Company registration number 00976052 (England and Wales)
SHEARLINE PRECISION ENGINEERING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2025
Whitings LLP
Chartered Accountants
Greenwood House
Greenwood Court
Skyliner Way
Bury St Edmunds
Suffolk
IP32 7GY
SHEARLINE PRECISION ENGINEERING LIMITED
COMPANY INFORMATION
Directors
D H Littlechild
J L Pinkhart
(Appointed 26 June 2024)
Company number
00976052
Registered office
Cambridgeshire Business Park
Angel Drove
Ely
Cambridgeshire
CB7 4EX
Auditor
Whitings LLP
Chartered Accountants & Statutory Auditors
Greenwood House
Greenwood Court
Skyliner Way
Bury St Edmunds
Suffolk
IP32 7GY
SHEARLINE PRECISION ENGINEERING LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Notes to the financial statements
10 - 26
SHEARLINE PRECISION ENGINEERING LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 APRIL 2025
- 1 -

The directors present the strategic report for the period ended 30 April 2025. The aim is to present a balanced and comprehensive review of the development and performance of the business during the period and its position at the period end. The review is consistent with the size of the business and is written in the context of the risks and uncertainties we face.

Business review

The principal activity of the company during the period continued to be the manufacturing of metal based products to customer specifications, selling predominantly in the UK.

During the period, the reporting end date was changed from 31 December 2024 to 30 April 2025. Due to this, the financial statements to 30 April 2025 are for a period of 16 months, and accordingly, the comparatives are not entirely comparable.

Revenue on an annual basis has dropped during the current period. Gross profit on an annual basis has unfortunately seen a reduction due to fluctuating material prices and our own increased energy charges.

At the time of reporting the company has appointed business turnaround specialists to initiate a structured turnaround plan. It is envisaged that the turnaround will be completed over a twelve-month period. A key element of the turnaround plan is to increase the gross margin via operational cost savings and pricing increases. Therefore, the directors are confident for the future prospects of the company.

We have continued to invest in accordance with the planned capital investment programme in order to maintain and exceed customer service levels.

We have assessed that the company is able to continue to meet its debts as they fall due and therefore have prepared these financial statements on the going concern basis. Further detail regarding our assessment can be found in note 1.3.

Principal risks and uncertainties

The key business risks and uncertainties affecting the company are those relating to price competition from competitors within the industry and liquidity.

To minimise exposure, processes within our business are regularly challenged to remain competitive, without eroding margins.

The company actively maintains a mix of long term and short term debt finance that ensures there are sufficient funds available for both daily operations and continued investment.

Regular cash flow forecasts are produced in order to monitor the Group’s cash flow requirements and the liquidity of the business.

SHEARLINE PRECISION ENGINEERING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
- 2 -
Financial performance indicators

There are a number of performance indicators that are used to monitor the business on a regular basis. The key indicators for the purpose of the strategic report are detailed below.

| Period ended 30 April 2025 |  | Year ended 31 December 2023
Turnover: | 10,124,824 |  | 8,525,128
Gross Profit: | 2,545,622 |  | 2,236,910
Pre tax loss: | (14,644) |  | (168,311)

This report was approved by the board and signed on its behalf.

D H Littlechild
Director
9 July 2026
SHEARLINE PRECISION ENGINEERING LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 APRIL 2025
- 3 -

The directors present their annual report and financial statements for the period ended 30 April 2025.

Results and dividends

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

Ordinary dividends were paid during the period amounting to £825,235 (2023: £Nil). The directors do not recommend a payment of a further dividend for the current year.

Directors

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

D H Littlechild
J S Littlechild
(Resigned 11 February 2025)
D A Wilson
(Resigned 31 December 2024)
J L Pinkhart
(Appointed 26 June 2024)
J P Rowe
(Appointed 14 August 2025 and resigned 4 March 2026)
D G Jakes
(Appointed 14 August 2025 and resigned 14 April 2026)
Post reporting date events

There have been no significant events affecting the Company since year end.

Future developments

As well as continuing to invest in the company infrastructure and our people, investment will also be made in raising the company profile.

Auditor

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

Statement of directors' responsibilities

The directors are responsible for preparing the strategic report, 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; 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.

SHEARLINE PRECISION ENGINEERING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
- 4 -
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
D H Littlechild
Director
9 July 2026
SHEARLINE PRECISION ENGINEERING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SHEARLINE PRECISION ENGINEERING LIMITED
- 5 -
Opinion

We have audited the financial statements of Shearline Precision Engineering Limited (the 'company') for the period ended 30 April 2025 which comprise the statement of income and retained earnings, the balance sheet 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 30 April 2025 and of its profit for the period 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.

Material uncertainty related to going concern

We draw attention to note 1.3 in the financial statements, which explains that the company is loss-making and is also subject to a cross guarantee in respect of the indebtedness of other group companies. In the event that amounts fall due and the cross guarantee is enforced, the company would not have sufficient resources to meet those obligations. As stated in note 1.3, these events or conditions, along with the other matters as set out in note 1.3, 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 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.

SHEARLINE PRECISION ENGINEERING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SHEARLINE PRECISION ENGINEERING LIMITED (CONTINUED)
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

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

- the information given in the strategic report and the directors' r eport for the financial period for which the financial statements are prepared is consistent with the financial statements; and

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie d material misstatements in the strategic report or the directors' r eport.

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

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

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

- certain disclosures of directors' remuneration specified by law are not made; or

- we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors' r esponsibilities s tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

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

- Enquiry of management about any known or suspected instances of non-compliance with laws and regulations, accidents in the workplace, and fraud;

- Enquiry of management around actual and potential litigation and claims;

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

- Challenging assumptions and judgements made by management in their significant accounting estimates, such as stock valuation and useful economic lives of tangible assets; and

- Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the course of normal business.

SHEARLINE PRECISION ENGINEERING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SHEARLINE PRECISION ENGINEERING LIMITED (CONTINUED)
- 7 -

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities 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.

Jaimie King ACA (Senior Statutory Auditor)
For and on behalf of Whitings LLP, Statutory Auditor
Chartered Accountants
Greenwood House
Greenwood Court
Skyliner Way
Bury St Edmunds
Suffolk
IP32 7GY
13 July 2026
SHEARLINE PRECISION ENGINEERING LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE PERIOD ENDED 30 APRIL 2025
- 8 -
Period
Year
ended
ended
30 April
31 December
2025
2023
Notes
£
£
Turnover
3
10,124,824
8,525,128
Cost of sales
(7,579,202)
(6,288,218)
Gross profit
2,545,622
2,236,910
Administrative expenses
(3,069,464)
(2,304,221)
Other operating income
25,381
12,323
Operating loss
4
(498,461)
(54,988)
Dividend income
650,000
-
0
Interest receivable and similar income
9
84
102
Interest payable and similar expenses
8
(166,267)
(113,425)
Loss before taxation
(14,644)
(168,311)
Tax on loss
10
136,481
41,789
Profit/(loss) for the financial period
121,837
(126,522)
Retained earnings brought forward
2,497,910
2,624,432
Dividends
11
(825,235)
-
0
Retained earnings carried forward
1,794,512
2,497,910

There are no recognised gains and losses other than those passing through the statement of income and retained earnings.

The notes on pages 10 to 26 form part of these financial statements.

SHEARLINE PRECISION ENGINEERING LIMITED
BALANCE SHEET
AS AT 30 APRIL 2025
30 April 2025
- 9 -
30 April 2025
31 December 2023
Notes
£
£
£
£
Fixed assets
Tangible assets
12
2,067,675
2,562,556
Investments
14
-
0
550,235
2,067,675
3,112,791
Current assets
Stocks
15
1,259,100
1,336,237
Debtors
16
1,865,217
1,717,443
Cash at bank and in hand
11,636
37,368
3,135,953
3,091,048
Creditors: amounts falling due within one year
17
(2,905,061)
(2,600,421)
Net current assets
230,892
490,627
Total assets less current liabilities
2,298,567
3,603,418
Creditors: amounts falling due after more than one year
19
(434,960)
(899,932)
Provisions for liabilities
Deferred tax liability
21
67,095
203,576
(67,095)
(203,576)
Net assets
1,796,512
2,499,910
Capital and reserves
Called up share capital
23
2,000
2,000
Profit and loss reserves
24
1,794,512
2,497,910
Total equity
1,796,512
2,499,910

The notes on pages 10 to 26 form part of these financial statements.

The financial statements were approved by the board of directors and authorised for issue on 9 July 2026 and are signed on its behalf by:
D H Littlechild
Director
Company registration number 00976052 (England and Wales)
SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2025
- 10 -
1
Accounting policies
Company information

Shearline Precision Engineering Limited is a private limited company incorporated in England. Its registered office is Cambridgeshire Business Park, Angel Drove, Ely, Cambridgeshire CB7 4EX.

The principal activity of the company is the manufacturing and machining of metal products.

1.1
Reporting period

During the period, the reporting end date was changed from 31 December 2024 to 30 April 2025. Due to this, the financial statements to 30 April 2025 are for a period of 16 months, and accordingly, the comparatives are not entirely comparable.

1.2
Basis of preparation

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

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

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

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

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

The financial statements of the company are consolidated in the financial statements of Shearline Holdings Limited. These consolidated financial statements are available from Companies House.

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts for 2023. In 2025, a group restructure resulted in the company no longer being a parent company at the balance sheet date. The financial statements present information about the company as an individual entity.

SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
1
Accounting policies
(Continued)
- 11 -
1.3
Going concern

The company’s parent has a bank loan due for repayment within 12 months of the approval of these financial statements, of which the company is party to a cross-guarantee, further details of which can be found in the consolidated group accounts of Shearline Holdings Limited filed at Companies House. The company does not have the ability to settle these debts should they fall due and the cross guarantee be enforced.

The company reported a loss before tax of £14,644 (2023 - £168,311), which includes dividend income of £650,000 from group companies. Excluding this income, the company incurred a trading loss of £664,644. This, together with the cross guarantee in respect of the parent company's bank loan, gives rise to uncertainty about the company's ability to continue to meet its debts as they fall due.

The directors have prepared cash flow forecasts of the company which provided the directors with sufficient comfort that the financial statements should be prepared on the going concern basis. These forecasts are highly sensitive to the level of sales forecast, and are reliant on the continued support of the company's banker, significant financial support of a director, and an extension of the bank loan within the ultimate parent company. A director has provided a letter of support to indicate his intention to support the company if required. The directors recognise that due to the above circumstances, the existence of a material uncertainty which may cast significant doubt over the company's ability to continue as a going concern exists.

1.4
Turnover

Revenue comprises sales of goods or services provided to customers net of value added tax and other sales taxes, less an appropriate deduction for actual and expected returns and discounts. Revenue is recognised when performance obligations are satisfied and the control of goods or services is transferred to the buyer. Where the performance obligation is satisfied over time, revenue is recognised in accordance with its progress towards complete satisfaction of that performance obligation.

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

Sale of goods

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recover able.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Plant and machinery
5 or 15 years straight line
Fixtures and fittings
3, 5 or 7 years straight line
Motor vehicles
5 years straight line
SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
1
Accounting policies
(Continued)
- 12 -

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

1.6
Fixed asset investments

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

1.7
Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a standard cost basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of income and retained earnings.

1.8
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.9
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets

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

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

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

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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 paymen ts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. A m ounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

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

1.10
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
1
Accounting policies
(Continued)
- 14 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
Provisions

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

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

1.12
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13
Retirement benefits

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.

SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
1
Accounting policies
(Continued)
- 15 -
1.14
Leases
As lessee

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 balance sheet 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.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease s asset are consumed.

1.15
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

1.16

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

2
Judgements and key sources of estimation uncertainty

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.

SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Stock valuation

The company manufactures items to order and as a result it is necessary to consider the recoverability of the cost of the stock and the associated provisioning required. When calculating stock provision, management considers evidence of impairment, such as the ageing of stock and the expectation of eventual use or sale.

Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancements, future investments, economic utilisation and the phys ic al condition of the asset.

SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
- 17 -
3
Turnover and other revenue

The whole of the turnover is attributable to manufacturing and machining of metal products.

Period ended 30 April 2025
Year ended 31 December 2023
£
£
Turnover analysed by geographical market
United Kingdom
9,468,327
7,895,327
Rest of Europe
133,069
82,857
Rest of the world
523,428
546,944
10,124,824
8,525,128
Period ended 30 April 2025
Year ended 31 December 2023
£
£
Other revenue
Sundry income
25,381
12,323
25,381
12,323
4
Operating profit/(loss)
Period ended 30 April 2025
Year ended 31 December
2025
2023
Operating profit/(loss) for the period is stated after charging:
£
£
Exchange losses
7,794
7,792
Depreciation of tangible fixed assets
494,811
421,869
5
Auditor's remuneration
Period ended 30 April 2025
Year ended 31 December 2023
Fees payable to the company's auditor:
£
£
For audit services
Audit of the financial statements of the company
17,000
16,500
SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
- 18 -
6
Employees

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

Period ended 30 April
Year ended 31 December
2025
2023
Number
Number
Administration
5
5
Manufacturing
98
105
Total
103
110

Their aggregate remuneration comprised:

Period ended 30 April
Year ended 31 December
2025
2023
£
£
Wages and salaries
4,446,171
3,467,410
Social security costs
451,345
337,601
Pension costs
270,986
159,669
5,168,502
3,964,680
7
Directors' remuneration
Period ended 30 April
Year ended 31 December
2025
2023
£
£
Remuneration for qualifying services
298,167
195,363
Company pension contributions to defined contribution schemes
26,154
12,697
324,321
208,060

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 2).

SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
7
Directors' remuneration
(Continued)
- 19 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
Period ended 30 April
Year ended 31 December
2025
2023
£
£
Remuneration for qualifying services
184,568
121,124
Company pension contributions to defined contribution schemes
12,469
4,687

Directors' remuneration and the highest paid directors' remuneration includes £61,584 paid in respect of loss of office. Assets valued at £19,000 were also transferred to the director, and are not included in the above.

Key management comprise the directors of the company.

8
Interest payable and similar expenses
Period ended 30 April
Year ended 31 December
2025
2023
£
£
Interest on bank overdrafts and loans
6,769
7,731
Other interest on financial liabilities
11,459
16,373
Interest on finance leases and hire purchase contracts
52,115
39,332
Other interest
95,924
49,989
166,267
113,425
9
Interest receivable and similar income
Period ended 30 April
Year ended 31 December
2025
2023
£
£
Interest income
Interest on bank deposits
84
102
SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
- 20 -
10
Taxation
Period ended 30 April 2025
Year ended 31 December
2025
2023
£
£
Deferred tax
Origination and reversal of timing differences
(136,481)
(41,789)

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

Period ended 30 April
Year ended 31 December
2025
2023
£
£
Loss before taxation
(14,644)
(168,311)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(3,661)
(31,979)
Tax effect of expenses that are not deductible in determining taxable profit
584
210
Tax effect of income not taxable in determining taxable profit
(162,500)
-
0
Changes in provisions leading to an increase in the tax charge
29,096
(10,030)
Other timing differences
-
0
10
Taxation charge/(credit) for the period/year
(136,481)
(41,789)

11
Dividends
Period ended 30 April
Year ended 31 December
2025
2023
£
£
Final dividends
825,235
-
0
SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
- 21 -
12
Tangible fixed assets
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2024
8,201,890
816,860
171,175
9,189,925
Additions
-
0
12,195
-
0
12,195
Disposals
-
0
-
0
(45,990)
(45,990)
At 30 April 2025
8,201,890
829,055
125,185
9,156,130
Depreciation and impairment
At 1 January 2024
6,115,611
401,115
110,643
6,627,369
Depreciation charged in the period
342,889
121,447
30,475
494,811
Eliminated in respect of disposals
-
0
-
0
(33,725)
(33,725)
At 30 April 2025
6,458,500
522,562
107,393
7,088,455
Carrying amount
At 30 April 2025
1,743,390
306,493
17,792
2,067,675
At 31 December 2023
2,086,279
415,745
60,532
2,562,556

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

30 April
31 December
2025
2023
£
£
Plant and machinery
1,177,896
1,342,333
Fixtures and fittings
210,885
266,199
Motor vehicles
17,792
60,532
1,406,573
1,669,064
13
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 were as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Hybrid Laser Tech Limited
Precision House, St Thomas Place, Ely, Cambridgeshire, CB7 4EX
Ordinary
100.00

During the current period, the Company disposed of its full investment in Hybrid Laser Tech Limited to the Company's parent, Shearline Holdings Limited for consideration of £550,235.

SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
- 22 -
14
Fixed asset investments
30 April
31 December
2025
2023
Notes
£
£
Investments in subsidiaries
13
-
0
550,235
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2024
550,235
Disposals (Note 13)
(550,235)
At 30 April 2025
-
Carrying amount
At 30 April 2025
-
At 31 December 2023
550,235

The gain/loss on disposal of the investment was £Nil.

15
Stocks
30 April
31 December
2025
2023
£
£
Raw materials and consumables
331,934
327,552
Work in progress
633,381
580,010
Finished goods and goods for resale
293,785
428,675
1,259,100
1,336,237

A net impairment loss of £27,571 (202 3 - £91,891) has been recognised in respect of slow-moving and obsolete stock.

SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
- 23 -
16
Debtors
30 April
31 December
2025
2023
Amounts falling due within one year:
£
£
Trade debtors
1,459,088
1,319,306
Amounts owed by group undertakings
73,565
280,262
Other debtors
-
0
2,690
Prepayments and accrued income
332,564
115,185
1,865,217
1,717,443

Included within trade debtors are balances totalling £1,459,088 (202 3 - £1,307,339) that are subject to factoring arrangements. The trade debtor balances have been transferred to the counterparty, though the transaction does not qualify for derecognition on the basis that the risks and rewards of ownership are retained by the company. The associated liability is recognised in creditors.

The amounts owed by group companies are interest free and have no fixed repayment terms.

17
Creditors: amounts falling due within one year
30 April
31 December
2025
2023
Notes
£
£
Bank loans
18
68,000
68,000
Obligations under finance leases
20
266,376
357,429
Proceeds of factored debts
961,900
573,693
Trade creditors
811,696
336,483
Amounts owed to group undertakings
36,275
632,835
Taxation and social security
348,031
300,821
Other creditors
272,168
187,157
Accruals and deferred income
140,615
144,003
2,905,061
2,600,421

Proceeds of factored debts are secured against the trade debtors of the company that they relate to.

Obligations under hire purchase and finance leases are secured on the assets concerned.

Amounts owed to group companies are interest free and have no fixed repayment terms.

SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
- 24 -
18
Bank loans
30 April
31 December
2025
2023
£
£
Bank loans
124,667
215,334
Payable within one year
68,000
68,000
Payable after one year
56,667
147,334

Bank borrowings are secured by a debenture and cross guarantee given by Hybrid Laser Tech L imited. The borrowings have a term of 72 months, the first 12 months are interest only and this is paid by the Government. Over the remaining 60 months, the loan is repayable by monthly installments. Interest is charged at a fixed rate of 2.62% over base rate. The loan is due for for full repayment by February 2027.

19
Creditors: amounts falling due after more than one year
30 April
31 December
2025
2023
Notes
£
£
Bank loans
18
56,667
147,334
Obligations under finance leases
20
378,293
752,598
434,960
899,932
20
Finance lease obligations
30 April
31 December
2025
2023
Amounts due:
£
£
Within one year
266,376
357,429
After more than one year
378,293
752,598
644,669
1,110,027
30 April
31 December
2025
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
347,996
390,653
In two to five years
401,963
935,125
749,959
1,325,778
Less: future finance charges
(105,290)
(215,751)
644,669
1,110,027
SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
- 25 -
21
Deferred taxation

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

Liabilities
Liabilities
30 April
31 December
2025
2023
Balances:
£
£
Accelerated capital allowances
450,585
548,863
Tax losses
(376,329)
(346,176)
Other short term differences
(7,161)
889
67,095
203,576
30 April
2025
Movements in the period:
£
Liability at 1 January 2024
203,576
Credit to profit or loss
(136,481)
Liability at 30 April 2025
67,095

The net deferred tax expected to reverse next year is £78,692 relating to the reversal of timing differences on tangible fixed assets.

A d eferred tax asset is recognised in respect of tax losses of £1,505,315 as it is expected that t hey will be recovered against the reversal of deferred tax liabilities or future taxable profits.

22
Retirement benefit schemes
30 April
31 December
2025
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
270,986
159,669

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

Contributions totalling £25,494 (2023 - £27,619) were payable to the fund at the balance sheet date and are included in creditors.

SHEARLINE PRECISION ENGINEERING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2025
- 26 -
23
Share capital
30 April
31 December
30 April
31 December
2025
2023
2025
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2,000
2,000
2,000
2,000
24
Reserves

Profit and loss reserves

Includes all current and prior period retained profits and losses.

25
Financial commitments, guarantees and contingent liabilities

There is a cross guarantee and debenture given by Shearline Precision Engineering Limited and Hybrid Laser Tech Limited in respect of bank borrowings. The balance at the period end is £Nil (2023 - £Nil). The debt is secured by a debenture over all assets of the company.

The company has provided a guarantee for Shearline Holdings Limited of £1.4m and a debenture in respect of bank borrowings.

26
Related party transactions

The company has taken advantage of exemptions from the disclosure of transactions with other group companies.

28
Ultimate controlling party

The immediate parent undertaking is Shearline Holdings Limited a company registered in England and Wales.

The ultimate controlling party is D H Littlechild.

29
Directors' transactions

A director has provided a guarantee of £1,850,000 in respect of bank borrowings of the company.

The company owed £257,690 (202 3 - £1 75,911) to director s at the balance sheet date. Interest has been charged at an average rate of 6%.

During the year rent of £207,000 (202 3 - £276,000) has been paid to a director by the company.

During the period, a director issued a rent concession for a seven month period totalling £161,000. This was a temporary concession and rent at the original value has since been reinstated.

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