The directors present the strategic report for the year ended 31 December 2025.
The results of the group are not entirely comparable to the prior year. The group acquired Gleason Metrology Systems (formerly Intra Limited) mid way through the year. As a result of this, the results for the group this year include the results for Gleason Metrology Systems Limited for the six months post acquisition.
Due to the acquisition, turnover for the group has increased from £2.7m to £12.5m this year. The group has made a profit before tax of £2.0m (2024: loss of £0.02m). On a like for like basis, excluding Gleason Metrology Systems Limited, the group's turnover would have been £2.7m and a profit before tax of £0.2m.
Overall, the directors are pleased with the results for the year.
Competitive Risks - The global industry remains intensely competitive in all aspects of technical capability, price and delivery timescales. The group's strategy is to maintain market leadership through relentless development and product improvements via fellow group companies and to continue to provide the high levels of service in the U.K. and foreign markets that the company and the group operate in.
Currency Risk - The foreign currency risk faced by the company is mitigated by operating multi-currency bank accounts which allows more timely control over currency forecasting and reducing the numbers of transactions requiring exchange rate exposure.
Credit risk - The company operates appropriate trade finance procedures and credit insurance policies to mitigate the additional credit risks that arise.
The group's most significant key performance indicators are earnings before interest, taxation, depreciation and amortisation ("EBITDA") excluding exceptional items and defined benefit pension liability costs as reported to US management (this differs from the final EBITDA and pension cost reported under UK GAAP). These indicators are used by the directors to manage and develop the business to achieve strategic objectives.
The key performance indicators during the year were as follows:
EBITDA excluding exceptional items and defined benefit pension costs:
2025: £2,882,025
2024: (£9,903)
Turnover:
2025: £12,485,652
2024: £2,737,365
Profit before tax:
2025: £1,980,453
2024: (£20,296)
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2025.
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The company and group will continue its sales and service activities. The markets served by these activities are key to the business of The Gleason Works, wholly owned by Gleason Corporation as the parent company to the enterprise, and management believes that these markets are best served by a direct presence in the UK.
In accordance with the company's articles, a resolution proposing that Rickard Luckin Limited be reappointed as auditor of the group will be put at a General Meeting.
United Kingdom company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have elected to prepare the group and parent company 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 group and parent company, and of the profit or loss of the group 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 United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and parent company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and parent 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 group and parent company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
As of 31 December 2025 the Gleason Cutting Tools Limited Superannuation and Life Assurance Fund pension scheme investments exceeded the underlying liabilities of the pension scheme and thus is in an asset position, as disclosed in the balance sheet and note 22. As the funded status of the pension scheme may change year to year based on interest rates, market performance and other factors, the company and group may not be able to sustain future funding requirements if the pension scheme were to move to a deficit position without the support of its ultimate US parent undertaking.
Historically, Gleason Corporation and the trustees of the pension scheme have agreed to funding plans to eliminate the shortfall within the Gleason Cutting Tools Limited Superannuation and Life Assurance Fund. Following the triennial review of the pension scheme, the company contributions were stopped from 1 January 2024 as the review showed a continued surplus. As of 31 December 2025, with the pension scheme in an asset position, there is no longer a pension shortfall.
The company and group has obtained a confirmation of support from Gleason Corporation in the United States for at least twelve months from the date of approval of these financial statements. This support is to assist the company and group in meeting its liabilities when they fall due, including any required contributions to the Gleason Cutting Tools Limited Superannuation and Life Assurance Fund, but limited to those consistent with past practice and as agreed with the company only.
The company and group believes that cash flow generated from ongoing sales and service activities and the receipt of confirmation of support from its parent corporation provide comfort that the company and group should be able to meet its obligations as and when they come due for at least 12 months from the date of approval of these financial statements.
As a consequence of the strength of the underlying business, the company's and group's balance sheet and the support of its ultimate parent company, the directors have no uncertainty about the group's ability to continue as a going concern.
We have audited the financial statements of Gleason Holdings (UK) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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).
Basis for opinion
Conclusions relating to going concern
Other information
Opinions on other matters prescribed by the Companies Act 2006
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 group's and parent 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 group or parent company or to cease operations, or have no realistic alternative but to do so.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management; and via inspection of the company’s regulatory and legal correspondence.
We discussed with those charged with governance and other management the policies and procedures regarding compliance with laws and regulations.
We communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit, we also specifically considered where and how fraud may occur within the group and parent company.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the group and parent company are subject to laws and regulations that directly affect the financial statements, including: the company’s constitution, relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assess the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly the group and parent company are subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigations. We identified the following areas as those most likely to have such an affect: waste carriers licence; employment legislation; health and safety legislation; trade and export legislation; data protection legislation and anti-bribery and anti-corruption legislation.
ISAs (UK) limit the required procedures to identify non-compliance with these laws and regulations and no procedures over and above those already noted are required. These limited procedures did not identify any actual or suspected non-compliance with laws and regulations that could have a material impact on the financial statements.
In relation to fraud, we performed the following specific procedures in addition to those already noted:
Challenging assumptions made by management in its significant accounting estimates in particular: revenue recognition; loss-making contracts; depreciation; warranty and dilapidation provisions;
Identifying and testing journal entries during the year, in particular any entries posted with unusual nominal ledger account combinations and journal entries crediting any revenue account;
Performing analytical procedures to identify unexpected movements in account balances which may be indicative of fraud;
Ensuring that testing undertaken on both the performance statement, and the Balance Sheet includes a number of items selected on a random basis;
Discussions with management.
These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with ISAs (UK). For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there remains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud.
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 parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by section 408 of the Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £714,725 (2024 - £5,500 loss).
Gleason Holdings (UK) Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 1 Martindale Road, Bayton Road Industrial Estate, Exhall, Coventry, CV7 9ET.
The group consists of Gleason Holdings (UK) Limited and all of its subsidiaries.
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 group has early adopted the amendments to FRS 102 issued by the Financial Reporting Council in March 2024 (effective for accounting periods beginning on or after 1 January 2026), including the revised requirements relating to revenue from contracts with customers and lease accounting. The adoption of these amendments has been applied in accordance with the transitional provisions of FRS 102.
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 £ except for the group cash flow statement and note 27 which are rounded to the nearest £000.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
As permitted by S408 Companies Act 2006, the company has not presented its own statement of cash flows and profit and loss accounts and related notes.
The consolidated group financial statements consist of the financial statements of the parent company Gleason Holdings (UK) Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The group is reliant on the ongoing support of its ultimate parent undertaking, Gleason Corporation. The directors have received confirmation from the ultimate parent, Gleason Corporation, that support will be in place for at least 12 months from the date of approval of these financial statements. This support is to assist the group in meeting its liabilities when they fall due, including contributions to the Gleason Cutting Tools Limited Superannuation and Life Assurance Fund but limited to those consistent with past practice and as agreed with the company only. Accordingly, the group continues to adopt the going concern basis in preparing the financial statements.
For those reasons, the directors continue to adopt the going concern basis in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for sale of goods and services in the ordinary nature of the business. Turnover is shown net of Value Added Tax of goods sold and services provided to customers.
The group has assessed its revenue recognition using the five step revenue recognition model.
Step 1 - The group has identified the contracts already in place and those issued in the year with each customer.
Step 2 - The performance obligations within these contracts have been identified.
Step 3 - The transactional price is stated in the contracts agreed.
Step 4 - The performance obligations have been matched to the transaction prices set within the contracts.
Step 5 - Revenue is recognised at a point in time.
Customers are generally required to pay a deposit upon entering into a contract. Such deposits do not give rise to revenue and are recognised as contract liabilities until the goods are delivered and the group's performance obligation has been fulfilled.
Sales of goods
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.
Servicing
Revenue from servicing is recognised once the entire agreed-upon service is completed.
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 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 recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group 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. The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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 group 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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors and loans from fellow group companies 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 group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
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 group’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 if, and only if, there is 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.
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.
The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.
The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.
The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
At inception, the group assesses whether a contract is, or contains, a lease. A lease arises where the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control of the use of an asset occurs where the group has both the right to direct the use of the asset, and the right to obtain substantially all the economic benefits from that use.
Where a tangible asset is acquired through a lease, the group recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within the same line items on the Balance sheet as owned assets.
The right-of-use asset is initially measured at cost, which comprises the initial measurement of the lease liability adjusted for lease payments made at or before the commencement date less any lease incentives or grants received, plus initial direct costs and an estimate of the cost of obligations to dismantle, remove or restore the underlying asset and the site on which it is located.
The right-of-use asset is subsequently adjusted for remeasurements of the lease liability and applies the relevant cost model, fair value model or revaluation model as set out within the accounting policies for the applicable asset class. Where the cost model is applied, the asset is depreciated from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term, and is periodically reduced by impairment losses, if any.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the group's incremental borrowing rate or the group’s obtainable borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be payable under residual value guarantees, the exercise price of any purchase options that the group is reasonably certain to exercise, and any penalties for early termination of a lease.
At each financial period end, the lease liability is adjusted to reflect payments made and interest accrued. Also, the lease liability is remeasured to reflect lease modifications and any changes to the factors considered at initial measurement, as set out above. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or recognised in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
In the comparative period, the group classified leases as finance leases whenever the terms of the lease transferred substantially all the risks and rewards of ownership to the lessees. All other leases were classified as operating leases. Assets held under finance leases were 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 was included in the balance sheet as a finance lease obligation. Lease payments were treated as consisting of capital and interest elements and the interest was 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, less any lease incentives received, were charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis was more representative of the time pattern in which economic benefits from the leased asset were 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.
The results and financial position of Gleason Cutting Tools Limited's French branch, whose functional currency is Euro (€), are translated into the group's presentation currency of Pounds Sterling (£).
Income and expenditure are translated at the average exchange rates for the period where these approximate to the actual exchange rates prevailing on the dates of the transactions. Assets and liabilities are translated at the closing exchange rate at the reporting date.
Exchange differences arising on the translation of the French branch are recognised in other comprehensive income and accumulated in a separate translation reserve within the profit and loss reserve. Such exchange differences are recognised in profit or loss on disposal of the foreign operation.
For the purpose of translation, the French branch is considered a foreign operation in accordance with Section 30 of FRS 102.
Product warranty
Warranties are granted on the group's products and provisions are made for these where there is an expectation that a claim will be made on these.
In the application of the group’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 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 pension cost and assets/liabilities of the Gleason Cutting Tools Limited Superannuation and Life Assurance Fund under FRS102 are assessed with accordance with the directors' best estimates using the advice of an independent qualified actuary and assumptions in the latest actuarial valuation. Assumptions include the discount rate and mortality rates and changes in these assumptions will impact the carrying amount of pension obligations.
The directors have reviewed FRS102, in particular paragraph 28.22. The scheme asset of £4,307,798 has been recognised as currently the company is fully expecting to recover the surplus through reduced contributions in the future.
The measurement of lease liabilities requires management to determine an appropriate discount rate in circumstances where the interest rate implicit in the lease cannot be readily determined.
The group estimates the discount rate by reference to the rate at which it could obtain borrowing for a similar term, with similar security and in a similar economic environment. In determining the rate, management considers a range of factors including the length of the lease term, the nature of the underlying asset, market interest rates and the company's financing profile.
In determining the recoverable amount of stock, the directors have to make estimates to arrive at net realisable value.
The group provides warranties on certain products sold and recognises a provision for the expected future costs of meeting claims arising under those warranty arrangements.
The provision is based on management's estimate of the expenditure required to settle future obligations, taking account of historical claim rates and the average cost incurred under these warranties.
This relates to an amount owed by a company under common control being fully provided for as it is no longer deemed recoverable. This is one-off expenditure and is not expected to reoccur.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
There were no directors located in the United Kingdom in the year. All the directors performed their duties wholly or mainly outside the United Kingdom and their services to the group and company do not occupy a significant amount of their time. As such the cost of directors' remuneration is reflected in the financial statements of other companies within the Gleason group.
The actual charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
At the year end, the group had an unprovided deferred tax asset of £1.8m (2024: £3.0m). There is significant uncertainty regarding the recoverability of this asset and therefore it has not been provided for in these financial statements.
Details of the company's subsidiaries at 31 December 2025 are as follows:
Finished goods and goods for resale include stock provisions at the year end of £244,281 (2024: £Nil). The net movement in the provision has resulted in a debit to the profit and loss account.
Stock includes raw materials and finished goods that are subject to reservation of title until they have been fully paid for.
Finance lease payments represent rentals payable by the group for property, plant and machinery and motor vehicles. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. Interest rates are based on the obtainable borrowing rate.
The warranty provision relates to managements best estimate of the outstanding warranty obligations at the balance sheet date.
The following are the major deferred tax liabilities and assets recognised by the group and company:
The deferred tax liability set out above is not expected to reverse within 12 months.
The group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The group operates a funded pension scheme providing benefits based on years of service and employees' final pensionable salaries. The assets of the scheme are held separately from those of the group. Contributions to the scheme are determined by a qualified actuary on the basis of triennial valuations. The scheme was closed to future accrual from December 2005.
As disclosed in the balance sheet and as detailed below, the scheme at 31 December 2025 is overfunded with an asset balance of £4,365,000. Historically, Gleason Corporation and the trustees of the pension scheme have agreed to funding plans to eliminate the shortfall within the Gleason Cutting Tools Limited Superannuation and Life Assurance Fund. Following the latest Triennial review prepared as at 31 December 2022 and the continued lack of shortfall within the scheme, there has been no group annual contribution in 2025 (2024: £nil).
The group also operated a money purchase section within the scheme for new members and the charge for the year was £14,451 (2024: £13,969).
Under current French law, retirement indemnities are mandatory for French companies and therefore the French branch will have to pay lump sums to its employees on their retirement at some time in the future. The benefits are defined through the collective bargaining agreement application to the branch and are expressed as a number of months salary (depending on the number of years of service with the entity) and on the employees' final salary. A liability has been estimated and recorded for £57,000 (2024: £57,000).
The valuation used for FRS102, Section 28 disclosure was carried out as at 31 December 2025. The financial assumptions used are:
Assumed life expectations on retirement at age 65:
The amounts included in the balance sheet arising from obligations in respect of defined benefit plans are as follows:
The actual return on plan assets was £933,000 (2024: £1,071,000).
During the year, the company issued 3,198,093 ordinary £1 shares at par value to the parent company, The Gleason Works, to facilitate the acquisition of Gleason Metrology Systems Limited.
On 30 June 2025 the group acquired 100 percent of the issued capital of Gleason Metrology Systems Limited.
Group
At the year end, the group was owed £458,290 by companies under common control.
At the year end, the group owed £1,052,052 to companies under common control.
During the year, the group undertook transactions with companies under common control. These transactions comprised of sales to related companies of £664,404 and purchases and charges from related companies of £259,812.
In the current year, the FRS 102 Periodic Review 2024 was applied by the group for the first time and affects the financial statements as follows.
The group has applied the FRS 102 Periodic Review 2024 amendments to Section 20 Leases as an adjustment to the opening balance of retained earnings at the date of initial application. Comparative information is not restated.
The group’s revised accounting policies for leases are set out in note 1 and the adjustment for each financial statement line item affected by the application of the Periodic Review 2024 in the current period is set out below.
The group has taken advantage of the following practical expedients permitted when applying the Periodic Review 2024:
For contracts that have previously been assessed for the existence of a lease, the group has not reassessed whether a contract is, or contains, a lease at the date of initial application.
Leases previously classified as operating leases for which the lease term ends within 12 months of the date of initial application have been treated as short-term leases.
A single discount rate has been applied to portfolios of leases with reasonably similar characteristics.
Information received and choices made after the date of initial application have been applied to the assessment of leases previously classified as operating leases, such as in determining the lease term where the contract contains options to extend or terminate the lease.
Where leases have previously been assessed as onerous operating leases, the right-of-use asset recognised at the date of initial application has been adjusted by the amount of any provision for onerous leases recognised, instead of carrying out a separate impairment assessment.
The group has applied the FRS 102 Periodic Review 2024 amendments to Section 23 Revenue. The directors have concluded that there is no material change resulting from this change to the group's revenue recognition policy therefore there is no material impact on turnover for either the current or comparative year.
The current year adjustments as a result of applying the Periodic Review 2024 to Gleason Metrology Systems Limited have not been disclosed below as Gleason Metrology Systems Limited was acquired on 30 June 2025 at fair value and the adjustments were already applied on acquisition.