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

Economic conditions in the UK and Ireland remained mixed during 2025. In the UK, the economy continued to grow, albeit at a modest pace, with the Office for National Statistics reporting that real GDP increased by 1.4% in 2025, compared with 1.0% in 2024. In Ireland, headline GDP growth was again affected by multinational activity, with the European Commission reporting strong 2025 GDP growth driven primarily by pharmaceutical exports, while modified domestic demand, recognised as a more reliable indicator of underlying domestic activity, grew by 4.9% in 2025, compared with 1.8% in 2024. More significant for the construction industry in both countries were the positive trends for both interest rates and inflation. Although inflation remained above the Bank of England’s 2% target throughout the year, with CPI averaging 3.4% in 2025 (2024: 2.6%), the easing of interest rates continued with the Bank of England reducing the base interest rate four times in 2025 from 4.75% at the end of 2024 to 3.75% by the end of 2025. Similarly, the European Central Bank cut its base rate from 3.0% at the end of 2024 to 2.0% by the end of 2025, in response to a relatively stable inflation outlook. The increased stability contributed to a slight improvement in consumer and investor confidence in real estate investment, although affordability, funding conditions, and regulatory delays continued to affect the timing of project starts. In the UK, the Labour Government continued to emphasise the importance of accelerating housebuilding and reforming the planning system, including its commitment to deliver 1.5 million new homes over the Parliament. In Ireland, Government policy continued to prioritise housing and infrastructure investment, with international bodies also highlighting the need for sustained capital expenditure to address housing and infrastructure constraints. Longer term the fundamental drivers for Sapphire in the UK and Ireland remain positive. The continuing trend of urbanisation is expected to drive demand for high-rise residential properties across major cities whilst increasing emphasis on sustainability, efficiency, and modern construction methods, including offsite manufactured modular construction, continue to favour Sapphire’s light-weight aluminium modular balcony systems.

Whilst the above positive factors continued to support the medium-term outlook, 2025 was still characterised by a high degree of uncertainty caused by multiple disruptive factors, including: ongoing implementation challenges and delays under the Building Safety Act and Gateway 2 process in the UK; persistent affordability and funding constraints in residential development; continued geopolitical turmoil in the Middle East and Eastern Europe; uncertainty around global trade policy; and ongoing pressure on supply chains and labour availability across the construction sector. These factors contributed to the 17% reduction in Turnover in 2025 to £43.9m compared with £53.1m in 2024. In addition, the cost pressures noted above resulted in an average gross profit margin of 35.5% for 2025 (2024: 41.6%) and profit before tax margin of 10.0% (2024: 23.8%).

The Directors are pleased to note that the first half of 2026 has seen positive developments in respect of Gateway 2 project approvals in the UK as well as strong activity in Ireland. 13 of Sapphire’s projects have received BSR Gateway 2 approval in 2026 (compared with just 8 projects in the whole of 2025) whilst £15m of new Irish orders were secured in the first half of 2026 compared with £10m for the same period of 2025. As a result, the outlook for 2026 has improved and the anticipated turnover for the year ending 31 December 2026 is expected to be in the region of £60 million.

Sapphire's innovative "Glide-on" balcony system continues to be a positive factor in reducing risks of 'working at height' and 'working under slung loads' thereby reducing the chances of on-site accidents and incidents. The “Glide-on” patented balcony system has been enhanced by further research, development and innovation with patents for a “Hook on” balcony and a “remote locking device” which all add to the solutions available to customers to ensure efficient and safe installation. There are a further 10 patents pending including some products specifically developed for the North America market. The launch of the Next Generation Balcony in 2023 was a huge step forward for the construction industry. Using an ultra-low carbon framework, and incorporating innovative developments across the board, has reduced the carbon dioxide (CO2) in our Next Generation balconies by 19% across stages A1 – A5, making this our most sustainable suite of products to date. The lighter weight of the Next Generation balcony has further environmental benefits, including: enabling optimised transportation; contributing to more energy efficient buildings; and helping to reduce the embodied carbon footprint of our customers’ projects and has rapidly become established as the balcony of choice for our customers in the UK and Ireland. The CarbonSmart balcony system which goes beyond Next Generation in carbon reduction and is poised for roll out in the months and years ahead.

During 2025, Sapphire continued to maintain its presence in the Canadian market through its wholly owned subsidiary, Sapphire Balconies (Canada) Incorporated. The wider Canadian housing and construction market became more challenging during 2025, with weaker demand, trade uncertainty, slower population growth, and reduced new construction activity, particularly in Toronto and Vancouver. Public market commentary from Canada Mortgage and Housing Corporation also highlighted a significant slowdown in condominium starts in these markets, with project delays, cancellations and weaker pre-construction sales affecting the development pipeline. In response to these market conditions, Sapphire remains focused on the successful delivery of projects won in 2024 and 2025 and maintaining a local presence to build customer relationships whilst controlling the cost base. Sapphire remains committed to the Canadian market and continues to see medium-term opportunity for its differentiated balcony systems, particularly where customers value safer installation, programme certainty, sustainability and the advantages of Sapphire’s globalised supply chain. The Directors consider that the current approach is a balanced and prudent response to market conditions, preserving Sapphire’s position in Canada and enabling the business to respond selectively to new opportunities and to scale up again when market conditions improve.

At Statutory Accounts sign-off date, the Company has a confirmed order book more than £160m with additional orders being negotiated.

The directors continually review all aspects of risk in the business and the market. This includes consideration of economic and regulatory factors in our key markets as well as a consideration of wider macro-economic factors impacting our supply chain and the longer-term outlook for the residential construction sector.

The Building Safety Regulations (“BSR”) continued to have a significant impact on the UK high-rise residential market during 2025. These regulations, enacted in response to the Grenfell Tower tragedy, impose stringent safety requirements on high-rise buildings, affecting both existing structures and new developments. The approval process required under BSR is extended and requires significantly more early engagement between developers, main contractors and sub-contractors. As a result, committed orders, on projects subject to BSR, are being placed earlier than in the past and there remains considerable uncertainty around both the outcome of the approval process and the start dates for projects. Although there have been some positive developments in respect of the timescales for the review and approval of Gateway 2 applications since mid-2025, the average time from application submission to approval remains at 40 weeks for the 15 Sapphire projects that have received approval. There is evidence of an industry-learning curve effect with Sapphire projects that submitted applications since the end of Q3 2026 tending to receive approval within 21 – 27 weeks. At the accounts sign off date, Sapphire has 15 projects in the order book, with a contract value of £35m, which have submitted Gateway 2 applications which are under review, A further 19 projects that are subject to the BSR regulations have been secured but are yet to submit Gateway 2 applications (total value of £43m). The 15 BSR projects approved to date have a total contract value of £30m. The implementation challenges and delays caused by the BSR Gateway 2 are ongoing with outcomes still unpredictable and timings uncertain. However, the approvals received to date and evidence of some improvement in approval timelines are contributing to greater confidence around the timing of revenue in 2026. Sapphire continues to engage with customers to get regular updates on progress on Gateway 2 applications. The Directors remain confident that these projects will be approved, and plans are in place to ensure resources are available to enable rapid mobilisation and efficient execution when approvals are received.

A 'Risk Matrix' is maintained and monitored by the Board and covers the material risks which may affect the Company. The principal risks monitored by the Board include the timing of project starts and revenue recognition, particularly where projects are subject to Building Safety Regulator approvals; customer and project concentration risk; credit exposure to main contractors and developers; supply chain disruption and availability of key materials; foreign exchange exposure on imported components and materials; volatility in aluminium, freight, energy and labour costs; product design, quality and compliance risk; health and safety risk; cyber and IT systems risk; and the impact of regulatory change across the UK, Ireland and Canada. These risks are managed through regular Board and management review, customer credit assessment, selective use of credit insurance, staged invoicing, supplier diversification, cost monitoring, contractual review, investment in product development and quality systems, and continued engagement with customers, suppliers and advisers.

Liquidity Risk

The Company has stringent controls on cash and has no borrowing commitments external to the group. As a member of the ATW Holdings Ltd group Sapphire has access to short term funding should an unexpected need arise.

Credit Risk

The Company undertakes credit reviews on all customers during the sales negotiations phase. A further review is conducted prior to order, sign off. Credit insurance is taken out on selected customers to protect Sapphire from both unpaid applications and invoices and for materials and production not yet invoiced.

Overdue debts are monitored closely with stringent 14-day and 30-day overdue targets set. Escalation processes are in place both internally and with our customers to ensure debts are paid when due or as close to due date as possible.

The Sapphire business model of invoicing customers at key stages of the build programme significantly reduces the credit risk the Company is exposed to. Sapphire provides vesting documents which protect customers in the highly unlikely event of insolvency and would enable customers to collect goods which have been fully paid from identified and notified sites.

Section 172 and stakeholder considerations

In making decisions during the year, the Directors have had regard to the likely long-term consequences of those decisions, the interests of employees, the need to foster business relationships with customers, suppliers and other stakeholders, the impact of the Company’s operations on the community and the environment, the desirability of maintaining a reputation for high standards of business conduct and the need to act fairly between members. Key decisions during the year included the continued investment in safer and lower-carbon balcony systems, the prudent management of the Canadian business in response to market conditions, the maintenance of strong customer engagement on projects affected by Building Safety Regulator delays, and continued focus on supply chain resilience, employee capability and customer delivery. The Directors consider that these actions support the long-term success of the Company whilst balancing the interests of the Company’s principal stakeholders.

In preparing the financial statements, the directors are required to assess the Company's ability to continue to trade as a going concern for the foreseeable future.

Sapphire imports materials from overseas, which gives rise to supply-chain risks from global events which could potentially impact its assembly and fabrication partners in the UK. The directors have taken mitigating steps and have put multiple sources of key materials in place to minimise disturbance to supplies from overseas sources.

The outlook for 2026, which reflects the known risks and uncertainties, shows expected revenue of approximately £60m, with potential upside should the emerging improvements in the BSR approval timelines be sustained. The Company continues to trade profitably in all its core markets and remains well positioned for future growth..

The Directors have set and continuously monitor key performance indicators throughout the business. These indicators are a mix of 'lead' and 'lag' measures and are not solely financial. The principal financial KPIs monitored by the Board include turnover, gross profit margin, profit before tax margin, cash generation, debtor days, overdue debt, secured order book and forecast revenue conversion. In support of the Directors’ duties under section 172, the Board also monitors stakeholder-related KPIs including employee retention, staff engagement, training and capability development, health and safety performance, customer satisfaction, project delivery performance, quality performance, supplier performance, supply chain resilience, progress against product innovation and sustainability objectives, embodied carbon reduction, complaint resolution and compliance matters. These measures help the Directors assess the impact of decisions on employees, customers, suppliers, the environment, the Company’s reputation and the long-term success of the business. A strong Management Team reviews these measures at least monthly and takes appropriate actions to meet and exceed expectations.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2025.

The principal activity of the company continued to be that of the design and supply of balconies.

The directors have presented a strategic report with a fair review of the business.

The results were in line with directors expectations and targets set for the financial year in respect of turnover and margins were above target and further mitigating actions have been taken to improve future margin performance.

Turnover for the FY2025 decreased by 17.4% to £43,866k from £53,104k in FY2024.

Gross profit for the FY2025 decreased by 29.4% to £15,571k compared to £22,069k in FY2024.

Profit before tax for the FY2025 decreased by 65.7% to £4,343k compared to £12,658k in FY2024.

The total distribution of dividends for the year ended 31 December 2025 will be £3,500,000 (2024:£10,000,000).

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

The company has made qualifying third-party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

The directors do not anticipate any future developments or change to the principal activities of the Company.

The auditors, Henton & Co LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK 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.

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

We have audited the financial statements of Sapphire Balconies Limited (the 'company') for the year ended 31 December 2025 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

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

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

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

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

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

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

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

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

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

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then 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, our procedures included the following: enquiring of management concerning the company's policies with regards identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; enquiring of management concerning the company's policies detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; enquiring of management concerning the company's policies in relation to the internal controls established to mitigate risks related to fraud or non- compliance with laws and regulations; discussing among the engagement team where fraud might occur in the financial statements and any potential indicators of fraud; and obtaining an understanding of the legal and regulatory framework that the company operates in and focusing on those laws and regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations of the company. The key laws and regulations we considered in this context included the UK Companies Act 2006, Financial Reporting Standard 102 and applicable tax legislation.

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance concerning compliance with such laws and regulations and any actual or potential litigation or claims; inspection of minutes and relevant legal correspondence; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

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

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

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. The nature of estimation means that actual outcomes could differ from those estimates. The following judgements have had a significant effect on amounts recognised in the financial statements:

a) The directors have made key assumptions regarding the stage of completion, future costs to complete and

recoverability of the costs of some contracts.

b) The directors make estimates of the recoverable value of trade and other debtors. When assessing the impairment of trade and other debtors, the factors considered include the current credit rating of the debtor, the ageing profile of debtors and historical experience.

c) The annual depreciation charge for all assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually.

Sapphire Balconies Limited is a private company limited by shares incorporated in England and Wales. The registered office is 11 Arkwright Road, Reading, Berkshire, England, RG2 0LU.

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

Act 2006.

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

The financial statements have been prepared under the historical cost convention.

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

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and

disclosures;

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

The company has taken advantage of the exemption under section 400 of the Companies act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Therefore the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Revenue is measured at the fair value of the consideration received or receivable in the year, net of discounts and value added tax. Revenue is recognised when the appropriate elements, representing contractual milestones of each construction contract is completed, when the outcome of the construction contract can be reliably measured. In addition, the company only recognises revenue when there is a reliable estimate of future cost, the stage of completion of the contract and the collectability of future applications for payment.

All revenue recognised in the year relates to revenue from construction contracts.

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

The Company holds patents in respect of its glide-on balcony systems. These patents have not been capitalised.

Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter. The assets' residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively:

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

Investments in subsidiaries are measured at cost less accumulated impairment.

Work in progress is valued at direct cost less amounts transferred to the profit and loss account in respect of work carried out, less foreseeable losses and payments on account. Direct cost is calculated as the cost of raw materials, subcontractors, direct labour and other building costs but excludes indirect overheads and interest.

Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade debtors, trade creditors and other debtors and creditors, loans from banks and other third parties and loans to related parties.

Debt instruments like loans and other accounts receivable and payable are initially measured at present value of the future payments and subsequently at amortised cost using the effective interest method; Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an outright short-term loan not at market rate, the financial asset or liability is measured, initially and subsequently, at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and the best estimate, which is an approximation, of the amount that the company would receive for the asset if it were to be sold at the reporting date.

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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

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

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

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

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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

Taxation for the year comprises current and deferred tax. Tax is recognised in the profit and loss and 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 balance sheet date.

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

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.

The company operates a defined contribution plan which is available to all 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 as accruals in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.

Assets obtained under hire purchase contracts or finance leases are capitalised in the Balance Sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated lives or the lease term, whichever is shorter.

The interest element of these obligations is charged so as to produce a reasonably constant periodic rate of charge on the outstanding capital balance. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit and loss on a straight line basis over the period of the lease.

Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Debtors

Short term debtors are measured at transaction price, less any impairment. Amounts receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Dividends

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

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 5 (2024 - 5).

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

Details of the company's subsidiaries at 31 December 2025 are as follows:

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

The shares have the following rights, preferences and restrictions:

The Ordinary shares have attached to them full voting, dividend and capital distribution (including on winding up) rights; they do not confer any rights of redemption.

The Ordinary A- X shares have attached to them no voting, full dividend and capital distribution (including on winding up) rights according to the article 15.7; they do not confer any rights of redemption.

The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions paid by the Company to the fund and amounted to £249,346 (2024: £239,002). At the year end there was an amount payable of £17,627 (2024: £21,831) and is included within other creditors.

ATW Holdings Limited, registered office 11 Arkwright Road, Reading, Berkshire RG2 0LU, is the ultimate parent company. The parent undertaking of the smallest and largest group in which the results of the Company are consolidated is ATW Holdings Limited. The Consolidated financial statements for ATW Holdings Limited may be obtained from Companies House.

In the opinion of the Directors there is no ultimate controlling party.

During the year, the group was charged rental expenses of £126,000 (2024: £126,000) by the Directors' pension fund, Sapphire Southern Pension Fund.