REGISTERED NUMBER: 01067795 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 31 December 2024

for

AVL United Kingdom Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

6

Report of the Independent Auditors

8

Income Statement

11

Other Comprehensive Income

12

Statement of Financial Position

13

Statement of Changes in Equity

14

Notes to the Financial Statements

15

DIRECTORS:

H O List

R J Salzinger

SECRETARY:

S J Crowe

REGISTERED OFFICE:

Avon House

Hartlebury Trading Estate

Hartlebury

Worcestershire

DY10 4JB

REGISTERED NUMBER:

01067795 (England and Wales)

SENIOR STATUTORY AUDITOR:

Stuart Banks BSc FCA

AUDITORS:

Banks Sheridan (Statutory Auditor)

Datum House

Electra Way

Crewe

Cheshire

CW1 6ZF

BANKERS:

NatWest

Northwich Branch

The Bull Ring

Northwich

Cheshire

CW9 5BN

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

The principal activities of the company in the year under review were those of design, supply, commissioning and service of test facilities for vehicle propulsion systems (i.e. powertrains including internal combustion engines, electric, hydrogen fuel cell and hybrid) using AVL specialist instrumentation.

FAIR REVIEW OF BUSINESS

AVL United Kingdom Ltd has continued to adapt to its customers' needs in 2024 as customers changes to their own strategies saw a shift towards a cleaner and greener world of mobility. AVL supports this change and looks to lead with a comprehensive suite of products for their customer's ever-changing needs. With solutions which aid improvement of conventional internal combustion engine (ICE) based powertrains, hybrid and alternative fuel powertrains such as hydrogen alongside electrification and shift to battery electric powertrains.

AVL has demonstrated its products and services will fulfil those customers' needs and support them in their evolving strategies. AVL United Kingdom supported by the wider AVL brand is uniquely placed with fully integrated solutions for all types and combinations of powertrain testing equipment, an offering no competitor in isolation can match.

Turnover reduced in the year due to a lower volume of high turnover, low margin projects. Despite the reduction in turnover the gross profit increased by £2.1m leading to the increase in EBITDA of £1.9m.

The key financial performance indicators during the year and at year end are as follows:

31 December

31 December

2024

2023

Revenue

£65.61m

£84.08m

Gross Profit Margin

15.00%

9.36%

EBITDA

£3.88m

£2.02m

Order intake

£50.02m

£62.37m

Shareholders funds

£8.1m

£10.19m

Average staff headcount increased to 173 (2023: 164).

During the reporting period, the company paid a total dividend of £5.5 million to its shareholders. This distribution reflects our commitment to delivering value to our investors while maintaining a strong financial position.

Our group vision & mission is to provide leading technology and superior service to our customers for mobility in a better world.

Our guiding principles are clean, affordable and connected intelligence.

The aim of our business strategy is to focus and align the whole organisation and all our activities towards our future challenges.

The AVL group is the world's largest independent company for development, simulation and testing in the automotive industry, and in other sectors. Drawing on its pioneering spirit, the company provides concepts, solutions and methodologies to shape future mobility trends including decarbonization and sustainability.

Our Values are pioneering spirit, customer orientation, problem-solving competence, responsibility and independence. With our innovative and comprehensive solutions, we turn our visions into reality for the sake of our customer's success. It is considered our duty as an organization to contribute to the resolution of social, cultural and global issues - especially with regards to environmental protection, sustainability and global emission reduction.

Key pillars of our Corporate Social Responsibility are employee engagement, supply chain responsibility, ethics and integrity, environment protection, efficient use of raw materials and responsible products.

The AVL group encompasses three disciplines: Instrumentation and Test Systems, Engineering Services, Advanced Simulation Technologies. AVL UK is therefore uniquely placed to offer customers a wide spectrum, from individual test equipment supplies through to turn-key facilities and operation.

Strategic Areas for future growth include:

1. Propulsion Solutions and Integration in Vehicle

The company's products and services are increasingly tailored to support the innovation and development of optimal propulsion systems integrated into the vehicle. We enable delivery of mobility including balanced attributes related to the complete end-user driving experience, environmental impact, connectivity and safety. Our portfolio covers current and future new technologies such as Battery Electric Vehicles (BEV), Advanced Driver-Assistance Systems (ADAS), autonomous driving, and zero emission technologies. Recent enhancements to our products and services include in-vehicle software development including certification of cyber security and functional safety. Our solutions are increasingly involving virtual (simulated) prototypes with representative driver behaviour and route & schedule optimisation based on environment information.

2. Expand Customer Base & Diversity

We are actively seeking new business with other non-automotive industries such as renewable power generation, power storage and aerospace.

3. Automated Driving and Mobility

AVL has a strong focus on delivering automated driving technology with safety, improved driver and passenger experience and energy efficiency. This is supported by the ongoing development of the software tools and data solutions necessary to capture the behaviour of the vehicle and environment. Examples of this are:

-

AVL DRIVE for ADAS - Enables development engineers to objectively assess, analyse and optimize driver and passenger perceived safety and driving comfort.

-

ADAS benchmark database - AVL has compiled a database of AVL DRIVE for ADAS results to allow automotive OEMs objective comparison of their products versus competitors.

-

The AVL DRIVINGCUBE - Provides safe, efficient testing of ADAS vehicles by coupling a rolling road test rig with a virtual environment. This allows representative, real-world driving scenarios to be presented to the ADAS functions before the vehicle is released for road testing.

-

AVL Dynamic Ground Truth (DGT) - Provides an independent reference sensor array for verification of vehicle ADAS systems.

4. Virtualisation - Integrated and Open Development Platform

AVL is pioneering a new software concept allowing the seamless integration of vehicle simulation tools with testing hardware. The solution links real and virtual testing and incorporates state of the art Artificial Intelligence (AI), Machine Learning and Data Intelligence concepts. This enables our customers to prototype and test innovative new powertrain configurations over a wider range of conditions in less time. Benefits include:

-

Improved product development effectiveness, productivity and quality.

-

Fully integrated real and virtual design verification including AI guided testing.

-

Seamless integration of different software tools.

-

Intelligent use of multiple data sources.

AVL Software is rapidly moving towards new deployment concepts including cloud and Software as a Service (SaaS) offerings. AVL is actively pursuing partnerships with other IT and cloud resource vendors to expand our customer base.

5. Production Orientation

AVL is expanding products and services to support the whole 'cradle to grave' product life cycle. Our product strategy is to digitally link design, validation, production, in-use and end of life phases. The aim is to deliver robust, industrialised solutions for series production. Examples are process-oriented software tools including facility energy management, vehicle fleet data management and Artificial Intelligence (AI) approaches to data mining, post processing and visualisation.

6. Global Execution and Support

Many of our customers are global organisations. In response to this we continue to expand our global account services and optimise the mix of local (UK) and global supply for maximum value. Whilst we communicate as 'one AVL' to our global customers we also provide the flexibility to engage and accommodate local market requirements. We also enable our customers to optimise their global operation. An example of this is providing the technology for remote operation of testing equipment from different geographical locations.

7. Customer Orientation and Efficiency

Customer success is key to our continued business. Our strategy is continually evolving to meet new industry demands including reduced time to market, reduction of physical prototypes and electric, hydrogen and decarbonisation technologies. We have a track record in the UK of developing new business approaches that connect the customer organisation, processes and tools to optimise productivity and facilitate change. Consequently, AVL is uniquely positioned to partner with our automotive OEM, tier 1 suppliers and SMEs as they manage the transition from conventional internal combustion engines to zero emission, sustainable propulsion solutions. We also continue to support our customers to evolve conventional propulsion solutions towards carbon neutrality e.g. synthetic fuels from renewal energy sources.

PRINCIPAL RISKS AND UNCERTAINTIES

We endeavour to manage and monitor risk factors that could impact our business objectives and aspirations

The Board has identified the following key principal risks and uncertainties:

1)

Volatility of currency exchange rates

2)

Rapid technology change and development of new technologies.

3)

Environmental & political regulation and compliance

4)

Rising costs and inflation

5)

Retention of key employees and the recruitment of skilled labour.

6)

Customers & markets

7)

Freedom of international trade

Despite the above the Board is confident that the company will provide a robust and sustainable long term growth platform for its shareholders and also its valued employees, suppliers and customers.

SECTION 172(1) STATEMENT

The board of directors of AVL United Kingdom Ltd consider that both individually and together that they have acted in the way they consider, in good faith, would be the most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and the matters set out in s 172(1)(a-f) of the Act) in the decisions taken in the year ended 31 December 2024.

ENGAGEMENT WITH EMPLOYEES

Our employees are fundamental to the delivery of our strategy and objectives. We aim to be a responsible employer in our approach, to the health, safety and wellbeing of our employees, having recently launched a wellbeing strategy, including the appointment of mental health first aiders.

As a company we only recruit the highest calibre of staff and continually invest in developing our staff to maintain excellence.

The business would not function without the engagement and commitment of its people and considerable effort is put into ensuring our team members are both protected and consulted as the company continues to expand and develop. The company is keen to retain quality team members.

The company operates a framework for employee information and consultation and regular meetings are held between management and employees to allow a free flow of information and ideas.

AVL United Kingdom Ltd is an equal opportunities employer and has appropriate policies in place to ensure applicants and employees are not discriminated against on any grounds.

The company has built an excellent team of employees on whom its success has depended. The directors would like to take this opportunity to thank all the team for their continued dedication and support.

ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS

Our success can only be measured by that of our customers. A true understanding of a customer and their needs, combined with experience and a global view, allows us to create innovative solutions. These are expertly conceived, uniquely tailored and efficiently carried out resulting in 'a shared success.'

Our business model prioritises quality and delivery with the very best in customer service. We have built and will maintain a reputation for transparency and fair dealing with customers and suppliers. We are regularly reviewing the company's operations with a view to reducing the impact on the environment. Modern mobility represents progress only when its goal, its form and its requirements respect nature. Our work at AVL reflects a deep understanding of the responsibility we share for our society, for mankind and for the world's achievements. We want to ensure that our world is one we can live in for now and in the future.

Furthermore, our industry must meet environmental and political challenges for better air quality, and we must continue to improve the performance of traditional powertrains, as well as accelerate powertrain electrification and fuel cells. At AVL we are committed to helping OEMs develop zero-impact emission mobility solutions. Testing and validation are key to achieving this and to ensuring the highest quality results.

STATEMENT OF CORPORATE GOVERNANCE ARRANGEMENTS

AVL United Kingdom Limited is an evolving organisation and one that has ethics, integrity and high standards of corporate governance as key priorities. The Board understands its responsibility in managing the business for the long-term benefit of its stakeholders.

ON BEHALF OF THE BOARD:

R J Salzinger - Director

18 March 2025

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

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2024 is £5,500,000.

FUTURE DEVELOPMENTS

The directors will ensure that the company continues to be well positioned to take advantage of any trading or other business opportunities that may be available.

DIRECTORS

H O List has held office during the whole of the period from 1 January 2024 to the date of this report.

Other changes in directors holding office are as follows:

A Ciriello - resigned 31 August 2024

R J Salzinger - appointed 31 August 2024

EXPOSURE TO CASH FLOW, LIQUIDITY, CREDIT AND PRICE RISK

Liquidity and cashflow risk

The objective of the company in managing liquidity risk is to ensure that it can meet its financial obligations as and when they fall due. The company is in a strong financial position and has agreed facilities to allow it to meet its financial obligations through operating cash flows.

Credit risk

The company may offer credit terms to its customers which allow payment of the debt after delivery of goods. The company is at risk to the extent that a customer may be unable to pay the debt on the specified due date. This risk is mitigated by the strong on-going customer relationships and effective credit control procedures.

Price risk

Price risk arises because of the volatile nature of purchase prices for goods, materials and services. This risk is mitigated by the fact that the company's main supplier is the ultimate holding company. This allows the effect of price risk to be managed on a group wide basis.

STREAMLINED ENERGY AND CARBON REPORTING

This report has been based upon the period January 2024 to the end of December 2024 and covers the whole organisation.

2024 UK Government conversion factors for company reporting have been used.

Scope 1 & 2 emissions to including our main energy sources as listed below.

Greenhouse gas emissions and energy use data for the period 1 to January 2024 to December 2024 - UK

Current reporting year 2024

Comparison reporting year 2023

Energy consumption break down (kWh)

Gas

229,660

224,627

Electricity

167,550

198,316

Transport fuel

991,955

955,416

Scope 1 emissions in metric tonnes CO2e

Gas consumption

42.00

41.01

Owned & leased vehicle

215.60

207.97

Total scope 1

257.60

248.98

Scope 2 emissions in metric tonnes CO2e

Purchased electricity

24.72

41.07

Total gross emissions in metric tonnes CO2e

282.32

290.05

Intensity ratio

Tonnes CO2e per member of staff

1.61

1.77

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), 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 and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

.

AUDITORS

The auditors, Banks Sheridan, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

R J Salzinger - Director

18 March 2025

Opinion

We have audited the financial statements of AVL United Kingdom Limited (the 'company') for the year ended 31 December 2024 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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 UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

Matters on which we are required to report by exception

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

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

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

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

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page seven, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations

We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. Based on our understanding of company, and its industry, we identified that the principal risks of non-compliance with laws and regulations related to the UK tax legislation, pensions legislation, employment regulation and health and safety regulation, anti-bribery, corruption, fraud and money laundering and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements, such as the Companies Act 2006.

We evaluated the directors' and management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to loss reserves, and significant one-off or unusual transactions.

Our audit procedures were designed to respond to those identified risks, including non-compliance with laws and regulations (irregularities) and fraud that are material to the financial statements. Our audit procedures included but were not limited to:

-

Discussing with the directors and management their policies and procedures regarding compliance with laws and regulations;

-

Communicating identified laws and regulations throughout our engagement team and remaining alert to any indications of non-compliance throughout our audit; and

-

Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.

Our audit procedures in relation to fraud included but were not limited to:

-

Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;

-

Gaining an understanding of the internal controls established to mitigate risks related to fraud;

-

Discussing amongst the engagement team the risks of fraud; and

-

Addressing the risks of fraud through management override of controls by performing journal entry testing.

There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

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.

Stuart Banks BSc FCA (Senior Statutory Auditor)

for and on behalf of Banks Sheridan (Statutory Auditor)

Datum House

Electra Way

Crewe

Cheshire

CW1 6ZF

19 March 2025

TURNOVER

2

65,612,523

84,082,002

Cost of sales

(55,641,017

)

(76,207,058

)

GROSS PROFIT

9,971,506

7,874,944

Administrative expenses

(6,593,849

)

(6,067,652

)

3,377,657

1,807,292

Other operating income

3

271,688

21

OPERATING PROFIT

5

3,649,345

1,807,313

Interest receivable and similar income

6

937,425

965,430

4,586,770

2,772,743

Interest payable and similar expenses

7

(47,483

)

(44,563

)

PROFIT BEFORE TAXATION

4,539,287

2,728,180

Tax on profit

8

(1,134,069

)

(660,684

)

PROFIT FOR THE FINANCIAL YEAR

3,405,218

2,067,496

PROFIT FOR THE YEAR

3,405,218

2,067,496

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

3,405,218

2,067,496

FIXED ASSETS

Intangible assets

11

21,531

2,554

Tangible assets

12

793,777

662,597

815,308

665,151

CURRENT ASSETS

Stocks

13

1,274,767

1,575,913

Debtors

14

19,442,481

47,007,381

Cash at bank and in hand

6,153,224

449,742

26,870,472

49,033,036

CREDITORS

Amounts falling due within one year

15

(17,117,799

)

(37,738,884

)

NET CURRENT ASSETS

9,752,673

11,294,152

TOTAL ASSETS LESS CURRENT LIABILITIES

10,567,981

11,959,303

PROVISIONS FOR LIABILITIES

18

(2,467,967

)

(1,764,507

)

NET ASSETS

8,100,014

10,194,796

CAPITAL AND RESERVES

Called up share capital

19

4,180,000

4,180,000

Share premium

20

11,248

11,248

Retained earnings

20

3,908,766

6,003,548

SHAREHOLDERS' FUNDS

24

8,100,014

10,194,796

The financial statements were approved by the Board of Directors and authorised for issue on 18 March 2025 and were signed on its behalf by:

R J Salzinger - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 January 2023

4,180,000

3,936,052

11,248

8,127,300

Changes in equity

Total comprehensive income

-

2,067,496

-

2,067,496

Balance at 31 December 2023

4,180,000

6,003,548

11,248

10,194,796

Changes in equity

Dividends

-

(5,500,000

)

-

(5,500,000

)

Total comprehensive income

-

3,405,218

-

3,405,218

Balance at 31 December 2024

4,180,000

3,908,766

11,248

8,100,014

1.	ACCOUNTING POLICIES

General information

AVL United Kingdom Limited ('The Company') is part of a group headed up by an Austrian parent company. The company is primarily engaged in the design, supply, commissioning and service support of engine test facilities using AVL specialist instrumentation.

STATUTORY INFORMATION

The company is a private company limited by shares and is incorporated in England. The address of the registered office is Avon House, Hartlebury Trading Estate, Hartlebury, Worcestershire, DY10 4JB.

Statement of compliance

The financial statements of AVL United Kingdom Ltd have been prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, "The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland"("FRS 102") and the Companies Act 2006.

Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

Basis of preparation

The financial statements are prepared on the going concern basis under the historical cost convention and comply with the Financial Reporting Standards of The Financial Reporting Council and Companies Act 2006.

Going concern

The directors are not aware of any uncertainties regarding the company's ability to continue as a going concern and after reviewing the company's orderbook and forecasts, the directors are satisfied that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Revenue recognition

Revenue is recognised to the extent that the company obtains the right to consideration in exchange for its performance. Revenue comprises the fair value of consideration received and receivable exclusive of value added tax and after discounts and rebates.

Revenue from the sale of standard products is recognised when the significant risks and rewards of ownership of the goods has transferred to the buyer. This is usually at the point the customer has signed for the delivery of the goods.

Revenue from the provision of project services and service contracts is recognised by reference to the stage of completion of a project. The stage of completion of a project is measured by comparing the costs incurred to date to the total estimated project costs. Revenue is only recognised to the extent of recoverable expenses when the outcome of a project cannot be estimated reliably. When it is expected that total project costs will exceed the total project revenue the expected loss is recognised as an expense immediately through a provision for future losses.

Cash Flow Exemption

The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

- the requirements of Section 7 Statement of Cash Flows.

Tangible fixed assets

Tangible fixed assets are stated at historical cost less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended.

Depreciation is provided at the following annual rates so as to write off their cost less residual amounts over their estimated useful economic lives. Assets not carried at fair value are also reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

Leasehold property improvements

-

at varying rates on cost

Plant and machinery

-

at varying rates on cost

Office and computer equipment

-

at varying rates on cost

Motor vehicles

-

20% on cost and 25% on cost

The residual values and useful lives of assets are reviewed and adjusted if appropriate at the end of each reporting period.

Intangible assets

Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated using the straight line method, to allocate the depreciable amount of the assets to their residual values over their estimated useful lives as follows:

Computer software

-

at varying rates on cost

Amortisation is charged to administrative expenses in the Income Statement.

Stocks

Stocks are stated at the lower of cost and selling price less costs to complete and sell. Cost includes all costs of purchase and also other costs incurred in bringing stock to its present location and condition. Cost is calculated using the first-in, first-out basis.

Provision is made for damaged, obsolete and slow-moving stock where appropriate.

Taxation

The tax expense represents the sum of the current tax expense and deferred tax expense. Current tax assets are recognised when tax paid exceeds the tax payable.

Current tax is based on taxable profit for the year. Taxable profit differs from the profit shown in the income statement because it excludes certain items of non-taxable income or expenses. Adjustments are also made for items of income or expense that are taxable or deductible in other periods. Current tax assets and liabilities are measured using tax rates that have been enacted or substantively enacted by the reporting period end date.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based on tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax liabilities are recognised in respect of all timing differences that exist at the reporting date. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expenses in tax assessments in the periods different from those in which they are recognised in the financial statements.

Deferred tax assets are recognised only to the extent that it is probable that they will be recovered by the reversal of deferred tax liabilities or using other future taxable profits.

Current and deferred tax is charged or credited in profit or loss, except when it relates to items credited or charged directly to other comprehensive income or equity, in which case the tax follows the transaction or event it relates to and is also charged or credited directly to other comprehensive income, or equity.

Current tax assets and current tax liabilities and deferred tax assets and deferred tax liabilities are offset, if and only if, there is a legally enforceable right to set off the amounts and the entity intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

Foreign currencies

The financial statements are prepared in pound sterling which is the financial currency of the company.

Foreign currency transactions are initially recorded by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.

Monetary assets and liabilities denominated in foreign currency at the balance sheet are translated using the closing rate. Foreign currency 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 Income Statement.

Leases

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases.

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

Employee benefits

The company provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements and a defined contribution pension plan.

(i) Short term benefits

Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.

(ii) Defined contribution pension plans

The company operates a defined contribution pension 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 when they are due. Amounts not paid are shown as accruals in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.

Trade and other receivables within one year

Trade and other receivables including amounts owing from group companies, with no stated interest rate are recorded at transaction price.

Trade and other creditors

Trade and other creditors 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 the transaction price and subsequently measured at amortised cost using the effective interest method.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, demand and other short-term highly liquid investments with original maturities of three months or less that are readily convertible into known amounts of cash.

Impairment of assets

Assets not measured at fair value are reviewed for any indications that the asset maybe impaired at each balance sheet date. If such indications exists the recoverable amount of the asset or the assets cash generating unit is estimated and compared to the carrying amount. Where the carrying amount exceeds its recoverable amount, an impairment loss is recognised in the Income Statement.

Any losses arising from impairment are recognised in the Income Statement in other administrative expenses.

Financial instruments

The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.

(i) Financial assets

Basic financial assets, including trade and other receivables, cash and bank balances are initially recognised at transaction price 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.

(ii) Financial liabilities

Basic financial liabilities, including trade and other payables and loans from fellow group companies, are initially recognised at transaction price and subsequently carried at amortised cost, using the effective interest rate method, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

Dilapidation costs

A provision is made to cover the expected costs of making good property dilapidations on leasehold properties where such work is required by the terms of the lease agreement.

Provisions for liabilities

Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that the company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

Key accounting judgements and estimates

The preparation of these financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.

Judgements and estimates are continually evaluated and are based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next year are discussed below:

(i) Costs to completion on projects and service contracts

Expected future costs to completion and contingency provisions are calculated on a project by project basis based on the current status of the project and the latest available project appraisals.

(ii) Warranty provision

A provision is included to cover the labour and third party costs element of any warranty work outstanding at the end of the reporting period. This provision requires management's best estimate of the likely costs to be incurred. Such estimates are established using historical information on the average cost of warranty claims as a percentage of turnover.

2.

TURNOVER

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

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

2024

2023

£

£

Projects

41,783,484

60,707,677

Standard products

8,812,310

8,641,258

Service

14,996,758

14,708,132

AST

19,971

24,935

65,612,523

84,082,002

An analysis of turnover by geographical market is given below:

2024

2023

£

£

United Kingdom

64,860,198

82,243,582

Europe

725,467

1,861,676

Other

26,858

(23,256

)

65,612,523

84,082,002

3.	OTHER OPERATING INCOME

2024

2023

£

£

Management charges received

from group companies

49

21

RDEC

271,639

-

271,688

21

4.	EMPLOYEES AND DIRECTORS

2024

2023

£

£

Wages and salaries

12,183,366

10,385,676

Social security costs

1,537,042

1,326,244

Other pension costs

617,476

551,382

14,337,884

12,263,302

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

2024

2023

Management

5

6

Order fulfilment & operations

68

64

Service and maintenance

60

59

Sales

24

21

Finance

7

6

Admin / HR / IT

8

8

172

164