The directors of the company have elected not to include a copy of the income statement within the financial statements.

FTV Proclad (U.K.) Limited is a private company limited by shares incorporated in Scotland. The registered office is Viewfield Industrial Estate, Viewfield Road, Glenrothes, Fife, United Kingdom, KY6 2RD. 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 Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

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 unless otherwise specified in these accounting policies. The material accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. In preparing these financial statements, the company applies the recognition, measurement and disclosure requirements of UK-adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken (where applicable):

• presentation of a statement of cash flows and related notes;

• disclosure of the objectives, policies and processes for managing capital;

• disclosure of key management personnel compensation;

• disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;

• disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;

• maturity analysis of lease liabilities;

• certain disclosures required under IFRS 15 Revenue from Contracts with Customers;

• comparaitve period reconciliations for the carrying amounts of property, plant and equipment; and

• related party disclosures for transactions with the parent or wholly-owned members of the group.

• the requirement to present a statement of financial position as at the beginning of the preceding period when the company has applied an accounting policy retrospectively or made a retrospective restatement of items in its financial statements.

Where required, equivalent disclosures are given in the group accounts of National Industries Group (Holding) SAK. The group accounts of National Industries Group (Holding) SAK are available to the public and can be obtained as set out in note 18.

The company has adopted amendments to IAS 1 and IFRS Practice Statement 2 requiring that an entity discloses its material accounting policies, instead of its significant accounting policies.

The directors have prepared the financial statements on a going concern basis.  In making their assessment the directors have considered the company's financial results in the year being a profit after tax of £214,896, Net Current liabilities of £391,844 after excluding intercompany receivables of £3,679,579 which contributes to an overall Net asset position of £4,919,598 and the pipeline of work.  The directors have prepared a detailed cashflow projections out to December 2026 that demonstrate that the company can meet its obligations as they fall due.true

The company's existing working capital facility is a Group Invoice Discounting Facility with a limit of £5m for the company and its fellow subsidiary companies (FTV Proclad International limited, Proclad Heat Treatment Limited, Proclad Induction Bending Limited and IODS Pipe Clad Limited).  The Invoice Discounting Facility matures in July 2026 and whilst the directors are confident the company will be able to refinance the facility; there is no guarantee at the time of approving the financial statements that a refinance on similar facility terms and limits will be secured.  On this basis the Directors have prepared cash flow projections that assume the run-down of the facility in July 2026.  These projections demonstrate that the company and its fellow subsidiaries can meet their obligations as they fall due from existing cash reserves by operating a group cash pooling treasury management system.

These projections are considered to be a worst case scenario as it is the Directors intention to operate with a finance facility in place and there are potential cash flow upsides that are not incorporated into the projections.  It is the Director's view that the primary risk associated with the cash flow projections is the delay in timing of secured work being completed due to supply chain or customer delays.  The Directors are confident that the close working relationships they have fostered with the supply chain and key customers mitigates this risk to an acceptably low level and whilst acknowledging it cannot be eliminated the directors believe they have levers available to them to mitigate this risk.

On this basis, the directors are of the opinion that the company can meet its obligations as they fall due and have prepared the financial statements on a going concern basis.

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. Turnover 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 and recognised revenue at this point in time;

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

• the amount of revenue can be measured reliably;

• it is probably 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.

Certain contracts are made up of numerous items and revenue is recognised as each line item is delivered or dispatched in line with the purchase order received from the customer as they have standalone parts, quantities, sizes and prices.

Goodwill represents the excess of the cost of a business combination over the total acquisition date fair value of the identifiable assets, liabilities and contingent liabilities acquired.

Cost comprises the fair value of assets given, liabilities assumed and equity instruments issued.

Goodwill is capitalised as an intangible asset and is not amortised. Instead, it is reviewed annually for impairment with any impairment in carrying value being charged to profit or loss. The Companies Act 2006 requires acquired goodwill to be reduced by provisions for depreciation calculated to write off the amount systematically over a period chosen by the directors, not exceeding its useful economic life. It has been deemed, however, the non-amortisation of goodwill is a departure, for the overriding purpose of giving a true and fair view. The effect of this departure has not been quantified because it is impracticable and, in the opinion of the directors, would be misleading.

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.

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.

At each reporting end date, the company reviews the carrying amounts of its property, plant and equipment 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.

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.

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.

Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.

Cost is applied in line with the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.

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

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 through profit or loss.

Cash and cash equivalents include cash in hand and deposits held at call with banks.

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.

The company only holds financial assets at amortised cost.

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 assessed for indicators of impairment at each reporting end date.

The impairment model is based on the premise of providing for expected losses. Expected credit losses are measured through a lifetime expected loss allowance for all trade receivables and contract assets.

To measure the expected credit losses, trade receivables and contract assets are grouped based on shared credit risk characteristics and the days past due. The company has concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss rates.

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.

The company has no 'financial liabilities at fair value through profit or loss' at the reporting date.

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.

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

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.

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. Amounts not paid are shown in accruals as a liability in the statement of financial position. The assets of the plan are held separate from the company in independently administrated funds.

The company recognises assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value.

Lease liabilities are initially measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the company's incremental borrowing rate on commencement of the lease is used.

Research and development tax credits

R&D tax credits are recognised in accordance with FRS 101 and are treated as either a corporation tax reduction or a tax credit. They are disclosed as other operating income in the financial statements.

Finance costs

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

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 extent to which deferred tax assets can be recognised is based on an assessment of the probability that future taxable income will be available against which the underlying tax losses or deductible temporary differences can be utilised. Based on an assessment of future market and trading conditions and the effects of such, management judge that there will be sufficient profits to recognise the deferred tax amount shown in note 13.

Goodwill is tested at least annually for impairment in accordance with the accounting policy for goodwill set out in the notes. The recoverable amounts of cash generating units are determined based on value in use calculations. These calculations require the use of estimates including projected future cash flows and other future events.

The carrying value of goodwill at the reporting date is outlined at note 6.

Management's estimate of the inventory provision required takes into account a number of judgements in respect of the condition of the inventory, the potential for future sales, the level of inventory holding compared to the projected future sales and assessment of the potential for alternative use of the inventory together with market-driven changes that may reduce future selling prices.

Details of any provision carried in respect of inventory at the reporting date is outlined at note 8.

In line with IFRS, the company makes use of a simplified approach in accounting for trade and other receivables as well as contract assets and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the company uses its historical experience, external indicators and forward looking information to calculate the expected credit losses using a provision matrix.

The company assesses impairment of trade receivables on a collective basis. As they possess shared credit risk characteristics they have been grouped based on the days due past.

Intercompany balances are assessed for impairment by first considering the liquid resource available to pay its balance. If this indicates impairment there is a further assessment into how the company could realise assets in order to repay its debt.

Details of any provision carried in respect of loans and other receivables at the reporting date is outlined at note 9.

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

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).

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

A change in the UK Corporation tax rate to 25% took effect from 1 April 2023. This change has had a consequential effect on the company's tax charge with the standard rate of tax in the prior year reflective of a marginal tax rate arising from the company's period straddling the 19% and 25% tax rates. Deferred tax has been calculated at 25%.

Goodwill arose on the purchase of the net assets from Forth Tool and Valve Limited in 2004.

The recoverable amount has been determined based on a value in use calculation using cashflow projections based on financial budgets approved by the board covering a five year period for the single CGU of the above mentioned UK businesses.

The key assumptions used in the calculations are gross margins and discount rates. For the goodwill impairment assessment, a Weighted Average Cost of Capital (WACC) of 8.14% (2023: 10.96%) was applied.

Gross margins are based on management's experience of achieved values in previous years and forward expectations.

Management's assumptions, which are based on past performance and knowledge of the industry, are that revenue and profit margins will increase to 2025 onwards. Management do not believe that any reasonably possible change in the assumptions used in calculating the value in use would result in the recoverable amount of goodwill falling below the carrying value and impairment becoming necessary. This has been proven by performing a range of sensitivities on assumptions including variability of discount rates used in the value in use models. In all scenarios modelled by management, the recoverable amount of the CGU exceeded the carrying value of goodwill.

Inventories above are stated net of provisions of £141,815 (2023 - £184,504).

There are no predetermined receivable dates, security or interest payment arrangements applying to amounts owed by group undertakings. Therefore, the amounts are considered to be repayable on demand.

As per IAS 1.10 of FRS 101 assets should be disclosed as they are expected to be settled. As such a reclassification has been made to disclose all intercompany receivables as non-current, this also resulted in prior year restatement to reflect the change in the prior year.

The amounts due on invoice financing are secured by a floating charge over the assets of this and other group undertakings within the UK. The invoice financing balance is secured against trade debtors.

Amounts owed to group undertakings are interest free, unsecured and repayable on demand.

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

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.

All shares rank pari passu for dividend rights and provide the holder with one vote.

Retained earnings represent cumulative profits and losses, less any dividends paid.

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was unqualified.

The immediate parent undertaking is Scotar Group Limited. The ultimate parent undertaking and controlling party is National Industries Group (Holding) SAK. This company is registered in Kuwait and copies of the financial statements which include the results of the company are available from PO Box, 13005 Safat, Kuwait.