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

• Profit Before Taxation: The company achieved a profit after taxation (before exceptional items) during the year of £1,496,511, a further improvement compared to the profit in 2023 when excluding the exceptional items.

• Turnover Growth: Turnover increased by 16.5% due to increased efficiencies in service sales

• Gross Margin: The gross margin increased slightly to 43.4% when compared with the prior year, being 42%.

Market Expansion and Historical Trade Sales

• The company continued to strengthen its after-sales customer care proposition, which remains a key strategic differentiator.

• Efforts were focused on retaining existing customers while targeting new segments within the hospitality and retail markets.

• Aftersales and maintenance services continued to provide a resilient revenue stream despite fluctuations in capital equipment sales.

Administrative Expenses and Workforce Reintegration

• Administrative expenses rose by 18.5% compared to 2023, largely due to sustained investment in skilled personnel within the customer care and technical service teams.

• This staffing expansion is aligned with the strategic aim of maintaining excellent service levels and enhancing long-term customer retention.

Positive Indicators for the Future

• The company is actively pursuing several tender opportunities.

• Continued investment in service capabilities and the expansion of the product portfolio position the company well for sustained profitability and market share growth.

The directors remain confident in the company's ability to manage its financial position effectively. Strategic initiatives, coupled with prudent cost management, provide a strong platform to address market challenges and capture new opportunities.

The company acknowledges the following principal risks and uncertainties:

• Increased Competition: The competitive coffee machine market requires constant innovation and differentiation to maintain and grow market share.

• Economic Climate: Broader economic uncertainty remains a risk, particularly regarding customer capital expenditure patterns.

Conclusion

Franke Coffee Systems UK Ltd remains committed to its strategic objectives. The board appreciates the dedication of its employees, partners, and stakeholders in achieving sustainable growth.

On behalf of the board

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

The principal activity of the company continued to be that of the the sale, distribution and maintenance of coffee machines.

The results for the year are set out on page 7.

Ordinary dividends were paid amounting to £6,500,000. The directors do not recommend payment of a final dividend.

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

The company is exposed to various risks in relation to financial instruments. Given the nature of the company's financial assets and liabilities the main types of risk are market risk, credit risk and liquidity risk.

The company's risk management is coordinated by the board of directors, and focuses on actively securing the company's short to medium-term cash flows by minimising the exposure to volatile financial markets.

The company does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the Company is exposed are described below.

Market risk analysis

The Company is exposed to market risk through its use of financial instruments specifically to currency risk.

Most of the Company's transaction are carried out in GBP. Exposure to currency exchange rates arise from Group's overseas sales and purchases, which are primarily denominated in CHF and EUR.

The Company does not enter into currency contracts to mitigate the exposure to foreign currency.

Credit risk analysis

Credit risk is the risk that a counterparty fails to discharge an obligation to the Company. The Group is exposed to this risk for various financial instruments, for example allowing receivables to customers, placing deposits etc. The Company's maximum exposure to credit risk is limited to the carrying amount of trade and other receivables recognised at 31 December.

The company's management considers that materially all financial assets are not impaired. Those past their due date at 31 December do not give risk to a material credit risk concern. In general management consider that the receivables are of good credit quality.

The credit risk for cash and cash equivalents is considered negligible since the counterparties are reputable banks with high quality external credit ratings.

Liquidity risk analysis

Liquidity risk is that the Company might be unable to meet its obligations. The Company manages its liquidity needs by monitoring forecast cash inflows and outflows due in day-to-day business. Liquidity needs are monitored on a week-to-week basis.

In accordance with the company's articles, a resolution proposing that Hart Shaw LLP be reappointed as auditor of the company will be put at a General Meeting.

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 International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. 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, International Accounting Standard 1 requires that directors:

• properly select and apply accounting policies;

• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

• provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

• make an assessment of the company's ability to continue as a going concern.

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.

Each director in office at the date of approval of this annual report confirms that:

• so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware, and

• the director has taken all the steps that he / she ought to have taken as a director in order to make himself / herself aware of any relevant audit information and to establish that the company's auditor is aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

We have audited the financial statements of Franke Coffee Systems UK Limited (the 'company') for the year ended 31 December 2024 which comprise the income statement, the statement of financial position, 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 UK adopted international accounting standards.

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 UK adopted international accounting standards; 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.

At the planning stage we identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the directors and other management, as required by auditing standards. The potential effect of any laws and regulation on the financial statements can vary considerably. There are laws and regulations that directly affect the financial statements (e.g. the Companies Act) as well as many other operational laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements. Owing to the size, nature and complexity of the organisation and the applicable laws and regulations to which it must adhere, the risk of material misstatement was deemed to be low, therefore the procedures performed by the audit team were limited to:

• Communicating identified laws and regulations at planning throughout the audit team to remain alert to any indications of non-compliance throughout the audit.

• Enquiry of management and those charged with governance around actual and potential litigation and claims as well as non-compliance with laws and regulations.

• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

We have assessed the overall susceptibility of the financial statements to material misstatement due to fraud. Management override is the most common way in which fraud might present itself and is therefore inherently high risk on any audit. Management override which may cause there to be a material misstatement within the financial statements may present itself in a number of ways, for example:

• Override of internal controls (e.g. segregation of duties)

• Entering into transactions outside the normal course of business, especially with related parties

• Fraudulent revenue recognition, including fictitious sales and sales being recorded in the wrong period

• Presenting bias in accounting judgements and estimates, particularly the ones disclosed in note 2 to the financial statements.

In order to reduce the risk of material misstatement to an acceptable level, numerous audit procedures were performed including:

• Enquiries of management as to whether they had any knowledge of any actual or suspected fraud

• Review of material journal entries made throughout the year as well as those made to prepare the financial statements

• Reviewing the underlying rationale behind transactions in order to assess whether they were outside the normal course of business

• Increased substantive testing across material income streams

• Assessing whether management’s judgements and estimates indicated potential bias, particularly those that we considered to be key.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected material misstatements in the financial statements, even though we have performed our audit in accordance with auditing standards. Furthermore, as with all audits, there is a higher risk of irregularities (especially those relating to fraud) being undetected, as these may involve the override of internal controls, collusion, intentional omissions and misrepresentations etc. We are not responsible for preventing non-compliance or fraud and therefore cannot be expected to detect all instances of such. Our audit was not designed to identify misstatements or other irregularities that would not be considered to be material to the financial statements. The further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

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.

The income statement has been prepared on the basis that all operations are continuing operations.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

Franke Coffee Systems UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is 6a Handley Page Way, Colney Street, St Albans, Hertfordshire, AL2 2DQ. The company's principal activities and nature of its operations are disclosed in the directors' report.

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

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 directors have at the time of approving the financial statements, a reasonable expectation that the truecompany has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The company recognises revenue when it transfers control of a product or service to a customer.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

The company recognises revenue from the following major sources:

• Machine sales

• Support and maintenance

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

Machine sales are recognised upon the date the machine is delivered, and if applicable installed, at the delivery address. Machines are sold with a 12 month warranty for which a provision is included on these accounts for the expected future cost.

Support and maintenance income is recognised evenly over the term of the contract.

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 and 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:

Software                  20% on cost

Property, plant and equipment 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 recognised in the income statement.

At each reporting 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.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell. Inventories are valued using the average cost method.

Inventories held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Cash and cash equivalents 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.

Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.

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.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event and it is probable that the company will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Warranties

Provisions for the expected cost of warranty obligations are recognised at the date of sale of the relevant products, at the directors' best estimate of the expenditure required to settle the company's obligation.

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 inventories or non-current 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.

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

At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

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, 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.

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

The Company makes a provision for slow moving inventory. The provision requires estimates for whether the item of inventory will be sold above cost. In the prior year, the company provided in full for any inventory in which they held over 1 years demand and was over 1 year old. In the current year, this was amended to any inventory for which they hold over 2 years demand and is over 1 year old. The previous year has not been restated for this change and it had an immaterial impact on the provision. The quantum of the provision is disclosed in note 14, actual outcomes may vary significantly from this estimate.

As detailed in the exceptional items note, 4, during the 2022 financial year, it became apparent that, in multiple previous years, numerous transactions charged to and paid by the company were not business-related but private. The company initiated a self-declaration to the UK tax authority, HMRC, to report about tax irregularities in the past. The company has committed to a comprehensive internal review to uncover the full extent of the tax non-compliance and have every intention of remedying the situation.

As a result of ongoing discussions with HMRC the company has reassessed the provision at 31 December 2024. The provision has been increased to include the company's best estimate of the interest and penalties expected to be levied by HMRC based on recent correspondence. As the investigation is still ongoing and given the nature of the estimate actual results could vary significantly from this estimate. The quantum of the provision is disclosed in note 21.

In the second half of 2022, concerns came to light that numerous transactions had been historically charged to and paid by the company were not business-related but private expenses of a director and therefore not in the interest of the company. 

During the prior year, the company was able to achieve a first compensation for all known undue transactions as of the date of the receipt. No further amounts were received in the current financial year.

In the 2022 financial year, a provision was made in relation to a non-routine tax liability that the company expected to incur. In the 2024 year this has been increased to include the company's best estimate of the penalties and interest expected to be incurred, based on recent correspondence. For further information, see note 21.

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

Their aggregate remuneration comprised:

The UK corporation tax rate during the year was 25% (2023: 23.52%). The rate of 19% was applicable to 31 March 2023, with 25% being applicable after this date. Deferred tax calculations are on the basis that the applicable tax rate will be 25%.

The charge for the year can be reconciled to the profit per the income statement as follows:

.

Property, plant and equipment includes right-of-use assets, as follows:

Included in inventories is a provision for slow moving/obsolete items of £690,333 (2023 - £930,062)

Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost.

Included in Amounts owed by fellow group undertakings is £61,365 (2023: £79,846) which is unsecured, interest free and repayable under normal trade terms

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value. The directors have included an immaterial provision for potential credit risk based on historical experience and overdue balances at the yearend.

No significant receivable balances are impaired at the reporting end date.

The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.

Trade and other payables disclosed above are classified as loans and receivables and are therefore measured at amortised cost.

The company has fixed and floating charges over all property and assets present and future, in respect of a £200,000 credit facility with Lloyds Bank PLC.

Included in Amounts owed to parent undertaking is £899,992 (2023: £596,944) and in Amounts owed to fellow group undertakings is £380,732 (2023: £19,419) which are all unsecured, interest free and repayable under normal trade terms

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

Lease liabilities are measured at amortised cost.

Lease liabilities relate to rentals payable by the company for:

• Property - The lease for the property is for a term of 10 years

• Motor Vehicles - The average lease term is 3 years and rentals are fixed.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.

Provisions are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

Warranty provision

A 12 month warranty is issued on the sale of all new machines. The company provides for the expected cost of honouring warranties based the volume of machine sales and the historic cost of claims. The provision has not been discounted because the effect of discounting is not material.

Non-routine tax liability

As detailed in the exceptional items note, 4, during the 2022 financial year it became apparent that, in multiple previous years, numerous transactions charged to and paid by the company were not business-related but private. The company initiated a self-declaration to the UK tax authority, HMRC, to report about tax irregularities in the past. The company has committed to a comprehensive internal review to uncover the full extent of the tax non-compliance and have every intention of remedying the situation. As a result the company has included a provision for their best estimate of the tax that has been underpaid as a result of these transactions, however given the nature of the estimate actual results could vary significantly from this estimate.

As a result of ongoing discussions with HMRC the company has reassessed the provision at 31 December 2024. The provision has been increased to include the company's best estimate of the interest and penalties expected to be levied by HMRC based on recent correspondence. As the investigation is still ongoing and given the nature of the estimate actual results could vary significantly from this estimate

As noted in the contingent liability note, 26, these charges have not yet been agreed and therefore there is the potential for HMRC to amend the assessment. The Directors intend to fully co-operate with HMRC.

Deferred revenues are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

The deferred revenue has not been discounted because the effect of discounting is not material.

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.

Potential for penalties & interest

As a result of the described event in the exceptional items note 4, the company initiated a self-declaration to the UK tax authority, HMRC, in the 2022 financial year to report about tax irregularities in the past. The company has committed to a comprehensive internal review to uncover the full extent of the tax non-compliance and have every intention of remedying the situation.

As a result, included in Provisions, note 21, is £1,800,000 which is the Directors’ best estimate of the tax, penalties and interest expected to be paid to HMRC. The estimate is based on correspondence to date with HMRC, however as the HMRC investigation is still open, there is the potential for HMRC to amend their assessment of the amount owed.

The Directors intend to fully co-operate with HMRC.

At 31 December 2024 the company had capital commitments as follows:

The Company's capital management objective are:

• To ensure the Company's ability to continue as a going concern.

• To provide an adequate return to shareholders by pricing services in a way that reflects the level of risk involved in providing those services.

The Company monitors capital on the basis of the carrying amount of equity, less cash and cash equivalents as presented in the statement of financial position.

The Company's goal in capital management is to maintain a capital to overall financing ratio of in excess of 1:1.

Management assess the Company's capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company's various classes of debt. The Company manages the capital structure and makes adjustment to it in the light of changes in economic conditions and the characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debts.

The company is not subject to any externally imposed capital requirements.

The key management personnel of the company is considered to be the directors.

During the year the company entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date:

The following amounts were outstanding at the reporting end date:

The Company is a subsidiary undertaking of Franke Kaffeemaschinen AG. The ultimate parent company is Centinox AG.

The largest group in which the results of the company are consolidated is that headed by Artemis Holding AG, 6052 Hergiswil, Switzerland. The smallest group in which the results of the company are consolidated is that headed by Franke Holdings AG, 4663 Aarburg, Switzerland. The consolidated financial statements are not available to the public.

The ultimate controlling party is Michael Pieper.

Risk management objectives and policies

The company is exposed to various risks in relation to financial instruments. Given the nature of the company's financial assets and liabilities the main types of risk are market risk, credit risk and liquidity risk.

The company's risk management is coordinated by the board of directors, and focuses on actively securing the

company's short to medium-term cash flows by minimising the exposure to volatile financial markets.

The company does not actively engage in the trading of financial assets for speculative purposes nor does it

write options. The most significant financial risks to which the Company is exposed are described below.

Market risk analysis

The Company is exposed to market risk through its use of financial instruments specifically to currency risk.

Most of the Company's transaction are carried out in GBP. Exposure to currency exchange rates arise from Group's overseas sales and purchases, which are primarily denominated in CHF and EUR.

The Company does not enter into currency contracts to mitigate the exposure to foreign currency.

Credit risk analysis

Credit risk is the risk that a counterparty fails to discharge an obligation to the Company. The Group is exposed to this risk for various financial instruments, for example allowing receivables to customers, placing deposits etc. The Company's maximum exposure to credit risk is limited to the carrying amount of trade and other receivables recognised at 31 December.

The company's management considers that materially all financial assets are not impaired. Those past their due date at 31 December do not give risk to a material credit risk concern. In general management consider that the receivables are of good credit quality.

The credit risk for cash and cash equivalents is considered negligible since the counterparties are reputable

banks with high quality external credit ratings.

Liquidity risk analysis

Liquidity risk is that the Company might be unable to meet its obligations. The Company manages its liquidity needs by monitoring forecast cash inflows and outflows due in day-to-day business. Liquidity needs are monitored on a week-to-week basis.