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

2024 following a similar pattern to 2023 with some marginal improvement overall.

Similarly to 2023, 2024 started well with a flurry of new Machine Orders that provided a newfound optimism that Capital Goods investments would see an improvement over the prior year. Machine sales did increase in the year by 12.4% across the Group. The increase was driven by sales in the UK Machine market which improved by 25.4%, countered by a contraction of sales in the smaller Irish market by 52.4%.

The business’ Workholding Division performed very well, exceeding expectations for the year with revenues improving by 18.1% and Operating Profit more than doubling. This is the result of volume improvements in the markets they serve, notably in the Automotive sector from existing customers, and also from new and returning customers who have recognised the benefits of Hyfore’s premium quality.

The Group revenue increase of 4.9% (2024: £23.3m v 2023: £22.2m) was therefore evenly split between the Capital Goods division and the Workholding Division.

Due to the mix of the sales, the GP% fell from 34% (2023) to 33.2% (2024) as there was a higher proportion of machine sales. In terms of EBITDA, a key measure for the Group, this marginally increased from £691,662 (2023) to £708,123 (2024) reflecting the similarities between 2023 and 2024. In addition to the improved EBITDA, a reduction, depreciation, amortisation, and interest expense turned the 2023 PBT Loss (£118,452) into a PBT profit for the year of £25,217. As Intangible Assets are fully amortised at the end of 2024 this will offer a further boost for PBT in the forthcoming years.

During the year the business continued to focus on the newly formed Fabrication Division, gaining market awareness by introducing products from Durma and VLB into the portfolio. Investing in the Service offering for these products will create a solid platform for the success of machine sales into the market in the years to come.

The sporadic economic landscape throughout the year continued to cause indifference in respect of investment decisions for Capital Equipment resulting in machines sales being irregular throughout 2024, again another similarity to 2023. The difficulty in predicting orders, and then the conversion of these into sales, resulted in some challenges in the management of Working Capital which did cause the business to record a technical breach of the banking facility. The pressure on cashflow was alleviated through managing stock purchases. With the bank loans scheduled to be settled before the end of 2026 such issues will be alleviated. The Group continue to pursue a more suitable Working Capital facility with a number of options under review at the year end.

The Group continues to secure Turnkey Projects with an increasing focus on automation with the average order value increasing year over year as more companies seek to focus on productivity. Looking ahead it is apparent that 2025 may continue to be challenging due to political unrest which may continue to create uncertainty and hesitation in the minds of investment decision makers. However, the Group remains well placed to manage through challenging periods due to the adaptability of its resources, deploying them where the greatest opportunities lie.

Summarising the Groups traditional KPI’s, compared to the prior year turnover increased by 4.8% and Gross Margin increased by 2.4% in value terms.

Gross Margin as a % of sales decreased by 0.8 percentage points from 34.0% (2023) to 33.2% due to a higher proportionate content of machine sales compared to aftercare and workholding sales.

The Groups EBITDA for the period increased by £16,461 to £708,123 (2023 – EBITDA Profit of £691,662).

The Group continues to invest in its Sales and Support functions across its Machine and Workholding divisions, as well enhancing its core brands, further strengthening and developing its Turnkey solution capability.

The principal short-term risk and hesitation continues to relate to the general economic environment and political uncertainty. The longer-term principal risks to the company remain the general fluctuations in the UK manufacturing economy, continued higher interest rates, and fluctuations in major currencies which may have an adverse effect on machine costs. These risks are mitigated by maintaining its current diversified spread of revenue between its Capital Equipment, Operations, and Manufacturing divisions, and increasing its diversification amongst the industries within the manufacturing sector. Exchange rate fluctuations would impact primarily on the Capital Equipment division. Currency movements are closely monitored with any fluctuations having a similar effect on the primary competitors which offers some mitigation. The risk is further mitigated through the use of currency sharing agreements with some key suppliers, as well as the groups’ concentration on added value services sourced in the UK.

The dynamic and balanced sectorial nature of the Group is such that resources can be deployed to focus on areas of the business with demand and the Group can adapt to new environments quickly which can mitigate such risks to a certain extent.

Going forward the trade of the Group will continue to focus on the long term customer and supplier relationships across a number of industry sectors which suit the high technology, high productivity, turnkey solutions designed, developed, and implemented by the Group, supplemented with a first class aftersales service.

The Group will also continue to develop its product portfolio to increase its market share within the UK and Republic of Ireland.

On behalf of the board

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

The principal activity of the Company is that of a holding Company.

The Group provides bespoke turnkey solutions for UK and Irish manufacturers of aerospace, automotive, medical and defence components and related sectors. Through its subsidiary The ETG Group Ltd, the business supplies ranges of globally recognised premium brand machine tools, automation, and software as the basis for these turnkey solutions. The Group also has an engineering support division, ETG Engineering Solutions Ltd, which designs and implements the turnkey solutions. To complete the full turnkey package the Group is able to offer bespoke workholding solutions through its subsidiary Hyfore Workholding Ltd, which designs and manufactures these complementary products as part of a turnkey machining solution as well standalone solutions to improve the productivity and efficiency of its customers existing equipment.

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

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

No preference dividends were paid. The directors do not recommend payment of a final dividend.

The Group's financial risk management objective is to seek to make neither profit nor loss from exposure to interest rate risks. Its policy is to finance working capital through a combination of retained earnings and fixed and variable rate borrowings, and to finance fixed assets through rate borrowings over a term broadly expected to match the useful economic life of the asset.

The directors do not consider any other risks attaching to the use of financial instruments to be material to an assessment of its financial position or profit.

The auditor, Burgis & Bullock, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 group and company, and of the profit or loss of the group 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;

• state whether applicable UK 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 group and company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of The Engineering Technology Group Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and 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 group's and the parent company's affairs as at 31 December 2024 and of the group's 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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.

Material uncertainty related to going concern

We draw attention to note 1.3 which outlines the assumptions upon which management have based their assessment of the appropriateness of the use of the going concern basis of preparation for these financial statements. Their reliance on the successful outcome of these assumptions particularly in relation to there being a recovery in the confidence levels in the general economy or alternatively a successful outcome of management’s proposed mitigation strategies, indicates that a material uncertainty exists that may cast doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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.

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• The information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

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

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

• the parent company financial statements are not in agreement with the accounting records and returns; or

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

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

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent 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 parent company or to cease operations, or have no realistic alternative but to do so.

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

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

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Based on our understanding of the group, company and industry we identified that the principal risk of non-compliance with laws and regulations related to breaches of Companies Act 2006, UK Tax Legislation and UK Employment Law. We also evaluated management incentive and opportunities for fraudulent manipulations of the financial statements.

Audit procedures performed included:

• Reviewing returns made to Companies House and HMRC;

• Discussions with management, including consideration of known or suspected incidences of non-compliance  with laws and regulation and fraud;

• Identifying and assessing the design effectiveness of controls in management have in place to prevent and detect fraud;

• Challenging assumptions and judgments made by management in their significant accounting estimates and assessing if these indicate evidence of management bias;

• Reviewing the accounting records for large and unusual journal entries and testing any identified and in particular the rationale for any transactions outside the company’s normal course of business;

• Reviewing the accounting records for large and unusual bank payments and testing any identified and in particular the rationale for any transactions outside the company’s normal course of business;

• Reviewing the accounting records for large and unusual transactions and testing any identified and in particular the rationale for any transactions outside the company’s normal course of business;

• Testing a sample of debit entries in the profit and loss account to check they are bona-fide costs of the business; and

• Testing a sample of bank payments to source documentation.

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.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

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

The profit and loss account has been prepared on the basis that all operations are continuing operations.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £114,131 (2023 - £160,746 loss).

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

The Engineering Technology Group Holdings Limited (“the Company”) is a private Company, limited by shares, domiciled and incorporated in England and Wales. The registered office is Wellesbourne Distribution Park, Unit 16, Loxley Road, Wellesbourne, Warwickshire, CV35 9JY.

The Group consists of The Engineering Technology Group Holdings Limited and all of its subsidiaries.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated group financial statements consist of the financial statements of the parent company The Engineering Technology Group Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

The Group reported a small increase in turnover levels during 2024 but since the year end the continued pressures on the UK’s manufacturing sectors and, in particular, the automotive sector in which a number of the Group’s customers operate, has impacted further growth. Disruptions for customers such as the JLR cyber-attack have also impacted the flow of work for the Group. This has inevitably brought additional pressures on the Group’s cash flows which continue to be managed with the support of creditors, including HMRC and the Group’s bankers, and its shareholders.

The Directors have prepared forecasts covering the year to 31 December 2026 and consider that these are based on attainable activity levels. However, having considered various economic forecasts, including those produced by Oxford Economics and allied Trade Associations, as well as the general uncertainties that prevail within the UK’s manufacturing sectors it is not anticipated that any upturn will be seen until the later part of 2026. Accordingly, the Directors and Shareholders have also considered what other options are available to them to ensure that the Group can withstand a further year of static activity.

One of the options explored has been to review the Group’s operational structure and, as a result, the decision has been taken to close the subsidiary company based in Ireland and move its operational facilities back to the UK, leaving a sales-based team in Ireland. The Directors continue to be aware of opportunities to realise other Group assets which are ancillary to the core machine sales operations and which could provide additional cashflow resource if required. We continue to work closely with our machine manufacturers to align cashflow patterns with the need to maintain adequate stock levels to provide a reactive lead-time for customers.

Having, to date, demonstrated our ability to manage working capital whilst experiencing fluctuating sales patterns and together with the underlying potential for further asset realisations if the need arose, the Directors have continued to adopt the going concern basis of accounting for the preparation of these financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

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

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.

Revenue from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

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

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Tangible fixed assets 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 profit and loss account.

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the Company holds a long-term interest and where the Company has significant influence. The Group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the Group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the Company has incurred legal or constructive obligations or has made payments on behalf of the associate.

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the Group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

At each reporting period end date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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

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

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

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

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

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The Group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

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

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

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the Group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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

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

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

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

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

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing 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 profit and loss account, 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 if, and only if, there is 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 stock or fixed 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.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

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

Government grants relating to income or expenditure are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

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

In the application of the Group’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 where the revision affects only that period, or in the period of the revision and future periods where 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 as follows.

The Group estimates the warranty provision based on the terms of warranties given in the year and historical costs incurred.

In relation to potentially obsolete stocks, the directors have made key assumptions regarding the provision to be included within the financial statements. Stock included on the balance sheet is net of any provision.

An analysis of the group's turnover is as follows:

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

Their aggregate remuneration comprised:

Directors remuneration was paid by a subsidiary.

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 3).

The actual (credit)/charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised/(reversed) in profit or loss:

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Details of the company's subsidiaries at 31 December 2024 are as follows:

The registered office of all UK subsidiaries apart from Hyfore Workholding Limited is Unit 16, Wellesbourne Distribution Park Loxley Road, Wellesbourne, Warwick, England, CV35 9JY, UK.

The registered office of Hyfore Workholding Limited is Unit 2, 67 Blackhorse Road, Longford, Coventry, West Midlands, England, CV6 6DP, UK.

The registered office of ETG CNC Machinery Limited is Unit 17, Newbridge Industrial Estate, Athgarvan, Newbridge, Co. Kildare, EH28 8PJ, Republic of Ireland.

Finance lease payments represent rentals payable by the Company or Group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. Finance lease obligations are secured over the assets to which they relate

The bank loans and overdrafts are secured by a debenture over all the assets and undertakings of the Group, together with cross corporate guarantees with all UK subsidiary companies.

The debenture loan notes are secured by a debenture over all the assets and undertakings of the Group, no interest is payable on the debenture loan notes.

The Senior bank loan is repayable in quarterly instalments over 5 years at a current rate of interest of 3.5% + Bank of England base rate. The year end balance on this loan was £800,000.

The RLS bank loan is repayable in quarterly instalments over 5 years at a current rate of interest of 4.45% + Bank of England base rate. The year end balance on this loan was £175,000.

The RLS bank loan is 80% guaranteed by the Government.

Other loans are secured by a charge over trade debtors.

Deferred tax assets and liabilities are offset where the Group or Company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Deferred income is included in the financial statements as follows:

Government grants were recognised in the year for the purchase of capital assets.

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the Group in an independently administered fund.

At the year end, contributions amounting to £40,475 (2023 - £28,173) were payable and are included within other creditors.

C Ordinary Shares are non-voting, other than in relation to any proposed change of class rights and have no dividend entitlement. On any sale or return of capital the C Ordinary Shares as a class are entitled to a varying % of total equity consideration received based on certain thresholds of consideration being achieved.

D Ordinary Shares are non-voting, other than in relation to any proposed change of class rights and have no dividend entitlement. On any sale or return of capital the D Ordinary Shares as a class are entitled to a varying % of total equity consideration received based on certain thresholds of consideration being achieved. Their entitlement to consideration also varies depending on whether the return is within 5 years of the date of issue of the shares or thereafter.

Any equity proceeds not allocated to the C and D Ordinary Shares will be distributed to the holders of the A and B Ordinary Shares pro rata to their holdings as currently set out in the Articles of Association.

The preference shareholders are not entitled to dividends or to vote other than in relation to any proposed change of class rights and the shares are redeemable at par value on exit only. The preference shareholders are entitled to participate in a distribution on a return of capital, on liquidation or capital reduction of the company following the payment of any unpaid arrears of dividends declared but not paid to the holders of Ordinary shares.

Group

As at 31 December 2024 the Group had entered into short-term forward foreign currency exchange contracts amounting to £2,168,589 (2023 - £1,031,335).

There is a contingent liability in respect of a guarantee given by Santander UK PLC to HMRC for £100,000 (2023 - £100,000) with recourse to the Group under counter indemnity.

The directors have given a personal indemnity in favour of the Group's bankers in respect for any potential losses on the Company's invoice discounting agreement.

Company

An unlimited debenture has been given by the Company in favour of the Group's bankers in respect of loans and overdrafts due by Group undertakings. The balance on these bank loans and overdrafts at the year end was £396,019 (2023 - £164,641).

Operating lease payments represent rentals payable by the Group for properties and motor vehicles.

The property lease has a term of ten years from 2020 with an option to break after five years. The vehicle rentals are predominantly fixed for three years.

At the reporting end date the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

As at 31 December 2024 £500,000 (2023 - £500,000) was owed to J Temple.

During a previous year the Group made a loan of £45,000 to a director, interest was charged at the beneficial rate of 2.5% - 3% and £46,048 (2023 - £ 46,048) was outstanding at the year end. There is no fixed date for repayment.

During a previous year the Group made a loan of £44,895 to a director, the loan is interest free and £44,895 (2023 - £44,895) was outstanding at the year end. There is no fixed date for repayment.

The company's ultimate controlling party is Mr M J Doyle.

The controlling party is Mr M J Doyle.