ACCOUNTS - Final Accounts preparation

An analysis of turnover by class of business is as follows:

Registered number: 06361441

CALLEN-LENZ ASSOCIATES LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

CALLEN-LENZ ASSOCIATES LIMITED

COMPANY INFORMATION

Directors	A James
	M Weinel
	M Barratt
	M Foster
	D Holmes


Registered number	06361441


Registered office	3 The Old Barns
	Manor Farm
	Chilmark
	Salisbury
	Wiltshire
	SP3 5AF

CALLEN-LENZ ASSOCIATES LIMITED

CONTENTS

	Page
Group strategic report	1 - 7
Directors' report	8 - 11
Independent auditors' report	12 - 16
Consolidated statement of comprehensive income	17
Consolidated balance sheet	18
Company balance sheet	19 - 20
Consolidated statement of changes in equity	21
Company statement of changes in equity	22
Consolidated statement of cash flows	23 - 24
Consolidated analysis of net debt	25
Notes to the financial statements	26 - 53

CALLEN-LENZ ASSOCIATES LIMITED

GROUP STRATEGIC REPORT

FOR THE PERIOD ENDED 31 DECEMBER 2024

Introduction

The directors present their strategic report for the 6 month period from 1 July 2024 to 31st December 2024. This 6 month period aligns future accounts to the same statutory dates as BAE Systems plc Group (“BAE Systems Group” or “Group”) of companies.
Principal activity
The principal activities of Callen-Lenz Associates Limited (the “Company”) is the design, development and manufacture of innovative uncrewed aerial systems (“UAS”) and the provision of associated technical and consulting services.

Business review

Callen-Lenz Associates designs, develops and manufactures novel UAS, delivering solutions tailored to the needs of our customers. The Company operates through four core business streams; Operational Services, Technical Services, Products and Platforms.
Key highlights for the 6 months period to December 2024 included:
- The business continued to deliver on its contracts to customers; with revenue of £37.8mil and headcount has grown from 161 heads to 188.
- Continued successful delivery of products to customers leading to anticipated further orders in Q1 2025.
- Continued demonstration of new platform capabilities in response to emerging customer requirements.

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CALLEN-LENZ ASSOCIATES LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE PERIOD ENDED 31 DECEMBER 2024

Principal risks and uncertainties

The Company’s principal risks are identified below, along with their potential impact on the Company and how these are currently being managed:
The Company’s potential customer base includes governments – primarily the UK
Description: Levels of defence spending by governments are difficult to predict and can fluctuate depending on changes of government policy, other political considerations, budgetary constraints, specific threats to national security and macro-economic conditions. From time to time, there have been constraints on government expenditure in a number of the Company’s principal potential customer markets.
Impact: Lower defence spending by the Company’s potential customers could have a material adverse effect on the Company’s business, results of operations, financial condition and prospects.
Mitigation: Many of the countries in which the Company may operate have announced increased, or are making plans to increase, spending to address the elevated threat environment. This includes a NATO agreed commitment for its members to invest 5% of GDP into defence and security related spending by 2035. Whilst governments face global economic and fiscal pressures, the commitment to defence in the Company’s major markets remains robust.
The Company’s principal defence markets have a significant and sustained commitment to defence and security – see ‘Our markets’ on pages 18 to 19 of the BAE Systems plc’s 2024 Annual Report (available at: www.baesystems.com/investors).
The Company benefits from Group’s established positions on long-term programmes in its principal potential customer markets. The Company also seeks to have a more diverse product portfolio which can be marketed across a range of commercial markets.
The Company could be negatively impacted by issues in its supply chain
Description: The Company is dependent upon the delivery of services and materials by suppliers and the assembly of components and subsystems by subcontractors used in its products in a timely and satisfactory manner, on satisfactory commercial terms and in full compliance with applicable terms and conditions.
This can be exacerbated where the Company is dependent on either one or a limited number of suppliers. Some of the Company’s suppliers or subcontractors may be impacted by the economic environment (including inflationary pressures and material shortages) which could impair their ability to meet their obligations to the Company and to supply on satisfactory commercial terms.
Impact: A failure by one or more of the Company’s suppliers to provide the agreed-upon materials, components or products or perform the agreed-upon services, on a timely basis, at the agreed price, according to specifications (including compliance with regulatory requirements) or at all may adversely affect the Company’s ability to perform its obligations, result in additional costs or delays, require the Company to transition work to other companies (resulting in further additional costs and delay) and/or result in penalties under, or the termination of, future customer contracts.
This impact is heightened where a supplier is a sole supplier or one of a small number of suppliers. Additionally, the Company could be adversely affected by actions, or issues experienced by, the Company’s suppliers which are outside its control, such as misconduct and reputational issues involving the Company’s suppliers, which could subject the Company to liability or adversely affect its ability to compete for contracts. Any of the foregoing could have a material adverse effect on the Company’s business, results of operations, financial condition, prospects and reputation.
Mitigation: The Company’s procurement function establishes and manages enduring end-to-end integrated supplier arrangements. Risk-based due diligence and audit activity is undertaken for each supplier whom the

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CALLEN-LENZ ASSOCIATES LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE PERIOD ENDED 31 DECEMBER 2024

Company engages. Once a supplier has been approved, and a contract has been executed, the procurement function continues to monitor that supplier in close alignment with the commercial function.
The Group’s supply chain risk management programme is working toward providing an enterprise-wide view of supplier risk, contributing to the continuity of supply and enabling better intelligence of sub-tier supply chain risk. The Company seeks to manage inflation risk through supplier cost management activity and through its long-term supplier agreements.
The Company could be negatively impacted by threats to the security of its information technology and operational technology systems
Description: It is critical that the Company’s information technology and operational technology (“IT & OT”) infrastructure, as well as the products and services it sells, are cyber resilient and the proprietary, classified, confidential or otherwise protected information, intellectual property and personal data held and processed on them are appropriately secured. Cyber security threats are continuous and evolving, and vary from attacks common to most industries, including those originating both externally and internally, to those from more advanced and persistent, highly organised adversaries, including nation states.
The war in Ukraine has also increased Russian-aligned hacktivist activity against pro-Ukraine nations and their defence industries. The cyber security threats faced by the Company include (but are not limited to): an attack impacting the availability of the Company’s IT & OT infrastructure and systems and/or those of its potential customers, partners and suppliers; unlawful attempts to gain access to the Company’s proprietary, classified, confidential or otherwise protected information, intellectual property and personal data, and that held or generated by the Company on behalf of its potential customers, partners and suppliers; and compromise of products and services for the purposes of sabotage or to disable or deny their use and/or alter their performance characteristics. The Company might also be exposed to cyber security risks through an attack on the Company’s supply chain.
Impact: Given the nature and scope of cyber attacks, it is possible that the Company is unable to defend itself against all cyber-attacks, that unknown vulnerabilities could be exploited or that the Company may otherwise be unable to mitigate customer losses and other potential liabilities (including potential liabilities related to privacy and intellectual property). The Company could potentially be subject to:
(a) production downtimes;
(b) operational delays;
(c) other detrimental impacts to its operations or ability to provide products and services to customers;
(d) the compromise, misappropriation, destruction or corruption of the Company’s proprietary, classified, confidential or otherwise protected information, intellectual property and personal data, and that held or generated by the Company on behalf of its potential customers, partners and suppliers;
(e) security breaches;
(f) other manipulation or improper use of the Company’s or third-party systems, networks or products; and/or
(g) financial losses from remedial actions, loss of business, or potential liability, penalties, fines and/or damages.

Any of these could have a material adverse effect on the Company’s business, results of operations, financial condition, prospects and reputation.
Mitigation: The security of the BAE Systems Group’s products and services, data, facilities and IT & OT infrastructure is regularly considered by the BAE Systems Group’s Board and senior management and underpins the BAE Systems Group’s strategy and influences its engineering, technology and digital strategies. Education and awareness to embed a strong cyber security culture across the Company is another vital part of its preventative activities. Employees are subject to applicable mandatory training which, depending on role, covers cyber security, physical security, document marking, security of export-controlled information, and personal data protection.
The Cyber Incident Response plan feeds into the BAE Systems Group’s crisis management plan and regular exercises are conducted across the business to test the Cyber Incident Response plan, including up to the BAE

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CALLEN-LENZ ASSOCIATES LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE PERIOD ENDED 31 DECEMBER 2024

Systems Group’s Executive Committee. The BAE Systems Group purchases cyber insurance; however, as with all insurance, it does not provide full cover against all potential loss scenarios. To mitigate the cyber security risk posed by suppliers, the Company includes cyber security related obligations in its contracts where relevant. Cyber security risk is constantly reviewed and an agile, proactive, approach to mitigating the risk is taken.
The Company’s strategy is dependent on its ability to recruit and retain people with appropriate talent and skills
Description: Competition for the people the Company needs to deliver its strategy, including those with innovative technological capabilities, is high. Competition may be intensified by nationality and regulatory restrictions (including the requirement for security clearances for certain roles), and exacerbated by macroeconomic, industry and labour market conditions more generally.
Impact: The loss of key employees or inability to attract the appropriate people on a timely basis could adversely impact the Company’s ability to deliver its strategy, meet its business plan and deliver on its contractual commitments, which accordingly could have a material adverse effect on the Company’s business, results of operations, financial condition and prospects.
Mitigation: The Company recognises that its employees are key to delivering its strategy and business plan and focuses on developing the existing workforce and hiring talented people to meet current and future requirements. The Company recruits apprentices and graduates and, to maximise the contribution that its workforce can make to the performance of the business, has an effective through career capability development programme. In order to seek to maximise its talent pool, the Company is committed to creating a diverse and inclusive environment for its employees.
The Company is subject to risk from a failure to comply with laws and regulations
Description: The Group operates in a highly regulated environment, across UK and US jurisdictions and is therefore subject to a variety of legal, regulatory and litigation risks. These risks relate to (among other things) trade controls, intellectual property rights, data protection and security, contract-related claims, government contracts (including audits and reviews of those contracts), taxes, environmental matters, sanctions, product safety and reliability, health and safety, employment matters, competition laws and laws governing improper business practices (such as money laundering, false accounting, anti-bribery and corruption, and anti-boycott laws). These laws and regulations may be interpreted in different ways, conflict and/or change from time to time (as may any related interpretations and guidance). For example, export restrictions could become more stringent and political factors or changing international circumstances could result in the Company being unable to obtain or maintain necessary export licences.
Impact: Changes in laws and regulations (or the interpretation thereof) could result in higher compliance costs and impact future customer or supplier contracts. Uncertainty relating to laws and regulations may also affect how the Company conducts its business and could limit its ability to enforce its rights.
A breach of applicable legislation and/or regulations by the Company, its employees, sales representatives, marketing advisers or others working on its behalf could result in significant fines, penalties or other damages and/or the suspension or debarment of the Company from government contracts or the suspension of the Company’s export privileges. If future customers or other third parties were harmed by the conduct of members of the Company, this may also give rise to legal proceedings, including class actions.
Other legal disputes may also arise between members of the Company and third parties relating to matters such as breaches or enforcement of legal rights or obligations arising under contracts, statutes or common law. Adverse findings in any such matters may result in members of the Company being liable to third parties or may result in rights not being enforced or not being enforced in the manner intended or desired. Any of the foregoing could have a material adverse effect on the Company’s business, results of operations, financial condition, prospects and reputation.
Mitigation: The Group has a well-established legal and regulatory compliance structure and resource aimed at

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CALLEN-LENZ ASSOCIATES LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE PERIOD ENDED 31 DECEMBER 2024

ensuring adherence to regulatory requirements and identifying restrictions that could adversely impact the Company’s activities as it looks to operate in jurisdictions outside of the UK. Internal and external market risk assessments form an important element of ongoing corporate development and training processes.
A uniform global policy and process for the appointment of advisers engaged in business development is in effect and an export control policy mandates compliance with all applicable trade controls requirements. It is important that the Company maintains a culture in which it focuses on responsible business behaviours and that all employees act in accordance with the requirements of the BAE Systems Group’s policies, including the Code of Conduct, at all times.
Accordingly, it continues to reinforce the BAE Systems Group’s ethics programme globally, supporting employees in making ethical decisions and embedding responsible business practices. The Company’s legal support and, where appropriate, external counsel manage litigation and advise on the management of associated impacts.
Section 172(1) statement
This statement contains an overview of how the directors have performed their duty to promote the success of the Company as set out in Section 172(1) of the UK’s Companies Act 2006. That section requires a director of a company to act in the way he considers, in good faith, would most likely promote the success of the company for the benefit of its shareholders. In doing this, the director must have regard, amongst other matters, to:
a) the likely consequences of any decision in the long term,
b) the interests of the Company's employees,
c) the need to foster the Company's business relationships with suppliers, customers and others,
d) the impact of the Company's operations on the community and the environment,
e) the desirability of the Company maintaining a reputation for high standards of business conduct, and
f) the need to act fairly as between members of the Company.
Decision making
The BAE Systems Group Operational Framework (the “Operational Framework”) sets out the principles of good governance to which BAE Systems Group subsidiaries are required to adhere, together with BAE Systems Group’s values and applicable policies. Decisions affecting a subsidiary are required to be taken in line with the Operational Framework, including in accordance with applicable delegations of authority. Pursuant to the Operational Framework, BAE Systems’ businesses each produce a strategic plan, a financial forecast for the current year and financial projections for the next five years. The directors of the Company contribute towards this process for the respective businesses of the Company for which they are responsible and are also responsible for identifying and managing principal and emerging risks in such businesses. In so doing, the directors have regard to a variety of matters including the interests of various stakeholders, the consequences of their decisions in the long term and the long term reputation of both the Company and the BAE Systems Group.
Employees
The safety, wellbeing, skills, capabilities and commitment of the Company’s people are critical to ensuring the long-term sustainability of the Company’s business and delivering the innovation needed to solve the Company’s future customers’ complex challenges. Effective engagement enables our employees to contribute to improving business performance and helps the Company to create an environment in which everyone is safe, valued and can fulfil their potential.
The Company continued to use a range of channels to engage with employees throughout the period, as well as keeping employees informed about the performance, developments and prospects of the business and the BAE Systems Group. This included in-person and virtual meetings, newsletters briefings, events and regular leadership updates through videos and events throughout the period (including in relation to financial and business performance); and engagement through the email systems. These engagement activities form part of the Company’s implementation of the BAE Systems Group-wide employee engagement processes and policies which are described on page 24 BAE Systems plc’s 2024 Annual Report (available at: www.baesystems.com/investors). Pursuant to the BAE Systems Group’s People Policy, directors and employees

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CALLEN-LENZ ASSOCIATES LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE PERIOD ENDED 31 DECEMBER 2024

are required to contribute to creating an engaged and inclusive working environment, where individuals are respected and where the value of a diverse workforce is recognised.
Fostering business relationships with suppliers, customers and others
The directors recognise that fostering business relationships with key stakeholders, such as potential future customers and suppliers, is essential to the Company’s success. The Company is fostering key relationships with its customers, suppliers and industry partners which will help us to create best-in-class, cost-effective equipment, goods, services and solutions.
Strong and collaborative relationships with the Group’s principal customers help it to identify the Company’s customer’s potential requirements and help position the Company as a trusted provider. The directors and their teams are in contact with the principal potential customer base of the Company.
The Company, through its procurement function, is working with its suppliers and their supply chains to provide services that ensure it will meet its anticipated future customers’ requirements. Meetings are held with key suppliers to foster deeper relationships with businesses in the supply chain and develop strategic relationships. The Company’s supply chain function continues to actively manage supply lead times against demand requirements.
The community and the environment
The directors recognise the importance of leading a company that not only generates value for shareholders but also contributes to wider society. The Company implements the requirements of the BAE Systems Group’s Community Investment Policy, which looks to ensure that BAE Systems Group builds and nurtures mutually beneficial relationships between its business, its people and local stakeholders. Giving back to the communities in which BAE Systems Group operates, and to charities that have meaning to our business, is vitally important to our BAE Systems Group and its subsidiaries and employees, allowing it to make a positive difference and have an impact where it counts.
Maintaining a reputation for high standards of business conduct
The BAE Systems Group aims to be a recognised leader in business conduct which helps it to earn and maintain stakeholder trust and sustain business success. The directors consider it fundamental to maintain a culture focused on embedding responsible business behaviours. All employees of the Company are expected to act in accordance with the requirements of applicable BAE Systems Group policies, including the Code of Conduct, at all times. As well as being the right thing to do, this reduces the risk of compliance failure and supports the Company in attracting and retaining high-calibre employees. Detailed information on the BAE Systems Groupwide business conduct processes and policies is described on pages 48 to 54 in BAE Systems plc’s 2024 Annual Report (available at: www.baesystems.com/investors).

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CALLEN-LENZ ASSOCIATES LIMITED

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE PERIOD ENDED 31 DECEMBER 2024

Financial key performance indicators

The key performance indicators that the Board use to judge performance are revenue growth, operating profit and closing order book.
Key financial performance indicators are shown below
July 2023 to June 2024 July 2024 to December 2024
£000 £000
Revenue 58,492 37,833
Operating Loss/(Profit) (4,710) 5,708
Closing Order Book 92,186 40,259
Revenue represents the amounts derived from the provision of goods and services. The increase reflects the introduction of new products to market.

Operating Loss/(Profit) is used for internal performance analysis as a measure of operating profitability that is comparable over time.

Closing Order Book represents the value of customer orders received that have yet to be discharged by the Company.

This report was approved by the board and signed on its behalf.

M Barratt

Director

Date: 26 September 2025

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CALLEN-LENZ ASSOCIATES LIMITED

DIRECTORS' REPORT

FOR THE PERIOD ENDED 31 DECEMBER 2024

The directors present their report and the financial statements for the period ended 31 December 2024.

Directors' responsibilities statement

The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and 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 for the Group's financial statements and then apply them consistently;

∙make judgments and accounting estimates that are reasonable and prudent;

∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the period, after taxation, amounted to £4,070,585 (2024 - loss £1,168,164).

Directors

The directors who served during the period were:

A James

M Weinel

M Barratt

M Foster

D Holmes

A Eves (resigned 3 December 2024)

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CALLEN-LENZ ASSOCIATES LIMITED

DIRECTORS' REPORT (CONTINUED)

FOR THE PERIOD ENDED 31 DECEMBER 2024

Strategic report

As allowed under Section 414c(11) of the Companies Act 2006, certain items to be disclosed in the Directors' report are included in the Strategic report.
Environmental Impact Statement – Baseline Period
As part of our commitment to sustainability and transparency, we are publishing our first environmental impact statement for the reporting period July 2024 - December 2024. This marks the beginning of our journey to monitor, manage, and reduce our environmental footprint and is in support of the overarching BAE Systems Group's commitment to reducing the environment impacts of its operations and products.
As a manufacturer, the Company recognises that its operations have an impact on the environment – from the energy and resources it uses, to the products it manufactures and the waste that it generates. As an organisation, the BAE Systems Group is committed to reducing the environmental impact of its operations and products, minimising its environmental footprint and, in turn, decreasing its operational costs.
Through the Operational Framework the Company implements the requirements of the BAE Systems Group’s Environmental Policy, which details the Group’s commitment to high standards of environmental management. In particular, the Company is supporting the Group’s target of achieving net zero greenhouse gas emissions across the Group’s operations (scope 1 and 2) by 2030 and its target of working towards a net zero value chain by 2050.
The above activities form part of the Company’s tailored implementation of the BAE Systems Group-wide community and environment policies and the BAE Systems Group’s impacts thereon which are described on pages 48 to 54 of BAE Systems plc’s 2024 Annual Report (available at: www.baesystems.com/investors).

Greenhouse gas emissions

For this six month period, we have established a reportable baseline for greenhouse gas emissions. Our total Scope 1 and Scope 2 emissions were 147.19 metric tons of CO2e. These figures will serve as a reference point for future targets and performance tracking.

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CALLEN-LENZ ASSOCIATES LIMITED

DIRECTORS' REPORT (CONTINUED)

FOR THE PERIOD ENDED 31 DECEMBER 2024

Energy consumption

Our total measured energy consumption across all operations was 220,737 kWh. This is across multiple providers with various sources of renewable energies. We are currently assessing opportunities to increase our use of clean energy and to further understand and streamline our overall consumption with the view of reducing overall consumption in future periods.

We recognise that this is an evolving process and are committed to continuous improvement. Future reports will include progress updates, expanded metrics, and third-party verification where applicable.

Our energy consumption and emissions of CO2 equivalents was as follows:
.
July 2024 - December 2024

kWh kWh

Energy Consumption

Aggregate of energy consumption in the period

- Gas -

- Fuel consumed for transport 69,518

- Electricity purchased 63,401

- Energy consumed from BioMass Heating 87,818

220,737

July 2024 - December 2024

Emissions of CO2 Equivalent Metric Tonnes Metric Tonnes

Scope 1 - Direct Emissions

- Gas -

- Fuel Consumed for owned transport 17.45

- Fuel consumed for BioMass Heating 1.07

18.53

Scope 2 - indirect emissions

- Electricity purchased 13.13

13.13

Scope 3 - other indirect emissions

- Fuel consumed for transport not owned by company 115.54

115.54

Total Gross Emissions 147.19

Intensity Ratio per £1m Revenue 0.84

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:

∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

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CALLEN-LENZ ASSOCIATES LIMITED

DIRECTORS' REPORT (CONTINUED)

FOR THE PERIOD ENDED 31 DECEMBER 2024

Post balance sheet events

There have been no significant events affecting the Group since the year end.

Auditors

The auditors, Xeinadin Audit Limited, 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.

M Barratt

Director

Date: 26 September 2025

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CALLEN-LENZ ASSOCIATES LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CALLEN-LENZ ASSOCIATES LIMITED

Opinion

We have audited the financial statements of Callen-Lenz Associates Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 31 December 2024, which comprise the Consolidated statement of comprehensive income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity 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).

In our opinion the financial statements:

∙give a true and fair view of the state of the Group's and of the parent Company's 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 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.

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 or 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.

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CALLEN-LENZ ASSOCIATES LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CALLEN-LENZ ASSOCIATES LIMITED (CONTINUED)

Other information

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.

Opinion 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 Directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and

∙the Group strategic report and the Directors' report 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 Directors' report.

We have nothing to report in respect of the following matters in relation to which 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.

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CALLEN-LENZ ASSOCIATES LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CALLEN-LENZ ASSOCIATES LIMITED (CONTINUED)

Responsibilities of directors

As explained more fully in the Directors' responsibilities statement set out on page 8, 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 is 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.

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CALLEN-LENZ ASSOCIATES LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CALLEN-LENZ ASSOCIATES LIMITED (CONTINUED)

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 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 Group 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 assessed the risk of material misstatement due to non-compliance with laws and regulations by:
- Obtaining an understanding of the legal and regulatory frameworks that are applicable to the Group and how it complies with those through enquiries of management and those charged with governance. Laws and regulations which have a direct material effect on the financial statements include the Companies Act 2006. Other laws and regulations which may have a material effect on the financial statements include the National Security and Investment Act 2021, Civil Aviation Authority regulations, data protection, contract law, and money laundering, false accounting, anti-bribery and corruption and sanctions laws;
- Making enquiries of management and reviewing documentation to understand whether there were any known instances of non-compliance with laws and regulations; and
- Communicating within the audit team and maintaining professional scepticism.
Specifically in respect of fraud we discussed with those charged with governance areas in which the Group was susceptible to fraud and whether there were any instances of known, suspected or alleged fraud. We also assessed the ability of internal controls to mitigate the risk of fraud.
We assessed the risk of non-compliance with laws and regulations by:
- Making enquiries of management and those charged with governance concerning actual and potential litigation or claims;
- Reviewing the company's records for evidence of legal costs which may indicate non-compliance with laws and regulations; and
- Considering the effectiveness of internal controls to mitigate such risks.
To address the fraud risk of management override of controls we:
- Tested the validity of journal entries;
- Tested accounting estimates for evidence of potential bias;
- Performed detailed testing of revenue and cost of sales recognised on a percentage completion basis where management’s forecast of future costs could materially affect the financial statements;
- Performed analytical procedures to identify any unusual relationships;
- Sought explanations and evidence for any transactions outside the normal course of business; and

Page 15

CALLEN-LENZ ASSOCIATES LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CALLEN-LENZ ASSOCIATES LIMITED (CONTINUED)

- Assessed the appropriateness of accounting policies, including in respect of revenue recognition.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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.

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 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.

Bindi Palmer (Senior statutory auditor)

for and on behalf of

Xeinadin Audit Limited

Chartered Accountants

Statutory Auditor

Wadebridge House

16 Wadebridge Square

Dorchester

Dorset

26 September 2025

Page 16

CALLEN-LENZ ASSOCIATES LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 31 DECEMBER 2024

	31 December	30 June
	2024	2024
Note	£	£


Turnover	4	37,832,799	58,492,367
Cost of sales		(27,488,485)	(52,910,581)
Gross profit		10,344,314	5,581,786
Administrative expenses		(5,164,325)	(8,847,989)
Exceptional administrative expenses	13	-	(2,012,455)
Other operating income	5	527,875	568,931
Operating profit/(loss)	6	5,707,864	(4,709,727)
Interest receivable and similar income	10	6,039	36,753
Interest payable and similar expenses	11	(1)	(359,300)
Profit/(loss) before tax		5,713,902	(5,032,274)
Tax on profit/(loss)	12	(1,643,317)	3,864,110
Profit/(loss) for the financial period		4,070,585	(1,168,164)

Profit for the year attributable to:
Owners of the parent company	(4,070,585)	1,168,164
	(4,070,585)	1,168,164

There were no recognised gains and losses the periods ended 31 December 2024 or 30 June 2024 other than those included in the consolidated statement of comprehensive income.

There was no other comprehensive income for the period ended 31 December 2024 (period ended 30 June 2024:£NIL).

The notes on pages 26 to 53 form part of these financial statements.

Page 17

CALLEN-LENZ ASSOCIATES LIMITED

REGISTERED NUMBER: 06361441

CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2024

	31 December	30 June
	2024	2024
Note	£	£

Fixed assets
Tangible assets	15		736,722		652,461
			736,722		652,461
Current assets
Stocks	17	24,235,700		11,624,403
Debtors: amounts falling due within one year	18	19,069,240		16,646,718
Cash at bank and in hand	19	9,287,430		20,461,136
		52,592,370		48,732,257
Creditors: amounts falling due within one year	20	(39,071,541)		(39,197,752)
Net current assets			13,520,829		9,534,505
Total assets less current liabilities			14,257,551		10,186,966
Creditors: amounts falling due after more than one year	21		(6,044,000)		(6,044,000)

Net assets			8,213,551		4,142,966

Capital and reserves
Called up share capital	23	3,327	3,327
Share premium account	24	3,747,545	3,747,545
Capital redemption reserve	24	164	164
Merger reserve	24	219,826	219,826
Profit and loss account	24	4,242,689	172,104
		8,213,551	4,142,966

The financial statements were approved and authorised for issue by the board and were signed on its behalf by:

M Barratt

Director

Date: 26 September 2025

The notes on pages 26 to 53 form part of these financial statements.

Page 18

CALLEN-LENZ ASSOCIATES LIMITED

REGISTERED NUMBER: 06361441

COMPANY BALANCE SHEET

AS AT 31 DECEMBER 2024

	31 December	30 June
	2024	2024
Note	£	£

Fixed assets
Tangible assets	15		736,722		652,461
Investments	16		40		40
			736,762		652,501
Current assets
Stocks	17	24,235,700		11,624,403
Debtors: amounts falling due within one year	18	19,036,192		16,612,696
Cash at bank and in hand	19	9,255,090		20,425,858
		52,526,982		48,662,957
Creditors: amounts falling due within one year	20	(39,066,734)		(39,192,893)
Net current assets			13,460,248		9,470,064
Total assets less current liabilities			14,197,010		10,122,565

Creditors: amounts falling due after more than one year	21		(6,044,000)		(6,044,000)

Net assets			8,153,010		4,078,565

Page 19

CALLEN-LENZ ASSOCIATES LIMITED

REGISTERED NUMBER: 06361441

COMPANY BALANCE SHEET (CONTINUED)

AS AT 31 DECEMBER 2024

	31 December	30 June
	2024	2024
Note	£	£

Capital and reserves
Called up share capital	23		3,327		3,327
Share premium account	24		3,747,545		3,747,545
Capital redemption reserve	24		164		164
Merger reserve	24		219,826		219,826
Profit and loss account brought forward		107,703		599,250
Profit/(loss) for the period		4,074,445		(1,362,257)
Other changes in the profit and loss account		-		870,710
Profit and loss account carried forward			4,182,148		107,703
			8,153,010		4,078,565

The financial statements were approved and authorised for issue by the board and were signed on its behalf by:

M Barratt

Director

Date: 26 September 2025

The notes on pages 26 to 53 form part of these financial statements.

Page 20


		CALLEN-LENZ ASSOCIATES LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31 DECEMBER 2024

	Called up share capital	Share premium account	Capital redemption reserve	Share option reserve	Merger reserve	Profit and loss account	Total equity
	£	£	£	£	£	£	£
At 1 July 2023	3,118	2,963,018	164	659,896	219,826	469,558	4,315,580

Loss for the year	-	-	-	-	-	(1,168,164)	(1,168,164)
Share options granted	-	-	-	210,814	-	-	210,814
Shares issued during the year	209	784,527	-	-	-	-	784,736
Transfer to/from profit and loss account	-	-	-	(870,710)	-	870,710	-

At 1 July 2024	3,327	3,747,545	164	-	219,826	172,104	4,142,966

Profit for the period	-	-	-	-	-	4,070,585	4,070,585
At 31 December 2024	3,327	3,747,545	164	-	219,826	4,242,689	8,213,551

The notes on pages 26 to 53 form part of these financial statements.

Page 21


		CALLEN-LENZ ASSOCIATES LIMITED

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31 DECEMBER 2024

	Called up share capital	Share premium account	Capital redemption reserve	Share option reserve	Merger reserve	Profit and loss account	Total equity
	£	£	£	£	£	£	£
At 1 July 2023	3,118	2,963,018	164	659,896	219,826	599,250	4,445,272

Loss for the year	-	-	-	-	-	(1,362,257)	(1,362,257)
Share options granted	-	-	-	210,814	-	-	210,814
Shares issued during the year	209	784,527	-	-	-	-	784,736
Transfer to/from profit and loss account	-	-	-	(870,710)	-	870,710	-

At 1 July 2024	3,327	3,747,545	164	-	219,826	107,703	4,078,565

Profit for the period	-	-	-	-	-	4,074,445	4,074,445
At 31 December 2024	3,327	3,747,545	164	-	219,826	4,182,148	8,153,010

The notes on pages 26 to 53 form part of these financial statements.

Page 22

CALLEN-LENZ ASSOCIATES LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 31 DECEMBER 2024

			31 December	30 June
			2024	2024
			£	£

Cash flows from operating activities
Profit/(loss) for the financial period	4,070,585	(1,168,164)
Adjustments for:
Depreciation of tangible assets	156,447	241,997
Loss on disposal of tangible assets	-	20,299
Interest paid	-	521,789
Interest received	(6,039)	(36,753)
Taxation charge	1,643,317	(3,864,110)
(Increase) in stocks	(12,611,297)	(10,002,061)
(Increase)/decrease in debtors	(643,052)	4,154,070
(Increase) in amounts owed by groups	(3,000,000)	(690,402)
(Decrease)/increase in creditors	(126,211)	15,368,015
Corporation tax received	105,088	38,553
Share based payments	-	210,814
RDEC credit	(527,875)	(568,930)
Net cash generated from operating activities	(10,939,037)	4,225,117

Cash flows from investing activities
Purchase of tangible fixed assets	(240,708)	(324,280)
Interest received	6,039	36,753
Net cash from investing activities	(234,669)	(287,527)

Page 23

CALLEN-LENZ ASSOCIATES LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

FOR THE PERIOD ENDED 31 DECEMBER 2024

		31 December	30 June
		2024	2024
		£	£


Cash flows from financing activities
Issue of ordinary shares	-	784,736
Repayment of loans	-	(33,155)
Repayment of other loans	-	(950,000)
Shares treated as debt - issued	-	5,000,000
Interest paid	-	(521,789)
Net cash used in financing activities	-	4,279,792
Net (decrease)/increase in cash and cash equivalents	(11,173,706)	8,217,382
Cash and cash equivalents at beginning of period	20,461,136	12,243,754
Cash and cash equivalents at the end of period	9,287,430	20,461,136

Cash and cash equivalents at the end of period comprise:
Cash at bank and in hand	9,287,430	20,461,136
	9,287,430	20,461,136

The notes on pages 26 to 53 form part of these financial statements.

Page 24

CALLEN-LENZ ASSOCIATES LIMITED

CONSOLIDATED ANALYSIS OF NET DEBT

FOR THE PERIOD ENDED 31 DECEMBER 2024


At 1 July 2024	Cash flows	At 31 December 2024
£	£	£

Cash at bank and in hand	20,461,136	(11,173,706)	9,287,430
Debt due after 1 year	(5,475,000)	-	(5,475,000)
	14,986,136	(11,173,706)	3,812,430

The notes on pages 26 to 53 form part of these financial statements.

Page 25

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

1.	General information

The company is a private company limited by share capital and incorporated in England and Wales. The address of its registered office is 3 The Old Barns Manor Farm, Chilmark, Salisbury, Wiltshire, SP3 5AF.

2.Accounting policies

2.1

Basis of preparation of financial statements

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 Group management to exercise judgment in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.

The following principal accounting policies have been applied:

2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 March 2014.

Therefore, the Group continues to recognise a merger reserve which arose on a past business combination that was accounted for as a merger in accordance with UK GAAP as applied at that time.

Page 26

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

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 profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

Page 27

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

2.4

Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

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

∙the Group has transferred the significant risks and rewards of ownership to the buyer;

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

∙the amount of revenue can be measured reliably;

∙it is probable that the Group will receive the consideration due under the transaction; and

∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

∙the amount of revenue can be measured reliably;

∙it is probable that the Group will receive the consideration due under the contract;

∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and

∙the costs incurred and the costs to complete the contract can be measured reliably.

2.5

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

Page 28

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

2.6

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
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.

2.7

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Consolidated statement of comprehensive income in the same period as the related expenditure.

2.8

Interest income

Interest income is recognised in profit or loss using the effective interest method.

2.9

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

2.10

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Group in independently administered funds.

Page 29

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

2.11

Share-based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Group keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.

2.12

Current and deferred taxation

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:

∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;

∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and

∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Page 30

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

2.13

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.

2.14

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

2.15

Development costs

Development costs are expenses and the Group has a policy of not capitalising such expenditure.

2.16

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.

Depreciation is provided on the following basis:

Plant and machinery	-	33%	straight line
Motor vehicles	-	33%	straight line
Fixtures and fittings	-	25%	reducing balance
Computer equipment	-	33%	straight line

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.

2.17

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Page 31

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

2.18

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 first in, first out 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 profit or loss.

2.19

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

2.20

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

2.21

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

2.22

Financial instruments

The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Group's Balance sheet when the Group 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

Page 32

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

2.22

Financial instruments (continued)

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 Group'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 Group after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies 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

Page 33

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

2.22

Financial instruments (continued)

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 Group 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 Group 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 Group's contractual obligations expire or are discharged or cancelled.

Page 34

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

2.23

Financial liabilities

Financial liabilities and equity are classified according to the substance of the financial instrument's contractual obligations, rather than the financial instrument's legal form.

Financial liabilities within the scope of IAS 39 are initially classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
The Group determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, plus directly attributable transaction costs.
Subsequently, the measurement of financial liabilities depends on their classification as follows:

Interest bearing loans and borrowings

Obligations for loans and borrowings are recognised when the Group becomes party to the related contracts and are measured initially at the fair value of consideration received less directly attributable transaction costs.
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.
Gains and losses arising on the repurchase, settlement or otherwise cancellation of liabilities are recognised respectively in finance revenue and finance cost.

2.24

Comparative information

The current financial period was shortened to cover 6 months to 31 December 2024 in order to align the accounting reference date with the group to which Callen-Lenz Associates Limited now belongs. The prior period covered the 12 months to 30 June 2024. Therefore the prior period is not entirely comparable.

Page 35

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

3.	Judgments in applying accounting policies and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The areas where judgement has been exercised and/or there is considered to be a source of estimation uncertainty that may be regarded as giving rise to the risk of material adjustment to the carrying amounts of assets and liabilities for the period ended 30 June 2023, and the notes in which the relevant assets and liabilities are disclosed, are as follows:
Revenue Recognition (Note 4)
Revenue is recognised on certain contracts using a percentage of completion method. This requires management to estimate the likely outcome and stage of completion of each contract. Judgement is required to estimate costs to complete and contract profitability.
Related party borrowings (Notes 21)
Related party borrowings comprise both loan and preference share elements. If the terms of these arrangements are at a rate that is below the market value rate of interest then the instruments may contain elements of liability and equity including share capital and capital contribution. Judgement is required to determine the amount of the liability component, which is the fair value of a similar liability obtained on an arms' length basis.

Page 36

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

Sale of services	8,779,762	8,511,112
Sale of goods	29,053,037	49,844,730
Grants received	-	136,525
	37,832,799	58,492,367

Analysis of turnover by country of destination:

					31 December	30 June
					2024	2024
					£	£

United Kingdom	36,823,708	58,278,114
Rest of the world	1,009,091	214,253
	37,832,799	58,492,367

Sale of services comprises revenue from construction contracts recognised on a percentage completion method, based on estimated costs to complete. The gross amount due from customers recognised as an asset at 31 December 2024 was £1,479k (30 June 2024 - £255k) and the gross amount due to customers recognised as a liability was £5,040k (30 June 2024 - £7,787k).

Other operating income	527,875	568,931
	527,875	568,931

Page 37

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

Research & development charged as an expense	597,027	1,129,421
Exchange differences	52,392	162,773
Other operating lease rentals	272,188	409,151

Fees payable to the Company's auditors and their associates for the audit of the consolidated and parent Company's financial statements	85,000	90,000
Fees payable to the Company's auditors and their associates in respect of:
Taxation compliance services	5,000	5,000
All non-audit services not included above	10,000	23,750

Page 38

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

8.	Employees
	Staff costs, including directors' remuneration, were as follows:

Group 31 December	Group 30 June	Company 31 December	Company 30 June
2024	2024	2024	2024
£	£	£	£


Wages and salaries	5,944,606	8,532,955	5,944,606	8,532,955
Social security costs	508,544	1,079,659	508,544	1,079,659
Cost of defined contribution scheme	224,983	1,412,585	224,983	1,412,585
	6,678,133	11,025,199	6,678,133	11,025,199

The average monthly number of employees, including the directors, during the period was as follows:

	Group	Group	Company	Company
	31 December	30 June	31 December	30 June
	2024	2024	2024	2024
	No.	No.	No.	No.

Production	20	33	20	33
Administration and support	65	26	65	26
Research and development	77	65	77	65
Sales, marketing and distribution	9	10	9	10
Other	15	10	15	10

	186	144	186	144

Page 39

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

Directors' emoluments	95,496	726,087
Group contributions to defined contribution pension schemes	5,033	116,053
Amounts paid to third parties in respect of directors' services	92,484	36,367
	193,013	878,507

	During the period retirement benefits were accruing to 2 directors (30 June 2024 - 8) in respect of defined contribution pension schemes.
	The highest paid director received remuneration of £92,484 (30 June 2024 - £142,985).
	The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (30 June 2024 - £3,729).

During the period no directors exercised share options (year-ended 30 June 2024 - 5).

	Other interest receivable	6,039	36,753
		6,039	36,753

Bank interest payable	2	-
Other loan interest payable	(1)	359,300
	1	359,300

Page 40

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

Corporation tax
Adjustments in respect of previous periods	-	(9,864)
	-	(9,864)

Total current tax	-	(9,864)

Deferred tax
Origination and reversal of timing differences	1,643,317	(3,854,246)
Total deferred tax	1,643,317	(3,854,246)


		1,643,317	(3,864,110)

Page 41

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

12.Taxation (continued)

Profit/(loss) on ordinary activities before tax

5,713,902

(5,032,274)

Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2024 - 25%)	1,428,476	(1,258,069)
Effects of:
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment	125	142,286
Adjustments to tax charge in respect of prior periods	214,716	(9,864)
Increase or decrease in pension fund prepayment leading to an increase (decrease) in tax	-	(12,831)
Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge	-	(142,232)
Tax deduction arising from exercise of employee options	-	(2,583,400)
Total tax charge for the period/year	1,643,317	(3,864,110)

Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 42

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

	Exceptional items	-	2,012,455
		-	2,012,455

The Group was sold on 2 May 2024. Exceptional items in the year ended 30 June 2024 includes one-off costs incurred in respect of the sale.

14.	Intangible assets
	Group

		Goodwill
		£
	Cost
	At 1 July 2024	202,380
	At 31 December 2024	202,380
	Amortisation
	At 1 July 2024	202,380
	At 31 December 2024	202,380
	Net book value
	At 31 December 2024	-
	At 30 June 2024	-

Page 43

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

	15.	Tangible fixed assets
		Group and Company

	Plant and machinery	Motor vehicles	Fixtures and fittings	Computer equipment	Total
	£	£	£	£	£
Cost or valuation
At 1 July 2024	479,213	96,316	318,465	387,326	1,281,320
Additions	36,802	31,573	141,793	30,540	240,708
At 31 December 2024	516,015	127,889	460,258	417,866	1,522,028
Depreciation
At 1 July 2024	264,586	76,156	110,421	177,696	628,859
Charge for the period on owned assets	62,709	10,346	30,788	52,604	156,447
At 31 December 2024	327,295	86,502	141,209	230,300	785,306
Net book value
At 31 December 2024	188,720	41,387	319,049	187,566	736,722
At 30 June 2024	214,627	20,160	208,044	209,630	652,461

Page 44

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

16.	Fixed asset investments

	Company

		Investments in subsidiary companies
		£
	Cost or valuation
	At 1 July 2024	220,030
	At 31 December 2024	220,030
	Impairment
	At 1 July 2024	219,990
	At 31 December 2024	219,990
	Net book value
	At 31 December 2024	40
	At 30 June 2024	40

17.	Stocks
		Group 31 December	Group 30 June	Company 31 December	Company 30 June
		2024	2024	2024	2024
		£	£	£	£

Raw materials and consumables	771,866	1,447,157	771,866	1,447,157
Work in progress	23,463,834	10,177,246	23,463,834	10,177,246
	24,235,700	11,624,403	24,235,700	11,624,403

The difference between purchase price or production cost of stocks and their replacement cost is not material.

Page 45

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

18.

Debtors

Group 31 December	Group 30 June	Company 31 December	Company 30 June
2024	2024	2024	2024
£	£	£	£


Trade debtors	7,170,062	4,195,544	7,170,062	4,195,544
Amounts owed by group undertakings	3,690,402	690,402	3,694,447	691,647
Other debtors	2,544,098	1,987,020	2,543,727	1,986,693
Prepayments and accrued income	2,317,637	4,783,394	2,316,768	4,783,032
Deferred taxation	3,347,041	4,990,358	3,311,188	4,955,780
	19,069,240	16,646,718	19,036,192	16,612,696

19.	Cash and cash equivalents
		Group 31 December	Group 30 June	Company 31 December	Company 30 June
		2024	2024	2024	2024
		£	£	£	£

Cash at bank and in hand	9,287,430	20,461,136	9,255,090	20,425,858
	9,287,430	20,461,136	9,255,090	20,425,858

20.	Creditors: Amounts falling due within one year
		Group 31 December	Group 30 June	Company 31 December	Company 30 June
		2024	2024	2024	2024
		£	£	£	£

Trade creditors	3,979,399	3,750,316	3,979,399	3,750,316
Other taxation and social security	425,072	489,047	425,072	489,047
Other creditors	251,665	182,263	251,618	182,134
Accruals and deferred income	34,415,405	34,776,126	34,410,645	34,771,396
	39,071,541	39,197,752	39,066,734	39,192,893

Disclosure of the terms and conditions attached to the non-equity shares is made in note 23.

Page 46

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

21.	Creditors: Amounts falling due after more than one year
		Group 31 December	Group 30 June	Company 31 December	Company 30 June
		2024	2024	2024	2024
		£	£	£	£

Accruals and deferred income	569,000	569,000	569,000	569,000
Share capital treated as debt	5,475,000	5,475,000	5,475,000	5,475,000
	6,044,000	6,044,000	6,044,000	6,044,000

Disclosure of the terms and conditions attached to the non-equity shares is made in note 23.

Non-current preference shares which are treated as debt are recognised at transaction value, which management concludes is materially the same as the present value of the future payments discounted at a market rate of interest for similar instruments.

Page 47

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

22.	Deferred taxation
	Group

		31 December 2024
		£

	At beginning of year	4,990,358
	Charged to profit or loss	(1,643,317)
	At end of year	3,347,041

Company

		31 December 2024
		£

	At beginning of year	4,955,780
	Charged to profit or loss	(1,644,592)
	At end of year	3,311,188

Group 31 December	Group 30 June	Company 31 December	Company 30 June
2024	2024	2024	2024
£	£	£	£

Accelerated capital allowances	(81,856)	(112,545)	(82,333)	(113,023)
Tax losses carried forward	3,238,754	4,874,994	3,203,378	4,840,894
Pension surplus	47,893	28,759	47,893	28,759
Accrued bonus	142,250	199,150	142,250	199,150
	3,347,041	4,990,358	3,311,188	4,955,780

Based on forecasts for the year ended 31 December 2025, £3.3m of the deferred tax asset is forecast to have reversed by 31 December 2025.

Page 48

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

Allotted, called up and fully paid

80,860 (30 June 2024 - 80,860) A Ordinary shares of £0.01 each	809	809
226,415 (30 June 2024 - 226,415) Ordinary shares of £0.01 each	2,264	2,264
17,258 (30 June 2024 - 17,258) C Ordinary shares of £0.01 each	173	173
8,083 (30 June 2024 - 8,083) B Ordinary shares of £0.01 each	81	81

	3,327	3,327

Allotted, called up and fully paid

475,000 (30 June 2024 - 475,000) A Preference shares of £1.00 each	475,000	475,000
5,000,000 (30 June 2024 - 5,000,000) B Preference shares of £1.00 each	5,000,000	5,000,000

	5,475,000	5,475,000

A Preference shares are non-voting and carry a fixed, non-cumulative dividend at 9% of the issue price and B Preference shares are non-voting and carry a fixed, non-cumulative dividend at 10% of the issue price.
All Ordinary shares are voting and carry a right to divdends after the preference share dividends have been paid.
All shares have equal rights on a liquidation or return of capital.

Page 49

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

24.

Reserves

Share premium account

The share premium account includes the amount above the nominal value received for shares issued, net of transaction costs.

Capital redemption reserve

The capital redemption reserve is a non-distributable reserve recognised following the purchase of a company’s own shares out of distributable reserves.

Merger Reserve

The merger reserve comprises the premium on equity shares issued in consideration for the acquisition of equity shares in another company.

Profit and loss account

The profit and loss account comprises the aggregate of current and prior period profits and losses.

Page 50

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

25.	Share-based payments
	The Company had an equity-settled Enterprise Management Incentive Scheme (EMI) which was available to employees who satisfied the qualifying conditions and the EMI working time requirements. The Company also operated an unapproved option scheme. The maximum term of these options was 10 years and they vested over a period of up to 3 years, with accelerated vesting on an exit event. The Black-Scholes Valuation Model was used to determine the fair value of the options as at the date of grant. An appropriate volatility rate was selected based on a publicly-available equivalent peer group. The risk-free rate was derived from rates attached to UK government bonds issued at a comparable point in time. A share-based payment equity provision through profit and loss was calculated in accordance with vesting terms and the likelihood of exercise according to the Company's average rate of option lapsing since the scheme commenced. A total charge of £nil (year ended 30 June 2024: £210,814) was recognised within the consolidated statement of comprehensive income in relation to share-based payment transactions. As an exit event occurred during the prior period, vesting accelerated on all oustanding options and they were exercised in full. Consequently, accumulated share-based payment provisions were transferred to the profit and loss reserve in the year ended 30 June 2024.
		31 December	31 December	30 June	30 June
		Weighted average exercise price (pence) 2024	Number 2024	Weighted average exercise price (pence) 2024	Number 2024

Outstanding at the beginning of the year	-	2594	16,165
Granted during the year	-	7850	4,654
Exercised during the year	-	3769	(20,819)

					31 December	30 June
					2024	2024
					£	£

	Equity-settled schemes	-	210,814
		-	210,814

Page 51

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

26.	Contingent liabilities

The directors have considered the position of the company and do not consider there to be any material contingent liabilities, provisions or commitments at or since the period end.

27.	Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £1,013,640 (year ended 30 June 2024 - £1,412,585) . Contributions totalling £191,569 (30 June 2024 - £115,035) were payable to the fund at the balance sheet date and are included in creditors.

28.	Commitments under operating leases
	At 31 December 2024 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
		Group 31 December	Group 30 June	Company 31 December	Company 30 June
		2024	2024	2024	2024
		£	£	£	£

Not later than 1 year	327,044	486,983	327,044	486,983
Later than 1 year and not later than 5 years	824,994	868,608	824,994	868,608
Later than 5 years	-	42,500	-	42,500
	1,152,038	1,398,091	1,152,038	1,398,091

29.	Related party transactions
	The Company and Group have taken exemption under Section 33.1A of FRS 102 from disclosing related party transactions between two or more 100% members of the same group. Key Management Personnel Key management personnel received aggregate remuneration of £336,826 (year ended 30 June 2024 - £927,553).

30.	Controlling party

The Group's immediate parent is BAE Systems (Holdings) Limited.
The ultimate controlling party is BAE Systems PLC, which is incorporated in the United Kingdom and registered in England and Wales. The consolidated financial statements of BAE Sytems PLC are available to the public and may be obtained from 6 Carlton Gardens, London, SW1Y 5AD.

Page 52

CALLEN-LENZ ASSOCIATES LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2024

31.	Subsidiary undertakings
	Subsidiary undertakings
	The following were subsidiary undertakings of the Company:
	Name	Registered office	Class of shares	Holding

	SkyCircuits Limited	9 The Old Barns, Manor Farm, Chilmark, Salisbury, Wiltshire, SP3 5AF	Ordinary	100%
	High Aerospace Limited	Suite 204, Warner House, 123 Castle Street, Sailsbury, Wiltshire, SP1 3TB	Ordinary	100%

The aggregate of the share capital and reserves as at 31 December 2024 and the profit or loss for the period ended on that date for the subsidiary undertakings were as follows:
Name	Aggregate of share capital and reserves	Profit/(Loss)
	£	£

	SkyCircuits Limited	24,728	(5,104)
	High Aerospace Limited	30	-

Page 53