1          Adoption of new and revised Standards

The Group has adopted all of the new and revised Standards and Interpretations issued by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) of the IASB that are relevant to its operations and effective for accounting periods beginning on 1st April 2015. The adoption of the following IFRSs has not impacted upon the financial statements:

IAS 19 - Employee Benefits - Amendment

Annual Improvements to IFRSs 2010-2012 Cycle

Annual Improvements to IFRSs 2011-2013 Cycle

At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective,  and are not expected to have a material impact on the group:

IAS 16 and IAS 38 - Clarification of Acceptable Methods of Depreciation and Amortisation - effective 2017

IAS 27 - Equity Method in Separate Financial Statements - Amendment - effective 2017

IAS 1 - Disclosure Initiative - effective 2017

Annual Improvements to IFRSs 2012-2014 Cycle - effective 2017

Amendments to IFRS 10, IFRS 12 and IAS 28 - Investment Entities - Applying the consolidation exception - effective 2017

IAS 12 - Recognition of Deferred Tax - Amendment - effective 2018

IAS 7 - Disclosure Initiative - effective 2018

IFRS 9 - Financial Instruments - effective 2019

IFRS 15 - Revenue from Contracts with Customers - effective 2019

IFRS 16 - Leases - effective 2020

2          Accounting policies

Basis of preparation of preliminary financial information

The financial statements, upon which this financial information is based, have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretation Committee (IFRIC) Interpretation as adopted by the European Union and the requirements of the Companies Act applicable to companies reporting under IFRS.

In accordance with Section 435 of the Companies Act 2006, The Group confirms that the financial information for the years ended 31 March 2016 and 2015 are derived from the Group's audited financial statements and that these are not statutory accounts and, as such, do not contain all information required to be disclosed in the financial statements prepared in accordance with IFRS. The statutory accounts for the year ended 31 March 2016 have been audited and approved, but have not yet been filed.

The Group's audited financial statements for the year ended 31 March 2016 received an unqualified audit opinion and the auditor's report contained no statement under section 498(2) or 498(3) of the Companies Act 2006.

The Annual Report and Financial Statements will be posted to shareholders shortly and thereafter will be available from the Company's registered office, and from the Company's website www.samuel-heath.com.

3          Critical accounting and key sources of estimation

Critical judgements in applying the entity's accounting policies

In the process of applying the entity's accounting policies the directors have made the following judgements that have the most significant effect on the amounts recognised in the financial statements.

Income taxes

The Group is subject to income taxes in the United Kingdom.  Judgment is required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The recoverable amounts of the Group's deferred tax assets have been determined based on the Board's estimates of future taxable profits and income and tax rates.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

Valuation of intangible assets

Intangible assets are initially valued at their cost and then evaluated periodically for impairment. For purposes of valuation an intangible asset is considered impaired if its carrying value is less than the expected net cash flow from the asset.

Valuation of inventories

Determining the valuation of inventories requires an estimation of the obsolescence provision required to write down items to their realisable value.

Retirement benefit scheme deficit

The valuation of expected returns on assets and the present value of the liabilities of the scheme are determined by assumptions and estimates made by the directors based on the current information to hand.  Therefore amounts are open to fluctuations in the future due to unforeseen changes or additional factors that come to light following the year end.

4.             Sales revenue by geographically market

5.             Income taxes

Corporation tax is calculated at 20% (2015: 20%) of the estimated assessable profit for the year.

Tax reconciliation

6.             Dividends

In addition to the dividends paid during the year the directors are recommending a final dividend for 2016 of 6.875 pence per share amounting to £174,000. The proposed final dividend is subject to approval at the Annual General Meeting (see note 8) and has not been included as a liability in these accounts.

7.             Earnings per share

The basic and diluted earnings per share are calculated by dividing the relevant profit after taxation of £769,000 (2015: £394,000) by the average number of ordinary shares in issue during the year being 2,534,322 (2015: 2,534,322). The number of shares used in the calculation is the same for both basic and diluted earnings.

8.             Notice of annual general meeting

Notice is hereby given that the 2016 Annual General Meeting of the Company will be held at the registered office of the Company, Leopold Street, Birmingham, on 12^th August 2016 at 12.00 noon. The final Ordinary Share dividend of 6.875 pence, if approved, will be payable on 19^th August 2016 to ordinary shareholders registered at close of business on 22^nd July 2016.