraged that the investments made during 2024 and 2025 in the Gilpin brand, digital marketing, public relations, service infrastructure and operational systems have begun to translate into improved reported profitability. However, a significant proportion of the anticipated benefits from these initiatives had not been fully realised by the end of the 2025 financial year.

The company therefore entered 2026 with a stronger operational base, improved management information and a clearer commercial strategy. The directors believe the benefits of the work undertaken during 2025 to become increasingly evident throughout 2026, particularly through stronger revenue management, improved pricing and yield management, tighter cost control, increased operational efficiency and a greater focus on profitable revenue rather than revenue growth in isolation.

During 2026, the company is progressing the development and launch of a new website. The new website is intended to improve the customer journey, strengthen the presentation of the Gilpin brand and increase the proportion of bookings made directly with the company, thereby reducing reliance on third-party booking channels and associated commission costs.

The company is also expanding the responsible use of artificial intelligence across digital marketing, revenue management, guest communications, data analysis and administrative processes. The directors anticipate these initiatives may contribute to more targeted marketing, faster and better-informed commercial decision-making, improved productivity and a more personalised guest experience.

Further benefits are expected during 2026 from the continued development of the company's hotel and restaurant brands, enhanced marketing activity, improved commercial decision-making and a more disciplined approach to payroll and other operating costs.

The directors believe that the investments and operational changes undertaken during 2025 will allow the company to build upon the progress already achieved and support stronger and more sustainable financial performance during 2026 and beyond.

The company recognised a non-cash downward revaluation of its fixed assets during the year, which is reflected within other comprehensive income. This accounting adjustment did not affect the company's operating profit, profit before taxation or EBITDA.

The directors remain mindful of the continuing pressures affecting the hospitality sector, including wage inflation, recruitment and retention challenges, consumer confidence and wider economic conditions. Management will therefore continue to focus closely on profitability, cash generation, cost control and the effective deployment of resources.

Overall, the directors regard the improved results achieved in 2025 as an encouraging initial return from the strategic investments made in recent years. The company's focus during 2026 is to build upon this progress and more fully convert those investments into sustained improvements in revenue quality, operational efficiency, profitability and cash generation.

PRINCIPAL RISKS AND UNCERTAINTIES

The company's principal activity continued to be the provision of hotel accommodation and restaurant services for visitors and others in the Lake District. As such, the principal risks it faces are:

General economic conditions: the tourism industry is significantly affected by the state of the general economy.

Interest rates: the company has invested heavily in the hotel in recent years, including the development of the five new spa lodges and the conversion of the coach houses to accommodate Gilpin Spice with much of the funding provided by variable rate bank loans.

The ever increasing difficulty of recruiting, retaining and accommodating staff in this rural area.

KEY PERFORMANCE INDICATORS

The company's key performance indicators continue to be occupancy levels, total sales, operating profit and payroll costs as detailed above in the fair review of the business section.

ON BEHALF OF THE BOARD:

B Cunliffe - Director

17 August 2026

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of hotel and restaurant proprietors.

DIVIDENDS

Ordinary dividends were paid amounting to £84,130. The directors do not recommend payment of a final dividend.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2025 to the date of this report.

B Cunliffe

Mrs Z Cunliffe

FINANCIAL INSTRUMENTS - FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The company's operations expose it to a variety of financial risks that include the effects of changes in debt market prices, credit risk, liquidity risk and interest rate risk (where relevant). The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company by monitoring levels of debt finance and the related finance costs. The company does not use derivative financial instruments to manage interest rate costs and as such, no hedge accounting is applied.

Given the size of the company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board, they oversee this themselves.

The directors will revisit the appropriateness of this policy should the company's operations change in size or nature.

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, Hardy & Company (Hyde) Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

B Cunliffe - Director

17 August 2026

Opinion

We have audited the financial statements of Gilpin Lodge Country House Hotel Limited (the 'company') for the year ended 31 December 2025 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 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 we considered those laws and regulations that have a direct impact on the preparation of 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 or reduce expenditures, and management bias in accounting estimates and judgemental areas of the financial statements such as revenue recognition.

Audit procedures performed by the engagement team included:

- discussions with management, including consideration of known or suspected instances of non-compliance with

laws and regulations and fraud.

- understanding of management's internal controls designed to prevent and detect irregularities.

- reviewing the litigation records in so far as it related to non-compliance with laws and regulations and fraud.

- reviewing relevant meeting minutes.

- designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing.

- testing transactions entered into outside of the normal course of the Company's business; and

- identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.

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 financial 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 collusion A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at ww.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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.

Paul Robert Campbell (Senior Statutory Auditor)

for and on behalf of Hardy & Company (Hyde) Ltd

Chartered Certified Accountants

& Statutory Auditors

Onward Chambers

34 Market Street

Hyde

Cheshire

SK14 1AH

24 August 2026

TURNOVER

3

8,922,737

8,836,301

Cost of sales

1,351,775

1,516,209

GROSS PROFIT

7,570,962

7,320,092

Administrative expenses

6,918,622

6,817,156

OPERATING PROFIT

5

652,340

502,936

Interest payable and similar expenses

6

476,206

538,028

PROFIT/(LOSS) BEFORE TAXATION

176,134

(35,092

)

Tax on profit/(loss)

7

100,743

(68,220

)

PROFIT FOR THE FINANCIAL YEAR

75,391

33,128

PROFIT FOR THE YEAR

75,391

33,128

OTHER COMPREHENSIVE INCOME

Revaluation of fixed assets in the year

(1,717,848

)

-

Income tax relating to other comprehensive income

383,610

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(1,334,238

)

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(1,258,847

)

33,128

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

15,010,000

16,938,277

15,010,000

16,938,277

CURRENT ASSETS

Stocks

11

136,267

127,736

Debtors

12

382,882

293,382

Cash in hand

3,558

4,149

522,707

425,267

CREDITORS

Amounts falling due within one year

13

3,615,264

9,486,320

NET CURRENT LIABILITIES

(3,092,557

)

(9,061,053

)

TOTAL ASSETS LESS CURRENT LIABILITIES

11,917,443

7,877,224

CREDITORS

Amounts falling due after more than one year

14

(5,766,806

)

-

PROVISIONS FOR LIABILITIES

18

(360,522

)

(744,132

)

NET ASSETS

5,790,115

7,133,092

CAPITAL AND RESERVES

Called up share capital

19

107,000

107,000

Share premium

20

118,000

118,000

Revaluation reserve

20

2,413,687

3,747,925

Retained earnings

20

3,151,428

3,160,167

SHAREHOLDERS' FUNDS

5,790,115

7,133,092

The financial statements were approved by the Board of Directors and authorised for issue on 17 August 2026 and were signed on its behalf by:

B Cunliffe - Director

Called up

share

Retained

Share

Revaluation

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Balance at 1 January 2024

107,000

3,239,530

118,000

3,742,739

7,207,269

Changes in equity

Dividends

-

(107,305

)

-

-

(107,305

)

Total comprehensive income

-

27,942

-

5,186

33,128

Balance at 31 December 2024

107,000

3,160,167

118,000

3,747,925

7,133,092

Changes in equity

Dividends

-

(84,130

)

-

-

(84,130

)

Total comprehensive income

-

75,391

-

(1,334,238

)

(1,258,847

)

Balance at 31 December 2025

107,000

3,151,428

118,000

2,413,687

5,790,115

Cash flows from operating activities

Cash generated from operations

1

937,001

1,038,393

Interest paid

(465,156

)

(519,597

)

Interest element of hire purchase payments paid

(11,050

)

(18,431

)

Tax paid

(59,146

)

(147,893

)

Net cash from operating activities

401,649

352,472

Cash flows from investing activities

Purchase of tangible fixed assets

(253,374

)

(644,922

)

Sale of tangible fixed assets

-

396,138

Net cash from investing activities

(253,374

)

(248,784

)

Cash flows from financing activities

Capital repayments in year

(9,319

)

(63,610

)

Amount withdrawn by directors

(58,638

)

(45,651

)

Equity dividends paid

(84,130

)

(107,305

)

Net cash from financing activities

(152,087

)

(216,566

)

Decrease in cash and cash equivalents

(3,812

)

(112,878

)

Cash and cash equivalents at beginning of year

2

(885,206

)

(772,328

)

Cash and cash equivalents at end of year

2

(889,018

)

(885,206

)

1.	RECONCILIATION OF PROFIT FOR THE FINANCIAL YEAR TO CASH GENERATED FROM OPERATIONS

31.12.25

31.12.24

£

£

Profit for the financial year

75,391

33,128

Depreciation charges

463,804

528,876

Loss on disposal of fixed assets

-

168,614

Finance costs

476,206

538,028

Taxation

100,743

(68,220

)

1,116,144

1,200,426

Increase in stocks

(8,531

)

(41,423

)

(Increase)/decrease in trade and other debtors

(83,805

)

170,093

Decrease in trade and other creditors

(86,807

)

(290,703

)

Cash generated from operations

937,001

1,038,393

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 December 2025

31.12.25

1.1.25

£

£

Cash and cash equivalents

3,558

4,149

Bank overdrafts

(892,576

)

(889,355

)

(889,018

)

(885,206

)

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

4,149

4,034

Bank overdrafts

(889,355

)

(776,362

)

(885,206

)

(772,328

)

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.25

Cash flow

At 31.12.25

£

£

£

Net cash

Cash at bank and in hand

4,149

(591

)

3,558

Bank overdrafts

(889,355

)

(3,221

)

(892,576

)

(885,206

)

(3,812

)

(889,018

)

Debt

Finance leases

(110,500

)

9,319

(101,181

)

Debts falling due within 1 year

(5,739,723

)

5,707,223

(32,500

)

Debts falling due after 1 year

-

(5,766,806

)

(5,766,806

)

(5,850,223

)

(50,264

)

(5,900,487

)

Total

(6,735,429

)

(54,076

)

(6,789,505

)

1.	STATUTORY INFORMATION

Gilpin Lodge Country House Hotel Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

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

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 as modified by the revaluation of certain assets.

Significant judgements and estimates

The preparation of the financial statements requires management to make estimates, judgements and assumptions that affect the amounts reported. These judgements and estimates are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows:

Valuation of freehold property

As detailed in note 10 to the financial statements, the freehold property, Gilpin Lodge Country House Hotel is stated at fair value based on a valuation carried out by CBRE, a firm of external independent Chartered Surveyors and Registered Valuers using their extensive experience in the location and category of property valued. When calculating their market valuation they have made various assumptions including estimates of maintainable levels of trade and profitability achievable by a competent operator acting in an efficient manner, which may be different to future levels of trade and profitability that might be achieved by the company.

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 company recognises accommodation income when the stay occurs. For all other income streams revenue is recognised as and when the goods and services are provided by the company.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

-

2% on cost

Plant and machinery

-

15% on reducing balance

Fixtures and fittings

-

15% on reducing balance

Motor vehicles

-

25% on reducing balance

Computer equipment

-

15% on reducing balance

Tangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated depreciation and impairment losses.

Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

No depreciation has been provided on the freehold property as any charge would be immaterial due to the high residual values.

An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in capital and reserves, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in capital and reserves in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in capital and reserves in respect of that asset, the excess shall be recognised in profit or loss.

Stocks

Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stocks to their present location and condition.

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

Financial instruments

A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument.

Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Debt instruments are subsequently measured at amortised cost.

Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.

For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets or either assessed individually or grouped on the basis of similar credit risk characteristics.

Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.

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 statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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.

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.

Impairment

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

When it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

Provisions

Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event; it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the Balance sheet and the amount of the provision as an expense.

Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised in finance costs in profit or loss in the period it arises.

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

3.

TURNOVER

The turnover and profit (2024 - loss) before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

31.12.25

31.12.24

£

£

United Kingdom

8,922,737

8,836,301

8,922,737

8,836,301