REGISTERED NUMBER: 08715531 (England and Wales)

British Premium Meats Limited

Strategic Report, Report of the Directors and

Financial Statements For The Period 1 January 2026 to 4 July 2026

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

10

Balance Sheet

11

Statement of Changes in Equity

12

Cash Flow Statement

13

Notes to the Cash Flow Statement

14

Notes to the Financial Statements

15

DIRECTORS:

G Hutchinson

M A Hutchinson

M Hutchinson

R J Hutchinson

REGISTERED OFFICE:

3 Coldbath Square

London

EC1R 5HL

REGISTERED NUMBER:

08715531 (England and Wales)

AUDITORS:

Kingswood Allotts Limited, Statutory Auditor

Chartered Accountants

Sidings Court

Lakeside

Doncaster

South Yorkshire

DN4 5NU

INTRODUCTION

The principle activity of the company continued to be that of food processing and sales.

BUSINESS REVIEW

The directors are pleased to report a profitable first 6 months of 2026 following a loss-making 2025 and 2024 after a post Covid return to profitability in 2023 and 2022. The directors are pleased that the company has performed robustly and has been able to deliver increased annualised revenue, margin and profits as a result of increased client base obtained during the previous difficult trading period. The increased stability to food prices has allowed gross margin to be more consistently achieved and return to profitability. The company is also cashflow positive and able to continue to service its financial requirement within its existing financing arrangements.

The company operates in the food processing sector, supplying a wide range of customers including local authorities, amusement parks, universities, hotel chains and restaurants across the whole of England. Despite this challenging environment, the company has grown its underlying customer base and is in its strongest position ever to grow in future periods.

As a result of greater stability in food and energy prices the company has been able to report a gross margin of 25.3% compared with 20.1% in 2025. This increased margin and continued tight management in expenses has led to a significant improvement in profitability. The company has reported a positive EBITDA for the first 6 months of 2026 of £939,625 and has a forecast positive EBITDA for the reminder of 2026 of £963,925, resulting in positive EBITDA of £1,903,550 for 2026 as a whole. This is a significant improvement on the results of 2025 and has been coupled with an improved liquidity and reduction in net liabilities of the company. The outlook for the company is very positive with forecast positive EBITDA of £2,168,308 for 2027. These positive results are in line with the previously reported performance of the business following a difficult 2025 and the directors remain confident in the future trading capabilities of the company.

The directors are pleased the company has continued to show it is robust to the challenges and has continued to operate as normal, and they expect profitability to improve in the remainder of 2026 and in future periods. The company has sufficient working capital finance to allow it to continue to grow in future years and the improved performance has resulted in increased liquidity for the business and the increase of cash reserves and reduction in net liabilities position.

The company continued to invest in its infrastructure in 2026. It continued the development of an expanded processing and storage facility as well as a new IT system to improve traceability at its headquarters in Welwyn Garden City. This continued investment will enable the business to fulfil orders to customers more efficiently across a significantly wider geographical focus, and has led to the company adding national, as well as regional, accounts with larger customer groups. Turnover is expected to increase from 2027 onwards in line with the long term strategic plan for the business and further growth is planned for future periods. The business also intends to develop new complementary products and provide these to existing customers, further increasing turnover.

PRINCIPAL RISKS AND UNCERTAINTIES

As for many businesses of a similar size, the business environment in which the company operates continues to be challenging in the current economic climate. We are subject to our customer's demands to deliver a cost effective and quality service on a continuous basis. The key risks are decreased customer demand and increased raw material costs. With these risks and uncertainties in mind, the company is constantly developing ways to further improve its service and offering, in order to reduce its exposure and to maintain customer relationships.

Treasury operations and financial instruments:

The company's principal financial instruments include financial assets and liabilities such as trade debtors and trade creditors arising directly from operations.

Liquidity risk:

The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business. Company facilities include cash, invoice discounting, term loans, asset finance and director loans.

Interest rate risk:

The company is exposed to interest rate risk on some of its hire purchase contracts, on which interest is charged at a variable rate. The company is exposed to interest rate risk on amounts owed to directors. Despite these amounts being interest free, the discounting of the balance is impacted by fluctuations to the base rate. The company manages its mix of fixed and variable rate debt so as to reduce its exposure to changes in interest rates.

Credit risk:

All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are reviewed on a regular basis and provision is made for doubtful debts when necessary.

Cost inflation:

The company is exposed to inflationary pressures on stock in the market. In order to mitigate the impact of this, the directors are working closely with suppliers and monitoring logistics in order to improve efficiencies and maximise opportunities to make the most of working capital.

FINANCIAL KEY PERFORMANCE INDICATORS

We consider that our key financial performance indicators are those that reflect the financial performance and strength of the company, being turnover, gross profit margin and net profit margin (before taxation).

The company has improved its gross margin to 25.3% from 20.15 which is a significant achievement by the business. The reported EBITDA for the 6 months to 4 July 2026 is £939,625 compared with an EBITDA loss of £500,841 for the prior year.

ON BEHALF OF THE BOARD:

M Hutchinson - Director

26 September 2026

The directors present their report with the financial statements of the company for the period 1 January 2026 to 4 July 2026.

DIVIDENDS

No dividends will be distributed for the period ended 4 July 2026.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2026 to the date of this report.

G Hutchinson

M A Hutchinson

M Hutchinson

R J Hutchinson

GOING CONCERN

During the 6 months ended 4 July 2026, the company made a profit before taxation of £493,184 (2025: loss before taxation of £1,309,037). The company was in a net current liability position of £2,240,298 at the period end (2025: £2,716,814) and had net liabilities of £681,320 (2024: £976,074).

The company had debt facilities comprising an invoice discounting facility, asset financing agreements, term loans and director loans. The invoice discounting facility and asset financing agreements have traditionally supported the working capital requirements of the business while the other facilities are in place to maintain liquidity through very challenging trading circumstances that commenced at the end of 2024 and ran through much of 2025. This was primarily a result of high food price inflation caused by macroeconomic factors.

The above return to profitability and improvement in net liability position of the business is in line with the previously reported improved trading conditions in 2026. The company made an EBITDA profit of £939,625 for the 6 months to 4 July 2026. The company has a forecast EBITDA of £963,925 for the remaining 6 months of 2026, resulting in annual EBITDA of £1,903,550. These significancy improved results are a result of reduced food price inflation. The outlook for the remainder of 2026 and 2027 is very positive with new business in place and margins much improved, with the company forecasting to make EBITDA in 2027 of £2,168,308.

The directors view the recent trading performance as very positive in alleviating some cash flow pressures but acknowledge that the trade must continue positively in order to maintain the headroom within existing debt facilities. Should the geo-political environment change and this impact trading performance, the directors are committed to supporting the business through such circumstances.

Based on current performance, forecasts for 2026 and 2027, facilities, and making other relevant enquiries, the directors have a reasonable expectation that the company will have sufficient resources to meet its obligations as they fall due for a period of at least twelve months from the date of approval of these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

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 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:

M Hutchinson - Director

26 September 2026

Opinion

We have audited the financial statements of British Premium Meats Limited (the 'company') for the period ended 4 July 2026 which comprise the Statement of 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 4 July 2026 and of its profit for the period 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.

Material Uncertainty 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.

We draw your attention to Note 2 in the financial statements, Going concern, which indicates that the company is reliant on its improved trading performance in order to maintain liquidity and continue as a going concern. These conditions indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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 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 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 engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

- we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the wholesale sector;

- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation;

- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

- performed analytical procedures to identify any unusual or unexpected relationships;

- tested a sample of journal entries to identify unusual transactions;

- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and

- investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

- agreeing financial statement disclosures to underlying supporting documentation;

- enquiring of management as to actual and potential litigation and claims; and

- reviewing correspondence with HMRC and relevant regulators.

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.

Richard Behan FCA (Senior Statutory Auditor) (Senior Statutory Auditor)

for and on behalf of Kingswood Allotts Limited, Statutory Auditor

Chartered Accountants

Sidings Court

Lakeside

Doncaster

South Yorkshire

DN4 5NU

28 September 2026

TURNOVER

3

20,431,340

38,708,141

Cost of sales

15,264,676

30,908,869

GROSS PROFIT

5,166,664

7,799,272

Distribution costs

2,413,134

4,632,706

Administrative expenses

2,094,787

4,354,456

4,507,921

8,987,162

OPERATING PROFIT/(LOSS)

5

658,743

(1,187,890

)

Interest payable and similar expenses

6

165,559

121,147

PROFIT/(LOSS) BEFORE TAXATION

493,184

(1,309,037

)

Tax on profit/(loss)

7

198,430

(240,597

)

PROFIT/(LOSS) FOR THE FINANCIAL PERIOD

294,754

(1,068,440

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

294,754

(1,068,440

)

FIXED ASSETS

Owned

Tangible assets

8

2,608,037

2,917,122

Right-of-use

Tangible assets

8, 15

2,003,541

-

Investments

9

200

200

4,611,778

2,917,322

CURRENT ASSETS

Stocks

10

808,131

740,000

Debtors

11

8,064,535

7,616,783

Cash at bank

49,215

192,291

8,921,881

8,549,074

CREDITORS

Amounts falling due within one year

12

11,162,179

11,265,888

NET CURRENT LIABILITIES

(2,240,298

)

(2,716,814

)

TOTAL ASSETS LESS CURRENT LIABILITIES

2,371,480

200,508

CREDITORS

Amounts falling due after more than one year

13

(2,677,151

)

(999,363

)

PROVISIONS FOR LIABILITIES

16

(375,649

)

(177,219

)

NET LIABILITIES

(681,320

)

(976,074

)

CAPITAL AND RESERVES

Called up share capital

17

200

200

Revaluation reserve

343,313

440,765

Retained earnings

(1,024,833

)

(1,417,039

)

SHAREHOLDERS' FUNDS

(681,320

)

(976,074

)

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

M Hutchinson - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2025

200

(557,340

)

649,506

92,366

Changes in equity

Deficit for the year

-

(1,068,440

)

-

(1,068,440

)

Transfer between reserves

-

208,741

(208,741

)

-

Total comprehensive income

-

(859,699

)

(208,741

)

(1,068,440

)

Balance at 31 December 2025

200

(1,417,039

)

440,765

(976,074

)

Changes in equity

Profit for the period

-

294,754

-

294,754

Other comprehensive income

-

97,452

(97,452

)

-

Total comprehensive income

-

392,206

(97,452

)

294,754

Balance at 4 July 2026

200

(1,024,833

)

343,313

(681,320

)

Cash flows from operating activities

Cash generated from operations

1

(11,079

)

(462,009

)

Interest paid

(2,092

)

(6,322

)

Tax received

14,642

(80,000

)

Net cash from operating activities

1,471

(548,331

)

Cash flows from investing activities

Purchase of tangible fixed assets

(111,734

)

(778,914

)

Sale of tangible fixed assets

33,029

55,230

HP interest paid

(21,597

)

(59,900

)

Net cash from investing activities

(100,302

)

(783,584

)

Cash flows from financing activities

New loans in year

454,700

520,000

Loan repayments in year

(158,499

)

(21,641

)

New HP agreements in year

44,719

666,915

Payment of lease liabilities

(330,916

)

(528,899

)

Amount withdrawn by directors

(269,917

)

261,976

Movements on invoice discounting

320,660

625,727

Interest paid

(104,992

)

(54,925

)

Net cash from financing activities

(44,245

)

1,469,153

(Decrease)/increase in cash and cash equivalents

(143,076

)

137,238

Cash and cash equivalents at beginning of period

2

192,291

55,053

Cash and cash equivalents at end of period

2

49,215

192,291

1.	RECONCILIATION OF PROFIT/(LOSS) FOR THE FINANCIAL PERIOD TO CASH GENERATED FROM OPERATIONS

Period

1.1.26

to

Year Ended

4.7.26

31.12.25

£

£

Profit/(loss) for the financial period

294,754

(1,068,440

)

Depreciation charges

475,595

687,049

Loss/(profit) on disposal of fixed assets

42,636

(9,864

)

Finance costs

165,559

121,147

Taxation

198,430

(240,597

)

1,176,974

(510,705

)

Increase in stocks

(68,131

)

(154,624

)

Increase in trade and other debtors

(462,394

)

(3,214

)

(Decrease)/increase in trade and other creditors

(657,528

)

206,534

Cash generated from operations

(11,079

)

(462,009

)

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:

Period ended 4 July 2026

4.7.26

1.1.26

£

£

Cash and cash equivalents

49,215

192,291

Year ended 31 December 2025

31.12.25

1.1.25

£

£

Cash and cash equivalents

192,291

55,053

3.	ANALYSIS OF CHANGES IN NET DEBT

Other

non-cash

At 1.1.26

Cash flow

changes

At 4.7.26

£

£

£

£

Net cash

Cash at bank

192,291

(143,076

)

49,215

192,291

(143,076

)

49,215

Debt

Hire purchase and

finance leases

(650,244

)

249,318

(2,133,980

)

(2,534,906

)

Debts falling due

within 1 year

(3,558,769

)

(528,071

)

-

(4,086,840

)

Debts falling due

after 1 year

(735,840

)

29,636

-

(706,204

)

(4,944,853

)

(249,117

)

(2,133,980

)

(7,327,950

)

Total

(4,752,562

)

(392,193

)

(2,133,980

)

(7,278,735

)

1.	STATUTORY INFORMATION

British Premium Meats 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.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies (see significant judgements and estimates).

Comparative information

During the period, the company changed its accounting reference date from 31 December to 04 July. Accordingly, the current financial statements cover the 26 week period ended 04 July 2026, whereas the comparative figures cover the year ended 31 December 2025. Consequently, the current and comparative figures are not directly comparable.

The following principal accounting policies have been applied:

Accounting reference date

The company has taken advantage of the provisions in section 390 of the Companies Act 2006 which allow the company to make accounts up to a date within seven days of the accounting reference date and consequently these financial statements are made up to 4 July 2026 (2025: 3 January 2026).

Consolidation

The company holds a 100% stake in two dormant subsidiary companies and is exempt from the requirement to prepare consolidated financial statements by virtue of Sections 402 and 405(2) of the Companies Act 2006, as these dormant subsidiaries are not material for the purpose of giving a true and fair view. These financial statements therefore present information about the company as an individual undertaking and not about its group.

Going concern

During the 6 months ended 4 July 2026, the company made a profit before taxation of £493,184 (2025: loss before taxation of £1,309,037). The company was in a net current liability position of £2,240,298 at the period end (2025: £2,716,814) and had net liabilities of £681,320 (2024: £976,074).

The company had debt facilities comprising an invoice discounting facility, asset financing agreements, term loans and director loans. The invoice discounting facility and asset financing agreements have traditionally supported the working capital requirements of the business while the other facilities are in place to maintain liquidity through very challenging trading circumstances that commenced at the end of 2024 and ran through much of 2025. This was primarily a result of high food price inflation caused by macroeconomic factors.

The above return to profitability and improvement in net liability position of the business is in line with the previously reported improved trading conditions in 2026. The company made an EBITDA profit of £939,625 for the 6 months to 4 July 2026. The company has a forecast EBITDA of £963,925 for the remaining 6 months of 2026, resulting in annual EBITDA of £1,903,550. These significancy improved results are a result of reduced food price inflation. The outlook for the remainder of 2026 and 2027 is very positive with new business in place and margins much improved, with the company forecasting to make EBITDA in 2027 of £2,168,308.

The directors view the recent trading performance as very positive in alleviating some cash flow pressures but acknowledge that the trade must continue positively in order to maintain the headroom within existing debt facilities. Should the geo-political environment change and this impact trading performance, the directors are committed to supporting the business through such circumstances.

Based on current performance, forecasts for 2026 and 2027, facilities, and making other relevant enquiries, the directors have a reasonable expectation that the company will have sufficient resources to meet its obligations as they fall due for a period of at least twelve months from the date of approval of these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Significant judgements and estimates

The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

Useful economic lives of goodwill and tangible assets

The annual amortisation and depreciation charges for goodwill and tangible assets are sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See notes 8 and 9 for the net carrying amount of goodwill and tangible assets, and their individual accounting policies for the useful lives for each class of assets.

Inventory provisioning

The company’s products are perishable items. As a result it is necessary to consider the recoverability of the cost of stocks and the associated provisioning required. When calculating the inventory, management considers the nature and condition of the stocks, as well as applying assumptions around anticipated saleability of finished goods based on the risk of stock obsolescence.

Bad debt provision

The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience.

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:

- the company has transferred the significant risks and rewards of ownership to the buyer;

- the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

- the amount of revenue can be measured reliably;

- it is probable that the company will receive the consideration due under the transaction; and

- the costs incurred or to be incurred in respect of the transaction can be measured reliably

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the profit and loss account over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

The estimated useful lives range as follows:

Goodwill - 10 years

Having considered the long term relationships with its customers, the Directors believe that 10 years useful life of goodwill is reasonable.

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Revalued tangible fixed assets are stated at revalued amounts less accumulated depreciation. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Short-term leasehold property

- 10% straight line

Plant and machinery

- 10% straight line

Motor vehicles

- 14% straight line

Fixtures and fittings

- 20% straight line

Computer equipment

- 20% straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Right of use assets in relation to leases

Right-of-use assets are initially measured at cost, comprising the amount of the initial measurement of the related lease liability together with any lease payments made at or before the commencement date and any initial direct costs incurred.

Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses.

Depreciation is charged so as to allocate the cost of the asset less its residual value over the shorter of the asset's useful economic life and the lease term on a straight-line basis.

Revaluation of tangible fixed assets

Motor vehicles are revalued with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using the fair value at balance sheet date. All assets within that particular class are revalued when such an exercise is conducted.

Fair values are determined from market based appraisals by the directors of the company. A revaluation of motor vehicles does not occur unless the fair value at the balance sheet date can be measured reliably.

Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

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

Financial instruments

The company has elected to apply Sections 11 and 12 of FRS 102 in respect of financial instruments.

Financial assets and financial liabilities are recognised when the company becomes party to the contractual provisions of the instrument.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

The company’s policies for its major classes of financial assets and financial liabilities are set out below.

Financial assets

Basic financial assets, including trade and other debtors and cash and bank balances are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.

Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment.

Financial liabilities

Basic financial liabilities, including trade and other creditors and bank loans are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Impairment of financial assets

Financial assets measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the company would receive for the asset if it were to be sold at the reporting date.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets and financial liabilities

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

Offsetting of financial assets and financial liabilities

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

Current tax is the amount of income tax payable in respect of taxable profit for the year or prior years.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.

Deferred tax arises from timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements.