REGISTERED NUMBER: 05844176 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 December 2024

for

Holroyd Precision Ltd

Page

Company Information

1

Strategic Report

2

Report of the Directors

5

Statement of Directors' Responsibilities

6

Report of the Independent Auditors

7

Statement of Comprehensive Income

11

Statement of Financial Position

12

Statement of Changes in Equity

13

Notes to the Financial Statements

14

DIRECTORS:

L J Neary

C S Carr

X Yue

Z Pan

W Yao

REGISTERED OFFICE:

Holroyd Harbour Lane North

Milnrow

Rochdale

Lancashire

OL16 3LQ

REGISTERED NUMBER:

05844176 (England and Wales)

AUDITORS:

Shinewing Wilson Accountancy Limited

Chartered Certified Accountants

and Statutory Auditors

9 St Clare Street

London

EC3N 1LQ

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

REVIEW OF BUSINESS

Holroyd Precision Ltd (HPL) manufactures specialised machine tools and ancillary equipment used for the production of high-value component parts. In 2024 the company exported approx. 97% (2023: 97%) of its products, service and support sales, with key markets for the year being China, Europe and USA. The Company's CNC machine tools are predominantly utilised in production of complex helical forms, such as gas and air compressor rotors for refrigeration and air conditioning (static / fixed and mobile systems), gear-type screws and 'blowers' used in multiple industrial applications. During the year to December 2024 turnover was £8,540,826 an increase from £7,664,004 in 2023. This increase (of approx. 11%), is due to a combination of sales contract phasing and market investment cycles with increased confidence due to capital investment orders in 2024. 2024 loss before taxation was £1,838,214 compared to a loss before tax of £2,011,361 in 2023, representing a decrease of 9%.

Holroyd continues to nurture high-level client relationships, ensuring that products are tailored specifically to industry requirements. Once again, Holroyd was re-selected in 2024 by several global blue-chip manufacturers as their preferred supplier of manufacturing systems and processes in existing and new facilities and was successful in winning business with new customers.

Holroyd continues to invest significantly in R&D, innovation, product development and marketing, strengthening its technologies and market presence. Working closely to provide a complete service using the resources of sister company, Precision Components Ltd, Holroyd supports new market entrants and established players alike. Holroyd's engineers are also actively supporting the rapid development and technological upgrading of HPL's fellow CQME group member CHMTI (China-Chongqing Machine Tools International) as it becomes more established as an international supplier of specialised machine tools and systems.

In December 2017 the business trade assets and liabilities from PTG Heavy Industries Limited were transferred into Holroyd Precision Limited, and selected products have continued to be supported and developed.

PRINCIPAL RISKS AND UNCERTAINTIES

The Company's revenues are drawn from a range of targeted, niche industrial segments. Risk is thereby spread across a limited number of markets, but again this is where being part of a larger more diversified group provides support. The Company will continue to invest in R&D, productivity improvements, training, quality and intelligent marketing.

The Company, its directors and its parent continue to invest in upgraded and improved capacity, R&D, product and market development, and will stay focused on quality and service excellence.

Financial risk management

The Company's operations expose it to a variety of financial risks, including the effects of changes in currencies, credit availability, market pricing, liquidity and interest rates. The Company's directors manage these risks in accordance with approved and regulated policies.

The main risks arising from the Company's financial instruments can be analysed as follows:

Currency risk

The Company is exposed in its trading operations to the risk of changes in currency exchange rates. Appropriate forward contracts are used to hedge this exposure.

Credit risk

The Company's principal financial assets are cash and bank balances, trade and other receivables and amounts due from other Group undertakings which represent the Company's maximum exposure to credit risk in relation to financial assets. Risk is managed through internal monitoring processes.

Price risk

The Company is exposed to steel and commodity price risks as a result of its operations which are managed through agreement of prices 6 to 12 months in advance of requirement with suppliers.

Liquidity risk

The Company has appropriate overdraft facilities in place with various banks where considered necessary. The Company uses its annual budget and planning process to predict and manage expected future liquidity. The liquidity forecast is reviewed and updated on a regular basis.

Interest rate risk

The Company is subject to risks arising from interest rate movements in connection with the cost of servicing its short-term borrowings and the returns on its liquid assets. The risks associated with this are managed at a Group level in conjunction with the liquidity risk.

KEY PERFORMANCE INDICATORS

Business KPIs are broad and include revenue, EBIT, EBITDA and operating profit/loss, net current assets and net liabilities together with a range of critical indicators to measure the success of new product development, including time to market, quality cost and warranty, personnel retention and development, and health and safety.

2024

2023

Movement

£

£

%

Revenue

8,540,826

7,664,004

11%

EBIT loss

958,016

1,172,083

18%

EBITDA loss

617,568

829,411

26%

Gross assets

12,181,191

19,206,076

-37%

Net current assets/(liabilities)

(12,220,743)

(1,009,914)

1110%

Net liabilities

(10,669,285)

(8,831,071)

21%

The main deviations can be explained with the main income statement impact on EBIT and EBITDA due to more gross margin on some machine orders which have been due to reduced material costs, however we have had positive foreign exchange movements offset by exceptional items.

Regarding the statement of financial position the assets have reduced due to work in progress of completed contracts and also a reduction in amount owed to group due to settlement of outstanding balances offset by lower cash balance, the net current liabilities and net liabilities have increased due to long term borrowing becoming due within 1 year, although the overall effect of the reduction in assets outweighed the liabilities reduction by approx. £1.3m.

The heart of the business is in its intellectual property and complete mastery of the technologies required to manufacture complex parts with helical forms and profiles, and a critical KPI is to further increase strengths in these fields, by a culture of continuous innovation and process development.

The Company has a full financial reporting package and measures KPIs on a regular basis.

ON BEHALF OF THE BOARD:

L J Neary - Director

8 September 2025

The directors present their report with the financial statements of the company for the year ended 31 December 2024.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2024 (2023: Nil).

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2024 to the date of this report.

L J Neary

C S Carr

X Yue

Other changes in directors holding office are as follows:

L Guo - resigned 12 December 2024

D Liu - resigned 12 December 2024

Z Pan - appointed 12 December 2024

W Yao - appointed 12 December 2024

DIRECTORS' INDEMNITIES

The Company has made qualifying third party indemnity provisions for the benefit of its directors, which were made during the year and remain in force at the date of this report. In accordance with its Articles, the Company has granted a qualifying third party indemnity, to the extent permitted by law, to each Director. The Company also maintains Directors’ and Officers’ liability insurance.

DISCLOSURE IN THE STRATEGIC REPORT

The Company has chosen to disclose information regarding the principal activity, future development opportunities for the Company, research and development and financial instrument risk management policies in the strategic report rather than the directors' report.

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.

AUDITORS

The auditors, Shinewing Wilson Accountancy Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

L J Neary - Director

8 September 2025

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and 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.

Opinion

We have audited the financial statements of Holroyd Precision Ltd (the 'company') for the year ended 31 December 2024 which comprise the Statement of Comprehensive Income, Statement of Financial Position, 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 31 December 2024 and of its loss 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.

Material Uncertainty Relating to Going Concern

We draw attention to Note 2 in the financial statements, which indicates that the company incurred a net loss of £1.84 million during the year ended 31 December 2024 and, as of that date, the company’s current liabilities exceeded its current assets and total assets by £12.2 million and £10.7 million respectively. As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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.

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, the Report of the Directors and the Statement of Directors' Responsibilities, 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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

-	adequate accounting records have not been kept, 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 six, 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:

Discussions were held with, and enquiries made of, management and those charged with governance with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

The following laws and regulations were identified as being of significance to the entity:

- Those laws and regulations considered to have a direct effect on the financial statements include FRS101 financial reporting standards, Company Law, Tax and Pensions legislation.

- It is considered that the laws and regulations for which non-compliance may be fundamental to the operating aspects of the business include ISO9001 and health and safety.

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the

appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Nijendra Dhungana FCCA (Senior Statutory Auditor)

for and on behalf of Shinewing Wilson Accountancy Limited

Chartered Certified Accountants

and Statutory Auditors

9 St Clare Street

London

EC3N 1LQ

9 September 2025

TURNOVER

4

8,540,826

7,664,004

Cost of sales

5,400,014

5,475,651

GROSS PROFIT

3,140,812

2,188,353

Administrative expenses

4,405,452

3,637,100

(1,264,640

)

(1,448,747

)

Other operating income

5

306,624

276,664

OPERATING LOSS

(958,016

)

(1,172,083

)

Interest payable and similar expenses

8

892,306

839,278

LOSS BEFORE TAXATION

9

(1,850,322

)

(2,011,361

)

Tax on loss

10

(12,108

)

-

LOSS FOR THE FINANCIAL YEAR

(1,838,214

)

(2,011,361

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(1,838,214

)

(2,011,361

)

FIXED ASSETS

Intangible assets

11

1,028,515

2,085,407

Tangible assets

12

1,159,509

1,395,213

2,188,024

3,480,620

CURRENT ASSETS

Stocks

13

488,288

683,816

Debtors

14

6,397,972

8,603,707

Contract assets

4

2,018,141

1,334,782

Cash at bank and in hand

1,088,766

5,103,150

9,993,167

15,725,455

CREDITORS

Amounts falling due within one year

15

22,213,910

16,735,369

NET CURRENT LIABILITIES

(12,220,743

)

(1,009,914

)

TOTAL ASSETS LESS CURRENT LIABILITIES

(10,032,719

)

2,470,706

CREDITORS

Amounts falling due after more than one year

16

(396,810

)

(11,022,357

)

PROVISIONS FOR LIABILITIES

19

(239,756

)

(279,420

)

NET LIABILITIES

(10,669,285

)

(8,831,071

)

CAPITAL AND RESERVES

Called up share capital

20

100

100

Retained earnings

(10,669,385

)

(8,831,171

)

SHAREHOLDERS' FUNDS

(10,669,285

)

(8,831,071

)

The financial statements were approved by the Board of Directors and authorised for issue on 8 September 2025 and were signed on its behalf by:

L J Neary - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

100

(6,819,810

)

(6,819,710

)

Changes in equity

Total comprehensive income

-

(2,011,361

)

(2,011,361

)

Balance at 31 December 2023

100

(8,831,171

)

(8,831,071

)

Changes in equity

Total comprehensive income

-

(1,838,214

)

(1,838,214

)

Balance at 31 December 2024

100

(10,669,385

)

(10,669,285

)

1.	STATUTORY INFORMATION

Holroyd Precision 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 and functional currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparation

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101). The financial statements have been prepared under the historical cost convention, and in accordance with the Companies Act 2006.

Adoption of the reduced disclosure framework

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 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.

Going concern

The company incurred a net loss of £1.84 million during the year ended 31 December 2024 and, as of that date, the company’s current liabilities exceeded its current assets and total assets by £12.2 million and £10.7 million respectively. The company meets its day-to-day working capital requirements through its cash reserves and borrowings. The current economic conditions continue to create uncertainty, particularly over the level of demand for the company’s products. The company’s forecasts and projections, taking account of reasonably possible changes in trading performance, show that the company should be able to operate within the level of its current cash reserves and borrowings. The company has loan facilities from DBS and HSBC which are guaranteed by the ultimate parent company. HSBC loan facility was renewed on 16 June 2025 for 12 months. The directors have also considered the company's ability to renew the HSBC facilities that are due to expire which the going concern period and have a reasonable expectation that a renewal will be forthcoming based on their success of renewals in the past.Based on these facts the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

New standards, amendments, IFRIC interpretations and new relevant disclosure requirements

There are no amendments to accounting standards, or IFRIC interpretations that are effective for the year ended 31 December 2024 that have a material impact on the company’s financial statements.

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable including trade receivable and contract assets relate to unbilled work in progress for goods supplied, stated net of discounts, returns and value added taxes. The company recognises revenue when performance obligations have been satisfied and for the company this is when the goods or services have transferred to the customer and the customer has control of these.

A substantial proportion of revenue arises from machine builds and is recognised using the percentage of completion method based on the proportion of costs incurred against total expected costs for each contract. Revenue for refurbishment, service and spares is recognised in the month that the service or the shipment is performed.

Profit on long term contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. Revenue is included in amounts recoverable on long term contracts in the statement of financial position. Full provision is made for losses on all contracts in the year in which they are first foreseen.

The company bases its estimate of return on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

Goodwill

Goodwill represents the excess of fair value attributed to acquisition of assets in business over the fair value of the underlying net assets, including intangible assets, at the date of their acquisition. Goodwill is principally related to the acquisition of assets in 2017.

Goodwill is stated at cost less impairments. Goodwill is deemed to have an indefinite useful life and is tested for impairment at least annually. Where the fair value of the interest acquired in an entity’s assets, liabilities and contingent liabilities exceeds the consideration paid, this excess is recognised immediately as a gain in the income statement.

Development cost

Development costs directly attributable to a new product development controlled by the Company are recognised as intangible assets when the following criteria are met:

- Project is technically feasible

- The intention of the Company is to complete the product and sell it

- There is ability to sell the product

- It is likely the product will generate future economic benefits

- Resources are available to complete the product

- Expenditure of the product can be measured reliably.

Development costs are measured initially at purchase cost and are amortised on a straight-line basis over their estimated useful lives: 10 years.

Tangible fixed assets

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

Right-of-use assets

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term.

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets.

Depreciation

Depreciation is provided to write-off the cost, less estimated residual values, of all property, plant and equipment on a straight line basis over their expected useful economic lives. It is calculated at the following annual return rates.

- Plant and machinery - 3 to 10 years

- Fixtures and fittings - 3 to 7 years

- Freehold property - 50 years

- Improvement to property - over the lease period

- Right of use assets - over the lease period

- Assets Under Construction - not depreciated

Depreciation methods, useful lives and residual values are reviewed at each balance sheet date.

Impairment of property, plant and equipment and intangible assets excluding goodwill

At the end of each reporting period, the Company reviews the carrying amounts of its tangible assets (property, plant and equipment), right-of-use assets and other intangible 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. When 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. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

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 recognized immediately in profit or loss.

When an impairment loss subsequently reverses, the carrying amount of the asset or a cash-generating unit is increased to the revised estimate of its recoverable amount, but the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

Financial instruments

Financial assets

The company's financial assets measured at amortised cost comprise trade debtors, contract assets and other debtors and cash and cash equivalents in the balance sheet. Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and - for the purpose of the statement of cash flows - bank overdrafts. Bank overdrafts are shown within 'Creditors: amounts falling due within one year' financial liabilities on the balance sheet.

Financial liabilities

Bank borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the balance sheet. Interest expense in this context includes initial transaction costs and premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Trade creditors and other short-term monetary liabilities, which are initially recognised at fair value and are subsequently carried at amortised cost using the effective interest method.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

Share capital

Financial instruments issued by the company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset.

The company's ordinary shares are classified as equity instruments.

Interest expense

Interest expense is recognised using the effective interest rate method. In calculating interest expense, the effective interest rate is applied to the gross carrying amount of the asset, when the asset is not impaired or to the amortised cost of the liability for interest expense. For financial assets that have been impaired after initial recognition.

Stocks

Stocks are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method. The cost of finished goods and work in progress comprises design costs, raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity). It excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

Taxation

Taxation on the profit or loss for the period comprises current and deferred tax.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date. Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised in respect of all taxable temporary differences that have originated but not reversed at the statement of financial position date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exceptions:

Provision is made for tax on gains arising from the revaluation (and similar fair value adjustments) of non-current assets, and gains on disposal of non-current assets that have been rolled over into replacement assets, only to the extent that, at the statement of financial position date, there is a binding agreement to dispose of the assets concerned. However, no provision is made where, on the basis of all available evidence at the statement of financial position date, it is more likely than not that the taxable gain will be rolled over into replacement assets and charged to tax only where the replacement assets are sold.

Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the statement of financial position date.

Foreign currencies

Transactions entered into by the company in a currency other than the functional currency are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in profit or loss.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in profit or loss within ‘finance income or costs’. All other foreign exchange gains and losses are presented in profit or loss within ‘other operating income or expense’.

Employee benefit costs

The Company operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the Company. The annual contributions payable are charged to the statement of comprehensive income.

Warranty provisions

A provision is recognised in the balance sheet when the company has a present legal or constructive obligation as a result of a past event, that can be reliably measured and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability.

Provisions for warranty costs are based upon specific liabilities expected to arise and are accrued throughout the life of each relevant contract. Warranty costs incurred are then charged against the provision.

Exceptional items

Exceptional items are disclosed as notes to the financial statements where it is necessary to do so to provide further understanding of the financial performance of the company. They are items that are material either because of their size or their nature, or that are nonrecurring are considered as exceptional items and are presented within the line items to which they best relate.

Government grants

Government grants related to income are recognised over the periods when the related costs are incurred and presented as part of profit or loss under ‘Other income’.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The company makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.

Critical Accounting Judgements

Revenue Recognition

The Company is required to apply judgement in determining whether, and the extent to which, revenue can be recognised in accordance with the conditions described in Note 2.

Key Sources of Estimation and Uncertainty

Recoverability of internally generated intangible assets

During the previous period, management reconsidered the recoverability of the company's internally generated intangible assets arising from its new project development. The project had not progressed as expected due to Covid 19 and increased material costs and competitor activity, causing management to reconsider the assumptions regarding its future market share and anticipated margins on these products. During this year with winning more contracts, the management concluded that the carrying amounts of the assets will be recovered in full hence no impairment has been considered.

The carrying amount of the intangible assets as of 31 December 2024 was £1,028,515 (2023: £1,870,519) see Note 11.

Lease

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the company, the lessee's incremental borrowing rate is used, being the rate that the company would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

To determine the incremental borrowing rate, the company uses recent third-party financing received as a starting point, adjusted to reflect changes in financing conditions since third party financing was received. The company used incremental borrowing rates of 2.6% to all the leases. This was disclosed in Note 18.

4.

TURNOVER

The turnover and loss before taxation are attributable to the one principal activity of the company.

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

31.12.24

31.12.23

£

£

Machines

5,795,953

5,003,183

Service

2,744,873

2,660,821

8,540,826

7,664,004

An analysis of turnover by geographical market is given below:

31.12.24

31.12.23

£

£

United Kingdom

281,310

240,014

Europe

3,214,468

2,161,368

United States of America

1,424,184

1,664,562

South America

57,948

113,296

Asia

3,373,116

3,484,764

North America

189,800

-

8,540,826

7,664,004

Revenue from contracts with customers

Revenue by timing of revenue

31.12.24

31.12.23

£

£

Goods transferred over time

5,795,953

5,003,183

Goods and services transferred at a point in time

2,744,873

2,660,821

Total

8,540,826

7,664,004

Assets and liabilities related to contracts with customers:

The company has recognised the following assets and liabilities related to contracts with customers:

31.12.24

31.12.23

01.01.23

£

£

£

Contract assets- machine contracts

2,018,141

1,334,782

1,549,538

Contract liabilities - machine contracts

1,343,862

1,600,222

843,895

In 2024 contract assets have increased due to more projects ahead of the agreed payment schedules for fixed price contracts.

Revenue recognised in relation to contract liabilities

The following table shows the revenue recognised in the current reporting period relates to carried forward contract liabilities.

31.12.24

31.12.23

£

£

Revenue recognised that was included in the contract liability balance

at the beginning of the period

4,024,939

248,000

Machine contracts

5.	OTHER OPERATING INCOME

31.12.24

31.12.23

£

£

Misc income

39,208

4,897

Government grants

267,416

271,767

306,624

276,664

Included in other income, amount of £39,208 represent tax credit for relief on R&D costs relating to accounting year 2021.

6.	EMPLOYEES AND DIRECTORS

31.12.24

31.12.23

£

£

Wages and salaries

2,690,265

2,605,264

Social security costs

223,975

224,925

Other pension costs

158,666

157,041

3,072,906

2,987,230

The average number of employees during the year was as follows:

31.12.24

31.12.23

Production

18

17

Distribution

3

3

Administration

35

38

56

58

31.12.24

31.12.23

£

£

Directors' remuneration

101,042

111,638

Directors' pension contributions to money purchase schemes

14,156

10,740

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

Money purchase schemes

2

2

7.	EXCEPTIONAL ITEMS

31.12.24

31.12.23

£

£

Exceptional items

(137,189

)

(93,421

)

During the year, the company received a waiver for amounts owed to group undertakings of £3,374,634 (2023: £77,552) as well as agreeing to waive amounts owed by the group undertakings of £3,272,145 (2023: £45,131) which resulted in a net loss of £102,489 (2023: £32,421). The rest was related to restructuring cost of £34,700 (2023: £61,000) incurred during the year.