REGISTERED NUMBER: 16209059 (England and Wales)

Group Strategic Report,

Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31 March 2026

for

The Networking People Topco Ltd

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Consolidated Income Statement

9

Consolidated Other Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

17

DIRECTORS:

Mr S T Daniels

Mr R C Williams

Mr N Redwood

REGISTERED OFFICE:

Network House

Caton Road

Lancaster

England

LA1 3PE

REGISTERED NUMBER:

16209059 (England and Wales)

AUDITORS:

Thompson Wright (Audit) Limited

Ebenezer House

Ryecroft

Newcastle under Lyme

Staffordshire

ST5 2BE

The directors present their strategic report of the company and the group for the year ended 31 March 2026.

REVIEW OF BUSINESS

The turnover of the primary trading company (TNP) is generated through the supply, design, implementation and support of ICT networks, including the provision of security solutions and services for them. Underpinning this, TNP operates its own carrier network providing high speed internet, cloud and wide area network connectivity across the UK.

TNP targets organisations that are major consumers of the internet and networking technologies, with a heavy emphasis on the public sector. Over 90% of TNP's business is in local government, health, blue light and education. This level of public sector experience ensures TNP is on key procurement frameworks, and that all relevant compliance and technical requirements are fully understood and can be leveraged when tendering for public sector contracts.

TNP continues to develop its supply chain relationships by working with carefully selected leading vendors such as Fortinet, Juniper/HPE and Cisco. As a Fortinet Expert partner, TNP continues to demonstrate its award-winning ability to deliver the full spectrum of Fortinet solutions at the highest partner level with highly trained staff who are able to manage the most complex customer deployments. TNP currently holds Juniper Elite level partnership (due to merge into the HPE partner ecosystem), given its recent investment to extend the portfolio from WAN connectivity solutions to include the Juniper MIST stack of LAN & WiFi technologies. The new Cisco 360 partner programme maps TNP as a Cisco Network & Services Partner, continuing to demonstrate its ongoing capability and performance.

TNP continued to deliver strong growth, with turnover increasing by 16.6% and operating profit increasing significantly by 117% during the year. The result benefited in part from the timing of milestones on a major contract. TNP continues to have a healthy pipeline and substantial order book, providing a strong platform for continued revenue growth.

The year marked the first full year following the investment by YFM Equity Partners (YFM), which primarily supported a management buyout led by Scott Daniels, Managing Director, and Robin Williams, Technical Director. The group is making a substantial investment in additional headcount and plans to appoint two new executive directors in the forthcoming year, increasing its capacity to support sustainable long-term growth.

PRINCIPAL RISKS AND UNCERTAINTIES

The financial instrument risks affecting the company relate to cashflow risk, credit risk, liquidity risk and foreign currency risk.

Cashflow risk

Cashflow risk is the risk that sufficient levels of cash do not flow into the business to allow working capital requirements to be met in a timely manner. The management of the timing of cash inflows and cash outflows is achieved with the close involvement of management with customer and supplier relationships. Management also reviews financial information on a regular basis to determine whether further measures are needed to ensure sufficient cash inflows to the business.

Credit risk

Credit risk is the risk that the company will not receive full settlement on amounts due from customers. This risk is managed through continually monitored credit procedures including having regular dialogue with customers during the conduct of the business. This risk is reduced dramatically for the company due to the nature of its customer base (over 90% public sector) who are mandated by law to pay all relevant invoices within 30 days of receipt.

Liquidity risk

Liquidity risk is the risk that the company will not have sufficient funds to carry out its short and longer- term objectives. Historically, the company has managed its funding requirements through the retention of cash arising from its operating activities without the need to raise cash through debt finance. The company has also secured additional liquidity by taking out loans in the UK.

Foreign currency risk

Foreign currency risk is the risk that on settlement of contractual balances the company will incur losses because of a fall in the value of the company's functional currency against that of the counterparty. This risk is not relevant to the company as its does not transact with its customers using foreign currency. Should this occur in the future the company will raise invoices in the customer's functional currency to offset some of this risk.

FINANCIAL KEY PERFORMANCE INDICATORS

The key financial performance indicators of the group are as follows:

2026

£

Turnover

18,099

Gross Profit

6,865

Operating Profit / (loss)

995

NON-FINANCIAL KEY PERFORMANCE INDICATORS

The key non-financial performance indicators of the group are as follows:

2026

Average number of employees

60

Debtors days

34 days

Creditors days

41 days

FUTURE DEVELOPMENTS

The trading outlook for 2026/27 financial year is healthy with trading levels and margins being maintained. TNP has seen an increase in the number of projects and the value of the contracts in the past 12 months which will continue in the future. The pipeline for the business is secured for the next four years with funding and delivery alongside the company's key partners.

ON BEHALF OF THE BOARD:

Mr S T Daniels - Director

21 September 2026

The directors present their report with the financial statements of the company and the group for the year ended 31 March 2026.

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2026.

DIRECTORS

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

Mr S T Daniels

Mr R C Williams

Mr N Redwood

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Thompson Wright (Audit) Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr S T Daniels - Director

21 September 2026

Opinion

We have audited the financial statements of The Networking People Topco Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2026 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated 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 group's and of the parent company affairs as at 31 March 2026 and of the group's loss 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 group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

The extent to which the audit was considered capable of detecting irregularities including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

- the Senior Statutory Auditor ensured that the audit 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 sector in which the company operates;

- 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 and corruption legislation, anti slavery and employment legislation, environmental, (including Waste Electrical and Electronic Equipment recycling (WEEE) Regulations 2013), other industry specific accreditations and health and safety legislation within the industry;

- 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 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;

-reading the minutes of meetings of those charged with governance;

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

- reviewing correspondence with HMRC, relevant regulators including the Health and Safety Executive, and the company's legal advisors.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

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.

Jeremy Bostock BA (Hons) BFP FCA (Senior Statutory Auditor)

for and on behalf of Thompson Wright (Audit) Limited

Ebenezer House

Ryecroft

Newcastle under Lyme

Staffordshire

ST5 2BE

21 September 2026

TURNOVER

3

18,099,102

-

Cost of sales

11,233,499

-

GROSS PROFIT

6,865,603

-

Administrative expenses

5,869,986

9,000

OPERATING PROFIT/(LOSS)

5

995,617

(9,000

)

Interest receivable and similar income

48,124

-

1,043,741

(9,000

)

Interest payable and similar expenses

6

1,005,297

13,650

PROFIT/(LOSS) BEFORE TAXATION

38,444

(22,650

)

Tax on profit/(loss)

7

264,168

-

LOSS FOR THE FINANCIAL YEAR

(225,724

)

(22,650

)

Loss attributable to:

Owners of the parent

(225,724

)

(22,650

)

LOSS FOR THE YEAR

(225,724

)

(22,650

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(225,724

)

(22,650

)

Total comprehensive income attributable to:

Owners of the parent

(225,724

)

(22,650

)

FIXED ASSETS

Intangible assets

9

8,019,214

8,910,238

Tangible assets

10

1,616,836

834,017

Investments

11

-

-

9,636,050

9,744,255

CURRENT ASSETS

Stocks

12

1,126,203

200,977

Debtors

13

4,122,139

2,748,969

Cash at bank and in hand

1,781,767

1,102,763

7,030,109

4,052,709

CREDITORS

Amounts falling due within one year

14

6,793,083

4,499,493

NET CURRENT ASSETS/(LIABILITIES)

237,026

(446,784

)

TOTAL ASSETS LESS CURRENT LIABILITIES

9,873,076

9,297,471

CREDITORS

Amounts falling due after more than one year

15

(8,442,709

)

(7,837,455

)

PROVISIONS FOR LIABILITIES

19

(398,521

)

(202,444

)

NET ASSETS

1,031,846

1,257,572

CAPITAL AND RESERVES

Called up share capital

20

9,548

9,648

Share premium

21

1,270,554

1,270,574

Capital redemption reserve

21

118

-

Retained earnings

21

(248,374

)

(22,650

)

SHAREHOLDERS' FUNDS

1,031,846

1,257,572

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

Mr S T Daniels - Director

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

-

-

Investments

11

1

1

1

1

CURRENT ASSETS

Debtors

13

1,280,219

1,280,221

NET CURRENT ASSETS

1,280,219

1,280,221

TOTAL ASSETS LESS CURRENT LIABILITIES

1,280,220

1,280,222

CAPITAL AND RESERVES

Called up share capital

20

9,548

9,648

Share premium

21

1,270,554

1,270,574

Capital redemption reserve

21

118

-

SHAREHOLDERS' FUNDS

1,280,220

1,280,222

Company's profit for the financial year

-

-

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

Mr S T Daniels - Director

Called up

Capital

share

Retained

Share

redemption

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Changes in equity

Issue of share capital

9,648

-

1,270,574

-

1,280,222

Total comprehensive income

-

(22,650

)

-

-

(22,650

)

Balance at 31 March 2025

9,648

(22,650

)

1,270,574

-

1,257,572

Changes in equity

Reduction in share capital

(100

)

-

-

-

(100

)

Total comprehensive income

-

(225,724

)

-

118

(225,606

)

Balance at 31 March 2026

9,548

(248,374

)

1,270,574

118

1,031,866

Called up

Capital

share

Retained

Share

redemption

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Changes in equity

Issue of share capital

9,648

-

1,270,574

-

1,280,222

Balance at 31 March 2025

9,648

-

1,270,574

-

1,280,222

Changes in equity

Reduction in share capital

(100

)

-

-

-

(100

)

Total comprehensive income

-

-

-

118

118

Balance at 31 March 2026

9,548

-

1,270,574

118

1,280,240

Cash flows from operating activities

Cash generated from operations

1

2,172,280

(131,862

)

Interest paid

(403,258

)

(13,650

)

Interest element of hire purchase payments paid

(8,831

)

-

Tax paid

(215,168

)

-

Net cash from operating activities

1,545,023

(145,512

)

Cash flows from investing activities

Purchase of tangible fixed assets

(874,565

)

-

Sale of tangible fixed assets

2,249

-

Purchase of subsidiary

-

(8,171,672

)

Interest received

48,124

-

Net cash from investing activities

(824,192

)

(8,171,672

)

Cash flows from financing activities

New loans in year

-

6,730,070

Capital repayments in year

(41,825

)

-

Share issue

(2

)

9,648

Share premium

-

1,270,574

Amounts due from related party

-

1,409,655

Net cash from financing activities

(41,827

)

9,419,947

Increase in cash and cash equivalents

679,004

1,102,763

Cash and cash equivalents at beginning of year

2

1,102,763

-

Cash and cash equivalents at end of year

2

1,781,767

1,102,763

1.	RECONCILIATION OF PROFIT/(LOSS) BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

Period

27.1.25

Year Ended

to

31.3.26

31.3.25

£

£

Profit/(loss) before taxation

38,444

(22,650

)

Depreciation charges

1,063,958

-

Profit on disposal of fixed assets

(1,818

)

-

Finance costs

1,005,297

13,650

Finance income

(48,124

)

-

2,057,757

(9,000

)

Increase in stocks

(925,226

)

-

Increase in trade and other debtors

(1,373,170

)

(137,069

)

Increase in trade and other creditors

2,412,919

14,207

Cash generated from operations

2,172,280

(131,862

)

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 March 2026

31.3.26

1.4.25

£

£

Cash and cash equivalents

1,781,767

1,102,763

Period ended 31 March 2025

31.3.25

27.1.25

£

£

Cash and cash equivalents

1,102,763

-

3.	ANALYSIS OF CHANGES IN NET DEBT

Other

non-cash

At 1.4.25

Cash flow

changes

At 31.3.26

£

£

£

£

Net cash

Cash at bank

and in hand

1,102,763

679,004

1,781,767

1,102,763

679,004

1,781,767

Debt

Finance leases

(124,947

)

41,825

(81,618

)

(164,740

)

Debts falling due

within 1 year

-

140,044

-

140,044

Debts falling due

after 1 year

(7,730,070

)

(453,164

)

(140,044

)

(8,323,278

)

(7,855,017

)

(271,295

)

(221,662

)

(8,347,974

)

Total

(6,752,254

)

407,709

(221,662

)

(6,566,207

)

1.	STATUTORY INFORMATION

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

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

2.	ACCOUNTING POLICIES

Basis of 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 a going concern basis which assumes the Group will have sufficient funds to continue to pay its debts as and when they fall due and thus continue to trade. The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future based on its forecasts and projections. In making their assessment, the directors have considered a period of at least 12 months from the date of signing these financial statements.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the company and all subsidiary undertakings, together with the group's shares of the net assets and results of associated undertakings. The financial statements of all group companies are adjusted, where necessary, to ensure the use of consistent accounting policies..

Significant judgements and estimates

Critical judgements in applying the Group's accounting policies.

There were no critical judgements made in applying the Group's accounting policies.

Critical accounting estimates and assumptions

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Turnover in respect of contacts for on-going services is recognised by reference to the stage of completion.

Where the substance of a contact is that the contractual obligations are performed gradually over time, revenue is recognised as contract activity progress to reflect the partial performance of our contractual obligations. The amount of revenue included reflects the accrual of the right to consideration as contact activity progresses by reference to value of the work performed.

Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimates of useful economic lives and residual value of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, if economic utilisation of the assets.

Impairment of debtors

Management perform ongoing reviews of the recoverabilty of debtor balances, an allowances for doubtful debts is maintained for potential credit losses based on management's assessment of the expected collectability of amounts receivable. The allowance for bad debts is reviewed periodically to assess the adequacy of the allowance.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2025, is being amortised evenly over its estimated useful life of ten years.

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.

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.

Plant and machinery

-

20% on reducing balance

Fixtures and fittings

-

20% on reducing balance

Motor vehicles

-

20% on reducing balance

Stocks

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

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated 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 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.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.