StocksStocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.Operating lease agreementsRentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease.Pension costsThe company operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the profit and loss account.Deferred taxationProvision is made, under the liability method, to take account of timing differences between the treatment of certain items for accounts purposes and their treatment for tax purposes. Tax deferred or accelerated is accounted in respect of all material timing differences to the extent that it is considered that a net liability may arise.Foreign currenciesAssets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Translations in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Exchange differences are taken into account in arriving at the operating profit.Financial instrumentsFinancial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all its liabilities.AccrualsAccording to FRS102 unpaid holiday entitlement at the year end has been accrued in the financial statements.