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 UK-adopted International 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 those financial statements the directors are required to:

 

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select suitable accounting policies and then apply them consistently;

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make judgements and estimates that are reasonable and prudent;

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provide additional disclosures when compliance with specific requirements in UK-adopted International Accounting Standards is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

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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.

The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards.

 

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In our opinion, the financial statements:

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give a true and fair view of the state of the company’s affairs as at 31 December 2025 and of its profit/loss for the year then ended; and

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have been properly prepared in accordance with UK-adopted international accounting standards; and

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have been prepared in accordance with the requirements of the Companies Act 2006.

The other information comprises the information included in included in the Strategic Report and Director 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.

Cash and cash equivalents in the statement of financial position comprise cash at banks and on hand and short-term deposits with a maturity of three months or less.

 

For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, net of outstanding bank overdrafts.

The Company’s financial statements are presented in £ sterling, which is also the Company’s functional currency.

 

Transactions in foreign currencies are initially recorded by the Company in £ sterling at currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the £ sterling spot rate of exchange ruling at the reporting date.

 

All exchange differences are taken to the income statement.

 

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.

 

The majority of the company’s revenue is derived from selling goods with revenue recognised at a point in time when control of the goods has transferred to the customer. This is generally when the goods are delivered to the customer. There is limited judgement needed in identifying the point control passes: once physical delivery of the products to the agreed location has occurred, the company no longer has physical possession, usually will have a present right to payment and retains none of the significant risks and rewards of the goods in question.

Most of the company’s revenue is derived from fixed price contracts and therefore the amount of revenue to be earned from each contract is determined by reference to those fixed prices.

 

For most contracts, there is a fixed unit price for each product sold. Therefore, there is no judgement involved in allocating the contract price to each unit ordered in such contracts. Where a customer orders more than one product line, the Company is able to determine the split of the total contract price between each product line by reference to each product’s standalone selling prices (all product lines are capable of being, and are, sold separately).

 

 

 

Current customer discounts are recognised when granted and are deducted from revenues. Customer discounts for which the customer is required to meet certain targets, such as a minimum amount of annual purchases (either quantitative or monetary), an increase in purchases compared to previous periods, etc. are recognised in proportion to the purchases made by the customer during the reported period that qualify for the target, provided that it is expected that the targets will be achieved and the amount of the discount can be reasonably estimated. The estimate as to meeting the targets is based, among others, on past experience, on the Company's relationship with the customers and on the expected amount of purchases by the customers in the remaining period.

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

 

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

 

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Revenues, expenses and assets are recognised net of the amount of sales tax, except:

 

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Where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; or

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Receivables and payables, that are stated with the amount of sales tax included.

 

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Property, plant and equipment is stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any, less related investment grants and excluding day-to-day servicing expenses.

 

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:

Inventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition is accounted for as follows:

 

Finished goods:

 

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Cost is based on the cost of purchase on a first in, first out basis.

 

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

Leases are recognised as a right-of-use asset and the corresponding liability at the date at which the leased asset is available for use by the Company. Each lease payment is allocated between the liability and finance expense. The finance expense is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

 

Assets and liabilities arising from a lease are initially measured on a present value basis.

 

Lease liabilities include the net present value of the following lease payments:

 

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fixed payments (including in-substance fixed payments), less any lease incentives,

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variable lease payments that are based on an index or a rate,

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the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and

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payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement.

 

Impairment provisions for trade receivables are recognised based on an approach which considers expected credit losses.  During this process the probability of the non-payment of the trade receivables is assessed and an appropriate amount then provided for where required. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

 

A provision for slow moving or discontinuing stock is made in respect of specific product lines whose saleable value in the opinion of the Company’s management is doubtful. Impaired stock holdings are derecognised when they are assessed as un-saleable and action is taken to dispose of the items.

A provision for onerous contracts is recognised when the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received by the Company under it. The provision is measured at the lower of the present value of the anticipated cost of exiting from the contract and the present value of the net anticipated cost of fulfilling it.

Financial assets are divided into the following categories: fair value through profit or loss; or amortised cost. Financial assets are assigned to the different categories by management on initial recognition, depending on the purpose for which they were acquired.

 

All financial assets are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

 

 

 

 

 

 

Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Company becomes a party to the contractual provisions of the instrument.

 

Financial liabilities categorised as at fair value through profit or loss are re-measured at each reporting date at fair value, with changes in fair value being recognised in the income statement. All other financial liabilities are recorded at amortised cost using the effective interest method, with interest-related charges recognised as an expense in finance cost in the income statement. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are charged to the income statement on an accruals basis using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

 

No directors received shares in the year under any long term incentive scheme.

 

Overseas directors have received £Nil (2024 - £Nil) remuneration for qualifying services during the year.

 

The Company offsets tax assets and liabilities if, and only if, it has a legally enforceable right to set off current tax assets and current tax liabilities, and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority. Deferred tax assets and liabilities listed relate to income tax levied by the same tax authority of the Company.

 

The deferred tax asset arises wholly in the UK, and is recognised on the basis that the Company expects there to be future taxable profits from which the taxable losses and reversal of timing differences can be deducted. The Company has no unrecognised deferred taxation assets or liabilities at 31 December 2025.

As at 31 December 2025, property, plant and equipment of an initial value of £137,000 (2024 - £130,000) were fully depreciated but still in use.

 

As at 31 December 2025, property, plant and equipment of an initial value of £777,000 (2024- £749,000) and net book value of £572,000 (2024 - £601,000) are right of use assets.

As at 31 December 2025, trade receivables of an initial value of £2,146,000 (2024 - £877,000) were impaired and fully or partially provided for. See below for the movements in the provision for impairment of receivables.

 

Factors considered in determining that accounts receivable are impaired are discussed within note 2 and note 3.