IRIS Accounts Production v25.2.0.378 04248256 Board of Directors 1.10.23 30.9.24 30.9.24 design, development, construction, operation and maintenance of military and police training facilities and ranges and the provision of range simulation equipment. 96 90 true true false true true false false false true true true true true true true true true true true false false false These accounts have been prepared in accordance with the provisions applicable to companies subject to the medium-sized companies regime. Ordinary 1.00000 iso4217:GBPiso4217:USDiso4217:EURxbrli:sharesxbrli:pureutr:tonnesutr:kWh042482562023-09-30042482562024-09-30042482562023-10-012024-09-30042482562022-09-30042482562022-10-012023-09-30042482562023-09-3004248256ns15:EnglandWales2023-10-012024-09-3004248256ns14:PoundSterling2023-10-012024-09-3004248256ns10:Director12023-10-012024-09-3004248256ns10:PrivateLimitedCompanyLtd2023-10-012024-09-3004248256ns10:FRS1012023-10-012024-09-3004248256ns10:Audited2023-10-012024-09-3004248256ns10:Medium-sizedCompaniesRegimeForDirectorsReport2023-10-012024-09-3004248256ns10:Medium-sizedCompaniesRegimeForAccounts2023-10-012024-09-3004248256ns10:FullAccounts2023-10-012024-09-300424825612023-10-012024-09-300424825612023-10-012024-09-3004248256ns10:OrdinaryShareClass12023-10-012024-09-3004248256ns10:Director22023-10-012024-09-3004248256ns10:Director32023-10-012024-09-3004248256ns10:CompanySecretary12023-10-012024-09-3004248256ns10:RegisteredOffice2023-10-012024-09-3004248256ns5:CurrentFinancialInstruments2024-09-3004248256ns5:CurrentFinancialInstruments2023-09-3004248256ns5:Non-currentFinancialInstruments2024-09-3004248256ns5:Non-currentFinancialInstruments2023-09-3004248256ns5:ShareCapital2024-09-3004248256ns5:ShareCapital2023-09-3004248256ns5:FurtherSpecificReserve1ComponentTotalEquity2024-09-3004248256ns5:FurtherSpecificReserve1ComponentTotalEquity2023-09-3004248256ns5:RetainedEarningsAccumulatedLosses2024-09-3004248256ns5:RetainedEarningsAccumulatedLosses2023-09-3004248256ns5:ShareCapital2022-09-3004248256ns5:RetainedEarningsAccumulatedLosses2022-09-3004248256ns5:FurtherSpecificReserve1ComponentTotalEquity2022-09-3004248256ns5:RetainedEarningsAccumulatedLosses2022-10-012023-09-3004248256ns5:FurtherSpecificReserve1ComponentTotalEquity2022-10-012023-09-3004248256ns5:RetainedEarningsAccumulatedLosses2023-10-012024-09-300424825612023-10-012024-09-3004248256ns5:Goodwill2023-10-012024-09-3004248256ns5:ComputerSoftware2023-10-012024-09-300424825612023-10-012024-09-3004248256ns5:LeasedAssets2023-10-012024-09-3004248256ns5:LeasedAssets2022-10-012023-09-3004248256ns5:ComputerSoftware2022-10-012023-09-3004248256ns5:Goodwill2023-09-3004248256ns5:ComputerSoftware2023-09-3004248256ns5:Goodwill2024-09-3004248256ns5:ComputerSoftware2024-09-3004248256ns5:Goodwill2023-09-3004248256ns5:ComputerSoftware2023-09-3004248256ns5:LandBuildingsns5:ShortLeaseholdAssets2023-09-3004248256ns5:PlantMachinery2023-09-3004248256ns5:LandBuildingsns5:ShortLeaseholdAssets2023-10-012024-09-3004248256ns5:PlantMachinery2023-10-012024-09-3004248256ns5:LandBuildingsns5:ShortLeaseholdAssets2024-09-3004248256ns5:PlantMachinery2024-09-3004248256ns5:LandBuildingsns5:ShortLeaseholdAssets2023-09-3004248256ns5:PlantMachinery2023-09-3004248256ns5:Subsidiary12023-10-012024-09-30042482561ns5:Subsidiary12023-10-012024-09-3004248256ns5:Subsidiary12024-09-3004248256ns10:OrdinaryShareClass12024-09-3004248256ns5:RetainedEarningsAccumulatedLosses2023-09-3004248256ns5:FurtherSpecificReserve1ComponentTotalEquity2023-09-30
REGISTERED NUMBER: 04248256 (England and Wales)















STRATEGIC REPORT, DIRECTORS' REPORT AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2024

FOR

CUBIC DEFENCE UK LTD.

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024










Page

Company Information 1

Strategic Report 2

Directors' Report 3

Report of the Independent Auditors 6

Statement of Comprehensive Income 10

Balance Sheet 11

Statement of Changes in Equity 12

Notes to the Financial Statements 13


CUBIC DEFENCE UK LTD.

COMPANY INFORMATION
FOR THE YEAR ENDED 30 SEPTEMBER 2024







DIRECTORS: M Armstrong
T Chester
M Luxton





SECRETARY: K Blom





REGISTERED OFFICE: AFC House
Honeycrook Lane
Salfords
Redhill
Surrey
RH1 5LA





REGISTERED NUMBER: 04248256 (England and Wales)





AUDITORS: Rothmans Audit LLP
Chartered Accountants & Statutory Auditors
Avebury House
St Peter Street
Winchester
Hampshire
SO23 8BN

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024


The directors present their strategic report for the year ended 30 September 2024.

REVIEW OF BUSINESS
The Company continues to deliver essential training to the British Army and in doing so it directly contributes to operational readiness whilst increasing market share through contractual scope growth and increasing customer demand for training services. The development of additional training capabilities has been key to scope growth and the Company continues to pursue additional revenue in this area. The British Army are presently competing for a Strategic Training Partner who will replace the MoD as the managing agent for training services. The Company isn't exclusive to either of the bidders and anticipates that the winner will continue to require the Company's unique training offerings. More broadly the Company is assisting eastern European nations with maintenance and upgrades of Collective Training capabilities.

PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties lie in the US Administration's economic policies that risk driving global customers to non-US training solutions. This uncertainty is compounded by the ongoing war in Ukraine that sees European Defence spending being prioritized to the buying of armaments and munitions as well as funding supplies for Ukraine. These expenditures may come at the expense of training budgets. Tariff threats remain an area of concern to competitiveness against domestic solutions of US sourced systems.

KEY PERFORMANCE INDICATORS
The Company monitors the development, performance and position of the business using key performance indicators relating to turnover and gross profit as a percentage of turnover.

Turnover represents a key performance indicator for the value of work completed and progress made within the financial period. Turnover for the period ended 30 September 2024 was £20,235,160 (2023: £17,964,425).

Gross profit as a percentage of turnover for the period ended 30 September 2024 was 35.5% (2023: 31.8%).

As at 30 September 2024 the company had net assets of £1,510,370 (2023: net liabilities of £1,876,288)

ON BEHALF OF THE BOARD:





T Chester - Director


4 August 2025

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024


The directors present their report with the financial statements of the company for the year ended 30 September 2024.

DIVIDENDS
No dividends will be distributed for the year ended 30 September 2024.

RESEARCH AND DEVELOPMENT
Cubic Defence UK continues to invest in its Live, Virtual and Constructive training ecosystem and in particular its Indirect Fire and Virtual in Live training systems which are increasingly relevant to the delivery of Combined Arms training. This R&D has been supplemented by expansion of the Company to include Live, Virtual and Constructive exercise design and scripting and this work shows encouraging customer take-up.

FUTURE DEVELOPMENTS
The business will, in line with the broader Cubic enterprise, continue to expand its UK portfolio of Multi Domain LVC training capabilities as part of a global strategy. Within the UK the Company remains close to the customer and the Authority in proactively identifying how best to support changes to the way in which the British Army trains, and exploiting excellence in system integration, open architecture and analytics to provide federated training environments that meet the customers desire to deliver challenging integrated training with training insights that improve speed to competency

POST BALANCE SHEET EVENTS
The company has no post balance sheet events to disclose.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 October 2023 to the date of this report.

M Armstrong
T Chester
M Luxton

FINANCIAL INSTRUMENTS
Cubic Defence UK Ltd's operations expose it to a variety of financial risks that include the effect of changes in market prices, foreign exchange risk, credit risk and liquidity risk. The Company has fully incorporated risk management in its strategic and operational processes that seeks to limit adverse effects on the financial performance of the Company by monitoring levels of debt finance and related finance costs. The Company does not use derivative financial instruments to manage risk and, as such, no hedge accounting is applied. The Managing Board assesses the functionality of risk management policies and continues to pursue further improvement of the internal risk management and control procedures. Given the size of the Company, the Directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the Board. The policies set by the Board of Directors are implemented by the Company's finance department. The department has policies and procedures that sets out specific guidelines to manage risks and circumstances where it would be appropriate to use financial institutions to manage these.

Price Risk
Price risk is the risk that the fair value of financial instruments will fluctuate due to changes in market prices. The Company is exposed to price risk as a result of its operations. However, given the size of the Company's operations, the costs of managing exposure to price risk exceed any potential benefits. The Directors will revisit the appropriateness of this policy should the Company's operations change in size or nature. The Company has no exposure to equity securities price risk as it has no listed or other equity investments.

Foreign exchange risk
Cubic Defence UK Ltd conducts business in a number of foreign countries, with certain transactions denominated in currencies other than the functional currency of the Company (sterling) or one of its subsidiaries conducting the business. The purpose of the Company's foreign currency policy is to manage the effect of exchange rate fluctuations on income, expenses, cash flows and assets and liabilities denominated in selected foreign currencies, in particular denominated in US dollars.

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024


Credit risk
Credit risk is the risk that a counterparty will not meet its obligations by virtue of a financial instrument or customer contract, leading to a financial loss. Financial instruments that potentially subject the Company to concentrations of credit risk arise from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures to retail customers, including outstanding receivables and committed transactions. These instruments contain a risk of counterparties failing to discharge their obligations. Credit risk exposure is monitored and managed, by type of financial instrument, by assessing the creditworthiness of counterparties. Cash and cash equivalents are deposited with a limited number of highly-rated major financial institutions. The creditworthiness of our counterparties are closely monitored and concentration risk is mitigated by not limiting the exposure to a single counter party.

Liquidity Risk
Cubic Defence UK Ltd's liquidity needs are affected by many factors, some of which are based on the normal on-going operations of the business, and others that relate to the uncertainties of the global economy and the defence industry. Although cash requirements fluctuate based on the timing and extent of these factors, cash generated from operations, together with principal sources of liquidity are sufficient to satisfy our current requirements, including our expected future capital expenditures.

QUALIFYING THIRD PARTY INDEMNITY PROVISIONS
During the period and up to the date of the signing of this director's report there were no qualifying indemnity provisions in force in respect of directors or former directors of the Company.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Directors' 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), including Financial Reporting Standard 101 'Reduced Disclosure Framework'. 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:

-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 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.

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 company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024


AUDITORS
The auditors, Rothmans Audit LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





T Chester - Director


4 August 2025

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CUBIC DEFENCE UK LTD.


Opinion
We have audited the financial statements of Cubic Defence UK Ltd. (the 'company') for the year ended 30 September 2024 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity and 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 101 'Reduced Disclosure Framework' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the company's affairs as at 30 September 2024 and of its 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 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Directors' Report, 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 Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CUBIC DEFENCE UK LTD.


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 where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the 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 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.

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.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

- the engagement partner ensured that the engagement team collectively had the appropriate
competence, capabilities and skills to identify or recognise non-compliance with applicable laws and
regulations;
- we identified the laws and regulations applicable to the company through discussions with the
directors, and from our knowledge and experience of the sector;
- we focused on specific laws and regulations which we considered may have a direct material effect on
the financial statements or the operations of the company, including the Companies Act 2006,
employment and health and safety legislation; and
- we assessed the extent of compliance with the laws and regulations identified above through making
enquiries of management and inspecting legal expenses. The identified laws and regulations were
communicated within the audit team regularly and the team remained alert to instances of
non-compliance throughout the audit.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CUBIC DEFENCE UK LTD.


We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

- making enquiries of management as to where they considered there was susceptibility to fraud, their
knowledge of actual, suspected and alleged fraud; and
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and
regulations.

We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be within the recognition of income and the override of controls by management. To address the risk of fraud in these areas, we:
- reviewed all material estimates affecting income, including recoverability of debtors and valuation of
contract assets and contract liabilities;
- selected a sample of transactions from material income streams and compared expected income to
that recorded within the financial statements;
- performed analytical procedures to identify any unusual or unexpected relationships;
- tested journal entries during the year and at the year-end to identify unusual transactions;
- assessed whether the judgements and estimates made in determining the accounting estimates set
out in note 2 were indicative of potential bias; and
- investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures, which included, but were not limited to:

- agreeing financial statement disclosures to underlying supporting documentation;
- reading the minutes of meetings of those charged with governance;
- enquiring of management as to actual and potential litigation and claims; and
- reviewing legal and professional expenditure incurred in the year.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CUBIC DEFENCE UK LTD.


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.




Lisa Wilson FCA (Senior Statutory Auditor)
for and on behalf of Rothmans Audit LLP
Chartered Accountants & Statutory Auditors
Avebury House
St Peter Street
Winchester
Hampshire
SO23 8BN

20 August 2025

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

STATEMENT OF COMPREHENSIVE
INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2024 2023
Notes £    £   

TURNOVER 3 20,235,160 17,964,425

Cost of sales 13,049,779 12,250,953
GROSS PROFIT 7,185,381 5,713,472

Administrative expenses 2,675,675 3,814,474
OPERATING PROFIT 4,509,706 1,898,998

Interest receivable and similar income 5 7,604 87,080
4,517,310 1,986,078
Amounts written off investments 6 - (153,193 )
4,517,310 2,139,271

Interest payable and similar expenses 7 14,465 21,951
PROFIT BEFORE TAXATION 8 4,502,845 2,117,320

Tax on profit 10 1,116,187 (71,131 )
PROFIT FOR THE FINANCIAL YEAR 3,386,658 2,188,451


OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

3,386,658

2,188,451

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

BALANCE SHEET
30 SEPTEMBER 2024

2024 2023
Notes £    £    £    £   
FIXED ASSETS
Owned
Intangible assets 11 1,070,000 1,070,000
Tangible assets 12 - -
Right-of-use
Tangible assets 12, 18 412,706 598,147
Investments 13 - -
1,482,706 1,668,147

CURRENT ASSETS
Stocks 14 - 191,013
Debtors 15 10,940,821 9,856,056
Cash at bank 1,644,642 2,310,606
12,585,463 12,357,675
CREDITORS
Amounts falling due within one year 16 11,662,542 14,495,906
NET CURRENT ASSETS/(LIABILITIES) 922,921 (2,138,231 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

2,405,627

(470,084

)

CREDITORS
Amounts falling due after more than one
year

17

(317,004

)

(424,269

)

PROVISIONS FOR LIABILITIES 19 (578,253 ) (981,935 )
NET ASSETS/(LIABILITIES) 1,510,370 (1,876,288 )

CAPITAL AND RESERVES
Called up share capital 20 8,281,474 8,281,474
Capital contribution reserve 21 15,428,492 15,428,492
Retained earnings 21 (22,199,596 ) (25,586,254 )
SHAREHOLDERS' FUNDS 1,510,370 (1,876,288 )

The financial statements were approved by the Board of Directors and authorised for issue on 4 August 2025 and were signed on its behalf by:





T Chester - Director


CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024

Called up Capital
share Retained contribution Total
capital earnings reserve equity
£    £    £    £   
Balance at 1 October 2022 8,281,474 (27,774,705 ) 15,428,492 (4,064,739 )

Changes in equity
Profit for the year - 2,188,451 - 2,188,451
Total comprehensive income - 2,188,451 - 2,188,451
Balance at 30 September 2023 8,281,474 (25,586,254 ) 15,428,492 (1,876,288 )

Changes in equity
Profit for the year - 3,386,658 - 3,386,658
Total comprehensive income - 3,386,658 - 3,386,658
Balance at 30 September 2024 8,281,474 (22,199,596 ) 15,428,492 1,510,370

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024


1. STATUTORY INFORMATION

Cubic Defence UK Ltd. is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).


2. ACCOUNTING POLICIES

Basis of preparation
These financial statements have been prepared in accordance with Financial Reporting Standard 101
"Reduced Disclosure Framework" and the Companies Act 2006, except for the departure from the Companies Act explained below. The financial statements have been prepared under the historical cost convention.

The company does not amortise goodwill in accordance with the requirements of IFRS as applied under FRS 101. Instead an annual impairment test is performed and any impairment that is identified is recognised in the income statement. The non-amortisation of goodwill conflicts with paragraph 22 of Schedule 1 to ‘The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410), which requires acquired goodwill to be written off over its useful economic life. As such, the non-amortisation of goodwill is a departure, for the overriding purpose of giving a true and fair view, from the requirement of paragraph 22 of Schedule 1 to the Regulations.

It is not possible to quantify the effect of the departure from the Companies Act, because a finite life for the goodwill has not been identified.

The accounting policies which follow set out the policies which apply in preparing the financial statements for the year ended 30 September 2024.

Going Concern
The Cubic Group has undertaken that it will support the company by financing its normal trading activities where necessary. Whilst the directors are confident that the company will have sufficient resources to fund its operations for at least the next 12 months there can be no certainty in these matters.

The financial statements have been prepared on a going concern basis, which assumes that the company will continue in operational existence for the foreseeable future. This assumes that the Cubic Group will financially support the company by providing the funds necessary to enable the company to continue to trade profitably.

Taking into account all of the information that could reasonably be expected to be available the directors consider it appropriate to prepare the accounts on a going concern basis.

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


2. ACCOUNTING POLICIES - continued

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 101 "Reduced Disclosure Framework":

the requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii),
B64(o)(ii), B64(p), B64(q)(ii), B66 and B67 of IFRS 3 Business Combinations;
the requirements of IFRS 7 Financial Instruments: Disclosures;
the requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement;
the requirements of paragraph 52, the second sentence of paragraph 89, and paragraphs 90, 91
and 93 of IFRS 16 Leases;
the requirements of paragraph 58 of IFRS 16;
the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118,
119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers;
the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present
comparative information in respect of:
- paragraphs 53(a), (h) and (j) of IFRS 16;
- paragraph 79(a)(iv) of IAS 1;
- paragraph 73(e) of IAS 16 Property, Plant and Equipment; and
- paragraph 118(e) of IAS 38 Intangible Assets;
the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111
and 134 to 136 of IAS 1;
the requirements of
- paragraphs 1 to 44E, 44H(b)(ii) and 45 to 63 of IAS 7 Statement of Cash Flows; and
- paragraphs 44F, 44G, 44H(a), 44H(b)(i), 44H(b)(iii) and 44H(c) of IAS 7;
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors;
the requirements of paragraphs 88C and 88D of IAS 12 Income Taxes;
the requirements of paragraph 74(b) of IAS 16;
the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures;
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions
entered into between two or more members of a group;
the requirements of paragraphs 134(d) to 134(f) and 135(c) to 135(e) of IAS 36 Impairments of
Assets.

Preparation of consolidated financial statements
These financial statements contain information about Cubic Defence UK Ltd as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt from the requirement to prepare consolidated accounts because its results are included in the consolidated accounts of a UK parent, its immediate parent is established under the law of any part of the UK and all the requirements set out in s400 of the Companies Act 2006 are met.

Cubic (UK) Limited, of AFC House, Honeycrock Lane, Salfords, Redhill, Surrey. RH1 5LA, is the parent of the smallest and largest group in which the results of Cubic Defence UK Limited are consolidated.

Copies of the group financial statements of Cubic (UK) Limited are available from AFC House, Honeycrock Lane, Salfords, Redhill, Surrey. RH1 5LA.

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


2. ACCOUNTING POLICIES - continued

Critical accounting 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 judgements management has made in the process of applying the entity's accounting policies that have the most significant effect on the amounts recognised in the financial statements are those in respect of its revenue recognition policies, valuation of goodwill and accounting for business combinations, which are described in detail later in this section.

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 revision and future periods where the revision affects both the current and future periods.

Management have not identified any key assumptions or sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Turnover
The company generates revenue from the sale of integrated solutions such as air and ground combat training systems, and products with C4ISR capabilities. A significant portion of our revenues are generated from long-term fixed-price contracts with customers that require us to design, develop, manufacture, modify, upgrade, test and integrate complex systems according to the customer’s specifications. We also generate revenue from services we provide, such as the support of specialized military training exercises.

We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

To determine the proper revenue recognition method, we evaluate each contractual arrangement to identify all performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The majority of our contracts have a single performance obligation because the promise to transfer the individual good or service is not separately identifiable from other promises within the contract and is, therefore, not distinct. These contractual arrangements typically represent a bundle of contracted goods and services that are integrated and together represent a combined output, which may include the delivery of multiple units.

Some of our contracts have multiple performance obligations, primarily (i) related to the provision of multiple goods or services or (ii) due to the contract covering multiple phases of the product lifecycle. For contracts with more than one performance obligation, we allocate the transaction price to the performance obligations based upon their relative standalone selling prices. For such contracts we evaluate whether the stated selling prices for the products or services represent their standalone selling prices. In cases where a contract requires a customized good or service, our primary method used to estimate the standalone selling price is the expected cost plus a margin approach.

The majority of our sales are from performance obligations satisfied over time. Sales are recognized over time when control is continuously transferred to the customer during the contract or the contracted good does not have alternative use to us.

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


2. ACCOUNTING POLICIES - continued

For those contracts for which control transfers over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided.

For our design and build type contracts, we generally use the input measure of progress because it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the input measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. Contract costs include material, labour and subcontracting costs, as well as an allocation of indirect costs, and are generally expensed as incurred for these contracts.

Sales from performance obligations satisfied at a point in time are typically for standard goods and are recognized when the customer obtains control, which is generally upon delivery and acceptance. Costs of sales are recorded in the period in which revenue is recognized.

Sales under service contracts are generally recognized as services are performed or value is provided to our customers. We measure the delivery of value to our customers using a number of metrics including units of work performed, and costs incurred. We determine which metric represents the most meaningful measure of value delivery based on the nature of the underlying service activities required under each individual contract. In certain circumstances we recognize revenue based on the right to bill when such amounts correspond to the value being delivered in a billing cycle. Costs incurred under these service contracts are generally expensed as incurred.

Due to the nature of the work required to be performed on many of our performance obligations, the estimation of total revenue and cost at completion is complex, subject to many variables and requires significant judgment. Some of our contracts with the UK government, including contracts with the MOD, are subject to the Single Source Contract Regulations and may include an element of variable consideration where the final contract value is reduced if final costs are lower than anticipated at the point of contract agreement. We estimate variable consideration at the most likely amount to which we expect to be entitled. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us.

Billing timetables and payment terms on our contracts vary based on a number of factors, including the contract type. Typical payment terms under fixed-price design and build type contracts provide that the customer pays either performance-based payments based on the achievement of contract milestones or progress payments based on a percentage of costs we incur. For the majority of our service contracts, we generally bill on a monthly basis which corresponds with the satisfaction of our monthly performance obligation under these contracts.

We recognize a liability for payments received in excess of revenue recognized, which is presented as a contract liability on the balance sheet. The portion of payments retained by the customer until final contract settlement is not considered a significant financing component because the intent is to protect the customer from our failure to adequately complete some or all of the obligations under the contract. Payments received from customers in advance of revenue recognition are not considered to be significant financing components because they are used to meet working capital demands that can be higher in the early stages of a contract.

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


2. ACCOUNTING POLICIES - continued

For fixed-price and cost-reimbursable contracts, we present revenues recognized in excess of billings as contract assets on the balance sheet. Amounts billed and due from our customers under both contract types are classified as receivables on the balance sheet.

We only include amounts representing contract change orders, claims or other items in the contract value when we believe the rights and obligations become enforceable. Contract modifications routinely occur to account for changes in contract specifications or requirements. In most cases, contract modifications are for goods or services that are not distinct and, therefore, are accounted for as part of the existing contract.

Transaction price estimates include additional consideration for submitted contract modifications or claims when we believe there is an enforceable right to the modification or claim, the amount can be reliably estimated, and its realization is reasonably assured. Amounts representing modifications accounted for as part of the existing contract are included in the transaction price and recognised as an adjustment to sales on a cumulative catch-up basis.

Warranty obligations arising from services provided to customers are accounted for depending on the nature of the contract. If the warranty provides for additional services, such as ongoing maintenance, it is accounted for as a distinct performance obligation. If the warranty is solely and assurance-type warranty against latent defects then the inherent warranty embedded in the contract is reflected in the performance obligation for the related good or service.

Contract Estimates
Use of the input method of revenue recognition requires us to make reasonably dependable estimates regarding the revenue and cost associated with the design, manufacture and delivery of our products and services. Revisions or adjustments to estimates of the transaction price, estimated costs at completion and estimated profit or loss of a performance obligation are often required as work progresses under a contract, as experience is gained, as facts and circumstances change and as new information is obtained, even though the scope of work required under the contract may not change. In determining the estimated costs at completion, we have to make assumptions regarding labour productivity and availability, the complexity of the work to be performed, the availability of materials, estimated increases in wages and prices for materials, performance by our subcontractors, and the availability and timing of funding from our customer, among other variables. Revisions or adjustments to our estimated transaction price and estimated costs at completion may also be required if contract modifications occur. The revisions in contract estimates, if significant, can materially affect our results of operations and cash flows, and in some cases result in liabilities to complete contracts in a loss position. Based upon our history, we believe we have the ability to make reasonable estimates for these items. We have accounting policies and controls in place to address these, as well as other contractual and business arrangements to properly account for long-term contracts, and we continue to monitor and improve such policies, controls, and arrangements.

Because of the significance of the judgments and estimation processes, it is likely that materially different amounts could be recorded if we used different assumptions or if our underlying circumstances were to change. When adjustments in estimated contract revenues or estimated costs at completion are required, any changes from prior estimates are recognized by recording adjustments in the current period for the inception-to-date effect of the changes on current and prior periods using the cumulative catch-up method of accounting. When estimates of total costs to be incurred on a contract exceed total estimates of revenue to be earned, a provision for the entire loss on the contract is recorded in the period the loss is determined.

Contract Assets
Contract assets include unbilled amounts typically resulting from sales under contracts when the percentage-of-completion method of revenue recognition is utilised and revenue recognised exceeds the amount billed to the customer per the contractually agreed project milestones. Contract assets are classified as current assets.

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


2. ACCOUNTING POLICIES - continued

Trade Debtors
A trade debtor is recognised when an amount of consideration that is unconditional is due from the customer (i.e.only the passage of time is required before payment of the consideration is due). Trade debtors that do not contain a significant financing component are measured at the transaction price. Where the time value of money is material, receivables are carried at amortised cost.

Provisions for expected credit losses are made using the simplified approach set out by IFRS9 and the loss allowance is measured at an amount equal to lifetime expected credit losses. Because the company's contracts are bespoke to each customer, each receivable outstanding at the reporting date is evaluated separately and expected credit losses are determined by evaluating a range of possible outcomes taking into account the time value of money and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

Contract Liabilities
Contract liabilities include advance payments and billings in excess of revenue recognised. Contract liabilities are classified as current based on our contract operating cycle.

Provisions for Losses on contracts
We establish reserves for loss contingencies when, in the opinion of management, the likelihood of liability is probable and the extent of such liability is reasonably estimable. Estimates, by their nature, are based on judgment and currently available information and involve a variety of factors, including the type, nature and progress of the matter, the advice of legal counsel, and our experience in similar cases. We may increase or decrease our provisions in the future, on a matter-by-matter basis, to account for developments in such matters.

Business combinations & goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Company elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses.

When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9 Financial Instruments, is measured at fair value with the changes in fair value recognised in the statement of profit or loss in accordance with IFRS 9. Other contingent consideration that is not within the scope of IFRS 9 is measured at fair value at each reporting date with changes in fair value recognised in profit or loss.

Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Company re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss.

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


2. ACCOUNTING POLICIES - continued

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.

Intangible assets
Intangible assets acquired separately from a business are capitalised at cost. Intangible assets acquired as part of an acquisition of a business are capitalised separately from goodwill if the fair value can be measured reliably on initial recognition. Subsequent to initial recognition, intangible assets are stated at cost less accumulated amortisation and accumulated impairment.

All of the intangible assets held by the company, other than goodwill, have finite useful lives. Intangible assets are amortised over their estimated useful lives. The carrying value of intangible assets is reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable. The depreciation methods applied to each intangible asset reflects the expected pattern of the consumption of its economic benefits and is as follows:

Customer Relationships acquired from H42 years straight line
Non Compete Agreements acquired from H42 years straight line
Backlog acquired from H42 years straight line
Software acquired from H42 years straight line

If there are indicators that the residual value or useful life of an intangible asset has changed since the most recent annual reporting period previous estimates shall be reviewed and, if current expectations differ the residual value, amortisation method or useful life shall be amended. Changes in the expected useful life or the expected pattern of consumption of benefit shall be accounted for as a change in accounting estimate.

Amortisation and impairment charges are included within administrative expenses in the statement of comprehensive income.

Tangible fixed assets
Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Cost comprises the aggregate amount paid to acquire the asset and includes costs directly attributable to making the asset capable of operating as intended. Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life:

Plant and machinery - Straight line over 2 years

The carrying values of property, plant and equipment are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable, and are written down immediately to their recoverable amount. Useful lives and residual values are reviewed annually and where adjustments are required these are made prospectively.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the derecognition of the asset is included in the income statement in the period of derecognition.

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


2. ACCOUNTING POLICIES - continued

Financial assets
Initial Recognition and Measurement
Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit and loss, loans and receivables or available for sale financial assets, as appropriate. The Company determines the classification of its financial assets at initial recognition. All financial assets are recognised initially at fair value plus directly attributable transaction costs. At present, the Company has only loans and receivables.

Subsequent measurement of Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance revenue in the income statement and the losses arising from impairment are recognised in the income statement in administrative expenses.

Impairment of financial assets
The Company assesses at each reporting date whether there is any objective evidence that a financial asset or group of financial assets is impaired.

If there is objective evidence that an impairment loss on loans and receivables carried at amortise cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have been incurred) discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced, with the amount of the loss recognised in administration costs.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss in recognised in the profit and loss account, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

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

Taxation
Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the balance sheet date.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities based on tax rates and laws that are enacted or substantively enacted by the balance sheet date.

Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carried forward tax credits or tax losses can be utilised.

Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date.

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


2. ACCOUNTING POLICIES - continued

Research and development
General expenditure on research and development is written off in the year in which it is incurred.

Government grants, such as the R&D Expenditure credit, are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed.

Foreign currencies
Foreign currency transactions are translated into sterling using the exchange rates prevailing at the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated into sterling using the rate of exchange ruling at the balance sheet date and the gains or losses on translation are included in the profit and loss account.

Leases
Right-of-use assets
Right-of-use assets are recognised at the commencement date of the lease (i.e. the date the underlying asset is available for use).

Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received.

Where ownership of the right-of-use asset transfers to the lessee at the end of the lease term, the right-of-use asset is depreciated over the asset’s remaining useful life. If ownership of the right-of-use asset does not transfer to the lessee at the end of the lease term, depreciation is charged over the shorter of the useful life of the right-of-use asset and the lease term. Deprecation is charged at the following rates:

Property Leases- 5 to 10 years

Lease liabilities
The lease liability is initially recognised at the present value of the lease payments which have not yet been made and subsequently measured under the amortised cost method. The initial cost of the right-of-use asset comprises the amount of the initial measurement of the lease liability, lease payments made prior to the lease commencement date, initial direct costs and the estimated costs of removing or dismantling the underlying asset per the conditions of the contract. Lease liabilities are recognised within creditors falling due within one year and creditors falling due after one year on the balance sheet.

Employee benefit costs
The Company operates a defined contribution pension scheme. Contributions payable to the Company's pension scheme are charged to the profit and loss account in the period to which they relate.

Provisions for liabilities
A provision is recognised when the company has a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation.

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


3. TURNOVER

An analysis of turnover by class of business is given below:

20242023
£   £   

Training, simulation, range design & related services18,644,52816,496,430
Communication systems design, production & related services1,557,8801,452,359
Wireless infrastructure and access point design & production32,75215,636
20,235,16017,964,425

An analysis of turnover by geographical region is given below:

20242023
£   £   

United Kingdom18,641,81516,423,697
Rest of World1,593,3451,540,728
20,235,16017,964,425

The company's principal activity is the delivery of integrated solutions that increase situational understanding for defence, C4ISR and training customers worldwide. All revenue stated above relates to revenue recognised from contracts with customers.

In 2024, revenue recognised in the reporting period that was included in the contract liability balance at the beginning of the period totalled £2,585,437 (2023: £3,362,009).

On 31 March 2017 the company acquired the business of Vocality International Limited and has continued its trade of providing communication systems design, production and associated services.

On 30 September 2017 the company acquired the business of Deltenna Limited and has continued its trade of designing and manufacturing wireless infrastructure and access points.

4. EMPLOYEES AND DIRECTORS

2024 2023
£    £   
Wages and salaries 5,357,575 4,807,479
Social security costs 578,008 535,088
Other pension costs 340,200 302,077
6,275,783 5,644,644

The average number of employees during the year was as follows:
2024 2023
Direct 91 85
Indirect 5 5
96 90

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


2024 2023
£    £   
Directors' remuneration 224,031 231,296
Directors' pension contributions to money purchase schemes 22,200 20,345

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 1 1

Information regarding the highest paid director is as follows:
2024 2023
£    £   
Emoluments etc 224,031 231,296
Pension contributions to money purchase schemes 22,200 20,345

Directors emoluments relate solely to one director directly employed by the Company.

The emoluments in respect of all other directors who served during the year have been borne by other Cubic Corporation Group companies, since these directors are either employees, officers or directors of other Cubic Corporation Group companies.

The Cubic Corporation Group does not make a specific charge to the Company for the services of these directors, however during the year fees of £988,272 (2023: £975,373) were paid to the Cubic Corporation Group for management services, which include services provided by these directors.

5. INTEREST RECEIVABLE AND SIMILAR INCOME
2024 2023
£    £   
Interest income 7,604 7,102
Interest receivable on loan to joint venture - 79,978
7,604 87,080

6. AMOUNTS WRITTEN OFF INVESTMENTS
2024 2023
£    £   
Amounts written off investments - (153,193 )

Amounts written off investments relate to provisions for irrecoverable loans to the joint venture Emirates Training Technology LLC (held within current assets) which were impaired to their recoverable value of £Nil. These losses were partially reversed in FY2023 due to costs recovered on the sale of the investment.

7. INTEREST PAYABLE AND SIMILAR EXPENSES
2024 2023
£    £   
Bank interest 666 -
Leasing 13,799 21,951
14,465 21,951

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


8. PROFIT BEFORE TAXATION

The profit before taxation is stated after charging/(crediting):
2024 2023
£    £   
Cost of inventories recognised as expense 191,013 42,824
Depreciation - assets on hire purchase contracts or finance leases 185,441 194,156
Other intangibles amortisation - 103,750
Foreign exchange differences (402,730 ) (451,576 )
Impairment of other intangibles - 207,500

9. AUDITORS' REMUNERATION
2024 2023
£    £   
Fees payable to the company's auditors for the audit of the
company's financial statements

18,360

17,000
Total audit fees 18,360 17,000

Auditors' remuneration for non audit work 11,650 12,500
Total non-audit fees 11,650 12,500
Total fees payable 30,010 29,500

No benefits in kind have been provided to the company's auditors.

10. TAXATION

Analysis of tax expense/(income)
2024 2023
£    £   
Current tax:
Tax 1,105,721 55,441

Deferred tax 10,466 (126,572 )
Total tax expense/(income) in statement of comprehensive income 1,116,187 (71,131 )

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


10. TAXATION - continued

Factors affecting the tax expense
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2024 2023
£    £   
Profit before income tax 4,502,845 2,117,320
Profit multiplied by the standard rate of corporation tax in the UK of
25% (2023 - 22.008%)

1,125,711

465,980

Effects of:
Trade expenses not allowable 8,186 52,013
Depreciation in excess of capital allowances - (80,100 )
provision in respect of
Utilisation of historic losses (1,901 ) (382,453 )
Recognition of deferred tax asset not previously recognised (15,809 ) (126,571 )
Tax expense/(income) 1,116,187 (71,131 )

On 1 April 2023 the main rate of corporation tax in the UK increased from 19% to 25%, resulting in a marginal rate of 22.008% for the year ended 30 September 2023.

Factors that may affect future tax charges

Subject to the agreement of HM Revenue and Customs the company has non-trading tax losses of £870,765 which can be carried forward indefinitely. No deferred tax asset has been recognised in respect of these losses as the transfer of future economic benefit is uncertain.

11. INTANGIBLE FIXED ASSETS
Other
Goodwill intangibles Totals
£    £    £   
COST
At 1 October 2023
and 30 September 2024 1,070,000 160,000 1,230,000
AMORTISATION
At 1 October 2023
and 30 September 2024 - 160,000 160,000
NET BOOK VALUE
At 30 September 2024 1,070,000 - 1,070,000
At 30 September 2023 1,070,000 - 1,070,000

Goodwill
The Goodwill shown above of £1,070,000 related solely to the acquisition of the assets and trade of H4 Global in November 2015

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


12. TANGIBLE FIXED ASSETS
Short Plant and
leasehold machinery Totals
£    £    £   
COST
At 1 October 2023
and 30 September 2024 1,044,624 742,883 1,787,507
DEPRECIATION
At 1 October 2023 446,477 742,883 1,189,360
Charge for year 185,441 - 185,441
At 30 September 2024 631,918 742,883 1,374,801
NET BOOK VALUE
At 30 September 2024 412,706 - 412,706
At 30 September 2023 598,147 - 598,147

Short leasehold assets relate solely to right of use assets.

13. INVESTMENTS

The company's investments at the Balance Sheet date in the share capital of companies include the following:

Cubic Technologies Sweden AB
Registered office: Järnvägsgatan 14, 252-78 Helsingborg, Sweden
Nature of business: Development of training and simulation software
%
Class of shares: holding
Ordinary 100.00
2024
£   
Aggregate capital and reserves 639,535
Profit for the year 353,696

On 23 October 2023 the company acquired 100% of the issued share capital in Cubic Technologies Sweden AB for consideration of £Nil.

14. STOCKS
2024 2023
£    £   
Finished goods - 191,013

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


15. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2024 2023
£    £   
Amounts owed by group undertakings 9,877,858 8,204,209
Contract assets 755,962 812,168
Other debtors 527 527
VAT - 248,956
Deferred tax asset 116,106 126,572
Prepayments and accrued income 190,368 463,624
10,940,821 9,856,056

The deferred tax asset above relates to £103,789 (2023: £126,572) in relation to depreciation in excess of capital allowances and £12,317 (2023: £Nil) in relation to unpaid pension contributions.

16. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2024 2023
£    £   
Contract liabilities 2,760,883 5,561,730
Trade creditors 127,836 1,021,826
Amounts owed to group undertakings 7,003,744 7,057,948
Tax 355,721 55,441
Social security and other taxes 168,975 141,574
VAT 114,269 -
Other creditors 21,603 63,872
Leasing liabilities 102,934 175,739
Accruals and deferred income 1,006,577 417,776
11,662,542 14,495,906

17. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR
2024 2023
£    £   
Other creditors - 5,646
Leasing liabilities 317,004 418,623
317,004 424,269

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


18. LEASING

Right-of-use assets

Tangible fixed assets

2024 2023
£    £   
COST
At 1 October 2023 1,044,624 1,146,061
Additions - 195,448
Disposals - (296,885 )
1,044,624 1,044,624

DEPRECIATION
At 1 October 2023 446,477 549,206
Charge for year 185,441 194,156
Eliminated on disposal - (296,885 )
631,918 446,477

NET BOOK VALUE 412,706 598,147

The company leases the premises from which it conducts its business. Set about above are the carrying amounts of right-of-use assets and the movements during the period.

Set out below are the carrying amount of lease liabilities and the movements during the period:

2024 2023
£    £   
As at 1 October 2023 594,363 625,815
Additions - 195,448
Interest 13,799 21,951
Payments (188,224 ) (248,851 )
As at 30 September 2024 419,938 594,363

Due within one year 102,934 175,739
Due after one year 317,004 418,624
Total 419,938 594,363

The following are the amounts recognised in profit or loss:
2024 2023
£    £   
Depreciation expense of right-of-use assets 185,441 194,156
Interest expense on lease liabilities 13,799 21,951
Total amount recognised in profit or loss 199,240 216,107


CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


19. PROVISIONS FOR LIABILITIES



Losses
on
contracts

Contingent
consideration


Total
£   £   £   

Balance at 1 October 2023681,935300,000981,935
Charged/credited to P&L in year(103,682)-(103,682)
Paid out in year-(300,000)(300,000)
Balance at 30 September 2024578,253-578,253

Provisions for losses on contracts relate to the estimated costs of closing out a historic contract where total costs are expected to exceed total revenues.

Contingent consideration related to payments due to the sellers of H4, which was settled in full in 2024.

20. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2024 2023
value: £    £   
8,281,475 Ordinary £1 8,281,474 8,281,474

Ordinary shares have voting rights, are entitled to participate in distributions as regards dividends and capital distributions and are not redeemable.

21. RESERVES
Capital
Retained contribution
earnings reserve Totals
£    £    £   

At 1 October 2023 (25,586,254 ) 15,428,492 (10,157,762 )
Profit for the year 3,386,658 3,386,658
At 30 September 2024 (22,199,596 ) 15,428,492 (6,771,104 )

On 30 April 2021 Cubic (U.K.) Ltd made a capital contribution of £15,428,492 to the company which has been recognised directly in equity within distributable reserves.

22. PENSION COMMITMENTS

The company operated a defined contribution pension scheme during the period. The cost of contributions to the scheme amounted to £340,200 (2023: £302,077). At 30 September 2024 contributions amounting to £49,270 (2023: £63,234) were payable to the fund and included within other creditors.

23. ULTIMATE PARENT UNDERTAKING AND CONTROLLING PARTY

The company's immediate parent undertaking is Cubic (UK) Limited. The company's ultimate parent undertaking and controlling party is Veritas Capital Fund Management L.L.C, a company which is incorporated in the United States of America.

CUBIC DEFENCE UK LTD. (REGISTERED NUMBER: 04248256)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 SEPTEMBER 2024


24. RELATED PARTY DISCLOSURES

Key Management Personnel Remuneration
The remuneration of key management personnel, who are also directors, is as follows:
2024 2023
£    £   

Aggregate Compensation 275,892 282,427