REGISTERED NUMBER: 08919614 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 31 March 2025

for

Materials Processing Institute

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Income Statement

10

Other 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

16

DIRECTORS:

C A Church

D W Pummell

J M Munday

L Baker

C Oswin

SECRETARY:

A Paterson

REGISTERED OFFICE:

Materials Processing Institute

Eston Road

MIDDLESBROUGH

TS6 6US

REGISTERED NUMBER:

08919614 (England and Wales)

SENIOR STATUTORY AUDITOR:

James Davies BSc (Hons) CA

AUDITORS:

Clive Owen LLP

Chartered Accountants

& Statutory Auditors

140 Coniscliffe Road

Darlington

County Durham

DL3 7RT

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

REVIEW OF BUSINESS

The Materials Processing Institute (MPI) develops new technology for the foundation industries, particularly steel, and is recovering critical minerals for the benefit of the UK economy.

Our work supports the steel industry to tackle climate change, and improve productivity and competitiveness. MPI offers expertise and facilities for both private commercial research and public/private collaborative projects in the areas of: Advanced Materials, Industrial Decarbonisation and the Circular Economy. MPI is the UK's National Centre for innovation in metals and[in recent years activity has expanded across the foundation industries, supply chains, and critical minerals.

2024/25 was a final year of significant UK Government investment to support the diversification of MPI's activities. Total capital invested in new research equipment and facilities over the last three years was approaching £10m, with a further £10m being invested in 2024/25. New facilities include hydrometallurgy for applications such as recycling of electric vehicle batteries and a pilot scale hydrogen gas network for investigations into fuel switching, hydrogen reduction processes and heating.

A small profit of £85,628 was recorded in 2024/25 which is double that of 2023/24 leading to improved margin, reduced dependence on grant income and a more diversified customer base. MPI continues to attract new tenants to its campus due to the availability of its facilities, office space and land.

The Board implemented a strategic plan to pivot the organisation from being predominantly financially dependent of grant funding and moving to a commercially financed enterprise model. A new CEO was previously appointed to take forward this agenda, who subsequently made considerable progress before resigning outside the period of these accounts. Consequently, an interim CEO was appointed to continue the transition, but due to a number of unexpected operational challenges, the company's financial preparedness for trading without receiving continued grant funding has resulted in significant cashflow challenges that now require a full restructuring of the business. The Board have appointed a new interim CEO that will undertake the financial and organisational restructuring of the business to create a low cost business model that will be commercially focused on a reduced number of strategic markets and creating an attractive commercial enterprise that is intended to secure private investment in the future. This transformation will involve significant redundancies. A key element will be the financial restructuring of the company's balance sheet and options are being explored with financial advisors. The most likely outcome is the establishment of a Company Voluntary Arrangement. This is discussed in more detail within note 2, page 16, of these financial statements.

PRINCIPAL RISKS AND UNCERTAINTIES

MPI has maintained strong control on wage inflation based on open Union discussions on affordability. Energy costs remain stable, due to a long-term fixed price agreement for the main energy supplies with future commercial offers being based on future energy prices to eliminate this cost risk.

LIQUIDITY RISK

Major cash movements are related to capital investment. During the year the company refinanced to deliver £1.7m of additional liquidity raised against our land and buildings assets.

CREDIT RISK

The company's main credit risk relates to trade debtors. Historically 60% of turnover has been funded via government grants, which carries a low risk of default. As we move to a commercially focused business model, we will continue with policies and procedures that ensure appropriate customer credit limits are implemented and account balances are monitored.

ON BEHALF OF THE BOARD:

J M Munday - Director

25 June 2026

The directors present their report with the financial statements of the company for the year ended 31 March 2025.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of research and development which is largely grant funded.

RESEARCH AND DEVELOPMENT

During the year the company was active in the development of new technology and services to support current and future customer requirements.

DIRECTORS

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

C A Church

D W Pummell

J M Munday

L Baker

Other changes in directors holding office are as follows:

P Kitson - resigned 8 November 2024

T M Walsh - appointed 1 July 2024

D Atkins - appointed 14 November 2024

C Oswin was appointed and resigned as a director after 31 March 2025 but prior to the date of this report.

T M Walsh , D Atkins , R J Neal and J M Bolton ceased to be directors after 31 March 2025 but prior to the date of this report.

CHARITABLE DONATIONS AND EXPENDITURE

During the year the company made donations of £8,500 (2024: £1,965).

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 auditors, Clive Owen LLP, are deemed to be appointed under section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

J M Munday - Director

25 June 2026

Opinion

We have audited the financial statements of Materials Processing Institute (the 'company') for the year ended 31 March 2025 which comprise the Income Statement, Other 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 31 March 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.

Material uncertainty relating to going concern

We draw attention to the going concern section within note 2 to the financial statements which indicates that the company is due to enter a company voluntary arrangement post year-end. As stated in note 2, these events and conditions, along with the other matters as set out in note 2 indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern.

Our opinion is not modified in respect of this matter.

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

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

Other information

The 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 four, 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.

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, to detect material misstatements in respect of irregularities, including fraud. Our audit must be alert to the risk of manipulation of the financial statements and seek to understand the incentives and opportunities for management to achieve this.

We undertake the following procedures to identify and respond to these risks of non-compliance:

- Understanding the key legal and regulatory frameworks that are applicable to the group. We communicated identified laws and regulations throughout the audit team and remained alert to any indications of non-compliance throughout the audit. We determined the most significant of these to be financial reporting legislation, taxation legislation, health & safety, employment law, company law and ISO9001 regulations.

- Enquiry of directors and management as to policies and procedures to ensure compliance and any known instances of non-compliance.

- Review of board minutes and correspondence with regulators.

- Enquiry of directors and management as to areas of the financial statements susceptible to fraud and how these risks are managed.

- Challenging management on key estimates, assumptions and judgements made in the preparation of the financial statements. These key areas of uncertainty are disclosed in the accounting policies.

- Identifying and testing unusual journal entries, with a particular focus on manual journal entries.

Through these procedures we did not become aware of actual or suspected non-compliance.

We planned and performed our audit in accordance with auditing standards but owing to the inherent limitations of procedures required in these areas, there is an unavoidable risk that we may not have detected a material misstatement in the accounts. 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. 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 concealment, collusion, forgery, misrepresentations, or 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.

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.

James Davies BSc (Hons) CA (Senior Statutory Auditor)

for and on behalf of Clive Owen LLP

Chartered Accountants

& Statutory Auditors

140 Coniscliffe Road

Darlington

County Durham

DL3 7RT

25 June 2026

TURNOVER

3

5,662,720

4,809,569

Cost of sales

(3,414,251

)

(3,184,707

)

GROSS PROFIT

2,248,469

1,624,862

Administrative expenses

(4,920,734

)

(3,581,962

)

(2,672,265

)

(1,957,100

)

Other operating income

2,419,761

1,150,852

OPERATING LOSS

5

(252,504

)

(806,248

)

Interest receivable and similar income

10,157

-

(242,347

)

(806,248

)

Interest payable and similar expenses

6

(70,817

)

(54,704

)

LOSS BEFORE TAXATION

(313,164

)

(860,952

)

Tax on loss

7

398,792

541,912

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

85,628

(319,040

)

PROFIT/(LOSS) FOR THE YEAR

85,628

(319,040

)

OTHER COMPREHENSIVE INCOME

Deferred tax on revaluation

54,625

54,625

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

54,625

54,625

TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR

140,253

(264,415

)

FIXED ASSETS

Intangible assets

8

90,423

-

Tangible assets

9

14,793,806

14,516,358

14,884,229

14,516,358

CURRENT ASSETS

Stocks

10

209,433

149,806

Debtors

11

3,091,651

2,949,897

Cash at bank

1,594,465

51,383

4,895,549

3,151,086

CREDITORS

Amounts falling due within one year

12

(3,002,466

)

(4,122,914

)

NET CURRENT ASSETS/(LIABILITIES)

1,893,083

(971,828

)

TOTAL ASSETS LESS CURRENT LIABILITIES

16,777,312

13,544,530

CREDITORS

Amounts falling due after more than one year

13

(13,693,673

)

(10,504,179

)

PROVISIONS FOR LIABILITIES

17

(855,542

)

(952,507

)

NET ASSETS

2,228,097

2,087,844

RESERVES

Revaluation reserve

18

2,566,623

2,730,498

Retained earnings

18

(338,526

)

(642,654

)

2,228,097

2,087,844

The financial statements were approved by the Board of Directors and authorised for issue on 25 June 2026 and were signed on its behalf by:

J M Munday - Director

Retained

Revaluation

Total

earnings

reserve

equity

£

£

£

Balance at 1 April 2023

(542,114

)

2,894,373

2,352,259

Changes in equity

Transfer between reserves

218,500

(218,500

)

-

Total comprehensive loss

(319,040

)

54,625

(264,415

)

Balance at 31 March 2024

(642,654

)

2,730,498

2,087,844

Changes in equity

Transfer between reserves

218,500

(218,500

)

-

Total comprehensive income

85,628

54,625

140,253

Balance at 31 March 2025

(338,526

)

2,566,623

2,228,097

Cash flows from operating activities

Cash generated from operations

1

1,371,452

2,695,642

Interest paid

(70,817

)

(54,704

)

Government grants

969,903

728,520

Tax credit received

432,615

393,235

Net cash from operating activities

2,703,153

3,762,693

Cash flows from investing activities

Purchase of intangible fixed assets

(90,423

)

-

Purchase of tangible fixed assets

(2,378,578

)

(3,028,239

)

Interest received

10,157

-

Net cash from investing activities

(2,458,844

)

(3,028,239

)

Cash flows from financing activities

New loans in year

1,755,000

-

Loan repayments in year

(455,806

)

(178,088

)

Amount introduced by directors

-

26,478

Amount withdrawn by directors

(421

)

(28,502

)

Net cash from financing activities

1,298,773

(180,112

)

Increase in cash and cash equivalents

1,543,082

554,342

Cash and cash equivalents at beginning of year

2

51,383

(502,959

)

Cash and cash equivalents at end of year

2

1,594,465

51,383

1.	RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2025

2024

£

£

Loss before taxation

(313,164

)

(860,952

)

Depreciation charges

1,147,440

970,415

Impairment of tangible assets

953,690

-

Government grants

(1,923,593

)

(728,520

)

Finance costs

70,817

54,704

Finance income

(10,157

)

-

(74,967

)

(564,353

)

(Increase)/decrease in stocks

(59,627

)

6,885

Increase in trade and other debtors

(233,271

)

(906,745

)

Increase in trade and other creditors

1,739,317

4,159,855

Cash generated from operations

1,371,452

2,695,642

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 31 March 2025

31.3.25

1.4.24

£

£

Cash and cash equivalents

1,594,465

51,383

Year ended 31 March 2024

31.3.24

1.4.23

£

£

Cash and cash equivalents

51,383

-

Bank overdrafts

-

(502,959

)

51,383

(502,959

)

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.4.24

Cash flow

At 31.3.25

£

£

£

Net cash

Cash at bank

51,383

1,543,082

1,594,465

51,383

1,543,082

1,594,465

Debt

Debts falling due within 1 year

(189,150

)

189,150

-

Debts falling due after 1 year

(266,656

)

(1,488,344

)

(1,755,000

)

(455,806

)

(1,299,194

)

(1,755,000

)

Total

(404,423

)

243,888

(160,535

)

1.	STATUTORY INFORMATION

Materials Processing Institute is a private company, limited by guarantee, registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

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.

There has been no material departures from this standard.

The principal accounting policies adopted in the preparation of the financial statements are set out below and have remained unchanged from the previous year, and also have been consistently applied within the same accounts.

The company is exempt from the requirement to have a name ending with "limited" or permitted alternative in accordance with section 60 of the Companies Act 2006.

Going concern

The financial statements are prepared on the going concern basis which assumes that MPI will continue to trade for a period of at least one year from the date the financial statements are approved. MPI has made these assumptions based on forecasts prepared which cover at least 12 months from the date of the sign off of the financial statements.

The Company has experienced a challenging trading period during the year, resulting in losses and pressure on short-term cash flows. In response, management has initiated a restructuring programme aimed at reducing the cost base and improving operational efficiency.

The Company is currently in advanced discussions with its creditors regarding the implementation of a Company Voluntary Arrangement (CVA). The successful approval and implementation of the CVA is a key component of the Company’s financial restructuring.

The directors have prepared cash flow forecasts and projections, which incorporate the anticipated impact of the restructuring activities and the proposed CVA. These forecasts indicate that, subject to the successful outcome of the CVA, the Company will have sufficient resources to continue trading and meet its liabilities as they fall due for a period of at least 12 months from the date of approval of these financial statements.

However, the requirement to successfully agree and implement the CVA, represents a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern. If the CVA is not approved or the anticipated support is not maintained, the Company may be unable to realise its assets and discharge its liabilities in the normal course of business.

Notwithstanding this material uncertainty, the directors consider it appropriate to adopt the going concern basis in preparing the financial statements, as they have a reasonable expectation that the Company will be able to continue in operational existence for the foreseeable future.

The financial statements do not include any adjustments that would result from the failure of obtaining possible results of the above. If the company is unable to trade, adjustments would be required to reduce the value of assets to their recoverable amounts, to provide for any further liabilities that might arise and to analyse long term liabilities as current liabilities.

Significant judgements and estimates

Preparation of the financial statements requires management to make significant judgements and estimates.

The items in the financial statements where these estimates have been made include:

Recognition of capital government grants - the company receives a large amount of income from government grants. The significant estimate is the decision of how much and when the government grant is considered to be earned and therefore released to the profit and loss account. The policy is to release the grants in line with the expected life. An estimate is also made in to record the valuation and allocation of the associated fixed assets.

Impairment of tangible fixed assets- the company have a large net book value of fixed assets but are not making significant levels of profits. There is a risk that the recoverable amount of some fixed assets is lower than the carrying value. There is an element of estimation surrounding calculating the recoverable amount for fixed assets. An impairment charge of £953,690 has been recognised in the current year in relation to a fixed asset impairment charge. This impairment charge has been offset with an equivalent grant release of £953,690.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes.

Turnover is a combination of invoiced sales to private customers for R&D work and grants received for R&D work.

Income recognition

Contracted income is recognised monthly for the services carried out in that period. Income from the provision of services is recognised on completion of the research project.

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.

Computer software is being amortised evenly over its estimated useful life of ten years.

Tangible fixed assets

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

Freehold property

- 1% on cost

Plant and machinery

- 10% on cost and 4% on cost

Fixtures and fittings

- 25% on cost

Computer equipment

- 25% on cost

Assets under construction represents costs incurred to date on fixed assets which are still under construction at the balance sheet date.

Tangible fixed assets are measured at deemed cost less accumulated depreciation and impairment.

Impairment of assets

At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.

If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately.

Stocks

Stocks are valued at the lower of cost and selling price less estimated costs to sell, after making due allowance for obsolete and slow moving items. Scrap iron stock is held at the scrap iron prices as per European Metal Recycling listings.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, 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 taxation

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

Expenditure on pure and applied research (unless it is expenditure on fixed assets, which is capitalised and amortised over its useful life) is written off in the year of expenditure through the profit and loss account.

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.

Government grants

Capital based grants are accounted for using the accruals model and are credited to the profit and loss account in equal instalments, over the estimated useful life of the related asset and are included within other income.

Revenue based project grants are credited to the profit and loss account inline with project expenditure and are included within turnover.

Financial instruments

Basic financial instruments are recognised at amortised cost with changes in the profit and loss.

Hire purchase and leasing commitments

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

Assets held under finance leases are recognised initially at the fair value of the leased asset (or, if lower, the

present value of minimum lease payments) at the inception of the lease. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation using the effective interest method so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are deducted in measuring profit or loss. Assets held under finance leases are included in tangible fixed assets and depreciated and assessed for impairment losses in the same way as owned assets.

Rentals payable under operating leases are charged against the profit and loss account in the period to which they relate.

3.

TURNOVER

The turnover and loss before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2025

2024

£

£

United Kingdom

5,091,970

4,123,246

Europe

570,750

683,773

Rest of world

-

2,550

5,662,720

4,809,569

4.	EMPLOYEES AND DIRECTORS

2025

2024

£

£

Wages and salaries

2,615,328

2,676,911

Social security costs

314,399

290,277

Other pension costs

527,310

521,388

3,457,037

3,488,576

The average number of employees during the year was as follows:

2025

2024

Administration

8

10

Direct labour

57

58

Directors

5

6

70

74

Total remuneration to directors was as follows: directors' remuneration £282,857 (2024: £326,380) and directors pension contributions to money purchase schemes £64,270 (2024: £65,087).

The number of directors to whom retirement benefits were accruing was 5 (2024: 3).

The emoluments payable to the highest paid director is £105,750 (2024: £147,000) and the amount of pension contributions is £16,875 (2024: £27,000).