REGISTERED NUMBER: 11618219 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 October 2025

for

Henig Diamonds Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

7

Income Statement

11

Statement Of Comprehensive Income

12

Balance Sheet

13

Statement of Changes in Equity

14

Cash Flow Statement

15

Notes to the Cash Flow Statement

16

Notes to the Financial Statements

18

DIRECTORS:

A M Henig

A Issacharoff

REGISTERED OFFICE:

Suite 2 First Floor

63-66 Hatton Garden

London

EC1N 8LE

REGISTERED NUMBER:

11618219 (England and Wales)

SENIOR STATUTORY AUDITOR:

Richard Rhodes

AUDITORS:

Feltons Chartered Accountants & Statutory Auditor

1, The Green

Richmond

TW9 1PL

INTRODUCTION

The directors present their strategic report with the financial statements of the year ended 31 October 2025.

PRINCIPAL ACTIVITIES

The principal activity of the Company throughout the year continued to be the sourcing, trading and sale of diamonds, precious stones and jewellery products to wholesale and retail customers within the United Kingdom and internationally.

BUSINESS REVIEW

The Company delivered a strong financial performance during the year despite continuing economic uncertainty and inflationary pressures affecting both consumers and businesses.

Turnover increased by 13.2% to £12.69 million (2024: £11.21 million), reflecting increased sales volumes and continued demand for the Company's products and services. Gross profit increased to £3.22 million (2024: £2.86 million), with gross margin improving due to enhanced purchasing arrangements, improved supplier relationships and effective stock management.

Operating profit increased to £1.14 million (2024: £0.74 million), whilst profit before taxation increased to £457,243 (2024: £278,307). The directors consider the results for the year to be satisfactory and reflective of the Company's continuing focus on product quality, customer service and operational efficiency.

The Company has continued to invest in technology, infrastructure and inventory during the year to support future growth and improve operational effectiveness.

FUTURE DEVELOPMENTS

The directors remain confident regarding the long-term prospects of the business. The Company intends to continue investing in its people, inventory, technology platforms and customer relationships in order to strengthen its market position.

The directors expect the business to continue operating within its current principal activity of sourcing, trading and selling diamonds and jewellery products whilst exploring opportunities to expand its customer base and geographic reach.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties facing the company are reviewed in detail by the directors and no material additional risk or uncertainty has been identified other than those detailed below. These risks are broadly accompanied with competitive, operational and financial risks. The directors risk management objectives consist of identifying and monitoring those risks which could have an adverse impact on the company assets, profitability or cash flows.

The company is exposed to financial risks including credit risk, liquidity risk, and market risk, arising from the company's normal business activities. These risks and the company's approach to dealing with them are discussed below.

COMPETITIVE RISK

The Company operates in the highly competitive diamond and jewellery sector. Changes in consumer demand, competitor pricing, economic conditions and industry trends may adversely affect revenue and profitability.

The directors mitigate these risks through maintaining strong supplier relationships, delivering high levels of customer service, careful inventory selection and regular monitoring of market conditions.

OPERATIONAL RISK

The main operational risk relating to the company's operations in wholesale of diamonds and jewellery are through relationships with the customers and quality of products to client specifications. The company's ability to provide products to its customers depends on maintaining relationships. The overall risk is mitigated by ensuring that the orders are delivered to client's specification and quality products to the company to enable operations to grow.

SUPPLY CHAIN RISK

The Company relies on established relationships with suppliers in the global diamond and jewellery markets. Disruptions to supply chains, geopolitical developments or reductions in availability of inventory could adversely affect trading performance.

PRICE RISK

The company's exposure to price risk is based on its operation to provide quality and unique watches and jewellery. The fluctuation has impact on the company margins and profitability. There is also some exposure product price risk based on its operations. The directors manage exposure based on working with their suppliers and controlling purchasing volumes and providing high level of service to customers. The company directors ensure they review and manage their policies to controls the level of risk through diversification of products they provide.

FOREIGN EXCHANGE RISKS

The Company undertakes transactions denominated in foreign currencies, principally USD and Euro. Fluctuations in exchange rates may affect profitability and cash flows.

Management regularly monitors foreign currency exposures and maintains foreign currency bank accounts to reduce exchange rate risks where appropriate.

CREDIT RISK

The company's principal financial assets are bank balances, trade and other receivables. The company's credit risk is primarily attributable to its trade receivables and balances from the related parties. The company gives significant attention to credit risk and manages the risk though credit control procedures to ensure that credit risk is at an acceptable level for its future operations.

LIQUIDITY RISK AND FINANCING RISK

The Company is financed through a combination of retained earnings, director funding and bank borrowing facilities. The directors monitor working capital requirements, cash flow forecasts and compliance with lending arrangements to ensure that sufficient liquidity is available to meet obligations as they fall due.

CYBER SECURITY RISK

The Company is increasingly reliant on information technology systems to support its operations. Cyber security incidents, unauthorised access or system failures may adversely impact trading activities or result in data loss.

The directors seek to mitigate this risk through ongoing investment in technology infrastructure, data security measures and external IT support.

REGULATORY AND COMPLIANCE RISK

The Company operates within a regulated environment and is required to comply with anti-money laundering regulations, taxation legislation and other applicable legal requirements. Failure to comply with applicable legislation could result in financial penalties or reputational damage.

The directors regularly review compliance procedures and obtain external professional advice where necessary.

KEY PERFORMANCE INDICATORS

The directors of the company use a variety of financial performance indicators, including turnover, total operating profit, profit after tax, shareholders' funds and average employees. These are reviewed and assessed by the board and appropriate action taken to ensure growth targets are being achieved.

The company's key financial and non-performance indicator for the year are as follows:

Particulars

2025

2024

2023

£

£

£

Turnover

12,692,048

11,210,732

11,110,188

Total operating profit

1,140,543

744,747

1,187,474

Profit after tax

297,967

226,926

540,207

Shareholder's Fund

2,337,259

2,274,503

2,467,997

Average Employees

26

29

23

FINANCIAL INSTRUMENTS

The Company is exposed to credit risk, liquidity risk, interest rate risk and foreign exchange risk arising from its normal trading activities.

The directors monitor these exposures on an ongoing basis and seek to minimise risks through effective credit control procedures, management of working capital and regular review of financing arrangements.

The Company does not currently enter into formal hedging arrangements.

ON BEHALF OF THE BOARD:

A Issacharoff - Director

21 August 2026

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of sale of diamonds and jewellery.

DIVIDENDS

The directors declared and paid interim dividends during the year amounting to £210,210 (2024: £420,420).

The directors do not recommend the payment of a final dividend for the year ended 31 October 2025.

EVENTS AFTER THE REPORTING DATE

The directors confirm that there were no events occurring between the balance sheet date of 31 October 2025 and the date on which these financial statements were approved that require adjustment to, or disclosure in, these financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 November 2024 to the date of this report.

A M Henig

A Issacharoff

Other changes in directors holding office are as follows:

A S Issacharoff - resigned 1 April 2025

CHARITABLE CONTRIBUTION

During the year ended 31 October 2025, the company made charitable donations totalling £8,928 (2024: £34,780) to a number of local and national charities, supporting initiatives in community welfare, education, healthcare, or industry related causes.

GOING CONCERN

The directors have, at the time of approving the financial statements, a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.

In making this assessment, the directors have considered the Company's current trading performance, profitability, cash balances, available financing facilities, working capital position and post year-end trading results. The directors have also reviewed management information and considered the impact of reasonably foreseeable adverse scenarios on the Company's operations and liquidity.

The Company generated a profit before taxation of £457,243 for the year ended 31 October 2025 (2024: £278,307), maintained positive net current assets of £8,867,069 (2024: £7,462,133) and continued to generate positive cash inflows from customers subsequent to the year end. The Company also maintains adequate banking facilities to support its operations.

Based on the information available and the results of their assessment, the directors are satisfied that the Company has sufficient resources to meet its liabilities as they fall due for a period of at least twelve months from the date of approval of these financial statements.

Accordingly, the directors continue to adopt the going concern basis in preparing the annual report and financial statements.

DISCLOSURE IN THE STRATEGIC REPORT

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the directors' report. It has done so in respect of the review of the business,principal risks and uncertainties and key performance indicators of the business.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

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

- select suitable accounting policies and apply them consistently;

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

- state whether applicable United Kingdom Accounting Standards have been followed, subject to any material

departures disclosed and explained in the financial statements;and

- 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.

AUDITORS

Feltons, Chartered Accountants & Statutory Auditor will be proposed for re-appointment at the forthcoming Annual General Meeting. pursuant to Section 487 of the Companies Act 2006.

ON BEHALF OF THE BOARD:

A Issacharoff - Director

21 August 2026

Opinion

We have audited the financial statements of Henig Diamonds Limited (the 'company') for the year ended 31 October 2025 which comprise the Income Statement, 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 October 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 of 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 six, 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. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We discussed with the Directors the policies and procedures in place regarding compliance with laws and regulations. We discussed amongst the audit team the identified laws and regulations, and remained alert to any indications of non-compliance.

During the audit we focussed on laws and regulations which could reasonably be expected to give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006, UK tax legislation and distributable profits legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management.

Our procedures in relation to fraud included but were not limited to: inquires of management whether they have any knowledge of any actual, suspected or alleged fraud, and discussions amongst the audit team regarding risk of fraud such as opportunities for fraudulent manipulation of financial statements. We determined that the principal risks related to posting manual journal entries to manipulate financial performance and management bias through judgements in accounting estimates. We also addressed the risk of management override of internal controls, including testing journals and appropriateness of other entries in the nominal ledger; reviewing transactions around the end of the reporting period; and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

Audit procedures performed in response to identified risks included testing journal entries, reviewing accounting estimates for evidence of management bias, evaluating the business rationale for significant unusual transactions, testing revenue recognition and performing procedures over the completeness and valuation of inventory balances.

The audit procedures performed were designed to identify material misstatements arising from fraud or error but were not designed to identify all instances of non-compliance with laws and regulations.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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 Rhodes (Senior Statutory Auditor)

for and on behalf of Feltons Chartered Accountants & Statutory Auditor

1, The Green

Richmond

TW9 1PL

21 August 2026

Turnover

4

12,692,048

11,210,732

Cost of sales

(9,469,025

)

(8,351,341

)

Gross profit

3,223,023

2,859,391

Administrative expenses

(2,082,480

)

(2,114,644

)

Operating profit

6

1,140,543

744,747

Interest payable and similar expenses

8

(683,300

)

(466,440

)

Profit before taxation

457,243

278,307

Tax on profit

9

(159,276

)

(51,381

)

Profit for the financial year

297,967

226,926

Profit for the year

297,967

226,926

Other comprehensive income

-

-

Total comprehensive income for the year

297,967

226,926

Fixed assets

Intangible assets

11

341,109

83,690

Tangible assets

12

601,264

664,741

942,373

748,431

Current assets

Stocks

13

6,902,232

6,194,640

Debtors

14

3,433,636

2,813,712

Cash at bank and in hand

1,751,420

1,768,425

12,087,288

10,776,777

Creditors

Amounts falling due within one year

15

(3,220,219

)

(3,314,644

)

Net current assets

8,867,069

7,462,133

Total assets less current liabilities

9,809,442

8,210,564

Creditors

Amounts falling due after more than one year

16

(7,404,714

)

(5,881,196

)

Provisions for liabilities

19

(67,469

)

(54,865

)

Net assets

2,337,259

2,274,503

Capital and reserves

Called up share capital

20

18

19

Share premium

21

475,000

500,000

Capital redemption reserve

21

1

-

Retained earnings

21

1,862,240

1,774,484

Shareholders' funds

2,337,259

2,274,503

The financial statements were approved by the Board of Directors and authorised for issue on 21 August 2026 and were signed on its behalf by:

A Issacharoff - Director

Called up

Capital

share

Retained

Share

redemption

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Balance at 1 November 2023

19

1,967,978

500,000

-

2,467,997

Changes in equity

Dividends

-

(420,420

)

-

-

(420,420

)

Total comprehensive income

-

226,926

-

-

226,926

Balance at 31 October 2024

19

1,774,484

500,000

-

2,274,503

Changes in equity

Issue of share capital

(1

)

-

(25,000

)

-

(25,001

)

Dividends

-

(210,210

)

-

-

(210,210

)

Total comprehensive income

-

297,966

-

1

297,967

Balance at 31 October 2025

18

1,862,240

475,000

1

2,337,259

Cash flows from operating activities

Cash generated from operations

1

(250,625

)

1,428,501

Interest paid

(683,300

)

(466,441

)

Tax paid

(80,601

)

22,154

Net cash from operating activities

(1,014,526

)

984,214

Cash flows from investing activities

Purchase of intangible fixed assets

(293,003

)

(96,989

)

Purchase of tangible fixed assets

(29,210

)

(33,132

)

Net cash from investing activities

(322,213

)

(130,121

)

Cash flows from financing activities

New loans in year

1,956,044

-

Loan repayments in year

(368,051

)

-

Amount introduced by directors

31,426

79,521

Amount withdrawn by directors

(64,474

)

(103,264

)

Share issue

(1

)

-

Security Premium

(25,000

)

-

Equity dividends paid

(210,210

)

(420,420

)

Net cash from financing activities

1,319,734

(444,163

)

(Decrease)/increase in cash and cash equivalents

(17,005

)

409,930

Cash and cash equivalents at beginning of year

2

1,768,425

1,358,495

Cash and cash equivalents at end of year

2

1,751,420

1,768,425

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

2025

2024

£

£

Profit before taxation

457,243

278,307

Depreciation charges

128,270

118,479

Finance costs

683,300

466,440

1,268,813

863,226

Increase in stocks

(707,592

)

(404,640

)

(Increase)/decrease in trade and other debtors

(651,350

)

893,792

(Decrease)/increase in trade and other creditors

(160,496

)

76,123

Cash generated from operations

(250,625

)

1,428,501

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 October 2025

31.10.25

1.11.24

£

£

Cash and cash equivalents

1,751,420

1,768,425

Year ended 31 October 2024

31.10.24

1.11.23

£

£

Cash and cash equivalents

1,768,425

1,358,495

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.11.24

Cash flow

At 31.10.25

£

£

£

Net cash

Cash at bank and in hand

1,768,425

(17,005

)

1,751,420

1,768,425

(17,005

)

1,751,420

Debt

Debts falling due within 1 year

(333,333

)

-

(333,333

)

Debts falling due after 1 year

(4,788,202

)

(1,587,992

)

(6,376,194

)

(5,121,535

)

(1,587,992

)

(6,709,527

)

Total

(3,353,110

)

(1,604,997

)

(4,958,107

)

1.	STATUTORY INFORMATION

Henig Diamonds 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.

GOING CONCERN

The financial statements have been prepared on the going concern basis.

In assessing the appropriateness of the going concern basis of accounting, the directors have considered the Company's current financial position, available cash resources, borrowing facilities, working capital requirements and trading performance.

The directors have also reviewed post year-end trading results, cash flows and management information available up to the date of approval of these financial statements and have considered the impact of reasonably foreseeable adverse scenarios on the Company's operations and liquidity.

Based on this assessment, the directors have a reasonable expectation that the Company will have adequate resources to continue in operational existence and meet its liabilities as they fall due for a period of at least twelve months from the date of approval of these financial statements.

Accordingly, the directors continue to adopt the going concern basis in preparing these financial statements.

REVENUE RECOGNITION

Revenue represents amounts receivable for diamonds and jewellery supplied during the year, excluding value added tax and trade discounts.

Revenue is measured at the fair value of consideration received or receivable and is recognised only when the Company has transferred control and the significant risks and rewards of ownership of the goods to the customer.

Revenue is recognised when:

- the goods have been delivered to the customer and customer acceptance has been obtained where required;

- the Company retains neither continuing managerial involvement 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 will flow to the company; and

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

For goods supplied on approval or similar arrangements, revenue is recognised only when the customer has accepted the goods or the approval period has expired and the conditions for revenue recognition have been satisfied.

Where goods have been delivered before the reporting date but invoiced subsequent to the reporting date, revenue is recognised in the period in which control and the significant risks and rewards of ownership have transferred to the customer.

INTANGIBLE ASSETS

Intangible assets comprise website development costs and other software development expenditure.

Costs directly attributable to the development and implementation of identifiable software systems that are expected to generate future economic benefits are capitalised as intangible assets. Expenditure relating to maintenance and ongoing support is recognised in profit or loss as incurred.

Intangible assets are measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is charged on a straight-line basis over the estimated useful economic life of three years, which reflects the expected period over which the assets are anticipated to generate economic benefits.

The useful economic life and residual value of intangible assets are reviewed annually.

TANGIBLE FIXED ASSETS

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

Leasehold improvement costs comprise expenditure incurred on the refurbishment and fit-out of leased premises. Leasehold improvements are stated at cost less accumulated depreciation and impairment losses.

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

Leasehold improvements

10 year lease (over the period of lease

)

Fixtures & fittings

15% Written down value method

Computer equipment

20% Straight line method

At each balance sheet date, the company reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication that any items of property, plant and equipment have suffered an impairment loss. If any such indication exists, the recoverable amount of an asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of the asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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

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

STOCKS

Stocks are stated at the lower of cost and net realisable value. Cost comprises purchase cost together with directly attributable costs incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price in the ordinary course of business less all estimated costs of completion and costs necessary to make the sale.

When stocks are sold, the carrying amount of those stocks is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of stocks to net realisable value and all losses of stocks are recognised as an expense in the period in which the write-down or loss occurs. The amount of any reversal of any write-down of stocks is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

FINANCIAL INSTRUMENTS

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

The Company's basic financial instruments comprise cash and bank balances, trade debtors, trade creditors, bank loans and amounts due to and from directors and related parties.

Trade debtors are measured initially at transaction price and subsequently at amortised cost less estimated impairment losses.

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

Financial assets are reviewed for impairment at each reporting date and provisions are recognised where there is objective evidence that amounts may not be fully recoverable.

TAXATION

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

Current or deferred taxation assets and liabilities are not discounted.

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

DEFERRED TAX

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:

- The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and

- Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

PROVISIONS

Provisions are recognised when the company has a present legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.

FOREIGN CURRENCIES

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

HIRE PURCHASE AND LEASING COMMITMENTS

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease s asset are consumed.

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.

Defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.

TRADE AND OTHER DEBTORS

Trade and other debtors that are receivable within one year and do not constitute a financing transaction are recorded at the undiscounted amount expected to be received, net of impairment. Those that are receivable after more than one year or that constitute a financing transaction are recorded initially at fair value less transaction costs and subsequently at amortised cost, net of impairment.

CASH AND CASH EQUIVALENTS

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.