REGISTERED NUMBER: 05442936 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 31 December 2025

for

AVL Powertrain UK Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

6

Report of the Independent Auditors

8

Statement of Comprehensive Income

11

Statement of Financial Position

12

Statement of Changes in Equity

13

Notes to the Financial Statements

14

DIRECTORS:

T C Stone

B K Longridge

REGISTERED OFFICE:

Langdale House

Sable Way

Southfields Business Park, Laindon

Basildon

Essex

SS15 6LN

REGISTERED NUMBER:

05442936 (England and Wales)

SENIOR STATUTORY AUDITOR:

Stuart Banks BSC FCA

AUDITORS:

Banks Sheridan (Statutory Auditor)

Datum House

Electra Way

Crewe

Cheshire

CW1 6ZF

BANKERS:

NatWest

Northwich Branch

The Bull Ring

Northwich

Cheshire

CW9 5BN

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

The principal activity of the company in the year under review was that of powertrain engineering consultancy.

There have been no significant changes in the company's activities during the year.

FAIR REVIEW OF BUSINESS

The company has a healthy order book and is in a strong financial position going into 2026. It continues to deliver for its existing customers, whilst also exploring, investing and extending into additional sectors. The company's Technical Centre in Ansty Park, which has been fully operational since March 2018, continues to provide a substantial contribution to the business in the UK. In 2025, customers fully utilised the entire testing capacity provided by the Technical Centre. The availability of these state-of-the-art powertrain test facilities and future driven workflows will provide the company's UK-based customers with reliable access to high-tech testing capabilities incorporating cutting edge testing methodologies and processes over the coming years.

Continued investment in Research and Development is seen as a fundamental principle of the company and the AVL Group as a whole. AVL Powertrain UK continues to participate in Government funded Research and Development projects, alongside internally funded work. This has allowed the company to retain its leading edge within the automotive engineering market in multiple domains including electrified and electric vehicles, fuel cells and hydrogen combustion engines, whilst continuing to upskill its engineers and expand the offering to customers beyond its traditional scope including aviation, defence, energy storage and marine.

The key financial performance indicators during the year are as follows:

31 December

31 December

2025

2024

Revenue

£48.17m

£51.30m

Gross Profit Margin

24.27%

24.69%

Gross Profit

£11.69m

£12.66m

EBITDA

£9.68m

£9.14m

Order Intake

£38.44m

£52.97m

Total Assets

£25.45m

£26.64m

Shareholders' Funds

£13.94m

£13.41m

Revenue has decreased by 6.11% to £48.17m (2024 £51.30m) as the company has seen slightly reduced project volumes with its larger customers.Thanks to the strong financials detailed above, AVL Powertrain UK Ltd has paid a £6.0m dividend to AVL Group in 2025.

Average staff head count has decreased from 249 in 2024 to 244 in 2025 resulting in a 2.8% decrease in staff costs.In line with the AVL Group, AVL Powertrain UK's mission is to provide leading technology which is sustainable, affordable, connected, and intelligent and also provide a superior service to its customers. The UK company serves not only UK based customers, but also has a strong heritage in supporting global projects and customers through the group.

AVL Powertrain UK aims to provide an inspiring working environment and provide opportunities to grow in all career paths. Both training and skill development for its engineers continues to play an important role and is firmly part of the company's strategic direction. Engineers are encouraged and supported to develop within their fields of expertise as well as acquire new knowledge outside of their core areas, including personal development. Consequently, the company continues to be at the forefront of the latest technical knowhow with a strong delivery mindset. A strong team culture is instilled in its employees based on AVLs 5 core values: 1) Pioneering Spirit, 2) Customer Orientation, 3) Problem Solving Competencies, 4) Responsibility and 5) Independence. Strong consistent investment in its employees and a strong team culture orientated towards its customers ensures the company continues to add value and consistently deliver high results for its customers

AVL Powertrain UK is a people company, and the success of the business is based on open communication, proactiveness, teamwork and expertise of the employees. The company is proud to have attracted people from 33 different nationalities to work in its diverse team and is committed to continuing to attract the best talent from both the UK and global talent pools. It fosters strong links with the wider community including several UK universities, government funded organisations (e.g. APC and ATI), and the Automotive Council and it has a strong CSR ethic, for example raising money for several charities through employee organised events. In 2025 the company signed the Armed Forces Covenant, to show continued support and commitment for the moral obligation between the nation, the government and the armed forces. In addition, AVL is proud to pay into the apprenticeship levy and over recent years has taken on board several apprentices across different areas of the business.

The trend towards the new mobility landscape and electrification continues, however we see some slowing down of the pace of change and some renewed interest in combining new and traditional technologies for applications such as range extenders and plug-in hybrids. The areas of autonomous driving and connectivity are continuing to develop and we are now seeing a resurgence in interest, particularly in the areas of driver assist and safety. The commercial vehicle sector remains strong for conventional powertrains as there is a recognition that improvements are required before electrification significantly penetrates the sector.

In 2025, as expected, customer demand for Electrification projects slightly reduced from the very high level experienced in 2024. This is in part due to rebalancing of customer internal resources, but also typical of the market landscape. Due to the aforementioned adjustment in head count AVL Powertrain UK Ltd has managed to maintain high levels of utilisation and consequently stabilised profit. The increased profit can be attributed to high utilisation of engineers in combination with reduced overhead costs as well as an increased RDEC claim and a warranty release.

AVL Powertrain UK has continued to expand its test and test methodology portfolio, significantly improving the methods by which test equipment is used to constantly improve the value and efficiency to its customers. Invertor and power electronics testing continues to play an important role and is a growth area as the company looks to diversify into other sectors.

With its existing key customers, the company is developing future technologies to deliver technical and environmental innovation to bring clean, safe and affordable mobility to consumers worldwide. AVL Powertrain UK has engaged and won projects with new customers entering the automotive sector and has expanded its customer base and reach into existing customers. Furthermore, AVL Powertrain UK Ltd has continued to expand its business activities in sectors beyond the automotive industry by targeting sectors such as aviation, defence, energy storage and marine. AVLs traditional strength in automotive coupled with global capability in alternative sectors is providing a highly competitive offering to new customers in these adjacent sectors.

Looking ahead the company expects a mid- to long-term reduction in the level of business executed in its traditional areas of expertise, particularly internal combustion engines. This reduction is expected to be compensated by growth in electrification topics and diversification into new sectors.

AVL Powertrain UK has two engineering centres in the UK, one in Basildon and one in Coventry and a Technical Centre in Coventry. These 3 locations ensure close proximity to our key customers in the UK. Our local operations use AVL Group's global processes, to ensure reliable and consistent project execution and to offer our customers access to a unique network of engineering expertise around the world.

PRINCIPAL RISKS AND UNCERTAINTIES

We endeavour to manage and monitor risk factors that could impact our business objectives and aspirations.

In 2025 the automotive industry continued to experience headwinds. Geo-political tensions such as US imposed tariffs, cyber attacks and UK removal of electric vehicle tax incentives have led to market uncertainties, and a reduced customer confidence to spend at levels seen in 2024. The continuing war in Ukraine and the conflict in the Middle East continue to perturb the market. This has had an impact on energy prices and customer willingness to spend creating further uncertainty in the market. UK political developments seem to indicate a way forward to reducing tensions between the UK and the EU, which could help to counterbalance other global tensions.

The global push to ban new internal combustion engine vehicles is undergoing significant revisions, with several major regions softening their 2035 targets due to industry pressure and lower-than-expected electric vehicle demand. While many countries initially targeted 100% zero-emission vehicle sales by 2035, the trend is shifting towards allowing hybrid and e-fuel vehicles to continue beyond that date. Europe for example has stepped back from a 100% reduction in tailpipe emissions to 90%, allowing for the continued sale of hybrid and efficient combustion engines using e-fuels after 2035. As the world's largest car market, China has not signed the global pledge to phase out ICE vehicles. However, it has internal government plans to move toward "clean energy" vehicles by 2035. Japan plans to ban the sale of pure gasoline-only cars in the 2030s but continues to support hybrid vehicles, allowing them to be sold indefinitely. USA is also reversing the push towards battery electric vehicles.

The UK government has faced pressure to align with the revised EU policies although at this stage no announcement has been made.

Another significant challenge for the automotive industry is end-customer uncertainty/hesitation to purchase new cars. particularly, fully electric cars. This hesitation is in part due to range anxiety, lack of charging infrastructure, initial cost and removal of tax incentives such as road tax exemption removal for EVs and the addition of an expensive car supplement for EVs over £40,000.

Concerns regarding the commitment of the US support to other NATO countries and worries regarding the reliability of the Trump administration, have resulted in European counties planning to significantly increase their defence budgets. As a consequence, this has created a whole new market with plenty of opportunities of diversifying away from the classic automotive sector.

The availability of sufficiently experienced and skilled engineers to enable the company to meet demand is a key risk. The company is committed to providing the right working environment to aid retention of existing staff and the recruitment of new team members. Retention of key customers is seen as an additional risk to the business. The company has an excellent relationship with all its customers. These relationships are carefully maintained via regular strategic alignments and meetings, customer specific technology showcases and regular project reviews to mitigate risks. The company mitigates risks by keeping up to date with technological advances and diversifying into other business sectors outside the automotive sector like for example defence, aviation, energy storage and marine.

The company also faces risks around currency exchange rates and rapid change in the development of new technologies.

SECTION 172(1) STATEMENT

Stakeholder Engagement

As the board at AVL Powertrain UK Limited, we have a legal responsibility under section 172 of the Companies Act 2006 to act in a way we consider, in good faith, would be likely to promote the company's success for the benefit of its members as a whole, and have regard to the long - term effect of our decisions on the company and its stakeholders. This statement addresses the ways in which as a Board we take this responsibility very seriously.

SECTION 172(1) STATEMENT CONTINUED

Engagement with employees

AVL Powertrain UK Limited is an equal opportunities employer and has appropriate policies in place to ensure applicants and employees are not discriminated against on any grounds.

Our employees are fundamental to the delivery of our strategy and objectives. We aim to be a responsible employer in our approach, to the health, safety and wellbeing of our employees.

As a company we only recruit the highest calibre of staff and continually invest in developing our staff to maintain excellence.

The business would not function without the engagement and commitment of its people and considerable effort is put into ensuring our team members are both protected and consulted as the company continues to expand and develop. The company is keen to retain quality team members. To strengthen team spirit the company invested in 2025 in various team buildings events. In 2026, we plan to scale down the team building activities in view of global headwinds. The introduction of an electric car salary sacrifice scheme is another investment made by the company to retain employees.

The company operates a framework for employee information and consultation and regular meetings are held between management and employees to allow a free flow of information and ideas.

The company has built an excellent team of employees on whom its success has depended. The directors would like to take this opportunity to thank all the team for their continued dedication and support.

ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS

The company prides and values its relationships with customers. Vendor relationships are paramount too and the company works close to forge long lasting relationships and sustainable partnerships to ensure the highest service standards to customers.

We have built and will maintain a reputation for transparency and fair dealing with customers and suppliers.

STATEMENT OF CORPORATE GOVERNANCE ARRANGEMENTS

AVL Powertrain UK Limited is an evolving organisation and one that has ethics, integrity and high standards of corporate governance as key priorities. The director understands its responsibility in managing the business for the long-term benefit of its stakeholders.

ON BEHALF OF THE BOARD:

T C Stone - Director

11 May 2026

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

DIVIDENDS

A dividend of £6,000,000 was voted in for the year ended 31 December 2025 (2024 : £7,000,000).

RESEARCH AND DEVELOPMENT

During the year the company has invested £1,250,000 (2024: £8,858,805) into Research and Development activities which are advancements in future technologies. This has enabled the company to continue as the centre of excellence for advanced driver-assistance system (ADAS) and electrification within the AVL global group.

FUTURE DEVELOPMENTS

The directors will continue with the strategic policies covered in the Strategic Report. Continued profitability is expected in 2026.

DIRECTOR

Dr M H Wellers held office from 1 January 2025 until after 31 December 2025 but prior to the date of this report.

T C Stone and B K Longridge were appointed as directors after 31 December 2025 but prior to the date of this report.

EXPOSURE TO CASHFLOW, LIQUIDITY, CREDIT RISK AND PRICE RISK

Liquidity and cashflow risk

The objective of the company in managing liquidity and cashflow risk is to ensure that it can meet its financial obligations as and when they fall due. The company maintains a strong financial position in its own right which allows it to meet its financial obligations through operating cashflows without reference to the group..

Credit risk

The company may offer credit terms to its customers which allow payments of its debt after performing the service. The company is at risk to the extent that a customer may be unable to pay the debt on the specified due date. This risk is mitigated by the strong on-going customer relationships and effective credit control procedures.

Price risk

Price risk arises because of the volatile nature of purchase prices, for goods, materials and services. This risk is mitigated by the fact that the company's main supplier is the ultimate holding company. This allows the effect of price risk to be managed on a group wide basis.

STREAMLINED ENERGY AND CARBON REPORTING

This report has been based upon the period 1 January 2025 to 31 December 2025 and covers the whole organisation.

2025 UK Government conversion factors for company reporting have been used.

Scope 1, 2 & 3 emissions to including our main energy sources as listed below.

Greenhouse gas emissions and energy use data for the period 1 January 2025 to 31 December 2025 - UK

Current reporting year 2025

Previous reporting year 2024

Energy consumption break down (kWh)

Gas

639,469

644,999

Electricity

6,704,843

5,675,358

Transport fuel

461,703

410,936

Scope 1 emissions in metric tonnes CO2e

Gas consumption

117.00

117.97

Owned & leased vehicle

3.77

4.20

Total scope 1

120.77

122.17

Scope 2 emissions in metric tonnes CO2e

Purchased electricity

1,186.76

1,175.08

Scope 3 emissions in metric tonnes CO2e

Business travel in employee-owned vehicles

110.99

94.59

Total gross emissions in metric tonnes CO2e

1,418.51

1,391.84

Intensity ratio

Tonnes CO2e per member of staff

5.82

5.61

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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;

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Banks Sheridan (Statutory Auditor), will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

T C Stone - Director

11 May 2026

Opinion

We have audited the financial statements of AVL Powertrain UK Limited (the 'company') for the year ended 31 December 2025 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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

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

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

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page seven, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations

We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. Based on our understanding of company, and its industry, we identified that the principal risks of non-compliance with laws and regulations were in the following areas taxation, pensions, employment, health and safety, anti-bribery corruption, fraud and money laundering, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements, such as the Companies Act 2006.

We evaluated the director's and management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to loss reserves, and significant one-off or unusual transactions.

Our audit procedures were designed to respond to those identified risks, including non-compliance with laws and regulations (irregularities) and fraud that are material to the financial statements. Our audit procedures included but were not limited to:

- Discussing with the director and management their policies and procedures regarding compliance with laws and regulations;

- Communicating identified laws and regulations throughout our engagement team and remaining alert to any indications of non-compliance throughout our audit; and

- Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.

Our audit procedures in relation to fraud included but were not limited to:

- Making enquiries of the director and management on whether they had knowledge of any actual, suspected or alleged fraud;

- Gaining an understanding of the internal controls established to mitigate risks related to fraud;

- Discussing amongst the engagement team the risks of fraud; and

- Addressing the risks of fraud through management override of controls by performing journal entry testing.

There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with the director and management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Stuart Banks BSC FCA (Senior Statutory Auditor)

for and on behalf of Banks Sheridan (Statutory Auditor)

Datum House

Electra Way

Crewe

Cheshire

CW1 6ZF

14 May 2026

TURNOVER

4

48,172,245

51,306,290

Cost of sales

(36,481,584

)

(38,636,772

)

GROSS PROFIT

11,690,661

12,669,518

Administrative expenses

(5,174,502

)

(6,113,970

)

6,516,159

6,555,548

Other operating income

5

2,080,688

1,506,618

OPERATING PROFIT

7

8,596,847

8,062,166

Interest receivable and similar income

227,959

290,116

8,824,806

8,352,282

Interest payable and similar expenses

8

-

(19,520

)

PROFIT BEFORE TAXATION

8,824,806

8,332,762

Tax on profit

9

(2,290,801

)

(2,146,044

)

PROFIT FOR THE FINANCIAL YEAR

6,534,005

6,186,718

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

6,534,005

6,186,718

FIXED ASSETS

Intangible assets

12

13,956

20,402

Tangible assets

13

8,666,009

9,303,873

Investments

14

20

20

8,679,985

9,324,295

CURRENT ASSETS

Debtors

15

16,125,636

12,682,325

Cash at bank and in hand

648,162

4,633,976

16,773,798

17,316,301

CREDITORS

Amounts falling due within one year

16

(9,277,426

)

(10,279,158

)

NET CURRENT ASSETS

7,496,372

7,037,143

TOTAL ASSETS LESS CURRENT LIABILITIES

16,176,357

16,361,438

CREDITORS

Amounts falling due after more than one year

17

(222,990

)

(267,963

)

PROVISIONS FOR LIABILITIES

20

(2,007,736

)

(2,681,849

)

NET ASSETS

13,945,631

13,411,626

CAPITAL AND RESERVES

Called up share capital

21

303,764

303,764

Retained earnings

22

13,641,867

13,107,862

SHAREHOLDERS' FUNDS

25

13,945,631

13,411,626

The financial statements were approved by the Board of Directors and authorised for issue on 11 May 2026 and were signed on its behalf by:

T C Stone - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2024

303,764

13,921,144

14,224,908

Changes in equity

Dividends

-

(7,000,000

)

(7,000,000

)

Total comprehensive income

-

6,186,718

6,186,718

Balance at 31 December 2024

303,764

13,107,862

13,411,626

Changes in equity

Dividends

-

(6,000,000

)

(6,000,000

)

Total comprehensive income

-

6,534,005

6,534,005

Balance at 31 December 2025

303,764

13,641,867

13,945,631

1.	GENERAL INFORMATION

AVL Powertrain UK Limited ('The Company') is part of a group headed up by an Austrian parent company. The company's principal activity is powertrain engineering consultancy.

STATUTORY INFORMATION

The company is a private company limited by shares and incorporated in England and Wales. The address of the registered office and principal place of business is Langdale House, Sable Way, Southfields Business Park, Laindon, Basildon, Essex, SS15 6LN.

2.	STATEMENT OF COMPLIANCE

The financial statements of AVL Powertrain UK Limited have been prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, "The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland"("FRS 102") and the Companies Act 2006.

3.	ACCOUNTING POLICIES

Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

Basis of preparation

The financial statements are prepared on the going concern basis under the historical cost convention and comply with United Kingdom Accounting Standards and Companies Act 2006.

Going concern

The directors are not aware of any uncertainties regarding the company's ability to continue as a going concern and after reviewing the company's orderbook and forecasts, the directors are satisfied that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Financial Reporting Standard 102 - reduced disclosure exemptions

Cash Flow Exemption

The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

- the requirements of Section 7 Statement of Cash Flows.

Significant judgements and estimates

The preparation of these financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.

Judgements and estimates are continually evaluated and are based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next year are discussed below:

(i) Warranty provision

A warranty provision is included to cover any defective work. This provision requires managements best estimate on a project by project basis of the probability of defects factoring in the technology being used, and the labour costs that will be incurred based on the contractual requirements.

(ii) Costs to completion on projects

Expected future costs to completion are estimated on a project by project basis based on the current status of the project and the latest available project appraisals.

Dilapidation provision

A provision is made to cover the expected costs of making good property dilapidation where such work is required by the terms of the lease agreement. The provision requires management's best estimate of the costs that will be incurred based on legislative and contractual requirements.

Revenue recognition

Revenue is recognised to the extent that the company obtains the right to consideration in exchange for its performance. Revenue comprises the fair value of consideration received and receivable exclusive of value added tax and after discounts and rebates.

Revenue from the provision of project services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred to date to the total estimated contract costs. Revenue is only recognised to the extent of recoverable expenses when the outcome of a contract cannot be estimated reliably. When it is probable that project costs will exceed the total project revenue the expected loss is recognised as an expense immediately with a corresponding provision.

Amounts recoverable on projects are included within debtors and represent revenue recognised in excess of amounts invoiced.

Payments on account included in creditors represent amounts invoiced on projects in excess of revenue recognised.

Tangible fixed assets

Tangible fixed assets are stated at historical cost less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended.

Depreciation is provided at the following annual rates so as to write off their cost less residual amounts over their estimated useful economic lives. Assets not carried at fair value are also reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

Land

-

nil

Freehold property

-

at varying rates on cost, main rates being 10% and 25%

Plant and machinery

-

at varying rates on cost between 7% and 50%

Office and computer equipment

-

at varying rates on cost between 7% and 40%

Motor vehicles

-

at varying rates on cost between 12.5% and 33.3%

The assets residual values and useful lives are reviewed and adjusted if appropriate at the end of each reporting period.

Assets in the course of construction

Assets in the course of construction are stated at cost. These assets are not depreciated until they are available for use.

Intangible assets

Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated using the straight line method, to allocate the depreciable amount of the assets to their residual values over their estimated useful lives as follows:

Computer software

-

33.33% on cost

Amortisation is charged to administrative expenses in the Income Statement.

Government grants

Government grants are recognised in the Income Statement so as to match them with the expenditure which they are intended to contribute towards.

Revenue based governments grants, recognised in the year, following this policy are shown within other operating income.

Capital based government grants are credited to other operating income over the estimated useful lives of the assets to which they relate. The deferred elements of the grants received are separately disclosed in creditors.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the

year end.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

Foreign currency

(i) Functional and presentation currency

The financial statements are prepared in sterling which is the financial currency of the company.

(ii) Transactions and balances

Foreign currency transactions are initially recorded by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of transaction.

(iii) Translation

Monetary assets and liabilities denominated in foreign currency at the balance sheet are translated using the closing rate. Foreign currency gains and losses resulting from the settlement of transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

Operating leases

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases.

Payments paid under operating leases are charged to the Income Statement on a straight line basis over the period of the lease.

Employee benefits

The company provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements and defined contribution pension plans.

(i) Short term benefits

The company recognises a provision for annual leave accrued by employees as a result of services rendered in the current period, and which employees are entitled to carry forward and use within the next 12 months. The provision is measured at the salary cost payable for the period of absence.

(ii) Defined contribution pension plans

The company operates a defined contribution pension plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the statement of financial position. The assets of the plan are held separately from the company in independently administered funds.

(iii) Annual bonus

The company operates an annual bonus plan for certain employees. An expense is recognised in the Income Statement when the company has a legal or constructive obligation to make payments under the plan as a result of past events and a reliable estimate of the obligation can be made.

Trade debtors and other receivables due within one year

Trade debtors and other receivables including amounts owing from group companies with no stated interest rate are recorded at transaction price less any impairment.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, demand and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.

Trade creditors and other payables

Trade creditors and other payables are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Impairment of assets

Assets not measured at fair value are reviewed for any indications that the asset maybe impaired at each balance sheet date. If such indications exist the recoverable amounts of the asset or the assets cash generating unit is estimated and compared to the carrying amount. Where the carrying amount exceeds its recoverable amount, an impairment loss is recognised in the profit and loss unless the asset is carried at a revalued amount where the impairment loss is a revaluation decrease.

Any losses arising from impairment are recognised in the Income Statement in other administrative expenses.

Financial instruments

The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.

(i) Financial assets

Basic financial assets, including trade and other receivables, cash and bank balances are initially recognised at transaction price and are subsequently carried at amortised cost, using the effective interest method, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

(ii) Financial liabilities

Basic financial liabilities, including trade and other payables and loans from fellow group companies, are initially recognised at transaction price and subsequently carried at amortised cost, using the effective interest rate method, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

Provisions for liabilities

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

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

4.

TURNOVER

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

An analysis of turnover by class of business is given below:

2025

2024

£

£

Passenger car

33,764,266

37,102,402

Commercial vehicle

915,789

723,343

Large engine

3,622,069

4,222,776

AST

1,237,042

1,039,998

Other

8,633,079

8,217,771

48,172,245

51,306,290

An analysis of turnover by geographical market is given below:

2025

2024

£

£

United Kingdom

47,680,691

50,490,603

Europe

10,790

328,054

United States of America

401,168

487,633

Asia

79,596

-

48,172,245

51,306,290