REGISTERED NUMBER: 05361853

THE TFP GROUP LIMITED

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST MARCH 2026

Page

Company Information

1

Group Strategic Report

2

to

3

Report of the Directors

4

Report of the Independent Auditors

5

to

8

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

to

28

DIRECTORS:

J Fisher

R J D Inman

C N Spencer

E D J R Turnbull

R J D Inman

SECRETARY:

R J D Inman

REGISTERED OFFICE:

Oak Trees Care Home

Main Street

Alne

York

North Yorkshire

YO61 1TB

REGISTERED NUMBER:

05361853

AUDITORS:

Thomas Coombs Limited

Statutory Auditor

Chartered Accountants

3365 The Pentagon

Century Way

Thorpe Park

Leeds

West Yorkshire

LS15 8ZB

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

REVIEW OF BUSINESS

The principal activity of The TFP Group Ltd continues to be the development and operation of care homes. The Group owns and operates four services providing nursing, residential and respite care:

- Esk Hall, Sleights

- Oak Trees, Alne

- Bedale Grange, Bedale

- Greenwell House, Bedale

The homes are registered with the Care Quality Commission for a combined total of 90 residents, and all four services continue to hold a 'Good' rating.

Across the Group, we have remained diligent in ensuring our care delivery and working practices meet high standards of safety, quality and professionalism. Admissions and occupancy remained strong throughout the year.

The Group continued to face significant cost pressures, including increases in employer taxation, minimum wage uplifts, and inflation across utilities, food, insurance and contracted services. Despite these challenges, the business worked proactively to protect margins while maintaining the standards of care expected by residents, families and regulators. Operational efficiencies, careful cost management and targeted investment allowed the Group to sustain service quality in a tightening financial environment.

Employee development continues to be a core focus. The Group recognises that job satisfaction and career progression are central to retention and to delivering high quality care. Investment in training, supervision and leadership development has continued across all homes.

Our teams have worked exceptionally hard, maintaining safe, welcoming environments for residents and their families. The Group has experienced its strongest year to date in terms of reputation for quality care, with consistently positive engagement from residents, families and the wider community. The Directors and management team wish to formally record their gratitude to all employees for their continued dedication.

The Group continued its programme of refurbishment and upgrading across all homes, including renewal of bathrooms, bedrooms and kitchens. Further works are scheduled for the coming year, including landscaping of gardens to enhance outdoor spaces for residents.

A capital investment programme has been launched to bring all homes to a consistent, modern standard. A full review has been completed and a schedule of works agreed for each home. This programme reflects the Group's long term commitment to quality and aims to create a lasting legacy for its founder, John Fisher.

The Group has also expanded its use of electronic monitoring and care tracking systems. These systems provide real time information on resident needs, support staff in delivering personalised care, and offer families secure access to updates on their relative's wellbeing.

PRINCIPAL RISKS AND UNCERTAINTIES

The Group identifies and monitors risks through regular meetings of directors and senior management, drawing on extensive sector knowledge and experience. Policies covering operations, staffing, training and compliance are in place, supported by internal audits to ensure adherence. Policies are reviewed regularly to ensure they remain appropriate to the Group's risk profile.

The principal risks faced by the Group as at 31 March 2026 include:

- Reputational risk, particularly within a sector where public confidence is critical.

- Financial risk, driven by rising interest rates, inflationary pressures, increased taxation, and statutory wage uplifts that directly affect supply costs and operational expenditure.

- Staffing and recruitment challenges, exacerbated by historically low sector wide pay rates, restrictions on overseas workers, and wider workforce shortages across health and social care.

The Group continues to plan carefully for the future, recognising that the wider economic environment remains uncertain. Forward planning includes structured capital investment, workforce development, and ongoing review of operational efficiencies to ensure that high quality care can be sustained even in a challenging financial landscape.

While these risks are actively managed, the Directors do not consider that they present any immediate threat to the day to day operations or financial viability of the Group.

ON BEHALF OF THE BOARD:

J Fisher - Director

4th September 2026

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

PRINCIPAL ACTIVITY

The principal activities of the group in the year under review were that of the operation of care homes.

DIVIDENDS

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

DIRECTORS

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

J Fisher

R J D Inman

C N Spencer

E D J R Turnball

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). 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 or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Thomas Coombs Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J Fisher - Director

4th September 2026

Opinion

We have audited the financial statements of The TFP Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31st 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 31st March 2026 and of the group's 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 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:

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 identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our knowledge of the business and sector, enquiries of directors and management, and review of regulatory information and correspondence. We communicated identified laws and regulations throughout the audit team and remained alert to any indication of non-compliance through the audit.

We discussed with directors and management the policies and procedures in place to ensure compliance with laws and regulations and otherwise prevent, deter and detect fraud.

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations identified as potentially having a material effect on the financial statements. Our procedures included review of financial statement information and testing of that information, enquiries of management and examination of documents, analytical procedures to identify unusual or unexpected relationships that may indicate fraud, and procedures to address the risk of fraud through director or management override of controls.

At the completion stage of the audit, the engagement partner's review included ensuring the audit team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

The primary responsibility for the prevention and detection of fraud rests with those charged with governance and management, and we cannot be expected to detect non-compliance with all laws and regulations. There are inherent limitations in the audit procedures described above and the further removed non-compliance of laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. In addition, the risk of not detecting a material misstatement relating to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment.

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.

Stuart Adam (Senior Statutory Auditor)

for and on behalf of Thomas Coombs Limited

Statutory Auditor

Chartered Accountants

3365 The Pentagon

Century Way

Thorpe Park

Leeds

West Yorkshire

LS15 8ZB

4th September 2026

TURNOVER

3

4,969,631

4,576,482

Cost of sales

240,789

243,509

GROSS PROFIT

4,728,842

4,332,973

Administrative expenses

4,147,865

3,823,031

580,977

509,942

Other operating income

4

9,811

-

OPERATING PROFIT

6

590,788

509,942

Profit on sale of investment

7

-

25,730

590,788

535,672

Interest payable and similar expenses

8

158,794

186,803

PROFIT BEFORE TAXATION

431,994

348,869

Tax on profit

9

130,462

54,929

PROFIT FOR THE FINANCIAL YEAR

301,532

293,940

Profit attributable to:

Owners of the parent

301,532

293,940

PROFIT FOR THE YEAR

301,532

293,940

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

301,532

293,940

Total comprehensive income attributable to:

Owners of the parent

301,532

293,940

FIXED ASSETS

Intangible assets

11

289,929

322,138

Tangible assets

12

5,838,940

5,934,539

Investments

13

-

-

6,128,869

6,256,677

CURRENT ASSETS

Stocks

14

2,720

2,720

Debtors

15

550,050

542,498

Cash at bank

773,895

600,007

1,326,665

1,145,225

CREDITORS

Amounts falling due within one year

16

1,789,320

1,891,101

NET CURRENT LIABILITIES

(462,655

)

(745,876

)

TOTAL ASSETS LESS CURRENT LIABILITIES

5,666,214

5,510,801

CREDITORS

Amounts falling due after more than one year

17

(2,076,415

)

(2,212,288

)

PROVISIONS FOR LIABILITIES

20

(162,285

)

(172,531

)

NET ASSETS

3,427,514

3,125,982

CAPITAL AND RESERVES

Called up share capital

21

2,000

2,000

Merger reserve

22

363,589

363,589

Retained earnings

22

3,061,925

2,760,393

SHAREHOLDERS' FUNDS

3,427,514

3,125,982

The financial statements were approved by the Board of Directors and authorised for issue on 4th September 2026 and were signed on its behalf by:

J Fisher - Director

FIXED ASSETS

Intangible assets

11

-

-

Tangible assets

12

4,901,767

4,956,383

Investments

13

217,100

217,100

5,118,867

5,173,483

CURRENT ASSETS

Debtors

15

40,872

58,646

Cash at bank

691,370

575,190

732,242

633,836

CREDITORS

Amounts falling due within one year

16

1,709,523

1,830,240

NET CURRENT LIABILITIES

(977,281

)

(1,196,404

)

TOTAL ASSETS LESS CURRENT LIABILITIES

4,141,586

3,977,079

CREDITORS

Amounts falling due after more than one year

17

2,076,415

2,212,288

NET ASSETS

2,065,171

1,764,791

CAPITAL AND RESERVES

Called up share capital

21

2,000

2,000

Retained earnings

2,063,171

1,762,791

SHAREHOLDERS' FUNDS

2,065,171

1,764,791

Company's profit for the financial year

300,380

620,732

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 4th September 2026 and were signed on its behalf by:

J Fisher - Director

Called up

share

Retained

Merger

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1st April 2024

2,000

2,466,453

363,589

2,832,042

Changes in equity

Total comprehensive income

-

293,940

-

293,940

Balance at 31st March 2025

2,000

2,760,393

363,589

3,125,982

Changes in equity

Total comprehensive income

-

301,532

-

301,532

Balance at 31st March 2026

2,000

3,061,925

363,589

3,427,514

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1st April 2024

2,000

1,142,059

1,144,059

Changes in equity

Total comprehensive income

-

620,732

620,732

Balance at 31st March 2025

2,000

1,762,791

1,764,791

Changes in equity

Total comprehensive income

-

300,380

300,380

Balance at 31st March 2026

2,000

2,063,171

2,065,171

Cash flows from operating activities

Cash generated from operations

1

649,549

(165,061

)

Interest paid

(158,794

)

(186,803

)

Tax paid

(58,307

)

(153,206

)

Net cash from operating activities

432,448

(505,070

)

Cash flows from investing activities

Purchase of tangible fixed assets

(37,978

)

(54,465

)

Sale of fixed asset investments

-

337,375

Net cash from investing activities

(37,978

)

282,910

Cash flows from financing activities

Bank loans

(129,582

)

(112,978

)

Amount introduced by directors

-

333,649

Amount withdrawn by directors

(91,000

)

(68,203

)

Net cash from financing activities

(220,582

)

152,468

Increase/(decrease) in cash and cash equivalents

173,888

(69,692

)

Cash and cash equivalents at beginning of year

2

600,007

669,699

Cash and cash equivalents at end of year

2

773,895

600,007

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

2026

2025

£

£

Profit before taxation

431,994

348,869

Depreciation charges

154,355

151,047

Loss on disposal of fixed assets

11,431

-

Profit on disposal of investment

-

(25,730

)

Finance costs

158,794

186,803

756,574

660,989

Increase in trade and other debtors

(7,552

)

(331,489

)

Decrease in trade and other creditors

(99,473

)

(494,561

)

Cash generated from operations

649,549

(165,061

)

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 31st March 2026

31/3/26

1/4/25

£

£

Cash and cash equivalents

773,895

600,007

Year ended 31st March 2025

31/3/25

1/4/24

£

£

Cash and cash equivalents

600,007

669,699

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1/4/25

Cash flow

At 31/3/26

£

£

£

Net cash

Cash at bank

600,007

173,888

773,895

600,007

173,888

773,895

Debt

Debts falling due within 1 year

(139,036

)

(6,291

)

(145,327

)

Debts falling due after 1 year

(2,212,288

)

135,873

(2,076,415

)

(2,351,324

)

129,582

(2,221,742

)

Total

(1,751,317

)

303,470

(1,447,847

)

1.	STATUTORY INFORMATION

The TFP Group Limited is a private company, limited by shares , registered in Not specified/Other. The company's registered number and registered office address can be found on the General Information page.

The principal activities of the group in the year under review were that of the operation of care homes and the development, rental and sale of residential property.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements are presented in sterling which is the functional currency of the company and rounded to the nearest £1.

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

Going concern

The Directors continue to monitor and assess the Group's operations, financial position and risk profile to ensure the business is well placed to respond to external factors that may impact performance. Processes and controls are reviewed regularly, with decisions informed by sector guidance and examples of best practice.

Occupancy levels fluctuated across individual homes during the year but averaged 90%, with demand for residential placements remaining consistently strong. Since the year end, the Group has continued to trade profitably and forecasts sustained profitability into the 2026/27 financial year.

The Group remained cash generative throughout the year and has continued to generate positive cash flows since the year end.

Short term funding facilities are maintained with the Group's bankers, with monthly reporting provided in line with agreed terms. At a company level, the TFP Group Limited has net current liabilities as at the year end of c.£977k (2025: £1.196m), of which the largest portion relates to inter company creditors and director loans. The directors have received confirmation that repayment of these debts will not be sought until the company has the ability to repay them, but expect a further reduction in total net current liabilities over the course of 2026/27.

The Directors have undertaken a full review of the Group's estate and initiated a structured repairs and capital investment programme. This includes targeted refurbishment across all homes and a major renovation at the Bedale service. These investments are designed to maintain high standards of accommodation, ensure resident comfort, and support long term operational quality.

The Group continues to operate in a challenging economic environment, with rising taxation, statutory wage uplifts and inflationary pressures affecting margins. Forward planning has therefore focused on cost control, operational efficiency, and phased capital investment to ensure the Group can maintain high quality care while navigating uncertain economic conditions.

Having considered current trading performance, cash generation, funding arrangements, occupancy levels, and the Group's forward plans, the Directors are satisfied that the company and Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, these financial statements have been prepared on a going concern basis.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the company and entities controlled by the group (its subsidiaries). Control is achieved where the group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in total comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate using accounting policies consistent with those of the parent. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Investments in subsidiaries are accounted for at cost less impairment in the individual financial statements.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Significant judgements and estimates

In the application of the group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

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

The directors have exercised judgement in determining:

- whether there are indications of impairment of the group's fixed assets

- whether there are indications of impairment of the group's goodwill

- whether there are indications of impairment in the carrying value of fixed asset investments

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

Acquired goodwill is being written off in equal annual instalments over its estimated useful economic life of 25

years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

1% on cost

Fixtures and fittings

10% on cost

Plant and machinery

20% on cost

Office equipment

33% on cost

Tangible fixed assets are initially recognised at historic cost or deemed historic cost, which includes expenditure incurred in bringing the asset to its present location and condition.

They are assessed at each reporting date for evidence of impairment. Impairment losses are recognised for the amount by which the carrying amount exceeds recoverable amount. Assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that previously recognised impairment losses may no longer exist or be reduced, and any reversal recognised in the accounts.

Stocks

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

Financial instruments

The company only enters into transactions in ‘basic’ financial instruments which result in the recognition of assets and liabilities; these include trade and other debtors and creditors, bank balances, loans from banks and other third parties, and loans to related parties. These are recognised in the company’s balance sheet when it becomes party to the contractual provisions of the instrument.

Basic financial assets (other than those classified as payable within one year) are initially measured at cost and are subsequently carried at cost or amortised cost using the effective interest method, less any impairment losses. Basic financial assets classed as receivable within one year are not amortised.

Basic financial liabilities (other than those classified as payable within one year) are initially measured at present value of future cash flows and subsequently at amortised cost using the effective interest method. Basic financial liabilities classed as payable within one year are not amortised.

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

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.