REGISTERED NUMBER: 06022429 (England and Wales)

Group Strategic Report,

Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31 December 2025

for

Tileflair Group Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Statement of Profit or Loss and Other Comprehensive Income

9

Consolidated Statement of Financial Position

10

Company Statement of Financial Position

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Statement of Cash Flows

15

Notes to the Consolidated Statement of Cash Flows

16

Notes to the Consolidated Financial Statements

17

Reconciliation of Equity

30

Reconciliation of Loss

32

DIRECTORS:

C Cakir Suna

A D Kizilkaya

REGISTERED OFFICE:

Tileflair Ltd

Highwood Lane

Cribbs Causeway

Bristol

BS34 5TQ

REGISTERED NUMBER:

06022429 (England and Wales)

AUDITORS:

Mander Duffill

Chartered Accountants & Statutory Auditor

The Old Post Office

41-43 Market Place

Chippenham

Wiltshire

SN15 3HR

The directors present their strategic report of the company and the group for the year ended 31 December 2025.

During the year the group prepared its financial statements under International Financial Reporting Standards (IFRS) for the first time. The transition date was 1 January 2025. The adoption of IFRS has resulted in changes to the recognition and measurement of certain assets, liabilities, income and expenses, most notably in relation to leases where operating leases are now classed as right of use assets.

THE START OF A NEW CHAPTER

2025 was a year of transformation for the Group. On 19 June 2025, the entire share capital of Tileflair Group Limited was acquired by QUA Granite Hayal Yapi ve Ürünleri Sanayi Ticaret A.S.

This combination brings together two complementary strengths: Tileflair's experienced team, its long-standing retail expertise, established brand and store network in the UK market; and QUA Granite's large-scale manufacturing capability, product development expertise and sourcing strength. Throughout the transition, our priority has been to maintain business continuity for our customers, suppliers and colleagues, while progressively integrating the resources made available through the new ownership.

2025 PERFORMANCE

Group revenue for 2025 was £10.9 million, broadly in line with the prior year's £11.1 million. Gross profit was £2.76 million, EBITDA was £510k and the loss before tax was £753k.

The directors consider that these results should be viewed in the context of the change of ownership and the Group's first-time adoption of IFRS. Under IFRS 16, leases have been brought onto the balance sheet, with right-of-use assets of approximately £3.4 million and lease liabilities of £3.34 million reported at the year end. This change limits the direct comparability of certain line items with the prior year.

During the year, a historical intra-group balance of approximately £6.6 million was settled by way of an accounting adjustment and an intra-group dividend. The majority of the reduction in equity arises from this transaction and does not reflect the Group's trading performance. The Group continues to report a positive equity position at the year end.

STRATEGIC PRIORITIES

Cost advantage through manufacturing strength. At the core of our strategy is bringing QUA Granite's manufacturing strength into Tileflair's product range. Sourcing directly from the manufacturer is expected to deliver a significant reduction in purchasing costs, higher gross margins, tighter quality control and greater security of supply. Early indicators from the first half of 2026 support this, with the unit stock cost of QUA products at approximately half the Group average and their gross margin significantly above the average. Together with Bien-sourced products, which form part of our sourcing strategy, we aim to increase the share of these products in sales progressively, subject to commercial performance.

Digital growth. The website has become the Group's highest-margin sales channel. Investment in digital marketing and online infrastructure will continue to be treated as a measurable driver of growth.

Investment capacity. The Group aims to benefit from the Turquality support programme in respect of eligible store, marketing, digitalisation and systems expenditure. These contributions are expected to support investment capacity mainly from 2027 onwards, and short-term cash planning does not rely on them.

Operational efficiency and diversification. We are assessing synergies in joint purchasing, data sharing, ERP and logistics, alongside complementary growth areas such as outdoor products, natural stone and commercial/architectural channels.

PRINCIPAL RISKS AND UNCERTAINTIES

The Group remains exposed to price risk, credit risk, liquidity risk and cash flow risk. Management monitors these risks closely through weekly cash flow tracking, working capital and inventory management, collection discipline and cost control.

GOING CONCERN

By way of a letter of support dated 6 May 2026, QUA Granite has confirmed that it will provide financial support to Tileflair Limited, to enable it to meet its liabilities as they fall due, for a period of at least 12 months from the date of approval of the financial statements, and that it will notify the company should it intend to withdraw this support.

OUTLOOK

The directors view the period ahead as one of transformation in which Tileflair's commercial and financial structure is being reshaped. We believe that combining Tileflair's retail experience with QUA Granite's manufacturing strength will, over time, create a more efficient, higher-margin business with a stronger capacity to generate its own cash.

ON BEHALF OF THE BOARD:

C Cakir Suna - Director

30 September 2026

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

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of retail and distribution of wall and floor tiles and associated products.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2025.

DIRECTORS

The directors who have held office during the period from 1 January 2025 to the date of this report are as follows:

P J Broadhurst - resigned 19 June 2025

Mrs L R Broadhurst - resigned 19 June 2025

D A Brown - resigned 19 June 2025

M T L Johnson - resigned 27 October 2025

C Cakir Suna - appointed 19 June 2025

A D Kizilkaya - appointed 19 June 2025

FINANCIAL INSTRUMENTS

The group has procedures to identify risk, protect and manage the group from events that may hinder its financial performance objectives. The objectives aim to limit counterparty exposure, ensure sufficient working capital exists and monitor risk and manage it at a business unit level. The group does not consider it necessary to employ derivatives such as forward currency contracts to manage risk based on the groups current activities.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group 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 UK-adopted international accounting standards. 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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 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 directors are 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 each director has taken all the steps that she ought to have taken as a director in order to make herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Mander Duffill, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

C Cakir Suna - Director

30 September 2026

Opinion

We have audited the financial statements of Tileflair Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows and Notes to the Consolidated 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 International Financial Reporting Standards (IFRSs) as adopted by the UK.

In our opinion:

-	the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2025 and of the group's loss for the year then ended;

-	the group financial statements have been properly prepared in accordance with IFRSs as adopted by the UK;

-	the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the UK and as applied in accordance with the provisions of the Companies Act 2006; and

-	the financial statements 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 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 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 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 Group 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 Group 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 Group 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 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 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 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 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 four, 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 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 directors either intend to liquidate the group or the parent 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:

In planning and designing our audit tests, we identify and assess the risks of material mis-statements, whether due to fraud or error. Our risk assessment procedures included:

- Enquiries of management about the entities policies and procedures on compliance with laws and regulations and whether they were aware of any instances of noncompliance together with the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations.

- Enquiries of management about the entities policies and procedures on fraud risks, including any actual, suspected or alleged fraud.

- Considered the nature of the industry and sector, control environment and business performance including the key drivers for directors' remuneration, bonus levels and performance targets.

- Reading minutes of meetings of those charged with governance.

We communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

We obtained an understanding of the legal and regulatory frameworks that the entity operates in, through discussions with the director, and from our commercial knowledge and experience of the sector in which the company operates, to enable us to identify the key laws and regulations applicable to the company. We focused on specific laws and regulations which we considered may have a direct material effect on the financial statement or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental and health and safety legislation.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override of controls including the following:

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

- Enquiry of management concerning actual and potential litigation and claims.

- Reviewing correspondence with HMRC, and the company's legal advisors.

- Addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments, assessing whether 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.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance.

In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

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.

Julian Duffill FCA (Senior Statutory Auditor)

for and on behalf of Mander Duffill

Chartered Accountants & Statutory Auditor

The Old Post Office

41-43 Market Place

Chippenham

Wiltshire

SN15 3HR

30 September 2026

CONTINUING OPERATIONS

Revenue

10,905,714

11,083,696

Cost of sales

(8,149,801

)

(7,991,394

)

GROSS PROFIT

2,755,913

3,092,302

Other operating income

283,679

59,420

Administrative expenses

(3,485,507

)

(3,777,467

)

OPERATING LOSS

(445,915

)

(625,745

)

Finance costs

4

(311,553

)

(31,555

)

Finance income

4

4,779

6,528

LOSS BEFORE INCOME TAX

5

(752,689

)

(650,772

)

Income tax

7

192,177

96,086

LOSS FOR THE YEAR

(560,512

)

(554,686

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(560,512

)

(554,686

)

Loss attributable to:

Owners of the parent

(560,512

)

(554,686

)

Total comprehensive income attributable to:

Owners of the parent

(560,512

)

(554,686

)

ASSETS

NON-CURRENT ASSETS

Goodwill

9

231,420

463,187

Owned

Property, plant and equipment

10

261,496

295,799

Investment property

11

-

300,000

Right-of-use

Property, plant and equipment

10, 20

3,404,576

-

Investments

12

-

840

Deferred tax

21

148,739

79,832

4,046,231

1,139,658

CURRENT ASSETS

Inventories

13

1,177,537

1,121,373

Trade and other receivables

14

943,445

881,058

Tax receivable

-

16,104

Cash and cash equivalents

15

202,757

437,205

2,323,739

2,455,740

TOTAL ASSETS

6,369,970

3,595,398

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital

16

320,000

320,000

Revaluation reserve

17

-

207,384

Capital redemption reserve

17

11,904

11,904

Retained earnings

17

826,040

991,299

TOTAL EQUITY

1,157,944

1,530,587

LIABILITIES

NON-CURRENT LIABILITIES

Financial liabilities - borrowings

Lease liabilities

19, 20

2,714,745

360,788

Deferred tax

21

61,378

108,470

2,776,123

469,258

CURRENT LIABILITIES

Trade and other payables

18

1,806,104

1,540,963

Financial liabilities - borrowings

Lease liabilities

19, 20

629,799

54,590

2,435,903

1,595,553

TOTAL LIABILITIES

5,212,026

2,064,811

TOTAL EQUITY AND LIABILITIES

6,369,970

3,595,398

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2026 and were signed on its behalf by:

C Cakir Suna - Director

ASSETS

NON-CURRENT ASSETS

Goodwill

9

-

-

Owned

Property, plant and equipment

10

-

-

Investment property

11

-

-

Right-of-use

Investments

12

926,460

7,688,518

926,460

7,688,518

CURRENT ASSETS

Trade and other receivables

14

9

9

Cash and cash equivalents

15

52

52

61

61

TOTAL ASSETS

926,521

7,688,579

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital

16

320,000

320,000

Retained earnings

17

606,521

766,730

TOTAL EQUITY

926,521

1,086,730

LIABILITIES

CURRENT LIABILITIES

Trade and other payables

18

-

6,601,849

TOTAL LIABILITIES

-

6,601,849

TOTAL EQUITY AND LIABILITIES

926,521

7,688,579

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2026 and were signed on its behalf by:

C Cakir Suna - Director

Called up

Capital

share

Retained

Revaluation

redemption

Total

capital

earnings

reserve

reserve

equity

£

£

£

£

£

Balance at 1 January 2024

320,000

1,270,910

482,459

11,904

2,085,273

Changes in equity

Total comprehensive income

-

(279,611

)

(275,075

)

-

(554,686

)

Balance at 31 December 2024

320,000

991,299

207,384

11,904

1,530,587

Changes in equity

Total comprehensive income

-

(353,128

)

(207,384

)

-

(560,512

)

IFRS transition

-

187,869

-

-

187,869

Balance at 31 December 2025

320,000

826,040

-

11,904

1,157,944

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2024

320,000

766,730

1,086,730

Changes in equity

Balance at 31 December 2024

320,000

766,730

1,086,730

Changes in equity

Total comprehensive income

-

(160,209

)

(160,209

)

Balance at 31 December 2025

320,000

606,521

926,521

Cash flows from operating activities

Cash generated from operations

1

935,207

(281,792

)

Interest paid

(9,798

)

(31,555

)

Finance costs paid

(301,755

)

-

Tax paid

92,282

(16,104

)

Net cash from operating activities

715,936

(329,451

)

Cash flows from investing activities

Purchase of tangible fixed assets

(82,309

)

(16,204

)

Sale of tangible fixed assets

2,900

502,000

Sale of fixed asset investments

840

-

Sale of investment property

475,000

-

Interest received

4,779

6,528

Net cash from investing activities

401,210

492,324

Cash flows from financing activities

Loan repayments in year

(220,878

)

(236,874

)

Group loan provided

(257,356

)

-

Payment of lease liabilities

(40,604

)

(29,665

)

Lease payments right of use assets

(832,756

)

-

Net cash from financing activities

(1,351,594

)

(266,539

)

Decrease in cash and cash equivalents

(234,448

)

(103,666

)

Cash and cash equivalents at beginning of year

2

437,205

540,871

Cash and cash equivalents at end of year

2

202,757

437,205

1.	RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS

31.12.25

31.12.24

£

£

Loss before income tax

(752,689

)

(650,772

)

Depreciation charges

1,154,582

344,195

(Profit)/loss on disposal of fixed assets

(177,406

)

12,899

Finance costs

311,553

31,555

Finance income

(4,779

)

(6,528

)

531,261

(268,651

)

(Increase)/decrease in inventories

(56,164

)

191,694

Decrease/(increase) in trade and other receivables

194,969

(18,374

)

Increase/(decrease) in trade and other payables

265,141

(186,461

)

Cash generated from operations

935,207

(281,792

)

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

202,757

437,205

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

437,205

540,871

1.	STATUTORY INFORMATION

Tileflair Group Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

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

2.	ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with UK-adopted international accounting standards and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.

Going concern

The directors have reviewed projections for the next twelve months and consider the group to be able to continue as a going concern. The company has performed well during the year and the directors believe the group is well placed to perform well in 2027.

Based upon the information available to the directors at the date of approval of the financial statements, the directors consider it appropriate to continue to adopt the going concern basis in preparing these financial statements and that the group has adequate resources to continue to trade for the foreseeable future being twelve months from approval of these financial statements.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2025.

A subsidiary is an entity controlled by the group. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the profit or loss account from the effective date of acquisition or up to the effective date of disposals, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at acquisition date. Any excess of the cost of the business combination over the acquirer's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group's equity therein. Non-controlling interest consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder's share of changes in equity since the date of the combination.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated 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.

Having given due consideration to estimates and assumptions that form part of the carrying amounts of assets and liabilities within the financial statements, the directors are of the opinion that significant judgements relate to the valuation of the investment property, valuation of stock and recoverability of debtors.

Furthermore, the directors believe that lease dilapidations are an area of judgement significant to the financial statements, but do not consider the potential effect material.

Cash and cash equivalents

Cash represents cash in hand and deposits held on demand with financial institutions. Cash equivalents are short-term, highly-liquid investments with original maturities of three months or less (as at their date of acquisition). Cash equivalents are readily convertible to known amounts of cash and subject to an insignificant risk of change in that cash value.

In the presentation of the Statement of Cash Flows, cash and cash equivalents also include bank overdrafts. Any such overdrafts are shown within borrowings under ‘current liabilities’ on the Statement of Financial Position.

Property, plant and equipment

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

Short leasehold - Right of use

-

Over the term of the lease

Leasehold land and buildings

-

Over the term of the lease

Leasehold improvements

-

20% - 33% straight line

Furniture, fixtures and fittings

-

20% - 30% straight line

Computer equipment

-

25% - 50% straight line

Motor vehicles

-

30% straight line

Commercial vehicles

-

20% straight line

Tangible assets are stated in the balance sheet at cost or valuation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

Tangible assets held at valuation are revalued with sufficient regularity such that the carrying amount does not differ materially for that which would be determined using fair values at the balance sheet date.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to sell. Cost is determined using the average cost (AVCO) method using standard cost.

At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit and loss.

Creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, 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.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position 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.