REGISTERED NUMBER: 02570730 (England and Wales)

THE BRITISH ROTOTHERM COMPANY LIMITED

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 DECEMBER 2024

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Income Statement

9

Other Comprehensive Income

10

Balance Sheet

11

Statement of Changes in Equity

12

Notes to the Financial Statements

13

DIRECTORS:

T J Conger

O E Conger

H Conger

C J Rea

R Carbonnaux Conger

REGISTERED OFFICE:

Kenfig Industrial Estate

Port Talbot

West Glamorgan

SA13 2PW

REGISTERED NUMBER:

02570730 (England and Wales)

AUDITORS:

Bevan Buckland LLP

Chartered Accountants

And Statutory Auditors

Ground Floor Cardigan House

Castle Court

Swansea Enterprise Park

Swansea

SA7 9LA

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

REVIEW OF BUSINESS

British Rototherm pioneer transformative technologies to provide the most accurate and reliable pressure, temperature and ultrasonic measurement solutions to the world. Our measurement solutions enable our customers to improve their processes, in a way which supports sustainable business practices and lessens our collective impact on the planet.

Our strategy is built around 5 key pillars:

1

High technology business within non-invasive ultrasonic flow and level

2

Leading design/manufacturer for process instrumentation within temperature and pressure

3

World class operation delivering total quality (delivered through a continuous improvement culture)

4

High level of AI and robotics

5

Sustainable thinking

Turnover overall for the year increased, driven by strong demand for our ultrasonic measurement portfolio and our defence product portfolio. We forecast that this will build strongly into 2025, as demand continues to increase and British Rototherm establishes a market leading position. At the same time, we continued to exit out of non-core product lines and suffered one-off costs relating to these which brought down our overall profitability, despite and increase year-on-year. We forecast this to grow strongly as we move into 2025.

The company is heavily investing in Automation and AI within our operation to further drive our operational excellence forwards and we foresee these driving further productivity gains and strengthening our competitive advantages.

Key Performance Indicators

The company's key performance indicators (KPI's) are summarised below:

KPI's

Year Ended 31 December 2024 (£)

Year Ended 31 December 2023 (£)

Turnover

10,956,875

10,234,469

Gross Margin

27.5%

11.3%

Operating profit / (loss)

714,887

(434,992)

OP as % of Turnover

6.5%

(4.3%)

Net Current Assets

4,071,337

2,860,963

PRINCIPAL RISKS AND UNCERTAINTIES

The nature of the business environment in which the company operates is inherently risky. Whilst it is not possible to eliminate all such risks and uncertainties, the company has a risk management and internal control system in place to manage them.

The directors and management meet regularly to identify the risks that are considered most likely to have an impact on the business and its strategic priorities. If emerging risks are identified, these are incorporated immediately into the risk management process.

The following sets out the principal risks faced by the company and how they are mitigated:

People

-

The company depends on a skilled, flexible, diverse and well-motivated workforce. If the company does not succeed in attracting, developing and retaining skilled people, as well as understanding and embracing the diversity of those people, it will not be able to grow the business as anticipated.

-

The company has in place procedures to monitor staff turnover closely and to monitor pay and conditions against the prevailing market to ensure that the company remains competitive. Succession planning and staff development are managed at all levels in the company, underpinned by a training process which is designed to assist in career development of its staff and also identify potential successors for key roles.

Reputation and Corporate Responsibility

-

The company's ability to win new business depends largely on its relationship with customers, supply chain partners, employees, and other stakeholders. The company's growth targets may not be achieved if its reputation is adversely affected.

-

The Steps taken include effective leadership, community engagement, and striving for safe, sustainable business.

-

The company takes corporate responsibility seriously and is committed to implementing appropriate policies and systems, including concern for employees' health, safety, the environment, and the community.

Health, Safety, Environment

-

The company's activities are often complex and require continuous monitoring and management of health, safety, and environmental risks. Failure to manage these could expose the company to significant potential liability and reputational damage.

-

Detailed policies and procedures exist to mitigate these risks and are subject to review and monitoring by internal and external specialists. Compliance is monitored in various ways, including audits, leadership involvement, and inspections.

-

The environmental policy aims to mitigate pollution, comply with environmental legislation, and maintain high standards to ensure environmental incidents are kept to a minimum.

Treasury Operations and Financial Instruments

The company’s operations expose it to a variety of financial risks that include the effects of price risk, credit risk, liquidity risk, and interest rate risk.

The company has in place an informal risk management programme that seeks to limit the adverse effects on the financial performance of the company by monitoring levels of debt finance and the related finance costs.

Given the size of the company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the company’s finance department.

Price Risk

The company is exposed to commodity price risk as a result of its operations. The price of commodities depends on a wide range of factors, most of which are outside of the control of the company. Where possible, the company will seek to mitigate the risk by fixing prices at favourable terms. However, given the current size of the company's operations, the costs of managing exposure to commodities may exceed any potential benefits. The directors will revisit the appropriateness of this policy as the company's operations change in size or nature.

Credit Risk

The company has in place policies that require appropriate credit checks on potential customers to be undertaken before sales are made. The amount of exposure to any individual counterparty will be continually monitored in line with the company's credit control procedures.

Liquidity Risk and Interest Rate Risk

The company actively maintains short-term and long-term debt finance designed to ensure sufficient available funds for operations and planned expansions. The directors are satisfied that sufficient funds and facilities are planned through the availability of loan funding from shareholders and external parties.

The directors recognise that unforeseen events could change this assumption, but they are sufficiently satisfied that available steps can raise short-term finance to ensure sufficient funds during the period.

Exposure to interest rate fluctuations is minimal as there is currently no external variable rate bank debt; loans are payable at fixed rate interest.

ON BEHALF OF THE BOARD:

O E Conger - Director

30 September 2025

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of manufacturing of precision instrumentation to measure temperature, pressure, level and flow.

DIVIDENDS

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

FUTURE DEVELOPMENTS

The strategy and future developments of the business are set out in the strategic report.

DIRECTORS

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

T J Conger

O E Conger

H Conger

C J Rea

R Carbonnaux Conger

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

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

-	select suitable accounting policies and then apply them consistently;

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Bevan Buckland LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

O E Conger - Director

30 September 2025

Qualified Opinion

We have audited the financial statements of The British Rototherm Company Limited (the 'company') for the year ended 31 December 2024 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion, except for the possible effects of the matters described in the basis for qualified opinion paragraph, 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 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 qualified opinion

The company's financial statements for the year to 31 December 2022 included stock balances with a carrying value of £2,904,479, however the audit information available to us states that the company did not keep an accurate stock recording system which could be relied on for the purpose of the audit. Since this date was prior to our appointment as auditor of the company we are unable to obtain sufficient appropriate audit evidence regarding the opening stock position for the year ended 31 December 2023. Therefore our opinion on the current period's financial statements is modified in relation to the comparative opening stock valuation. We did not identify any further modifications to our opinion in relation to the current year figures.

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

Conclusions relating to going concern

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

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

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

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

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

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We discussed our audit independence complying with the Revised Ethical Standard 2024 with the engagement team members whilst planning the audit and continually monitored our independence throughout the process.

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

-enquiring of management, including obtaining and reviewing supporting documentation, concerning the company's policies and procedures relating to:

- identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;

- detecting and responding to the risks of fraud and whether they have knowledge of any actual suspected or alleged fraud;

- the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations;

- discussing among the engagement team how and where fraud might occur in the Financial Statements and any potential indicators of fraud. As part of this discussion, we identified potential for fraud in the following areas;

- Management override of controls

- Obtaining an understanding of the legal and regulatory frameworks that the company operates in, focusing on those laws and regulations that had a direct effect on the Financial Statements or that had a fundamental effect on the operations of the company, The key laws and regulations we considered in this context included the UK Companies Act and relevant tax legislation.

Audit response to risks identified

In addition to the above, our procedures to respond to risks identified included the following:

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

- enquiring of management concerning actual and potential litigation and claims; performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

- reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and

- in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments;

- assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and

- evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

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

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Alison Vickers (Senior Statutory Auditor)

for and on behalf of Bevan Buckland LLP

Chartered Accountants

And Statutory Auditors

Ground Floor Cardigan House

Castle Court

Swansea Enterprise Park

Swansea

SA7 9LA

30 September 2025

TURNOVER

3

10,956,875

10,234,469

Cost of sales

7,943,058

9,073,923

GROSS PROFIT

3,013,817

1,160,546

Administrative expenses

2,350,430

1,602,637

663,387

(442,091

)

Other operating income

15,124

7,099

OPERATING PROFIT/(LOSS)

5

678,511

(434,992

)

Income from shares in group undertakings

383,639

-

Interest receivable and similar income

5,251

-

388,890

-

1,067,401

(434,992

)

Interest payable and similar expenses

6

12,054

13,825

PROFIT/(LOSS) BEFORE TAXATION

1,055,347

(448,817

)

Tax on profit/(loss)

7

12,152

(96,469

)

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

1,043,195

(352,348

)

PROFIT/(LOSS) FOR THE YEAR

1,043,195

(352,348

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,043,195

(352,348

)

FIXED ASSETS

Intangible assets

8

566,170

672,492

Tangible assets

9

1,297,112

1,288,329

Investments

10

955,477

975,460

2,818,759

2,936,281

CURRENT ASSETS

Stocks

11

2,347,523

2,386,042

Debtors

12

2,972,803

2,917,923

Cash at bank and in hand

878,233

552,265

6,198,559

5,856,230

CREDITORS

Amounts falling due within one year

13

2,147,506

2,995,267

NET CURRENT ASSETS

4,051,053

2,860,963

TOTAL ASSETS LESS CURRENT LIABILITIES

6,869,812

5,797,244

CREDITORS

Amounts falling due after more than one year

14

(128,132

)

(195,316

)

PROVISIONS FOR LIABILITIES

17

(318,716

)

(222,159

)

NET ASSETS

6,422,964

5,379,769

CAPITAL AND RESERVES

Called up share capital

18

86,245

86,245

Capital redemption reserve

19

348,704

348,704

Retained earnings

19

5,988,015

4,944,820

SHAREHOLDERS' FUNDS

6,422,964

5,379,769

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

O E Conger - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2023

86,245

5,297,168

348,704

5,732,117

Changes in equity

Total comprehensive income

-

(352,348

)

-

(352,348

)

Balance at 31 December 2023

86,245

4,944,820

348,704

5,379,769

Changes in equity

Total comprehensive income

-

1,043,195

-

1,043,195

Balance at 31 December 2024

86,245

5,988,015

348,704

6,422,964

1.	STATUTORY INFORMATION

The British Rototherm Company Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

•

the requirements of paragraphs 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A;

•

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

Preparation of consolidated financial statements

The financial statements contain information about The British Rototherm Company Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertaking are included by full consolidation in the consolidated financial statements of its parent, Melius Holdings Limited, Cardigan House, Swansea Enterprise Park, Swansea, Wales, SA7 9LA.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the company's accounting policies, management is required to make judgements, estimates, and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Key Sources of Estimation Uncertainty

The key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are described below:

Useful Economic Lives of Intangible Assets

The annual amortisation charge for intangible assets is sensitive to changes in the estimated useful economic lives of the assets. The useful economic lives are re-assessed annually and amended when necessary to reflect current estimates. See the notes for the carrying amount of intangible assets.

Useful Economic Lives of Tangible Assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of these assets. These are re-assessed annually and amended when necessary to reflect current estimates.

Impairment of Debtors

The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment, management considers factors including the current credit rating of the debtor, the ageing profile of debtors, and historical experience.

Stock Provisioning

When calculating stock provisions, management considers the nature and condition of stock, as well as applying assumptions regarding the anticipated saleability of finished goods and future usage of raw materials.

Turnover

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured at fair value of the consideration received or receivable, excluding discounts, rebates, value added taxes and any other sales taxes.

In respect of long term contracts for ongoing services, turnover represents the value of work done in the year, including estimates of amounts not invoiced.

Goodwill

Goodwill recognised represents the excess of fair value and directly attributable cost of the purchase consideration over the fair values of the company's interest in the identifiable net assets, liabilities and contingent liabilities acquired.

Goodwill is amortised over its expected useful life. Where the company is unable to make a reliable estimate of useful life, goodwill is amortised over a period not exceeding 10 years. Goodwill is assessed for impairment when there are indicators of impairment and any such impairment is charged to the Profit and Loss Account. Reversal of impairments are recognised when the reasons for the impairments no longer apply.

Intangible assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity, the fair value of the asset can be measured reliably,

the intangible asset arises from contractual or other legal rights, and the intangible asset is separable from the entity.

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:

Intellectual property rights: 10% on cost

Research and development: 10% on cost

Tangible fixed assets

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

Long leasehold

-

10% on cost

Plant and Machinery

-

10 - 50% on cost

Fixtures and fittings

-

10 - 20% on cost

Motor vehicles

-

25% on cost

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks

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

Cost is determined on a weighted average basis that approximates to a first-in, first-out (FIFO) method. The company applies the standard cost method for the recognition and subsequent measurement of raw materials.

The cost of manufactured finished goods and work in progress includes direct labour costs, other direct labour costs, and related production overheads (based on standard operating capacity).

A provision is made for any foreseeable losses where appropriate for work in progress. No element of profit is included in the valuation of work in progress.

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

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

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

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

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

Research and development

Development of products is capitalised where there is expected to be a benefit to future periods and the following conditions are met:

(i) It is technically feasible to complete the research or development so that the product will be available for use or sale.

(ii) It is intended to use or sell the product being developed.

(iii) The company is able to use or sell the product.

(iv) It can be demonstrated that the product will generate probable future economic benefits.

Adequate technical, financial and other resources exist so that product development can be completed and subsequently used or sold.

(v) Expenditure attributable to the research and development work can be reliably measured.

(vi) Capitalised development expenditure is stated at cost less accumulated amortisation and impairment losses and amortised over its useful economic life. Assessments of useful economic life range from 5 to 15 years.

All other research and development expenditure is recognised as an expense in the period in which it is incurred.

Foreign currencies

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

Hire purchase and leasing commitments

At inception, the company assesses agreements that transfer the right to use assets. The assessment considers whether the arrangement is, or contains, a lease based on the substance of the arrangement.

(i) Finance Leased Assets

Leases of assets that transfer substantially all the risks and rewards incidental to ownership are classified as finance leases.

Finance leases are capitalised at commencement of the lease as assets at the fair value of the leased asset or, if lower, the present value of minimum lease payments calculated using the interest rate implicit in the lease. Where the implicit rate cannot be determined, the company's incremental borrowing rate is used. Incremental direct costs incurred in negotiating and arranging the lease are included in the cost of the asset.

Assets are depreciated over the shorter of the lease term and the estimated useful life of the asset. Assets are assessed for impairment at each reporting date.

The capital element of the lease obligation is recorded as a liability on inception of the arrangement. Lease payments are apportioned between capital repayment and finance charge, using the effective interest rate method, to produce a constant rate charge on the balance of capital repayments outstanding.

(ii) Operating Leased Assets

Leases that do not transfer all risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to the Income Statement on a straight-line basis over the period of the lease.

(iii) Lease Incentives

Incentives received to enter into finance leases reduce the fair value of the asset included in the calculation of the present value of minimum payments.

Incentives received to enter into operating leases are credited to the Income Statement to reduce expenses on a straight-line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions are charged to the Income Statement as they become payable in accordance with the rules of the scheme. Differences between contributions payable in the year and contributions actually paid are shown in either accruals or prepayments on the Balance Sheet.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Financial instruments

The company has chosen to adopt the Sections 11 and 12 of FRS102 in respect of financial instruments.

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

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

Basic financial assets

Basic financial assets, which include 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

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.

Impairment of financial assets

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.

Derecognition of financial assets

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.

Classification of financial liabilities

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

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans and loans from fellow group companies 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.

Derecognition of financial liabilities

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

Equity instruments

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

Government Grants

Government grants are recognised at the fair value of the asset received or receivable when there is a reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recongised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

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.

Provisions

(i) Provisions

Provisions are recognised when the company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount of the obligation can be estimated reliably.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are not made for future operating losses.

Provisions are measured at the present value of expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and risks specific to the obligation. The increase in provision due to the passage of time is recognised as a finance cost.

(ii) Contingencies

Contingent liabilities arise as a result of past events when:

(a) it is not probable that there will be an outflow of resources or that amounts cannot be reliably measured at the report date, or

(b) when existence will be confirmed by the occurrence or non-occurrence of uncertain future events not wholly within the company's control.

Contingent liabilities are disclosed in the financial statements unless the probability of an outflow of resources is remote.

Contingent assets are not recognised. Contingent assets are disclosed in the financial statements when the inflow of future economic benefits is probable.

3.

TURNOVER

The turnover and profit (2023 - loss) before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2024

2023

£

£

United Kingdom

5,459,180

4,885,648

Europe

2,834,587

2,558,433

Rest of world

2,663,108

2,790,388

10,956,875

10,234,469

4.	EMPLOYEES AND DIRECTORS

2024

2023

£

£

Wages and salaries

3,328,555

3,259,668

Social security costs

314,635

291,188

Other pension costs

85,221

70,126

3,728,411

3,620,982

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

2024

2023

Production

89

96

Selling and distribution

10

10

Administration

9

9

108

115

2024

2023

£

£

Directors' remuneration

166,780

-

Directors' pension contributions to money purchase schemes

21,000

-

5.	OPERATING PROFIT/(LOSS)

The operating profit (2023 - operating loss) is stated after charging/(crediting):

2024

2023

£

£

Hire of plant and machinery

5,110

4,774

Other operating leases

252,222

131,422

Depreciation - owned assets

161,362

180,520

Depreciation - assets on hire purchase contracts

22,000

22,000

Profit on disposal of fixed assets

(965

)

(13,377

)

Goodwill amortisation

48,276

-

Patents and licences amortisation

27,926

27,926

Development costs amortisation

30,120

-

Auditors' remuneration

35,960

54,175

Foreign exchange differences

17,266

43,016

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2024

2023

£

£

Bank loan interest

12,054

13,825

7.

TAXATION

Analysis of the tax charge/(credit)

The tax charge/(credit) on the profit for the year was as follows:

2024

2023

£

£

Current tax:

UK corporation tax

(84,405

)

-

Deferred tax

96,557

(96,469

)

Tax on profit/(loss)

12,152

(96,469

)