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

The principal activities of the company are the research and development, design, prototyping, manufacture and sale of high mobility vehicles, trailers and other systems together with the provision of engineering services and equipment.

The company saw a 3% reduction in profit on the prior year. The operating profit for the year was £3.7m (2024: £3.8m profit). Turnover was £69.1m (2024: £58.1m) –18.8% higher than the prior year. Our adjusted earnings before interest, tax, depreciation amortisation and impairment of non-financial assets increased by 4% from £5.2m to £5.4m. The gross profit margin was 14.4% (2024: 16.5%) – 2.1% lower than the prior year.

The increase in revenue compared to 2024 primarily reflects the impact of the delivery of the prime project that the business has been engaged in over the last couple of years together with the commencement of production of a subsequent follow-on project for the same customer.

Unfortunately, supply chain issues on the main project over the current and previous year, together with inflationary increases, has continued to erode the resulting margin of the business.

The company remains focused on controlling overheads; however, some cost increases have been out of the business’s control. For example, the gross margin has deteriorated due to rising prices of raw materials due to inflation and delays in completion of projects, not always under the control of the business. The conflict in Ukraine, has also affected the cost of utilities and fuel which has led to some increased costs.

The business has continued to look at developing new products to add to its existing offering and so £2.64m (2024: £1.8m) has been capitalised relating to research and development activities. Depreciation, amortisation, and impairment of non-financial assets increased by £0.3m to £1.7m (2024: £1.4m). This was mainly due to the amortisation of development costs of £1.3m.

The net asset position of the company increased to £19.9m (2024: £18.7m).

Current assets have increased from £24.3m to £28.7m, an increase of £4.4m. Of this, £0.6m relates to an increase in cash and cash equivalents. This has been supplemented by an increase in trade and other receivables of £5.7m due to increased levels of business and offset by a reduction in the levels of raw material stock and WIP of £1.9m as projects have commenced deliveries. There has been no change from the prior year to concentration of credit risk and our experience of bad debts, remains comparatively low.

The increase in current assets has been offset by a £4.0m increase in current liabilities from £12.2m to £16.2m. This is mainly due to a combination of an increase of £3.0m in trade creditors as the business commenced production and delivery of the main UK MoD contracts together with an increase in VAT liabilities at the year end.

This increase has been offset by a reduction in corporation tax payable from £0.6m to £0.2m. Accruals and deferred income has decreased marginally from £6.0m to £5.7m. Non-current liabilities have increased by £0.7m from £4.1m to £4.8m. £0.5m of bank loans were repaid in the year.

Macro economic conditions

Potential impact on the company

The company operates primarily in the defence and aerospace sector with its principal customers being Government organisations. As a result, the business is at risk of global economic and political conditions, cuts in government spending and competitor pressures particularly around tender pricing.

Mitigating actions

The business continues to look to differentiate its product as market leading and aims to price its products appropriately. In depth discussions with prospective customers and detailed market analysis is undertaken to ensure that contracting risks are mitigated before engaging in contract negotiations

Cyber Security

Potential impact on the company

Given that the company operates within the sector that it does, the directors believe that there is a significant risk to the business from Cyber attack

Mitigating actions

The Company has strengthened its cyber security protocols and has obtained the Cyber essentials plus accreditation and continues to monitor its internal systems. The business has also invested in mirroring the site infrastructure to ensure that should the business be compromised; the reserve system can be invoked with minimal disruption

Margin erosion – Raw Materials, subcontract costs

Potential impact on the company

The current global economic situation is resulting in rising prices of raw materials. This has led to the erosion of profit margins in the short to medium term, particularly since the business tends to operate of fixed and firm price contracts with customers.

Mitigating actions

The company will not seek to win business at any price and will include price escalation risk within any negotiations for individual contracts.

Supply chain

Potential impact on the company

The current global economic situation is causing delays in the supply chain. This is having a negative impact of project profitability as late delivery of raw materials impacts production runs, leading to delays in completion and subsequently increases in cost.

Mitigating actions

The business looks to build strong relationships with suppliers and where possible, for our significant raw material supplies, we look to secure long term supply contracts to ensure availability. To avoid disruption in the current climate we have also increased our buffer stock levels of high risk items.

Competition in our markets

Potential impact on the company

The company operates in a competitive market environment and the continuing development of new product ranges is key to success.

Mitigating actions

The business continues to monitor the use of its products with customers to identify areas for improvement and development. In addition, the business also reviews the marketplace against customers’ needs with a view to identifying gaps in the market for new product.

The company’s strategy is to remain operating within the defence and Aerospace engineering sector for the medium to long term. In the shorter term the company is looking to win more business by engaging with large Defence Primes. Historically, the company has focussed on primarily on direct involvement with end customers.

Considering the capabilities of the business, the Board believes that the company has the expertise to work with large primes as well as continuing to maintain the company’s position as a premier supplier of all-terrain vehicles in its chosen markets.

Management makes use of certain alternative performance measures (APMs) that are non-UK GAAP measures. The Board uses these to assess performance of the business and considers them to provide useful supplementary information to the statutory results. The Board does not consider APMs to be more relevant or reliable than UK GAAP measures and notes that their definition and basis of calculation may differ from other companies. The business’s APMs are defined and a reconciliation to the most directly comparable UK GAAP measure is shown below. EBITDA is operating profit as measured using UK GAAP principles adjusted for the effects of depreciation, amortisation and impairment of non-financial assets. EBITDA is reported to the Board as management considers that it provides a useful proxy for the Group’s operating profit excluding non-cash items. It can be reconciled to the operating profit measure reported in the profit and loss account as shown below:

Free cash flow is an important APM and gives the Board some insight as to the company’s ability to produce cash to repay creditors or to distribute to shareholders. The free cash flow uses cash generated from operations adjusted by capital expenditure. This APM can be reconciled from the measures reported in the primary financial statements below:

The directors have had due regard for their duties under section 172 of the UK Companies Act 2006 and consider the interests of the company's main stake holders, being employees, suppliers, and customers in their decisions. Regular dialogue is held with these parties to understand their needs and all decisions are taken with the view that they will result in long term benefits.

On behalf of the board

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

The results for the year are set out on page 11.

Ordinary dividends were paid amounting to £2m. The directors do not recommend payment of a further dividend.

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

Objectives and policies

The company's activities expose it to a number of financial risks including price risk, credit risk, liquidity risk and foreign exchange risk which are managed as follows:

Price risk, credit risk, liquidity risk and cash flow risk

Price risk: the company is engaged in long term contracts where the prices are often fixed. The company is therefore exposed to sub-contractor and supplier price risk. The company manages its exposure to these risks by engaging in ongoing negotiations with sub-contractors and suppliers over prices. The company looks to fix prices where possible to reduce exposure to price fluctuations on contracts. The company also continues to improve its systems to ensure that the company manages the risks associated with contract costs, which will help ensure that the company's results continue to improve into the future.

Credit risk: the company’s principal financial assets are bank balances, trade debtors and other receivables. The credit risk on liquid funds is mitigated because the counterparties are banks with high credit-ratings. Trade debtors and other receivables are managed in respect of credit risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and limits. A significant part of the company’s operations are with national governments which have low credit risks.

Liquidity risk: in order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the company uses a mixture of long-term and short-term debt finance.

Foreign exchange risk: the company is exposed to currency risk on revenue and purchases that are denominated in a currency other than sterling. The company seeks to reduce foreign currency exchange exposures through a policy of matching and the use of forward currency contracts as considered necessary.

Employees

The company looks to ensure that all applications for employment, including those made by disabled persons, are given full and fair consideration in light of the applicants’ aptitudes and abilities. The company also ensures that all employees are treated equally in terms of employment, training, career development and promotion. Where employees develop a disability during their employment, every effort is made to continue their employment and arrange for appropriate training as far as is reasonably practicable.

Employee involvement

Regular meetings are held between local management and employees to allow a free flow of information and ideas.

Future developments

The directors consider that there are a number of opportunities both from a domestic and export perspective, that are now beginning to come to fruition and as a result, they expect the fortunes of the business to continue to improve.

Research and development

The company continues to design and develop the HMT family of vehicles. Due to the continued development enhancements required for the HMT product, the company has continued to feel it prudent, to focus on this and as a result, development of other vehicle platforms has been limited. As a result, the company invested a total of £2.6m (2024: £1.8m) in development projects and IP. The directors regard continued investment in this area as a prerequisite for success in the medium to long term.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Going concern

Please see note 1.2 of the financial statements which describes the directors’ assessment of the going concern status of the company.

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.

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 explained in the financial statements;

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

The 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.

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 explained in the financial statements; and

• 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.

We have audited the financial statements of Supacat Limited (the 'company') for the year ended 31 August 2025 which comprise the statement of income and retained earnings, the statement of financial position 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 August 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' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

In the light of the knowledge and understanding of the 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.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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.

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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.

Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.

Audit response to risks identified

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is 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 collusion.

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

Use of our report

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

The income statement has been prepared on the basis that all operations are continuing operations.

The notes on pages 13 to 30 form part of these financial statements.

The notes on pages 13 to 30 form part of these financial statements.

Supacat Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Airfield, Dunkeswell, Honiton, Devon, England, EX14 4LF.

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

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.

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. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• 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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; 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 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

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

The financial statements of the company are consolidated in the financial statements of SC Group-Global Limited. These consolidated financial statements are available from its registered office, The Airfield, Dunkeswell Airfield, Honiton, EX14 4LF.

At the time of approving these financial statements, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. true

As part of making the above assessment, the directors continue to review the business in the current trading environment and in particular the adequacy of its current banking facilities and its access to additional facilities should these be required. The Company has an on demand bank facility that is renewable on an annual basis and believe that this will continue to be renewed at the current levels in line with previous years. The directors continue to test their assumptions with forecasts being reviewed regularly and ongoing discussions with lenders and banks to explore opportunities to increase facilities if appropriate.

The latest budget has been reviewed, sensitised and a number of differing scenarios produced under different planning assumptions. A number of projects which are under contract, have positively contributed to the underpinning of the revenues for the business for the forthcoming year regardless of which scenario is considered. Although these scenarios, show a reduction of revenues and margins over the period, the plans that remain in place to conserve cash and mitigate the effect drops of this magnitude in the forecast, the scenarios continue to indicate that the business will be able to operate positively and effectively.

Following these reviews, the directors have a reasonable expectation that the business has adequate resources to continue in operational existence for the foreseeable future. Therefore, the directors consider it to be appropriate to prepare the accounts on a going concern basis.

Turnover comprises revenue receivable by the company in respect of goods and services supplied during the year, exclusive of value added tax.

Goods

Turnover from the sale of goods is recognised when the goods are physically delivered to the customer or when substantially all the risks and rewards are transferred, whichever is earlier.

Services

Turnover from the supply of services represents the value of services provided during the year to the extent that there is a right to consideration and is recorded at the fair value of the consideration due.

Long term contract revenue

Where a contract has only been partly complete at the balance sheet date, turnover is calculated by reference to the value of work performed to date as a proportion of the total contract value. Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within one year. Turnover which has not been invoiced is included within amounts recoverable under contracts. Revenues derived from variations on contracts are recognised only which they have been accepted by the customer and work completed.

Profit on long-term contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the year end, by recording turnover related costs as contract activity progresses. Full provision is made for losses on all contracts in the year in which they are first foreseen.

Funded development expenditure incurred on specific contracts is treated as a contract cost in accordance with the general accounting policy for contract work in progress. Unfunded development costs incurred on certain projects are capitalised and carried forward as intangible assets when certain criteria are fulfilled. This includes the recoverability can be foreseen with reasonable certainty, there is an ability to sell the product being developed, there is a firm commitment to complete the project and there are sufficient resources to do so. These deferred costs, which include labour costs and an element of directly attributable overheads, are amortised on the straight line basis over the anticipated life of the benefits arising from the completed products or projects. The Directors consider that this treatment results in a proper matching of costs and revenue. All other research and development expenditure is written off in the year of expenditure.

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

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than assets under construction over their estimated useful lives, as follows:

Stocks and work in progress are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Cost includes all direct costs and an appropriate proportion of fixed and variable production overheads.

Financial instruments are recognised when the company becomes party to the contractual provisions of the instrument and derecognised when in the case of assets, the contractual rights to cash flows from the assets expire or substantially all the risks and rewards of ownership are transferred to another party, or in the case of liabilities, when the company's obligations are discharged, expire or are cancelled.

The company holds the following basic financial instruments:

• Short term trade debtors and creditors, including group balances,

• Short term bank overdrafts and long term bank loans,

• Long term intra group debtors,

• Long term bank borrowings

Basic instruments are initially measured at transaction price, including transaction costs. Those instruments considered current are subsequently carried at the undiscounted amount of the cash or other consideration expected to be paid or received, after taking account of impairment adjustments.

Long term instruments are subsequently measured at amortised cost using the effective interest rate method.

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

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

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

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

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

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

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

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

Tax expense for the period represents the sum of the current tax currently payable and deferred tax..

Tax is recognised in the profit or loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current corporation 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 taxable income.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax.

Provisions are recognised when the company has an obligation at the reporting date 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. Warranty provisions are based on the best estimate of future costs to be incurred in relation to claims by customers, formed from historical data where appropriate. Provisions for warranties are recognised once the product has been delivered to the customer.

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

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

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

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates. Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

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

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Revenue in relation to long term contracts is recognised under a stage of completion basis. The costs attributable to the contract are subsequently recognised by applying a gross profit margin that is estimated to be achieved on completion of the contract. Calculations of the margin requires management judgements to be made which include monitoring forecasts and assessing the estimated costs to complete.

Provisions are held against slow moving stock and work in progress. This inherently requires a degree of estimation. The directors have estimated the stock provision based on age, on a line by line basis. Provision against work in progress is made where total costs on projects are expected to exceed total revenues. The total amount provided for is £297,352 (2024: £456,941).

The company makes significant investments on an annual basis in research and development, which is a key element to enable it to compete in its marketplace. The business continues to adopt a policy of capitalising these costs as part of its Intangible fixed assets, where it believes that the development costs incurred will lead to future economic benefit. The amount capitalised in the year is disclosed in note 11.

The amount of contract revenue recognised as turnover in the year was £61,011,769 (2024: £46,835,774).

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2024 - 3).

Following changes to the UK research and development tax credit regimes, the Company recognises R&D tax credits above profit before tax within "Other gains and losses".

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:

High Mobility Vehicles

The carrying amount of these assets is £5,648,493 (2024: £4,251,940).

The amortisation of the original HMT 400 project commenced in the year ended 31 August 2003, upon commencement of commercial production of the HMT 400 vehicle. Similarly, the amortisation of the original HMT 600 vehicle development costs commenced in the year ended 31 August 2007 upon its successful commencement of commercial production.

Subsequent product enhancement expenditure is written off over ten years from the date of capitalisation. Additions in the year of £2,133,784 relate to the closed cab variant and virtual modelling and monitoring technology.

Light Reconnaissance Vehicle and Specialist Utility Vehicle

The carrying amount of these assets is £1,644,454 (2024: £1,504,679).

Development of the assets commenced in the year ended 31 August 2015 and 31 August 2014 respectively. Whilst not yet in commercial production, the directors consider the project to be substantially complete and amortisation began in 2020, writing off the development costs over a 10 year period.

Additions in the year of £431,153 relate to a variant based on a different chassis.

Lightweight recovery vehicle

The carrying amount of these assets is £1,583,882 (2024: £1,837,163).

Development of these assets commenced in the year ended 31 August 2017. Amortisation began to be charged this year after the asset was brought into use.

Included within tangible fixed assets are assets held under finance leases or hire purchase contracts, as follows:

Details of trade and other debtors

Amounts owed by group undertaking - the loan to Supacat Pty Limited was repaid during the year. Interest was charged during the period of £13,379 being 5% above the Bank of England base rate. No interest is charged on intercompany trade debtors.

All amounts due from group undertakings are unsecured and are payable on demand.

Amounts owed to group undertakings are unsecured, no interest is charged on these amounts.

The bank loans are secured by charges over the assets of the company's parent company by way of a cross guarantee.

The company is part of a group that has an on demand revolving credit facility of a maximum value at any time of £6.5m covering the UK group companies. This facility is for a period of three years, is repayable on demand and attracts interest at 3.95% above the bank's base rate.

The company has one CBILS loan facility that is outstanding. This attracts an interest of 9.5%. The loan will be repaid over the next 18 months.

The minimum lease payments under finance leases and hire purchase agreements are disclosed in note 20. The finance leases and hire purchase agreements are secured on the assets to which they relate.

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

Finance lease liabilities are secured on the assets to which they relate.

The company provides for warranty costs up to agreed contractual amounts. Once warranty periods end, any related provision is released back to the profit and loss account.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

The company operates a defined contribution pension scheme for all qualifying employees. Contributions totalling £49,812 (2024: £44,788) were payable to the scheme at the end of the year and are included in creditors.

All Ordinary shares have equal voting and participation rights in the company.

An unlimited multilateral company guarantee has been given to the group's bankers by SC Group-Global Limited, SC Innovation-Global Limited, Proteum Limited, Blackhill Engineering Services Limited and Supacat Limited covering all the present and future indebtedness and liabilities to the bank howsoever arising. All amounts owed to the group's bankers are secured by fixed and floating charges over the assets of the companies.

Amounts contracted for but not provided in the financial statements:

During the year, the company traded with a group entity that is not wholly owned (90% owned by the parent of the company, SC Group-Global Limited). Sales made to the entity totalled £1,478,183 (2024: £313,255) and the company purchased services from the entity totalling £143, 774 (2024: £48,309). At the balance sheet date the amount due from this entity was £612,050 (2024: £394,155).

The company has taken advantage of the exemption in FRS 102 from disclosing transactions with its parent company and other wholly owned members of the group.

The company's immediate parent is SC Group-Global Limited, incorporated in England and Wales.

These financial statements are available upon request from Companies House. The address of the parent company's registered office is that of the company's and is stated in note 1.