REGISTERED NUMBER: 07680845 (England and Wales)

Xcel Aerospace Limited

Strategic Report, Directors' Report and

Audited Financial Statements

for the Year Ended 31 December 2024

Page

Company Information

1

Strategic Report

2

Directors' Report

3

Independent Auditors' Report

5

Income Statement and Other Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Notes to the Financial Statements

11

Directors:

H Cuadrado

N J Rafferty

Secretary:

N J Rafferty

Registered office:

1 Ashton Road

Harold Hill

Romford

Essex

RM3 8UH

Registered number:

07680845 (England and Wales)

Auditors:

Cooper Parry Group Limited

Statutory Auditor

New Derwent House

69-73 Theobalds Road

London

WC1X 8TA

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

Principal activities

The principal activity of the Company is to be a manufacturer of precision aviation products.

Review of business

The Company's position in the marketplace remains strong in terms of customer interest and support, with the business having been selected by several key customers as a future strategic supplier. The Company has invested in five axis machining centers in recent years, which has significantly increased capacity and quality of products available for delivery. The aviation industry has recovered from the challenges of the Covid 19 worldwide impact of air travel and the main airframe manufacturers having extraordinarily strong orderbooks with significant backlogs in deliveries.

Key performance indicators

The Company measures itself in a number of diverse ways using key performance indicators (KPI's). These include:

- Turnover

- Operating profit / (loss)

- Stock Holding

The Company results show an increase in turnover of 27% to £8,318,451 (2023: £6,535,964) mainly because of the increased volume of Boeing B787 aircraft built.

The operating profit for the year is £1,362,137 (2023: £663,769) because of the increased turnover.

The Company closed the year with stocks of £1,626,069 (2023: £1,392,389) due to the stock held to achieve increased turnover.

Principal risks and uncertainties facing the company

The principal risks to the business are revenue losses and margin erosion through customer price challenges and contractual discount structure and end dates. With the ongoing pursuit of continuous improvement and investment in the latest manufacturing machinery and methods being used to offset margin erosion, combined with the ongoing negotiations with major customers around contract renewal and additional new business, we are confident these risks are being tackled.

During the period of Covid 19 many airlines retired old models of aircraft earlier than the normal cycle would have dictated and this led to less demand for parts for engine overhaul frequency and build rate profile changes on legacy and new platforms. During this year, the demand for new platforms has increased considerably and the result is that we have seen an increase in revenue growth and a change in focus in terms of business development for the future.

The business still faces the ongoing challenges of stock obsolescence, the risks of defaults on debts from customers, and the risks associated with a small number of customers representing a sizable proportion of the Company's turnover. Obsolete stocks are marked down, and where they cannot be disposed of, they are scrapped. Our exposure to bad debts has been historically low due to tight credit control procedures that we maintain. The short-term risk to a small number of key customers representing a sizable proportion of turnover is managed by business contracts whilst in the longer term the customer base is planned to be expanded.

Future outlook

The outlook for the company is to continue to increase turnover with a diversification of its customer base combined with investment in new machinery with will improve capacity and quality of the products it produces.

On behalf of the board:

N J Rafferty - Director

29 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 the manufacturing and supply of aerospace components.

Results

The profit for the year, after taxation, amounted to £894,026 (2023: £601,590).

Dividends

The directors do not recommend the payment of a dividend for the financial year (2023: £Nil).

Future developments

There are no significant changes anticipated to the operations of the Company and the Company is expected to continue with manufacturing activities for the foreseeable future.

Directors

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

H Cuadrado

N J Rafferty

Qualifying third party indemnity provisions

The directors benefit from a qualifying indemnity provision in the form permitted by the Section 24 of the Companies Act 2006 in respect of certain third party actions against directors. No claim or notice of claim in respect of these indemnities has been received in the year. The qualifying indemnity provision was in force throughout the financial year and up to the date of approval of the Directors Report.

Going concern

The Company made a profit during the year of £894,026 (2023: £601,590) and at the year end had net current assets of £3,521,738 (2023: £2,896,193). In assessing the appropriateness of the going concern assumption, the directors have prepared detailed monthly cash flow forecasts for the period to 31 December 2025 and considered those cash flow forecasts alongside the committed funding facilities available to the Company, which is principally an invoice discounting facility provided by Lloyds Bank Limited. That facility is undrawn at the time of approval of these financial statements.

The cash flow forecasts have taken into account the unprecedented circumstances brought on by the worldwide events, including a downturn in the global aviation sector and a prudent expectation of the speed of recovery. The base case scenario also reflects the benefits of actions already taken by management to mitigate the trading downsides, including utilising government support measures, renegotiating supplier arrangement (including payment terms) and reassessing the Company's cost base.

Having assessed the Company's liquidity outlook on the basis of revised forecasts, and after considering plausible downside scenarios, the directors have a reasonable expectation that the Company will be able to operate within the facility available to it for at least 12 months from the date of approval of these financial statements and, consequently, have continued to prepare the financial statements on a going concern basis.

Statement of directors' responsibilities

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

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

-	select suitable accounting policies and then apply them consistently;

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

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

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 ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

The auditors, Cooper Parry Group Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

On behalf of the board:

N J Rafferty - Director

29 September 2025

Opinion

We have audited the financial statements of Xcel Aerospace Limited (the 'Company') for the year ended 31 December 2024 which comprise the Income Statement and 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 the financial statements:

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

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 Directors' Report, but does not include the financial statements and our Auditors' Report 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 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.

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 Directors' Report.

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

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

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

We gained an understanding of the legal and regulatory framework applicable to the Company and the industry in which it operates, and considered the risk of acts by the Company that were contrary to applicable laws and regulations, including fraud. We discussed with the Directors the policies and procedures in place regarding compliance with laws and regulations. We discussed amongst the audit team the identified laws and regulations, and remained alert to any indications of non-compliance.

During the audit we focussed on laws and regulations which could reasonably be expected to give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management.

Our procedures in relation to fraud included but were not limited to: inquires of management whether they have any knowledge of any actual, suspected or alleged fraud, and discussions amongst the audit team regarding risk of fraud such as opportunities for fraudulent manipulation of financial statements. We determined that the principal risks related to posting manual journal entries to manipulate financial performance and management bias through judgements in accounting estimates. We also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. In assessing the potential risks of material misstatement we obtained an understanding of; the entities operations, including the nature of its revenue sources and services and of its objectives and strategies to understand the classes of transactions, account balances, expected financial statement disclosures and business risks that may result in risks of material misstatement. We did not identify any matters relating to non-compliance with laws and regulations relating to fraud.

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

Other matters

We draw attention to Note 2 of the financial statements, which explains that the comparative information presented for the year ended 31 December 2023 was not audited. Our opinion is not modified in respect of this matter.

Use of our report

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

Chris Evans (Senior Statutory Auditor)

for and on behalf of Cooper Parry Group Limited

Statutory Auditor

New Derwent House

69-73 Theobalds Road

London

WC1X 8TA

29 September 2025

Turnover

4

8,318,451

6,535,964

Cost of sales

(4,059,093

)

(3,093,923

)

Gross profit

4,259,358

3,442,041

Administrative expenses

(2,959,933

)

(2,888,272

)

1,299,425

553,769

Other operating income

62,712

110,000

Operating profit

1,362,137

663,769

Interest payable and similar expenses

7

(56,438

)

1,658

Profit before taxation

8

1,305,699

665,427

Tax on profit

9

(411,673

)

(63,837

)

Profit for the financial year

894,026

601,590

Other comprehensive income

Share options expense

47,082

46,211

Income tax relating to other comprehensive income

-

-

Other comprehensive income for the year, net of income tax

47,082

46,211

Total comprehensive income for the year

941,108

647,801

Fixed assets

Tangible assets

11

1,734,606

1,361,236

Investments

12

100

100

1,734,706

1,361,336

Current assets

Stocks

13

1,626,069

1,392,389

Debtors

14

3,075,991

3,589,856

Cash at bank

911,544

60,747

5,613,604

5,042,992

Creditors

Amounts falling due within one year

15

2,091,866

2,146,799

Net current assets

3,521,738

2,896,193

Total assets less current liabilities

5,256,444

4,257,529

Creditors

Amounts falling due after more than one year

16

(355,955

)

(554,151

)

Provisions for liabilities

19

(286,003

)

(30,000

)

Net assets

4,614,486

3,673,378

Capital and reserves

Called up share capital

20

3,500,000

3,500,000

Capital contribution reserve

21

664,000

664,000

Share option reserve

21

93,293

46,211

Retained earnings

21

357,193

(536,833

)

Shareholders' funds

4,614,486

3,673,378

The financial statements were approved by the Board of Directors and authorised for issue on 29 September 2025 and were signed on its behalf by:

N J Rafferty - Director

Called up

Capital

Share

share

Retained

contribution

option

Total

capital

earnings

reserve

reserve

equity

£

£

£

£

£

Balance at 1 January 2023

3,500,000

(1,138,423

)

664,000

-

3,025,577

Changes in equity

Total comprehensive income

-

601,590

-

46,211

647,801

Balance at 31 December 2023

3,500,000

(536,833

)

664,000

46,211

3,673,378

Changes in equity

Total comprehensive income

-

894,026

-

47,082

941,108

Balance at 31 December 2024

3,500,000

357,193

664,000

93,293

4,614,486

1.	Statutory information

Xcel Aerospace 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 Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Prior year financial statements

The financial statements for the year ended 31 December 2023 have not been audited.

Functional and presentational currency

The presentation of the financial statements is the Pound Sterling (£). Amounts in these financial statements are rounded to the nearest £.

Foreign currency translation

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

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

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income Statement within 'other operating income'.

Financial Reporting Standard 102 - reduced disclosure exemptions

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 requirement of paragraph 3.17(d);

•

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 26.18(b), 26.19 to 26.21 and 26.23.

Preparation of consolidated financial statements

The financial statements contain information about Xcel Aerospace 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, Captiva Venture Partners Limited, New Derwent House, 69-73 Theobalds Road, London, England, WC1X 8TA.

Copies of the group accounts are available from the registered office address of the parent.

Related party exemption

The Company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

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 as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

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

-

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

-

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

-

the amount of revenue can be measured reliably;

-

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

-

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

Tangible fixed assets

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

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell or its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is provided on the following basis:

Short-term leasehold property

-

Straight line over the length of the lease

Plant and machinery

-

2.5% - 12.5% on a straight line basis

Motor vehicles

-

10% - 25% on a straight line basis

Fixtures and fittings

-

10% - 25% on a straight line basis

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised in the Income Statement.

Government grants

Grants are accounted for under the accruals model as permitted by FRS102.

Grants of a revenue nature are recognised in the income statement in the same period as the related expenditure.

The Company has taken advantage of one of the local government grants and, consistent with the point above, income has been classified as other income in the income statement.

The Company received a government grant of £62,712 (2023: £110,000) for Research & Development.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Income Statement.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flow discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the reporting date.

Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an 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.

Taxation

Tax is recognised in the Income Statement, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.

Deferred tax

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

-

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

-

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

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

Operating leases: the company as lessee

Rentals paid under operating leases are charged to the Income Statement on a straight line basis over the lease term.

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

The Company has taken advantage of the optional exemption available on transition to FRS 102 which allows lease incentives on leases entered into before the date of transition to the standard 01 January 2018 to continue to be charged over the period to the first market rent review rather than the term of the lease.

Interest payable and similar expense

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

Borrowing costs

All borrowing costs are recognised in the Income Statement in the year in which they are incurred.

Pensions: Defined contribution pension plan

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

The contributions are recognised as an expense in the Income Statement when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

Debtors

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

Cash and cash equivalents

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

Creditors

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

Provisions and contingencies

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

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

When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.

Share based payments

The Company operates an equity-settled compensation plan for its employees. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense in the income statement. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted at the date of grant, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At each statement of financial position date, the entity revises its estimates of the number of options that are expected to vest. It recognises the impact of the revision to original estimates, if any, in the income statement. The credit entry is taken to reserves because the share options are equity-settled.

Going concern

The Company made a profit £894,026 (2023: £601,590) during the year and at the year end had net current assets of £3,521,738 (2023: £2,896,193). In assessing the appropriateness of the going concern assumption, the directors have prepared detailed monthly cash flow forecasts for the period 31 December 2025 and considered those cash flow forecasts alongside the committed funding facilities available to the Company, which is principally an invoice discounting facility provided by Lloyds Bank Limited. That facility is undrawn at the time of approval of these financial statements.

Having assessed the Company's liquidity outlook on the basis of revised forecasts, and after considering plausible downside scenarios, the directors have a reasonable expectation that the Company will be able to operate within the facilities available to it for at least 12 months from the date of approval of these financial statements and consequently, have continued to prepare the financial statements on a going concern basis.

3.	Critical accounting judgements and key sources of estimation uncertainty

In applying the accounting policies, the Directors are required to make judgements, estimates and assumptions affecting the carrying values 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, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates and assumptions.

Significant judgments and estimates

An estimate or judgement may be considered critical if it involves matters that are highly uncertain or where different estimation methods could reasonably have been used, or if changes in the estimate that would have a material impact on the Company's results are likely to occur from period to period.

Key sources of estimation uncertainty

There is estimation uncertainty in calculating depreciation. A full line by line review of fixed assets is carried out by management regularly. Whilst every attempt is made to ensure that the depreciation policy is as accurate as possible, there remains a risk that the policy does not match the useful life of the assets.

There is estimation uncertainty in calculating deferred tax. A full line by line review of deferred tax is carried out by management regularly. Whilst every attempt is made to ensure that the deferred tax is accurate as possible, there remains a risk that the provisions do not match the actual tax liability when asset is disposed off.

The directors consider that the estimation for the allowance for doubtful debts is a source of uncertainty. This estimate replies on a subjective assessment of the recoverability of each receivable. The directors regularly review aged receivables reports in order to inform this estimate.

Similarly the directors consider the estimation of the allowance for stock is critical. This estimate relies on an assessment of the net realisable value of the stocks. The directors review the age and potential obsolescence of stock in order to inform this estimate.

Share-based payments have been made to employees of the Company. The fair value of any vested share options is recognised in the income statement. The fair value of share options is estimated using the Black Scholes model. The fair value of the ordinary shares in issue at the date of granting the options is used as an input to the model.

4.

Turnover

The turnover and profit 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

64%

77%

Europe

33%

19%

Rest of the World

3%

4%

100%

100%

5.	Employees and directors

2024

2023

as restated

£

£

Wages and salaries

2,384,956

2,255,509

Social security costs

245,529

232,914

Other pension costs

114,557

59,305

2,745,042

2,547,728

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

2024

2023

as restated

Manufacturing

40

42

Distribution

10

10

Administrative

7

7

57

59

6.	Directors' emoluments

2024

2023

£

£

Director' emoluments

176,690

203,000

Company contributions to defined contribution pension schemes

58,456

14,932

235,146

217,932

During the year retirement benefits were accruing to 2 directors (2023: 2) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £88,690 (2023: £115,071) during the year, and the value of contribution to a defined contribution pension scheme in respect of the highest paid director amounted to £51,200 (2023: £14,932).

7.

Interest payable and similar expenses

Interest payable includes £21,014 (2023: £39,770) on bank loans and £35,424 (2023: £38,112) on hire purchase agreements

8.	Profit before taxation

The profit is stated after charging/(crediting):

2024

2023

as restated

£

£

Other operating leases

401,100

401,100

Depreciation - owned assets

235,910

236,503

Profit on disposal of fixed assets

(1,333

)

-

Foreign exchange differences

832

2,115

Auditors remuneration

20,000

-

9.

Taxation

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2024

2023

as restated

£

£

Current tax:

UK corporation tax

217,507

63,837

CT Over/ Under Provision

(63,837

)

-

Total current tax

153,670

63,837

Deferred tax

258,003

-

Tax on profit

411,673

63,837