REGISTERED NUMBER: 15551180 (England and Wales)

Group Strategic Report, Report of the Director and

Consolidated Financial Statements for the Period 10 March 2024 to 31 March 2025

for

RML Group Holdings Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Director

4

Report of the Independent Auditors

5

Consolidated Income Statement

8

Consolidated Other Comprehensive Income

9

Consolidated Balance Sheet

10

Company Balance Sheet

11

Consolidated Statement of Changes in Equity

12

Company Statement of Changes in Equity

13

Consolidated Cash Flow Statement

14

Notes to the Consolidated Cash Flow Statement

15

Notes to the Consolidated Financial Statements

16

DIRECTOR:

P Sharma

REGISTERED OFFICE:

6-10 Whittle Close

Park Farm Industrial Estate

Wellingborough

Northamptonshire

NN8 6TY

REGISTERED NUMBER:

15551180 (England and Wales)

AUDITORS:

Harris & Co (Accountants) Ltd, Statutory Auditor

2 Pavilion Court

600 Pavilion Drive

Northampton

NN4 7SL

The director presents his strategic report of the company and the group for the period 10 March 2024 to 31 March 2025.

REVIEW OF BUSINESS

The year under review represents a period of growth, investment and transformation for the total engineering solutions group, including a change of ownership in May 2024 of RML Group Limited (the only actively trading entity within RML Group Holdings Limited). The financial year end was extended until March 2025 to reflect the fact that RML Group Limited ("RML") no longer primarily operates as a motorsport team, where financial years are typically aligned to the end of the racing season in October.

The 24/25 period saw the acceleration of some large multi-year programmes:

- The Lotus GT4 race car programme progressed into series production. The final cars will be completed during Q1 FY25/26

- Production of the RML Short Wheelbase (SWB) programme continued at pace

- The business extended its support for the British Touring Car Championship (BTCC), as sole supplier for all subframes, steering and suspension components

Elsewhere, RML invested heavily into its HV battery design and build capability to meet growing market demand:

- Series production began for unit supply to a US-produced, record-breaking hybrid supercar

- Two further OEM battery projects commenced, initially covering design and development in hydrogen and BEV prototypes

- Numerous feasibility programmes were undertaken for a wide range of customers, including major OEMs and small series supercar manufacturers

- A new UK OEM contract commenced to supply prototype looms and other related design services on an ongoing basis

Building for the future

Upon the change of RML ownership in May 2024, a full business review was undertaken. A new strategy saw priorities split into four divisions (Power, Engineering, Motorsport and Bespoke) to focus on core skills and drive further revenue growth. In parallel, a £17m investment was made to accelerate internationalisation.

Subsequently, a number of key new appointments were made to the management team. Alongside a new CEO and CCO, a new Board was formed to guide the corporate development of the business. Immediate priorities include growing the business across the automotive and motorsport sectors, as well as expanding its activities across defence and marine.

With the aim of maximising commercial performance, the RML campus was reorganised to improve efficiency and quality. This targeted programme optimised core skills and capabilities to deliver ambitious future growth.

A roadmap to growth

Following the creation of RML's Bespoke division, investment has been ringfenced to develop and launch the P39 hypercar. Showcasing RML's world class engineering, build and total solutions capabilities, customer deliveries will begin in August 2025.

Partners have been appointed across the UK, Europe, Middle East and US to drive global profile and sales.

Thanks to a period of optimisation and investment, RML is set for significant growth, driven by its core strengths of technical excellence and customer focus. That growth will build on the foundations laid and see the business excel as a total solutions provider to OEMs worldwide.

Through continued expansion and horizontal innovation from automotive and motorsport to adjacent markets, the RML brand is set for a positive future as a world-leading total engineering solutions group.

GOING CONCERN

In evaluating the going concern aspect the director has considered the company's financial forecasts over the next twelve months. The company forecasts have been prepared on the assumption that, if required, the company will raise monies from new investment into the business to meet its business requirements, but also have an increase in new business opportunities currently in the pipeline but not yet contracted.

The key assumption in these forecasts is an increase in sales resulting from the initiatives taken by the company and improvement in profitability. The director is confident that the company would be able to achieve the projected revenue and, if required, will be able to raise monies from the investors to meet the business requirements of the company as detailed in the financial projections.

ON BEHALF OF THE BOARD:

P Sharma - Director

11 August 2025

The director presents his report with the financial statements of the company and the group for the period 10 March 2024 to 31 March 2025.

INCORPORATION

The group was incorporated on 9 March 2024 .

PRINCIPAL ACTIVITY

The principal activity of the group in the period under review was that of a holding company.

DIVIDENDS

No dividends will be distributed for the period ended 31 March 2025.

DIRECTOR

P Sharma held office during the whole of the period from 10 March 2024 to the date of this report.

The director, being eligible, offers himself for election at the forthcoming first Annual General Meeting.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Group Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the director is 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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and he 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 group's auditors are aware of that information.

AUDITORS

The auditors, Harris & Co (Accountants) Ltd, Statutory Auditor, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

P Sharma - Director

11 August 2025

Opinion

We have audited the financial statements of RML Group Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 March 2025 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, 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 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 group's and of the parent company affairs as at 31 March 2025 and of the group's loss for the period 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 group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's 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 group's and the parent 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 director with respect to going concern are described in the relevant sections of this report.

Other information

The director is responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Director, 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 Group Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Director 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Director.

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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page four, the director is 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 director determines 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 director is responsible for assessing the group's and the parent 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 director either intends to liquidate the group or the parent company or to cease operations, or has no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

- The company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant: The Companies Act 2015 and 2006. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

- We understood how the company is complying with those legal and regulatory frameworks by making enquiries through our review of relevant documentation.

- The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognize non-compliance with laws and regulations. Audit procedures performed by the engagement team included:

- Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;

- Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process; and

- Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.

- As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud to be management override. Our audit work did not identify any instances of fraud by management override.

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.

Phillip J Harris BA(Hons) FCA BFP (Senior Statutory Auditor)

for and on behalf of Harris & Co (Accountants) Ltd, Statutory Auditor

2 Pavilion Court

600 Pavilion Drive

Northampton

NN4 7SL

11 August 2025

TURNOVER

3

7,297,513

Cost of sales

10,828,845

GROSS LOSS

(3,531,332

)

Administrative expenses

6,418,134

(9,949,466

)

Other operating income

291,008

OPERATING LOSS

5

(9,658,458

)

Interest receivable and similar income

5,247

(9,653,211

)

Interest payable and similar expenses

6

(311,097

)

LOSS BEFORE TAXATION

(9,342,114

)

Tax on loss

7

-

LOSS FOR THE FINANCIAL PERIOD

(9,342,114

)

Loss attributable to:

Owners of the parent

(9,342,114

)

LOSS FOR THE PERIOD

(9,342,114

)

OTHER COMPREHENSIVE INCOME

-

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

(9,342,114

)

Total comprehensive income attributable to:

Owners of the parent

(9,342,114

)

FIXED ASSETS

Intangible assets

9

8,013,986

Tangible assets

10

1,183,174

Investments

11

-

9,197,160

CURRENT ASSETS

Stocks

12

2,867,870

Debtors

13

1,143,218

Cash at bank and in hand

2,810,396

6,821,484

CREDITORS

Amounts falling due within one year

14

25,333,173

NET CURRENT LIABILITIES

(18,511,689

)

TOTAL ASSETS LESS CURRENT LIABILITIES

(9,314,529

)

CREDITORS

Amounts falling due after more than one year

15

27,485

NET LIABILITIES

(9,342,014

)

CAPITAL AND RESERVES

Called up share capital

17

100

Retained earnings

18

(9,342,114

)

SHAREHOLDERS' FUNDS

(9,342,014

)

The financial statements were approved by the director and authorised for issue on 11 August 2025 and were signed by:

P Sharma - Director

FIXED ASSETS

Intangible assets

9

-

Tangible assets

10

-

Investments

11

18,900,915

18,900,915

CREDITORS

Amounts falling due within one year

14

18,912,815

NET CURRENT LIABILITIES

(18,912,815

)

TOTAL ASSETS LESS CURRENT LIABILITIES

(11,900

)

CAPITAL AND RESERVES

Called up share capital

17

100

Retained earnings

18

(12,000

)

SHAREHOLDERS' FUNDS

(11,900

)

Company's loss for the financial year

(12,000

)

The financial statements were approved by the director and authorised for issue on 11 August 2025 and were signed by:

P Sharma - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Changes in equity

Issue of share capital

100

-

100

Total comprehensive income

-

(9,342,114

)

(9,342,114

)

Balance at 31 March 2025

100

(9,342,114

)

(9,342,014

)

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Changes in equity

Issue of share capital

100

-

100

Total comprehensive income

-

(12,000

)

(12,000

)

Balance at 31 March 2025

100

(12,000

)

(11,900

)

Cash flows from operating activities

Cash generated from operations

1

(4,658,005

)

Interest paid

342,322

Interest element of hire purchase payments paid

(31,225

)

Net cash from operating activities

(4,346,908

)

Cash flows from investing activities

Purchase of intangible fixed assets

(8,904,429

)

Purchase of tangible fixed assets

(524,016

)

Sale of tangible fixed assets

81,438

NBV of subsidiary opening fixed assets

(1,557,327

)

Interest received

5,247

Net cash from investing activities

(10,899,087

)

Cash flows from financing activities

Capital repayments in year

192,391

Amount introduced by directors

17,864,000

Amount withdrawn by directors

(100

)

Share issue

100

Net cash from financing activities

18,056,391

Increase in cash and cash equivalents

2,810,396

Cash and cash equivalents at beginning of period

2

-

Cash and cash equivalents at end of period

2

2,810,396

1.	RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

£

Loss before taxation

(9,342,114

)

Depreciation charges

1,788,552

Profit on disposal of fixed assets

(81,378

)

Finance costs

(311,097

)

Finance income

(5,247

)

(7,951,284

)

Increase in stocks

(2,867,870

)

Increase in trade and other debtors

(1,143,218

)

Increase in trade and other creditors

7,304,367

Cash generated from operations

(4,658,005

)

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Period ended 31 March 2025

31/3/25

10/3/24

£

£

Cash and cash equivalents

2,810,396

-

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 10/3/24

Cash flow

At 31/3/25

£

£

£

Net cash

Cash at bank and in hand

-

2,810,396

2,810,396

-

2,810,396

2,810,396

Debt

Finance leases

-

(192,391

)

(192,391

)

-

(192,391

)

(192,391

)

Total

-

2,618,005

2,618,005

1.	STATUTORY INFORMATION

RML Group Holdings Limited 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 General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 March each year.

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer's interest in the net fair value of the identifiable assets, liabilities, and contingent liabilities is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder's share of changes in equity since the date of the combination.

As permitted by Section 408 of the Companies Act 2006, a profit and loss account, dealing with the results of the holding company only, has not been presented.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty

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

- Assessment of the commercial and technical viability of development projects in order to determine the write off period and any impairment in the carrying value.

- The assessment of any provision required under FRS102 for anticipated losses on contracts. The estimates of future revenues and costs requires the exercise of judgement.

- The assessment of the likely level of warranty claims based on previous experience and the judgement of the provision required.

- The assessment of the saleability of stock in the light of current sales volumes and judgement of the level of any slow moving or obsolete stock provision needed.

- Reviewing the condition of leasehold property and assessing the need for any dilapidation provisions.

- Assessing the useful economic life of the goodwill arising on consolidation.

Turnover

In accordance with FRS 102, where relevant, income is recognised in accordance with contract performance or in the absence of specific criteria income is time apportioned over the period of the contract.

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

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and cost to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Invoices in advance are taken to deferred income.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2024, is being amortised evenly over its estimated useful life of ten years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Development costs have been fully amortised in the current year.

Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated. Development expenditure that is capitalised is regularly assessed for its recoverability and an impairment provision made when it is no longer considered to be of future economic benefit.

Capitalised development cost are included within intangible assets and recognised at cost. They are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

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

Development costs are written off over the expected useful life of the product once it reaches production.

Tangible fixed assets

Short leasehold - 25% on cost

Plant and machinery - 25% on cost

Fixtures, fittings and computers - 25% to 33% on cost

Motor vehicles - 33% on cost

Tooling - amortised over the expected life of the product

Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and 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 to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash generating unit to which the asset belongs.

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

If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit and loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset or cash generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss being recognised for the asset (or cash generating unit) in prior years a reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried as a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks

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

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition.

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

Taxation

Taxation for the period comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

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 balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

Going concern

The financial statements have been prepared on a going concern basis, which assumes that the company will continue in operational existence for the foreseeable future.

In assessing the appropriateness of the going concern assumption, the directors have reviewed the latest management information, detailed forecasts and the present order book for a period of at least twelve months from the expected date of approval of the financial statements. Based on these forecasts, the directors have a reasonable expectation that the company can meet its liabilities as they fall due. The cash position of the company has also significantly improved after the year end as a result of further investment into the company by the shareholders.

For the reasons set out above, the directors have prepared the financial statements on a going concern basis, and have concluded that there are no material uncertainties related to going concern.

Cash and cash equivalents

Cash and cash equivalents are basic financial instruments and include cash in hand, deposits held at call with banks, other short term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Financial instruments

Financial instruments

The company has elected to apply the provisions of section 11 'Basic financial instruments' and section 12 'Other financial instruments issues' of FRS 102 to all of its financial instruments.

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

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

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

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

Impairment of financial assets

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

Financial assets are impaired where there is objective evidence that, because of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

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

Classification of financial liabilities

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

Basic financial liabilities

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

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

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

All the financial liabilities

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

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

Derecognition of financial liabilities

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

Equity instruments

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

Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently re measured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value he is recognised as a financial asset, whereas A derivative with a negative fair value is recognised as a financial liability.

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employees' services are received.

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

Leases

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

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

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

3.

TURNOVER

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

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

£

Automotive engineering

7,297,513

7,297,513

4.	EMPLOYEES AND DIRECTORS

£

Wages and salaries

6,986,908

Social security costs

960,354

Other pension costs

63,683

8,010,945

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

Direct

76

Indirect

31

107

The average number of employees by undertakings that were proportionately consolidated during the period was 107 .

£

Director's remuneration

-

The directors of the subsidiary company received £424,523 in remuneration and £6,867 in pension contributions to a money purchase scheme from the subsidiary.

The highest paid director in the subsidiary company received £174,505 in remuneration and £6,867 in pension contributions to a money purchase scheme from the subsidiary.

The director of the parent company did not receive any remuneration from it.