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

The year ended 31 March 2025 represents a further period of operational stabilisation and financial progress for the Company. During the year management continued to focus on improving manufacturing efficiency, strengthening supply chain resilience, reducing operating costs, enhancing cash generation and positioning the business for sustainable long term growth. The Company owns and operates a portfolio of luxury furniture and cabinetry brands, including Smallbone of Devizes, Mark Wilkinson Furniture, Brookmans and McCarron & Co. The brands serve private clients, developers, architects and interior designers throughout the United Kingdom, North America and selected international markets. The operational restructuring and investment programme undertaken in previous years has substantially completed. The Company continues to benefit from investments in manufacturing capability, systems, operational processes and supply chain improvements, resulting in enhanced efficiency, reduced fixed costs and improved production flexibility. In the current financial year this is being complemented by investment in information technology and artificial intelligence, together with an expansion of the Company's social media presence, which the directors expect to further strengthen the platform for sustainable long-term growth.

Financial Performance

Turnover for the year was approximately £21.4 million (2024: £28.8 million). The reduction in revenue primarily reflects delayed installations within the international development sector, where projects are often large, bespoke and subject to extended delivery schedules, and where development cycles during the year did not allow for installation activity. Despite this, the Company remained profitable, reflecting the success of the efforts undertaken in recent years to lower the Company's breakeven point through reductions in fixed costs and improvements in operational efficiency, together with a continued focus on margin quality, cost control and project execution. The Company is also in the process of finalising plans for five large developments with several developers which, taken together, are expected to generate revenues approximately ten times larger than the developer contract that delivered strong results in the year ended 31 March 2024, and which the directors expect to provide a substantial contribution to future revenue and profitability. The balance sheet position continued to improve during the year with net liabilities reducing compared with the prior year. The directors believe that the combination of profitability and reduction of external indebtedness represents a significant milestone in the Company's ongoing recovery and development.

Balance Sheet Strengthening and Debt Reduction

A significant achievement during the year was the continued strengthening of the Company's balance sheet. During the year the Company repaid external borrowing and asset-backed finance facilities, including the repayment of the Company's CBILS borrowing, Close Brothers equipment finance facilities and other third-party lending arrangements. Since 2019 the Company has undertaken a substantial programme of balance sheet strengthening and debt reduction. Over this period approximately £11.6 million of third-party borrowings, equipment finance facilities, hire purchase obligations and other external debt have been repaid. Including associated finance costs and interest, the total value of these repayments exceeds £13 million. During the year ended 31 March 2025 the Company completed repayment of its remaining CBILS borrowing and equipment finance facilities. As a result, the Company entered the new financial year with no material external bank debt and a significantly simplified capital structure.

The Company continues to benefit from the long-term support of its principal shareholder, who has provided substantial financial backing since the acquisition and restoration of the Company's heritage brands. Since the year end, shareholder funding arrangements have been further formalised through a legally binding undertaking under which amounts due to Greyson Holdings LLC and entities owned by it will not be called for repayment for a minimum period of 24 months from the date of approval of the financial statements. In addition, the Company has the benefit of committed funding facilities totalling £14.7 million, comprising facilities of £2.4 million each provided by Greyson Holdings LLC, a US limited liability company, in September 2022, June 2023 and October 2024, a further £5 million facility provided by Greyson Holdings LLC in April 2026, and a £2.5 million facility provided by Extell Development Company in September 2022, in each case as evidenced by charges registered at Companies House. The Company had previously drawn £2,794,155.27 in aggregate against these facility agreements (all drawings having been made against the Greyson Holdings LLC facilities only) and the lenders have agreed that the Company may continue to draw on the prior agreements, such that £11,905,844.73 remains undrawn and accessible to the Company for its needs. Combined with the elimination of material external bank debt and a healthy forward order book, the directors believe that the Company is appropriately funded to support its current operations and future growth plans. The Company's capital structure now reflects a long term shareholder-supported funding model rather than reliance upon external lending institutions, providing greater flexibility to pursue strategic opportunities whilst maintaining financial stability.

Extell Development Company, one of the largest developers in Manhattan, Park City, Utah and Jerusalem, Israel, has been a client of the Company for over 21 years and, in addition to providing the facility referred to above, has a development pipeline in excess of $13 billion (approximately £10 billion). The Company is in the process of finalising contracts with Extell Development Company which are expected to generate revenues in excess of £100 million, underlining the strength and longevity of the relationship.

Operational Development

The directors continue to invest selectively in manufacturing capability, systems and operational processes where such investment is expected to improve productivity, efficiency and customer service. Recent operational initiatives have focused on streamlining workflows, improving project delivery and enhancing manufacturing performance. The operational restructuring undertaken in recent years has reduced the Company's fixed cost base and improved manufacturing efficiency, providing a stronger platform for future growth and profitability. The directors have approved additional capital expenditure over the next 2 years in the amount of £5,000,000.

Investment in Information Technology and Artificial Intelligence

In addition to investment in manufacturing capability, the Company has, in the current financial year, begun to invest in information technology and artificial intelligence as part of a significant and ongoing programme of digital expansion. This investment has been made since 31 March 2025 and is therefore not reflected in these financial statements. The artificial intelligence programme is based on open-source large language models and is not expected to require significant investment in additional IT equipment. A comprehensive enterprise resource planning (ERP) system is currently being implemented across the business, accompanied by improvements to each of the Company's core processes, from design and sales through to manufacturing, project delivery and aftercare. This investment programme also includes a comprehensive revamp and expansion of the Company's social media activities and a focus on high-end collaboration tools across the business. The Company is also in the process of enhancing the bespoke design and craftsmanship expertise developed over the past 50 years by digitising this knowledge and incorporating it into an AI-enabled database, which together support the Company in serving its clients. This investment is expected to support the further downsizing and more efficient use of both property and personnel, contributing to further reductions in the Company's fixed cost base. The directors believe that this investment positions the Company with the capacity and scalability to more than double its annual sales and to then sustain growth rates of approximately 20 per cent compound annual growth over the medium term. The directors consider these investments to be an important element of the Company's strategy to improve productivity through investment in capacity, strengthen client engagement and support sustainable long-term growth, and intend to continue investing in these areas where appropriate.

Showroom and Litigation Matters

The Company has previously reported issues relating to its former Knightsbridge showroom premises. Following a series of water ingress events and subsequent disputes concerning responsibility for remediation works and associated losses, the Company ceased occupation of the premises. The Company has since opened a new showroom at 100 Brompton Road, London, and during the year invested £809,346 in its fit-out (note 12). The Company has commenced legal proceedings against a number of parties in relation to losses arising from these matters, including a counterclaim in excess of £100 million filed in the High Court against the Landlord in response to the Landlord's claim against the Company of approximately £2 million (see note 28). In addition, two claims have been made against Aviva Insurance, as insurer of Unbloc Ltd., whose actions on two occasions the Company alleges caused damage to the premises, with the insurance claims being for substantial amounts in aggregate in excess of £10 million; Unbloc Ltd. has insurance coverage of £20 million. The directors believe that the Company has strong grounds to pursue recovery of certain costs and losses incurred, and consider that successful prosecution of these claims would provide further support to the Company's financial position and ongoing recovery. As legal proceedings remain ongoing, their ultimate outcome cannot presently be determined and no related asset has been recognised within the financial statements. The directors continue to monitor developments closely and will pursue recovery actions where considered appropriate and in the best interests of the Company.

Principal Risks and Uncertainties

The principal risks and uncertainties facing the Company include general economic conditions affecting demand for premium residential projects, inflationary pressures and tariff developments affecting input costs, timing and execution of major development and private client projects, supply chain disruption and labour market conditions, and the outcome of ongoing litigation and associated insurance claims. The directors regularly review these risks and seek to mitigate their potential impact through active management and ongoing monitoring.

Outlook

The directors remain encouraged by the Company's performance and strategic position. The Company's brands continue to enjoy strong recognition within the premium and ultra-high-net-worth residential markets, particularly within the United Kingdom and North America. The Company enters the new financial year with a substantial forward order book, no material external bank debt and committed long-term shareholder support. Whilst wider economic conditions remain uncertain, the directors believe that the Company is well positioned, supported by its current investment in information technology, artificial intelligence and digital client engagement, to continue improving profitability, cash generation and operational performance over the medium term.

Valuation of the Company

The directors have a strategic plan to realise the benefit of the significant investment made in the Company's brands over the past fifty years, and in particular over the past five years. Planned capital expenditure on a new, first-of-its-kind manufacturing facility is expected to increase capacity so that the Company can achieve revenues in excess of £75 million per annum. The Company has no borrowings from third parties, its borrowings being long-term funding provided by related parties, and the directors' objective is for the Company to become fully debt free and cash rich over the next three to five years. The directors believe that a future debt-free, cash-rich, multi-brand luxury business with state of-the-art manufacturing facilities would attract valuation multiples in line with those achieved by other luxury brands, in the order of 10 to 12 times EBITDA.

On 23 June 2026 Howden Joinery Group Plc completed its acquisition of the parent company of Ultima Furniture Systems Limited, trading as DIY Kitchens, a vertically integrated British kitchen manufacturer, for an enterprise value of £390 million on a cash and debt-free basis, representing approximately 8.5 times EBITDA for the twelve months to March 2026. DIY Kitchens reported revenue of £136 million and EBIT of £37 million in 2025. Although DIY Kitchens addresses a lower-tier segment of the market, the directors consider this transaction to provide a current and relevant market benchmark for the valuation of vertically integrated British kitchen manufacturers, and expect the Company's position in the luxury segment to support a higher multiple.

The Company generated operating profit of £4,360,346 in the year ended 31 March 2024 (as restated) and £4,801,443 in the year ended 31 March 2025, equivalent to EBITDA of approximately £5.1 million and £5.8 million respectively after adding back depreciation and amortisation. Applying the transaction multiple of approximately 8.5 times EBITDA on an illustrative basis would imply indicative enterprise values of approximately £44 million and £49 million respectively.

The directors expect revenue and profitability to continue to grow over the next three to five years as the Company concludes a number of large contracts. Consistent with the Outlook above and the investment in technology described in this report, the directors expect the Company to achieve EBITDA of approximately £16 million in the 2028/2029 financial year, implying an indicative enterprise value in excess of £130 million on the same basis, with growth of approximately 20 per cent compounded annually expected thereafter over the longer term.

These indicative values are before taking account of the Company's heritage brand portfolio, its substantial forward order book, the development contracts in the process of being finalised (including with Extell Development Company, Four Seasons, Aman Resorts and Red Mountain LLC of Aspen, Colorado), other development opportunities and the planned expansion of several of the Company's brands.

This commentary is illustrative only, includes forward-looking expectations that are inherently uncertain, does not constitute a formal valuation of the Company and is not reflected in these financial statements, which are prepared under the historical cost convention. It is provided to assist readers in understanding the directors' view that the underlying value of the Company's brands and business substantially exceeds the carrying amounts recognised in the balance sheet.

As at 31 March 2025, the Company reported net liabilities and net current assets. The substantial majority of these liabilities relate to long-term shareholder funding provided in support of the Company's growth and development and are not repayable on demand. Greyson Holdings LLC has provided a legally binding undertaking that amounts due to it and entities owned by it will not be called for repayment for a period of at least 24 months from the date of approval of these financial statements. In addition, the Company has access to undrawn committed funding facilities of £11,905,844.73, out of total committed facilities of £14.7 million provided by Greyson Holdings LLC and Extell Development Company, available throughout that period. The directors have reviewed detailed cash flow forecasts, current trading performance, the forward order book and available funding facilities. During the year the Company repaid external borrowing, including CBILS and equipment finance obligations. The Company is no longer materially reliant on external bank debt. After considering these matters, together with the expected continued support of the principal shareholder, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future, and are not aware of any material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern. Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements. The directors are confident that the 2026 and 2027 accounts will yield additional profits in excess of the operating profits of £4,360,346 and £4,801,443 reported for the years ended 31 March 2024 and 31 March 2025 respectively, being £9,161,789 in aggregate.

Key Performance Indicators

On behalf of the board

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

The principal activity of the Company in the period under review was that of design, manufacture and installation of bespoke fitted kitchens.

The results for the year are set out on page 11.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

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

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.

The financial statements have been prepared on a going concern basis which assumes that the Company will continue in operational existence for at least twelve months from the date of approval of the financial statements.

The Company had net liabilities of £18,910,307 (2024: £31,476,900) for the financial period ended 31 March 2025. Greyson Holdings LLC has provided a legally binding undertaking that amounts due to Greyson Holdings LLC and entities owned by it will not be called for repayment for at least 24 months from the date of approval of the financial statements, and the Company has undrawn committed funding facilities of £11,905,844.73. Further details are given in the strategic report and in note 1.2 to the financial statements.

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

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

In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

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

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

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

Qualified opinion on financial statements

We have audited the financial statements of Lux Group Holdings Ltd (the 'company') for the year ended 31 March 2025 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements:

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

The evidence available to us was limited because we were not appointed as auditor until after 31 March 2025 and we were consequently unable to attend the year end stock count at this date. As a result, we were unable to perform the auditing procedures necessary to obtain sufficient audit evidence as regards the stock balance of £1,582,254. Consequently we were unable to determine whether any adjustment to this amount was necessary.

Conclusions relating to going concern

In forming our opinion on the financial statements, we have considered the adequacy of the disclosures made in note 1 to the financial statements concerning the company's ability to continue as a going concern.

The company has received a legally binding undertaking from Greyson Holdings LLC, a related party controlled by Mr R Shemesh, that amounts due to Greyson Holdings LLC and entities owned by it will not be called for repayment for a period of at least 24 months from the date of approval of the financial statements for the year ended 31 March 2025. In addition, the company has committed funding facilities totalling £14.7 million, of which £11,905,844.73 is undrawn and available to the company.

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 respect solely of the limitation on our work relating to stock, described above:

• we have not obtained all the information and explanations that we considered necessary for the purpose of out audit; and

• we were unable to determine whether adequate accounting records had been maintained.

Apart from the matter described above, we have nothing else 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.

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.

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006 and taxation legislation,

• we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management; and

• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;

considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

• performed analytical procedures to identify any unusual or unexpected relationships;

• tested journal entries to identify unusual transactions;

investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• agreeing financial statement disclosures to underlying supporting documentation;

• enquiring of management as to actual and potential litigation and claims;

• reviewing legal and professional fees for evidence of legal work undertaken or fines/penalties incurred.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Our audit testing typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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

Use of our report

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

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

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

Lux Group Holdings Ltd is a private company limited by shares incorporated in England and Wales. The registered office is The Hopton Workshop, Hopton Road, Devizes, SN10 2EU.

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. The principal accounting policies adopted are set out below.

These financial statements are prepared on the going concern basis. The directors have reasonable expectations that thetrue company will continue in operational existence for the foreseeable future.

At 31 March 2025 the company had net liabilities of £18,910,307 (2024: £31,476,900) and net current assets of £3,598,279 (2024: net current liabilities of £35,575,331). The substantial majority of the company's liabilities relate to long-term funding provided in support of the company's growth and development, which is not repayable on demand. Greyson Holdings LLC has provided a legally binding undertaking that amounts due to Greyson Holdings LLC and entities owned by it will not be called for repayment for a period of at least 24 months from the date of approval of these financial statements.

In addition, the company has committed funding facilities totalling £14.7 million provided by Greyson Holdings LLC and Extell Development Company, of which £11,905,844.73 was undrawn and available to the company at the date of approval of these financial statements.

The directors have reviewed cash flow forecasts covering a period of at least twelve months from the date of approval of these financial statements, together with current trading performance, the forward order book and the funding available to the company. During the year the company completed repayment of its CBILS borrowing and equipment finance obligations and it is no longer materially reliant on external bank debt.

After considering these matters, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and are not aware of any material uncertainties that may cast significant doubt upon the company's ability to continue as a going concern. The financial statements have therefore been prepared on the going concern basis and do not include any adjustments that would result if the company were unable to continue as a going concern.

Revenue comprises sales of goods or services provided to customers net of value added tax and other sales taxes, less an appropriate deduction for actual and expected returns and discounts. Revenue is recognised when performance obligations are satisfied and the control of goods or services is transferred to the buyer. Where the performance obligation is satisfied over time, revenue is recognised in accordance with its progress towards complete satisfaction of that performance obligation.

When cash inflows are deferred and represent a financing arrangement, the promised consideration is adjusted for the effects of the time value of money, which is recognised as interest income.

The company recognises revenue from the following major sources:

• Finalised and approved client designs

• Delivered sales

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

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

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Assets in the course of construction are not depreciated.

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.

Assets held under HP had a net book value of £92,515 (2024: £166,805) as at 31 March 2025.

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs 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. Financial assets classified as receivable within one year are not amortised.

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.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable 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 transaction price and subsequently measured at amortised cost using the effective interest method.

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.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

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

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

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

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

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

The directors have assessed the Company's ability to continue as a going concern based on forecasts for the following twelve months and beyond, and the continued support of the stakeholders and shareholders, and are satisfied that it has the resources to continue its business for the foreseeable future. Furthermore, the directors are not aware of any material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern. Therefore the financial statements continue to be prepared on the going concern basis.

Management assess at the inception of the lease whether an arrangement is a finance or operating lease, based on who bears substantially all risk and benefits incidental to the ownership of the leased items. Based on management's assessment, when the risk and rewards of owning the items leased by the Company are retained by the lessor, the lease will be accounted for as an operating lease. Otherwise, the lease will be accounted for as a finance lease.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

The Company estimates the useful lives of intangible fixed assets and tangible fixed assets based on the period over which the assets are expected to be available for use. The estimated useful lives are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the assets. In addition, estimation of the useful lives of tangible fixed assets is based on collective assessment of industry practice, internal technical evaluation and experience with similar assets. Actual results, however, may vary due to changes in estimates brought about by changes in factors mentioned above.

The Company assesses impairment on intangible and tangible assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The factors that the Company considers important which could trigger an impairment review include the following:

- significant underperformance relative to expected historical or projected future operating results;

- significant changes in the manner of use of the acquired assets or the strategy for overall business; and

- significant negative industry or economic trends.

In determining the present value of estimated future cash flows expected to be generated from the continued use of the assets, the Company is required to make estimates and assumptions that can materially affect the financial statements. These assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss would be recognised whenever evidence exists that the carrying value is not recoverable. For purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows.

An impairment loss is recognised and charged to profit or loss if the discounted expected future cash flows are less than the carrying amount. Fair value is estimated by discounting the expected future cash flows using a discount factor that reflects the risk-free rate of interest for a term consistent with the period of expected cash flows.

Recognised amounts of construction contract revenues and related work in progress reflect management's best estimate of each contract's outcome and stage of completion. This includes the assessment of the profitability of on-going construction contracts and the order backlog. For more complex contracts in particular, costs to complete and contract profitability are subject to estimation uncertainty.

Management estimates the net realisable values of stocks, taking into account the most reliable evidence available at each reporting date. The future realisation of these stocks may be affected by market-driven changes that may reduce future selling prices.

The Company estimates the allowance for doubtful trade and intercompany debtors based assessment of specific accounts where the Company has objective evidence comprising default in payment terms or significant financial difficulty that certain customers are unable to meet their financial obligations. In these cases, judgement used was based on the best available facts and circumstances including but not limited to, the length of the relationship.

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

An analysis of turnover by geographical market is given below:

During the year, the Company recognised an exceptional charge of £314,090 in respect of provisions established for claims made against the Company. The provision reflects management's best estimate of the expenditure required to settle the obligations arising from these matters at the reporting date, based on legal advice received and the information currently available.

Due to the size and non-recurring nature of the claims, the charge has been presented separately on the face of the statement of comprehensive income as an exceptional item in order to assist users' understanding of the Company's underlying trading performance.

The exceptional credit of £2,243,457 in the year ended 31 March 2024 arose from the release of a rent provision.

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

Their aggregate remuneration comprised:

The actual credit 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:

The NBV of assets held under HP is £92,515 (2024: £166,805).

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

The ARX Group Limited was dissolved on 15 July 2025.

Smallbone Atelier Ltd was incorporated on 27 April 2024.

The debtors have been reviewed by the directors for indicators of impairment. An impairment allowance of £7,659,153 (2024: £7,659,153) was recognised against trade debtors.

Finance lease payments represented rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. Finance leases are secured on the assets that have been financed. All were paid off in the year.

Goods (other than appliances and any other items not manufactured by the group) are covered by a 10 year warranty from the date of delivery. Furthermore, the Company undertakes remedial work once jobs are complete. Provisions have been provided for in these respects.

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

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

There is a single class of equity shares. There are no restrictions on the distributions of dividends and the repayment of capital, subject to the availability of distributable reserves. All shares carry equal voting rights and rank for dividends to the extent to which the total amount on each share is paid up.

The following non-adjusting events have occurred since 31 March 2025 and have not been reflected in the balance sheet at that date:

In April 2026 Greyson Holdings LLC, a related party controlled by Mr R Shemesh, provided the Company with a further committed funding facility of £5 million, bringing the total committed funding facilities available to the Company to £14.7 million, as described in the strategic report.

Greyson Holdings LLC has provided a legally binding undertaking that amounts due to Greyson Holdings LLC and entities owned by it will not be called for repayment for a period of at least 24 months from the date of approval of these financial statements.

The ARX Group Limited, a wholly owned subsidiary of the Company, was dissolved on 15 July 2025.

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

The Company bought furniture products during the year from W J White Furniture Limited, a company in which R Shemesh is a director and shareholder, to the value of £2,791,249 (2024: £2,540,818). At 31 March 2025, the balance outstanding to W J White Furniture Limited from Lux Group Holdings was £1,246,057 (2024: £893,668).

At 31 March 2025 the Company owed £26,023,162 (2024: £21,319,719) in respect of loans from entities owned by Greyson Holdings LLC, which are related parties of the Company. Greyson Holdings LLC is controlled by Mr R Shemesh, a director of the Company. The balance comprises loans from group undertakings of £13,523,167 (2024: £20,169,739) and other loans of £12,499,995 (2024: £1,149,980), as analysed in note 19. The loans are interest free and have no fixed terms of repayment. Greyson Holdings LLC has provided a legally binding undertaking that these loans will not be called for repayment for a period of at least 24 months from the date of approval of these financial statements.

No compensation was paid to key management personnel during the period (2024: £Nil).

The Company's immediate parent company is Sapphire 700 Limited, registered in the United Kingdom. Sapphire 700 Limited is owned by Sapphire Cabinetry (UK) LLC, registered in the United States of America, which is in turn owned by Greyson Holdings LLC, a US limited liability company. The Company's ultimate parent undertaking is Greyson Holdings LLC, and the Company's ultimate controlling party is Mr R Shemesh, a director of the Company, who controls Greyson Holdings LLC.

The results of the Company and its subsidiaries are included in the consolidated financial statements of Sapphire 700 Limited, which are publicly available from Companies House. The Company is therefore exempt under section 400 of the Companies Act 2006 from the requirement to prepare group financial statements, and these financial statements present information about the Company as an individual undertaking.

The Company is involved in a contractual dispute concerning amounts claimed by a third party in connection with contractual obligations relating to a premises. The amount claimed is approximately £2 million. The company has counterclaims for losses and damages that far exceed that amount in relation to this. The matter is subject to court proceedings, and the timing and amount of any potential inflow and outflow remain uncertain.