REGISTERED NUMBER: 15461420 (England and Wales)

ARMORGARD GROUP HOLDINGS LIMITED

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD 2 FEBRUARY 2024 TO 31 DECEMBER 2024

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

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

DIRECTORS:

T Mitchell

P R Mitchell

A G Mitchell

B Mitchell

G Mitchell

K Mitchell

P Mitchell

R Mitchell

S Mitchell

W Mitchell

REGISTERED OFFICE:

Units 14-16 Fareham Industrial Park

Standard Way

Fareham

Hampshire

PO16 8XB

REGISTERED NUMBER:

15461420 (England and Wales)

AUDITORS:

Rothmans Audit LLP

Statutory Auditors

Chartered Accountants

Fryern House

125 Winchester Road

Chandlers Ford

Hampshire

SO53 2DR

The directors present their strategic report of the company and the group for the period 2 February 2024 to 31 December 2024.

REVIEW OF BUSINESS

The principal activity of the Group is that of selling niche products to the construction industry and developing high quality products for secure storage and manual handling. The products are quality tested and ergonomically designed. The Group grows from strength to strength, given the innovative development of products. The Group is constantly looking to open up markets not only in the UK but overseas.

The Group has launched new innovative products, and expanded into new markets during the period. The Group's mission has continued to be security and safety on construction sites.

The outlook for the Group is positive. The directors plan to continue to develop the corporate activities over the coming year, and will continue to invest in the business to keep the Armorgard brand at the forefront of the market.

Turnover for the period was £15,727,932. The Group's profit before tax for the financial year was £455,780.

The net assets of the Group were £37,335,609.

PRINCIPAL RISKS AND UNCERTAINTIES

The main risks to the Group are that of supply chain disruption, which is mitigated by having diversified suppliers and having an adequate stock buffer, and that of fluctuations in exchange rates, which is mitigated by hedging as appropriate.

Specific risks include the impact of legislation and the loss of key personnel. The board of directors will continue to actively monitor these on an ongoing basis.

The Group's fiduciary management of cash flow is closely monitored and all risks are identified and addressed.

The other risks and uncertainties to the business relate to the Russia Ukraine conflict, and the unrest in the Middle East, but the Group is monitoring this closely. The risks surrounding the supply chain and any future trading issues with suppliers, who are likely to be impacted by the broad impacts of the geographical disruption and inflation, are also being monitored.

KEY PERFORMANCE INDICATORS

The directors monitor the business using a combination of both financial and non-financial key performance indicators.

Key performance indicators include turnover, profit before tax and net assets.

The key performance indicators tracked by the directors are included in the Review of Business above.

ON BEHALF OF THE BOARD:

T Mitchell - Director

25 September 2025

The directors present their report with the financial statements of the company and the group for the period 2 February 2024 to 31 December 2024.

INCORPORATION

The group was incorporated on 2 February 2024 .

DIVIDENDS

No dividends will be distributed for the period ended 31 December 2024.

RESEARCH AND DEVELOPMENT

The Group continues to invest in R&D activities, having its own internal team based in Fareham. The R&D work involves the design and development of innovative and market leading products for use in the construction industry.

FUTURE DEVELOPMENTS

The directors anticipate the business environment will remain competitive. They believe that the Group is in a good financial position and that the risks that have been identified are being well managed. With focus on the development of new products as well as continuing review of the state of the market and the activities of competitors, the directors are confident in the Group's ability to maintain and build on this position.

EVENTS SINCE THE END OF THE PERIOD

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

DIRECTORS

The directors who have held office during the period from 2 February 2024 to the date of this report are as follows:

T Mitchell - appointed 2 February 2024

P R Mitchell - appointed 2 February 2024

A G Mitchell - appointed 2 February 2024

B Mitchell - appointed 2 February 2024

G Mitchell - appointed 2 February 2024

K Mitchell - appointed 2 February 2024

P Mitchell - appointed 2 February 2024

R Mitchell - appointed 2 February 2024

S Mitchell - appointed 2 February 2024

W Mitchell - appointed 2 February 2024

All the directors who are eligible offer themselves for election at the forthcoming first Annual General Meeting.

FINANCIAL INSTRUMENTS RISKS

The Group has a normal level of exposure to price, credit, liquidity and cash flow risks arising from trading activities. The Group does not enter into any formally designated hedging arrangements and has a risk management programme that seeks to limit the adverse effects on the financial performance of the Group.

Price risk

The Group is exposed to the risk of stock pricing due to general economic or industry specific factors, as are all businesses in this industry. The directors mitigate this risk by ensuring they only carry stock of a suitable profile, and closely monitor the ageing of stock to ensure a suitable stock turn is maintained.

Credit risk

The directors mitigate credit risk by carrying out credit checks, regularly reviewing aged and overdue accounts, and taking out credit insurance.

Liquidity / cash flow risk

The directors manage this risk by ensuring sufficient funds are available to meet amounts due.

THIRD PARTY INDEMNITIES

Qualifying third party indemnity provisions for the benefit of the directors were in force during the period under review and remain in force as at the date of approval of the financial statements.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group 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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 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 directors are 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 each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Rothmans Audit LLP, were appointed during the period. They will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

T Mitchell - Director

25 September 2025

Opinion

We have audited the financial statements of Armorgard Group Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the period 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 period then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the 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 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 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 Group 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 Group 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 Group 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 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 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 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 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 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 directors either intend to liquidate the group or the parent 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.

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

We obtained an understanding of the legal and regulatory framework that the Group operates in, focusing on those laws and regulations that had a direct effect on the Financial Statements or that had a fundamental effect of the operations of the Group. The key laws and regulations we considered in this context included the UK Companies Act and Health & Safety regulations.

Discussions were held within 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 risk areas such as the completeness of revenue. Audit procedures were designed to ensure all of the risks were addressed.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

•

enquiring of management as to actual and potential litigation and claims; and

•

reviewing any correspondence with regulators and the Group's legal advisors.

To address the risk of fraud through management bias and override of controls, we:

•

performed analytical procedures to identify any unusual or unexpected relationships; and

•

tested journal entries to identify unusual transactions; and

•

assessed whether judgements and assumptions contained any indication of potential bias.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or 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.

Robin Lloyd (Senior Statutory Auditor)

for and on behalf of Rothmans Audit LLP

Statutory Auditors

Chartered Accountants

Fryern House

125 Winchester Road

Chandlers Ford

Hampshire

SO53 2DR

25 September 2025

TURNOVER

3

15,727,932

Cost of sales

9,137,197

GROSS PROFIT

6,590,735

Administrative expenses

6,176,312

OPERATING PROFIT

5

414,423

Interest receivable and similar income

46,748

461,171

Interest payable and similar expenses

6

5,391

PROFIT BEFORE TAXATION

455,780

Tax on profit

7

186,224

PROFIT FOR THE FINANCIAL PERIOD

269,556

Profit attributable to:

Owners of the parent

269,556

PROFIT FOR THE PERIOD

269,556

OTHER COMPREHENSIVE INCOME

Exchange adjustment on consolidation

3,448

Income tax relating to other comprehensive income

-

OTHER COMPREHENSIVE INCOME FOR THE PERIOD, NET OF INCOME TAX

3,448

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

273,004

Total comprehensive income attributable to:

Owners of the parent

273,004

FIXED ASSETS

Intangible assets

9

26,748,285

Tangible assets

10

935,603

Investments

11

-

27,683,888

CURRENT ASSETS

Stocks

12

5,267,124

Debtors

13

5,751,254

Cash at bank and in hand

6,167,376

17,185,754

CREDITORS

Amounts falling due within one year

14

5,878,701

NET CURRENT ASSETS

11,307,053

TOTAL ASSETS LESS CURRENT LIABILITIES

38,990,941

CREDITORS

Amounts falling due after more than one year

15

(347,132

)

PROVISIONS FOR LIABILITIES

18

(1,308,200

)

NET ASSETS

37,335,609

CAPITAL AND RESERVES

Called up share capital

19

910

Other reserves

20

37,061,695

Retained earnings

20

273,004

37,335,609

The financial statements were approved by the Board of Directors and authorised for issue on 25 September 2025 and were signed on its behalf by:

T Mitchell - Director

FIXED ASSETS

Intangible assets

9

-

Tangible assets

10

-

Investments

11

39,878,605

39,878,605

CREDITORS

Amounts falling due within one year

14

2,816,000

NET CURRENT LIABILITIES

(2,816,000

)

TOTAL ASSETS LESS CURRENT LIABILITIES

37,062,605

CAPITAL AND RESERVES

Called up share capital

19

910

Other reserves

20

37,061,695

37,062,605

Company's profit for the financial year

-

The financial statements were approved by the Board of Directors and authorised for issue on 25 September 2025 and were signed on its behalf by:

T Mitchell - Director

Called up

share

Retained

Other

Total

capital

earnings

reserves

equity

£

£

£

£

Changes in equity

Share issue

910

-

37,061,695

37,062,605

Total comprehensive income

-

273,004

-

273,004

Balance at 31 December 2024

910

273,004

37,061,695

37,335,609

Called up

share

Retained

Other

Total

capital

earnings

reserves

equity

£

£

£

£

Changes in equity

Share issue

910

-

37,061,695

37,062,605

Balance at 31 December 2024

910

-

37,061,695

37,062,605

Cash flows from operating activities

Cash generated from operations

1

1,474,366

Interest paid

(1,383

)

Tax refund

121,509

Net cash from operating activities

1,594,492

Cash flows from investing activities

Purchase of tangible fixed assets

(218,522

)

Cash acquired on acquisition

4,786,883

Interest received

4,523

Net cash from investing activities

4,572,884

Increase in cash and cash equivalents

6,167,376

Cash and cash equivalents at beginning of period

2

-

Cash and cash equivalents at end of period

2

6,167,376

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

£

Profit before taxation

455,780

Depreciation charges

183,454

Loss on disposal of fixed assets

6,012

Amortisation

1,657,915

Finance costs

5,391

Finance income

(46,748

)

2,261,804

Increase in stocks

(114,435

)

Decrease in trade and other debtors

1,729,692

Decrease in trade and other creditors

(2,402,695

)

Cash generated from operations

1,474,366

2.	CASH AND CASH EQUIVALENTS

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

Period ended 31 December 2024

31/12/24

2/2/24

£

£

Cash and cash equivalents

6,167,376

-

3.	ANALYSIS OF CHANGES IN NET FUNDS

Acquisition

Other

of

non-cash

At 2/2/24

Cash flow

subsidiary

changes

At 31/12/24

£

£

£

£

£

Net cash

Cash at bank

and in hand

-

1,380,493

4,786,883

6,167,376

-

1,380,493

4,786,883

6,167,376

Debt

Debts falling due

within 1 year

-

-

-

(2,014

)

(2,014

)

Debts falling due

after 1 year

-

-

(356,821

)

9,689

(347,132

)

-

-

(356,821

)

7,675

(349,146

)

Total

-

1,380,493

4,430,062

7,675

5,818,230

1.	STATUTORY INFORMATION

Armorgard Group Holdings Limited is a private company, limited by shares, incorporated in England and Wales. The registered office address is units 14-16 Fareham Industrial Park, Standard Way, Fareham, Hampshire, PO16 8XB. The company's registered number is 15461420.

The principal activity of the Group is that of the manufacture of fabricated metal products.

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 presentation currency is £ sterling.

Going concern

The financial statements have been prepared on a going concern basis.

Financial Reporting Standard 102 - reduced disclosure exemptions

The parent 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 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c); and

•

the requirement of paragraph 33.7.

Basis of consolidation

The group financial statements consolidate the financial statements of Armorgard Group Holdings Limited and all its subsidiary undertakings. These financial statements are made up to 31 December 2024.

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.

Unless otherwise stated, the acquisition method of accounting has been adopted. Under this method the results of the subsidiary companies acquired or disposed of in the year are included in the Consolidated Income Statement from the date of acquisition or up to the date of disposal.

Investments in associate undertakings are recognised using the equity accounting method. After initial investment being recognised at cost, the share of profit or loss, other comprehensive income and possible impairment losses will account for an increase/decrease in the net book value of the investment.

Significant judgements and estimates

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date, and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates.

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Leases

A lease that does not transfer substantially all of the risks and rewards of ownership is classified as an operating lease and is therefore not included on the balance sheet.

Intangibles and goodwill

On acquisition, the directors use their judgement to determine the fair value of any intangibles to recognise separately from goodwill. This is based on their knowledge and experience of the sector.

Other key sources of estimation uncertainty

Useful life of goodwill

A reliable estimate is made of the useful life of goodwill arising on acquisitions. The estimate is based on the directors knowledge of the underlying company and sector.

Turnover

Turnover represents net sales during the period (excluding Value Added Tax) adjusted for accrued and deferred income where applicable.

Turnover is derived from the sale of secure boxes and is recognised upon despatch of the goods.

Intangible fixed assets

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

Patents and licenses are amortised over their estimated useful life of 5 - 10 years.

Goodwill is amortised over its estimated useful life of 10 years.

Tangible fixed assets

Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses.

The cost of tangible fixed assets initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in a manner intended by management.

Depreciation is provided to write off the cost, less estimated residual values, evenly over their expected useful lives. It is calculated at the following rates:

Asset class

Depreciation method and rate

Leasehold improvements

Over the period of the lease

Furniture, fittings and equipment

20 - 25% straight line

Motor vehicles

20 - 25% straight line

The asset's residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.

Tangible fixed assets are derecognised on disposal or when no future economic benefits are expected. On disposal, the difference between the net disposal proceeds and the carrying amount is recognised in the Consolidated Income Statement.

Investments

Investments in subsidiary and associate undertakings are recognised at cost.

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a 'weighted-average cost' basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Consolidated Income Statement.

Financial instruments

The Group only has financial assets and liabilities of the kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and debt instruments are subsequently measured at amortised cost.

Taxation

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

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

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

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

Research and development

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

Foreign currencies

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

Pension costs and other post-retirement benefits

The Group operates a defined contribution pension scheme. Contributions payable to the Group's pension scheme are charged to the Consolidated Income Statement in the period to which they relate.

Leasing commitments

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

3.

TURNOVER

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

An analysis of turnover by geographical market is given below:

£

United Kingdom

12,183,002

Europe

1,903,653

United States of America

1,324,120

Canada

317,157

15,727,932

4.	EMPLOYEES AND DIRECTORS

£

Wages and salaries

2,516,255

Social security costs

292,658

Other pension costs

49,627

2,858,540

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

Operations

17

Administration and support

11

Research and development

5

Sales

13

Marketing

3

49

£

Directors' remuneration

74,096

Directors' pension contributions to money purchase schemes

101

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1

5.	OPERATING PROFIT

The operating profit is stated after charging:

£

Depreciation - owned assets

183,454

Loss on disposal of fixed assets

6,012

Goodwill amortisation

1,377,815

Patents and licences amortisation

280,100

Auditors' remuneration

14,000

Foreign exchange differences

14,199

Operating lease expense

364,957

Research and development cost

170,323