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COMPANY REGISTRATION NUMBER: 00942427

Cutting & Wear Resistant Developments Limited

Financial Statements

30 September 2025

Cutting & Wear Resistant Developments Limited

Financial Statements

Year ended 30 September 2025

Contents | Pages

Officers and professional advisers | 1

Strategic report | 2 to 4

Directors' report | 5 to 6

Independent auditor's report to the members | 7 to 10

Statement of income and retained earnings | 11

Statement of financial position | 12

Statement of cash flows | 13

Notes to the financial statements | 14 to 23

Cutting & Wear Resistant Developments Limited

Officers and Professional Advisers

The board of directors | Mr M Cooper
| Mr M A Russell
| Mr A Ollerenshaw
| Mr P Jacobs
| Mr L T Moore
| Mr B H Russell
| Mr P Burns

Registered office | 7 Cowley Way
| Ecclesfield
| Sheffield
| S35 1QP

Auditor | Hebblethwaites
| Chartered accountants & statutory auditor
| 2 Westbrook Court
| Sharrow Vale Road
| Sheffield
| S11 8YZ

Bankers | Barclays Bank plc

Cutting & Wear Resistant Developments Limited

Strategic Report

Year ended 30 September 2025
The principal activities of the company continued to be those concerned with hardfacing and engineering and, in particular, the manufacture and supply of specialised products and services for use within the energy industry. Fair review of the business The company has enjoyed significant growth in recent years and in the post pandemic era having exploited world-wide opportunities, these arising partly as a result of macro-economic and global events, and impacting on the market conditions in the specialist areas where the company has significant expertise and experience. This had enabled the company to return to its medium to long term growth plan and to re-build reserves and resilience. However, this latest year has presented market challenges consequent on a reduction in global investment in the specialist company sectors in particular, being not untypical of the cyclical nature of the market activity in these specialist areas. The diversification of products and departments by the company has, however, provided some resilience and reduction in exposure to any particular area. As a result of these market conditions, total turnover for the year has fallen by £3.34 million or 27.4% to a new total of £8.849 million. The earlier year investment in plant and equipment has enhanced productivity and efficiency, this to offset other production cost increases if with an overall reduction in the gross profit percentage return consequent on the reduced level of activities during this latest year. The company has maintained its' underlying trading base in anticipation of future growth as the cyclical trading market returns, this with the benefit of earlier year retained profits and reserves. With the overhead base retained for future exploitation, the company has recorded a pre tax loss for the year with a resultant reduction in the overall net worth as portrayed by the Statement of Financial Position. However, the directors remain confident of a return to the medium to long term growth strategy and they continue to monitor and react to market conditions and demands on an ongoing basis. Despite recording a loss for the year, the company has continued to reduce its' medium to long term liabilities whilst maintaining cash reserves and capacity to exploit future demand and growth. The Statement of Financial Position remains relatively strong and resilient going forward.
Whilst research and development was inevitably scaled back during the challenging financial years surrounding the pandemic, the underlying policy remains with ongoing investment in R & D continuing towards longer term growth if with inevitable extended gestation periods towards commercial realisation, some of which is now approaching maturity. The company policy of continuous focus on cost control allied to positive customer service and product development has become even more important in the modern commercial world in which the company operates, but leaves the "Cutting & Wear" well placed to further advance going forward, in particular in the context of subsequent world events. This continued investment and forward-thinking strategy maintains the company's position at the cutting edge of technological product development and remains a policy and focus for the longer term future. Alongside this product development, the company continues to invest in its people and their skills, this again promoting future development and growth, if with challenges in sourcing those individuals with the appropriate skill-sets commensurate with the company investment in modern equipment and lean manufacturing processes Whilst continuing these development plans and, again, with constant monitoring, overhead and administrative costs remain under tight control as far as the markets will permit. The retained reserves and net worth from earlier years have provided the resilience and capacity to survive these recent challenges, this now giving rise to an enhancement in reserves to the highest recorded in the history of the company. The directors are confident of enhanced future profitability and continued growth with product and skills development at the forefront of future positivity giving rise to a strong financial return on investment
Principal risks and uncertainties Alongside the general and recently topical global issues impacting on all business entities, the directors view is that the ongoing principal risk to the business is that of the fluctuating, and often uncertain, market rates of energy pricing, itself exposed to numerous global and competing issues. Conversely, these risks can, and indeed are now, manifesting themselves in a positive manner for the company if in a highly volatile and changing world marketplace. The earlier stabilisation in market pricing, allied to macro controls, has been somewhat undermined in recent years as a result of global issues, if to a positive effect for the company but further emphasising the volatility of global energy pricing subject to economic, political and strategic issues. As outlined above, future production costs will be impacted by reference to increasing costs of energy in the market place, which costs are regularly monitored and managed accordingly. The directors continue to monitor such risks on an ongoing basis and to respond in an appropriate manner if now with greater confidence as a result of ongoing profitability and retention.
This report was approved by the board of directors on 1 August 2026 and signed on behalf of the board by:

Mr M A Russell
Director

Registered office:
7 Cowley Way
Ecclesfield
Sheffield
S35 1QP

Cutting & Wear Resistant Developments Limited

Directors' Report

Year ended 30 September 2025
The directors present their report and the financial statements of the company for the year ended 30 September 2025 .
Directors
The directors who served the company during the year were as follows:

Mr M Cooper |
Mr M A Russell |
Mr A Ollerenshaw |
Mr P Burns |
Mr P Jacobs | (Appointed 6 February 2025)
Mr L T Moore | (Appointed 6 February 2025)
Mr B H Russell | (Appointed 6 February 2025)
Mrs G M Macdonald | (Resigned 6 February 2025)
Mr S R Welburn | (Resigned 30 November 2024)

Dividends
Particulars of recommended dividends are detailed in note 12 to the financial statements.
Future developments
As outlined in the Strategic Report, the directors remain confident of continued future growth and development, especially as the effects of the global pandemic are hopefully reduced or eliminated.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' 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 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 judgments and accounting estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 1 August 2026 and signed on behalf of the board by:

Mr M A Russell
Director

Registered office:
7 Cowley Way
Ecclesfield
Sheffield
S35 1QP

Cutting & Wear Resistant Developments Limited

Independent Auditor's Report to the Members of Cutting & Wear Resistant Developments Limited

Year ended 30 September 2025
Opinion
We have audited the financial statements of Cutting & Wear Resistant Developments Limited (the 'company') for the year ended 30 September 2025 which comprise the statement of income and retained earnings, statement of financial position, statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: - give a true and fair view of the state of the company's affairs as at 30 September 2025 and of its profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the strategic report and the 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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the 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.
Responsibilities of directors
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.
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: We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: - the nature of the industry and sector, control environment and business performance, including the identification of related party transactions, and matters which could potentially impact on the company's continuation as a going concern; - results of our enquiries of management and assessment of the risks of irregularities; - any matters we identified having obtained and reviewed the company's documentation of their policies and procedures relating to: - identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; - detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; - the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; - the matters discussed among the audit engagement team, including how and where fraud might occur in the financial statements and any potential indicators of fraud. As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in relation to revenue recognition. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, UK Corporate Governance Code and local tax legislation. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 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.

Andrew Throssell FCA
(Senior Statutory Auditor)

For and on behalf of
Hebblethwaites
Chartered accountants & statutory auditor
2 Westbrook Court
Sharrow Vale Road
Sheffield
S11 8YZ

6 August 2026

Cutting & Wear Resistant Developments Limited

Statement of Income and Retained Earnings

Year ended 30 September 2025

| 2025 | 2024
Note | £ | £
Turnover | 4 | 8,849,815 | 12,192,714

Cost of sales | ( 5,665,481) | ( 7,336,603)
| ------------ | -------------
Gross profit | 3,184,334 | 4,856,111

Administrative expenses | ( 3,242,688) | ( 3,043,410)
|  | ------------ | ------------
Operating (loss)/profit | 5 | ( 58,354) | 1,812,701

Other interest receivable and similar income | 9 | 20,973 | 4,201
Interest payable and similar expenses | 10 | ( 105,808) | ( 118,864)
| ------------ | ------------
(Loss)/profit before taxation | ( 143,189) | 1,698,038

Tax on (loss)/profit | 11 | 206,226 | ( 424,562)
| --------- | ------------
Profit for the financial year and total comprehensive income | 63,037 | 1,273,476
| --------- | ------------

Dividends paid and payable | 12 | ( 212,600) | ( 100,000)

Retained earnings at the start of the year | 6,781,928 | 5,608,452
| ------------ | ------------
Retained earnings at the end of the year | 6,632,365 | 6,781,928
| ------------ | ------------

All the activities of the company are from continuing operations.

Cutting & Wear Resistant Developments Limited

Statement of Financial Position

30 September 2025

| 2025 | 2024
Note | £ | £

Fixed assets

Tangible assets | 13 | 4,261,549 | 4,696,105
Investments | 14 | 10,000 | 10,000
| ------------ | ------------
| 4,271,549 | 4,706,105

Current assets

Stocks | 15 | 2,653,148 | 3,030,217
Debtors | 16 | 1,783,730 | 2,624,681
Cash at bank and in hand | 1,138,670 | 1,167,572
| ------------ | ------------
| 5,575,548 | 6,822,470

Creditors: amounts falling due within one year | 17 | 1,449,473 | 2,427,186
| ------------ | ------------
Net current assets | 4,126,075 | 4,395,284
| ------------ | ------------
Total assets less current liabilities | 8,397,624 | 9,101,389

Creditors: amounts falling due after more than one year | 18 | 960,087 | 1,427,667

Provisions

Taxation including deferred tax | 20 | 360,089 | 446,711
| ------------ | ------------
Net assets | 7,077,448 | 7,227,011
| ------------ | ------------

Capital and reserves

Called up share capital | 23 | 445,054 | 445,054
Capital redemption reserve | 24 | 29 | 29
Profit and loss account | 24 | 6,632,365 | 6,781,928
| ------------ | ------------
Shareholders funds | 7,077,448 | 7,227,011
| ------------ | ------------

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These financial statements were approved by the board of directors and authorised for issue on 1 August 2026 , and are signed on behalf of the board by:

Mr M A Russell
Director

Company registration number: 00942427

Cutting & Wear Resistant Developments Limited

Statement of Cash Flows

Year ended 30 September 2025

| 2025 | 2024
| £ | £

Cash flows from operating activities

Profit for the financial year | 63,037 | 1,273,476

Adjustments for: |  |
Depreciation of tangible assets | 534,830 | 398,842
Other interest receivable and similar income | ( 20,973) | ( 4,201)
Interest payable and similar expenses | 105,808 | 118,864
Loss on disposal of tangible assets | 3,952 | –
Tax on (loss)/profit | ( 206,226) | 424,562
Accrued (income)/expenses | ( 341,600) | 168,961

Changes in: |  |
Stocks | 377,069 | ( 93,619)
Trade and other debtors | 840,951 | ( 397,667)
Trade and other creditors | ( 323,543) | ( 178,470)
| ------------ | ------------
Cash generated from operations | 1,033,305 | 1,710,748

Interest paid | ( 105,808) | ( 118,864)
Interest received | 20,973 | 4,201
Tax paid | ( 121,017) | –
| ------------ | ------------
Net cash from operating activities | 827,453 | 1,596,085
| ------------ | ------------

Cash flows from investing activities

Purchase of tangible assets | ( 104,226) | ( 465,131)
| ------------ | ------------
Net cash used in investing activities | ( 104,226) | ( 465,131)
| ------------ | ------------

Cash flows from financing activities

Repayment of borrowings | ( 266,503) | ( 332,202)
Repayment of hire purchase liabilities | ( 273,026) | ( 189,500)
Ordinary dividends paid | ( 212,600) | ( 100,000)
| ------------ | ------------
Net cash used in financing activities | ( 752,129) | ( 621,702)
| ------------ | ------------

Net (decrease)/increase in cash and cash equivalents | ( 28,902) | 509,252
Cash and cash equivalents at beginning of year | 1,167,572 | 658,320
| ------------ | ------------
Cash and cash equivalents at end of year | 1,138,670 | 1,167,572
| ------------ | ------------

Cutting & Wear Resistant Developments Limited

Notes to the Financial Statements

Year ended 30 September 2025
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is 7 Cowley Way, Ecclesfield, Sheffield, S35 1QP.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Research and development
Research and development expenditure is written off in the year in which it is incurred.
Going concern
The directors have assessed the company’s ability to continue as a going concern, taking into account its current financial position, expected future performance, and cash flow forecasts covering a period of at least twelve months from the date of approval of the financial statements. Based on this assessment, the directors are satisfied that the company has adequate resources to continue in operational existence for the foreseeable future. The financial statements have therefore been prepared on the going concern basis.
Consolidation
The entity has taken advantage of the exemption from preparing consolidated financial statements contained in Section 402 of the Companies Act 2006 on the basis that its subsidiaries are excluded from consolidation on the grounds that their inclusion is not material for the purpose of giving a true and fair view.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. In the opinion of management, there are no areas of judgement or key sources of estimation uncertainty that have a significant effect on the financial statements, other than those highlighted below.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:

| Freehold buildings | - | 2% straight line
| Plant & machinery | - | 20% reducing balance
| Motor vehicles | - | 20% reducing balance
| Office equipment & fixtures | - | 20% reducing balance/33% straight line

Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Listed investments are measured at fair value with changes in fair value being recognised in profit or loss.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:

| 2025 | 2024
| £ | £
United Kingdom | 1,588,906 | 3,569,735
Western hemisphere | 3,159,237 | 4,235,899
Eastern hemisphere | 4,101,672 | 4,387,080
| ------------ | -------------
| 8,849,815 | 12,192,714
| ------------ | -------------

The turnover is attributable to the one principal activity of the company. An analysis of turnover by the geographical markets that substantially differ from each other is given below:

| 2025 | 2024
| £ | £
United Kingdom | 1,588,906 | 3,569,735
Western hemisphere | 3,159,237 | 4,235,899
Eastern hemisphere | 4,101,672 | 4,387,080
| ------------ | -------------
| 8,849,815 | 12,192,714
| ------------ | -------------

5. Operating (loss)/profit
Operating profit or loss is stated after charging/crediting:

| 2025 | 2024
| £ | £
Depreciation of tangible assets | 534,830 | 398,842
Loss on disposal of tangible assets | 3,952 | –
Impairment of trade debtors | 2,455 | 15,544
Foreign exchange differences | ( 60,311) | ( 125,131)
| --------- | ---------

6. Auditor's remuneration

| 2025 | 2024
| £ | £
Fees payable for the audit of the financial statements | 17,000 | 16,500
| -------- | --------

7. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:

| 2025 | 2024
| No. | No.
Production staff | 45 | 48
Administrative staff | 27 | 24
| ---- | ----
| 72 | 72
| ---- | ----

The aggregate payroll costs incurred during the year, relating to the above, were:

| 2025 | 2024
| £ | £
Wages and salaries | 2,856,818 | 3,292,414
Social security costs | 333,036 | 377,859
Other pension costs | 268,884 | 290,657
| ------------ | ------------
| 3,458,738 | 3,960,930
| ------------ | ------------

8. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:

| 2025 | 2024
| £ | £
Remuneration | 423,008 | 521,210
Company contributions to defined contribution pension plans | 57,229 | 107,503
| --------- | ---------
| 480,237 | 628,713
| --------- | ---------

The number of directors who accrued benefits under company pension plans was as follows:

| 2025 | 2024
| No. | No.
Defined contribution plans | 5 | 3
| ---- | ----

Remuneration of the highest paid director in respect of qualifying services:

| 2025 | 2024
| £ | £
Aggregate remuneration | 110,603 | 258,387
Company contributions to defined contribution pension plans | 11,407 | 83,910
| --------- | ---------
| 122,010 | 342,297
| --------- | ---------

9. Other interest receivable and similar income

| 2025 | 2024
| £ | £
Interest on cash and cash equivalents | 20,973 | 4,201
| -------- | -------

10. Interest payable and similar expenses

| 2025 | 2024
| £ | £
Interest on banks loans and overdrafts | 51,849 | 80,746
Interest on obligations under finance leases and hire purchase contracts | 53,959 | 38,118
| --------- | ---------
| 105,808 | 118,864
| --------- | ---------

11. Tax on (loss)/profit
Major components of tax (income)/expense

| 2025 | 2024
| £ | £

Current tax:

UK current tax expense | 1,079 | 241,700
Adjustments in respect of prior periods | ( 120,683) | –
| --------- | ---------
Total current tax | ( 119,604) | 241,700
| --------- | ---------

Deferred tax:

Origination and reversal of timing differences | ( 86,622) | 182,862
| --------- | ---------
Tax on (loss)/profit | ( 206,226) | 424,562
| --------- | ---------

Reconciliation of tax (income)/expense
The tax assessed on the (loss)/profit on ordinary activities for the year is lower than (2024: higher than) the standard rate of corporation tax in the UK of 25 % (2024: 25 %).

| 2025 | 2024
| £ | £
(Loss)/profit on ordinary activities before taxation | ( 143,189) | 1,698,038
| --------- | ------------
(Loss)/profit on ordinary activities by rate of tax | ( 35,797) | 424,510
Adjustment to tax charge in respect of prior periods | ( 120,683) | –
Effect of expenses not deductible for tax purposes | 1,588 | 600
R&D tax adjustment | ( 69,377) | ( 35,658)
Accelerated capital allowances | 18,043 | 35,110
| --------- | ------------
Tax on (loss)/profit | ( 206,226) | 424,562
| --------- | ------------

12. Dividends

| 2025 | 2024
| £ | £
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year ) | 212,600 | 100,000
| --------- | ---------

13. Tangible assets

| Freehold property | Plant and machinery | Motor vehicles | Equipment | Total
| £ | £ | £ | £ | £
Cost |  |  |  |  |
At 1 October 2024 | 3,806,368 | 4,749,289 | 64,291 | 331,883 | 8,951,831
Additions | – | 91,853 | – | 12,373 | 104,226
Disposals | – | ( 260,274) | – | – | ( 260,274)
| ------------ | ------------ | -------- | --------- | ------------
At 30 September 2025 | 3,806,368 | 4,580,868 | 64,291 | 344,256 | 8,795,783
| ------------ | ------------ | -------- | --------- | ------------
Depreciation |  |  |  |  |
At 1 October 2024 | 972,445 | 2,942,442 | 22,158 | 318,681 | 4,255,726
Charge for the year | 76,128 | 436,779 | 12,858 | 9,065 | 534,830
Disposals | – | ( 256,322) | – | – | ( 256,322)
| ------------ | ------------ | -------- | --------- | ------------
At 30 September 2025 | 1,048,573 | 3,122,899 | 35,016 | 327,746 | 4,534,234
| ------------ | ------------ | -------- | --------- | ------------
Carrying amount |  |  |  |  |
At 30 September 2025 | 2,757,795 | 1,457,969 | 29,275 | 16,510 | 4,261,549
| ------------ | ------------ | -------- | --------- | ------------
At 30 September 2024 | 2,833,923 | 1,806,847 | 42,133 | 13,202 | 4,696,105
| ------------ | ------------ | -------- | --------- | ------------

Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:

| Plant and machinery
| £
At 30 September 2025 | 1,033,473
| ------------
At 30 September 2024 | 1,248,713
| ------------

14. Investments

| Shares in group undertakings
| £
Cost |
At 1 October 2024 and 30 September 2025 | 10,000
| --------
Impairment |
At 1 October 2024 and 30 September 2025 | –
| --------

Carrying amount |
At 30 September 2025 | 10,000
| --------
At 30 September 2024 | 10,000
| --------

The company owns 10,000 ordinary £1 shares in Intelligent Drilling Tools Limited, which represents 24.5% of the share capital. The company started trading in 2020 and has been loss-making since, due to the development nature of the company. The registered office of Intelligent Drilling Tools is 2 Westbrook Court, Sharrow Vale Road, Sheffield, UNited Kingdom, S11 8YZ.
The most recently filed accounts for Intelligent Drilling Tools Limited are for the year ended 31
December 2025 (2024) reflecting:
Aggregate capital and reserves
Intelligent Drilling Tools Limited £824,586 (2024: £889,925)
Profit and (loss) for the period
Intelligent Drilling Tools Limited Loss of £248,180 (2024: £65,339)
15. Stocks

| 2025 | 2024
| £ | £
Raw materials and consumables | 988,251 | 1,182,210
Work in progress | 417,308 | 507,931
Finished goods and goods for resale | 1,247,589 | 1,340,076
| ------------ | ------------
| 2,653,148 | 3,030,217
| ------------ | ------------

Inventories are stated after provisions for impairment of £55,228 (2024: £36,130).
16. Debtors

| 2025 | 2024
| £ | £
Trade debtors | 1,327,636 | 2,249,576
Amounts owed by related parties | 39,926 | –
Prepayments and accrued income | 189,413 | 177,894
Other debtors | 226,755 | 197,211
| ------------ | ------------
| 1,783,730 | 2,624,681
| ------------ | ------------

17. Creditors: amounts falling due within one year

| 2025 | 2024
| £ | £
Bank loans and overdrafts | 202,781 | 265,041
Trade creditors | 698,056 | 1,025,836
Accruals and deferred income | 115,198 | 456,798
Corporation tax | 1,079 | 241,700
Social security and other taxes | 75,979 | 78,184
Obligations under finance leases and hire purchase contracts | 263,337 | 273,026
Director loan accounts | 34,808 | 39,317
Other creditors | 58,235 | 47,284
| ------------ | ------------
| 1,449,473 | 2,427,186
| ------------ | ------------

Included within creditors due in less than one year are bank loans of £202,781 (2024: £265,041) and hire purchase liabilities of £263,337 (2024: £273,026) which are secured by the company. The hire purchase agreements are secured by way of a charge over the assets of the company to which the agreements relate.
18. Creditors: amounts falling due after more than one year

| 2025 | 2024
| £ | £
Bank loans and overdrafts | 388,496 | 592,739
Obligations under finance leases and hire purchase contracts | 571,591 | 834,928
| --------- | ------------
| 960,087 | 1,427,667
| --------- | ------------

Included within bank loans and overdrafts is a total of £115,532 (2024: £179,598) which is payable in more than five years.
Included within creditors due in more than one year are bank loans of £388,496 (2024: £592,739) and hire purchase liabilities of £571,591 (2024: £834,928) which are secured by the company. The hire purchase agreements are secured by way of a charge over the assets of the company to which the agreements relate. The two existing bank loans are term arrangements with interest chargeable at 2.25% and 2.1% respectively above base rate, with capital repayments being made on a monthly basis. The loans are secured by a legal charge over the company premises at Cowley Way, Smithy Wood, Sheffield, S35 1QP.
19. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:

| 2025 | 2024
| £ | £
Not later than 1 year | 263,337 | 273,026
Later than 1 year and not later than 5 years | 571,591 | 834,928
| --------- | ------------
| 834,928 | 1,107,954
| --------- | ------------

20. Provisions

| Deferred tax (note 21)
| £
At 1 October 2024 | 446,711
Additions | ( 86,622)
| ---------
At 30 September 2025 | 360,089
| ---------

21. Deferred tax
The deferred tax included in the statement of financial position is as follows:

| 2025 | 2024
| £ | £
Included in provisions (note 20) | 360,089 | 446,711
| --------- | ---------

The deferred tax account consists of the tax effect of timing differences in respect of:

| 2025 | 2024
| £ | £
Accelerated capital allowances | 360,089 | 446,711
| --------- | ---------

22. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 211,655 (2024: £ 183,154 ).
23. Called up share capital
Issued, called up and fully paid

| 2025 | 2024
| No. | £ | No. | £
Ordinary shares of £ 1 each | 445,054 | 445,054 | 445,054 | 445,054
| --------- | --------- | --------- | ---------

24. Reserves
Capital redemption reserve - This reserve records the nominal value of shares repurchased by the company. Profit and loss account - This reserve records retained earnings and accumulated losses.
25. Directors' advances, credits and guarantees
Included in creditors at the balance sheet date is an amount owed to Mr M A Russell of £34,808 (2024: £39,317). The loan is interest free and carries no formal terms of repayment.
26. Related party transactions
The company was under the control of Mr M A Russell throughout the year. Mr M A Russell is the Chairman and majority shareholder. Included in creditors at the balance sheet date is an amount owed to Mr M A Russell of £34,808 (2024: £39,317), full details of which can be found in note 26 of these financial statements. Peter Burns, a director, continues to provide consultancy services to the company and, during the year, charge were levied on the company, in this regard, in the sum of £24,600 (2024: £18,150). At the year end date, Intelligent Drilling Tools Limited, the associate company, was indebted to Cutting & Wear Resistant Developments Limited , by way of loan, in the sum of £39,926 (2024: £Nil), in respect of which interest is not being charged and there are no formal repayment terms applicable.