REGISTERED NUMBER: SC827774 (Scotland)

Redpath Tyres Holdings Limited

Group Strategic Report,

Report of the Directors and

Audited

Consolidated Financial Statements

for the period

4th November 2024 to 30th April 2026

Page

Company Information

1

Group Strategic Report

2

to

3

Report of the Directors

4

to

5

Report of the Independent Auditors

6

to

9

Consolidated Income Statement

10

Consolidated Other Comprehensive Income

11

Consolidated Balance Sheet

12

Company Balance Sheet

13

Consolidated Statement of Changes in Equity

14

Company Statement of Changes in Equity

15

Consolidated Cash Flow Statement

16

Notes to the Consolidated Cash Flow Statement

17

Notes to the Consolidated Financial Statements

18

to

30

Directors:

J N Redpath

G Redpath

Registered office:

Academy House

Shedden Park Road

Kelso

Roxburghshire

TD5 7AL

Business address:

Industrial Estate

Station Road

Duns

Berwickshire

TD11 3HS

Registered number:

SC827774 (Scotland)

Auditors:

Rennie Welch Audit Limited

Academy House

Shedden Park Road

Kelso

Roxburghshire

TD5 7AL

The directors present their strategic report of the company and the group for the period 4th November 2024 to 30th April 2026.

The directors, in preparing this strategic report, have complied with s414C of the Companies Act 2006.

Review of business

The group's principal activity is disclosed within the Report of the Directors. Trading operations are conducted primarily through the subsidiary undertaking, with the parent company acting principally as a holding company.

The results for the year reflect continued trading of the subsidiary after its aquisition in the group. As substantially all trading activity is undertaken by the subsidiary company, the commentary below relates principally to the performance, financial position and development of those operations.

As a leading independent commercial tyre business, the strategic transformation from distributor to service operator, focusing on data, sustainability and integrated services, has delivered a strong financial performance during its first reporting period for the group.

Operating from a network of 11 depots across Scotland and Northern England, with 40+ service vehicles, the group serves more than 1,500 customers across its core activities. Despite inflationary cost pressures, gross profit margins are reported at a strong level of 37.4%, with turnover for the group in its first period reaching £23,062,847, this was as a result of Redpath Tyres' commitment to:

- 24/7 roadside support, handling more than 20,000 breakdowns per annum

- Fast turnaround times as a result of wide SKU ranges and good forecasting

- Nationwide fitting coverage, and

- Digital booking and reporting

Following the group's investment in systems in recent years, its focus during the year on eco-credentials has meant it is supplied by all the main tyre manufacturers. With retreading and recycling increasingly seen as cost-efficient and environmentally responsible options, some of the UK's largest truck fleets have chosen Redpath Tyres for its:

- Remould truck programme with its international partners, producing more than 5,000 remoulds per year

- Accredited vulcanised repair facility handling in excess of 1,500 tyres per annum

- Tyre collection and recycling service

- Achievement of Constructionline Gold

- Continued development towards Net Zero commitments.

With demand in the UK increasingly tied to logistics efficiency, regulatory emissions goals and fleet optimisation efforts, Redpath Tyres' commitment to quality, service and the environment means that it is well positioned to benefit from significant infrastructure development over the coming years. As a result, the directors believe the group is well positioned to continue its success from its core strengths in commercial fleet, OTR and agriculture.

Principal risks and uncertainties

The directors have considered the major financial risks that face the group both currently and in the future. The group is subject to the normal commercial and economic pressures of a trading entity and the financial risks that apply thereto, as well as giving due consideration to the principal risks presented by the industry in which it operates.

The directors view risk management as a vital part of the business and, as such, regularly review accounting records, management accounts and financial information. Good accounting systems are in place to monitor ongoing financial performance and trends, enabling the directors to assess risks and implement changes where appropriate.

Technological risks, including software failure and cyber-attacks, could impact operational efficiency. The directors continue to review and invest in technology and system monitoring to ensure systems remain robust, resilient and capable of supporting accurate and efficient operations.

The main areas of financial risk are the recoverability of debtors and the security of stock. Debtors are actively monitored and new customers are vetted prior to the supply of goods and services to help limit financial loss from unrecoverable balances. Stocks are securely stored to mitigate the risk of loss or misappropriation.

In addition, the group adopts a strategy to minimise non-financial risks through the application of robust health and safety policies, comprehensive insurance cover and other operational controls and procedures.

The directors continue to monitor both financial and non-financial aspects of the group's operations and take appropriate action in respect of matters that could impact the business.

On behalf of the board:

J N Redpath - Director

3rd November 2026

The directors present their report with the financial statements of the company and the group for the period 4th November 2024 to 30th April 2026.

Incorporation

The group was incorporated on 4th November 2024 .

Principal activity

The principal activity of the group in the period under review was that of the fitting, repairing and retailing of tyres, batteries and exhausts.

Dividends

Interim dividends per share were paid as follows:

144,578

- 31st January 2025

144,579

- 31st January 2026

289,157

The directors recommend that no final dividend be paid.

The total distribution of dividends for the period ended 30th April 2026 will be £ 289,157 .

Events since the end of the period

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

Directors

The directors who have held office during the period from 4th November 2024 to the date of this report are as follows:

J N Redpath - appointed 4th November 2024

G Redpath - appointed 4th November 2024

Mrs A Redpath - appointed 4th November 2024

Mrs A Redpath ceased to be a director after 30th April 2026 but prior to the date of this report.

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, Rennie Welch Audit Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

On behalf of the board:

J N Redpath - Director

3rd November 2026

Opinion

We have audited the financial statements of Redpath Tyres Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 30th April 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 30th April 2026 and of the group's profit for the period 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:

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 those 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:

Audit response to risks identified

- the nature of the industry and sector, control environment and business performance.

- any matters we identified having obtained and reviewed the group's documentation of their policies and procedures relating to:

-- identifying, evaluating, and complying with laws and regulations and whether they were aware of any instances of non-compliance.

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

-- the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations.

- 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.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and have not identified any significant areas with potential for fraud to occur. We hold this view on the basis on that the company is classified under the Companies Act 2006 as a medium company (in respect of the parent company) and a medium group (in respect of the group) for reporting purposes, under which anomalies would be detected.

Further to this no non-routine financial accounting has taken place from which we would expect an increase of fraud or error to occur.

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 frameworks that the group 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. The key laws and regulations we considered in this context included the UK Companies Act and local tax legislation.

In addition, we considered 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 group's ability to operate or to avoid a material penalty.

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.

Gillian Adamson BSC(Hons) CA CTA (Senior Statutory Auditor)

for and on behalf of Rennie Welch Audit Limited

Academy House

Shedden Park Road

Kelso

Roxburghshire

TD5 7AL

4th November 2026

Turnover

4

23,062,847

Cost of sales

(14,421,578

)

Gross profit

8,641,269

Administrative expenses

(7,489,297

)

1,151,972

Other operating income

5

769

Operating profit

8

1,152,741

Interest receivable and similar income

14,727

1,167,468

Interest payable and similar expenses

10

(79,330

)

Profit before taxation

1,088,138

Tax on profit

11

(289,633

)

Profit for the financial period

798,505

Profit attributable to:

Owners of the parent

798,505

Profit for the period

798,505

Other comprehensive income

Capital demerger movement

5,000

Income tax relating to other comprehensive income

-

Other comprehensive income for the period, net of income tax

5,000

Total comprehensive income for the period

803,505

Total comprehensive income attributable to:

Owners of the parent

803,505

Fixed assets

Tangible assets

14

1,622,347

Investments

15

-

1,622,347

Current assets

Stocks

16

2,161,644

Debtors

17

3,575,189

Cash at bank and in hand

153,510

5,890,343

Creditors

Amounts falling due within one year

18

4,605,716

Net current assets

1,284,627

Total assets less current liabilities

2,906,974

Creditors

Amounts falling due after more than one year

19

(275,724

)

Provisions for liabilities

23

(266,205

)

Net assets

2,365,045

Capital and reserves

Called up share capital

24

5,000

Revaluation reserve

25

556,682

Other reserves

25

5,000

Retained earnings

25

1,798,363

Shareholders' funds

2,365,045

The financial statements were approved by the Board of Directors and authorised for issue on 3rd November 2026 and were signed on its behalf by:

J N Redpath - Director

G Redpath - Director

Fixed assets

Tangible assets

14

-

Investments

15

10,000

10,000

Total assets less current liabilities

10,000

Capital and reserves

Called up share capital

24

5,000

Other reserves

25

5,000

Shareholders' funds

10,000

Company's profit for the financial year

289,157

The financial statements were approved by the Board of Directors and authorised for issue on 3rd November 2026 and were signed on its behalf by:

J N Redpath - Director

G Redpath - Director

Called up

share

Retained

Revaluation

Other

Total

capital

earnings

reserve

reserves

equity

£

£

£

£

£

Changes in equity

Issue of share capital

5,000

-

-

-

5,000

Dividends

-

(289,157

)

-

-

(289,157

)

Total comprehensive income

-

798,505

-

5,000

803,505

Balance at 30th April 2026

5,000

509,348

-

5,000

519,348

Called up

share

Retained

Other

Total

capital

earnings

reserves

equity

£

£

£

£

Changes in equity

Issue of share capital

5,000

-

-

5,000

Dividends

-

(289,157

)

-

(289,157

)

Total comprehensive income

-

289,157

5,000

294,157

Balance at 30th April 2026

5,000

-

5,000

10,000

Cash flows from operating activities

Cash generated from operations

1

1,523,230

Interest paid

(10,475

)

Interest element of hire purchase payments paid

(68,855

)

Finance costs paid

(1,173

)

Tax paid

(174,369

)

Net cash from operating activities

1,268,358

Cash flows from investing activities

Purchase of tangible fixed assets

(185,734

)

Sale of tangible fixed assets

46,982

Cash and cash equivalents on acquisition

(1,399,497

)

Interest received

14,727

Net cash from investing activities

(1,523,522

)

Cash flows from financing activities

Loan repayments in year

(9,913

)

Capital repayments in year

(328,493

)

Amount introduced by directors

507,605

Amount withdrawn by directors

(477,260

)

Equity dividends paid

(289,157

)

Net cash from financing activities

(597,218

)

Decrease in cash and cash equivalents

(852,382

)

Cash and cash equivalents at beginning of period

2

-

Cash and cash equivalents at end of period

2

(852,382

)

1.	Reconciliation of profit before taxation to cash generated from operations

£

Profit before taxation

1,088,138

Depreciation charges

670,352

Profit on disposal of fixed assets

(21,341

)

Finance costs

79,330

Finance income

(14,727

)

1,801,752

Increase in stocks

(67,341

)

Increase in trade and other debtors

(470,253

)

Increase in trade and other creditors

259,072

Cash generated from operations

1,523,230

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:

Period ended 30th April 2026

30.4.26

4.11.24

£

£

Cash and cash equivalents

153,510

-

Bank overdrafts

(1,005,892

)

-

(852,382

)

-

3.	Analysis of changes in net debt

Other

non-cash

At 4.11.24

Cash flow

changes

At 30.4.26

£

£

£

£

Net cash

Cash at bank

and in hand

-

153,510

153,510

Bank overdrafts

-

(1,005,892

)

(1,005,892

)

-

(852,382

)

(852,382

)

Debt

Finance leases

-

(145,057

)

-

(617,475

)

Debts falling due

within 1 year

-

(9,306

)

-

(9,306

)

-

(154,363

)

-

(626,781

)

Total

-

(1,006,745

)

-

(1,479,163

)

1.	Statutory information

Redpath Tyres Holdings Limited is a private company, limited by shares , registered in Scotland. 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.	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

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings from the 17th December 2024 to 30th April 2026. The subsidiary undertakings comprise of Redpath Tyres Limited and Rocklug Tyres Limited for the consolidated accounts made up to 30th April 2026.

Associate companies will be recognised where the group companies hold significant influence, but not control or joint control. Influence can be determined either by the shareholding of the associate which will generally be above 20% of the voting right shares but no more than 50% or another factor which would present significant influence but not control, otherwise if significant control exists, the investment would be considered as a subsidiary.

A subsidiary is an entity controlled by the parent company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities, either through it's voting rights or another factor which would allow for significant control to be applied.

The results of subsidiaries acquired or disposed of during the year are included in the profit and loss account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirers interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the group's activities. Turnover is shown net of value added tax, returns, rebates and discounts and after eliminating sales within the group.

The group recognises revenue when:

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

- the group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

- the amount of revenue can be measured reliably

- it is probable that the economic benefits associated with the transaction will flow to the group; and

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

Tangible fixed assets

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

Freehold land and buildings

- 2% on revalued cost

Improvements to property

- 5% on cost

Plant and machinery

- 20% on cost

Motor vehicles

- 33% on cost

Where freehold land and property includes any acquisitions of land, this shall not have the respective depreciation policy applied to it. Land is deemed to be an everlasting asset and therefore will have an infinite useful life.

Tangible fixed assets are stated at cost, net of depreciation and any provision for impairment. Within 2024 in the subsidiary there was a change in accounting policy to revalue freehold property and change the future depreciation rate. Therefore, freehold property is now stated at revalued cost, net of depreciation and any provision for impairment.

Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deduction of estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

Stocks

Stock is valued at the lower of cost and net realisable value. Cost value is calculated on a weighted average cost method and includes all direct expenditure and appropriate proportion of fixed and variable overheads. Net realisable value is based on estimated selling prices less further costs expected to be incurred in bringing the stock to completion.

Part worn stock is bought through bulk order rather than on an individual basis, resulting in an average cost being applied. This average cost can vary from consignment to consignment; therefore there is no specific value per item. In order to create a valuation for this element of the company's stock, the physical quantities have an average cost applied, which is calculated by the directors, as their best estimate of the individual average cost or net realisable value if this is lower.

Financial instruments

The following assets and liabilities are classified as financial instruments - trade debtors, trade creditors, bank loans and directors' loans.

Bank loans are initially measured at the present value of future payments, discounted at a market rate of interest, and subsequently at amortised cost using the effective interest method.

Directors' loans (being repayable on demand), trade debtors and trade creditors are measured at the undiscounted amount of the cash or other consideration expected to be paid or received.

Financial assets that are measured at amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Income and Retained Earnings.

Taxation

Taxation for the period comprises current and deferred tax. Tax is recognised in the Statement of Income and Retained Earnings, 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 period 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.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the leased asset to the group. All other leases are classified as operating leases.

Assets held under finance leases are recognised initially at the fair value of the leased asset (or, if lower, the present value of minimum lease payments) at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation using the effective interest method so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are deducted in measuring profit or loss. Assets held under finance leases are included in tangible fixed assets and depreciated and assessed for impairment losses in the same way as owned assets.

Rentals paid under operating leases are charged to the 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.

Provisions

Provisions are set up only where it is probable that a present obligation exists as a result of an event prior to the balance sheet date and that a payment will be required in settlement that can be estimated reliably. Where material, provisions are calculated on a discounted basis.

Debtors

Trade debtors are amounts due from customers for goods sold or services performed in the ordinary course of business.

Trade debtors with no stated interest rate are recognised initially at the transaction price. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value. In the balance sheet, bank overdrafts are shown within borrowings or current liabilities.

Creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from supplies. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement of the creditor for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors with no stated interest rate are recognised at the transaction price.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the statement of comprehensive income over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in the interest payable and similar charges.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Going concern

The directors, in carrying out their duties in respect of going concern, prepare and review monthly management accounts to monitor the financial performance of the company to date. They have also considered the financial position for a minimum period of 12 months from the date of signing these financial statements and have an expectation that the group can continue trading in the current format for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.

Employee benefits

Short term employee benefits, including holiday pay, are recognised as an expense in the statement of comprehensive income in the period in which they are incurred.