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Registered number: 03467183 IKM TESTING UK LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
IKM TESTING UK LIMITED
COMPANY INFORMATION
Directors | Stale Kyllingstad
| Anthony Stephen Perkin
Company secretary | Erling Meinich Bache
Registered number | 03467183
Registered office | 42 Colbourne Crescent
| Nelson Park Industrial Estate
| Cramlington
| Northumberland
| NE23 1WB
Independent auditors | Anderson Anderson and Brown Audit LLP
| Kingshill View
| Prime Four Business Park
| Kingswells
| Aberdeen
| AB15 8PU
IKM TESTING UK LIMITED
CONTENTS
| Page
Strategic report | 1 - 2
Directors' report | 3 - 5
Directors' responsibilities statement | 6
Independent auditors' report | 7 - 10
Statement of comprehensive income | 11
Balance sheet | 12 - 13
Statement of changes in equity | 14
Notes to the financial statements | 15 - 31
IKM TESTING UK LIMITED
STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2024
Principal activities
As part of the IKM Group, IKM Testing UK is a leading provider of testing, commissioning and inspection services primarily within the oil and gas and renewables sectors, with a focus on ensuring safety, quality and operational efficiency. IKM offers Pipeline Services, Process Services, Well Services, Valve Solutions, Renewables, Decommissioning, Operations Training and 3D Animation and Design. The company operates from locations in Aberdeen and Cramlington servicing both the on and offshore industry in the UK and Internationally. IKM has a number of Framework agreements in place with operators and large contractors within the oil and gas and energy transition sectors. The company’s strategic objectives focus on growth by building long-term relationships with clients, with a strong commitment to innovation and delivering high quality solutions. Guided by the mantra ‘Challenge Convention, Inspire Innovation’ the company focuses on continuous improvement.
Key performance indicators
IKM uses a number of performance indicators to measure day-to-day operational and financial activity in the business. Most of these are studied on a daily, weekly or monthly basis. A well-developed management accounts pack, including profit and loss statements are prepared for each service line on a monthly basis. Below are a number of key performance indicators used to measure the long-term health of the business and monitor progress in implementing the strategic objectives. • Safety • Days sales outstanding • Net profit margin • Customer loyalty • Staff retention IKM have a Net Zero plan in place setting a roadmap for progress to halve emissions by 2030 and achieve net zero by 2045. The plan emphasises the company’s commitment to reduce the effects of climate change and also identifies financial savings through improved efficiency, in turn increasing resilience and helping to grow the business sustainably.
Business review and results
Revenue for the year ended 31 December 2024 has increased by 25.1% to £32,761,567 (2023 - £26,189,141) with a profit before tax of £3,540,704 (2023 - £2,071,399). 2024 was a year of significant growth and progress for IKM, with the company delivering on both financial and operational performance. A strong focus on service quality ensured the company continued to deliver for customers. Highly skilled employees helped the company focus on providing innovative solutions.
Future developments
The Company is looking to identify any new markets which current technology and equipment would allow easy transition to in order to expand the services provided to both existing and new customers. A focused strategy and differentiated offering has strengthened market position and the Company is well positioned for growth in the energy transition and decommissioning space. Page 1
IKM TESTING UK LIMITED
STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024
Going concern
The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis in preparing the annual financial statements. The company’s forecasts and projections, taking account of reasonably possible changes in trading performance, show that the company should be cash positive and that no borrowing facilities will be required. Further details regarding the adoption of the going concern basis can be found in Note 1.4 to the financial statements.
Principal risks and uncertainties
Below are the principal risks the Company work to mitigate and manage. Economic conditions There is a link between demand for the Company’s services and levels of economic activity. Variations in demand can lead to larger variations in profitability. An economic factor to consider is the price of crude oil; a high price produces higher levels of wealth to oil producing countries which is recycled into infrastructure investment from which the company generates revenue. Competition IKM monitors competition activity carefully but the only protection from suffering material damage to the business by competitors is to work relentlessly to provide customers with a high quality service at a price they believe provides good value. Tendering risk The Company wins most of its work through a competitive tendering process. Failure to understand risks, costs and contractual terms could have a detrimental impact on the Company's financial performance and position. Formal tendering reviews are conducted by appropriate management and professional advice is sought for international contracts. This report was approved by the board and signed on its behalf.
Anthony Stephen Perkin Director
Date: 5 September 2025
Page 2
IKM TESTING UK LIMITED
DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2024 The directors present their report and the financial statements for the year ended 31 December 2024.
Results and dividends
The profit for the year, after taxation, amounted to £2,615,395 (2023 - £1,575,741). The Directors recommend the payment of dividends during the year amounting to £2,206,175 (2023: £nil).
Directors
The directors who served during the year were:
Stale Kyllingstad
Anthony Stephen Perkin
Future developments and going concern
Details of future developments and going concern can be found in the Strategic Report on pages 1 and 2. Page 3
IKM TESTING UK LIMITED
DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024
Financial instruments
The Company’s activities expose it to a number of financial risks including credit risk, cash flow risk and liquidity risk. Cash flow risk IKM's products and services are mainly priced in sterling, however, some contracts do require invoicing in US Dollars and Norwegian Kroner, exposing the Company to some currency exchange risk. The Company utilises foreign currency bank accounts to mitigate these exposures. Credit risk The Company’s principal financial assets are bank balances and trade and other receivables. The Company’s credit risk is primarily attributable to its trade receivables. The failure to collect a major debt could result in an unexpected and possibly significant reduction in profit. The vast majority of the contracts into which the Company enters into are small relative to the size of the business and if a customer fails to pay a debt, this is dealt with in the normal course. IKM constantly monitor the risk profile and debtor position on all contracts and deploy a variety of techniques to mitigate the risk of delayed or non-payment. The mitigation will vary from customer to customer but methods include advance payments and letters of credit. The Company has a good track record of cash generation and as part of the IKM Group has sufficient working capital for its business needs The amounts presented in the balance sheet are net of allowances for doubtful receivables. The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies. The company has no significant concentration of credit risk, with exposure spread over a significant number of customers. Liquidity risk In order to maintain liquidity to ensure sufficient funds are available for ongoing operations and future developments, the company uses a mixture of long and short-term debt finance. Page 4
IKM TESTING UK LIMITED
DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024
Research and development activities
The company operates in an innovative market and undertakes research and development activities to continually make efficiencies throughout the company and for the benefit of us and our customers.
Disclosure of information to auditors
Each of the persons who are directors at the time when this Directors' report is approved has confirmed that: ∙so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware, and ∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditors are aware of that information.
Post balance sheet events
There have been no significant events affecting the company since the year end.
Auditors
A resolution to appoint AAB Audit & Accountancy Limited as auditor of the company will be proposed at the next general meeting. This report was approved by the board and signed on its behalf.
Anthony Stephen Perkin Director
Date: 5 September 2025
Page 5
IKM TESTING UK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2024 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the company's financial statements 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 to 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. Page 6
IKM TESTING UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IKM TESTING UK LIMITED
Opinion
We have audited the financial statements of IKM Testing UK Limited (the 'company') for the year ended 31 December 2024, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, 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 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: ∙give a true and fair view of the state of the company's affairs as at 31 December 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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Page 7
IKM TESTING UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IKM TESTING UK LIMITED (CONTINUED)
Opinion 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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: ∙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 Directors' responsibilities statement set out on page 6, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. Page 8
IKM TESTING UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IKM TESTING UK LIMITED (CONTINUED)
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 an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: We obtained an understanding of the legal and regulatory frameworks within which the company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006 and Taxation legislation, We identified the greatest risk of material impact on the financial statements from irregularities including fraud to be: ∙Management override of controls to manipulate the company’s key performance indicators to meet targets ∙Timing and completeness of revenue recognition ∙Management judgement applied in calculating provision ∙Compliance with relevant laws and regulations which directly impact the financial statements and those that the company needs to comply with for the purpose of trading Our audit procedures to respond to these risks included: ∙Testing of journal entries and other adjustments for appropriateness ∙Review of sales transactions around the year end to ensure revenue recorded in the correct period ∙Evaluating the business rationale of significant transactions outside the normal course of business ∙Reviewing judgments made by management in their calculation of accounting estimates for potential management bias ∙Enquiries of management about litigation and claims and inspection of relevant correspondence ∙Reviewing legal and professional fees to identify indications of actual or potential litigation, claims and any non-compliance with laws and regulations, and ∙Reviewing minutes of meetings of those charged with governance to identify any matters indicating actual or potential fraud Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. 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 Auditors' report. Page 9
IKM TESTING UK LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF IKM TESTING UK LIMITED (CONTINUED)
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed. Christopher Masson (Senior statutory auditor) for and on behalf of Anderson Anderson and Brown Audit LLP Kingshill View Prime Four Business Park Kingswells Aberdeen AB15 8PU 8 September 2025 Page 10
IKM TESTING UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2024
| 2024 | 2023
Note | £ | £
Turnover | 3 | 32,761,567 | 26,189,141
Cost of sales |  | (22,896,798) | (18,321,920)
Gross profit |  | 9,864,769 | 7,867,221
Administrative expenses |  | (6,359,577) | (5,930,631)
Other operating income | 4 | - | 4,425
Operating profit | 5 | 3,505,192 | 1,941,015
Interest receivable and similar income | 8 | 50,522 | 238,718
Interest payable and expenses | 9 | (15,010) | (108,334)
Profit before tax |  | 3,540,704 | 2,071,399
Tax on profit | 10 | (925,309) | (495,658)
Profit for the financial year |  | 2,615,395 | 1,575,741
There was no other comprehensive income for 2024 (2023:£NIL).
The notes on pages 15 to 31 form part of these financial statements.
Page 11
IKM TESTING UK LIMITED REGISTERED NUMBER:03467183
BALANCE SHEET AS AT 31 DECEMBER 2024
|  | 2024 |  | 2023
Note |  | £ |  | £
Fixed assets |  |  |  |  |
Tangible assets | 12 |  | 3,432,518 |  | 3,616,293
|  |  | 3,432,518 |  | 3,616,293
Current assets |  |  |  |  |
Stocks | 13 | 754,143 |  | 916,760 |
Debtors: amounts falling due within one year | 14 | 11,717,112 |  | 11,432,758 |
Cash at bank and in hand | 15 | 4,548,093 |  | 3,702,458 |
|  | 17,019,348 |  | 16,051,976 |
Creditors: amounts falling due within one year | 16 | (4,120,393) |  | (3,521,963) |
Net current assets |  |  | 12,898,955 |  | 12,530,013
Total assets less current liabilities |  |  | 16,331,473 |  | 16,146,306
Creditors: amounts falling due after more than one year | 17 |  | (92,320) |  | (324,554)
Provisions for liabilities |  |  |  |  |
Deferred tax | 20 | (249,394) |  | (241,213) |
|  |  | (249,394) |  | (241,213)
Net assets |  |  | 15,989,759 |  | 15,580,539
Capital and reserves |  |  |  |  |
Called up share capital | 21 |  | 45,000 |  | 45,000
Profit and loss account |  |  | 15,944,759 |  | 15,535,539
|  |  | 15,989,759 |  | 15,580,539
Page 12
IKM TESTING UK LIMITED REGISTERED NUMBER:03467183
BALANCE SHEET (CONTINUED) AS AT 31 DECEMBER 2024 The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
Anthony Stephen Perkin
Director
Date: 5 September 2025
The notes on pages 15 to 31 form part of these financial statements. Page 13
IKM TESTING UK LIMITED
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024
| Called up share capital | Profit and loss account | Total equity
| £ | £ | £
At 1 January 2023 | 45,000 | 13,959,798 | 14,004,798
Comprehensive income for the year |  |  |
Profit for the year | - | 1,575,741 | 1,575,741
At 1 January 2024 | 45,000 | 15,535,539 | 15,580,539
Comprehensive income for the year |  |  |
Profit for the year | - | 2,615,395 | 2,615,395
Dividends: Equity capital | - | (2,206,175) | (2,206,175)
At 31 December 2024 | 45,000 | 15,944,759 | 15,989,759
| The notes on pages 15 to 31 form part of these financial statements.
Page 14
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 1.Accounting policies
| 1.1 | General information
IKM Testing UK Limited, is a private limited liability company incorporated in England. The registered office is 42 Colbourne Crescent, Nelson Park Industrial Estate, Cramlington, Northumberland, NE23 1WB.
| 1.2 | Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies (see note 2). The functional and presentational currencies of the company are considered to be pounds sterling because that is the currency of primary economic environment in which the company operates. The company meets the definition of a qualifying entity under FRS 102 and has therefore taken advantage of the disclosure exemptions available to it in respect of its separate financial statements. IKM Testing UK Limited is consolidated in the financial statements of the its ultimate parent, IKM Gruppen A/S, which may be obtained at the address in note 26. Exemptions have been taken in these separate company financial statements in relation to the presentation of a cash flow statement, remuneration of key management personnel and related party transactions with the companies controlled by the parent. The following principal accounting policies have been applied:
| 1.3 | Financial Reporting Standard 102 - reduced disclosure exemptions
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": ∙the requirements of Section 7 Statement of Cash Flows; ∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d); ∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c); ∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A; ∙the requirements of Section 33 Related Party Disclosures paragraph 33.7. This information is included in the consolidated financial statements of IKM Gruppen A/S as at 31 December 2024 and these financial statements may be obtained from the address in Note 26. Page 15
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 1.Accounting policies (continued)
| 1.4 | Going concern
The directors, having made due and careful enquiry, are of the opinion that the Company has adequate working capital to execute its operations over the next 12 months. The directors, therefore, have made an informed judgement, at the time of approving the financial statements, that there is a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Based on the above the company continues to adopt the going concern basis of accounting in preparing the annual financial statements.
| 1.5 | Revenue
Turnover represents the amounts (excluding value added tax) derived from the provision of services by the company. Turnover represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the fair value of the consideration received or receivable. Where a contract has only been partially completed at the balance sheet date turnover represents the fair value of the service provided to date based on the stage of completion of the contract activity at the balance sheet date. Revenues received for the provision of services under day-rate contracts, reimbursable/cost-plus contracts and similar contracts are recognised on an accruals basis as services are provided.
| 1.6 | Leased assets: the company as lessee
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
| 1.7 | Government grants
Grants are accounted under the accruals model as permitted by FRS 102. Grants of a revenue nature are recognised in the Statement of comprehensive income in the same period as the related expenditure.
| 1.8 | Finance costs
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument. Page 16
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 1.Accounting policies (continued)
| 1.9 | Pensions
Defined contribution pension plan The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations. The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the company in independently administered funds.
| 1.10 | Current and deferred taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income. Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that: ∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and ∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met. Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Page 17
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 1.Accounting policies (continued)
| 1.11 | Foreign currency translation
Functional and presentation currency The company's functional and presentational currency is GBP. Transactions and balances Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined. Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income as administrative expenses except when deferred in other comprehensive income as qualifying cash flow hedges.
| 1.12 | Intangible assets
Patents Patents represents the cost of registering new technology. Patents are recognised at cost and are amortised on a straight line basis to the Income statement over their estimated useful economic life of ten years.
| 1.13 | Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. 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 by management. Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method. Depreciation is provided on the following basis:
|  |  |  | Tenants improvements | - | 10 years
|  |  |  | Plant and machinery | - | 5 - 12 years
|  |  |  | Motor vehicles | - | 3 years
|  |  |  | Fixtures, fittings, tools and equipment | - | 5 - 10 years
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss. Page 18
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 1.Accounting policies (continued)
| 1.14 | Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads. At each balance sheet date, stocks are assessed for obsolesce and a provision is made and recognised where required.
| 1.15 | Debtors
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
| 1.16 | Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
| 1.17 | Creditors
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
| 1.18 | Provisions for liabilities
Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made. Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties. Increases in provisions are generally charged as an expense to profit or loss. Page 19
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 1.Accounting policies (continued)
| 1.19 | Financial instruments
The company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments. Financial instruments are recognised in the company's Balance sheet when the company becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. Basic financial assets Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial. The company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments. Other financial assets Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment. Impairment of financial assets At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss. Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate. If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss. Financial liabilities Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after the deduction of all its liabilities. Page 20
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 1.Accounting policies (continued)
| 1.19 | Financial instruments (continued)
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial. Debt instruments are subsequently carried at their amortised cost using the effective interest rate method. Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. Other financial instruments Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss. Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy. Derecognition of financial instruments Derecognition of financial assets Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the company will continue to recognise the value of the portion of the risks and rewards retained. Derecognition of financial liabilities Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or cancelled.
| 1.20 | Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. Page 21
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
2. | Judgments in applying accounting policies and key sources of estimation uncertainty
In the application of the Company’s accounting policies, which are described in note 1, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision if the revision affects current and future periods. Critical judgements in applying the company’s accounting policies The critical judgements made in the process of applying the company’s accounting policies that has the most significant effect on the amounts recognised in the financial statements is considered below. Key sources of estimation uncertainty Recoverability of third party debtors and related party balances The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors with third parties, management consider factors including the current credit rating of the debtor, the aging profile of debtors and historical collection experience. A provision for any doubtful debt is considered and included against the trade debtor balance in Note 14. Stocks At each balance sheet date, stocks are assessed for obsolescence depending on the age and the condition of the stock. A provision is considered and included against the stock balance in Note 13. I mpairment of plant and machinery Determining whether rental assets included into Plant and Machinery category are impaired requires estimation of their value in use, which in turn is based on the assessment of their future utilisation and revenue generation. The carrying amount of Plant and Machinery at the balance sheet date is included in note 12 with no impairment loss recognised during the year.
3. | Turnover
The directors consider the company to have one class of business being the provision of services to customers. Analysis of turnover by country of destination:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| United Kingdom | 24,054,381 | 19,681,187
| Rest of Europe | 3,889,006 | 2,862,581
| Rest of the world | 4,818,180 | 3,645,373
|  | 32,761,567 | 26,189,141
Page 22
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
4. | Other operating income
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Government grants receivable | - | 4,425
|  | - | 4,425
5. | Operating profit
| The operating profit is stated after charging:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Fees payable to the company's auditor and its associates for the audit of the company's annual financial statements | 26,000 | 24,500
| Net foreign exchange loss/(gain) | 16,837 | 42,415
| Profit on sale of fixed assets | (100,768) | (79,591)
6. | Employees
| Staff costs, including directors' remuneration, were as follows:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Wages and salaries | 13,279,777 | 11,080,106
| Social security costs | 996,626 | 1,036,547
| Cost of defined contribution scheme | 760,044 | 437,008
|  | 15,036,447 | 12,553,661
| The average monthly number of employees, including the directors, during the year was as follows:
|  |  | 2024 | 2023
|  |  | No. | No.
|  | Administration and management | 39 | 48
|  | Engineering | 115 | 123
|  |  | 154 | 171
Page 23
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
7. | Directors' remuneration
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Directors' emoluments | 171,672 | 159,599
| Company contributions to defined contribution pension schemes | 22,067 | 20,989
|  | 193,739 | 180,588
| During the year retirement benefits were accruing to 1 director (2023 - 1) in respect of defined contribution pension schemes.
8. | Interest receivable
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Bank interest | 50,522 | 238,718
|  | 50,522 | 238,718
9. | Interest payable and similar expenses
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Bank interest | - | 5,231
| Finance leases and hire purchase contracts | 15,010 | 103,103
|  | 15,010 | 108,334
Page 24
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
10. | Taxation
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Corporation tax |  |
| Current tax on profits for the year | 861,962 | 522,880
| Adjustments in respect of previous periods | (40,387) | 6,070
|  | 821,575 | 528,950
| Foreign tax |  |
| Current tax on income for the year | 53,579 | -
| Adjustment in respect of prior periods | 41,974 | -
|  | 95,553 | -
| Total current tax | 917,128 | 528,950
| Deferred tax |  |
| Origination and reversal of timing differences | 13,695 | (19,712)
| Adjustment in respect of prior periods | (5,514) | (13,580)
| Total deferred tax | 8,181 | (33,292)
| Taxation on profit on ordinary activities | 925,309 | 495,658
Page 25
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 10.Taxation (continued)
| Factors affecting tax charge for the year
| The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of 25% (2023 - 23.52%). The differences are explained below:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Profit on ordinary activities before tax | 3,540,704 | 2,071,399
| Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 23.52%) | 885,176 | 487,204
| Effects of: |  |
| Expenses not deductible for tax purposes | 13,898 | 9,212
| Fixed assets differences | 12,354 | 7,918
| Adjustments to tax charge in respect of prior periods | (3,927) | (7,510)
| Non-taxable income | (1,394) | -
| Adjustment to closing deferred tax rate | - | (1,166)
| Foreign tax credits | 19,202 | -
| Total tax charge for the year | 925,309 | 495,658
11. | Dividends
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Dividends | 2,206,175 | -
|  | 2,206,175 | -
Page 26
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
12. | Tangible fixed assets
|  | Plant and machinery | Motor vehicles | Fixtures and fittings | Total
|  | £ | £ | £ | £
| Cost or valuation |  |  |  |
| At 1 January 2024 | 11,777,783 | 434,825 | 848,005 | 13,060,613
| Additions | 499,354 | 175,130 | 138,289 | 812,773
| Disposals | (265,552) | (129,022) | (360) | (394,934)
| At 31 December 2024 | 12,011,585 | 480,933 | 985,934 | 13,478,452
| Depreciation |  |  |  |
| At 1 January 2024 | 8,506,078 | 228,591 | 709,651 | 9,444,320
| Charge for the year on owned assets | 484,834 | 106,654 | 100,824 | 692,312
| Charge for the year on financed assets | 235,761 | - | - | 235,761
| Disposals | (239,237) | (86,862) | (360) | (326,459)
| At 31 December 2024 | 8,987,436 | 248,383 | 810,115 | 10,045,934
| Net book value |  |  |  |
| At 31 December 2024 | 3,024,149 | 232,550 | 175,819 | 3,432,518
| At 31 December 2023 | 3,271,705 | 206,234 | 138,354 | 3,616,293
| The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Plant and machinery | 1,390,106 | 1,625,867
|  | 1,390,106 | 1,625,867
13. | Stocks
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Raw materials and consumables | 570,401 | 863,082
| Work in progress | 183,742 | 53,678
|  | 754,143 | 916,760
Page 27
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
14. | Debtors
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Trade debtors | 8,145,691 | 4,479,858
| Amounts owed by group undertakings | 1,478,815 | 4,762,276
| Other debtors | 236,998 | 241,513
| Prepayments and accrued income | 1,855,608 | 1,949,111
|  | 11,717,112 | 11,432,758
15. | Cash and cash equivalents
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Cash at bank and in hand | 4,548,093 | 3,702,458
|  | 4,548,093 | 3,702,458
16. | Creditors: Amounts falling due within one year
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Trade creditors | 1,334,675 | 877,993
| Amounts owed to group undertakings | 659,140 | 802,849
| Corporation tax | - | 32,180
| Other taxation and social security | 593,759 | 327,329
| Obligations under finance lease and hire purchase contracts | 232,232 | 502,808
| Other creditors | 230,644 | 219,977
| Accruals and deferred income | 1,069,943 | 758,827
|  | 4,120,393 | 3,521,963
17. | Creditors: Amounts falling due after more than one year
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Obligations under finance lease and hire purchase contracts | 92,320 | 324,554
|  | 92,320 | 324,554
Page 28
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
18. | Hire purchase and finance leases
| Minimum lease payments under hire purchase fall due as follows:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Within one year | 232,234 | 502,807
| Between 1-5 years | 92,320 | 324,554
|  | 324,554 | 827,361
19. | Financial instruments
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Financial assets |  |
| Financial assets measured at fair value through profit or loss | 4,548,093 | 3,702,458
| Financial assets that are debt instruments measured at amortised cost | 11,502,919 | 11,154,495
|  | 16,051,012 | 14,856,953
| Financial liabilities |  |
| Financial liabilities measured at amortised cost | (3,294,402) | (2,659,646)
| Financial assets measured at fair value through profit or loss comprise cash at hand in bank.
| Financial assets that are debt instruments measured at amortised cost comprise trade debtors, amounts owed by group undertakings, other debtors and accrued income.
| Financial liabilities measured at amortised cost comprise trade creditors, accruals, amounts owed to group undertakings and bank loans.
20. | Deferred taxation
|  | 2024
|  | £
| At beginning of year | 241,213
| Charged to profit or loss | 8,181
| At end of year | 249,394
Page 29
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 20.Deferred taxation (continued)
| The provision for deferred taxation is made up as follows:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Accelerated capital allowances | 277,078 | 248,833
| Short term timing differences | (27,684) | (7,620)
|  | 249,394 | 241,213
21. | Share capital
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
|  | Allotted, called up and fully paid |  |
|  | 45,000 (2023 - 45,000) Ordinary shares of £1.00 each | 45,000 | 45,000
22. | Pension commitments
The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £760,044 (2023: £437,008). There were outstanding contributions amounting to £109,194 (2023: £38,637) due to the pension scheme at the year end.
23. | Capital Commitments
At 31 December 2024, the company had capital commitments amounting to £23,391 (2023: £nil).
24. | Commitments under operating leases
| At 31 December 2024 the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|  |  |  |  | 2024 | 2023
|  |  |  |  | £ | £
| Not later than 1 year | 581,069 | 549,762
| Later than 1 year and not later than 5 years | 1,872,685 | 1,751,707
| Later than 5 years | 203,919 | 180,236
|  | 2,657,673 | 2,481,705
Page 30
IKM TESTING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
25. | Related party transactions
| The company has taken advantage of FRS 102.33.1A ‘Related Party Disclosures’ and hence not disclosed details of transactions with other group companies in which IKM Gruppen A/S ultimately owns 100% of the share capital.
26. | Controlling party
The company is a subsidiary undertaking of IKM Gruppen A/S, which is the ultimate parent company incorporated in Norway. The only group in which the results of the company are consolidated is that headed by IKM Gruppen A/S. Copies of the financial statements of IKM Gruppen A/S may be requested from the company secretary at IKM Gruppen A/S, Ljosheimveien 3, N-4050 Sola, Norway.
Page 31