Company registration number 02632823 (England and Wales)
MECHLINE DEVELOPMENTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2025
MECHLINE DEVELOPMENTS LIMITED
COMPANY INFORMATION
Directors
P Galliford
A Farrell
C Small
N Falco
Secretary
A Farrell
Company number
02632823
Registered office
One Brudenell Drive
Brinklow
Milton Keynes
Buckinghamshire
MK10 0DE
Auditor
Mercer & Hole LLP
The Pinnacle
170 Midsummer Boulevard
Milton Keynes
Buckinghamshire
MK9 1BP
MECHLINE DEVELOPMENTS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 22
MECHLINE DEVELOPMENTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2025
- 1 -

The directors present the strategic report for the year ended 31 July 2025.

Fair review of the business

The financial year ending 31 st July 2025 saw an increase in revenue of 6.1% (2024 - 1.7%), a result of a continued emphasis on high standards of quality and customer service.

Following the significant efforts we have made in cost management and continuous improvement, 2025 sees us a step closer to the historical average profitability achieved prior to the Covid-19 pandemic.

Principal risks and uncertainties

The company maintains a comprehensive risk register, which is reviewed periodically by the senior management team and suitable mitigating strategies are actioned where appropriate. A summary of the principal risks, are detailed below.

A downturn in economic conditions and increased employment costs could lead to the closure of end user customer sites which will limit our customer market and delay possible projects.

Mechline Developments sales pipeline is across a diversified range of sectors and is further diversifying in other countries. The company also has cash reserves and lending facilities to support it through downturns should they occur.

Significant changes in foreign exchange rates could lead to unstable pricing of imported components. Primary exposure is limited by reasonable levels of inventory with additional products and components and sustainability driving new product development being sourced from more local manufacturers.

Market risk

Market risk encompasses two types of risk, being currency risk and interest rate risk. The company does not ordinarily enter into derivative transactions such as currency or interest rate swaps, as the directors consider the risk is adequately managed without the use of such instruments. The currency rate is further mitigated by the increasing volume of international business and selling and receiving funds in Euros and US dollars. However, the directors will continue to monitor these risks and the appropriateness of such instruments.

Credit risk

The company continues to trade with reputable companies with long term trading relationships and trading history. Risk is further mitigated by a stringent credit control process.

Despite the difficult economic conditions the company has suffered limited exposure to bad debts. The directors are confident that the procedures in place and the constant vigilance of the credit control team will ensure that the company’s exposure is minimised.

Liquidity risk

The company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.

Key performance indicators

Mechline Developments reviews and monitors business performance through a number of KPI’s, such as financial performance, customer satisfaction, quality performance, operational efficiency and sustainability. Principal among these are the measures of sales and profitability.

MECHLINE DEVELOPMENTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2025
- 2 -
Key performance indicators (continued)

Sales at £11.7m were up from £11.0m in the prior year. The company made an operating profit in the current year as a result of cost management and continuous improvement.

2025 2024 Change

£’000 £’000 %

Turnover 11,674 11,007 6.1%

Gross profit 4,903 4,416 11.0%

Operating profit 1,801 1,439 25.2%

Another key performance indicator is considered to be employee productivity and efficiency, where performance against revenue, gross profit and profit before tax per employee are reviewed:

2025 2024 Change Pre-Covid

£’000 £’000 % £’000

Turnover 248 229 8.3% 200

Gross Profit 104 92 13.0% 95

Profit before tax 39 31 25.8% 39

On behalf of the board

C Small
Director
9 February 2026
MECHLINE DEVELOPMENTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2025
- 3 -

The directors present their annual report and financial statements for the year ended 31 July 2025.

Principal activities

The principal activity of the company during the year continued to be that of the design, manufacture and marketing of innovative products for the catering industry.

Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £1,259,000. The directors do not recommend payment of a final dividend.

Directors

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

P Galliford
A Farrell
C Small
N Falco
Auditor

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

Statement of disclosure to auditor

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 company’s auditor 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 company’s auditor is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
C Small
Director
9 February 2026
MECHLINE DEVELOPMENTS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2025
- 4 -

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 company and of the profit or loss of the company for that period.

In preparing these financial statements, the directors are required to:

- select suitable accounting policies and then apply them consistently;

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

- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explain in the financial statements;

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

MECHLINE DEVELOPMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MECHLINE DEVELOPMENTS LIMITED
- 5 -
Opinion

We have audited the financial statements of Mechline Developments Limited (the 'company') for the year ended 31 July 2025 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 company's affairs as at 31 July 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 UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The 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' r eport 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.

MECHLINE DEVELOPMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MECHLINE DEVELOPMENTS LIMITED (CONTINUED)
- 6 -
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 identifie d material misstatements in the strategic report or the directors' r eport.

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' r esponsibilities s tatement, 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.

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.

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

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. These included, but were not limited to, the Companies Act 2006 and tax legislation.

We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements and the financial report (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate entries including journals to overstate revenue or understate expenditure and management bias in accounting estimates.

Audit procedures performed by the engagement team included:

- discussions with management, including considerations of known or suspected instances of non- compliance with laws and regulations and fraud;

- gaining an understanding of management's controls designed to prevent and detect irregularities; and

- identifying and testing journal entries.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non- compliance and cannot be expected to detect non-compliance with all laws and regulations.

MECHLINE DEVELOPMENTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MECHLINE DEVELOPMENTS LIMITED (CONTINUED)
- 7 -

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.

Andrew Lawes MA MSc FCA (Senior Statutory Auditor)
For and on behalf of Mercer & Hole LLP, Statutory Auditor
Chartered Accountants
The Pinnacle
170 Midsummer Boulevard
Milton Keynes
Buckinghamshire
MK9 1BP
9 February 2026
MECHLINE DEVELOPMENTS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2025
- 8 -
2025
2024
£
£
Turnover
2
11,674,007
11,007,030
Cost of sales
(6,771,264)
(6,591,094)
Gross profit
4,902,743
4,415,936
Administrative expenses
(3,118,536)
(2,977,251)
Other operating income
16,999
-
0
Operating profit
3
1,801,206
1,438,685
Interest receivable and similar income
7
45,833
43,540
Interest payable and similar expenses
8
(15,518)
(15,564)
Profit before taxation
1,831,521
1,466,661
Tax on profit
9
(372,580)
(291,564)
Profit for the financial year
1,458,941
1,175,097

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

MECHLINE DEVELOPMENTS LIMITED
BALANCE SHEET
AS AT 31 JULY 2025
31 July 2025
- 9 -
2025
2024
Notes
£
£
£
£
Fixed assets
Intangible assets
11
14,183
19,673
Tangible assets
12
238,235
283,521
252,418
303,194
Current assets
Stocks
13
2,757,540
2,060,198
Debtors
14
7,686,624
7,632,273
Cash at bank and in hand
2,923,879
3,475,337
13,368,043
13,167,808
Creditors: amounts falling due within one year
15
(1,662,726)
(1,726,958)
Net current assets
11,705,317
11,440,850
Total assets less current liabilities
11,957,735
11,744,044
Provisions for liabilities
Provisions
16
208,400
189,300
Deferred tax liability
17
19,179
24,529
(227,579)
(213,829)
Net assets
11,730,156
11,530,215
Capital and reserves
Called up share capital
19
230,230
230,230
Share premium account
20
116,681
116,681
Capital redemption reserve
20
144,814
144,814
Profit and loss reserves
20
11,238,431
11,038,490
Total equity
11,730,156
11,530,215

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

The financial statements were approved by the board of directors and authorised for issue on 9 February 2026 and are signed on its behalf by:
C Small
Director
Company registration number 02632823 (England and Wales)
MECHLINE DEVELOPMENTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2025
- 10 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 August 2023
230,230
116,681
144,814
10,492,893
10,984,618
Year ended 31 July 2024:
Profit and total comprehensive income
-
-
-
1,175,097
1,175,097
Dividends
10
-
-
-
(629,500)
(629,500)
Balance at 31 July 2024
230,230
116,681
144,814
11,038,490
11,530,215
Year ended 31 July 2025:
Profit and total comprehensive income
-
-
-
1,458,941
1,458,941
Dividends
10
-
-
-
(1,259,000)
(1,259,000)
Balance at 31 July 2025
230,230
116,681
144,814
11,238,431
11,730,156
MECHLINE DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2025
- 11 -
1
Accounting policies
Company information

Mechline Developments Limited is a private company limited by shares incorporated in England and Wales. The registered office is One Brudenell Drive, Brinklow, Milton Keynes, Buckinghamshire, MK10 0DE.

1.1
Accounting convention

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 a mounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. T he company has therefore taken advantage of e xemptions from the following disclosure requirements:

- Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;

- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

- Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

- Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of Mechline Holdings Limited. These consolidated financial statements are available from its registered office,

1.2
Going concern

The financial statements have been prepared on a going concern basis. In making this assessment, t he directors have prepared detailed trading and cash flow forecasts to 31 July 202 7. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence over this period and have therefore adopted the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Revenue is recognised to the extent that the company obtains the right to consideration in exchange for its performance. Revenue is measured at the fair value of the consideration receivable, excluding discounts, rebates and value added tax. 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 delivery of the goods.

1.4
Intangible fixed assets other than goodwill

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

MECHLINE DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2025
1
Accounting policies
(Continued)
- 12 -

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:

Software
Over the estimated useful life of 5 years
1.5
Tangible fixed assets

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:

Leasehold improvements
Straight line over the life of the lease
Plant and machinery
20% Straight line
Fixtures, fittings & equipment
20% Straight line
Motor vehicles
25% Straight line

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 credited or charged to profit or loss.

1.6
Impairment of fixed assets

At each reporting period end date, the company 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.

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.

1.7
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.

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.

MECHLINE DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2025
1
Accounting policies
(Continued)
- 13 -
1.8
Cash at bank and in hand

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.

1.9
Financial instruments

The company 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 company's balance sheet 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 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.

Impairment of financial assets

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.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company 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.

Classification of 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 deducting all of its liabilities.

MECHLINE DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2025
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities

Basic financial liabilities, including creditors and bank loans, 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 receipts 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. A m ounts 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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

Equity instruments issued by the company 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 company.

1.11
Taxation

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

Current 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

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 when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

MECHLINE DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2025
1
Accounting policies
(Continued)
- 15 -
1.12
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision i s measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.13
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

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.

1.14
Retirement benefits

The pension costs in the financial statements represent the contribution payable by the company during the year.

1.15
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

1.16
Leases

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 lease s asset are consumed.

1.17
Foreign exchange

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.

MECHLINE DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2025
- 16 -
2
Turnover and other revenue

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

2025
2024
£
£
Turnover analysed by class of business
Sales of products
11,674,007
11,007,030
2025
2024
£
£
Turnover analysed by geographical market
UK
10,312,460
10,001,798
Europe
572,941
522,678
Rest of the world
788,606
482,554
11,674,007
11,007,030
2025
2024
£
£
Other revenue
Interest income
45,833
43,540
Research and development expenditure credit
16,999
-
0
3
Operating profit
2025
2024
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(54,204)
63,759
Depreciation of tangible fixed assets
74,257
82,766
(Profit)/loss on disposal of tangible fixed assets
-
5,128
Amortisation of intangible assets
5,490
5,490
Operating lease charges
222,787
222,787
4
Auditor's remuneration
2025
2024
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
21,000
20,000
MECHLINE DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2025
- 17 -
5
Employees

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

2025
2024
Number
Number
Sales and administration
47
48

Their aggregate remuneration comprised:

2025
2024
£
£
Wages and salaries
2,104,706
2,041,756
Social security costs
248,356
221,161
Pension costs
87,110
109,866
2,440,172
2,372,783
6
Directors' remuneration
2025
2024
£
£
Remuneration for qualifying services
529,139
530,345
Company pension contributions to defined contribution schemes
52,275
76,794
581,414
607,139

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2024 - 4).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2025
2024
£
£
Remuneration for qualifying services
229,765
225,044
Company pension contributions to defined contribution schemes
1,321
1,321
7
Interest receivable and similar income
2025
2024
£
£
Interest income
Interest on bank deposits
45,833
43,540
MECHLINE DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2025
- 18 -
8
Interest payable and similar expenses
2025
2024
£
£
Interest on bank overdrafts and loans
15,518
15,564
9
Taxation
2025
2024
£
£
Current tax
UK corporation tax on profits for the current period
378,140
292,724
Adjustments in respect of prior periods
(210)
9,806
Total current tax
377,930
302,530
Deferred tax
Origination and reversal of timing differences
(5,350)
(10,966)
Total tax charge
372,580
291,564

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

2025
2024
£
£
Profit before taxation
1,831,521
1,466,661
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2024: 25.00%)
457,880
366,665
Tax effect of expenses that are not deductible in determining taxable profit
5,477
7,992
Research and development and patent box deductions
(90,555)
(92,899)
Under/(over) provided in prior years
(210)
9,806
Group relief
(12)
-
0
Taxation for the year
372,580
291,564
10
Dividends
2025
2024
£
£
Interim paid
1,259,000
629,500
MECHLINE DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2025
- 19 -
11
Intangible fixed assets
Software
£
Cost
At 1 August 2024 and 31 July 2025
27,450
Amortisation and impairment
At 1 August 2024
7,777
Amortisation charged for the year
5,490
At 31 July 2025
13,267
Carrying amount
At 31 July 2025
14,183
At 31 July 2024
19,673
12
Tangible fixed assets
Leasehold improvements
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 August 2024
324,165
474,486
120,509
217,594
1,136,754
Additions
-
0
8,691
20,280
-
0
28,971
Disposals
-
0
(72,513)
-
0
-
0
(72,513)
At 31 July 2025
324,165
410,664
140,789
217,594
1,093,212
Depreciation and impairment
At 1 August 2024
154,013
472,864
77,828
148,528
853,233
Depreciation charged in the year
22,102
2,020
11,474
38,661
74,257
Eliminated in respect of disposals
-
0
(72,513)
-
0
-
0
(72,513)
At 31 July 2025
176,115
402,371
89,302
187,189
854,977
Carrying amount
At 31 July 2025
148,050
8,293
51,487
30,405
238,235
At 31 July 2024
170,152
1,622
42,681
69,066
283,521
13
Stocks
2025
2024
£
£
Finished goods and goods for resale
2,757,540
2,060,198
MECHLINE DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2025
- 20 -
14
Debtors
2025
2024
Amounts falling due within one year:
£
£
Trade debtors
2,400,272
2,151,432
Amounts due from fellow group undertakings
5,074,950
5,254,650
Other debtors
16,213
19,608
Prepayments and accrued income
195,189
206,583
7,686,624
7,632,273
15
Creditors: amounts falling due within one year
2025
2024
£
£
Bank loans and overdrafts
40,028
-
0
Trade creditors
541,051
565,486
Corporation tax
210,931
292,697
Other taxation and social security
443,243
456,876
Other creditors
326,171
300,864
Accruals and deferred income
101,302
111,035
1,662,726
1,726,958
16
Provisions for liabilities
2025
2024
£
£
Dilapidations provision
179,400
162,600
Warranty provision
29,000
26,700
208,400
189,300
Movements on provisions:
Dilapidations provision
Warranty provision
Total
£
£
£
At 1 August 2024
162,600
26,700
189,300
Additional provisions in the year
16,800
2,300
19,100
At 31 July 2025
179,400
29,000
208,400
MECHLINE DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2025
- 21 -
17
Deferred taxation

Deferred tax assets and liabilities are offset where the 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:

Liabilities
Liabilities
2025
2024
Balances:
£
£
Accelerated capital allowances
19,906
24,529
Short term timing differences
(727)
-
19,179
24,529
2025
Movements in the year:
£
Liability at 1 August 2024
24,529
Credit to profit or loss
(5,350)
Liability at 31 July 2025
19,179

The deferred tax liability set out above is expected to reverse within 5 years and relates to accelerated capital allowances that are expected to mature within the same period.

18
Retirement benefit schemes
2025
2024
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
87,110
109,866

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

MECHLINE DEVELOPMENTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2025
- 22 -
19
Share capital
2025
2024
£
£
Ordinary share capital
Issued and fully paid
460,373 Ordinary shares of 50p each
230,186
230,186
88 "A" Ordinary shares of 50p each
44
44
230,230
230,230

During 2019 options over 3,500 Ordinary shares of £1 each and 7 Ordinary B shares of £1 each were granted by Mechline Holdings Limited, the company's parent undertaking, to certain employees of the company at an option price of £1 per share. The options can be exercised after 9.5 years or on a sale or flotation of Mechline Holdings Limited if earlier. At 31 July 2025, options over 2,000 Ordinary shares (2024: 2,000) of £1 each and 4 Ordinary B shares (2024: 4) of £1 each remained outstanding. Based on conditions at 31 July 2025, no material share based payments charge arises in the current year.

20
Reserves
Share premium

This reserve records the amount above the nominal value received for shares sold.

Profit and loss reserves

This reserve includes all current and prior period retained profits and losses.

Capital redemption reserve

This reserve records the nominal value of shares repurchased by the company.

21
Operating lease commitments
As lessee

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

2025
2024
£
£
Within 1 year
231,039
231,428
Years 2-5
156,528
387,567
387,567
618,995
22
Ultimate controlling party

The company's immediate and ultimate parent undertaking is Mechline Holdings Limited.

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