REGISTERED NUMBER: 07417548 (England and Wales)

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTOR AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

FOR

MJ SECTIONS AEROSPACE GROUP 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:

Mr P R M Jordan

REGISTERED OFFICE:

Grove House

Coombs Wood Court

Steel Park Road

Halesowen

West Midlands

B62 8BF

BUSINESS ADDRESS:

Unit 5 Marriott Road Industrial Estate

Cradley Road

Netherton

DUDLEY

West Midlands

DY2 0JZ

REGISTERED NUMBER:

07417548 (England and Wales)

AUDITORS:

E R Grove & Co Limited

Chartered Accountants and Statutory Auditors

Grove House

Coombs Wood Court

Steel Park Road

Halesowen

West Midlands

B62 8BF

The director presents his strategic report of the company and the group for the year ended 31 December 2024.

REVIEW OF BUSINESS

We aim to present a balanced and comprehensive review of the development and performance of the group during the year and its position at the year end. Our review is consistent with the size and non-complex nature of the group and is written in the context of the risks and uncertainties we face.

As for many businesses of our size, the business environment in which we operate continues to be challenging. We face competition from the UK and the import market. To help the group stay ahead of its competitors and to meet the demands of major customers the group has embarked on a significant investment program in new premises and plant.

The overall order book remains healthy, and the board believes that the continued investment in plant and machinery will strengthen the group's ability to increase market share.

During the year the group has continued to expand its production capabilities by investing in a new purpose built factory and two new vacuum heat treatment furnaces at its Halesowen site.

In line with its strategic plan, the group has continued to invest in its workforce during the year, widening the implementation of a skilled based salary framework to encompass further key areas and a roll out of a learning and development strategy. the group increased overall headcount in the year by 15% to support the group's increased orders and growth targets.

We consider that our key performance indicators are those that communicate the financial performance and strength of the group, these being turnover, gross margin and profitability.

2024

2023

Turnover

£28.1m

£26.1m

Gross profit

£9.7m

£9.8m

Gross profit %

34.4%

37.6%

Profit before tax

£4.3m

£4.9m

2025 will continue to be a challenging year for the aerospace industry from airlines, airports and their supporting industries to manufacturers throughout the supply chain.

The group has in recent years adopted a strategy to reduce risk by expanding into new overseas markets and investing in plant and capacity without the need for high levels of borrowing. This strategy continues to keep the group in a strong position and the group is able to adjust capacity without the pressure to meet finance payments.

Securing the required volume of raw material, at a competitive price, has been at times, very challenging but the group has continued to adopt its approach to acquire stock in anticipation of future orders. Post balance sheet, orders have increased and the group is well positioned to deal with the backlog as airlines begin to return to the skies.

We anticipate the business environment will remain competitive and believe that the group is in a good financial position and that the risks that have been identified and are being well managed. With careful focus on new markets and new products, as well as continuing review of the state of the market and the activities of competitors, we are confident in the group's ability to maintain and build on the current position.

Each year, the board undertakes an in-depth review of the group's strategy, including an assessment of the business plan. Once approved by the board, the plan and strategy form the basis for financial budgets, resource plans and investment decisions and also the future strategic direction of the group. In making decisions concerning the business plan and future strategy, the board has regard to a variety of matters including the interests of various stakeholders, the consequences of its decisions in the long term and its long-term reputation.

PRINCIPAL RISKS AND UNCERTAINTIES

The board has overall responsibility for ensuring that risk is effectively managed. The risk management process is designed to identify, evaluate and manage the significant risks that the group faces.

Principal risks

The principal risks and uncertainties facing the group are the turbulence in the financial markets, competition from the UK and abroad and changes in macro-economic conditions. Global market and economic conditions have been challenging, with tighter credit conditions and slower growth in most major economies during the last few years. Although signs of recovery exist, there are continued concerns about government austerity measures, bank debts, the availability and cost of credit and geographical issue that all contribute to increased market volatility.

As a supplier to the aerospace industry we are of course also subject to air passenger travel patterns. These can be affected by consumers' overall level of disposable income in the global economy, the threat of terrorism, an increased awareness of the environmental impact of air travel and environmental factors.

With these risks and uncertainties in mind, we are aware that any plans for the future development of the business may be subject to unforeseen future events outside of our control.

Financial risk management

The group's principal financial instruments comprise of stock and cash and cash equivalents. Other financial assets and liabilities such as trade debtors and trade creditors arise directly form the group's operating activities. the main purpose of these financial assets is to provide finance for the group's on-going operations.

Credit risk

The company's policy is to require assessments of customers credit worthiness prior to their being accepted as a credit customer. Payment histories are monitored on a continuous basis to mitigate credit risk. the directors set limits for customers based on a combination of payment history and third-party references.

Cashflow and liquidity risk

The group's finances are monitored by the directors on an ongoing basis. the directors assess the group's cash requirements by assessing short term and long-term forecast.

Mitigation

The barriers for new entrants who specialise in the similar products continues to be very high. Despite this, the group continues to penetrate new territories and increase its product range with an increasing customer base. The directors are taking a cautious and steady approach to expansion into overseas markets. The directors see the expansion into new markets as a reduction in the risk of relying heavily on the UK market.

The group continues to be a major supplier of precision cold formed rings and fabrications to the UK and international aerospace industry.

ENGAGEMENT WITH EMPLOYEES

The group places considerable value on the involvement of its employees and has continued its previous practice of keeping them informed of matters affecting them as employees and on the various factors affecting the performance of the group. This is achieved through formal and informal meetings. Employee representatives are consulted regularly on a wide range of matters affecting their current and future interests.

ON BEHALF OF THE BOARD:

Mr P R M Jordan - Director

23 September 2025

The director presents his report with the financial statements of the company and the group for the year ended 31 December 2024.

PRINCIPAL ACTIVITY

The principle activity of the company in the year under review was that of a property holding company. The principal activity of the group is the production and machining of high quality non-ferrous steel and cold formed section rolling, principally for the aerospace industry.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2024 will be £ 15,000 .

RESEARCH AND DEVELOPMENT

As we move forward the group will continue to explore new products and markets. Research and development will remain a key area of focus which the board believes will provide a strong platform for the future growth of the group.

DIRECTOR

Mr P R M Jordan held office during the whole of the period from 1 January 2024 to the date of this report.

FINANCIAL INSTRUMENTS

The group operates within its agreed overdraft facility with the bank. Most sales are to UK customer and the majority of suppliers are UK based: the group has therefore not entered into any hedging arrangements in respect of risks relating to trade debtors and creditors. the group does not use derivative financial instruments for speculative purposes.

DISCLOSURE IN THE STRATEGIC REPORT

Certain information is not shown in the Director's Report because it is shown in the Strategic Report instead. The Strategic Report includes a business review, principle risks and uncertainties and information on the group's key performance.

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, E R Grove & Co Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr P R M Jordan - Director

23 September 2025

Opinion

We have audited the financial statements of MJ Sections Aerospace Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 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 December 2024 and of the group's 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 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:

We gained an understanding of the legal and regulatory framework applicable to the Company and the industry in which it operates, and considered the risks of acts by the Company which were contrary to applicable laws and regulations, including fraud. These included but were not limited to compliance with the Companies Act 2006, the principles of United Kingdom Generally Accepted Accounting Practice and tax legislation.

We designed audit procedures to respond to the risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion.

We focused on laws and regulations that could give rise to a material misstatement in the Company financial statements. Our tests included, but were not limited to:

- agreement of the financial statement disclosures to underlying supporting documentation;

- enquiries of management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud;

- review of minutes of Directors' board meetings throughout the year; and

- obtaining an understanding of the control environment in monitoring compliance with laws and regulations.

There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We also addressed the risk of management override of internal controls, including testing journals, assessing and challenging the accounting estimates made and evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.

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.

Steven Lomas (Senior Statutory Auditor)

for and on behalf of E R Grove & Co Limited

Chartered Accountants and Statutory Auditors

Grove House

Coombs Wood Court

Steel Park Road

Halesowen

West Midlands

B62 8BF

23 September 2025

TURNOVER

4

28,091,658

26,116,020

Cost of sales

18,403,717

16,281,836

GROSS PROFIT

9,687,941

9,834,184

Administrative expenses

5,405,890

4,940,117

4,282,051

4,894,067

Other operating income

42,000

42,000

OPERATING PROFIT

6

4,324,051

4,936,067

Interest receivable and similar income

11,144

19,000

4,335,195

4,955,067

Interest payable and similar expenses

7

(7,133

)

441

PROFIT BEFORE TAXATION

4,342,328

4,954,626

Tax on profit

8

916,063

1,135,705

PROFIT FOR THE FINANCIAL YEAR

3,426,265

3,818,921

Profit attributable to:

Owners of the parent

3,426,265

3,818,921

PROFIT FOR THE YEAR

3,426,265

3,818,921

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

3,426,265

3,818,921

Total comprehensive income attributable to:

Owners of the parent

3,426,265

3,818,921

FIXED ASSETS

Tangible assets

11

16,789,031

11,697,174

Investments

12

-

-

Investment property

13

357,192

-

17,146,223

11,697,174

CURRENT ASSETS

Stocks

14

11,410,325

9,453,572

Debtors

15

7,494,144

10,283,224

Cash at bank and in hand

4,669,215

4,688,966

23,573,684

24,425,762

CREDITORS

Amounts falling due within one year

16

4,478,018

3,760,350

NET CURRENT ASSETS

19,095,666

20,665,412

TOTAL ASSETS LESS CURRENT LIABILITIES

36,241,889

32,362,586

PROVISIONS FOR LIABILITIES

19

1,319,301

851,363

NET ASSETS

34,922,588

31,511,223

CAPITAL AND RESERVES

Called up share capital

20

200

100

Retained earnings

21

34,922,388

31,511,123

SHAREHOLDERS' FUNDS

34,922,588

31,511,223

The financial statements were approved by the director and authorised for issue on 23 September 2025 and were signed by:

Mr P R M Jordan - Director

FIXED ASSETS

Tangible assets

11

10,941,176

-

Investments

12

100

-

Investment property

13

357,192

-

11,298,468

-

CURRENT ASSETS

Debtors

15

12,700

100

Cash at bank

80

-

12,780

100

CREDITORS

Amounts falling due within one year

16

4,805

-

NET CURRENT ASSETS

7,975

100

TOTAL ASSETS LESS CURRENT LIABILITIES

11,306,443

100

CAPITAL AND RESERVES

Called up share capital

20

200

100

Retained earnings

21

11,306,243

-

SHAREHOLDERS' FUNDS

11,306,443

100

Company's profit for the financial year

11,306,243

-

The financial statements were approved by the director and authorised for issue on 23 September 2025 and were signed by:

Mr P R M Jordan - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

100

27,692,202

27,692,302

Changes in equity

Total comprehensive income

-

3,818,921

3,818,921

Balance at 31 December 2023

100

31,511,123

31,511,223

Changes in equity

Issue of share capital

100

-

100

Dividends

-

(15,000

)

(15,000

)

Total comprehensive income

-

3,426,265

3,426,265

Balance at 31 December 2024

200

34,922,388

34,922,588

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2023

100

-

100

Changes in equity

Balance at 31 December 2023

100

-

100

Changes in equity

Issue of share capital

100

-

100

Total comprehensive income

-

11,306,243

11,306,243

Balance at 31 December 2024

200

11,306,243

11,306,443

Cash flows from operating activities

Cash generated from operations

1

5,665,268

4,899,906

Interest paid

7,133

(441

)

Tax paid

(212,252

)

(90,567

)

Net cash from operating activities

5,460,149

4,808,898

Cash flows from investing activities

Purchase of tangible fixed assets

(5,473,185

)

(5,707,562

)

Interest received

11,144

19,000

Net cash from investing activities

(5,462,041

)

(5,688,562

)

Cash flows from financing activities

Amount introduced by directors

8,251

-

Amount withdrawn by directors

(11,210

)

(40,626

)

Share issue

100

-

Equity dividends paid

(15,000

)

-

Net cash from financing activities

(17,859

)

(40,626

)

Decrease in cash and cash equivalents

(19,751

)

(920,290

)

Cash and cash equivalents at beginning of year

2

4,688,966

5,609,256

Cash and cash equivalents at end of year

2

4,669,215

4,688,966

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

2024

2023

£

£

Profit before taxation

4,342,328

4,954,626

Depreciation charges

904,533

527,259

(Profit)/loss on disposal of fixed assets

(880,397

)

980

Finance costs

(7,133

)

441

Finance income

(11,144

)

(19,000

)

4,348,187

5,464,306

Increase in stocks

(1,956,753

)

(1,740,745

)

Decrease in trade and other debtors

2,722,708

54,445

Increase in trade and other creditors

551,126

1,121,900

Cash generated from operations

5,665,268

4,899,906

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:

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

4,669,215

4,688,966

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

4,688,966

5,609,256

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank and in hand

4,688,966

(19,751

)

4,669,215

4,688,966

(19,751

)

4,669,215

Total

4,688,966

(19,751

)

4,669,215

1.	STATUTORY INFORMATION

MJ Sections Aerospace Group 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 present the results of the company and its own subsidiaries ("the group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Related party exemption

The group has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Significant judgements and estimates

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about he 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.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Turnover is the amount derived from ordinary activities, and is measured at the fair value of the consideration received or receivable. Turnover is reduced for estimated customer returns, rebates and other similar allowances, and is stated net of VAT.

Revenue from the sale of goods is recognised when all the following conditions are satisfied:

-

the company has transferred to the buyer the significant risks and rewards of ownership of the goods;

-

the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

-

the amount of revenue can be measured reliably;

-

it is probable that the economic benefits associated with the transaction will flow to the company; and

-

the costs incurred or to be incurred in respect of the transaction can be measured reliably, specifically, revenue from the sale of goods is recognised when goods are delivered and legal title is passed.

Rental income from property leased out under an operating lease is recognised in the profit and loss on a straight line basis over the lease term.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold property

-

1% on cost

Plant and machinery

-

20% on cost and 20% on reducing balance

Fixtures and fittings

-

20% on cost and 20% on reducing balance

Motor vehicles

-

25% on reducing balance

Depreciation methods, useful lives and residual values are reviewed if there is an indication of a significant change since the last annual reporting date in the pattern by which the company expects to consume an asset's future economic benefits.

Investment property

Investment property is carried at fair value determined by the directors or professionally qualified valuers using current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in profit and loss,

Changes in fair value recognised in the Statement of Comprehensive Income are non-distributable until realised by a disposal of the property. In such cases, the company accounts for the revaluation gain, net of deferred tax, as a movement on reserves with the total net revaluation gains forming the revaluation reserve on the balance sheet. Movements are analyse in the Statement of Changes in Equity. On the disposal of a previously revalued property, any previously unrealised gain becomes realised and is realised from the revaluation reserve and transferred to the profit and loss account reserve within the Statement of Changes in Equity and becomes distributable.

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.

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

Work-in-progress is reflected in the accounts on a job by job basis by recording turnover and related costs as job activity progresses.

Provision is made for obsolete, slow-moving or defective items where appropriate.

Taxation

Taxation for the year 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 year 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.

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 presented in pounds sterling, which is also the functional currency of the company. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing on the reporting date. Gains and losses arising on translation are included in the income statement for the period.

Pension costs and other post-retirement benefits

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

Leases

Assets that are held by group under leases which transfer to the group substantially all the risks and rewards of ownership are classified as being held under finance leases. Leases which do not transfer substantially all the risks and rewards of ownership to the group are classified as operating leases.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term.

Going concern

The management of liquidity and cash flow is scrutinised by the directors at a group level where detailed cash flow forecasts are prepared. In preparing those forecasts, the directors adopt prudent assumptions on matters such as lease renewals, loan refinancing, interest rates and cash flow timing. The methodology is kept under constant review with the forecasts routinely tested against the actual outcomes achieved.

The most recently prepared forecasts demonstrate that the group has adequate resources to meet all liabilities as they fall due. In their judgement, the directors therefore believe that these financial statements may validly be prepared using the going concern basis.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, be definition, seldom equal the related actual results.In the opinion of the directors the following are the critical judgements made in the process of applying the group's accounting policies:

Impairment of fixed assets:

At each reporting date, the group is required to assess whether there is any indication that, in management's judgement, the carrying value of tangible or intangible assets may not be recoverable. If any indication exists, the relevant assets recoverable value is estimated, being the greater of its value in use and fair value less cost to sell. Where the carrying value exceeds the recoverable value, the asset's carrying value is reduced to the recoverable value.

Stock provisioning:

The group manufactures components and sub assemblies for the aerospace industry. As a result it is necessary to consider the recoverability of the cost of stock and the associated provisioning required. Management consider the nature and condition of the stock and apply assumptions around future demand when calculating the level of provisioning required.

Debtor provisioning:

The group makes an estimate of the recoverable value of trade debtors. When assessing recoverability, management considers factors including customer credit rating, the age profile and historic experience.

Changes to the tax charge based on research and development expenditure:

At each reporting date the company is required to assess the value of research and development expenditure in calculating the corporation tax charge.