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

Edgar Brothers (trading style of Ian Edgar (Liverpool) Limited) continues to be the leading UK distributor in its market and continues to look to strengthening its position.

The Company looked to continue the profitable trading performance achieved in 2020 - 2023, whilst still aiming to improve its working capital/cash flow position even further than the successes already achieved in 2019-2023, via the reduction of older inventory.

Overall, the Company had a solid sales and profit year for 2024. It was a year of two halves for the Police and Military sales division. The first half of the year continued at 2023 high sales levels. After the change in UK government mid-way through the year, the fiscal pressures placed on public spending saw the level of business fall off significantly in the second half of the year. The Shooting Sports sales division put in another strong performance for the year and continued on its upward curve,re-establishing itself at the target level of trade set for that side of the business.

During the year the Company was awarded a £300m defence contract and accessed significant external funding in order to facilitate the cash flows associated with that contract.

The combination of lower business in the second half of 2024 and the funding requirements on the new contract placed some strain on existing cash reserves, which were reduced to a lower level by the end of 2024.

The Company fully expects the profit generating performance during 2020 - 2024 to proceed on an ongoing basis in 2025 and beyond. The performance of the new contract, mentioned above, looks like ensuring that 2025 is back at the 2023 sales level based on current forecasts.

The company continues to be accredited to ISO9001, ISO14001, ISO45001, be Carbon Neutral and certified for IIP Silver.

The company promotes the brands it represents extensively on an ongoing basis whilst looking for new opportunities and will continue to be a leading supplier to its customers with the major brands it represents.

Management continually monitors the key risks facing the company together with assessing the controls used for managing these risks. The board of directors formally reviews and documents the principal risks facing the business at least monthly.

The principal risks and uncertainties facing the company are as follows:

Economic downturn

The UK gun trade is hugely resilient and has managed to remain consistent during the recessionary periods but is not immune. The company actively controls its debtor days and has a strong credit control department. The customer base is well established and payment history has been built up over many years with its customers.

Competitor pressure

The market in which the company operates is competitive but is controlled by only a few main distributors. The company manages the risk by providing quality products from well-established suppliers on an exclusive basis.

Reliance on key suppliers

The company is not reliant on any single supplier and works to have a policy of sourcing products from different suppliers, whilst they may compete, it causes better sales potential rather than if sold on its own. New distribution agreements are always sought at trade shows to further strengthen this policy should the loss of a major brand happen. The company cultivates strong relationships with suppliers to mutual advantage.

Loss of key personnel

Management seek to ensure that key personnel are appropriately remunerated and motivated to ensure that good performance is recognised. All staff are motivated and supported as can be recognised in our IIP Silver accreditation.

Liquidity risk

The company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.

The company’s policy throughout the year has been to maintain liquid funds at the bank and avoid incurring overdraft interest whilst also funding the repayment of longer term borrowing obligations.

Currency risk

The company incurs foreign exchange risk on sales and purchases that are denominated in currencies other than sterling.

The currency principally giving rise to this risk are US Dollars. The group uses foreign exchange contracts to hedge its foreign currency risk. The Company has foreign exchange forward contracts in place at the year end date (Note 16 Creditors: amounts falling due within one year).

Credit risk

The company’s principal financial assets are cash and trade debtors. The principal credit risk arises from its trade debtors.

In order to manage credit risk the directors set limits for customers based on a combination of payment history and third party credit references.

Credit limits are reviewed by the credit controller on a regular basis in conjunction with debt ageing and collection history. During the year ended 31 December 2024, the credit risk exposure was spread over a large number of customers.

The company uses a number of key financial performance indicators in assessing and driving performance. The key financial performance indicators used by the company are as follows:

                                2024            2023

Sales £'000                             69,412              121,738

Gross profit £'000                             18,376             37,048

Gross profit margin %                        26             30

Profit before tax £'000                        762             7,930

Debtor days                             51             21

Creditor days                            104            86

Non-financial key performance indicators are metrics used to track aspects of a business beyond just monetary values. Whilst financial performance metrics are quantitative and focus on measuring a company's financial health, profitability and growth, non-financial performance metrics are qualitative and measure a Company's intangible assets such as customer satisfaction, brand reputation and employee engagement. Examples include customer satisfaction, employee turnover rates, product defect rates and environment and social and community responsibility.

The Directors consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1) (a-f) of the Companies Act 2006) in the decisions taken in the year ended 31 December 2024.

Further information on this can be found in the remainder of the Strategic Report regarding the interests of the Company's employees, the need to foster the Company's business relationships with customers and suppliers, the impact of the Company's operations on the community and the environment and the desirability of the Company maintaining a reputation for high standards of business conduct.

The Directors have overall responsibility for delivering the Company's strategy and values and for ensuring high standards of governance. The primary objective of the directors is to promote the long-term sustainable success of the Company to generate benefit for its stakeholders.

Edgar Brothers operates an Integrated Management System (IMS), comprising ISO 9001:2015, ISO 14001:2025 and ISO 45001:2018, as part of its governance arrangements in relation to assessing and managing climate-related risks and opportunities. Within the defined scope of our IMS, the Company determines the aspects and risks of our activities, products and services that it can control and those that it can influence, and their associated impacts, considering a life cycle perspective.

When determining aspects and risks, the Company considers:

- change, including planned or new developments, and new or modified activities, products and services; and

- abnormal conditions and reasonably forseeeable emergency situations.

The Company determines those aspects that have, or can have, a significant impact, i.e., significant aspects and risks, by using established criteria. It then communicates the identified significant aspects and risks among the various levels and functions of the Company, as appropriate. Documentation is generated and kept throughout these processes.

As a Company, our impacts on the environment are relatively low due to the nature of our business.

The areas where we do impact the environment are:

- procurement and disposal of electrical equipment;

- electricity consumption;

- gas consumption;

- vehicle fuel consumption;

- use of couriers;

- air travel;

- florescent tube and IT disposal'

- water consumption and discharge;

- use of stationery;

- disposal of toner and printer cartridges;

- fire run-off; and

- explosion/smoke.

These impacts are reviewed on an annual basis for any significant increase in activity levels that may require further actions as appropriate.

On behalf of the board

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

The principal activities of the company continued to be that of a UK distributor of firearms and ammunition.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Going concern    

The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future, therefore they continue to adopt the going concern basis for accounting in preparing the financial statements.

The results for the year are set out on page 12.

Dividends of £62,379 (2023: £1,515,569) were proposed by the board and approved by the shareholders in the year and are recognised as a liability of the company at the year-end date.

The company's Articles of Association provide, subject to the provisions of UK legislation, an indemnity for directors of the company in respect of liabilities they may incur in the discharge of their duties or in the exercise of their powers, including any liabilities relating to the defence of any proceedings brought against them which relate to anything done or omitted, or alleged to have been done or omitted, by them as officers or employees of the company.

Appropriate directors' liability insurance cover is in place in respect of all of the company's directors.

The company plans to keep growing the business and its reputation throughout the industry.

The auditor, DSG Audit, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

The following information is provided in relation to the company's energy consumption, emissions, and energy efficiency activities. The information is provided as the company consumed more than 40,000 kWh of energy during the reporting period and is defined as large by the Companies Act.

The company has followed the SECR (Streamlined Energy and Carbon Reporting) government reporting guidelines. Using the latest figures provided by The Department for Business, Energy and Industrial Strategy (BEIS) the company was able to convert data into Tonnes of Carbon Dioxide equivalent (CO2e).

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £1m sales revenue.

• Ongoing conversion of petrol/diesel fleet vehicles to electric vehicles.

• Electric vehicle charging points made available free of charge to all staff.

• Ongoing conversion of warehouse lighting to LED.

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. This information includes principal risks and uncertainties and financial key performance indicators.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

There have been no post balance sheet events affecting the company.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

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

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

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

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

We have audited the financial statements of Ian Edgar (Liverpool) Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

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, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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 auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

Discussions were held with and enquiries made of management and those charged with governance with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

The following laws and regulations were identified as being of significance to the entity:

• Those laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards, company law, tax and pensions legislation, and distributable profits legislation.

• Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements, including registration as a firearms dealer, registration under Section 5 of the Firearms Act 1968, and having the appropriate licence to store explosives granted under the Explosives Regulations 2014.

Audit procedures undertaken in response to the potential risk relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation claims; inspection of certificates of registration and licences; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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 auditor's 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.

Ian Edgar (Liverpool) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Units 1-3 Heather Close, Lyme Green Business Park, Macclesfield, Cheshire, SK11 0LR.

The principal activity of the company is disclosed in the Strategic Report.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The financial statements have been prepared on a going concern basis. At 31 December 2024 the company had net assets of £5,743,102 and net current assets of £5,307,781, together with banking facilities provided by its funders throughout 2024 and continuing into 2025. true

The directors are not aware in making their assessment on going concern of any reasons why current financing facilities should not be renewed on the same or similar terms so as to continue throughout their period of assessment.

During the year the company was awarded a significant Government defence contract which required securing additional funding to ensure its successful delivery. As part of the directors' going concern review, the directors revisited and challenged their financial forecasts to consider the potential impact of servicing this contract with the company's available working capital, particularly if any of the original assumptions about the timing of the contract were to change.

The directors are confident that any changes in the timing of the contract delivery can be managed within the existing facilities, supplemented by the additional facilities secured since the year-end. The directors also believe that the contract includes additional protections for the company in the unlikely event of contract cancellation.

Based on the above assessment, the directors believe that it remains appropriate to prepare the financial statements on a going concern basis.

Revenue is recognised to the extent that is it probable that the economic benefits will flow to the company 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.

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

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

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

• the amount of revenue can be measured reliably.

• it is probable that the company 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.

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.

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.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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 is recognised immediately in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The company designates certain hedging instruments, including derivatives, embedded derivatives and non-derivatives, as either fair value hedges or cash flow hedges. At the inception of the hedge relationship, the company documents the relationship between the hedging instrument and the hedged item along with risk management objectives and strategy for undertaking various hedge transactions. At the inception of the hedge and on an ongoing basis, the company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item.

For derivatives that are designated and qualify as cash flow hedges, the effective portion of changes in the fair value of the hedge is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss.

Any gain or loss previously recognised in other comprehensive income is reclassified to profit or loss when the hedge relationship ends. This occurs when the hedging instrument expires or no longer meets the hedging criteria, the forecast transaction is no longer highly probable, the hedged debt instrument is derecognised, or the hedging instrument is terminated.

The tax expense represents the sum of the tax currently payable and deferred tax. Tax is recognised in the Income Statement, 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 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 operates and generates 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; and

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

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.

Provisions are made where an event has taken place that gives the company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.

Provisions are charged as an expense to the Income Statement in the year that the company becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.

When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

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

The contributions are recognised as an expense in the Income Statement 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 company in independently administered funds.

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

Rentals payable under operating leases are charged to the Income Statement 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.

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

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

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

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Income Statement within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Income Statement within 'administrative expenses'.

Interest income

Interest income is recognised in the Income Statement using the effective interest method.

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

Stock is reviewed annually to assess whether any items are impaired, i.e. the carrying amount is not fully recoverable (e.g. because of damage, obsolescence or declining selling prices). If an item (or a group of items) of stock is impaired, the company measures the stock at its selling price less costs to sell. An impairment loss is recognised as the difference between initial cost and the recoverable amount.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Trade debtors are valued at management's estimate after assessing potential bad debts and credit notes. This is estimated based on prior experience with customers and historic trends of returns.

In calculating the share based payment charge there is estimation uncertainty surrounding the assumptions used for the inputs to the Black Scholes option pricing model from which the fair value charge is derived. These are the expected volatility, expected life and risk-free rate for the share options.

The whole of the turnover is attributable to the principal activity of the company.

The disclosure of turnover by geographical market is not provided, as in the opinion of the directors the disclosure of this information would be seriously prejudicial to the interests of the company.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 3).

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

Dividends were proposed by the board and approved by the shareholders in the year and are recognised as a liability of the company at the year-end date.

The bank loans falling due in less than one year as at 31 December 2024 of £4,577,611 (2023: £NIL) are secured by a debenture over all assets held by the company.

Other loans falling due in less than one year as at 31 December 2024 of £33,187 (2023: £742,423) comprise:

1) A Coronavirus Business Interruption Loan (CBIL) of £33,187 (2023: £124,009) which is a UK government backed loan scheme whereby the government provides a limited guarantee to the lender for up to 80% of the loan value. The loan is payable in monthly instalments commencing 12 months after the drawn down date (April 2021). Interest is calculated on a fixed rate basis. The interest costs for the first 12 months of the term of the loan were met by the government.

2) An invoice discounting facility of £NIL (2023: £618,414) provided by 4syte to fund working capital requirements.

Other loans falling due in more than one year as at 31 December 2024 of £1,010,000 (2023: £1,010,000) comprise:

1) Minimum 10% fixed rate unsecured loan notes 2036 of £1,010,000 issued to certain directors and shareholders of the company and their spouses under the terms of the original loan notes instrument dated 22 September 2020 which was amended by way of written resolution on 30 November 2021 and 1 July 2022. Interest accrues at the fixed rate of 10% per annum which is paid on a monthly basis to the loan note holders. In respect of each accounting period ending on 31 December, variable interest calculated at the rate of 0.125% of earnings before interest, taxation, depreciation, and amortisation (“EBITDA”) per annum per £5,000 principal amount of the loan notes is payable to the loan note holders. Interest paid on the loan notes in the year was £1,862,000 (2023: £6,062,000). The loan notes shall be redeemed on 30 June 2036, the loan note instrument containing provision for the company or loan note holders to redeem loan notes in integral multiples of £5,000 effective from 1 July 2020 (the effective date of inception of the loan note instrument). In the period of redemption, the loan note holder shall only be entitled to interest at the fixed rate of 10% per annum, calculated on the basis of holding the loan note for the full year in the year of redemption.

The company also had facilities in place which were unused at 31 December 2023, secured by way of a second ranked charge on Unit 1, Lyme Green Business Park, Macclesfield, and an all monies personal guarantee and indemnity granted by the director, I Gordon, in favour of the prospective lender.

The dilapidation provision represents the estimated costs required to return the company's current leasehold properties to their original state. The costs of such have been valued by independent property consultants, Altus Edwin Hill.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

The net deferred tax asset is not expected to reverse within the next 12 months.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. There were no contributions outstanding at the current or prior year-end date.

The company has invited certain directors to participate in a share option scheme.

In accordance with Financial Reporting Standard 102, a charge is recognised based on the fair value of share options granted in the period.

The options outstanding at 31 December 2024 had an exercise price of £42.94 per share, and a remaining contractual life of 8.5 years.

The weighted average fair value of options granted in the year ended 31 December 2023 was determined using the Black Scholes option pricing model. The Black Scholes model is considered to apply the most appropriate valuation method due to the relatively short contractual lives of the options and the requirement to exercise within a short period after the employee becomes entitled to the shares (the "vesting date"). The assumptions at the date of grant were as follows:

Note a - Volatility is based on industry average share price movement for Aerospace/Defence.

Note b - The risk free interest rate has been taken as at the grant date based on the yield for UK 10-year gilt bonds.

Note c - The company has paid dividends in each of the last 3 years.

Non-vesting conditions and market conditions are taken into account when estimating the fair value of the option at the grant date.

Included within administrative expenses is a share based payments charge of £451,000 (2023: £225,565).

The company has one class of Ordinary shares which carry the right to vote and receive dividends.

The share premium account represents the extra money the company received following an issue of its shares above their nominal value (par value).

The hedging reserve is an equity reserve that holds the cumulative gains and losses from the effective portion of a cash flow hedge as recognised in Other Comprehensive Income. The reserve reflects the temporary changes in the value of a hedging instrument used to manage financial risks of fluctuating exchange rates.

The hedge loss arising at the year end of £4,352,706 arose as the rate of the Euro hedge, taken out by the company in connection with the defence contract, was lower than the spot rate at 31 December 2024. The loss does not form part of profit and loss reserves for the year ended 31 December 2024, and reverses in the post balance sheet period.

Share-based payment reserve

The share-based payment reserve represents the cumulative value of equity -settled share-based payments that have been recognised as an expense in the profit and loss account over time.

The profit and loss reserves represents the cumulative profits or losses, net of dividends paid and other adjustments.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Loan notes of £910,000 (2023: £910,000) are held by the directors and certain of their spouses on which interest of £1,687,675 was due in the year (2023: £5,461,365) and £NIL (2023: £NIL) was outstanding at the year end date and included within creditors due in less than one year.

Loan notes of £100,000 (2023: £100,000) are held by certain shareholders on which interest of £174,325 was due in the year (2023: £600,635) and £NIL (2023: £NIL) was outstanding at the year end date and included within creditors due in less than one year.

During the year, directors were entitled to dividends of £14,436 (2023: £350,735) proposed by the directors and approved by the shareholders at the year end date which is recognised as a liability by the company at the year end date and included within creditors due in less than one year.

Key management personnel are deemed to be the directors only. Directors remuneration is disclosed in note 7 to the financial statements.

The company is not deemed to have an immediate or ultimate controlling party due to no individual shareholder possessing a majority of the company's shares.