Company registration number 05047798 (England and Wales)
CARALLON LTD
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 JULY 2024
Kings House
9-10 Haymarket
London
United Kingdom
SW1Y 4BP
CARALLON LTD
CONTENTS
Page
Company information
1
Strategic report
2 - 3
Directors' report
5
Directors' responsibilities statement
4
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 25
CARALLON LTD
COMPANY INFORMATION
- 1 -
Directors
Mr C Hunt
Mr R J Mead
Mr L Khale
Mr W H Wagner
Ms S K Darby
Mr A M Drofiak
Mr P Watson
(Appointed 15 January 2024)
Secretary
Mr C Hunt
Company number
05047798
Registered office
272 Gunnersbury Avenue
London
W4 5QB
Auditor
TC Group London Limited
Kings House
9-10 Haymarket
London
United Kingdom
SW1Y 4BP
CARALLON LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 2 -

The directors present the strategic report for the year ended 31 July 2024.

Principal activity

The principal activity of the company is the design, development, and manufacture of industry-leading control products for the architectural, entertainment, film and broadcast industries.

 

Fair review of the business

The company increased its profitability despite the residual challenges of the Covid pandemic and continues to manage several development projects with extended life cycles for all its major customers. This allows Carallon to plan with a long-term growth strategy in mind.

 

Manufacturing income more than doubled compared to the previous year due both to continued demand for its control products and an unwinding of long lead-times as component pressures eased, while income from development contracting increased by 28% supported by an increase in overall headcount to 114.

 

The Carallon group of companies is ultimately owned by an Employee Ownership Trust, which directly works for the benefit of its employees and enables its staff to share in all rights and benefits.

Principal risks and uncertainties

Carallon’s main customers are primarily export-focused and cost of living and inflationary pressures may pose a risk to both its contracting revenue and manufacturing income if there are consequent effects on demand.

 

The company has implemented enhanced IT security measures to protect against potential data loss and cyber-crime. VAT and other liabilities have been paid to terms.

 

Carallon uses a contract manufacturer for some of its electronics requirements, and there is a risk to production should global or environmental events impact on its ability to supply key assemblies. The significant disruption in the global supply chain for electronics has reduced and the lead times of some core components has returned to nearer normal levels. However, longer lead-time ordering is still in place for some parts, and some redesign of affected materials has been adopted to mitigate the threat of those components which are end-of-life or difficult to source.

Financial and credit risk

Carallon has budgetary and forecasting procedures in place to monitor its working capital and cash requirements. An enhanced internal ERP system is in place to support audit and approval processes for purchases, expenses, and credit management. Customer trade credit limits are regularly assessed by senior management.

 

Currency risk

The company holds debtor and creditor balances in foreign currencies, and where possible attempts to buy and sell in US dollars to set off balances against each other. Bank reserves of foreign currency are regularly monitored and transferred to pounds at prevailing rates of exchange.

CARALLON LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 3 -
Key performance indicators

The company monitors its performance primarily via comparative earnings before dividends and tax after

adjustments for non-recurring expenditure.

 

 

 

 

 

 

2024

 

2023

 

 

 

 

 

 

 

 

Operating profit before interest, tax and dividends

1,510,802

 

3,272,534

 

 

Depreciation and amortisation

205,783

 

145,116

 

 

Adjusted operating profit

1,633,346

 

3,417,650

 

 

On behalf of the board

Mr C Hunt
Director
19 August 2025
CARALLON LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2024
- 4 -

The directors are responsible for preparing the annual report 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:

 

 

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.

CARALLON LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 5 -

The directors present their annual report and financial statements for the year ended 31 July 2024.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr C Hunt
Mr R J Mead
Mr L Khale
Mr W H Wagner
Ms S K Darby
Mr A M Drofiak
Mr P Watson
(Appointed 15 January 2024)
Results and dividends

The results for the year are set out on page 10.

Ordinary dividends were paid amounting to £282,937. The directors do not recommend payment of a final dividend.

Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the exposure of the group to financial, credit and currency risk.

Auditor

TC Group are deemed to be re-appointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr C Hunt
Director
19 August 2025
CARALLON LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CARALLON LTD
- 6 -
Opinion

We have audited the financial statements of Carallon Ltd (the 'company') for the year ended 31 July 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including 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:

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 Auditor's 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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.

CARALLON LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARALLON LTD
- 7 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

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 directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 is 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.

Auditor's 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 an auditor's report 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.

 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

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

The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.

CARALLON LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARALLON LTD
- 8 -

Our approach was as follows:

 

 

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. 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 are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities .This description forms part of our auditor’s report.

 

CARALLON LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARALLON LTD
- 9 -

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 an auditor's report 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.

Robert Keen FCCA (Senior Statutory Auditor)
For and on behalf of TC Group London Limited
Statutory Auditor
19 August 2025
Office: London
CARALLON LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2024
- 10 -
2024
2023
Notes
£
£
Turnover
4
29,960,912
36,477,450
Cost of sales
(22,268,801)
(27,409,092)
Gross profit
7,692,111
9,068,358
Distribution costs
(138,902)
(209,559)
Administrative expenses
(6,441,054)
(5,972,371)
Other operating income
398,646
386,106
Operating profit
3
1,510,801
3,272,534
Interest payable and similar expenses
7
(28,680)
(24,544)
Profit before taxation
1,482,121
3,247,990
Tax on profit
8
33,898
(99,313)
Profit for the financial year
1,516,019
3,148,677

The profit and loss account has been prepared on the basis that all operations are continuing operations.

CARALLON LTD
BALANCE SHEET
AS AT
31 JULY 2024
31 July 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
992,447
1,026,075
Current assets
Stocks
11
5,140,869
4,930,947
Debtors
12
10,082,930
6,835,184
Cash at bank and in hand
1,113,207
2,053,227
16,337,006
13,819,358
Creditors: amounts falling due within one year
13
(6,617,519)
(5,260,583)
Net current assets
9,719,487
8,558,775
Total assets less current liabilities
10,711,934
9,584,850
Creditors: amounts falling due after more than one year
15
(51,479)
(157,477)
Net assets
10,660,455
9,427,373
Capital and reserves
Called up share capital
17
1,000
1,000
Profit and loss reserves
10,659,455
9,426,373
Total equity
10,660,455
9,427,373
The financial statements were approved by the board of directors and authorised for issue on 19 August 2025 and are signed on its behalf by:
Mr C  Hunt
Director
Company Registration No. 05047798
The notes on pages 13 to 25 form part of these financial statements
CARALLON LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 August 2022
1,000
7,409,446
7,410,446
Year ended 31 July 2023:
Profit and total comprehensive income
-
3,148,677
3,148,677
Dividends
9
-
(1,131,750)
(1,131,750)
Balance at 31 July 2023
1,000
9,426,373
9,427,373
Year ended 31 July 2024:
Profit and total comprehensive income
-
1,516,019
1,516,019
Dividends
9
-
(282,937)
(282,937)
Balance at 31 July 2024
1,000
10,659,455
10,660,455
CARALLON LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
- 13 -
1
Accounting policies
Company information

Carallon Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 272 Gunnersbury Avenue, London, W4 5QB.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

- Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

- Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of services is recognised by reference to the stage of completion.

CARALLON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 14 -

Royalties due to the company on sale of goods are recognised when the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the entity.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
Over the term of the lease
Fixtures, fittings and equipment
3 years straight line
Computer equipment
3 years straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and associated costs which have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

CARALLON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 15 -
1.7
Cash and cash equivalents

Cash at bank and in hand are basic financial assets and include cash in hand and deposits held at call with banks.

1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented 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.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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 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.

CARALLON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

CARALLON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 17 -
1.10
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13
Leases

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

 

Assets held under finance leases are recognised as assets at the lower of the assets' fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit and loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

CARALLON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 18 -
1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the profit and loss account for the period.

1.15

Research and development

Research and development expenditure is written off as incurred.

2
Judgements and key sources of estimation uncertainty

In the application of the company’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.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Stock provision

Stock values can decrease due to deterioration, damage or obsolescence. Provisions for slow-moving and obsolete stock are based on management's judgement using their expertise and knowledge.

3
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Exchange losses
49,307
82,881
Fees payable to the company's auditor for the audit of the company's financial statements
7,000
5,575
Depreciation of owned tangible fixed assets
76,488
61,543
Depreciation of tangible fixed assets held under finance leases
100,615
83,573
Operating lease charges
1,060,793
1,103,160
CARALLON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 19 -
4
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Product design and development
29,960,912
36,477,450
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
29,960,912
36,477,450
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Directors
6
5
Direct staff
64
51
Admin, operational and manufacturing staff
62
50
Total
132
106

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
6,563,804
5,437,701
Social security costs
686,298
618,158
Pension costs
299,424
241,892
7,549,526
6,297,751
CARALLON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 20 -
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
872,745
798,402
Company pension contributions to defined contribution schemes
84,299
81,534
957,044
879,936

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 6 (2023 - 6).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
179,021
179,427
Company pension contributions to defined contribution schemes
26,690
22,538
7
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
-
362
Interest on finance leases and hire purchase contracts
28,680
24,182
28,680
24,544
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(33,898)
(44,687)
Deferred tax
Origination and reversal of timing differences
-
0
144,000
Total tax (credit)/charge
(33,898)
99,313
CARALLON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
8
Taxation
(Continued)
- 21 -

The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit before taxation
1,482,121
3,247,990
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 21.01%)
370,530
682,403
Tax effect of expenses that are not deductible in determining taxable profit
542
469
Tax effect of utilisation of tax losses not previously recognised
(3,578)
(146,311)
Permanent capital allowances in excess of depreciation
(35,868)
(120,061)
Depreciation on assets not qualifying for tax allowances
44,276
-
0
Research and development enhanced expenditure
(314,124)
(408,937)
RDEC tax credit
(95,676)
(52,250)
Deferred tax asset for tax losses
-
0
144,000
Taxation (credit)/charge for the year
(33,898)
99,313
9
Dividends
2024
2023
£
£
Interim paid
282,937
1,131,750
CARALLON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 22 -
10
Tangible fixed assets
Leasehold improvements
Fixtures, fittings and equipment
Computer equipment
Total
£
£
£
£
Cost
At 1 August 2023
972,804
74,190
578,965
1,625,959
Additions
116,270
-
0
27,201
143,471
At 31 July 2024
1,089,074
74,190
606,166
1,769,430
Depreciation and impairment
At 1 August 2023
90,470
71,745
437,669
599,884
Depreciation charged in the year
100,615
1,188
75,296
177,099
At 31 July 2024
191,085
72,933
512,965
776,983
Carrying amount
At 31 July 2024
897,989
1,257
93,201
992,447
At 31 July 2023
882,335
2,447
141,293
1,026,075

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2024
2023
£
£
Leasehold Property
972,804
669,241
Depreciation charge for the year in respect of leased assets
100,615
83,573
11
Stocks
2024
2023
£
£
Raw materials and consumables
5,140,869
4,930,947
CARALLON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 23 -
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
4,124,042
479,966
Corporation tax recoverable
79,530
45,632
Amounts due from connected companies
4,719,463
5,179,225
Prepayments and accrued income
1,159,895
1,130,361
10,082,930
6,835,184
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
14
170,790
155,361
Trade creditors
3,112,848
3,065,543
Amounts owed to group undertakings
227,895
227,895
Taxation and social security
662,783
365,784
Other creditors
42,664
56,397
Accruals and deferred income
2,400,539
1,389,603
6,617,519
5,260,583
14
Finance lease and hire purchase obligations
2024
2023
Future minimum lease payments due under finance leases and hire purchase contracts:
£
£
Within one year
170,790
155,361
In two to five years
51,479
157,477
222,269
312,838

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

CARALLON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 24 -
15
Creditors: amounts falling due after more than one year
2024
2023
£
£
Obligations under hire purchase agreements
14
51,479
157,477

Obligations under hire purchase agreements are secured against the assets to which they relate.

16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
299,424
241,892

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
18
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
1,172,992
662,996
Between two and five years
3,569,977
4,589,970
4,742,969
5,252,966
19
Events after the reporting date

After the year-end, the company declared dividends amounting to £282,937.

CARALLON LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
19
Events after the reporting date
(Continued)
- 25 -
20
Related party transactions

During the year, the company sold goods and services to, and received royalties from, connected companies in the sum of £29,960,914 (2023 - £35,407,464).

Also during the year, the company received contributions from connected companies towards rent amounting to £432,391 (2023 - £386,106).

At the year end, the company was owed £4,719,463 (2023 - £5,179,225 ) by the connected companies.

The company has taken advantage of the exemption under section 33.1a of FRS102 from the requirement to disclose transactions with group companies on the grounds that consolidated financial statements are prepared by the ultimate parent company, which are publicly available.

21
Ultimate controlling party

The immediate parent company is Carallon Holdings Limited, a company registered in England and Wales.

 

The ultimate parent company is Carallon Group Holdings Limited, a company registered in England and Wales.

The ultimate controlling party is Carallon EOT Trustee Limited.

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