The directors present the strategic report for the year ended 31 March 2026.

The principal activities of the company are the design and manufacture of engineering solutions for the handling and processing of technical fibres.

The Company is a principal subsidiary of Cygnet Group Limited (‘the Group’). Further information on the performance of the Group can be found in the strategic report prepared by the Directors of Cygnet Group Limited.

Markets, People and Infrastructure

The primary business focus of Cygnet Texkimp is on delivering process machinery, automation and turnkey plant solutions for the processing of technical fibres. Composites and Carbon fibre remains the largest technical fibre growth area, enabling next generation composite structures. This is expected to continue for the foreseeable future, combined with ongoing support for the broader textile handling market opportunities.

Global trends are driving demand for more advanced structures using composite materials. Defence and Military require combinations of 3D woven fibres, high-temperature materials such as ceramics, high-deposition rates and advanced resin systems. Energy transition drives growth of composite wind turbine blades, hydrogen pressure vessels, higher-voltage transmission. Travel & Mobility (while working towards Net Zero) requires increased use of composites to improve fuel economy, with light weighting and widening the use of technical fibres and advanced materials in the aerospace, automotive, wind, industrial, defence and space industries providing opportunities for growth into new sectors.

The demand for innovative solutions in the handling of these fibres and materials in these different sectors (for which the company has won several industry awards) also gives scope for the spread of risk. This has formed a significant part of Cygnet Texkimp’s strategy for the future.

Building on the Advanced Materials focus of the Government’s 10 year Modern Industrial Strategy the company will host the first open access carbon fibre development facility (in collaboration with the NCC innovating for industry). The facility will house two digitally-enabled development lines for manufacturing carbon fibre, funded by the Department for Science, Innovation and Technology (DSIT). The new capability was recognised in the UK Government’s Industrial Strategy and Advanced Manufacturing Sector Plan as a key strategic asset enabling innovation in advanced materials and further developing and industrialising carbon fibre manufacturing expertise in the UK.

The Company continues to review performance, our operational structure, systems and processes to help drive efficiencies. Key investments include implementation of a new ERP system, extending and enhancing the office environment and warehouse facilities, as well as internal investment enhancing and developing our team.

Future Developments

As a company, we continue to invest heavily in R&D projects that are focused on future technologies, supporting UK and global aspirations for greener processes and outputs that will be used to improve the green credentials of the end users.

On a product level, we expect the next phase of growth will come from innovating in core areas, adding complimentary capability and providing more integrated factory solutions beyond 1-process machines.

We continue to undertake collaborative R&D projects, utilising the Innovate UK grant funding platform to accelerate our internal R&D and build key relationships with some of the biggest brands in the sectors we operate. Working with industry partners such as McLaren, we have collaborated to industrialise a revolutionary, high-rate fibre deposition solution from a concept originally developed by global supercar manufacturer McLaren Automotive.

The company intends to further capitalise on working towards an element of product standardisation as well as supporting product innovation. Strategic plans are being continually reviewed, cascaded and adapted with a clear view of the main drivers of growth and profitability.

Research and development remain at the forefront of what we do. Our focus on expanding our product portfolio through innovation underpins our future strategy for growth and profitability.

Financial review

The Board monitors the progress of the Company strategy and its individual elements by reference to certain financial and non-financial key performance indicators. The key performance indicators used by the Board include:

The Company has had a successful year delivering a substantial orderbook whilst improving profitability. Ongoing focus on margins has resulted in continued margin improvement as we keep overheads under control. The directors remain confident in the long term development of the business and continued opportunities for growth over the 3 - 5 year timeframe. We expect the benefits of the recent ERP system implementation to deliver further operational efficiencies and cost control benefits.

The Company continues to invest strategically in R&D, through a mixture of grant, industry and self-funded projects, at £1.0m (2025: £1.4m), and continue to be supported by Innovate UK grant funded projects during the last financial year. This ensures resources were committed to developing products which will drive future growth and profitable return on this investment.

Operating profit of £2.4m (2025: £1.4m) demonstrates an exceptional performance as margins on core products support development in newer product areas.

The Company maintained healthy a cash balance of £10.6m (2025: £11.6m) reflecting the stage payments of the projects in progress at the year end.

The Company remains exposed to macro market risk from UK government export policies. The company has a long record of compliance with export licences, engaging early with the Government Export Control Joint Unit where required. Risks and instability in the credit markets are addressed by foreign exchange forward contracts if the Company’s contracts are denominated significantly in US Dollars or Euros to mitigate exchange rate risk. The Company actively tries to avoid reliance on any one customer, geographical area or market sector.

The Company is exposed to liquidity risk as the profile of receipts under long-term contracts may not be timed to coincide with corresponding outflows. The company closely controls the mix of contracts to cover working capital funding, and where possible endeavours to minimise credit risk through payment terms. With support from the Ultimate Parent Company, Barclays and UKEF facilities the company uses a mixture of debt facilities where required.

The Company recognises its obligations relating to health and safety and the risk to its reputation of any incident affecting the health and safety of its customers or employees. The Directors are mindful of their responsibilities to ensure a safe environment and regularly monitor the health and safety procedures to ensure that a safe environment is maintained in the our operations.

The Company recognises its increasing reliance on core IT systems to support operational efficiency, financial reporting, and data integrity. A new Enterprise Resource Planning (ERP) system implementation is complete, which will enhance operational integration and scalability and strengthen our cyber resilience by improved system security, access controls, and monitoring capabilities. Ensuring the reliability and security of our digital infrastructure remains a key priority to support the Company’s long-term growth.

With a healthy outlook, the Company believes it is well placed to respond to current global markets and to continue to build on the progress made in the financial year.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 March 2026.

The results for the year are set out on page 9.

Dividends of £512,982 were distributed in the year ended 31 March 2026 (31 March 2025: £252,168).

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

In considering the appropriateness of the going concern basis of preparation, the Directors have considered current trading performance, the availability of bank facilities, market expectations and financial forecasts for the next twelve months from the date of signing the 2026 financial statements.

The Company has a cross guarantee and debenture agreement relating to any monies owing to Barclays PLC by other Group undertakings. The Company has access to £4,000,000 of debt facilities with no associated covenants.

The Directors have reviewed the latest trading forecasts which indicate that the Company will continue to operate as a going concern for the foreseeable future. The latest forecasts are based on both secured and prospective orders and review of the sales pipeline which show significant activity across our different streams; And additionally, a strong pipeline of a number of sizeable projects which could materialise. After making detailed enquiries and reviewing these forecasts the Directors have formed a judgment, at the time of approving the financial statements, that there is a strong expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors continue to adopt the going concern basis of accounting in preparing the annual financial statements of the Company.

The company undertakes research and development expenditure and, in the opinion of the Directors, continuity of investment in this area is essential for the maintenance of the Company's market position and for future growth.

Matters of strategic importance

In accordance with section 414 c(11) of the Companies Act 2006 the company has chosen to set out details of likely future developments in the business as required by schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports Regulations 2008) within the strategic report.

In accordance with the company's articles, a resolution proposing that Champion Accountants LLP be reappointed as auditor of the company will be put at a General Meeting.

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; 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.

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.

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

We have audited the financial statements of Cygnet Texkimp Limited (the 'company') for the year ended 31 March 2026 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 March 2026 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.

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

As part of our planning process:

- We enquired of management the systems and controls the company has in place, the areas of the financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. Management did not inform us of any known, suspected or alleged fraud.

- We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: FRS 102, Companies Act 2006, tax legislation and compliance with health and safety laws.

- We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetrated, and tailored our risk assessment accordingly.

- Using our knowledge of the company, together with the discussions held with management at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

- Identifying and testing journal entries in overall accounting records, in particular those that were significant and unusual.

- Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.

- Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, in particular in relation to doubtful debt provisions and depreciation methods.

- Assessing the extent of compliance, or lack of, with the relevant laws and regulations.

- Documenting and verifying all significant related party balances and transactions.

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

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

Cygnet Texkimp Limited is a private company limited by shares incorporated in England and Wales. The registered office is Swan House, Kimpton Drive, Off Wincham Lane, Wincham, Northwich, Cheshire, CW9 6GG.

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 £'000.

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 Cygnet Group Limited. These consolidated financial statements are available from its registered office, Swan House Kimpton Drive, Off Wincham Lane, Wincham, Northwich, Cheshire, CW96GG.

In considering the appropriateness of the going concern basis of preparation, the Directors have considered current trading performance, the availability of bank facilities, market expectations and financial forecasts for the next twelve months from the date of signing the 202true6 financial statements.

The Company has a cross guarantee and debenture agreement relating to any monies owing to Barclays PLC by other Group undertakings. The company has access to a £4m facility with no associated covenants.

The Directors have reviewed the latest trading forecasts which indicate that the Company will continue to operate as a going concern for the foreseeable future. The latest forecasts are based on both secured and prospective orders and review of the sales pipeline which show significant activity across our different streams; and additionally, a strong pipeline of a number of sizeable projects which could materialise. After making detailed enquiries and reviewing these forecasts the Directors have formed a judgment, at the time of approving the financial statements, that there is a strong expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors continue to adopt the going concern basis of accounting in preparing the annual financial statements of the Company.

Turnover arises from the sales of goods and services. It is stated at the fair value of the consideration receivable, net of value added tax, rebates and discounts. Turnover from the sale of goods and services is recognised when the significant risks and benefits if ownership of the product have transferred to the buyer or the service has been discharged, which may be upon shipment, completion of the product or the product being ready for delivery, based on specific contract terms.

Long-term contracts

Long-term contracts are assessed on a contract-by-contract basis and are reflected in the profit and loss account by recording turnover and related costs as contract activity progresses. Turnover is ascertained in a manner appropriate to the cost completion of the contract, and credit is taken for profit earned to date when the outcome of the contract can be assessed with reasonable certainty. The amount by which turnover exceeds payments on account is classified as "amounts recoverable on contracts" and included in debtors, to the extent that payments on account exceed relevant turnover and long-term contract balances, the excess is included as a creditor.

When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.

When the outcome of a contract cannot be estimated reliably, contract turnover is recognised only to the extent of contract costs that are recoverable and the contract costs are expensed as incurred.

Research and development

The company capitalises development expenditure as an intangible asset when it is able to demonstrate all of the following:

• The technical feasibility of completing the development so the intangible asset will be available for use or sale,

• Its intention to complete the development and to use or sell the intangible asset,

• Its ability to use or sell the intangible asset,

• How the intangible asset will generate probably future economic benefits,

• The availability of adequate technical, financial and other resources to complete the development and to use, or sell the intangible asset,

• Its ability to measure reliably the expenditure attributable to the intangible asset during its development.

All research expenditure and development expenditure that does not meet the above conditions is expensed as incurred

Capitalised development expenditure is initially recognised at cost and subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Capitalised development expenditure is amortised on a straight line basis over its useful life, which is between 3 and 5 years. The Directors consider these useful lives to be appropriate because that is the period over which economic benefit is anticipated. Amortisation of these assets, on the same basis as other assets, commences when the assets are ready for their intended use. Amortisation in respect of intangible fixed assets recognised in profit or loss for the year is recognised within administration expenses.

On disposal, the difference between the net disposal proceeds and the carrying amount of the intangible asset is recognised in profit or loss.

Software

Software is capitalised at cost and amortised to profit and loss on a straight line basis over its useful life, at the rate of 33% per annum.

Amortisation in respect of intangible fixed assets recognised in profit and loss for the year is recognised within administrative expenses.

Patents

Patent costs are capitalised at cost and amortised to profit and loss on a straight line basis over its useful life, at the rate of 5% per annum.

Amortisation in respect of intangible fixed assets recognised in profit and loss for the year is recognised within administrative expenses.

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

Depreciation is provided on all tangible fixed assets, excluding capital work in progress, at rates calculated to write off the cost less estimated residual value of each asset as follows:

Residual value is calculated using prices prevailing at the reporting date, after estimated cost of disposal, for the asset as if it were at the age and in the condition expected at the end of its useful life.

Assets under construction

Assets in the course of construction for production, supply or administrative purposes. or for purposes not yet determined, are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the company's accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

An assessment is made at each reporting date of whether there are indicators that a fixed asset may be impaired or that an impairment loss previously recognised has fully or partially reversed, If such indications exist, the Company estimates the recoverable amount of the asset or, for goodwill, the recoverable amount of the cash-generating unit to which the goodwill belongs.

Shortfalls between the carrying value of fixed assets and their recoverable amounts, being the higher or fair value less costs to sell and value-in-use, are recognised as impairment losses,

Any impairment loss recognised for goodwill is not reversed, For fixed asset other than goodwill, recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Reversals or impairment losses are recognised in profit or loss or, for revalued assets, as a revaluation gain. On reversal of an impairment loss, the depreciation or amortisation is adjusted to allocate the asset's revised carrying amount (less any residual value) over its remaining useful life.

Stock and work in progress are valued at the lower of average cost and estimated selling price less costs to complete and sell. Provision is made for obsolete and slow-moving items.

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.

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 assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument, and are offset only when the Company currently has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Trade, Group and other debtors

Trade, group and other debtors which are receivable within one year and which do not constitute a financing transaction are initially measured at the transaction price. Trade debtors are subsequently measured at amortised cost, being the transaction price less any amounts settled and any impairment losses.

A provision for impairment of trade debtors is established when there is objective evidence that the amounts due will not be collected according to the original terms of the contract. Impairment losses are recognised in profit or loss for the excess of the carrying value of the trade debtor over the present value of the future cash flows discounted using the original effective interest rate. Subsequent reversals of an impairment loss that objectively relate to an event occurring after the impairment loss was recognised, are recognised immediately in profit or loss.

Financial instruments are classified as liabilities and equity instruments 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.

Equity instruments

Financial instruments classified as equity instruments are recorded at the fair value of the cash or other resources received or receivable, net of direct costs of issuing the equity instruments.

Trade, group and other creditors

Trade, Group and other creditors payable within one year that do not constitute a financing transaction are measured at the transaction price less any amounts settled.

A financial asset is derecognised only when the contractual rights to cash flows expire or are settled, or substantially all the risks and rewards of ownership are transferred to another party, or if some significant risks and rewards 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. A financial liability (or part therof) is derecognised when the obligation specified in the contract is discharged, cancelled or expires.

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

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

Deferred tax 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.

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.

Warranty obligations

When turnover is recognised for long-term contracts, a provision is made for the estimated cost of the warranty obligation. The provision is measured based on the probability weighting of all possible outcomes and is included within provisions and released at the end of the warranty period.

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.

Defined contribution plans

Certain employees are eligible to join a Group Personal Pension Plan. The contributions are charged to the profit and loss account in the year in which they become payable. Differenced between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments.

Operating leases are those which do not meet the definition of a finance lease. Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Income from government grants is presented within other operating income at the fair value of the amounts received or receivable.

The Company recognises grant income when the grant's performance-related conditions are met. A grant that does not impose specified future performance-related conditions on the recipient is recognised in income when the grant proceeds are receivable. A grant that imposes specified future performance conditions on the recipient, is recognised in income only when the performance-related conditions are met. Grants receivable before the revenue recognition criteria are satisfied are recognised as a liability.

Transactions in currencies other than the functional currency (foreign currencies) are initially recorded at the system exchange rate (generally the previous month end rate).

Monetary assets and liabilities denominated in foreign currencies at the rate of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies are translated a the rate ruling at the date of the transaction or, if the asset or liability is measured at fair value, the rate when that fair value was determined.

All translation differences are taken to profit or loss.

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.

In order to assess the recognition of turnover and profits generated on contracts, management consider the stage of completion of the contracts ongoing at the year-end by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of expected total costs. This assessment includes an estimate of expected costs to complete and an assessment of the technical and commercial risk of the project, which includes an element of judgement as projects can change and result in either additional or less costs depending on the outcome of work performed.

In order to assess the carrying value of stock and, therefore, the resulting stock provision, management review the historical level of stock provisions (which are based on the ageing of the stock), levels of stock write-offs over the past 3 years and the general recoverability of stock. These combined, provide a basis for the stock provision estimate. Stock is also reviewed by management on a line by line basis to determine whether any additional provisions, which would sit outside of the policy detailed, are required. Any outliers would be provided for specifically irrespective of its age.

When turnover is recognised for long-term contracts, a provision is made for the estimated cost of the warranty obligation. The provision is measured based on the probability weighting of all possible outcomes and is included within provisions.

In the year ended 31 March 2026, the Company received a grant from Innovate UK as part of a consortium working on the innovation and development of new technologies relevant to the automotive industry. The grant is unconditional and has been recognised as earned in line with the Company's progress through our section of the consortium's project.

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 4 (2025 - 3).

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:

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

Assets under construction comprises software costs of £122,997 (2025: £4,856 of patent costs).

More information on impairment movements in the year is given in note 12.

At 31 March 2026 plant and machinery costs of £599,000 (2025: £494,000) were under construction.

During the year, a stock impairment of £102,381 (2025: £20,000) was recognised within cost of sales.

Trade debtors are stated net of a provision of £6,000 (2025: £Nil).

Amounts owed by Group undertakings are unsecured and repayable on demand. No interest is charged on trading balances.

A provision of £44,000 (2025: £105,000) has been recognised for expected warranty claims on goods sold during the last two years. The warranty provision represents the Company's liability in respect of warranties granted on projects. The amount provided represents management's best estimate of the future cash outflows in respect of those products still within the warranty period at the year end.

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

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. The assets of the scheme are held separately from those of the company in an independently administered fund.

The Company has a cross guarantee and debenture agreement relating to any monies owing to Barclays PLC by other Group undertakings.

At 31 March 2026, the Group had access to a facility of £4,000,000 (2025: £1,450,000) of which £1,065,251 (2025: £514,552) was committed by way of bank guarantees at the balance sheet date.

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

During the year the company entered into the following transactions with related parties:

The following amounts were outstanding at the reporting end date:

Included within the amounts owed from Group Companies balance is an interest free loan due to Cygnet Texkimp Limited of £713,000 (2025: £713,000).

During the year rental payments of £147,616 (2025: £109,109) were paid to the self-invested personal pension of Mr M J Kimpton-Smith. There were no balances outstanding at the end of the period.

By virtue of combined interest in Cygnet Group Limited, the company considers M J Kimpton-Smith and S Kimpton-Smith to be the ultimate controlling parties.

The Directors regard Cygnet Group Limited, a company registered in England and Wales, as the ultimate parent company. Cygnet Group Limited is the immediate parent and is the smallest and largest company for which consolidated accounts including Cygnet Texkimp Limited are prepared. The consolidated accounts of Cygnet Group Limited are available from its registered office, which is the same as this company.