REGISTERED NUMBER: 02793994 (England and Wales)

AERO FABRICATIONS LIMITED

STRATEGIC REPORT, REPORT OF THE DIRECTOR AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MAY 2025

Page

Company Information

1

Strategic Report

2

to

5

Report of the Director

6

to

7

Report of the Independent Auditors

8

to

10

Income Statement

11

Other Comprehensive Income

12

Balance Sheet

13

Statement of Changes in Equity

14

Notes to the Financial Statements

15

to

28

DIRECTOR:

N Gouldby

REGISTERED OFFICE:

Common Lane

Watnall

Nottingham

Nottinghamshire

NG16 1HD

REGISTERED NUMBER:

02793994 (England and Wales)

AUDITORS:

Essex Abel Ltd (Statutory Auditors)

4 Bank Court

Weldon Road

Loughborough

Leicestershire

LE11 5RF

The director presents his strategic report for the year ended 31 May 2025.

REVIEW OF BUSINESS

We aim to present a balanced and comprehensive review of the development and performance of our business during the year and its position at the year end.

Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face.

Results and performance

The results of the company for the year, show a profit on ordinary activities before tax of £3.0 million (2024 - £1.9 million). The shareholders' funds of the company reported for the year is £16.3 million (2024 - £14.1 million).

The company has continued to perform well with turnover levels increasing by a further 19%. Gross margin percentage has increased following the increased level of staff recruited in the prior year to compensate for the expected future demand. Staff costs will continue to increase in future years as we continue to increase staff numbers to enable the company to meet the further increases in the level of demand for its services.

The company's gross profit margin has increased to 29.6% from 28.6% in 2024. This in a year when uncertainty in the global supply chain and increases in the cost of raw materials shows that the company is well placed to perform in a difficult trading environment.

Business environment

The results for the year demonstrate that the business was ideally placed to take advantage of the increases in demand across the industry. The company has excellent relationships with its customers, has a strong market presence and has further established its brand as being recognised as one synonymous with high quality and precision products. This perception has played a key role in securing new contracts, as customers are aware of our increasing capacity, our expertise and ability to deliver a quality product within the agreed scope and timescales set.

The company is committed to the achievement of quality in the projects undertaken and complies with the requirements of ISO9001 - quality management systems. We ensure that we recognise our environmental responsibilities to enable us to understand, as well as manage the actual and potential environmental impact of our activities. Our operations are conducted to ensure we comply with the legal requirements relating to the environment in which we carry out our business.

The company continues to monitor and improve its health and safety standards and performance across all operational sites. The company recognises the importance of specific and effective training for its employees to ensure compliance with the legal requirements and accreditations held by the company.

As for many businesses of our size, the business environment in which we operate continues to be very challenging, but we believe the company is well placed to deliver its performance objectives in these uncertain economic times.

PRINCIPAL RISKS AND UNCERTAINTIES

The process of risk management is applied through a combination of policies, procedures and internal controls. All policies are subject to Board approval and ongoing review by management. Compliance with regulation, legal and ethical standards is a high priority for the company to ensure they are able to continue trading. The management team is responsible for ensuring that effective internal controls exist to manage the risks and that these controls operate effectively for the benefit of the business.

I the director endeavour to identify the risks that the company faces on a day to day basis. This is to ensure we have the financial strength and operational capacity to continue to trade.

I continuously work to build a robust and flexible business, in doing so the business is in a good financial position to deal with any situations which have arisen during the year and those that are expected to be faced in the future.

Financial risk management objectives and policies

The activities of the company expose it to a number of financial risks. Exposure to interest rate and credit risks arise in the normal course of the company's business. The principal risks for our business are as follows:

Exchange rate risk: The company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the respective functional currency of the company. The functional currency of the company is in pound sterling. The company enters into forward exchange contracts for US Dollars in order to mitigate this risk, where possible.

Legislative risks: The majority of the company's products have to comply with national or international recognised performance and safety standards. Whereas such standards usually form part of the initial contract with a customer, there is a remote possibility of revisions being made during the course of the contract. However, because the company has on-going close contact with its key customer base, any retrospective changes have not significantly affected the business or its processes.

Credit risk: The company reduces its risk by undertaking a credit assessment of the customer base and puts in place credit limits, where they are considered necessary as well as applying improved cash collection policies.

Competitor risk: The company operates in a highly competitive market balancing both customer requirements and market pressures. The director reviews and monitor these factors to ensure the company's competitiveness is maintained, which enables the company to maintain its long term relationships with key customers both in the UK and overseas.

Liquidity risk and going concern: The company is exposed to liquidity risk as sufficient funds are required to support trading and financing activities. The company regularly monitors its liquidity position to ensure that sufficient funds are available to meet both current and future requirements.

Economic risk: The company's trading is broadly linked to the recovery and performance of the worldwide economy and in particular the Aerospace industry; therefore, it is exposed to recessionary risk when economies come into difficulties. To mitigate such a risk, management regularly reviews the market to assess the potential impact on the business operations.

With business risks and uncertainties in mind, we are aware that any plans for the future development of the business may be subject to unforeseen future events outside of our control.

SECTION 172(1) STATEMENT

Company Overview

Aero Fabrications Ltd has been trading in the aerospace industry for over 35 years, employing just under 300 dedicated staff members today. Our commitment to innovation, safety, and sustainability drives our operations and underpins our long-term success.

This S172 statement, explains how the directors have:

- Engaged with employees, customers, and others; and

- had regard to employees' interests, the need to foster the group's relationship with suppliers,

customers and others, and the effect of that regards, including on the principal decisions

taken by the company and its subsidiaries during the financial period.

The S172 statement focuses on matters of strategic importance to the company and the level of information disclosed is consistent with the size and complexity of the business.

When making decisions, the director ensures that he acts in a way he considers, in good faith, would most likely promote the company's success for the benefit of its members, and in doing so have regards (among other matters) to the section 172 matters.

Stakeholder Engagement

We recognise that our stakeholders-including employees, customers, suppliers, shareholders, and the communities in which we operate-are integral to our business. We actively engage with them through:

Employee Wellbeing

We prioritise the health and safety of our 300 staff members by maintaining high workplace standards and providing ongoing training and development opportunities. The company also adopts an open-door policy ensuring that employees are comfortable to make their voices heard.

The company engages with employees on a regular basis through internal media methods, these provide updates on company performance, key business events, charity events, quality control and standards, departmental introductions as well as recognition of individual employee performance. Employees are also informed of financial and economic factors which affect their working environment.

Customer Relationships

We maintain close relationships with our customers by understanding their needs and delivering high-quality products. Regular communication and customer satisfaction engagement forms form part of the company's continuous improvement.

Supplier Collaboration

We work closely with our suppliers to ensure a robust supply chain that supports innovation and efficiency.

Shareholder Engagement

We communicate regularly with our shareholders through reports, meetings, and updates on company performance and strategy, ensuring they are informed and engaged in our growth journey.

Community Impact

We are committed to being a responsible corporate member of the community, supporting local charities through regular fundraising initiatives and donating goods to schemes focussed on improving the environment.

We also understand that supporting communities means more than just charity and community work. Therefore, we actively employ workers, apprentices, and graduates from local areas, giving our local workforce the chances, they deserve.

Long-Term Success

Our strategic decisions are made with a long-term perspective, balancing immediate performance with sustainable growth. We continuously assess the impact of our operations on the environment and society, striving to minimise our carbon footprint and contribute positively to the aerospace sector.

The long term aims of the group, in addition to increasing the shareholder value, is to provide secure employment opportunities within the local area in which it operates. During these challenging economic times, ensuring that people have secure and stable employment is more important than ever.

In fulfilling our obligations under Section 172, we remain dedicated to creating value for all our stakeholders while ensuring the sustainable growth of Aero Fabrications Ltd. We believe that by prioritising these relationships, we are better positioned to achieve our business objectives and maintain our reputation as a key contributor to the aerospace industry.

KEY PERFORMANCE INDICATORS

We consider that our key financial performance indicators are those that communicate the financial performance and strength of the company, these being turnover, gross margin, operating profit and earnings before interest tax depreciation and amortisation (EBITDA).

Turnover from continuing operations has increased 19% from £23.5 million to £27.9 million. As the prime measure of our economic output, revenue levels are key to measuring shareholder return and the success of our expansion strategies. Based on the medium term forecast we are expecting our turnover to increase in the coming year, as we continue to win contracts with both new and existing customers.

Gross margins from continuing operations for the year is 30% (2024: 29%). Gross margin provides an indication of the quality of turnover and is also a measure of value added by the company, reflecting the quality of our design and production processes. We expect an increase in our gross margins during 2025-26 as staffing costs will more accurately be matched with our increased capacity and as the global supply chain stabilises.

Overall, operating profit has increased to £3.1 million (2024: £2.0 million), with shareholders' funds increasing to £16.3 million (2024: £14.1 million).

During the year the company reported EBITDA of £4.0 million (14%) compared to the previous year of £3.0 million (13%).

GOING CONCERN

The company is well placed to continue its projected growth, our current staffing levels and our production facilities will enable us to realise the increase in demand within the industry and more specifically, from our signed contracts. Since the year end demand has continued to increase along with our profitability.

The main customer base of the company are large multi-national aerospace companies, our schedules for additional works with these customers is expected to increase turnover levels in 2025-26 with further expected increases expected beyond 2026.

The company reserves have increased by £2.2m during the year to £16.3m, these reserves together with the levels of cash will allow it to continue in business for the foreseeable future. The director therefore considers it appropriate to prepare the financial statements on a going concern basis.

ON BEHALF OF THE BOARD:

N Gouldby - Director

4 December 2025

The director presents his report with the financial statements of the company for the year ended 31 May 2025.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of fabrications of assemblies and components for the aerospace industry.

DIVIDENDS

An interim dividend of £655.98666 per share was paid on the Ordinary 'A' £1 shares on 31 March 2025. No dividends were paid on the Ordinary 'B' £1 shares.

The total distribution of dividends for the year ended 31 May 2025 will be £ 98,398 .

RESEARCH AND DEVELOPMENT

The company continues to review the development of new products and processes in order to enhance its market share.

FUTURE DEVELOPMENTS

The director anticipates that the business environment will remain difficult due to the current economic climate but the company is ideally situated to continue to benefit from the increasing levels of demand within the industry. He believes that the company is in a good financial position and that the risks that have been identified are being well managed. With careful focus on reducing the company's variable costs to match demand, as well as continuing to review the state of the market and the activities of competitors, the director is confident in the company's ability to continue to trade profitably through the current economic climate.

DIRECTOR

N Gouldby held office during the whole of the period from 1 June 2024 to the date of this report.

FINANCIAL INSTRUMENTS

Details of financial instruments are provided in the strategic report on page 3.

GOING CONCERN

Having completed his assessment the director has concluded that there are no material uncertainties that cast significant doubt about the ability of the company to continue as a going concern.

The company's business activities, together with the factors likely to affect its future development and financial position have been documented in the strategic report. The company currently has sufficient financial resources together with long term contracts spread over a number of customers.

The director has reasonable expectations that the company will be able to continue in operational existence for the foreseeable future. On this basis the director has adopted the going concern basis for preparing the financial statements.

POST BALANCE SHEET EVENTS

There have been no significant events affecting the company since the year end.

ENGAGEMENT WITH EMPLOYEES

The company engages with employees on a regular basis through internal media methods, these provide updates on company performance, key business events, charity events, quality control and standards, departmental introductions as well as recognition of individual employee performance. Employees are also informed of financial and economic factors which affect their working environment.

The Health & Safety at work of all employees is constantly reviewed by Senior Management and external Health & Safety advisors to ensure that high standards are maintained throughout the organisation.

Disabled employees

Throughout its equal opportunities policy, the company seeks to ensure that every employee without exception, is treated equally and fairly and that all employees are aware of their responsibilities.The company is responsive to the needs of its employees and as such, should any employee of the company become disabled during their employment, we will actively retain that employee and make reasonable adjustments to their working environment wherever possible. The company's recruitment, training, career development and promotion activity of a disabled person is as far as possible, identical to that of other employees.

ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS

A detailed report on the engagement with suppliers, customers and others has been completed as part of the S172 statement in the strategic report on pages 2-6 in accordance with section 414C(11) CA 2006.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

-	select suitable accounting policies and then apply them consistently;

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

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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

The director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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 director is 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 he 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, Essex Abel Ltd, have expressed their willingness to continue in office as auditors pursuant to Section 487 of the Companies Act 2006. The auditor will be deemed to be reappointed and will therefore continue in office.

ON BEHALF OF THE BOARD:

N Gouldby - Director

4 December 2025

Opinion

We have audited the financial statements of Aero Fabrications Limited (the 'company') for the year ended 31 May 2025 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 May 2025 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 director's 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 director with respect to going concern are described in the relevant sections of this report.

Other information

The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors thereon.

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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 director's remuneration specified by law are not made; or

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

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page seven, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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

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

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.

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 noncompliance with regulation. The 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 noncompliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

We obtained an understanding of the internal controls which are used by the entity in order to prevent such fraud or errors from occurring and design audit test and procedures in order to test the appropriateness and effectiveness of such internal controls.

We have performed substantive testing in order to assess the appropriateness of the internal controls and whether the controls are being followed and as such to what extent the risk of fraud or error is being mitigated through these controls.

We obtained an understanding on the subjective judgements made by management, such as accounting estimates where there is a potential for personal bias to affect the judgements which have been made. We have also obtained an understanding of the accounting policies which have been used by management.

We held discussions with management to find the rationale behind any judgemental area such as accounting estimates and assessed the appropriateness of accounting policies used, using our professional judgement.

We identified the laws and regulations applicable to the company through discussions with the directors and other management. These were communicated throughout the audit team and the team remained alert to instances of non-compliance throughout the audit.

We assessed the extent of compliance with laws and regulations identified through making enquiries of management and those charged with governance.

We correspond with those charged with governance, regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies or inadequacies in internal controls that we identify during our audit.

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

Use of our report

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

Jason Mark Oram FCCA (Senior Statutory Auditor)

for and on behalf of Essex Abel Ltd (Statutory Auditors)

4 Bank Court

Weldon Road

Loughborough

Leicestershire

LE11 5RF

4 December 2025

TURNOVER

4

27,916,618

23,455,325

Cost of sales

19,643,850

16,740,836

GROSS PROFIT

8,272,768

6,714,489

Administrative expenses

5,353,181

4,835,004

2,919,587

1,879,485

Other operating income

139,905

151,269

OPERATING PROFIT

6

3,059,492

2,030,754

Interest receivable and similar income

79,665

78,554

3,139,157

2,109,308

Interest payable and similar expenses

8

149,227

196,567

PROFIT BEFORE TAXATION

2,989,930

1,912,741

Tax on profit

9

749,572

691,493

PROFIT FOR THE FINANCIAL YEAR

2,240,358

1,221,248

PROFIT FOR THE YEAR

2,240,358

1,221,248

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

2,240,358

1,221,248

FIXED ASSETS

Tangible assets

11

4,528,802

5,059,966

CURRENT ASSETS

Stocks

12

4,604,726

5,650,719

Debtors

13

11,851,076

9,920,738

Cash at bank and in hand

3,856,049

2,860,520

20,311,851

18,431,977

CREDITORS

Amounts falling due within one year

14

6,645,095

6,929,315

NET CURRENT ASSETS

13,666,756

11,502,662

TOTAL ASSETS LESS CURRENT LIABILITIES

18,195,558

16,562,628

CREDITORS

Amounts falling due after more than one year

15

(908,739

)

(1,290,968

)

PROVISIONS FOR LIABILITIES

19

(1,005,713

)

(1,132,514

)

NET ASSETS

16,281,106

14,139,146

CAPITAL AND RESERVES

Called up share capital

20

225

225

Capital redemption reserve

21

75

75

Retained earnings

21

16,280,806

14,138,846

SHAREHOLDERS' FUNDS

16,281,106

14,139,146

The financial statements were approved and authorised for issue by the director and authorised for issue on 4 December 2025 and were signed by:

N Gouldby - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 June 2023

225

12,140,760

75

12,141,060

Prior year adjustment

-

887,259

-

887,259

As restated

225

13,028,019

75

13,028,319

Changes in equity

Dividends

-

(110,421

)

-

(110,421

)

Total comprehensive income

-

1,221,248

-

1,221,248

Balance at 31 May 2024

225

14,138,846

75

14,139,146

Changes in equity

Dividends

-

(98,398

)

-

(98,398

)

Total comprehensive income

-

2,240,358

-

2,240,358

Balance at 31 May 2025

225

16,280,806

75

16,281,106

1.	STATUTORY INFORMATION

Aero Fabrications 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.

The presentation currency of the financial statements is the Pound Sterling (£).

The company's principal activities are set out in the directors report.

2.	STATEMENT OF COMPLIANCE

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.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention.

The financial statements have been prepared in accordance with applicable United Kingdom accounting standards and under the provision of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.

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).

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.

Significant judgements and estimates

In the application of the company's accounting policies, which are described in the accounting policies below, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In preparing these financial statements, the director has made the following judgements:

- Determine whether leases entered into by the company either as a lessee are operating or lease or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.

- Determine whether there are indicators of impairment of the company's tangible and intangible assets, including goodwill.

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

a) Tangible fixed assets

Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing assets lives, factors such as technological innovation, maintenance programmes and product life cycles are taken into account by management. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and the estimated disposal values.

b) Current asset provisions

At each reporting date judgement is used by management to establish the net realisable value of various elements of working capital, principally being stock and trade debtors. Provisions are established for net realisable value, bad and doubtful debt risks where appropriate. Provisions made are based on facts available at the time and are applied to stock and trade debtor balances where required.

In arriving at an estimate for the net realisable value of stock, judgement is required in assessing their likely value on realisation taking into account market and technological changes.

In estimating the collectability of trade debtors, judgement is required in assessing their likely realisation, including the current creditworthiness of each customer and related ageing of past due balances.

Revenue recognition

Revenue is recognised to the extent that the company obtains the right to consideration in exchange for its performance. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, VAT and other sales taxes or duty.

The following criteria must also be met before revenue is recognised:

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on dispatch of the goods, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

These criteria are considered to be met when the goods are delivered to the buyer.

The company has determined that some of its contracts satisfy the over-time criteria because the company has an enforceable right to payment for the performance completed to the date.

For each performance obligation to be recognised over-time , the company recognises revenue using an input method, based on costs incurred in the period. Revenue and attributable margin are calculated by reference to reliable forecasts of transaction price and costs after taking account of technical and other risks. Revenue and associated margin are therefore recognised progressively as costs are incurred, and as risks have been mitigated or retired.

If the over-time criteria for revenue recognition are not met, revenue is accounted at the point in time that control is transferred to the customer, which is usually when legal title passes to the customer and the business has the right to payment.

Tangible fixed assets

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

Short leasehold

-

Straight line over 10 years

Plant and machinery

-

10% on cost

Office equipment

-

20% on cost

Motor vehicles

-

25% on reducing balance

Computer equipment

-

20% on cost

Tangible assets are stated at cost (or deemed cost) less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price, costs directly attributable to bringing the asset to its working condition for its intended use.

The assets’ residual values and useful lives are reviewed, and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell, and after making due allowance for obsolete and slow moving items. Cost is computed using the specific identification method on a first-in, first-out basis.

Cost for raw materials and consumables are at the purchase cost to the company. Cost for work in progress and finished goods includes all direct expenditure.

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 provision is determined primarily by future demand forecasts. The write down is measured as the difference between the calculated cost of the stock and market based upon assumptions about future demand and charged to the provision for inventory, which is a component of cost of sales. At the point of the loss recognition, a new, lower-cost basis for that stock is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

Current tax

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

Deferred tax

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

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

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

Foreign currencies

Functional currency and presentation currency

The financial statements of the company are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the financial statements, the results and financial position are presented in Sterling (£).

Transactions and balances

In preparing the financial statements, transactions in currencies other than the functional currency of the company (foreign currencies) are recognised at the spot rate at the dates of the transactions, or at an average rate where this rate approximates the actual rate at the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in profit or loss within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives.

The interest element of hire purchase obligations is charged to the profit and loss account over the relevant period. The capital element of the future payments is treated as a liability.

Where assets are financed by leasing agreements that give rights approximately to ownership (finance leases), the assets are treated as if they have been purchased outright. The amount capitalised is the present value of the minimum lease payments payable over the term of the lease. The corresponding leasing commitments are shown as amounts payable to the lessor. Depreciation on the relevant assets is charged to profit or loss over the shorter of estimated useful economic life and the term of the lease.

Lease payments are analysed between capital and interest components so that the interest element of the payment is charged to profit or loss over the term of the lease and is calculated so that it represents a constant proportion of the balance of capital repayments outstanding. The capital part reduces the amounts payable to the lessor.

All other leases are treated as operating leases. Their annual rentals are charged to profit or loss on a straight-line basis over the term of the lease.

Pension costs and other post-retirement benefits

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

The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the company in an independently administered fund.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the balance sheet, bank overdrafts are shown within borrowings or current liabilities when applicable.

Basic financial instruments

The company enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable and loans to/from related parties.

Debt instruments, like loans and other accounts receivable and payable, are initially measured at present value of the future payments and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at 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 financed at a rate of interest that is not a market rate or in case of an outright short-term loan not at market rate, the financial asset or liability is measured, initially and subsequently, at the present value of the future payment discounted at a market rate of interest for a similar debt instrument.

Trade and other debtors

Trade and other debtors are initially recognised at the transaction price and thereafter stated at amortised cost using the effective interest method, less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases, the debtors are stated at cost less impairment losses for bad and doubtful debts.

A provision for impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of debtors. The amount of the provision is determined as the difference between the asset's carrying amount and the present value of estimated future cash flows, and is recognised in the profit & loss in operating expenses.

Trade and other creditors

Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

Derivative instruments

The company uses forward foreign currency contracts to reduce exposure to foreign exchange rates.

Derivative financial instruments are initially measured at fair value on the date on which a derivative contract is entered into and are subsequently measured at fair value through profit or loss. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

The fair value of the forward currency contracts is calculated by reference to current forward exchange contracts with similar maturity profiles.

Provisions for liabilities

Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that the company will be required to settle the 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 end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value using a pre-tax discount rate. The unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.

The company recognises a provision for annual leave accrued by employees as a result of services rendered in the current period, and which employees are entitled to carry forward and use within the next 12 months. The provision is measured at the salary cost payable for the period of absence.

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:

2025

2024

£

£

United Kingdom

13,590,707

11,958,609

Rest of the world

14,325,911

11,496,716

27,916,618

23,455,325

5.	EMPLOYEES AND DIRECTORS

2025

2024

£

£

Wages and salaries

9,957,928

9,532,965

Social security costs

1,000,318

927,581

Other pension costs

249,101

215,349

11,207,347

10,675,895

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

2025

2024

Directors

1

1

Production staff

254

266

Administration & office staff

45

23

300

290

2025

2024

£

£

Director's remuneration

17,685

6,000