Registered number: 03729504
FOR THE YEAR ENDED 31 DECEMBER 2024
COMPANY INFORMATION
CONTENTS
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
Introduction
The directors present their report and financial statements for the year ended 31 December 2024.
Business review
2024 saw a small slow down in the automotive sector. The reorganisation that was developing in the automotive sector has transpired into a hesitation from the consumer to purchase electric vehicles in the volumes expected.
However, although some customers had to change their development plans and cut costs, we were able to secure work in new and growing clients to end the year better than forecast.
Tecosim UK changed its name in early 2024 to Tecosim Ltd, dropping the previous association with only simulations as the UK business [along with its associated team in Romania] has diversified into CAD, Engineering, Project Management, Test and Validation.
A notable and exciting change in 2024 for the business was the sale of Tecosim Group to Hinduja Tech, a part of the Hinduja Group. After a period of discussion, the group of Tecosim was purchased to augment the growing capability of Hinduja Tech globally.
With this change, Tecosim is now part of a much larger engineering services team, able to offer a wider and diverse capability, from single component engineering through to full vehicle development.
Digitalization is still changing the automobile sector, emphasizing data-driven services, in-car infotainment systems, and connected cars. New products, derivatives and facelifts are needed by the market, with customers focused on Software Defined Vehicles solutions.
Mobility-as-a-service (MaaS) is still growing strong, with a focus on shared mobility solutions including ride-hailing, car-sharing, and micro-mobility choices. Urbanization, environmental concerns, and the need for practical, affordable transportation options are the main drivers of this movement and Tecosim has been at the forefront of this sector for some years, with expertise and knowledge on hand for customer programs.
Our new shareholders and directors are appreciative of the effort and commitment from our team as always, even more so when we have challenging times. They consistently demonstrate innovation, determination, and an ongoing commitment to quality. In addition, we have always tried to ensure our team is in tune with the ever-changing customer needs, delivering flexibility and reliability in challenging projects.
2025 will see the implementation of a new business development initiative and this has already given some positive new direction to the business
The overall program of work for 2024 remained diverse, split between all aspect of engineering and offering continued CAD, CAE, Engineering, Testing, Prototyping and Project Management.
There is a continued focus on the integration of AI and Machine Learning along with other internal research projects – much of this is confidential of course as it give our teams and client engineering team a competitive edge.
A number of new business initiatives are being worked on for 2025. Some current customer work will be pushed into 2026, where it will still need to be delivered, possibly on a more compressed time scale. Tecosim will continue to support the clients with their changing plans and needs and to support where there may be delivery gaps for the client engineering programs. This is one of our USPs, providing a flexible and reliable service to our clients.
As with prior reporting periods, the business still maintains low administrative cost and flexibility in the business structure to allow for future change/growth and focused in 2024 on continued optimisation of the structure and workflow. This included the introduction of AI into business processes to speed up and automate wherever possible, including the recruitment phase.
The directors present their report and financial statements for the year ended 31 December 2024.
Business review
2024 saw a small slow down in the automotive sector. The reorganisation that was developing in the automotive sector has transpired into a hesitation from the consumer to purchase electric vehicles in the volumes expected.
However, although some customers had to change their development plans and cut costs, we were able to secure work in new and growing clients to end the year better than forecast.
Tecosim UK changed its name in early 2024 to Tecosim Ltd, dropping the previous association with only simulations as the UK business [along with its associated team in Romania] has diversified into CAD, Engineering, Project Management, Test and Validation.
A notable and exciting change in 2024 for the business was the sale of Tecosim Group to Hinduja Tech, a part of the Hinduja Group. After a period of discussion, the group of Tecosim was purchased to augment the growing capability of Hinduja Tech globally.
With this change, Tecosim is now part of a much larger engineering services team, able to offer a wider and diverse capability, from single component engineering through to full vehicle development.
Digitalization is still changing the automobile sector, emphasizing data-driven services, in-car infotainment systems, and connected cars. New products, derivatives and facelifts are needed by the market, with customers focused on Software Defined Vehicles solutions.
Mobility-as-a-service (MaaS) is still growing strong, with a focus on shared mobility solutions including ride-hailing, car-sharing, and micro-mobility choices. Urbanization, environmental concerns, and the need for practical, affordable transportation options are the main drivers of this movement and Tecosim has been at the forefront of this sector for some years, with expertise and knowledge on hand for customer programs.
Our new shareholders and directors are appreciative of the effort and commitment from our team as always, even more so when we have challenging times. They consistently demonstrate innovation, determination, and an ongoing commitment to quality. In addition, we have always tried to ensure our team is in tune with the ever-changing customer needs, delivering flexibility and reliability in challenging projects.
2025 will see the implementation of a new business development initiative and this has already given some positive new direction to the business
The overall program of work for 2024 remained diverse, split between all aspect of engineering and offering continued CAD, CAE, Engineering, Testing, Prototyping and Project Management.
There is a continued focus on the integration of AI and Machine Learning along with other internal research projects – much of this is confidential of course as it give our teams and client engineering team a competitive edge.
A number of new business initiatives are being worked on for 2025. Some current customer work will be pushed into 2026, where it will still need to be delivered, possibly on a more compressed time scale. Tecosim will continue to support the clients with their changing plans and needs and to support where there may be delivery gaps for the client engineering programs. This is one of our USPs, providing a flexible and reliable service to our clients.
As with prior reporting periods, the business still maintains low administrative cost and flexibility in the business structure to allow for future change/growth and focused in 2024 on continued optimisation of the structure and workflow. This included the introduction of AI into business processes to speed up and automate wherever possible, including the recruitment phase.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The performance of 2024 will give confidence that through challenging times, a solid result is maintained as the business continues to remain debt free and cash positive.
The US activity spun out from the UK enterprise continues to develop and the US based customers have been handed over to the US business completely.
Principal risks and uncertainties
The management of the business and the nature of the company’s strategy are subject to a number of risks. The directors have set out the principal risks and how these are mitigated below:
Economic climate
Global vehicle sales increased in 2024, 2-2.5% from 2023, restoring pre-pandemic sales levels. Inventory levels also rose which stabilised the pricing spike seen in 2023.
EV sales accounted for +20% of global vehicle sales and is predicted to hit 20m units in 2025. This reinforces the decisions within client OEMs for investing in their EV product line up and our strength for engineering derivative products for our customers.
There is still a period of transition to happen in 2025/26, with the switch from internal combustion to electric in progress and the potential for hybrids and other fuels to also be included in the mix, which could see the need for quick introduction of alternatives into product line-up.
The UK economy had a year of recovery and consolidation – the economy grew in 2024 by 1.1%, with strong uplift in Q1 but modest growth by Q3 and stabilisation in Q4 – this pattern was reflected in the customer performance during the year.
Competition
The markets for engineering and automotive development are highly competitive. To satisfy customers and keep ahead of the competition, constant development and change are necessary. The team works hard to continuously develop and improve our tools, processes and know-how because they are still essential to our ability to be our customers' go-to supplier.
And now with the new group offering, we are engaged in discussions with client discussions on much broader and more complex program needs.
In order to continue being a dependable partner to our clients, we are now able to offer our previously proven quality initiatives with an expansion of capability and also a larger potential for best cost country sourcing.
Financial risk
The main risks arising from the company’s financial instruments are liquidity risk and credit risk with currency and interest risks being deemed immaterial.
Through 2024, there was a small but continued risk came from delayed customer payments. However, the business team worked hard in 2024 to ensure that these risks were minimised and all accounts were settled during the year with no bad debt at the year end. This meant that the business did not need to rely on any external financial support.
Liquidity
The company is part now part of Hinduja Tech, where liquidity is managed and reviewed at a group level. At all times, the business operates at optimal liquidity.
The US activity spun out from the UK enterprise continues to develop and the US based customers have been handed over to the US business completely.
Principal risks and uncertainties
The management of the business and the nature of the company’s strategy are subject to a number of risks. The directors have set out the principal risks and how these are mitigated below:
Economic climate
Global vehicle sales increased in 2024, 2-2.5% from 2023, restoring pre-pandemic sales levels. Inventory levels also rose which stabilised the pricing spike seen in 2023.
EV sales accounted for +20% of global vehicle sales and is predicted to hit 20m units in 2025. This reinforces the decisions within client OEMs for investing in their EV product line up and our strength for engineering derivative products for our customers.
There is still a period of transition to happen in 2025/26, with the switch from internal combustion to electric in progress and the potential for hybrids and other fuels to also be included in the mix, which could see the need for quick introduction of alternatives into product line-up.
The UK economy had a year of recovery and consolidation – the economy grew in 2024 by 1.1%, with strong uplift in Q1 but modest growth by Q3 and stabilisation in Q4 – this pattern was reflected in the customer performance during the year.
Competition
The markets for engineering and automotive development are highly competitive. To satisfy customers and keep ahead of the competition, constant development and change are necessary. The team works hard to continuously develop and improve our tools, processes and know-how because they are still essential to our ability to be our customers' go-to supplier.
And now with the new group offering, we are engaged in discussions with client discussions on much broader and more complex program needs.
In order to continue being a dependable partner to our clients, we are now able to offer our previously proven quality initiatives with an expansion of capability and also a larger potential for best cost country sourcing.
Financial risk
The main risks arising from the company’s financial instruments are liquidity risk and credit risk with currency and interest risks being deemed immaterial.
Through 2024, there was a small but continued risk came from delayed customer payments. However, the business team worked hard in 2024 to ensure that these risks were minimised and all accounts were settled during the year with no bad debt at the year end. This meant that the business did not need to rely on any external financial support.
Liquidity
The company is part now part of Hinduja Tech, where liquidity is managed and reviewed at a group level. At all times, the business operates at optimal liquidity.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Credit risk
The principal risk arises from the company’s trade debtors. The company utilises an external credit service to check customer credit performance and has a warning system setup to provide alerts on client credit conditions.
In addition, a monitoring and action process is followed for late payments to minimise the exposure.
Financial key performance indicators
The directors use the following key performance indicators to monitor the business: -
2024 2023
£ £
Turnover 16,100,661 17,111,847
Gross Profit 1,852,848 1,715,630
Profit before tax 450,433 363,518
Other key performance indicators
In addition to the above the company’s other key performance indicators include the satisfaction and acknowledgement of yearly performance from the holding company, number of employees, cash flow and customer feedback.
The principal risk arises from the company’s trade debtors. The company utilises an external credit service to check customer credit performance and has a warning system setup to provide alerts on client credit conditions.
In addition, a monitoring and action process is followed for late payments to minimise the exposure.
Financial key performance indicators
The directors use the following key performance indicators to monitor the business: -
2024 2023
£ £
Turnover 16,100,661 17,111,847
Gross Profit 1,852,848 1,715,630
Profit before tax 450,433 363,518
Other key performance indicators
In addition to the above the company’s other key performance indicators include the satisfaction and acknowledgement of yearly performance from the holding company, number of employees, cash flow and customer feedback.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the company's financial statements and then apply them consistently;
∙make judgments 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 to 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.
The profit for the year, after taxation, amounted to £395,440 (2023 - £276,558).
The directors do not recommend the payment of a final dividend.
The directors who served during the year were:
The outlook for 2025 is favourable, with continued projects and customer relationships from 2024. Tecosim will continue to support the clients with their changing plans and needs and to support where there may be delivery gaps for the client engineering programs.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The auditors, Venthams, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TECOSIM LIMITED
We have audited the financial statements of Tecosim Limited (the 'company') for the year ended 31 December 2024, which comprise the Statement of Income and Retained Earnings, the Balance Sheet, the Statement of Cash Flows and the related notes, 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).
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 United Kingdom, including the Financial Reporting Council'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.
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.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. 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. 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 course of 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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TECOSIM LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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 Directors' Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TECOSIM LIMITED (CONTINUED)
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 an Auditors' Report 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:
Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.
The following laws and regulations were identified as being of significance to the entity:
- Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation.
- Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements include health and safety legislation.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
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 Auditors' Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TECOSIM LIMITED (CONTINUED)
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 an Auditors' Report 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.
for and on behalf of
Chartered Accountants
Statutory Auditor
Millhouse
32 - 38 East Street
Essex
SS4 1DB
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STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2024
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BALANCE SHEET
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
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ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Tecosim Limited is a private company limited by shares, incorporated in England and Wales. Its registered office is 22 Seax Court, Southfields Industrial Park, Basildon, Essex SS15 6SL.
The principal activity of the company continued to be the provision of engineering design and consultancy services.
The principal activity of the company continued to be the provision of engineering design and consultancy services.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The directors have considered in detail and, taking into account a period exceeding 12 months from the date of approval of these financial statements, the directors have a reasonable expectation that it has adequate resources to continue in operational existence for the foreseeable future. These financial statements have therefore been prepared on the going concern basis.
Functional and presentation currency
Transactions and balances
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
All fixed assets with a cost in excess of £1,000 are capitalised.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's Balance Sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
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 profit or loss.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Basic financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after the deduction of all its liabilities.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or cancelled.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Revenue on construction contracts is recognised based on the percentage of completion method.
Included in creditors, shown as payments received on account, is £1,144,276, (2023: £1,481,759) in respect of revenue received in advance on engineering contracts.
Analysis of turnover by country of destination:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
12.Taxation (continued)
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