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Company registration number: 02285953
| ANNUAL REPORT AND FINANCIAL STATEMENTS
| FOR THE YEAR ENDED 31 MAY 2025
| ESPRIT ELECTRONICS LIMITED
ESPRIT ELECTRONICS LIMITED |  |
COMPANY INFORMATION
Directors | P J Handley
| L Holloway
| I McInnes
| J McInnes
| R F O'Mara
| R B Otter
| G E Page
| L L Sigournay
| Z M Vine
Company secretary | Mr A Ward
Registered number | 02285953
Registered office | Unit 33 Mitchell Point
| Ensign Way
| Southampton
| SO31 4RF
Independent auditor | Menzies LLP
| Chartered Accountants & Statutory Auditor
| 3000a Parkway
| Whiteley
| Hampshire
| PO15 7FX
Bankers | National Westminster Bank PLC
| 69-73 High street
| Cosham
| Portsmouth
| Hampshire
| PO6 3DA
ESPRIT ELECTRONICS LIMITED |  |
CONTENTS
| Page
Strategic report | 1 - 2
Directors' report | 3 - 4
Independent auditor's report | 5 - 8
Statement of income and retained earnings | 9
Statement of financial position | 10
Notes to the financial statements | 11 - 29
ESPRIT ELECTRONICS LIMITED |  |
STRATEGIC REPORT FOR THE YEAR ENDED 31 MAY 2025
Business review
The principal activity of the Company continued to be that of manufacturing electronic components and assemblies. The Company reported a net profit before tax for the year of £1,357,163 (2024 - £865,244). Customer & supplier relationships continue to grow with new customers in addition to a wider spread of manufactured electronic components & assemblies for established customers. Following the success of expanding the product and customer range the Company is now actively engaged in further developing it’s manufacturing base. The Company maintains a strong working capital position and spreads risk for longer term investments by way of external finance. The risk of any individual customer dependence to the Company is contained by the growth of the customer base. Component availability and stability of pricing, which includes $ exchange rates, and the lead time for that supply is considered to be the biggest risk to the Company as that impacts on the service to its customers on which the Company has built its reputation. Improved productivity will be required to finance continued increases in direct wage costs due to the statutory increases in Minimum Wage. The Company, therefore, continually reviews its capital expenditure program to maintain the technological advantage of our manufacturing processes, and to mitigate wage cost inflation as far as practicably possible. The conclusion of the last major review of capital equipment led to purchases of £1,100,000 (2024 - £500,000). This expenditure being primarily funded by asset finance to maintain working capital. The Company is pleased to announce the purchase (within the Group) of a third building since the financial year end that will continue to increase and expand the capacity of operations and securing the ongoing success of Esprit Electronics Limited. At the year end, the directors consider the Company remains in a strong financial position with shareholders’ funds totalling £6,583,489 ( 2024 - £5,649,456).
Principal risks and uncertainties
The principal threats to the Company, in addition to material availability and the lead time for that supply, as with most other companies, will always be the loss of major customers and the cost of supply impacted by wages, sourcing of components and stability of material prices which are affected by world supply and the values of the GBP. Page 1
ESPRIT ELECTRONICS LIMITED |  |
STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 MAY 2025
Financial key performance indicators
The directors consider the Company’s key financial performance indicators to be its Profit Before Tax and margins together with stock turn which then has an impact on working capital. These key performance indicators of the business have all been within planned ranges and at a level to ensure customer development and retention and the long-term success of the Company. The reduction in stock turn was consistent with increased stock needs for new products. The main key financial performance indicators for the Company are as follows:
|  | 2025 | 2024
| Operating profit | 1,418,633 | 917,695
| Profit before tax margin | 7.76% | 5.60%
| Stock turnover | 4.08 | 3.46
| Current ratio | 2.14 | 2.20
This report was approved by the board and signed on its behalf.
Z M Vine Director
Date: 16 January 2026
Page 2
ESPRIT ELECTRONICS LIMITED |  |
DIRECTORS' REPORT FOR THE YEAR ENDED 31 MAY 2025 The directors present their report and the financial statements for the year ended 31 May 2025.
Directors' responsibilities statement
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to: ∙select suitable accounting policies for the Company's financial statements and then apply them consistently; ∙make judgements and accounting estimates that are reasonable and prudent; ∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Results and dividends
The profit for the year, after taxation, amounted to £1,009,033 (2024 - £643,353). The directors have recommended the payment of a dividend of £75,000 (2024 - £75,000).
Directors
The directors who served during the year were:
P J Handley
L Holloway
I McInnes
J McInnes
R F O'Mara
R B Otter
G E Page
L L Sigournay
Z M Vine
Future developments
The Company will continue to focus its efforts on core customers and service lines in order to maintain profit levels, whilst actively seeking to develop relationships with new customers to increase profit levels.
Financial instruments
The Company uses basic financial instruments such as cash and fixed term deposits. Page 3
ESPRIT ELECTRONICS LIMITED |  |
DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MAY 2025
Matters covered in the Strategic report
The Company has chosen in accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out in the Company's strategic report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 it must be stated in the Directors' Report that it has done so. This includes information that would have been included in the business review and the principal risks and uncertainties.
Disclosure of information to auditor
Each of the persons who are directors at the time when this Directors' report is approved has confirmed that: ∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and ∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information. Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
Post balance sheet events
There have been no significant events affecting the company since the year end.
Going concern
The directors have a reasonable expectation that the Company has adequate resources to continue operational existence for a period of at least 12 months from the date that the accounts are autrhorised for issue. For this reason the directors continue to adopt the going concern basis of accounting in preparing the annual financial statements.
Auditor
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditor 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier. This report was approved by the board and signed on its behalf.
Z M Vine Director
Date: 16 January 2026
Page 4
ESPRIT ELECTRONICS LIMITED |  |
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ESPRIT ELECTRONICS LIMITED
Opinion
We have audited the financial statements of Esprit Electronics Limited (the 'Company') for the year ended 31 May 2025, which comprise the Statement of income and retained earnings, the Statement of financial position and the related notes, 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Page 5
ESPRIT ELECTRONICS LIMITED |  |
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ESPRIT ELECTRONICS LIMITED (CONTINUED)
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit: ∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and ∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: ∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or ∙the financial statements are not in agreement with the accounting records and returns; or ∙certain disclosures of directors' remuneration specified by law are not made; or ∙we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors' responsibilities statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. Page 6
ESPRIT ELECTRONICS LIMITED |  |
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ESPRIT ELECTRONICS LIMITED (CONTINUED)
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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: ∙The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation, and general regulations such as health and safety. There are no industry specific laws and regulations which would be deemed to have a significant impact on the financial statements. We assessed the extent of compliance with the appropriate laws and regulations as part of our procedures on the related financial statement items. ∙We understood how the Company is complying with the legal and regulatory frameworks by, making inquiries to management and those responsible for legal and compliance procedures. We corroborated our inquiries through our review of board minutes. ∙The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognize non-compliance with laws and regulations. The assessment did not identify any issues in this area. ∙We assessed the susceptibility of the Company financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included: °Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud; °Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process; °Challenging assumptions and judgments made by management in its significant accounting estimates; and °Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations. ∙As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: °Posting of unusual journals and complex transactions. °Misappropriation of funds through fraudulent purchase ledger and payroll activity. °Manipulation of amounts subject to significant judgment or estimate. 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 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 Auditor's report. Page 7
ESPRIT ELECTRONICS LIMITED |  |
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ESPRIT ELECTRONICS LIMITED (CONTINUED)
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. Andrew Galliers FCA (Senior statutory auditor) for and on behalf of Menzies LLP Chartered Accountants Statutory Auditor 3000a Parkway Whiteley Hampshire PO15 7FX Date: 19 January 2026 Page 8
ESPRIT ELECTRONICS LIMITED |  |
STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEAR ENDED 31 MAY 2025
| 2025 | 2024
Note | £ | £
Turnover | 4 | 17,474,948 | 15,449,650
Cost of sales |  | (11,022,573) | (10,209,385)
Gross profit |  | 6,452,375 | 5,240,265
Administrative expenses |  | (5,053,810) | (4,352,673)
Other operating income | 5 | 20,068 | 30,103
Operating profit | 6 | 1,418,633 | 917,695
Interest receivable and similar income | 10 | 23,788 | 21,205
Interest payable and similar expenses | 11 | (85,258) | (73,656)
Profit before tax |  | 1,357,163 | 865,244
Tax on profit | 12 | (348,130) | (221,891)
Profit after tax |  | 1,009,033 | 643,353
Retained earnings at the beginning of the year |  | 5,584,456 | 5,016,103
|  | 5,584,456 | 5,016,103
Profit for the year |  | 1,009,033 | 643,353
Dividends declared and paid |  | (75,000) | (75,000)
Retained earnings at the end of the year |  | 6,518,489 | 5,584,456
The notes on pages 11 to 29 form part of these financial statements.
Page 9
ESPRIT ELECTRONICS LIMITED REGISTERED NUMBER:02285953 |  |
STATEMENT OF FINANCIAL POSITION AS AT 31 MAY 2025
|  | 2025 |  | 2024
Note |  | £ |  | £
Fixed assets |  |  |  |  |
Tangible assets | 14 |  | 1,992,481 |  | 1,432,170
Investments | 15 |  | 54,499 |  | 54,499
|  |  | 2,046,980 |  | 1,486,669
Current assets |  |  |  |  |
Stocks | 16 | 2,319,477 |  | 2,518,674 |
Debtors: amounts falling due within one year | 17 | 5,946,427 |  | 4,755,694 |
Cash at bank and in hand | 18 | 2,378,781 |  | 1,327,290 |
|  | 10,644,685 |  | 8,601,658 |
Creditors: amounts falling due within one year | 19 | (4,977,728) |  | (3,860,545) |
Net current assets |  |  | 5,666,957 |  | 4,741,113
Total assets less current liabilities |  |  | 7,713,937 |  | 6,227,782
Creditors: amounts falling due after more than one year | 20 |  | (715,382) |  | (299,734)
Provisions for liabilities |  |  |  |  |
Deferred tax | 22 | (415,066) |  | (278,592) |
|  |  | (415,066) |  | (278,592)
Net assets |  |  | 6,583,489 |  | 5,649,456
Capital and reserves |  |  |  |  |
Called up share capital | 23 |  | 65,000 |  | 65,000
Profit and loss account | 24 |  | 6,518,489 |  | 5,584,456
|  |  | 6,583,489 |  | 5,649,456
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
L L Sigournay | Z M Vine
Director | Director
Date: 16 January 2026 | Date:16 January 2026
The notes on pages 11 to 29 form part of these financial statements. Page 10
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025
1. | General information
These financial statements have been prepared in compliance with FRS102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'. Esprit Electronics Limited is a private company limited by shares incorporated and domiciled in England & Wales. The address of its registered office, which is also the Company's principal place of business, is disclosed on the 'Company information' page. 2.Accounting policies
| 2.1 | Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3). The following principal accounting policies have been applied:
| 2.2 | 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 the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": ∙the requirements of Section 7 Statement of Cash Flows; ∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d); ∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c); ∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A; ∙the requirements of Section 33 Related Party Disclosures paragraph 33.7. This information is included in the consolidated financial statements of Esprit Business Services Limited as at 31 May 2025 and these financial statements may be obtained from Companies House.
| 2.3 | Going concern
The directors consider the Company's finances remain strong and having taken that into consideration the expected performance over the foreseeable future, the directors consider that the Company has sufficient resources to continue its operational existence for a period of at least 12 months from the date that these accounts are authorised for approval. For this reason, the Company continues to adopt the going concern basis of accounting in preparing these annual financial statements. Page 11
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025 2.Accounting policies (continued)
| 2.4 | Foreign currency translation
Functional and presentation currency The Company's functional and presentational currency is GBP. Transactions and balances Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined. Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of income and retained earnings within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
| 2.5 | Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised: Sale of goods Revenue from the sale of goods is recognised when all of the following conditions are satisfied: ∙the Company has transferred the significant risks and rewards of ownership to the buyer; ∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; ∙the amount of revenue can be measured reliably; ∙it is probable that the Company will receive the consideration due under the transaction; and ∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
| 2.6 | Operating leases: the Company as lessee
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term. Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset. Page 12
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025 2.Accounting policies (continued)
| 2.7 | Government grants
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income. Grants of a revenue nature are recognised in the Statement of income and retained earnings in the same period as the related expenditure.
| 2.8 | Finance costs
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
| 2.9 | Borrowing costs
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
| 2.10 | Pensions
Defined contribution pension plan The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations. The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds. Page 13
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025 2.Accounting policies (continued)
| 2.11 | Current and deferred taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income. Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that: ∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and ∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met. Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
| 2.12 | Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis. Depreciation is provided on the following basis:
|  |  |  | Long-term leasehold property | - | 25-50% reducing balance
|  |  |  | Plant and machinery | - | 20-25% reducing balance
|  |  |  | Motor vehicles | - | 30-35% reducing balance
|  |  |  | Fixtures and fittings | - | 25-50% reducing balance
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
| 2.13 | Valuation of investments
Investments in subsidiaries are measured at cost less accumulated impairment. Page 14
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025 2.Accounting policies (continued)
| 2.14 | Associates and joint ventures
Associates and Joint Ventures are held at cost less impairment.
| 2.15 | Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads. At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
| 2.16 | Debtors
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
| 2.17 | Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
| 2.18 | Creditors
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
| 2.19 | Provisions for liabilities
Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made. Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties. Increases in provisions are generally charged as an expense to profit or loss. Page 15
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025 2.Accounting policies (continued)
| 2.20 | Financial instruments
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments. Financial instruments are recognised in the Company's Statement of financial position when the Company becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset, with 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 Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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. Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments. Basic financial liabilities 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 Company after the deduction of all its liabilities. Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial. Debt instruments are subsequently carried at their amortised cost using the effective interest rate method. Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
| 2.21 | Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. Page 16
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025
3. | Judgements in applying accounting policies and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Fixed asset residual values: The directors have reviewed the asset lives and associated residual values of all fixed asset classes and have concluded that asset lives and residual values are appropriate. Slow moving stock provision: Slow moving stock is defined as stock that cannot be directly allocated to a customer order for a period of between 3 and 18 months. The directors believe this is a reasonable measure based on their experience of the business.
4. | Turnover
| An analysis of turnover by class of business is as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Sale of goods | 17,474,948 | 15,449,650
|  | 17,474,948 | 15,449,650
Analysis of turnover by country of destination:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| United Kingdom | 15,193,803 | 14,773,864
| Rest of World | 2,281,145 | 675,786
|  | 17,474,948 | 15,449,650
5. | Other operating income
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Government grants receivable | 20,068 | 30,103
|  | 20,068 | 30,103
Page 17
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025
6. | Operating profit
| The operating profit is stated after charging:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Exchange differences | 5,958 | 5,865
| Other operating lease rentals | 234,940 | 228,671
7. | Auditor's remuneration
| During the year, the Company obtained the following services from the Company's auditor:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Fees payable to the Company's auditor for the audit of the Company's financial statements | 18,750 | 17,750
8. | Employees
| Staff costs, including directors' remuneration, were as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Wages and salaries | 3,419,796 | 2,954,960
| Social security costs | 341,169 | 271,264
| Cost of defined contribution scheme | 87,170 | 102,264
|  | 3,848,135 | 3,328,488
| The average monthly number of employees, including the directors, during the year was as follows:
|  |  | 2025 | 2024
|  |  | No. | No.
|  | Average employees | 90 | 89
Page 18
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025
9. | Directors' remuneration
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Directors' emoluments | 921,537 | 773,063
| Company contributions to defined contribution pension schemes | 54,938 | 50,053
|  | 976,475 | 823,116
| During the year retirement benefits were accruing to 7 directors (2024 - 7) in respect of defined contribution pension schemes.
| The highest paid director received remuneration of £188,690 (2024 - £154,197).
| The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £15,664 (2024 - £14,664).
10. | Interest receivable
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Other interest receivable | 23,788 | 21,205
|  | 23,788 | 21,205
11. | Interest payable and similar expenses
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Bank interest payable | 1,336 | 1,732
| Finance leases and hire purchase contracts | 44,313 | 32,346
| Other interest payable | 39,609 | 39,578
|  | 85,258 | 73,656
Page 19
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025
12. | Taxation
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Corporation tax |  |
| Current tax on profits for the year | 211,656 | 236,529
|  | 211,656 | 236,529
| Total current tax | 211,656 | 236,529
| Deferred tax |  |
| Origination and reversal of timing differences | 136,474 | (14,638)
| Total deferred tax | 136,474 | (14,638)
| Tax on profit | 348,130 | 221,891
| Factors affecting tax charge for the year
| The tax assessed for the year is higher than (2024 - higher than) the standard rate of corporation tax in the UK of 25% (2024 - 25%). The differences are explained below:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Profit on ordinary activities before tax | 1,357,163 | 865,244
| Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2024 - 25%) | 339,291 | 216,311
| Effects of: |  |
| Expenses not deductible for tax purposes, other than goodwill amortisation and impairment | 5,228 | 5,431
| Permanent timing differences | 3,639 | 149
| Other tax charge (relief) on exceptional items | (28) | -
| Total tax charge for the year | 348,130 | 221,891
13. | Dividends
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Equity dividends paid on Ordinary shares | 75,000 | 75,000
|  | 75,000 | 75,000
Page 20
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025
14. | Tangible fixed assets
|  | Long-term leasehold property | Plant and machinery | Motor vehicles | Fixtures and fittings | Total
|  | £ | £ | £ | £ | £
| Cost or valuation |  |  |  |  |
| At 1 June 2024 | 257,080 | 3,772,288 | 516,779 | 538,279 | 5,084,426
| Additions | - | 967,613 | 98,010 | 49,176 | 1,114,799
| Disposals | - | - | (67,910) | (4,861) | (72,771)
| At 31 May 2025 | 257,080 | 4,739,901 | 546,879 | 582,594 | 6,126,454
| Depreciation |  |  |  |  |
| At 1 June 2024 | 198,863 | 2,717,983 | 243,616 | 491,794 | 3,652,256
| Charge for the year on owned assets | 14,554 | 407,054 | 102,788 | 19,252 | 543,648
| Disposals | - | - | (57,366) | (4,565) | (61,931)
| At 31 May 2025 | 213,417 | 3,125,037 | 289,038 | 506,481 | 4,133,973
| Net book value |  |  |  |  |
| At 31 May 2025 | 43,663 | 1,614,864 | 257,841 | 76,113 | 1,992,481
| At 31 May 2024 | 58,217 | 1,054,305 | 273,163 | 46,485 | 1,432,170
| The net book value of land and buildings may be further analysed as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Long leasehold | 43,663 | 58,214
|  | 43,663 | 58,214
Page 21
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025 14.Tangible fixed assets (continued)
| The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Plant and machinery | 1,325,885 | 732,230
| Motor vehicles | 66,735 | 106,150
|  | 1,392,620 | 838,380
The depreciation charge in respect of assets held under finance leases or hire purchase contracts amounted to £364,208 (2024 - £317,531).
15. | Fixed asset investments
|  | Investments in associates
|  | £
| Cost or valuation |
| At 1 June 2024 | 54,499
| At 31 May 2025 | 54,499
| The Company holds 100% of the Ordinary shares in Niche Holdings and 22.5% of its Preference shares.
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Aggregate capital and reserves |  |
| Niche Holdings Limited | 420,994 | 423,853
| Profit and (loss) for the year |  |
| Niche Holdings Limited | (2,859) | (2,910)
Page 22
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025
16. | Stocks
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Raw materials and consumables | 1,164,593 | 1,709,827
| Work in progress (goods to be sold) | 1,154,884 | 808,847
|  | 2,319,477 | 2,518,674
17. | Debtors
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Trade debtors | 4,198,850 | 2,901,618
| Amounts owed by group undertakings | 898,840 | 898,840
| Other debtors | 526,793 | 456,124
| Prepayments and accrued income | 321,845 | 499,013
| Tax recoverable | 99 | 99
|  | 5,946,427 | 4,755,694
| Included within 'Trade debtors' are debts of £4,198,850 (2024 - £2,901,618) which are under a factoring agreement where recourse lies with the lender.
18. | Cash and cash equivalents
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Cash at bank and in hand | 2,378,781 | 1,327,290
|  | 2,378,781 | 1,327,290
Page 23
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025
19. | Creditors: Amounts falling due within one year
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Bank loans | 12,500 | 22,500
| Trade creditors | 2,511,493 | 2,260,247
| Corporation tax | 51,657 | 118,258
| Other taxation and social security | 456,985 | 428,012
| Obligations under finance lease and hire purchase contracts | 309,660 | 236,734
| Proceeds of factored debts | 984,019 | 260,789
| Other creditors | 132,679 | 87,111
| Accruals and deferred income | 518,735 | 446,894
|  | 4,977,728 | 3,860,545
| Bank overdrafts and advances from factored debt are secured by charges over the Company's assets. In addition to this security, there is a third party guarantee in place dated 25 May 2005 limited to £100,000 in respect of the available overdraft facility. Hire purchase creditors are secured by a charge over the related asset.
20. | Creditors: Amounts falling due after more than one year
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Net obligations under finance leases and hire purchase contracts | 715,382 | 299,734
|  | 715,382 | 299,734
| Hire purchase creditors are secured by a charge over the related asset.
21. | Hire purchase and finance leases
| Minimum lease payments under hire purchase fall due as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Within one year | 309,660 | 236,734
| Between 1-5 years | 715,382 | 299,734
|  | 1,025,042 | 536,468
Page 24
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025
22. | Deferred taxation
|  | 2025
|  | £
| At beginning of year | (278,592)
| Charged to profit or loss | (136,474)
| At end of year | (415,066)
| The provision for deferred taxation is made up as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Accelerated capital allowances | (417,650) | (283,171)
| Short term timing differences | 2,584 | 4,579
|  | (415,066) | (278,592)
23. | Share capital
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
|  | Allotted, called up and fully paid |  |
|  | 65,000 (2024 - 65,000) Ordinary shares of £1.00 each | 65,000 | 65,000
| Each Ordinary share has equal voting and dividend rights.
24. | Reserves
Profit and loss account This reserve includes all current and prior period retained profit and losses.
25. | Capital commitments
| At 31 May 2025 the Company had capital commitments as follows:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Contracted for but not provided in these financial statements | 51,834 | 333,293
|  | 51,834 | 333,293
Page 25
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025
26. | Pension commitments
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £110,166 (2024 - £102,264). Contributions totalling £21,115 (2024 - £18,314) were payable to the fund at the reporting date and are included in creditors.
27. | Commitments under operating leases
| At 31 May 2025 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Buildings |  |
| Not later than 1 year | 37,425 | 37,425
|  | 37,425 | 37,425
|  |  |  |  | 2025 | 2024
|  |  |  |  | £ | £
| Other |  |
| Not later than 1 year | 19,893 | 24,794
| Later than 1 year and not later than 5 years | 16,905 | 36,797
|  | 36,798 | 61,591
28. | Transactions with directors
| The following is a summary of the directors' transactions with the company during the year:
|  |  |  |  | I McInnes
|  |  |  |  | £
| Balance due to the company as at 1 June 2024 | 6,436
| Payments made on behalf of the director | -
| Repayments made on behalf of the director | -
| Balance due to the company as at 31 May 2025 | 6,436
Page 26
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025
29. | Related party transactions
| The Company has taken advantage of the exemption in Financial Reporting Standard 102 Section 33 from the requirement to disclose transactions with companies wholly owned within the Group.
| The Company had the following related party transactions with companies related to the Company by virtue of Mr I McInnes' controlling interest in the Group: During the year, the Company sold goods and recharged expenses to:
|  | 2025 | 2024
|  | £ | £
| Wavelength Holdings Limited | 58,834 | 58,818
| Wavelength Properties Limited | 20,914 | 20,843
| Open Systems Solutions Limited | 465,935 | 744,848
| Icon Electronics Limited | 695 | 1,234
| The Company made purchases from:
|  | 2025 | 2024
|  | £ | £
| Wavelength Holdings Limited | 624,260 | 513,166
| Wavelength Properties Limited | 169,777 | 133,396
| Open System Solutions Limited | - | 28,904
| Icon Electronics Limited | - | -
Page 27
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025
Page 28
ESPRIT ELECTRONICS LIMITED |  |
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2025
29. | Related party transactions (continued)
| The Company also incurred a management fee of £591,000 (2024 - £501,000) from Wavelength Holdings Limited. At the balance sheet date, the Company was owed the following amounts:
|  | 2025 | 2024
|  | £ | £
| Revival Power Boats LLP | 75,198 | 75,198
| Revival Yachts LLP | 30,300 | 30,300
| Wavelength Holdings Limited | 482,505 | 411,832
| Wavelength Property Services LLP | 3,640 | 3,640
| Open Systems Solutions Limited | 13 | 17
| IThe following amounts have been provided against the above balances in case of non-recovery:
|  | 2025 | 2024
|  | £ | £
| Revival Powerboats LLP | 75,198 | 75,198
| Revival Yachts LLP | 30,200 | 30,200
| Included within trade creditors are the following amounts:
|  | 2025 | 2024
|  | £ | £
| Wavelength Holdings Limited | 30,480 | 28,486
| Included within trade debtors are the following amounts:
|  | 2025 | 2024
|  | £ | £
| Open System Solutions Limited | 76,152 | 369,835
30. | Controlling party
The ultimate parent company is Esprit Business Services Limited, by virtue of its majority shareholding in the issued shares of the Company, and is registered in England and Wales. Esprit Business Services Limited is the smallest and largest group undertaking to prepare consolidated accounts, which include Esprit Electronics Limited. Its registered office and address is the same as that of the Company from which the accounts may be obtained. The ultimate controlling party is considered to be Mr I McInnes by virtue of his interest in the parent company.
Page 29