REGISTERED NUMBER: 06822548 (England and Wales)

ZETTLEX (UK) LIMITED

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Statement of Income and Retained Earnings

9

Balance Sheet

10

Notes to the Financial Statements

11

DIRECTORS:

R J Buckley

C M Glennon

C G Ravetto

S H Lane

REGISTERED OFFICE:

Faraday House

Barrington Road

Foxton

CB22 6SL

REGISTERED NUMBER:

06822548 (England and Wales)

AUDITORS:

Clarke Nicklin LLP

Chartered Accountants and

Statutory Auditors

Clarke Nicklin House

Brooks Drive

Cheadle Royal Business Park

Cheadle

Cheshire

SK8 3TD

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

REVIEW OF BUSINESS

Zettlex UK Ltd experienced a year of continued growth in 2024; revenue grew over 30% and was supported by healthy Gross Margins. Zettlex UK sells to a number of sectors including the medical, telecommunication and satellite navigation industries through its broad range of high quality encoder products.

Medium-term business development continues to be the primary strategy with focus on expanding into more diverse markets as part of the Novanta Inc Celera Motion business sector.

With Novanta Inc being a progressive owner, Zettlex continues to draw on the resources available within the group specifically around the global supply chain and the Novanta Growth System, which provides access to Continuous Improvement resource. Zettlex has placed focus on increased capability and performance around processes and productivity, embracing Kaizen and similar initiatives to assist in maximising capacity through the additional use of both the Foxton and Newton locations and achieving strong On Time Delivery and Quality performance.

Employee wellbeing and the importance of the wider community continues to be recognised within the business culture with the company continuing to advocate Diversity, Engagement and Inclusion within its practices. Zettlex also continues to work with local charities within the Cambridge area. Similarly, supported by Novanta Group initiatives, Zettlex is proactive in sustainable activities with Environmental and Social Governance (ESG) performance routinely measured.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties of the company relate to competition with supply chain risks reducing as general global trading markets return to pre-pandemic levels of stability. Zettlex has not experienced any downturn in the markets in which it trades.

Similarly, Zettlex has not been materially impacted by the Ukraine war nor directly adversely affected by the recent fluctuations in interest rates due to the business not carrying debt.

Further details are included in note 19 to the financial statements.

FINANCIAL RISK MANAGEMENT

Information on financial risk management is scheduled in note 19 to the financial statements.

ON BEHALF OF THE BOARD:

S H Lane - Director

23 September 2025

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of supplier of inductive encoder products.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2024 will be £10,221,049.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

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

R J Buckley

C M Glennon

C G Ravetto

S H Lane

DIRECTORS' LIABILITIES

Novanta Inc., the ultimate parent company, indemnified one or more directors of the company against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006. Such qualifying third party indemnity provision was in force during the year and remains in place to the date of this report.

CREDITOR PAYMENT POLICY AND PRACTICE

It is the company's policy that payments to suppliers are made in accordance with those terms and conditions agreed between the company and its suppliers, provided that all trading terms and conditions have been complied with.

As at 31 December 2024, the company had an average of 54 (2023: 49) days purchases outstanding in trade creditors.

GOING CONCERN

Information on going concern is included in note 2 to the financial statements.

ENVIRONMENT, HEALTH & SAFETY

The company recognises the importance of its environmental responsibilities and designs and implements policies to reduce any damage that might be caused by the company's activities. There are various initiatives designed to minimise the company's impact on the environment.

The company recognises the importance and implications of the Health & Safety at Work Act 1974, the Environmental Protection Legislation, and all new Health & Safety legislation especially that being promulgated through EU Directives.

DISABLED EMPLOYEES

Applications for employment by disabled persons are always fully considered bearing in mind the aptitudes of the applicant concerned. In the event of members of staff being disabled every effort is made to ensure that their employment with the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

EMPLOYEE INVOLVEMENT

The company operates policies to keep employees informed on matters relevant to them as employees through regular meetings and newsletters. These meetings include updates on the financial position of the company and the group to ensure awareness of the achievement of financial goals. Employee representatives are consulted regularly on a wide range of matters affecting their interest.

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). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

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

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

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, Clarke Nicklin LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

S H Lane - Director

23 September 2025

Opinion

We have audited the financial statements of Zettlex (UK) Limited (the 'company') for the year ended 31 December 2024 which comprise the Statement of Income and Retained Earnings, Balance Sheet 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 four, 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:

Procedures to identify risks:

-

enquiring of management concerning the company's procedures relating to: identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance; detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

-

discussing among the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. As part of this discussion, we identified potential for fraud in the following areas: timing of recognition of sales and purchases and their related stock movements, posting of unusual journals; and

-

obtaining an understanding of the legal and regulatory frameworks that the company operates in, focusing on those laws and regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations of the company. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety, pensions legislation and tax legislation.

The procedures to respond to risks identified included:

-

reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations discussed above;

-

enquiring of management, concerning actual and potential litigation and claims;

-

performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

-

reviewing correspondence with HMRC;

-

testing the timing and matching of income and expense transactions relating to stock movements either side of the year end; and

-

in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulation that are not closely related to events and transactions reflected in the financial statements. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detection one resulting from an error, as fraud may involve deliberate concealment, by for example, forgery or intentional misrepresentation, or through collusion.

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.

Graham Travis FCA (Senior Statutory Auditor)

for and on behalf of Clarke Nicklin LLP

Chartered Accountants and

Statutory Auditors

Clarke Nicklin House

Brooks Drive

Cheadle Royal Business Park

Cheadle

Cheshire

SK8 3TD

23 September 2025

TURNOVER

3

21,369

16,064

Cost of sales

5,902

5,362

GROSS PROFIT

15,467

10,702

Administrative expenses

2,879

1,716

12,588

8,986

Other operating income

55

74

OPERATING PROFIT

5

12,643

9,060

Interest receivable and similar income

15

-

PROFIT BEFORE TAXATION

12,658

9,060

Tax on profit

6

1,394

999

PROFIT FOR THE FINANCIAL YEAR

11,264

8,061

Retained earnings at beginning of year

4,012

3,001

Dividends

7

(10,221

)

(7,050

)

RETAINED EARNINGS AT END OF YEAR

5,055

4,012

FIXED ASSETS

Owned

Intangible assets

8

-

-

Tangible assets

9

212

231

Right-of-use

Tangible assets

9, 14

372

-

584

231

CURRENT ASSETS

Stocks

10

1,666

1,876

Debtors

11

3,731

2,436

Cash at bank

1,896

1,167

7,293

5,479

CREDITORS

Amounts falling due within one year

12

2,555

1,642

NET CURRENT ASSETS

4,738

3,837

TOTAL ASSETS LESS CURRENT LIABILITIES

5,322

4,068

CREDITORS

Amounts falling due after more than one year

13

(269

)

-

PROVISIONS FOR LIABILITIES

15

(48

)

(56

)

NET ASSETS

5,005

4,012

CAPITAL AND RESERVES

Called up share capital

16

-

-

Retained earnings

17

5,005

4,012

SHAREHOLDERS' FUNDS

5,005

4,012

The financial statements were approved by the Board of Directors and authorised for issue on 23 September 2025 and were signed on its behalf by:

S H Lane - Director

1.	STATUTORY INFORMATION

Zettlex (UK) Limited ("the Company") is a limited company incorporated in the United Kingdom and registered in England and Wales under the Companies Act 2006. The address of its registered office and principal place of business is Faraday House, Barrington Road, Foxton, CB22 6SL.

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.

The company has chosen to early adopt FRS 102 amendments issued up to 30 September 2024, including the Periodic Review 2024 amendments.

The presentation currency of the financial statements is Sterling (£).

Going Concern

The financial statements have been prepared on a going concern basis as the directors believe that the company will be able to continue to meet its liabilities as they fall due for the foreseeable future. In drawing this conclusion, management have considered the following:

Zettlex UK Limited traded profitably through 2024 with H1 2025 seeing a continuation of this performance. At the date of signing the company continues to maintain significant cash balances. The directors expect the company to show growth in terms of both revenue and profit in 2025 against 2024 levels.

Financial Reporting Standard 102 - reduced disclosure exemptions

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

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of paragraph 3.17(d);

•

the requirements of paragraphs 26.18(b), 26.19 to 26.21 and 26.23;

•

the requirement of paragraph 33.7.

Related party exemption

The company 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.

Significant judgements and estimates

Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include:

Amortisation and depreciation of assets

The company amortises and depreciates its intangible and tangible assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic experience as well as expectations about future use and therefore requires estimates and assumptions to be applied by the directors. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes.

Stock provisioning

The company designs, manufactures and sells inductive encoder products and is subject to changing consumer demands and industry trends. As a result, it is necessary to consider the recoverability of the cost of inventory and the associated provisioning required. When calculating the inventory provision, management considers the nature and condition of the inventory, as well as applying assumptions around anticipated saleability of finished goods and future usage of raw materials. See note 10 for the net carrying amount of the inventory and associated provision.

Impairment of debtors

The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. See note 11 for the net carrying amount of the debtors and associated impairment provision.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added tax.

The majority of the company's products are sold on an ex works basis and the revenue is recognised on dispatch. The remaining revenue is recognised when title to the goods is transferred to customers and is normally upon delivery of the product to the customer.

The company recognises turnover when (a) the significant risks and rewards of ownership have been transferred to the buyer, (b) the company retains no continuing involvement or control over the goods, (c) the amount of turnover can be measured reliably, (d) it is probable that future economic benefits will flow to the entity.

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.

Computer software is being amortised evenly over its estimated useful life of three years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Long leasehold

-

in accordance with lease

Plant and machinery

-

25% on reducing balance, 20% on cost and 10% on cost

Fixtures and fittings

-

25% on reducing balance, 20% on cost and 10% on cost

Computer equipment

-

33% on cost

All new fixed assets within the fixture and fittings category are depreciated over 5 years through legacy items on reducing balance and 10 years remain

Impairment of assets

At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in the income statement.

If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in the prior years. A reversal of an impairment loss is recognised immediately in the income statement.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Stocks are recognised as an expense in the period in which the related revenue is recognised.

Cost is valued at standard. The cost of purchased items is the purchase price.

At the end of each reporting period, stocks are assessed for impairment. If an item of inventory is impaired, the identified inventory is reduced to its selling price less costs to complete and sell and an impairment charge is recognised in the income statement. Where a reversal of the impairment is recognised, the impairment charge is reversed, up to the original impairment loss, and is recognised as a credit in the income statement.

Financial instruments

The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments. The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities, including amounts owed by and to group undertakings.

Financial assets

Basic financial assets, including trade debtors, cash and bank balances and amounts owed by group undertakings, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at the market rate of interest.

Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period, financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in the income statement.

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 the income statement.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party, or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

Financial liabilities

Basic financial liabilities, including trade creditors and amounts owed to group undertakings, 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.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade 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 transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

Taxation

Taxation expense for the period comprises current and deferred tax recognised in the reporting period. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case tax is also recognised in other comprehensive income or directly in equity respectively.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is the amount of income tax payable in respect of the taxable profit for the year or prior years. Tax is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the period end.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred tax

Deferred tax arises from timing differences that are differences between taxable profits reported in the tax return and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements.

Deferred tax is recognised on all timing differences at the reporting date except for certain exceptions. Unrelieved tax losses and other deferred tax assets are only recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

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 timing difference.

Foreign currencies

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end, foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement except when deferred in other comprehensive income as qualifying cash flow hedges.

Leases

Leases are recognised as finance leases. The lease liability is initially recognised at the present value of the lease payments which have not yet been made and subsequently measured under the amortised cost method. The initial cost of the right-of-use asset comprises the amount of the initial measurement of the lease liability, lease payments made prior to the lease commencement date, initial direct costs and the estimated costs of removing or dismantling the underlying asset per the conditions of the contract.

Where ownership of the right-of-use asset transfers to the lessee at the end of the lease term, the right-of-use asset is depreciated over the asset’s remaining useful life. If ownership of the right-of-use asset does not transfer to the lessee at the end of the lease term, depreciation is charged over the shorter of the useful life of the right-of-use asset and the lease term.

Pension costs and other post-retirement benefits

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 in accruals in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.

3.

TURNOVER

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

An analysis of turnover by geographical market is given below:

2024

2023

£'000

£'000

United Kingdom

3,743

1,198

Overseas

17,626

14,866

21,369

16,064

4.	EMPLOYEES AND DIRECTORS

2024

2023

£'000

£'000

Wages and salaries

2,056

1,957

Social security costs

224

219

Other pension costs

127

105

2,407

2,281

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

2024

2023

Production

30

30

Sales

4

4

Administration

5

2

Research & Development

5

7

44

43

2024

2023

£

£

Directors' remuneration

-

-

5.	OPERATING PROFIT

The operating profit is stated after charging:

2024

2023

£'000

£'000

Depreciation - owned assets

50

43

Depreciation - assets on finance leases

102

-

Computer software amortisation

-

10

Auditors' remuneration

16

13

Foreign exchange differences

98

84

6.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2024

2023

£'000

£'000

Current tax:

UK corporation tax

1,381

995

Prior year adjustment

21

2

Total current tax

1,402

997

Deferred tax

(8

)

2

Tax on profit

1,394

999

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2024

2023

£'000

£'000

Profit before tax

12,658

9,060

Profit multiplied by the standard rate of corporation tax in the UK of 25% (2023 - 23.520%)

3,165

2,131

Effects of:

Expenses not deductible for tax purposes

4

6

Adjustments to tax charge in respect of previous periods

21

2

Patent box

(1,799

)

(1,134

)

Other permanent differences

3

(6

)

Total tax charge

1,394

999

7.

DIVIDENDS

2024

2023

£'000

£'000

Ordinary shares of £1 each

Interim

10,221

7,050

8.	INTANGIBLE FIXED ASSETS

Computer

software

£'000

COST

At 1 January 2024

and 31 December 2024

32

AMORTISATION

At 1 January 2024

and 31 December 2024

32

NET BOOK VALUE

At 31 December 2024

-

At 31 December 2023

-

9.	TANGIBLE FIXED ASSETS

Fixtures

Long

Plant and

and

Computer

leasehold

machinery

fittings

equipment

Totals

£'000

£'000

£'000

£'000

£'000

COST

At 1 January 2024

599

418

46

99

1,162

Additions

-

31

-

-

31

At 31 December 2024

599

449

46

99

1,193

DEPRECIATION

At 1 January 2024

125

196

37

99

457

Charge for year

102

48

2

-

152

At 31 December 2024

227

244

39

99

609

NET BOOK VALUE

At 31 December 2024

372

205

7

-

584

At 31 December 2023

474

222

9

-

705

Long leasehold relates to properties leased which are classified as right-of-use assets (see note 14).

10.

STOCKS

2024

2023

£'000

£'000

Stocks

1,273

1,578

Work-in-progress

393

298

1,666

1,876

Stock is stated after provision for impairment of £418,931 (2023: £301,954).