REGISTERED NUMBER: 04464608 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 31 December 2025

for

Tacklestore Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Cash Flow Statement

12

Notes to the Cash Flow Statement

13

Notes to the Financial Statements

15

DIRECTORS:

J Morris

A Stoppelmann

J M Warner

M S Storey

REGISTERED OFFICE:

Unit R1D

Rockingham Gate

Cabot Park

Avonmouth

Bristol

BS11 0YW

REGISTERED NUMBER:

04464608 (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 for the year ended 31 December 2025.

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

REVIEW OF BUSINESS

The company's principal activity is the online and multichannel supply of lifting, fall protection, materials handling and related products, supported by a comprehensive range of after-sales services including inspection, maintenance, testing, rental and installation. The company serves customers throughout the United Kingdom through its ecommerce platforms, distribution operations and strategically located service centres.

The business continues to focus on providing customers with a broad product offering, technical expertise, high levels of customer service and reliable delivery performance. Through a combination of ecommerce capability, operational excellence and value-added services, the company seeks to maintain and strengthen its position within its core markets.

The company operates from its main distribution centre in Bristol and maintains strategic locations across the United Kingdom, including Bristol, East and West London, Leeds, Southampton, Cardiff and Glasgow, enabling it to support customers on a national basis.

PRINCIPAL RISKS AND UNCERTAINTIES

The continued success of the company is subject to a number of risks and the directors seek to identify, monitor and mitigate these risks wherever possible. The principal risks that the directors consider the business faces are as follows:

- The company operates primarily through its ecommerce platforms and supporting technology infrastructure. Any significant interruption, cyber security incident, data breach or failure of key systems could adversely affect trading performance, customer service levels and the reputation of the business.

- The company sources products from a range of domestic and international suppliers. Supply chain disruption, transportation delays, product shortages, inflationary pressures, changes in tariffs or adverse movements in foreign exchange rates may impact product availability, operating costs and profitability.

- The company operates in a highly competitive market. Changes in customer demand, competitor activity, pricing pressure, digital marketing effectiveness or broader economic conditions could adversely affect revenue growth and profit margins.

- The company operates in markets where product quality, safety, inspection and regulatory compliance are critical. Failure to comply with applicable laws, regulations or industry standards could result in financial penalties, legal claims, reputational damage and loss of customer confidence.- The company relies on attracting, developing and retaining skilled employees across its commercial, operational and technical functions. An inability to recruit or retain appropriately qualified personnel could adversely affect service levels, operational performance and future growth.

- The company extends credit to certain customers in the normal course of business and is exposed to the risk of customer default. Economic uncertainty or deterioration in customer financial strength could result in increased bad debts, slower cash collections and adverse impacts on cash flow.

BUSINESS ENVIRONMENT

The company operates in competitive and evolving end markets where customer expectations relating to product availability, technical support, delivery performance and digital purchasing experiences continue to increase. The directors believe that customers increasingly value suppliers that can provide a broad range of products, technical expertise, responsive service and reliable fulfilment from a single source.

The company remains focused on delivering a differentiated customer proposition through its ecommerce capabilities, national operational footprint, technical knowledge and value-added service offerings.

STRATEGY

The company's strategy is to strengthen its position as a leading UK provider of lifting, fall protection and related safety products through a combination of ecommerce leadership, customer service excellence, technical expertise and operational efficiency.

The company seeks to grow organically through customer acquisition, expansion of product categories, continued investment in its digital platforms and the development of proprietary and exclusive brand offerings. The strategy is supported by a comprehensive suite of after-sales services, including inspection, maintenance, installation and rental activities, that deepen customer relationships and provide recurring revenue opportunities.

The company also maintains strategic relationships with leading manufacturers and suppliers to ensure customers have access to a broad and competitive product offering while benefiting from a single-source solution for their operational requirements.

KEY PERFORMANCE INDICATORS

The directors monitor the performance of the company through a combination of financial and non-financial key performance indicators, including:

- Revenue growth and gross margin performance

- Operating profitability

- Cash generation and working capital management

- Website traffic and ecommerce conversion metrics

- Customer satisfaction and retention

- Health and safety performance

- Employee engagement and retention

- Environmental and sustainability initiatives

ON BEHALF OF THE BOARD:

J Morris - Director

7 October 2026

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

DIVIDENDS

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

DIRECTORS

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

J Morris

A Stoppelmann

J M Warner

Other changes in directors holding office are as follows:

M S Storey - appointed 24 April 2025

FINANCIAL INSTRUMENTS

The company uses various financial instruments including loans, cash, equity, capital and various

items such as trade debtors and creditors that arise directly from its operations. The main purpose of

these financial instruments is to raise finance for company operations.

Exposure to foreign currency, credit, liquidity and cash flow interest rate risks arise in the normal

course of the company business. These risks are limited by the company's financial management

policies and practices described below.

Market risk

Market risk encompasses three types of risk being price risk, interest rate risk and currency risk.

Price risk

The company operates in a competitive market. If the company does not continue to compete

effectively by developing its product range and responding to activities in the market it could lose

customers and its results, cash flow and financial conditions could adversely be affected.

Interest rate risk

The company's overdraft and cash at bank incur interest cost or income at market rates and the

company is therefore exposed to interest rate risk. The company is also exposed to interest rate risk

through the impact of rate changes on interest-bearing borrowings. The company's policy is to obtain

the most favourable interest rates available for its borrowings. The company does not use any

derivative instruments to reduce its economic exposure to changes in interest rates.

Foreign currency risk

The company makes purchases from suppliers from a number of suppliers whose invoices are

denominated in currencies other than sterling. The most frequently used currencies other than sterling

are the Euro and the US Dollar.

Credit risk

The company's principal assets are cash deposits and trade debtors. The credit risk associated with

cash deposits is limited as the accounts are held with major UK high street banks only. The principal

credit risk arises therefore from its trade debtors and the company manages closely its exposure to

bad debts by strong credit control, credit checks for new accounts.

Liquidity risk

The company seeks to manage financial risk by ensuring sufficient liquidity is available to meet

foreseeable needs and to invest cash assets safely and profitably. The company policy throughout the

year has been to hold cash balances in readily accessible cash deposits.

FUTURE DEVELOPMENTS

The company will continue to invest in its ecommerce platforms, operational capabilities and customer service offerings to support future growth. Management remains focused on expanding market share, strengthening customer relationships, improving operational efficiency and developing value-added service offerings across the business.

The directors remain confident in the long-term prospects of the company and its ability to deliver sustainable growth within its core markets.

GOING CONCERN

After reviewing the company's forecasts, available financing arrangements and current trading performance, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors 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:

J Morris - Director

7 October 2026

Opinion

We have audited the financial statements of Tacklestore Limited (the 'company') for the year ended 31 December 2025 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 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:

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.

Andrew Davis 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

9 October 2026

TURNOVER

28,532,014

28,662,434

Cost of sales

16,893,559

18,194,985

GROSS PROFIT

11,638,455

10,467,449

Administrative expenses

8,487,792

8,983,865

OPERATING PROFIT

5

3,150,663

1,483,584

Interest receivable and similar income

117

6,283

3,150,780

1,489,867

Interest payable and similar expenses

7

50,140

36,798

PROFIT BEFORE TAXATION

3,100,640

1,453,069

Tax on profit

8

(47,070

)

228,030

PROFIT FOR THE FINANCIAL YEAR

3,147,710

1,225,039

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

3,147,710

1,225,039

FIXED ASSETS

Intangible assets

10

37,200

49,600

Tangible assets

11

1,593,467

1,741,384

1,630,667

1,790,984

CURRENT ASSETS

Stocks

12

3,403,448

3,252,845

Debtors

13

6,442,222

3,386,868

Cash at bank and in hand

707,786

453,954

10,553,456

7,093,667

CREDITORS

Amounts falling due within one year

14

4,705,752

4,316,675

NET CURRENT ASSETS

5,847,704

2,776,992

TOTAL ASSETS LESS CURRENT LIABILITIES

7,478,371

4,567,976

CREDITORS

Amounts falling due after more than one year

15

(362,745

)

(496,823

)

PROVISIONS FOR LIABILITIES

18

(937,741

)

(1,040,978

)

NET ASSETS

6,177,885

3,030,175

CAPITAL AND RESERVES

Called up share capital

19

1,030

1,030

Retained earnings

20

6,176,855

3,029,145

SHAREHOLDERS' FUNDS

6,177,885

3,030,175

The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on 7 October 2026 and were signed on its behalf by:

J Morris - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2024

1,030

5,662,239

5,663,269

Changes in equity

Dividends

-

(3,858,133

)

(3,858,133

)

Total comprehensive income

-

1,225,039

1,225,039

Balance at 31 December 2024

1,030

3,029,145

3,030,175

Changes in equity

Total comprehensive income

-

3,147,710

3,147,710

Balance at 31 December 2025

1,030

6,176,855

6,177,885

Cash flows from operating activities

Cash generated from operations

1

4,256,644

3,151,503

Interest paid

(1,014

)

(1,531

)

Interest element of hire purchase payments paid

(49,126

)

(35,267

)

Tax paid

(202,500

)

(1,100,576

)

Net cash from operating activities

4,004,004

2,014,129

Cash flows from investing activities

Purchase of tangible fixed assets

(335,283

)

(547,759

)

Sale of tangible fixed assets

37,724

90,897

Interest received

117

6,283

Net cash from investing activities

(297,442

)

(450,579

)

Cash flows from financing activities

Loan repayments in year

-

(24,167

)

Group loan provided

(3,329,877

)

(200,000

)

Group loan received

92,126

34,737

Capital repayments in year

(214,979

)

(179,730

)

Amount withdrawn by directors

-

(1,884

)

Equity dividends paid

-

(3,858,133

)

Net cash from financing activities

(3,452,730

)

(4,229,177

)

Increase/(decrease) in cash and cash equivalents

253,832

(2,665,627

)

Cash and cash equivalents at beginning of year

2

453,954

3,119,581

Cash and cash equivalents at end of year

2

707,786

453,954

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

31.12.25

31.12.24

£

£

Profit before taxation

3,100,640

1,453,069

Depreciation charges

567,728

617,528

Loss/(profit) on disposal of fixed assets

33,407

(5,523

)

Dilapidation provision

(26,496

)

650,000

Finance costs

50,140

36,798

Finance income

(117

)

(6,283

)

3,725,302

2,745,589

(Increase)/decrease in stocks

(150,603

)

508,716

Decrease in trade and other debtors

447,352

64,702

Increase/(decrease) in trade and other creditors

234,593

(167,504

)

Cash generated from operations

4,256,644

3,151,503

2.	CASH AND CASH EQUIVALENTS

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

Year ended 31 December 2025

31.12.25

1.1.25

£

£

Cash and cash equivalents

707,786

453,954

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

453,954

3,119,700

Bank overdrafts

-

(119

)

453,954

3,119,581

3.	ANALYSIS OF CHANGES IN NET DEBT

Other

non-cash

At 1.1.25

Cash flow

changes

At 31.12.25

£

£

£

£

Net cash

Cash at bank

and in hand

453,954

253,832

707,786

453,954

253,832

707,786

Debt

Finance leases

(680,513

)

214,979

-

(608,848

)

(680,513

)

214,979

-

(608,848

)

Total

(226,559

)

468,811

-

98,938

1.	STATUTORY INFORMATION

Tacklestore 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.

The financial statements have been prepared in accordance with applicable Accounting Standards in

the United Kingdom. A summary of the more important accounting policies, which have been applied

consistently is set out below.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the company's accounting policies, management is required to make judgements,

estimates and assumptions about carrying values of assets and liabilities that are not readily apparent

from other sources. The estimates and underlying assumptions are based on historical experience and

other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting

estimates are recognised in the period in which the estimate is revised if the revision affects that

period, or in the period of the revision and future periods if the revision affects both current and future

periods.

The key sources of estimation uncertainty that have a significant effect on the amounts recognised in

the financial statements are described below:

Trade and other receivables - The allowance for doubtful debts involves significant management

judgement and management review individual receivables based upon individual creditworthiness,

current economic trends and historical bad debts on a portfolio basis.

Stock provisions - Significant estimates are involved in the determination of stock provisions.

Management exercise significant judgement in determining whether costs of stock items can be

recovered. A provision is made where a loss can be reliably estimated.

Turnover

Turnover is measured at the fair value of the consideration received or receivable. Turnover is reduced

for customer returns, rebates or other similar allowances and is net of value added taxes. Turnover

includes revenue earned from the sale of goods.

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

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

- the company retains neither continuing managerial involvement to the degree associated with

ownership nor effective control over the goods sold;

- the amount of revenue can be measured reliably;

- it is probable that the economic benefits associated with the transaction can be measured reliably.

Specifically, revenue from the sale of goods is primarily recognised upon delivery of goods to

customers.

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.

Computer software is being amortised evenly over its estimated useful life of three years.

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.

Leasehold improvements

-

Over remaining term of the lease

Plant and machinery

-

20% on reducing balance and 15% on reducing balance

Furniture, fixtures and fittings

-

15% on reducing balance

Motor vehicles

-

25% on reducing balance

Computer equipment

-

25% on cost

Stocks

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

Stock are stated at the lower of cost, using the first in first out method, and selling price less costs to complete and sell.

Financial instruments

The company has chosen to adopt the requirements of sections 11 and 12 of FRS 102 in respect of the measurement and disclosure of financial instruments.

The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans from related parties and investments in non-puttable ordinary shares.

Trade and other debtors

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

Cash and cash equivalents

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

Impairment of financial assets

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

For all financial assets, objective evidence of impairment could include:

- significant financial difficulty of the issuer or counterparty; or

- breach of contract, such as a default or delinquency in interest or principal payments; or

- it becoming probable that the borrower will enter bankruptcy or financial re-organisation; or

- the disappearance of an active market for that financial asset because of financial difficulties.

For certain categories of financial asset, such as trade debtors, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of trade debtors could include the company's past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with default of trade debts.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the assets carrying amount and the present value of estimated future cash flows, discounted at the financial assets original effective interest rate.

For financial assets carried at cost, the amount of the impairment loss is measured as the difference between the asset's carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occuring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount at the date of the impairment is reversed does not exceed the amortised cost would have been made had the impairment not been recognised.

Trade and other creditors

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

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the 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 balance sheet date.

Deferred tax

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

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

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

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.

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.