REGISTERED NUMBER: 09742928 (England and Wales)

MGBC LTD

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

10

Statement of Financial Position

11

Statement of Changes in Equity

12

Statement of Cash Flows

13

Notes to the Statement of Cash Flows

14

Notes to the Financial Statements

16

DIRECTORS:

S McGuinness

D McGuinness

K M McGuinness

REGISTERED OFFICE:

5 Imperial Court

Laporte Way

Luton

Bedfordshire

LU4 8FE

REGISTERED NUMBER:

09742928 (England and Wales)

AUDITORS:

Miller & Co

Statutory Auditor

Chartered Accountants

5 Imperial Court

Laporte Way

Luton

Bedfordshire

LU4 8FE

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

REVIEW OF BUSINESS

Turnover has decreased by 35.9% in the year to £13.7 million. The gross margin achieved in the year fell from 21.96% to 18.26%, mainly due to rising material costs.

The final results show a profit before tax of £749,249 for the year, compared to a profit of £3,678,759 in the previous period. At the balance sheet date the net assets of the company had increased by 4% to £8,996,260 due to profits earned throughout the year.

The company continues to allocate resources, both capital and management time, towards business improvement initiatives across all processes to enhance client service efficiency and cost-effectiveness. Benefits from this commitment are becoming evident.

The company believes it is well positioned to continue growth and profitability by maintaining its market reputation and a solid client base in both the public and private sectors. The financial position remains stable, with a strong balance sheet and cash reserves.

While the construction industry presents ongoing challenges, the company adopts a proactive approach and applies enhanced commercial controls to address opportunities as they arise.

PRINCIPAL RISKS AND UNCERTAINTIES

The cost of living crisis is still causing cost increases to businesses worldwide. However, the directors consider that the business is in a good position to face these challenges, benefitting from good relations with customers and suppliers, together with strong liquidity in the form of cash reserves.

The company's credit risk is primarily attributed to its trade debtors and continues to be managed by operating strict credit checks on new customers and closely monitoring the credit limits of existing customers by reference to current financial information.

FINANCIAL KEY PERFORMANCE INDICATORS

The company had total comprehensive income for the year ended 31 December 2025 of £687,371 (2024: £2,783,076) and has a strong net asset position of £8,996,260 (2024: £8,647,049).

ENVIRONMENT

We continue to have a number of tenders and opportunities ahead of us which will allow us to develop the business in a sustainable and profitable manner in the medium term in line with our strategic plan, subject to the future economic climate.

The company is committed to the achievement of quality in the projects undertaken and complies with the requirements of IS09001 - quality management systems. We ensure that we recognise our environmental responsibilities to enable us to understand, as well as manage the actual and potential environmental impact of our activities. Our operations are conducted to ensure we comply with the legal requirements relating to the environment in which we carry out our business. As part of this obligation, we comply with the requirements of IS014001 - environmental management, for which we have received the accreditation.

The company continues to invest in its health and safety standards and performance across all its sites. Health and safety remains at the forefront of our planning and culture to manage the risks associated with operating within the construction industry, whilst further improving the company's procedures and processes. The company recognises the importance of specific and effective training for its employees to ensure compliance with the legal requirements and accreditation held by the company.

ON BEHALF OF THE BOARD:

K M McGuinness - Director

22 October 2026

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of building and development contractors.

DIVIDENDS

Interim dividends totalling £409,864 were paid throughout the year.

The directors recommend that no final dividends be paid.

The total distribution of dividends for the year ended 31 December 2025 will be £409,864.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

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

S McGuinness

D McGuinness

K M McGuinness

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.

AUDITORS

The auditors, Miller & Co, were appointed during the year and will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

K M McGuinness - Director

22 October 2026

Opinion

We have audited the financial statements of MGBC Ltd (the 'company') for the year ended 31 December 2025 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and 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 four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditors' responsibilities for the audit of the financial statements

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

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

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, including fraud.

Extent to which the audit was considered capable of detecting irregularities, including fraud

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.

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to these risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

- the nature of the industry, control environment and business performance;

- the results of our enquiries of management about their own identification and assessments of the risks of

irregularities;

- any matters we identified having obtained and reviewed the company's policies and procedures relating to:

o identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of

non-compliance;

o detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or

alleged fraud;

o the matters discussed among the audit engagement team regarding how and where fraud might occur in the

financial statements and any potential indicators of 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.

We also obtained an understanding of the legal and regulatory framework that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements, such as the Companies Act 2006.

In addition, we considered the provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Company's ability to operate or to avoid a material penalty.

Audit response to risk identified

Our procedures to respond to risks identified included the following:

- Reviewing the financial statement disclosures to assess compliance with provisions of relevant laws and

regulations described as having a direct effect on the financial statements;

- Performing analytical procedures to identify any unusual or unexpected relationships that may indicate material

misstatement due to fraud;

- In addressing the risk of fraud through management override of controls, the testing of the appropriateness of

journal entries and other adjustments and evaluating the business rationale of any significant transactions that are

unusual or outside the normal course of business.

We also 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.

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.

Stephen Healy FCA (Senior Statutory Auditor)

for and on behalf of Miller & Co

Statutory Auditor

Chartered Accountants

5 Imperial Court

Laporte Way

Luton

Bedfordshire

LU4 8FE

22 October 2026

TURNOVER

4

13,746,210

21,437,145

Cost of sales

11,236,179

16,730,216

GROSS PROFIT

2,510,031

4,706,929

Administrative expenses

1,144,551

967,906

1,365,480

3,739,023

Other operating income

41,513

36,171

OPERATING PROFIT

6

1,406,993

3,775,194

Interest receivable and similar income

118,430

65,919

1,525,423

3,841,113

Gain/loss on revaluation of assets

(628,000

)

(7,965

)

897,423

3,833,148

Interest payable and similar expenses

7

148,174

154,389

PROFIT BEFORE TAXATION

749,249

3,678,759

Tax on profit

8

211,878

895,683

PROFIT FOR THE FINANCIAL YEAR

537,371

2,783,076

OTHER COMPREHENSIVE INCOME

Gain on revaluation of assets

200,000

-

Income tax relating to other comprehensive income

(50,000

)

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

150,000

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

687,371

2,783,076

FIXED ASSETS

Tangible assets

10

3,721,532

3,504,461

Investment property

11

3,665,000

4,293,000

7,386,532

7,797,461

CURRENT ASSETS

Debtors: amounts falling due within one year

12

4,589,797

4,254,687

Debtors: amounts falling due after more than one year

12

-

225,370

Cash at bank

3,219,225

4,583,218

7,809,022

9,063,275

CREDITORS

Amounts falling due within one year

13

4,427,933

5,532,710

NET CURRENT ASSETS

3,381,089

3,530,565

TOTAL ASSETS LESS CURRENT LIABILITIES

10,767,621

11,328,026

CREDITORS

Amounts falling due after more than one year

14

(1,201,102

)

(2,007,986

)

PROVISIONS FOR LIABILITIES

19

(570,259

)

(672,991

)

NET ASSETS

8,996,260

8,647,049

CAPITAL AND RESERVES

Called up, paid and allotted share capital

20

200

200

Revaluation reserve

21

1,358,962

1,208,962

Capital redemption reserve

21

3

3

Retained earnings

21

7,637,095

7,437,884

SHAREHOLDERS' FUNDS

8,996,260

8,647,049

The financial statements were approved by the Board of Directors and authorised for issue on 22 October 2026 and were signed on its behalf by:

K M McGuinness - Director

Called

up, paid

and

allotted

Capital

share

Retained

Revaluation

redemption

Total

capital

earnings

reserve

reserve

equity

£

£

£

£

£

Balance at 1 January 2024

200

5,075,388

1,208,962

3

6,284,553

Changes in equity

Dividends

-

(348,876

)

-

-

(348,876

)

Total comprehensive income

-

2,783,076

-

-

2,783,076

Distribution re NPV

calculation

-

(71,704

)

-

-

(71,704

)

Balance at 31 December 2024

200

7,437,884

1,208,962

3

8,647,049

Changes in equity

Dividends

-

(409,864

)

-

-

(409,864

)

Total comprehensive income

-

537,371

150,000

-

687,371

Distribution re NPV

calculation

-

71,704

-

-

71,704

Balance at 31 December 2025

200

7,637,095

1,358,962

3

8,996,260

Cash flows from operating activities

Cash generated from operations

1

(55,250

)

6,349,695

Interest paid

(114,406

)

(130,110

)

Interest element of hire purchase payments paid

(33,768

)

(24,279

)

Tax paid

(601,567

)

(554,677

)

Net cash from operating activities

(804,991

)

5,640,629

Cash flows from investing activities

Purchase of tangible fixed assets

(935,497

)

(1,027,395

)

Purchase of investment property

-

(2,780,965

)

Sale of tangible fixed assets

556,000

436,248

Interest received

118,430

65,919

Net cash from investing activities

(261,067

)

(3,306,193

)

Cash flows from financing activities

Loan repayments in year

(164,474

)

(233,225

)

Group loans in year

-

(170,147

)

Capital advanced in year

536,550

-

Capital repayments in year

(277,213

)

(55,525

)

Amount introduced by directors

357

235

Equity dividends paid

(409,864

)

(348,876

)

Net cash from financing activities

(314,644

)

(807,538

)

(Decrease)/increase in cash and cash equivalents

(1,380,702

)

1,526,898

Cash and cash equivalents at beginning of year

2

4,583,218

3,056,320

Cash and cash equivalents at end of year

2

3,202,516

4,583,218

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

2025

2024

£

£

Profit before taxation

749,249

3,678,759

Depreciation charges

351,469

298,880

Loss on disposal of fixed assets

10,957

48,218

Loss on revaluation of fixed assets

628,000

7,965

Finance costs

148,174

154,389

Finance income

(118,430

)

(65,919

)

1,769,419

4,122,292

Increase in trade and other debtors

(38,036

)

(1,935,013

)

(Decrease)/increase in trade and other creditors

(1,786,633

)

4,162,416

Cash generated from operations

(55,250

)

6,349,695

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 December 2025

31.12.25

1.1.25

£

£

Cash and cash equivalents

3,219,225

4,583,218

Bank overdrafts

(16,709

)

-

3,202,516

4,583,218

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

4,583,218

3,058,486

Bank overdrafts

-

(2,166

)

4,583,218

3,056,320

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.25

Cash flow

At 31.12.25

£

£

£

Net cash

Cash at bank

4,583,218

(1,363,993

)

3,219,225

Bank overdrafts

-

(16,709

)

(16,709

)

4,583,218

(1,380,702

)

3,202,516

Debt

Finance leases

(467,148

)

(259,337

)

(726,485

)

Debts falling due within 1 year

(197,048

)

(20,411

)

(217,459

)

Debts falling due after 1 year

(580,584

)

184,887

(395,697

)

(1,244,780

)

(94,861

)

(1,339,641

)

Total

3,338,438

(1,475,563

)

1,862,875

1.	STATUTORY INFORMATION

MGBC 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, rounded to the nearest pound.

2.	STATEMENT OF COMPLIANCE

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.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.

Significant judgements and estimates

In applying the company's accounting policies, the directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. The directors' judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of revision and future period, if the revision affects both current and future periods.

Revenue and profit recognition

The estimation techniques used for revenue and profit recognition in respect of construction contracts and services contracts require forecasts to be made of the outcome of long-term contracts which require assessments and judgements to be made on the recovery of pre-contract costs, changes in the scope of work, contract programmes, maintenance and defects liabilities and changes in costs.

These assessments include a degree of uncertainty and therefore, if the key judgements and estimates change unfavourably, then write down of construction contracts may be necessary.

Recoverable value of debtors

The recoverability of trade and other debtors is regularly reviewed in light of available economic information specific to each receivable and provisions are recognised for balances considered to be irrecoverable.

Net present value calculation

Where loans are made/received that are interest free and not repayable on demand, the loan must initially be measured at the present value of the future payments, discounted at a market rate of interest for a similar debt instrument. The directors consider that the Bank of England base rate at the time of the financing transaction to be an appropriate rate of interest.

Turnover

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

Construction contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.

The percentage of completion method is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by surveys of the work performed. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments, or other assets depending on their nature, and provided it is probable they will be recovered.

Tangible fixed assets

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

Freehold property

-

not provided

Plant and machinery

-

25% on reducing balance

Fixtures and fittings

-

33% on reducing balance

Motor vehicles

-

25% on reducing balance

Computer equipment

-

33% on cost

Tangible assets are stated at cost less accumulated depreciation and any provision for impairment.

Following initial recognition, land and buildings are carried at fair value at the date of the revaluation, less any subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period. Any aggregate surplus or deficit arising from changes in the fair value are recognised in the revaluation reserve.

Investment property

Investment property is shown at most recent valuation. Revaluations are performed with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit or loss.

Financial instruments

Basic financial assets and liabilities, including cash and bank balances, trade and other accounts receivable and payable and loans from banks and other third parties are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction or debt instrument is measured at the present value of future receipts discounted at a market rate of interest. Such assets and debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in the profit or loss.

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

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

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

Taxation

Current tax represents the amount of tax payable or receivable in respect of the taxable profit (or loss) for the current or past reporting periods. It is measured at the amount expected to be paid or recovered using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax represents the future tax consequences of transactions and events recognised in the financial statements of current and previous periods. It is recognised in respect of all timing differences, with certain exceptions. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expense in tax assessments in periods different from those in which they are recognised in the financial statements. 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.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date that are expected to apply to the reversal of timing differences. Deferred tax on revalued non-depreciable tangible fixed assets and investment properties is measured using the rates and allowances that apply to the sale of the asset.

Hire purchase and leasing commitments

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 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.

Cash and cash equivalents

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