REGISTERED NUMBER: 03620177 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 30 September 2025

for

PROGRESSIVE ENERGY LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

7

Statement of Comprehensive Income

11

Balance Sheet

12

Statement of Changes in Equity

13

Cash Flow Statement

14

Notes to the Cash Flow Statement

15

Notes to the Financial Statements

17

DIRECTORS:

D J Hanstock

J A G Brown

C D J Manson-Whitton

D J Parkin

P N Whitton

SECRETARY:

D J Hanstock

REGISTERED OFFICE:

38F Swan House

Bonds Mill, Bristol Road

Stonehouse

Gloucestershire

GL10 3RF

REGISTERED NUMBER:

03620177 (England and Wales)

AUDITORS:

Gravita Audit Western Limited

Chartered Accountants and Statutory Auditors

2nd Floor, South

One Castle Park

Tower Hill

Bristol

BS2 0JA

The directors present their strategic report for the year ended 30 September 2025.

FAIR REVIEW OF THE BUSINESS, DEVELOPMENT AND PERFORMANCE

Turnover for the year to 30 September 2025 was in line with the directors' expectations at £3.1 million (2024 - £6.2 million). The company's gross profit margin increased to 75.5% (2024 - 61.6%). The company recorded a profit before tax of £2.1m (2024 - loss of £0.1m). The 2025 profit includes a receipt arising on the realisation of the Company's long term commercial interest in one of the major projects.

BUSINESS ENVIRONMENT AND STRATEGY

Progressive Energy Limited ('Progressive') is a low carbon project development company. The company aims to create value by making a material contribution to the reduction of greenhouse gases and has a particular focus on Carbon Capture Utilisation and Storage (CCUS) and hydrogen. Progressive Energy Limited has been an early mover in conceiving and developing full chain CCUS projects and CCS-enabled hydrogen projects to supply hydrogen to industrial consumers.

This year saw continued significant advances in both the CCUS and hydrogen project portfolios resulting in a substantial reduction in the development risk for key projects in these areas. The decrease in turnover and the increase in gross margin is a result of the cessation of the recharge of pass through costs incurred by Progressive relating to HyNet due to the completion of the transport and storage elements of the project.

HyNet is a large-scale project in the North West of England, originated by Progressive, which aims to make a major contribution to the decarbonisation of industry across the region by direct capture of emitted CO2 on site and/or the substitution of fossil fuel by low carbon hydrogen. The element of HyNet relating to the transport and storage of CO2 and the first two emitters of CO2 have taken their Final Investment Decisions (FID). As a result, Progressive has realised its commercial interest in this element of the project in the 2025 Financial Year. Progressive remains a shareholder in Vertex, a joint venture with Essar Oil UK, developing CCS-enabled hydrogen production projects whose first plant was selected for support. FID of this project is anticipated in 2025/26.

The primary risk is a change in Government policy with regard to CCUS and hydrogen. However the risk has reduced considerably by the commitment by Government to two clusters (including HyNet) backed by an associated budget over 20 years, and by the announcement of the intent to support follow on Clusters. CCUS deployment has strong support from the Committee for Climate Change whose assessment is that it is an essential requirement to enable the UK to meet the legally binding targets set in place by the 2008 Climate Change Act and its subsequent commitment made in 2019 to achieve Net Zero UK emissions by 2050. However the risk of delay and budget limitations remain.

Further value is being created, and risk diversified, elsewhere in the Progressive development portfolio with the development of electrolytic hydrogen projects, power generation projects and other cluster development.

The electrolytic hydrogen projects continue to advance through Grenian Hydrogen Limited, a joint venture between Progressive Energy Limited, Statkraft and Foresight. The joint venture currently has one project shortlisted as part of the HAR2 funding round. FEED and consenting is complete for this project and we are now awaiting the next steps from Government in progressing the HAR2 funding process.

Progressive continues to undertake early development opportunities in the dispatchable low carbon power sector, with several projects now defined and discussions with potential partners well advanced. We would expect the first project to commence detailed development in the 2025/26 financial year.

Peak Cluster is an innovative collaboration between Progressive Energy, Tarmac, Breedon, Holcim, SigmaRoc, Summit Energy Evolution and National Wealth Fund to capture, transport and permanently store carbon dioxide (CO2) emissions from the cement and lime industries across Derbyshire, Staffordshire and Cheshire. Following formation of the Project development vehicle and investment by the partners, this development project is now under execution and is making excellent progress, being both on schedule and on budget to reach FID in 2029.

The Bacton Hydrogen Hub is progressing as a collaboration between Summit Energy Evolution Limited and Progressive Energy. Bacton is a key energy node on the UK and European gas system, through which substantial volumes of natural gas flow in both directions. The purpose of this project is to decarbonise the facility and provide low carbon hydrogen to regional offtakers.

RESULTS AND DIVIDENDS

The results, as summarised above, are in line with the directors' expectations and they consider the results achieved to be satisfactory in the context of the current economic position.

During the year, the Company paid interim dividends of £2,532,826 (2024: £Nil) to its holding company.

PRINCIPAL RISKS AND UNCERTAINTIES

The company's principal risks and uncertainties are considered to be as follows:

Economic uncertainty

Refer to business environment and strategy narrative above.

Technological challenges

Refer to business environment and strategy narrative above.

Key staff

There are a number of key personnel who are considered to be crucial to the success of the business. Staff relationships and remuneration packages, together with clear career development, are implemented such that key personnel are retained.

Cash flows

Cash is crucial to the ongoing development of the business. The company actively manages cash flow to ensure that sufficient funding is available to meet its obligations as they fall due.

Credit risk

Credit risk is the financial exposure generated by the potential default of third parties in fulfilling their obligations. Credit risk arises for the company if it is unable to recover sums due from customers and business partners. It is mitigated by rigorous credit control.

KEY PERFORMANCE INDICATORS

The directors monitor the progress of the company by reference to certain key performance criteria, both financial and non-financial. The primary indicators are:

- Carbon savings achieved through the portfolio of projects being delivered by the business

- Revenue

- Cashflow

- New contract success

- Retention of sufficient management and staff to deliver the project portfolio

- Impact of the business on the environment

ON BEHALF OF THE BOARD:

C D J Manson-Whitton - Director

8 April 2026

The directors present their report with the financial statements of the company for the year ended 30 September 2025.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of energy sector project developments.

DIVIDENDS

An interim dividend of 7.97 pence per share was paid on 30 September 2025. The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 30 September 2025 will be £2,532,826.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 October 2024 to the date of this report.

D J Hanstock

J A G Brown

C D J Manson-Whitton

D J Parkin

P N Whitton

POLITICAL DONATIONS AND EXPENDITURE

No political donations were made in the year (2024 - £nil)

DISCLOSURE IN THE STRATEGIC REPORT

The Companies Act 2006 (Strategic Report and Directors' Report) regulations 2013 requires a Strategic Report to be prepared. Where mandatory disclosures in the Directors' Report are considered by the directors to be of strategic importance, these have been included within the Strategic Report rather than the Directors' Report in accordance with S414C(11) Companies Act 2006.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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;

-	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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditor, Gravita Audit Western Limited, is deemed to have been reappointed in accordance with Section 487 of the Companies Act 2006.

ON BEHALF OF THE BOARD:

C D J Manson-Whitton - Director

8 April 2026

Opinion

We have audited the financial statements of Progressive Energy Limited (the 'company') for the year ended 30 September 2025 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 30 September 2025 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of 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 Statement of Directors' Responsibilities set out on page five, 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 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.

Auditors' responsibilities for the audit of the financial statements

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

Irregularities, including fraud, are instances on non-compliance with laws and regularities. 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:

o We obtained an understanding of the legal and regulatory frameworks applicable to the company and the sector in

which it operates. We determined the following laws and regulations of most significance were: Companies Act 2006, UKGAAP, and UK corporate taxation laws.

o We obtained an understanding of how the company complies with those legal and regulatory frameworks by making inquiries of management.

o We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud

might occur.

Audit procedures performed by the engagement team included:

o Identifying and assessing the effectiveness of controls management has in place to prevent and detect fraud;

o Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;

o Challenging assumptions and judgements made by management in its significant accounting estimates;

o Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations;

and

o Assessing the extent of compliance with the relevant laws and regulations.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with

laws and regulations are from the events and transactions reflected in the financial statements, the less likely we

would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk

of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or

intentional misrepresentations, or through collusions.

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

Use of our report

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

Matthew Bracher BSc FCA (Senior Statutory Auditor)

for and on behalf of Gravita Audit Western Limited

Chartered Accountants and Statutory Auditors

2nd Floor, South

One Castle Park

Tower Hill

Bristol

BS2 0JA

8 April 2026

TURNOVER

3

3,073,429

6,151,923

Cost of sales

(752,381

)

(2,361,056

)

GROSS PROFIT

2,321,048

3,790,867

Administrative expenses

(4,252,527

)

(3,978,239

)

(1,931,479

)

(187,372

)

Other operating income

3,940,000

(113,672

)

OPERATING PROFIT/(LOSS)

5

2,008,521

(301,044

)

Income from fixed asset investments

23,764

28,092

Interest receivable and similar income

55,042

21,483

2,087,327

(251,469

)

Gain/loss on revaluation of investments

42,770

111,173

2,130,097

(140,296

)

Interest payable and similar expenses

7

(2,933

)

(3,446

)

PROFIT/(LOSS) BEFORE TAXATION

2,127,164

(143,742

)

Tax on profit/(loss)

8

(742,134

)

38,896

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

1,385,030

(104,846

)

FIXED ASSETS

Intangible assets

10

-

2,933

Tangible assets

11

18,889

13,416

Investments

12

1,157,552

1,091,019

1,176,441

1,107,368

CURRENT ASSETS

Debtors: amounts falling due within one year

13

668,997

3,895,124

Investments

14

1,897,000

760,000

Cash at bank

167,681

455,521

2,733,678

5,110,645

CREDITORS

Amounts falling due within one year

15

(518,468

)

(1,680,277

)

NET CURRENT ASSETS

2,215,210

3,430,368

TOTAL ASSETS LESS CURRENT LIABILITIES

3,391,651

4,537,736

PROVISIONS FOR LIABILITIES

17

(3,344

)

(1,633

)

NET ASSETS

3,388,307

4,536,103

CAPITAL AND RESERVES

Called up share capital

18

1,589

1,589

Share premium

19

103,235

103,235

Capital redemption reserve

19

129

129

Retained earnings

19

3,283,354

4,431,150

SHAREHOLDERS' FUNDS

3,388,307

4,536,103

The financial statements were approved by the Board of Directors and authorised for issue on 8 April 2026 and were signed on its behalf by:

C D J Manson-Whitton - Director

Called up

Capital

share

Retained

Share

redemption

Total

capital

earnings

premium

reserve

equity

£

£

£

£

£

Balance at 1 October 2023

1,589

4,535,996

103,235

129

4,640,949

Changes in equity

Deficit for the year

-

(104,846

)

-

-

(104,846

)

Total comprehensive income

-

(104,846

)

-

-

(104,846

)

Balance at 30 September 2024

1,589

4,431,150

103,235

129

4,536,103

Changes in equity

Profit for the year

-

1,385,030

-

-

1,385,030

Total comprehensive income

-

1,385,030

-

-

1,385,030

Dividends

-

(2,532,826

)

-

-

(2,532,826

)

Balance at 30 September 2025

1,589

3,283,354

103,235

129

3,388,307

Cash flows from operating activities

Cash generated from operations

1

2,921,651

60,889

Interest paid

(2,933

)

(3,446

)

Tax paid

179,530

-

Net cash from operating activities

3,098,248

57,443

Cash flows from investing activities

Purchase of intangible fixed assets

67

-

Purchase of tangible fixed assets

(17,983

)

(6,786

)

Purchase of current asset investments

(1,582,413

)

(760,000

)

Sale of intangible fixed assets

(67

)

-

Sale of tangible fixed assets

67

-

Sale of current asset investments

434,044

-

Interest received

55,042

21,483

Dividends received

23,764

-

Net cash from investing activities

(1,087,479

)

(745,303

)

Cash flows from financing activities

Loan repayments in year

-

(93,750

)

Loan to group companies

234,217

(402,722

)

Equity dividends paid

(2,532,826

)

-

Net cash from financing activities

(2,298,609

)

(496,472

)

Decrease in cash and cash equivalents

(287,840

)

(1,184,332

)

Cash and cash equivalents at beginning of year

2

455,521

1,639,853

Cash and cash equivalents at end of year

2

167,681

455,521

1.	RECONCILIATION OF PROFIT/(LOSS) BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2025

2024

£

£

Profit/(loss) before taxation

2,127,164

(143,742

)

Depreciation charges

12,376

13,362

Loss on disposal of fixed assets

3,000

-

Gain on revaluation of fixed assets

(55,164

)

(111,173

)

RDEC tax credit

-

124,696

Movement on provisions

-

(65,041

)

Intercompany loan provision

632,967

550,244

Finance costs

2,933

3,446

Finance income

(78,806

)

(49,575

)

2,644,470

322,217

Decrease in trade and other debtors

1,568,033

457,577

Decrease in trade and other creditors

(1,290,852

)

(718,905

)

Cash generated from operations

2,921,651

60,889

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 30 September 2025

30.9.25

1.10.24

£

£

Cash and cash equivalents

167,681

455,521

Year ended 30 September 2024

30.9.24

1.10.23

£

£

Cash and cash equivalents

455,521

1,639,853

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.10.24

Cash flow

At 30.9.25

£

£

£

Net cash

Cash at bank

455,521

(287,840

)

167,681

455,521

(287,840

)

167,681

Liquid resources

Current asset investments

760,000

1,137,000

1,897,000

760,000

1,137,000

1,897,000

Total

1,215,521

849,160

2,064,681

1.	COMPANY INFORMATION

Progressive Energy Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The company's principal activities and nature of its operations was that of energy sector project developments.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

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

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

Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Significant judgements and estimates

In determining the carrying amounts of certain assets and liabilities, the company makes assumptions of the

effects of uncertain future events on those assets and liabilities at the balance sheet date. The entities' estimates and assumptions are based on historical experience and expectation of future events and are reviewed periodically. These include, but are not limited to, depreciation on tangible assets, amortisation on intangible assets and recoverability of debtors.

Revenue

Revenue from energy sector project development 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 from energy sector project development 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:

Rendering of services:

Revenue from energy sector project development from a contract to provide services is recognised in the period in which the services are provided when all of the following conditions are satisfied:

- the amount of revenue can be measured reliably;

- it is probable that the Company will receive the consideration due under the contract;

- the stage of completion of the contract at the end of the reporting period can be measured

reliably; and

- the costs incurred and the costs to complete the contract can be measured reliably.

Any potential losses on contracts are recognised at the point recovery of the input costs of the company are deemed to be potentially irrecoverable.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Patents and licences have been amortised evenly over their estimated useful life of twenty years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Fixtures and fittings

-

33% on cost

Computer equipment

-

50% on cost and 33% on cost

Assets of a capital nature which have an extended useful economic life are capitalised in the balance sheet. The asset residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively as appropriate, if there is a significant change since the last reporting date.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Cash and cash equivalents

Cash and cash equivalents 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.

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 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, which include trade and other debtors, amounts due from group undertakings and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost. 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.

Basic financial liabilities, including trade and other creditors and amounts due to group undertakings are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Financial liabilities are derecognised when, and only when, the company's contractual obligations are discharged, cancelled, or they expire.

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

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

Deferred tax

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

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

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

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research is recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.

If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Onerous contracts

Where the unavoidable costs of a contract exceed the economic benefit expected to be received from it, a provision is made for the present value of the obligations under the contract.

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.

Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the statement of financial position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the statement of financial position.

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the statement of financial position date.

3.

TURNOVER

The turnover and profit (2024 - loss) before taxation are attributable to the one principal activity of the company.